As filed with the Securities and Exchange Commission on November 18, 1997
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
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<S> <C>
THE LTV CORPORATION LTV STEEL COMPANY, INC.
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
Delaware New Jersey
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
4812 4812
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
13-3784318 34-0486510
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
200 Public Square 200 Public Square
Cleveland, Ohio 44114 Cleveland, Ohio 44114
(216) 622-5000 (216) 622-5000
(Address and telephone number (Address and telephone number
of registrant's principal executive offices) of principal executive offices)
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Glenn J. Moran
Senior Vice President, General
Counsel and Secretary
The LTV Corporation
200 Public Square
Cleveland, Ohio 44114
(216) 622-5000
(Name, address and
telephone number of agent for service)
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Copies to:
Keith L. Kearney
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
(212) 450-4000
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
==============================================================================================================================
Proposed
Maximum Proposed Maximum
Title of Each Class Amount to be Offering Price Aggregate Offering Amount of
of Securities to be Registered Registered Per Note(1) Price(1) Registration Fee(2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
8.20% Senior Exchange Notes due 2007(3).. $ 300,000,000 100% $300,000,000 $90,910
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(1) Estimated solely for purposes of calculating the registration fee.
(2) Calculated pursuant to Rule 457(f)(2).
(3) Guaranteed by LTV Steel Company, Inc., which Guaranty shall not require a
separate registration fee pursuant to Rule 457(n).
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended or until the
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
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FORM S-4
REGISTRATION STATEMENT
Cross-Reference Sheet
Pursuant to Item 501(b) of Regulation S-K
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Item Number and Caption Caption in Prospectus
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1. Forepart of Registration Statement and Outside Front Cover Page
of Prospectus.............................................................. Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages of Prospectus.................... Available Information; Incorporation of
Certain Information by Reference;
Outside Back Cover Page
3. Risk Factors, Ratio of Earnings to Fixed Charges and Other
Information................................................................ Risk Factors; Consolidated Ratio of
Earnings to Fixed Charges
4. Terms of the Transaction................................................... The Exchange Offer
5. Pro Forma Financial Information............................................ Capitalization and Other Significant
Obligations
6. Material Contacts With the Company Being Acquired.......................... Not Applicable
7. Additional Information Required for Reoffering by Persons and
Parties Deemed to be Underwriters.......................................... Not Applicable
8. Interests of Named Experts and Counsel..................................... Not Applicable
9. Disclosure of Commission Position on Indemnification For
Securities Act Liabilities................................................. Not Applicable
10. Information With Respect to S-3 Registrants............................... Not Applicable
11. Incorporation of Certain Information by
Reference................................................................. Inside Front Cover Page
12. Information With Respect to S-2 or S-3
Registrants............................................................... Not Applicable
13. Incorporation of Certain Information by
Reference................................................................. Not Applicable
14. Information With Respect to Registrants Other Than S-3 or S-2
Registrants:
(a) Description of Business................................................ Not Applicable
(b) Description of Property................................................ Not Applicable
(c) Legal Proceedings...................................................... Not Applicable
(d) Common Equity Securities............................................... Not Applicable
(e) Financial Statements................................................... Not Applicable
(f) Selected Financial Data................................................ Not Applicable
(g) Supplementary Financial Information.................................... Not Applicable
(h) Management's Discussion and Analysis of Financial
Condition and Results of Operations.................................... Not Applicable
(i) Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................................... Not Applicable
15. Information With Respect to S-3 Companies................................. Not Applicable
16. Information With Respect to S-2 or S-3
Companies................................................................. Not Applicable
17. Information With Respect to Companies Other Than S-2 or S-3
Companies................................................................. Not Applicable
18. Information if Proxies, Consents or Authorizations Are to be
Solicited................................................................. Not Applicable
19. Information if Proxies, Consents or Authorizations Are Not to be
Solicited, or in an Exchange Offer........................................ Not Applicable
</TABLE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 18, 1997
PROSPECTUS
, 1997
Offer to Exchange
8.20% Senior Notes due 2007
(which have been registered under the Securities Act of 1933)
For Any and All Outstanding
8.20% Senior Notes due 2007
of
The LTV Corporation
Unconditionally Guaranteed
by LTV Steel Company, Inc.
The Exchange Offer will expire at 5:00 P.M.
New York City time, on , 1997, unless extended
The LTV Corporation ("LTV" or the "Company") hereby offers,
upon the terms and subject to the conditions set forth in this Prospectus and
the accompanying Letter of Transmittal (which together constitute the
"Exchange Offer"), to exchange $300 million principal amount of 8.20% Senior
Notes due 2007 (which have been registered under the Securities Act of 1933)
(the "New Notes") of the Company for the $300 million principal amount of
issued and outstanding 8.20% Senior Notes due 2007 (the "Old Notes" and,
together with the New Notes, the "Notes") of the Company. The Old Notes were,
and the New Notes will be, fully and unconditionally guaranteed (the
"Guaranty") by LTV Steel Company, Inc. ("LTV Steel"). The terms of the New
Notes are identical in all material respects to the Old Notes, except that the
offer of the New Notes will have been registered under the Securities Act and,
therefore, the New Notes will not be subject to certain transfer restrictions,
registration rights and related liquidated damage provisions applicable to the
Old Notes.
Interest on the Notes will be payable semi-annually on March 15
and September 15 of each year, commencing March 15, 1998. See "Description of
Notes."
The New Notes are being offered hereunder in order to satisfy
certain obligations of the Company under the Registration Rights Agreement
dated September 17, 1997 among the Company and the other signatories thereto
(the "Registration Rights Agreement"). Based upon interpretations contained
in letters issued to third parties by the staff of the Securities and Exchange
Commissions (the "Commission"), the Company believes that the New Notes issued
pursuant to the Exchange Offer in exchange for Old Notes may be offered for
resale, resold and otherwise transferred by each holder thereof (other than a
broker-dealer, as set forth below, and any such holder which is an "affiliate"
of the Company within the meaning of Rule 405 under the Securities Act of
1933, as amended (the "Securities Act")) without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that such New Notes are acquired in the ordinary course of such holder's
business and such holder has no arrangement or understanding with any person
to participate in the distribution of such New Notes. Eligible holders
wishing to accept the Exchange Offer must represent to the Company in the
Letter of Transmittal that such conditions have been met. Each broker-dealer
that receives New Notes for its own account pursuant to the Exchange Offer
must acknowledge that it will deliver a prospectus in connection with any
resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Notes received in exchange for Old Notes where such Old Notes were acquired
by such broker-dealer as a result of marketmaking activities or other
trading activities. The Company has agreed that, for a period of 90 days
after the Expiration Date (as defined herein), it will make this Prospectus
available to any broker-dealer for use in connection with any such resale.
See "Plan of Distribution."
The Company will not receive any proceeds from the Exchange
Offer. The Company will pay all the expenses incident to the Exchange Offer.
Tenders of Old Notes pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date. In the event the Company terminates the
Exchange Offer and does not accept for exchange any Old Notes, the Company will
promptly return all previously tendered Old Notes to the holders thereof. See
"The Exchange Offer."
Prior to this Exchange Offer, there has been no public market
for the Notes. The Company does not currently intend to list the New Notes on
any securities exchange or to seek approval for quotation through any
automated quotation system. There can be no assurance than an active public
market for the New Notes will develop.
See "Risk Factors" for a discussion of certain risk factors
that should be considered by holders prior to tendering their Old Notes in the
Exchange Offer.
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
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE, COMPLETION OR AMENDMENT
WITHOUT NOTICE. THIS PRELIMINARY OFFERING MEMORANDUM 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. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED BEFORE THE OFFERING MEMORANDUM IS DELIVERED IN
FINAL FORM.
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration
Statement on Form S-4 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act, with respect to the Notes
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto.
For further information with respect to the Company and the Notes, reference
is hereby made to such Registration Statement and the exhibits and schedules
thereto. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith is required to file reports and other information with the
Commission. The Registration Statement, as well as such reports and other
information filed by the Company with the Commission, may be inspected without
charge at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Commission's
regional offices located at Seven World Trade Center, 13th Floor, New York,
New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can be obtained by mail from
the Commission's Public Reference Section at 450 Fifth Street, N.W.,
Washington D.C. 20549 at prescribed rates. The Commission maintains a Web
site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants, including the Company,
that file electronically with the Commission. In addition, such reports and
other information concerning the Company may also be inspected at the offices
of the New York Stock Exchange at 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the
Commission (File No. 1-4368) pursuant to the Exchange Act are incorporated
herein by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(ii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31, 1997;
(iii) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30, 1997; and
(iv) the Company's Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1997;
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Notes offered
hereby shall be deemed incorporated by reference into this Prospectus and to
be a part hereof from the date such documents are filed.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein will be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in the applicable Prospectus Supplement or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded will not be deemed, except as so modified or
superseded, to constitute part of this Prospectus.
The Company will provide without charge to each person to whom
a copy of this Prospectus is delivered, upon the written or oral request of
such person, a copy of each document incorporated herein by reference.
Requests for such copies should be directed to Glenn J. Moran, Senior Vice
President, General Counsel and Secretary, The LTV Corporation, 200 Public
Square, Cleveland, Ohio, 44114-2308, (216) 622-5000.
THE COMPANY
LTV is a leading integrated steel producer that manufactures
and sells coated sheet and cold rolled and hot rolled sheet and strip, as well
as tubular and tin mill products and, beginning in July 1997, metal building
systems. Based on 1996 shipments, LTV believes it is the third largest
domestic integrated steel producer, the second largest producer of flat rolled
steel and a leading supplier of quality-critical, flat rolled steel to the
automotive, appliance and electrical equipment industries in the United
States. LTV operates two integrated steel mills (Cleveland Works and Indiana
Harbor Works) and various finishing and processing facilities, as well as
tubular, tin mill operations and metal building operations.
Over the last ten years, the Company has made capital
expenditures of approximately $3 billion to achieve significant reductions in
operating costs, enhance its ability to produce value-added steel products and
improve its quality to internationally competitive levels. As a result, LTV
believes it has core steel facilities that are highly competitive in terms of
cost, technology and quality. In 1996, the Company derived over 78% of its
revenues from steel that was processed beyond the hot rolled stage. LTV's
emphasis on value-added products and quality has allowed the Company to
achieve its leadership position in the quality-critical automotive, appliance
and electrical equipment industries and to win numerous quality awards from
its customers. All the Company's flat rolled, tin mill and tubular product
facilities are ISO-9002 certified, and each of the Company's flat rolled
facilities is certified as to QS-9000. In addition, LTV is a qualified
supplier to all domestic automobile manufacturers (including all foreign-owned
transplant automobile assembly operations).
LTV's strategy is to capitalize on its current position as a
leading supplier of quality-critical steel products and to pursue
opportunities for profitable growth in leading steel technologies and metal
fabrication, while continuing to strengthen its financial position.
LTV's principal office is located at 200 Public Square,
Cleveland, Ohio, 44114-2308 and its telephone number is (216) 622-5000.
Recent Developments
Acquisition of Metal Buildings Business
On July 2, 1997, VP Buildings ("VP Buildings"), a wholly-owned
subsidiary of the Company, acquired the Varco-Pruden metal buildings
division of United Dominion Industries, Inc. for approximately $187.5
million, subject to final closing adjustments and expenses (the "VP
Acquisition"). See "Use of Proceeds." VP Buildings, the second largest
domestic participant in the growing metal buildings industry, engineers and
manufactures non-residential, low-rise steel building systems for
manufacturing, warehousing, school and commercial applications. In 1996,
Varco-Pruden had revenues of $305 million. The United Steelworkers of
America ("USWA") is currently engaged in an organizing effort to represent
non-management employees at certain plants of VP Buildings. The USWA
recently secured representation rights for non-management employees at the
Evansville, Wisconsin plant and is seeking to represent such employees at
the Pine Bluff, Arkansas plant.
Closure of Pittsburgh Coke Plant
Also in July 1997, LTV announced its intention to close
permanently its Pittsburgh coke and by-product plant by the end of 1997.
Closure of the plant, which has reached the end of its useful life, resulted
in a charge for the third quarter of 1997 of $150 million for employee costs,
demolition, environmental matters and facilities write down, approximately
$100 million of which would be payable in cash over a period of several years.
The Company has engaged a consultant to study the environmental condition of
the facility, which has been in operation for over a century. The Company
believes that it will be able to negotiate the scope and stringency of any
required remediation with the state regulatory authorities under the
newly-enacted voluntary cleanup legislation. If this is not the case,
remediation expenses could increase substantially. The Company has entered
into long-term supply contracts which, when combined with the Company's own
coke production capability, will fulfill all the Company's coke requirements.
In August 1997, the USWA filed a grievance, which is subject to
binding arbitration under its labor agreement with the Company, alleging that
the Company's actions relating to the Pittsburgh coke plant violated the
Company's labor agreement. A decision on the anticipated arbitration
proceeding is not expected until some time after November 1997, and the
Company cannot predict the outcome of such anticipated arbitration. The
Company is unable to predict the effect of a finding of violation on the
Company.
New Labor Contracts
In August 1997, the Company and the USWA reached a tentative
agreement on new labor contracts covering approximately 230 USWA-represented
employees at two electro-galvanizing joint ventures. The agreements, which
were ratified by the USWA-represented employees at the two facilities, will
expire on August 1, 1999 and provide for wage and benefit increases which are
comparable to increases accorded recently at other domestic integrated steel
producers.
New Tubular Facility
In August 1997, the Company announced its intention to build a
new "best in class" tubing manufacturing facility in Marion, Ohio at an
initial project cost of approximately $66 million. The facility will
manufacture high-quality tubing for the automotive mechanical tubing market,
including for the manufacture of hydroformed parts. This market is expected
to grow as automobile manufacturers increase their use of tubular products in
order to reduce the weight of vehicles and the cost of vehicle construction.
The facility will have a high-speed steel slitter, two forming and welding
mills, heat treating capabilities and precision cutting and end finishing
equipment designed to produce the quality levels needed by the automotive
industry. The facility is expected to have a processing capacity of 146,000
tons of steel annually.
RISK FACTORS
In addition to other matters described in this Prospectus,
holders of Old Notes should carefully consider the following risk factors
before accepting the Exchange Offer.
Risk Factors Relating to the Notes
Holding Company Structure; Asset Encumbrance
Although the Notes are senior unsecured obligations of the
Company and the Guaranty is a senior unsecured obligation of LTV Steel, the
Notes will be effectively subordinated to all the liabilities of the Company's
other subsidiaries (including claims of the Pension Benefit Guaranty
Corporation (the "PBGC"), trade creditors, secured creditors and creditors
holding guarantees and claims of preferred stockholders, if any). As of
September 30, 1997, the total balance sheet liabilities of such other
subsidiaries would have been approximately $371 million (excluding outstanding
letters of credit) and such subsidiaries would have had approximately $320
million of additional available borrowing capacity under senior credit
facilities.
Since all the operations of the Company are conducted through
subsidiaries, the cash flow and the consequent ability to service debt and
other obligations of the Company, including the Notes, will be dependent upon
the earnings of its subsidiaries and the distribution of those earnings to, or
upon loans or other payments of funds by those subsidiaries to, the Company
(other than, in the case of LTV Steel, to the extent the Guaranty is in
effect). The payment of dividends and the making of loans and advances to the
Company by its subsidiaries are subject to statutory and contractual
restrictions, are dependent upon the earnings of those subsidiaries and are
subject to various business considerations.
The Notes and the Guaranty also will be effectively
subordinated to any secured debt of the Company and LTV Steel, respectively,
to the extent of the value of the assets securing such debt. As of the date
of this Prospectus, the Company and LTV Steel have no secured debt or other
secured obligations outstanding (other than outstanding letters of credit and
borrowings available under senior credit facilities and the contingent
obligations under the $250 million lien (the "USWA Lien") pursuant to a labor
agreement with the USWA). Although the Indenture contains limitations on the
amount of additional Debt the Company and the Restricted Subsidiaries may
incur, the amounts of such Debt could be substantial and, in any case, a
significant portion of the Debt may be Debt or Secured Debt of non-Guarantor
subsidiaries (which will be effectively senior in right of payment to the
Notes).
Potential Limitations on Guaranty
Although the Notes are obligations of the Company, they will be
unconditionally guaranteed by LTV Steel, which in 1996 accounted for
approximately 85% of the Company's sales. The performance by LTV Steel of its
obligations with respect to the Guaranty may be subject to review under
relevant federal and state fraudulent conveyance and similar statutes in a
bankruptcy or reorganization case or a lawsuit by or on behalf of creditors of
LTV Steel. Under these statutes, if a court were to find that an obligation
(such as the Guaranty) was incurred with the intent of hindering, delaying or
defrauding present or future creditors, that LTV Steel received less than a
reasonably equivalent value of fair consideration for the obligation, or that
LTV Steel contemplated insolvency with a design to prefer one or more
creditors to the exclusion, in whole or in part, of other creditors and that,
at the time of the incurrence of the obligation, the obligor either (i) was
insolvent or was rendered insolvent by reason thereof, (ii) was engaged or was
about to engage in a business or transaction for which its remaining
unencumbered assets constituted unreasonably small capital, or (iii) intended
to incur or believed that it was incurring debts beyond its ability to pay
such debts as they matured or became due, such court could void LTV Steel's
obligations under the Guaranty, subordinate the Guaranty to other debt of LTV
Steel or take other action detrimental to the holders of the Notes. The
Guaranty could be subject to the claim that, since the Guaranty was incurred
for the benefit of the Company (and only indirectly for the benefit of LTV
Steel), the obligations of LTV Steel thereunder were incurred for less than
reasonably equivalent value or fair consideration. If the Guaranty was not
enforceable, the Notes would be effectively subordinated to all liabilities of
LTV Steel.
The measure of insolvency for purposes of a fraudulent
conveyance or other similar claim will vary depending upon the laws of the
jurisdiction being applied. Generally, however, a company will be considered
insolvent at a particular time if the sum of its debts at that time is greater
than the then fair value of its assets or if the fair salable value of its
assets at that time is less than the amount that would be required to pay its
probable liability on its existing debts as they become absolute and mature.
The Company believes that, after giving effect to the Offering, each of the
Company and LTV Steel will be (a) neither insolvent nor rendered insolvent by
the incurrence of debt in connection with the Offering, (b) in possession of
sufficient capital to run their businesses effectively and (c) incurring debts
within their ability to pay as the same mature or become due.
Furthermore, LTV Steel may be or become subject to contractual
restrictions on its ability to make payments on the Guaranty. Upon the sale or
other disposition of LTV Steel or the sale or disposition of all or
substantially all the assets of LTV Steel permitted by the Indenture, LTV
Steel will be released from all its obligations under the Guaranty. See
"Description of Notes."
Change of Control Provisions
Upon the occurrence of a Change of Control at any time, each
holder of the Notes will have the right to require the Company to repurchase
each holder's Notes at a price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest, if any, thereon to the date of
purchase. There can be no assurance that the Company will have the financial
resources necessary to repurchase the Notes upon a Change of Control. See
"Description of Notes --Repurchase of Notes at the Option of holders Upon a
Change of Control." In addition, a Change of Control may constitute a
liquidation event or default under the Receivables Credit Agreement dated as
of October 12, 1994 among LTV Sales Finance Company, a bankruptcy-remote
special purpose subsidiary of LTV, the Lenders party thereto and Bankers Trust
Company, as Collateral Agent and Facility Agent (the "Receivables Credit
Agreement") or the Letter of Credit Agreement dated as of October 12, 1994
among LTV and certain of its subsidiaries, the Lenders party thereto and BT
Commercial Corporation, as Agent (the "Letter of Credit Agreement"),
respectively. Future debt of LTV may contain similar provisions to those in
the Receivables Credit Agreement and the Letter of Credit Agreement.
Restrictions on Resales; Absence of Public Market for the Old Notes
The Old Notes were offered and sold by the Company in a private
offering exempt from registration requirements of the Securities Act. Holders
of Old Notes who do not exchange their Old Notes for New Notes pursuant to the
Exchange Offer will continue to be subject to the restrictions on transfer of
such Old Notes as set forth in the legend thereon. In general, the Old Notes
may not be offered or sold, unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. The Company does not
intend to register the Old Notes under the Securities Act. The Company
believes that, based upon interpretations contained in letters issued to third
parties by the staff of the Commission, New Notes issued pursuant to the
Exchange Offer in exchange for Old Notes may be offered for resale, resold or
otherwise transferred by each holder thereof (other than a broker-dealer, as
set forth below, and any such holder which is an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act) without compliance
with the registration and prospectus delivery provisions of the Securities Act
provided that such New Notes are acquired in the ordinary course of such
holder's business and such holder has no arrangement or understanding with any
person to participate in the distribution of such New Notes. If any holder has
any arrangement or understanding with respect to the distribution of the New
Notes to be acquired pursuant to the Exchange Offer, such holder (i) could not
rely on the applicable interpretations of the staff of the Commission and (ii)
must comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. Each broker-dealer
that receives New Notes for its own account in exchange for Old Notes must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. See "Plan of Distribution." In addition, to comply with the
securities laws of certain jurisdictions, if applicable, the New Notes may not
be offered or sold unless they have been registered or qualified for sale in
such jurisdiction or an exemption from registration or qualification is
available and is complied with. The Company does not currently intend to take
any action to register or qualify the New Notes for resale in any such
jurisdictions.
Risk Factors Relating to LTV
Substantial Leverage; Ability to Meet Liquidity Needs
The Company has substantial unfunded retiree health care,
unfunded pension and other obligations, including debt. As of September 30,
1997, the total consolidated debt, pension and other postemployment health
care and insurance benefit liabilities of the Company and LTV Steel were
approximately $2.474 billion (excluding approximately $99.6 million of
outstanding letters of credit), and the Company and its subsidiaries had
approximately $320 million of additional available borrowing capacity under
senior credit facilities. The degree to which the Company is leveraged could
affect its ability to service its debt and fund its pension and other
postemployment benefit obligations, to make capital investments, to take
advantage of business opportunities, including making joint venture
investments, or to obtain additional financing. Declines in the demand for
steel or in steel prices (whether as a result of the steel industry's
cyclicality or otherwise), increases in labor, raw material or other costs,
adverse environmental or other regulatory developments or the inability to
borrow additional funds for operations if and when required could also impair
the Company's ability to meet its substantial liquidity needs. These factors
could force the Company to restructure or refinance its debt or seek
additional equity capital. There can be no assurance that any of these
actions could be effected on a timely basis. In addition, the terms of the
Company's existing and future debt and PBGC agreements, including the
Indenture, may prohibit the Company from taking such actions, and the
Company's ability to obtain equity financing is separately limited by certain
tax considerations.
LTV's aggregate annual expense for pensions and other
postemployment benefit obligations is currently higher on a per ton shipped
basis than that of some other domestic integrated steel producers that
publicly report such data. Cash obligations include postemployment health
care and other insurance benefits, payments under the PBGC Settlement
Agreement among the PBGC, LTV and certain affiliates of LTV (the "PBGC
Settlement Agreement") to amortize the unfunded liability in the Company's
restored defined benefit pension plans; and required contributions to a
Voluntary Employees' Beneficiary Association ("VEBA") Trust to prefund
postemployment health care and other insurance benefits. The Company's actual
annual expense depends on a variety of factors, some of which are beyond the
control of the Company. The United States government could enact legislation
which could materially change the Company's postemployment benefit and
pension-related liabilities or could materially increase the Company's annual
cash flow requirements related to current pension funding requirements or
level of pension insurance premiums. Further, if the actual retirement or
other termination of active employees is significantly earlier than projected
(for plant closings or other reasons), if the plans are modified after August
1999 because of contractual changes with the USWA, if certain trends change,
if events occur differently than as assumed or if assumptions change as a
result of such events or for other reasons, these liabilities could change
substantially.
Significance of the Automotive Industry; Customer Concentration
Demand for the Company's steel products is affected by, among
other things, the relative strength or weakness of the domestic automotive
industry and events impacting the domestic automotive industry. The
automotive industry can be highly cyclical, is dependent on consumer spending
and is subject to the impact of international trade. Direct shipments of the
Company's products to the automotive market accounted for approximately 24%,
22%, 25% and 26% of the Company's steel-related shipments in the first nine
months of 1997 and in the years 1996, 1995 and 1994, respectively. The
Company also sells to the steel service center and converter markets which, in
turn, sell a portion of their product to the automotive industry. Direct
sales to General Motors Corporation ("General Motors"), the Company's largest
customer, accounted for approximately 12%, 11%, 12% and 11% of the Company's
steel-related sales in the first nine months of 1997 and in the years 1996,
1995 and 1994, respectively. The Company's current sales arrangement with
General Motors expires at year end 1998. Accordingly, there can be no
assurance that future sales to General Motors will be at historical levels.
Automotive manufacturers that sell passenger cars and
light-duty trucks in the United States are required to comply with federally
mandated corporate average fuel economy ("CAFE") standards. From time to
time, there have been federal legislative and administrative initiatives that
would increase CAFE standards from their current levels. More stringent CAFE
standards could require vehicle manufacturers to restrict their current
product offerings or otherwise reduce the average weight of such vehicles sold
in the United States in future model years. Such action would likely result
in a reduction in the average weight of steel used in vehicles sold in the
United States. Because of the significance of the United States automotive
market to the Company, a significant reduction in the average usage of steel
in such vehicles could have a material adverse effect on the Company's
business.
Substantial Capital Expenditure Requirements
The Company's integrated steel operations are capital
intensive. Over the last ten years, the Company's capital expenditures have
totaled approximately $3 billion. This level of capital expenditures was made
in order to maintain productive capacity, reduce costs, improve productivity
and upgrade selected facilities to meet competitive requirements and, to a
lesser extent, maintain compliance with environmental laws and regulations,
including the Clean Air Act of 1990. The Company anticipates that capital
expenditures will approximate $300 million in 1997. Although the Company
believes it will be able to make capital expenditures deemed necessary or
appropriate, there can be no assurance that the Company will have adequate
funds to make all such capital expenditures or that the amount of future
capital expenditures will be adequate to preserve its competitive position or
to comply with environmental regulations.
Production Shutdowns
The Company's manufacturing processes are dependent upon
certain critical pieces of steelmaking equipment, such as its blast furnaces
and continuous casters, which on occasion may be out of service due to routine
scheduled maintenance or as the result of equipment failures. Interruptions
in the Company's production capabilities could result in fluctuations in the
Company's quarterly total sales and income. The most significant scheduled
maintenance outages involve the relining of the Company's five blast furnaces.
The relining of each furnace is scheduled approximately once every five years
and typically takes ten to twelve weeks. The Company has currently scheduled
its five blast furnaces to be relined at the rate of one a year, although the
reline scheduled for 1997 has been postponed until 1998 because of
better-than-anticipated furnace conditions. LTV plans to offset lost
production from furnace relines with purchased steel in order to enable the
Company to continue to satisfy its customers' requirements. Using purchased
steel, however, may adversely affect the Company's profitability. Other
routine scheduled maintenance outages or equipment failures could limit the
Company's production for a period of several days to several weeks. The
Company maintains property insurance covering both physical damage to real and
personal property and business interruption. Although the Company has
experienced no equipment failures or scheduled maintenance outages that have
resulted in the complete shutdown of a major portion of its steelmaking
production for a significant period of time, no assurance can be given that a
material shutdown will not occur in the future.
Labor Relations
The Company's primary labor agreement with the USWA covering
approximately 10,800 employees (substantially all of the hourly employees at
its steel operations) expires on August 1, 1999. The Company's participation
in a minimill joint venture, Trico Steel Company, L.L.C. ("Trico"), the
employees of which are not currently represented by the USWA or another union,
has been a significant issue between the USWA and the Company. This issue may
adversely affect the Company's negotiations for a new labor agreement, and the
Company cannot predict the outcome of such negotiations. Further, no
assurance can be given that the USWA will not seek to represent Trico employees
at some future date. The USWA's labor agreements with other domestic
integrated steel producers also expire on August 1, 1999, which may further
complicate the Company's negotiations with the USWA.
The USWA has recently alleged that the Company's actions
relating to the closure of the Pittsburgh coke plant violates the Company's
labor agreement.
In the course of recent negotiations, the Company has not
experienced work stoppages, but there can be no assurance that work stoppages
will not occur in the future in connection with contract negotiations or
otherwise, or as to the results of such a stoppage. A prolonged general work
stoppage would, however, have a material adverse effect on the Company.
Managing Expansion
The Company's strategy of expanding beyond its existing
integrated steel operations is subject to various risks. The Company's
management has only limited experience in many of these other operations, and
there can be no assurance it will be able to effectively evaluate or manage
such operations. Joint ventures have in the past been one of the Company's
primary means for expanding its operations, and the Company expects to
continue to make investments in joint ventures. The Company's joint venture
partners may from time to time have economic or business interests that are
inconsistent with the interests of the Company. The Company also faces the
risk that a joint venture partner may be unable to meet its economic or other
obligations and that the Company may be required or choose to fulfill those
obligations. Many of the opportunities that the Company is pursuing are
start-up operations and require significant investments before becoming
operational. The development, construction and start-up of such operations
are themselves subject to numerous risks. After start-up, further investments
may be required and significant losses could be incurred before any profits
are realized. The Company's strategy includes pursuing additional
steel-related investments beyond those it has already acquired, but there can
be no assurance that any such other investments will be consummated.
Litigation
The Company is a defendant in a number of pending lawsuits,
including certain challenges to actions taken during the Chapter 11 bankruptcy
proceedings and other proceedings involving environmental matters and patent
infringement. There can be no assurance that the Company will succeed in
defending such claims or that judgments will not be rendered against the
Company in respect of any or all of such proceedings. While, in the opinion
of the Company's management, adequate provision has been made for losses which
are likely to result from these claims, to the extent that such reserves prove
to be inadequate, the Company could incur a charge to earnings which could
have a material adverse effect on the Company's results of operations and
liquidity for the applicable period. The Company has benefitted from certain
trade cases relating to steel imports which remain subject to annual review.
Such annual reviews may adversely affect such benefits.
Potential Limitation on Utilization of Net Operating Loss Carryforwards and
Other Tax Attributes
The Company's ability to reduce its future income tax
liability, if any, through utilization of its substantial net operating loss
carryforwards of $2.6 billion and other favorable tax attributes could be
significantly limited if the Company were to undergo an "ownership change" (an
"Ownership Change") within the meaning of Section 382 of the Internal Revenue
Code of 1986, as amended (the "Code"). Imposition of such limitations could
have a material adverse effect on the Company. Article Ninth of the Company's
Restated Certificate of Incorporation ("Article Ninth") provides a measure of
protection against an Ownership Change by prohibiting certain ownership
accumulations without the approval of the Board of Directors of the Company.
However, the Company's future ability to issue additional shares of stock or
equity-related instruments convertible into stock may be limited because of
the constraints imposed by Section 382 of the Code.
Year 2000 Compliance
As is the case with most other companies using computers in
their operations, the Company is faced with the task of addressing the Year
2000 problem during the next two years. The Company is currently engaged in a
comprehensive project to upgrade its computer software in its information
technology, manufacturing and facilities systems to programs which will be
Year 2000 compliant. In addition, over a three-year period, the Company
currently estimates that it will expense approximately $50 million related to
Year 2000 compliant work. Approximately $10 million will be expensed in 1997.
Failure by the Company and/or vendors working on this project to complete the
Year 2000 compliance work in a timely manner could have a material adverse
effect on the Company's operations.
Risk Factors Relating to the Steel Industry Generally
Steel Price Sensitivity and Cyclicality of the Steel Industry
The steel industry is highly cyclical in nature and the
Company's results of operations are substantially affected by small variations
in the realized prices of its products. Such realized prices are
significantly influenced by prevailing prices for steel and demand for
particular products. The Company's steel operations shipped 8.1 million tons
of steel products and recorded sales of $4.1 billion during 1996. A 1%
increase or decrease in the average realized price during 1996 would, on a
pro forma basis, have resulted in an increase or decrease in pre-tax income of
approximately $36 million. The Company's average realized steel selling
prices during the first six months of 1997 were only 8% above those of a
decade ago. Domestic integrated producers suffered substantial losses between
1982 and 1986, primarily as a result of recessionary conditions, high levels
of steel imports, the strength of the United States dollar against other
currencies, worldwide steel production overcapacity, increased domestic and
international competition, high labor costs and inefficient production
facilities. Domestic steel industry earnings improved between 1987 and 1989,
compared to such prior period, due in part to substantial restructuring
activities (including the reduction of steel production capacity), the
strength of the domestic economy, the decline of the United States dollar
against foreign currencies and temporary labor concessions. Domestic steel
production in 1995 was the highest since 1981. Industry demand, however,
slackened during the latter half of 1990 and continued to be weak through
1992, and the steel industry suffered losses during such period. Demand
increased in 1993 and in years subsequent thereto and domestic steel producers
have been able to implement a number of announced price increases since 1993.
While the Company and the steel industry in general realized a number of price
increases during 1993, 1994 and the first half of 1995, steel prices declined
materially in the second half of 1995. In 1996 and the first nine months of
1997, the Company was able to implement price increases that only partially
offset the decreases experienced in the second half of 1995, and average
realized steel selling prices per ton in 1996 and the first nine months of
1997 remained below average 1995 levels. The price increase announced in May
1997 by LTV has only partially taken effect.
With severe competitive pressures in the steel industry, excess
worldwide capacity, a significantly higher level of imports than in 1996 and
fluctuating automotive industry sales as described above, there can be no
assurance that prices will not decline during any future period or as to
domestic steel industry earnings in the future. See "Excess Worldwide
Industry Capacity and Depressed Prices" and "Competition."
Excess Worldwide Industry Capacity and Depressed Prices
At current worldwide demand levels, there exists substantial
excess worldwide steelmaking capacity. In addition, Wheeling-Pittsburgh
Corporation ("WHX") resumed steel production in the fourth quarter of 1997
after a ten-month strike-related cessation of operations. Domestic flat
rolled steel production capacity has been reduced through corporate
reorganizations or as a result of bankruptcy proceedings, causing domestic
capacity to fall below current domestic demand for flat rolled steel.
However, taking into account both historic and recent levels of imports and an
expected increase in domestic raw steel production capacity of more than 8%
during the next two years (primarily due to the construction of new minimill
and other production facilities), there is expected to be an excess supply in
the domestic flat rolled steel market. Steel selling prices have been under
pressure recently as a result of the recent sustained high level of imports,
the start-up or planned start-up of new minimills and other production
facilities, a strengthened United States dollar and various other factors.
The outlook for prices continues to be uncertain. See "Steel Price Sensitivity
and Cyclicality of the Steel Industry."
Competition
Domestic steel producers have faced significant competition
from foreign producers. Foreign competition is intense and has adversely
affected product prices in the United States and tonnage sold by domestic
producers. The intensity of foreign competition is substantially affected by
the relative strength of foreign economies and fluctuations in the value of
the United States dollar against foreign currencies. Steel imports have
increased as the value of the dollar has risen in relation to foreign
currencies. Further, many foreign steel producers are owned, controlled or
subsidized by their governments. Decisions by such foreign producers with
respect to production and sales may be influenced to a greater degree by
political and economic policy considerations than by prevailing market
conditions. Based on reports by the American Iron and Steel Institute
("AISI"), imports of flat rolled product increased approximately 41% in the
first eight months of 1997 from the comparable period in 1996 to approximately
9.8 million tons or 20% of domestic steel consumption. See "Steel Price
Sensitivity and Cyclicality of the Steel Industry."
LTV also competes with other domestic integrated producers,
some of which have greater resources than the Company, and with minimills
which are relatively efficient, low-cost producers that generally produce
steel from scrap in electric furnaces, have lower employment and environmental
costs and generally target regional markets. Recently developed thin slab
casting technologies have allowed some minimill producers to enter certain
sectors of the flat rolled market which have traditionally been supplied by
integrated producers, and other producers have announced their intention to do
the same. Industry experts estimate that current domestic raw steel
production capacity will be increased by more than 8% during the next two
years as new minimills, now under construction, engaged in start-up operations
or otherwise proposed, begin operation.
In the case of many steel products, there is substantial
competition from manufacturers of other products, including plastics,
aluminum, ceramics, glass, wood and concrete.
Environmental Regulation
With respect to its properties and operations, the Company and
other steel producers have become subject to increasingly stringent
environmental standards imposed by federal, state and local environmental laws
and regulations concerning air emissions, water discharges and waste
disposal. The Company has incurred and will continue to incur substantial
capital costs and operating and maintenance expenses in complying with such
stringent environmental standards. In particular, the 1990 Clean Air Act
Amendments will continue to require additional significant expenditures for
air pollution control or major changes in the production of steel. Further,
new federal environmental regulations adopted in 1997 impose significantly
more stringent ambient air environmental standards which could in the future
also add significantly to expenditure levels by the Company. Additionally,
the United States Environmental Protection Agency (the "EPA") has interpreted
the Resource Conservation and Recovery Act of 1976, as amended ("RCRA"), as
granting the EPA authority to require companies to clean up plant sites where
hazardous wastes have been used (and are being or may be released into the
environment), even if such sites are not subject to the permitting
requirements of RCRA. If the EPA were to require the Company to clean up its
facilities under RCRA, the costs to the Company associated with such a cleanup
could be substantial.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the
issuance of the New Notes offered hereby. In consideration for issuing the
New Notes in exchange for the Old Notes as described in this Prospectus, the
Company will receive Old Notes in like principal amount. The Old Notes
surrendered in exchange for the New Notes will be retired and canceled.
Accordingly, the issuance of the New Notes will not result in any change in
the indebtedness of the Company.
The net proceeds to the Company from the sale of the Old Notes
was approximately $289.8 million. Such net proceeds were used by the Company
to finance the approximate $187.5 million cost, subject to final closing
adjustments, of the VP Acquisition and to redeem the $100 million principal
amount of Senior Secured Convertible Notes due 2003 issued by LTV to SMI
America, Inc.
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of
earnings to fixed charges for the Company for the periods indicated:
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
----------------- --------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges
(unaudited) (1)................... 0.7x 3.3x 3.5x 5.8x 4.1x 0.1x --
</TABLE>
- ---------------
(1) The ratio of earnings to fixed charges is determined by dividing the sum
of earnings from continuing operations before extraordinary items,
discontinued operations, interest expense, taxes and a portion of rent
expense representative of interest, by the sum of interest expense and a
portion of rent expense representative of interest. The ratio for the
nine months ended September 30, 1997 includes the $150 million special
charge recorded in the third quarter of 1997. Without the special
charge, the ratio would have been 3.5x. The ratio of earnings to fixed
charges is not meaningful for periods that result in a deficit. For
1992, the deficit of earnings to fixed charges was $166 million.
THE EXCHANGE OFFER
Terms of the Exchange Offer; Period for Tendering Old Notes
Upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal (which together
constitute the Exchange Offer), the Company will accept for exchange Old Notes
which are properly tendered on or prior to the Expiration Date and not
withdrawn as permitted below. As used herein, the term "Expiration Date"
means 5:00 p.m, New York City time, on , 1997; provided,
however, that if the Company, in its sole discretion, has extended the period
of time for which the Exchange Offer is open, the term "Expiration Date" means
the latest time and date to which the Exchange Offer is extended.
As of the date of this Prospectus, $300 million aggregate
principal amount of the Old Notes was outstanding. This Prospectus, together
with the Letter of Transmittal, is first being sent on or about the date set
forth on the cover page to all holders of Old Notes at the addresses set forth
in the security register with respect to Old Notes maintained by the Trustee.
The Company's obligations to accept Old Notes for exchange pursuant to the
Exchange Offer is subject to certain conditions as set forth under "Certain
Conditions to the Exchange Offer" below.
The Company expressly reserves the right, at any time or from
time to time, to extend the period of time during which the Exchange Offer is
open, and thereby delay acceptance of any Old Notes, by giving oral (promptly
confirmed in writing) or written notice of such extension to the Exchange
Agent and notice of such extension to the holders as described below. During
any such extension, all Old Notes previously tendered will remain subject to
the Exchange Offer and may be accepted for exchange by the Company. Any Old
Notes not accepted for exchange for any reason will be returned without
expense to the tendering holder thereof as promptly as practicable after the
expiration or termination of the Exchange Offer.
The Company expressly reserves the right to amend or terminate
the Exchange Offer, and not to accept for exchange any Old Notes not
theretofore accepted for exchange, upon the occurrence of any of the
conditions of the Exchange Offer specified below under "Certain Conditions to
the Exchange Offer." The Company will give oral (promptly confirmed in
writing) or written notice of any extension, amendment, non-acceptance or
termination to the holders of the Old Notes as promptly as practicable, such
notice in the case of any extension to be issued by means of a press release
or other public announcement no later than 9:00 am., New York City time, on
the next business day after the previously scheduled Expiration Date.
Holders of Old Notes do not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware or the
Indenture in connection with the Exchange Offer. The Company intends to
conduct the Exchange Offer in accordance with the applicable requirements of
the Exchange Act and the rules and regulations of the Commission thereunder.
Procedures for Tendering Old Notes
The tender to the Company of Old Notes by a holder thereof as
set forth below and the acceptance thereof by the Company will constitute a
binding agreement between the tendering holder and the Company upon the terms
and subject to the conditions set forth in this Prospectus and in the
accompanying Letter of Transmittal. Except as set forth below, a holder who
wishes to tender Old Notes for exchange pursuant to the Exchange Offer must
transmit a properly completed and duly executed Letter of Transmittal or
Agent's Message (as defined below) in lieu thereof, including all other
documents required by such Letter of Transmittal, to The Chase Manhattan Bank
(the "Exchange Agent") at one of the addresses set forth below under "Exchange
Agent" on or prior to the Expiration Date. In addition, (i) certificates for
such Old Notes must be received by the Exchange Agent along with the Letter of
Transmittal, (ii) a timely confirmation of a book-entry transfer (a
"Book-Entry Confirmation") of such Old Notes, if such procedure is available,
into the Exchange Agent's account at The Depository Trust Company ("DTC" or
the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry
transfer described below, must be received by the Exchange Agent prior to the
Expiration Date or (iii) the holder must comply with the guaranteed delivery
procedures described below. THE METHOD OF DELIVERY OF OLD NOTES, LETTERS OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF
THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED
MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY, NO LETTERS OF
TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY.
The term "Holder" or "holder" with respect to the Exchange
Offer means any person in whose name Old Notes are registered on the books of
the Company or any other person who has obtained a properly completed bond
power from the registered holder or any participant in DTC whose name appears
on a security position listing as the holder of Old Notes (which for the
purpose of the Exchange Offer, include beneficial interests in the Old Notes
held by direct or indirect participants in DTC and Old Notes held in
definitive form).
Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed unless the Old Notes
surrendered for exchange pursuant thereto are tendered (i) by a registered
holder of the Old Notes who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the Letter of
Transmittal or (ii) for the account of an Eligible Institution (as defined
below). In the event that signatures on a Letter of Transmittal or a notice
of withdrawal, as the case may be, are required to be guaranteed, such
guarantees must be by a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or by a commercial bank or trust company having an office or
correspondent in the United States (collectively, "Eligible Institutions").
If Old Notes are registered in the name of a person other than the person
signing the Letter of Transmittal, the Old Notes surrendered for exchange must
be endorsed by, or be accompanied by a written instrument or instruments of
transfer or exchange, in satisfactory form as determined by the Company in its
sole discretion, duly executed by the registered holder with the signature
thereon guaranteed by an Eligible Institution.
All questions as to the validity, form, eligibility (including
time of receipt) and acceptance of Old Notes tendered for exchange will be
determined by the Company in its sole discretion, which determination shall be
final and binding. The Company reserves the absolute right to reject any and
all tenders of any particular Old Notes not properly tendered or to not accept
any particular Old Notes which acceptance might, in the judgment of the
Company or its counsel, be unlawful. The Company also reserves the absolute
right in its sole discretion to waive any defects or irregularities or
conditions of the Exchange Offer as to any particular Old Notes either before
or after the Expiration Date (including the right to waive the ineligibility
of any holder who seeks to tender Old Notes in the Exchange Offer). The
interpretation of the terms and conditions of the Exchange Offer as to any
particular Old Notes either before or after the Expiration Date (including the
Letter of Transmittal and the instructions thereto) by the Company shall be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with the tenders of Old Notes for exchange must be cured within
such reasonable period of time as the Company shall determine. Neither the
Company, the Exchange Agent nor any other person shall be under any duty to
give notification of any defect or irregularity with respect to any tender of
Old Notes for exchange, nor shall any of them incur any liability for failure
to give such notification.
If the Letter of Transmittal is signed by a person or persons
other than the registered holder or holders of Old Notes, such Old Notes must
be endorsed or accompanied by appropriate powers of attorney, in either case
signed exactly as the name or names of the registered holder or holders that
appear on the Old Notes.
If the Letter of Transmittal or any Old Notes or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such person should so indicate when signing and,
unless waived by the Company, proper evidence satisfactory to the Company of
its authority to so act must be submitted.
By tendering, each holder will represent to the Company that,
among other things, (i) the New Notes acquired pursuant to the Exchange Offer
are being acquired in the ordinary course of business of the person receiving
such New Notes, whether or not such person is the holder, (ii) neither the
holder nor any such other person has an arrangement or understanding with any
person to participate in the distribution of such New Notes, (iii) if the
holder is not a broker-dealer, or is a broker-dealer but will not receive New
Notes for its own account in exchange for Old Notes, neither the holder nor
any such other person is engaged in or intends to participate in the
distribution of such New Notes and (iv) neither the holder nor any such
other person is an "affiliate," as defined under Rule 405 of the Securities
Act, of the Company. If the tendering holder is a broker-dealer that will
receive New Notes for its own account in exchange for Old Notes that were
acquired as a result of market-making activities or other trading
activities, it will be required to acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes.
Acceptance of Old Notes for Exchange, Delivery of New Notes
Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, the Company will accept, promptly after the Expiration Date,
all Old Notes properly tendered and will issue the New Notes promptly after
acceptance of the Old Notes. See "Certain Conditions to the Exchange Offer"
below. For purposes of the Exchange Offer, the Company shall be deemed to have
accepted properly tendered Old Notes for exchange when, as and if the Company
has given oral (promptly confirmed in writing) or written notice thereof to
the Exchange Agent.
In all cases, issuance of New Notes for Old Notes that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Old Notes or a
timely Book-Entry Confirmation of such Old Notes into the Exchange Agent's
account at the Book-Entry Transfer Facility pursuant to the book-entry
transfer procedures described below, a properly completed and duly executed
Letter of Transmittal (or Agent's Message in lieu thereof) and all other
required documents. If any tendered Old Notes are not accepted for any reason
set forth in the terms and conditions of the Exchange Offer or if certificates
representing Old Notes are submitted for a greater principal amount than the
holder desires to exchange, such unaccepted or non-exchanged Old Notes will
be returned without expense to the tendering holder thereof (or, in the case
of Old Notes tendered by book-entry transfer into the Exchange Agent's account
at the Book-Entry Transfer Facility pursuant to the book-entry transfer
procedures described below, such non-exchanged Old Notes will be credited to
an account maintained with such Book-Entry Transfer Facility) as promptly as
practicable after the expiration or termination of the Exchange Offer.
Interest on the New Notes
Interest on the Notes will accrue at the rate of 8.20% per
annum and will be payable in cash semi-annually on each March 15 and September
15, commencing on March 15, 1998.
Book-Entry Transfer
The Exchange Agent will make a request to establish an account
with respect to the Old Notes at the Book-Entry Transfer Facility for purposes
of the Exchange Offer promptly after the date of this Prospectus. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Notes by causing the
Book-Entry Transfer Facility to transfer such Notes into the Exchange Agent's
account in accordance with the Book-Entry Transfer Facility Automated Tender
Offer Program ("ATOP") procedures for transfer. However, the exchange for the
Notes so tendered will only be made after timely confirmation of such
book-entry transfer of Notes into the Exchange Agent's account, and timely
receipt by the Exchange Agent of an Agent's Message (as defined) and any other
documents required by the Letter of Transmittal. The term "Agent's Message"
means a message, transmitted by the Book-Entry Transfer Facility and received
by the Exchange Agent and forming a part of a Book-Entry Confirmation, which
states that the Book-Entry Transfer Facility has received an express
acknowledgment from a participant tendering Notes that are the subject of such
Book-Entry Confirmation that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal, and that the Company may
enforce such agreement against such participant.
Guaranteed Delivery Procedures
If a registered holder of the Old Notes desires to tender such
Old Notes and the Old Notes are not immediately available, or time will not
permit such holder's Old Notes or other required documents to reach the
Exchange Agent before the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if
(i) the tender is made through an Eligible Institution, (ii) prior to the
Expiration Date, the Exchange Agent receives from such Eligible Institution a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Company (by telegram, telex,
facsimile transmission, mail or hand delivery), setting forth the name and
address of the holder of Old Notes and the amount of Old Notes tendered,
stating that the tender is being made thereby and guaranteeing that within
five New York Stock Exchange ("NYSE") trading days after the date of execution
of the Notice of Guaranteed Delivery, the certificates of all physically
tendered Old Notes, in proper form for transfer, or a Book-Entry Confirmation,
as the case may be, the Letter of Transmittal (or an Agent's Message in lieu
thereof) and any other documents required by the Letter of Transmittal will be
deposited by the Eligible Institution with the Exchange Agent, and (iii) the
certificates for all physically tendered Old Notes, in proper form for
transfer, or a Book-Entry Confirmation, as the case may be, the Letter of
Transmittal (or an Agent's Message in lieu thereof) and all other documents
required by the Letter of Transmittal, are received by the Exchange Agent
within five NYSE trading days after the date of execution of the Notice of
Guaranteed Delivery.
Withdrawal Rights
Tenders of Old Notes may be withdrawn at any time prior to the
Expiration Date.
For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent at one of the addresses set
forth below under "Exchange Agent." Any such notice of withdrawal must specify
the name of the person having tendered the Old Notes to be withdrawn, identify
the Old Notes to be withdrawn (including the principal amount of such Old
Notes), and (where certificates for Old Notes have been transmitted) specify
the name in which such Old Notes are registered, if different from that of the
withdrawing holder. If certificates for Old Notes have been delivered or
otherwise identified to the Exchange Agent, then, prior to the release of such
certificates, the withdrawing holder must also submit the serial numbers of
the particular certificates to be withdrawn and a signed notice of withdrawal
with signatures guaranteed by an Eligible Institution unless such holder is an
Eligible Institution. If Old Notes have been tendered pursuant to the
procedure for book-entry transfer described above, any notice of withdrawal
must specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Old Notes and otherwise comply with
the procedures of such facility. All questions as to the validity, form and
eligibility (including time of receipt) of such notices will be determined by
the Company, whose determination shall be final and binding on all parties.
Any Old Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Old Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder (or, in the case of
Old Notes tendered by book-entry transfer into the Exchange Agent's account at
the Book-Entry Transfer Facility pursuant to the book-entry transfer
procedures described above, such Old Notes will be credited to an account
maintained with such Book-Entry Transfer Facility for the Old Notes) as soon
as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following
one of the procedures described under "Procedures for Tendering Old Notes"
above at any time on or prior to the Expiration Date.
Certain Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, the
Company shall not be required to accept for exchange, or to issue New Notes in
exchange for, any Old Notes and may terminate or amend the Exchange Offer, if
at any time before the acceptance of such Old Notes for exchange or the
exchange of the New Notes for such Old Notes such acceptance or issuance would
violate applicable law or any interpretation of the staff of the Commission.
The foregoing condition is for the sole benefit of the Company
and may be asserted by the Company regardless of the circumstances giving rise
to such condition or may be waived by the Company in whole or in part at any
time and from time to time in its sole discretion. The failure by the Company
at any time to exercise the foregoing rights shall not be deemed a waiver of
any such right and each such right shall be deemed an ongoing right which may
be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Old
Notes tendered, and no New Notes will be issued in exchange for any such Old
Notes, if at such time any stop order shall be threatened or in effect with
respect to the Registration Statement of which this Prospectus constitutes a
part or the qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act").
Exchange Agent
The Chase Manhattan Bank has been appointed as the Exchange
Agent for the Exchange Offer. All executed Letters of Transmittal should be
directed to the Exchange Agent at one of the addresses set forth below.
Questions and requests for assistance, requests for additional copies of this
Prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Exchange Agent, addressed as
follows:
Deliver To:
By Registered or Certified Mail
or Hand or Overnight Delivery:
The Chase Manhattan Bank
55 Water Street
Room 234, North Building
New York, New York 10041
Attention: Carlos Esteves
Confirm by Telephone:
(212) 638-0828
Facsimile Transmission:
(212) 638-7375 or (212) 344-9367
DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
Fees and Expenses
The principal solicitation is being made by mail; however,
additional solicitation may be made by telegraph, telephone or in person by
officers and regular employees of the Company and its affiliates. No
additional compensation will be paid to any such officers and employees who
engage in soliciting tenders. The Company will not make any payment to
brokers, dealers, or others soliciting acceptances of the Exchange Offer. The
Company, however, will pay the Exchange Agent reasonable and customary fees
for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith.
The estimated cash expenses to be incurred in connection with
the Exchange Offer will be paid by the Company and are estimated in the
aggregate to be $75,000.
Transfer Taxes
Holders who tender their Old Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that
holders who instruct the Company to register New Notes in the name of, or
request that Old Notes not tendered or not accepted in the Exchange Offer be
returned to, a person other than the registered tendering holder will be
responsible for the payment of any applicable transfer tax thereon.
Consequences of Failure to Exchange
Holders of Old Notes who do not exchange their Old Notes for
New Notes pursuant to the Exchange Offer will continue to be subject to the
restrictions on transfer of such Old Notes as set forth in the legend thereon.
In general, the Old Notes may not be offered or sold, unless registered under
the Securities Act, except pursuant to an exemption from, or in a transaction
not subject to, the Securities Act and applicable state securities laws. The
Company does not intend to register the Old Notes under the Securities Act.
The Company believes that, based upon interpretations contained in letters
issued to third parties by the staff of the Commission, New Notes issued
pursuant to the Exchange Offer in exchange for Old Notes may be offered for
resale, resold or otherwise transferred by each holder thereof (other than a
broker-dealer, as set forth below, and any such holder which is an "affiliate"
of the Company within the meaning of Rule 405 under the Securities Act)
without compliance with the registration and prospectus delivery provisions of
the Securities Act provided that such New Notes are acquired in the ordinary
course of such holder's business and such holder has no arrangement or
understanding with any person to participate in the distribution of such New
Notes. If any holder has any arrangement or understanding with respect to the
distribution of the New Notes to be acquired pursuant to the Exchange Offer,
such holder (i) could not rely on the applicable interpretations of the staff
of the Commission and (ii) must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction. Each broker-dealer that receives New Notes for its own account in
exchange for Old Notes must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. See "Plan of Distribution." In
addition, to comply with the securities laws of certain jurisdictions, if
applicable, the New Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdiction or an exemption from
registration or qualification is available and is complied with. The Company
does not currently intend to take any action to register or qualify the New
Notes for resale in any such jurisdictions.
Tax Consequences to U.S. Holders
There will be no federal income tax consequences to holders
exchanging Old Notes for New Notes pursuant to the Exchange Offer and a holder
will have the same adjusted basis and holding period in the New Notes as it
had in the Old Notes immediately before the exchange.
DESCRIPTION OF NOTES
The Old Notes were issued and the New Notes will be issued
under an indenture to be dated as of September 22, 1997 (the "Indenture"),
among the Company, LTV Steel and The Chase Manhattan Bank, as trustee (the
"Trustee"). The Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. The Indenture will be
qualified under the Trust Indenture Act upon effectiveness of the Registration
Statement. The following summary of certain provisions of the Indenture does
not purport to be complete and is subject to, and qualified in its entirety by
reference to the Trust Indenture Act and to all the provisions of the Notes
and the Indenture, including the definitions therein of certain terms. For
purposes of this Section, references to the "Company" shall mean The LTV
Corporation excluding its subsidiaries. Capitalized terms used in this
Section and not otherwise defined below have the respective meanings assigned
to them in the Indenture.
General
The Notes will mature on September 15, 2007, and will be
limited to an aggregate principal amount of $300 million. The Notes will bear
interest at the rate set forth on the cover page of this Offering Memorandum
from September 22, 1997, or from the most recent interest payment date to
which interest has been paid, payable semiannually on March 15 and September
15 of each year, beginning on March 15, 1998, to the Persons who are
registered holders of the Notes at the close of business on the preceding
March 1 or September 1, as the case may be. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months.
Principal of, and premium, if any, and interest on, the Notes
will be payable in immediately available funds, and the Notes will be
exchangeable and transferable, at an office or agency of the Company, one of
which will be maintained for such purpose in The City of New York (which
initially will be the corporate trust office of the Trustee); provided,
however, that payment of interest may be made at the option of the Company by
check mailed to the Person entitled thereto as shown on the Security Register.
The Notes will be issued only in fully registered form without coupons, in
denominations of $1,000 or any integral multiple thereof. No service charge
will be made for any registration of transfer or exchange of Notes, except for
any tax or other governmental charge that may be imposed in connection
therewith.
The terms of the New Notes are identical in all material
respects to the terms of the Old Notes, except for certain transfer
restrictions and registration rights relating to the Old Notes and except
that, if (a) on or prior to the 60th day following the date of original
issuance of the Old Notes, neither the Registration Statement nor a shelf
registration statement for the New Notes (the "Shelf Registration Statement")
has been filed with the Commission, (b) on or prior to the 150th day following
the date of original issuance of the Old Notes, the Registration Statement has
not been declared effective, (c) on or prior to the 180th day following the
date of original issuance of the Old Notes, neither the Exchange Offer has
been consummated nor a Shelf Registration Statement has been declared
effective or (d) after either the Registration Statement or the Shelf
Registration Statement has been declared effective, such Registration Statement
thereafter ceases to be effective or usable (subject to certain exceptions) in
connection with resales of Old Notes or New Notes in accordance with and
during the periods specified in the Registration Agreement (each such event
referred to in clauses (a) through (d), a "Registration Default"), interest
("Special Interest") will accrue on the principal amount of the Old Notes and
the New Notes (in addition to the stated interest on the Old Notes and the New
Notes) from and including the date on which any such Registration Default
shall occur to but excluding the date on which all Registration Defaults have
been cured. Special Interest will accrue at a rate of 0.25% per annum during
the 90-day period immediately following the occurrence of any Registration
Default and shall increase by 0.25% per annum at the end of each subsequent
90-day period, but in no event shall such rate exceed 1.00% per annum.
Ranking
The Notes will be senior unsecured obligations of the Company,
will rank pari passu with all existing and future senior debt of the Company,
will be senior in right of payment to all future subordinated debt of the
Company and will be guaranteed on a senior unsecured basis by LTV Steel. For
certain financial information with respect to LTV Steel, see the notes to the
Consolidated Financial Statements for the years ended December 31, 1996, 1995
and 1994 and for the nine months ended September 30, 1997 and 1996. As of
September 30, 1997, after giving effect to the VP Acquisition, the Offering
and the application of the estimated net proceeds therefrom, the total
outstanding debt of the Company and LTV Steel was approximately $354 million
(excluding approximately $99.6 million in outstanding letters of credit) and
the Company and LTV Steel had approximately $320 million of additional
available borrowing capacity under the Receivables Credit Agreement and the
Letter of Credit Agreement. As of such date, the total outstanding pension
liabilities of the Company and LTV Steel were approximately $601 million and
the total outstanding liabilities of the Company and LTV Steel for
postemployment health care and other insurance benefits were approximately
$1.5 billion. None of the debt or pension or other postemployment benefit
liabilities of the Company and LTV Steel outstanding as of September 30, 1997,
would have been subordinated to the Notes or the Guaranty. Although the
Indenture contains limitations on the amount of additional Debt which the
Company and LTV Steel may incur, the amounts of such Debt could be
substantial. In addition, the Company and LTV Steel have other liabilities,
including contingent liabilities, which may be significant.
The Notes and the Guaranty will be effectively subordinated to
creditors (including the PBGC, trade creditors and secured creditors) and
preferred stockholders, if any, of the Subsidiaries of the Company other than
LTV Steel. As of September 30, 1997, the total balance sheet liabilities of
such Subsidiaries were approximately $371 million (excluding approximately
$99.6 million of outstanding letters of credit and approximately $320 million
of additional available borrowing capacity under the Receivables Credit
Agreement and the Letter of Credit Agreement). Since all the operations of
the Company are conducted through Subsidiaries, the cash flow and the
consequent ability to service debt of the Company, including the Notes, is
dependent upon the earnings of any such Subsidiaries and the distribution of
those earnings to, or upon loans or other payments of funds by those
Subsidiaries to, the Company. The payment of dividends and the making of
loans and advances to the Company by such Subsidiaries could be limited by
statutory and contractual restrictions or other business considerations and
will be dependent upon the earnings of those Subsidiaries. Under certain
circumstances, the Guaranty could be effectively subordinated to all the
obligations of LTV Steel. See "Certain Covenants--Limitation of Debt and
Restricted Subsidiary Preferred Stock."
The Notes and the Guaranty also will be effectively
subordinated to any secured debt of the Company and LTV Steel, respectively,
to the extent of the value of the assets securing such debt. As of September
30, 1997, after giving effect to the Offering and the application of the
estimated net proceeds therefrom, the Company and LTV Steel had no secured
debt or other secured obligations outstanding (other than letters of credit
and additional available borrowing capacity under the Receivables Credit
Agreement and the Letter of Credit Agreement and the contingent obligations
under the $250 million USWA Lien.
Guaranty
The obligations of the Company under the Indenture, including
the repurchase obligation resulting from a Change of Control, will be
unconditionally guaranteed on a senior unsecured basis by LTV Steel. LTV's
trade sales accounted for 85% of the Company's trade sales in 1996 (without
giving pro forma effect to the VP Acquisition). Upon the sale or other
disposition of LTV Steel or the sale or disposition of all or substantially
all the assets of LTV Steel permitted by the Indenture, LTV Steel will be
released from all its obligations under the Guaranty. See "Certain Covenants--
Limitation on Issuance or Sale of Capital Stock of Restricted Subsidiaries"
and "Merger, Consolidation and Sale of Property." The Company will agree to
contribute to LTV Steel an amount equal to the Company's proportionate share
of any payment made by LTV Steel under the Guaranty, based on the net worth of
the Company relative to the aggregate net worth of the Company and LTV Steel).
Optional Redemption
Except as set forth in the following paragraph, the Notes will
not be redeemable at the option of the Company prior to September 15, 2002.
Thereafter, the Notes will be redeemable at the option of the Company, in
whole or in part, on not less than 30 nor more than 60 days' prior notice, at
the following redemption prices (expressed as percentages of principal
amount), plus accrued and unpaid interest (if any) to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on September 15 of the years set forth below:
<TABLE>
<S> <C>
Redemption
Year Price
- ---- ----------
2002...................................... 104.100%
2003...................................... 102.733%
2004...................................... 101.367%
2005 and thereafter....................... 100.000%
</TABLE>
At any time and from time to time prior to September 15, 2000,
the Company may redeem up to a maximum of 35% of the original aggregate
principal amount of the Notes with the proceeds of one or more Public Equity
Offerings, at a redemption price equal to 108.20% of the principal amount
thereof, plus accrued and unpaid interest thereon, if any, to the redemption
date (subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided,
however, that after giving effect to any such redemption, at least 65% of the
original aggregate principal amount of the Notes remains outstanding. Any
such redemption shall be made within 60 days of such Public Equity Offering
upon not less than 30 nor more than 60 days' notice mailed to each holder of
Notes being redeemed and otherwise in accordance with the procedures set forth
in the Indenture.
Sinking Fund
There are no sinking fund payments for the Notes.
Repurchase at the Option of Holders Upon a Change of Control
Upon the occurrence of a Change of Control, each holder of
Notes shall have the right to require the Company to repurchase all or any
part of such holder's Notes pursuant to the offer described below (the "Change
of Control Offer") at a purchase price (the "Change of Control Purchase
Price") equal to 101% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the purchase date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date).
Within 30 days following any Change of Control, the Company
shall (a) cause a notice of the Change of Control Offer to be sent at least
once to the Dow Jones News Service or similar business news service in the
United States and (b) send, by first-class mail, with a copy to the Trustee,
to each holder of Notes, at such holder's address appearing in the Security
Register, a notice stating, among other things: (i) that a Change of Control
has occurred and a Change of Control Offer is being made pursuant to the
covenant entitled "Repurchase at the Option of holders Upon a Change of
Control" and that all Notes timely tendered will be accepted for payment; (ii)
the Change of Control Purchase Price and the purchase date, which shall be,
subject to any contrary requirements of applicable law, a business day no
earlier than 30 days nor later than 60 days from the date such notice is
mailed; (iii) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization after giving effect to the Change of Control);
and (iv) the procedures that holders of Notes must follow in order to tender
their Notes (or portions thereof) for payment, and the procedures that holders
of Notes must follow in order to withdraw an election to tender Notes (or
portions thereof) for payment.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Notes pursuant to a
Change of Control Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of the covenant described
hereunder, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under the
covenant described hereunder by virtue of such compliance.
The Change of Control repurchase feature is a result of
negotiations between the Company and the initial purchasers of the Old Notes
(the "Initial Purchasers"). Management has no present intention to engage in
a transaction involving a Change of Control, although it is possible that the
Company would decide to do so in the future. Subject to certain covenants
described below, the Company could, in the future, enter into certain
transactions, including acquisitions, refinances or other recapitalization,
that would not constitute a Change of Control under the Indenture, but that
could increase the amount of debt outstanding at such time or otherwise affect
the Company's capital structure or credit ratings.
The definition of Change of Control includes a phrase relating
to the sale, assignment, lease, conveyance, disposition or transfer of "all or
substantially all" the Company's assets. Although there is a developing body
of case law interpreting the phrase "substantially all," there is no precise
established definition of the phrase under applicable law. Accordingly, the
ability of a holder of Notes to require the Company to repurchase such Notes
as a result of a sale, assignment, lease, conveyance, disposition or transfer
of less than all the assets of the Company may be uncertain.
The occurrence of certain of the events that constitute a
Change of Control under the Indenture would constitute a liquidation event or
a default under the Receivables Credit Agreement and the Letter of Credit
Agreement, respectively. Future Senior Debt of the Company may contain
prohibitions of certain events which would constitute a Change of Control or
require such Senior Debt to be repurchased upon a Change of Control.
Moreover, the exercise by holders of Notes of their right to require the
Company to repurchase such Notes could cause a default under existing or
future Senior Debt of the Company, even if the Change of Control itself does
not, due to the financial effect of such repurchase on the Company. Finally,
the Company's ability to pay cash to holders of Notes upon a repurchase may
be limited by the Company's then existing financial resources. There can be
no assurance that sufficient funds will be available when necessary to make
any required repurchases. The Company's failure to purchase the Notes in
connection with a Change in Control would result in a default under the
Indenture which would, in turn, constitute a default under the existing or
future Senior Debt of the Company. The provisions under the Indenture
relative to the Company's obligation to make an offer to repurchase the Notes
as a result of a Change of Control may be waived or modified (at any time
prior to the occurrence of such Change of Control) with the written consent of
the holders of a majority in principal amount of the Notes.
Certain Covenants
Covenant Termination. The Indenture provides that the
following restrictive covenants will be applicable to the Company and the
Restricted Subsidiaries unless the Company reaches Investment Grade Status.
After the Company has reached Investment Grade Status, and notwithstanding
that the Company may later cease to have an Investment Grade Rating from
either or both of the Rating Agencies, the Company and the Restricted
Subsidiaries will be released from their obligations to comply with the
restrictive covenants described below, except for the covenants described
under "Limitation on Liens," "Limitation on Sale and Leaseback Transactions"
and "Designation of Restricted and Unrestricted Subsidiaries" (other than
clause (x) of the second paragraph (and such clause (x) as referred to in the
first paragraph) thereunder). The Company and LTV Steel will also, upon
reaching Investment Grade Status, remain obligated to comply with the
provisions described under "Merger, Consolidation and Sale of Property" (other
than clauses (e) and (f) of the first and second paragraphs thereunder) and
under "Repurchase at the Option of Holders Upon a Change of Control."
Limitation on Debt and Restricted Subsidiary Preferred Stock.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, Incur any Debt (which includes, in the case of
Restricted Subsidiaries, Preferred Stock) unless, after giving pro forma
effect to the application of the proceeds thereof, no Default or Event of
Default would occur as a consequence of such Incurrence or be continuing
following such Incurrence and either (a) after giving effect to the Incurrence
of such Debt and the application of the proceeds thereof, the Consolidated
Interest Coverage Ratio would be greater than 2.00 to 1.00 or (b) such Debt is
Permitted Debt.
The term "Permitted Debt" is defined to include the following:
(a) Debt of the Company evidenced by the Notes and of LTV Steel
evidenced by the Guaranty;
(b) Debt under the Credit Facilities, provided that the
aggregate principal amount of all such Debt under the Credit Facilities,
together with all Permitted Refinancing Debt Incurred in respect of Debt
previously Incurred pursuant to this clause (b), at any one time outstanding
shall not exceed the greater of (i) $470 million less the sum of the aggregate
amount of all prepayments and required payments of principal applied to reduce
the aggregate amount available to be borrowed under the Credit Facilities or
such Permitted Refinancing Debt, including pursuant to the covenant described
below "Limitation on Asset Sales," and (ii) the sum of the amounts equal to
(x) 60% of the book value of the inventory of the Company and the Restricted
Subsidiaries and (y) 85% of the book value of the accounts receivable of the
Company and the Restricted Subsidiaries, in each case as of the most recently
ended quarter of the Company for which financial statements of the Company
have been provided to the holders of Notes;
(c) Capital Expenditure Debt, provided that (i) the aggregate
principal amount of such Debt does not exceed the Fair Market Value (on the
date of the Incurrence thereof) of the Property acquired, constructed or
leased and (ii) the aggregate principal amount of all Debt Incurred and then
outstanding pursuant to this clause (c), together with all Permitted
Refinancing Debt Incurred and then outstanding in respect of Debt previously
Incurred pursuant to this clause (c), does not exceed $300 million;
(d) Debt of the Company owing to and held by any Wholly Owned
Subsidiary and Debt of a Restricted Subsidiary owing to and held by the
Company or any Wholly Owned Subsidiary; provided, however, that any subsequent
issue or transfer of Capital Stock or other event that results in any such
Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of any such Debt (except to the Company or a Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Debt by the issuer thereof;
(e) Debt of a Restricted Subsidiary Incurred and outstanding on
or prior to the date on which such Restricted Subsidiary was acquired by the
Company or otherwise became a Restricted Subsidiary (other than Debt Incurred
as consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of transactions
pursuant to which such Restricted Subsidiary became a Subsidiary of the
Company or was otherwise acquired by the Company), provided that at the time
such Restricted Subsidiary was acquired by the Company or otherwise became a
Restricted Subsidiary and after giving pro forma effect to the Incurrence of
such Debt, the Company would have been able to Incur $1.00 of additional Debt
pursuant to clause (a) of the immediately preceding paragraph;
(f) Debt under Interest Rate Agreements entered into by the
Company or a Restricted Subsidiary for the purpose of limiting interest rate
risk in the ordinary course of the financial management of the Company or such
Restricted Subsidiary and not for speculative purposes, provided that the
obligations under such agreements are directly related to payment obligations
on Debt otherwise permitted by the terms of this covenant;
(g) Debt under Commodity Price Protection Agreements entered
into by the Company or a Restricted Subsidiary in the ordinary course of the
financial management (including cost control) of the Company or such
Restricted Subsidiary and not for speculative purposes;
(h) Debt in connection with one or more standby letters of
credit or performance bonds issued by the Company or a Restricted Subsidiary
in the ordinary course of business or pursuant to self-insurance obligations
and not in connection with the borrowing of money or the obtaining of advances
or credit;
(i) Debt outstanding on the Issue Date not otherwise described
in clauses (a) through (h) above and any additional Debt Incurred after the
Issue Date representing interest paid in-kind on Debt outstanding pursuant to
this clause (i);
(j) Debt of the Company or any Restricted Subsidiary (other
than Debt permitted by the immediately preceding paragraph or the other
clauses of this paragraph) in an aggregate principal amount outstanding at any
one time not to exceed $100 million; and
(k) Permitted Refinancing Debt Incurred in respect of Debt
Incurred pursuant to clause (a) of the immediately preceding paragraph and
clauses (a), (b), (c), (e) and (i) above, subject, in the case of clauses (b)
and (c) above, to the limitations set forth in the respective provisos thereto.
Limitation on Restricted Payments. The Company shall not make,
and shall not permit any Restricted Subsidiary to make, directly or
indirectly, any Restricted Payment if at the time of, and after giving pro
forma effect to, such proposed Restricted Payment,
(a) a Default or Event of Default shall have occurred and be
continuing,
(b) the Company could not Incur at least $1.00 of additional
Debt pursuant to clause (a) of the first paragraph of the covenant described
under "Limitation on Debt and Restricted Subsidiary Preferred Stock" or
(c) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made since the Issue Date (the amount of
any Restricted Payment, if made other than in cash, to be based upon Fair
Market Value) would exceed an amount equal to the sum of:
(i) 50% of the aggregate amount of Consolidated Net Income accrued
during the period (treated as one accounting period) from and after the
first day of the fiscal quarter following the end of the most recent
fiscal quarter ended immediately prior to the Issue Date to the end of
the most recent fiscal quarter ending at least 45 days prior to the date
of such Restricted Payment (or if the aggregate amount of Consolidated
Net Income for such period shall be a deficit, minus 100% of such
deficit),
(ii) Capital Stock Sale Proceeds, and
(iii) the amount by which Debt (other than Subordinated Obligations
issued or sold prior to the Issue Date) of the Company or LTV Steel is
reduced on the Company's balance sheet upon the conversion or exchange
(other than by a Subsidiary of the Company) subsequent to the Issue Date
of any Debt of the Company or LTV Steel convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company (less the
amount of any cash or other Property distributed by the Company or any
Restricted Subsidiary upon such conversion or exchange).
Notwithstanding the foregoing limitation, the Company may:
(a) pay dividends on its Capital Stock within 60 days of the
declaration thereof if, on said declaration date, such dividends could have
been paid in compliance with the Indenture; provided, however, that at the
time of such payment of such dividend, no other Default or Event of Default
shall have occurred and be continuing (or would result therefrom); provided
further, however, that such dividend shall be included in the calculation of
the amount of Restricted Payments;
(b) purchase, repurchase, redeem, legally defease, acquire or
retire for value Capital Stock of the Company or Subordinated Obligations in
exchange for, or out of the proceeds of the substantially concurrent sale of,
Capital Stock of the Company (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary of the Company or an employee
stock ownership plan or trust established by the Company or any of its
Subsidiaries for the benefit of their employees); provided, however, that (i)
such purchase, repurchase, redemption, legal defeasance, acquisition or
retirement shall be excluded in the calculation of the amount of Restricted
Payments and (ii) the Net Cash Proceeds from such exchange or sale shall be
excluded from the calculation of the amount of Capital Stock Sale Proceeds;
(c) purchase, repurchase, redeem, legally defease, acquire or
retire for value any Subordinated Obligations in exchange for, or out of the
proceeds of the substantially concurrent sale of, Permitted Refinancing Debt;
provided, however, that such purchase, repurchase, redemption, legal
defeasance, acquisition or retirement shall be excluded in the calculation of
the amount of Restricted Payments;
(d) expend up to $43 million to repurchase, prior to the
two-year anniversary of the Issue Date, common stock of the Company pursuant
to the Company's stock repurchase plan approved on January 24, 1997, by the
Board of Directors; provided, however, that at the time of, and after giving
pro forma effect to, any such expenditure, (i) no other Default or Event of
Default shall have occurred and be continuing and (ii) the Company could incur
at least $1.00 of additional Debt pursuant to clause (a) of the first
paragraph of the covenant described under "Limitation on Debt and Restricted
Subsidiary Preferred Stock;" provided further, however, that such repurchase
shall be excluded in the calculation of the amount of Restricted Payments;
(e) expend up to $5 million in any fiscal year of the Company
to repurchase common stock of the Company (i) to distribute to current or
former employees, officers and directors of the Company and its Subsidiaries,
(ii) from such current or former employees, officers or directors or (iii)
otherwise in order to distribute as employee compensation; provided, however,
that the time of, and after giving pro forma effect to, any such expenditure,
no other Default or Event of Default shall have occurred and be continuing;
provided further, however, that such repurchase shall be excluded in the
calculation of the amount of Restricted Payments; and
(f) expend up to $40 million for Restricted Payments in
addition to amounts permitted pursuant to clauses (a) through (e) above;
provided, however, that at the time of, and after giving pro forma effect to,
any such expenditure, no other Default or Event of Default shall have occurred
and be continuing; provided further, however, that such expenditures shall be
excluded in the calculation of the amount of Restricted Payments.
Limitation on Liens. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, Incur or suffer
to exist, any Lien (other than Permitted Liens) upon any of its Property
(including Capital Stock of a Restricted Subsidiary), whether owned at the
Issue Date or thereafter acquired, or any interest therein or any income or
profits therefrom, unless it has made or will make effective provision whereby
the Notes or the Guaranty will be secured by such Lien equally and ratably
with (or prior to) all other Debt of the Company or any Restricted Subsidiary
secured by such Lien.
Limitation on Issuance or Sale of Capital Stock of Restricted
Subsidiaries. The Company shall not (a) sell, pledge, hypothecate or
otherwise dispose of any shares of Capital Stock of a Restricted Subsidiary or
(b) permit any Restricted Subsidiary to, directly or indirectly, issue or sell
or otherwise dispose of any shares of its Capital Stock other than (i)
directors' qualifying shares, (ii) to the Company or a Wholly Owned Subsidiary
or (iii) if, immediately after giving effect to such disposition, such
Restricted Subsidiary would no longer constitute a Restricted Subsidiary;
provided, however, that, in the case of this clause (iii), (x) such
disposition is effected in compliance with the covenant described under
"Limitation on Asset Sales" and (y) if such Restricted Subsidiary is LTV
Steel, then, upon consummation of such disposition and execution and delivery
of a supplemental indenture in form satisfactory to the Trustee, LTV Steel
shall be released from all its obligations under the Guaranty.
Limitation on Asset Sales. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, consummate
any Asset Sale unless (a) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale (or, in the case of a lease that
is an Asset Sale, the Company or such Restricted Subsidiary is to receive over
the term of such lease consideration) at least equal to the Fair Market Value
of the Property subject to such Asset Sale; (b) at least 75% of the
consideration paid to the Company or such Restricted Subsidiary in connection
with such Asset Sale is in the form of cash, cash equivalents, Additional
Assets or the assumption by the purchaser of liabilities of the Company or any
Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Notes or the Guaranty) as a result of which the Company
and the Restricted Subsidiaries, are no longer obligated with respect to such
liabilities; and (c) the Company delivers an Officers' Certificate to the
Trustee certifying that such Asset Sale complies with the foregoing clauses
(a) and (b).
The Net Available Cash (or any portion thereof) from Asset
Sales may be applied by the Company or a Restricted Subsidiary, to the extent
the Company or such Restricted Subsidiary elects (or is required by the terms
of any Debt): (a) to prepay, repay, legally defease or purchase Senior Debt of
the Company or LTV Steel or Debt of any other Restricted Subsidiary
(excluding, in any such case, Debt owed to the Company or an Affiliate of the
Company); or (b) to reinvest in Additional Assets (including by means of an
Investment in Additional Assets by a Restricted Subsidiary with Net Available
Cash received by the Company or another Restricted Subsidiary); provided,
however, that in connection with any prepayment, repayment, legal defeasance
or purchase of Debt pursuant to clause (a) above, the Company, LTV Steel or
such other Restricted Subsidiary shall retire such Debt and shall cause the
related loan commitment (if any) to be permanently reduced by an amount equal
to the principal amount so prepaid, repaid, legally defeased or purchased.
Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within twelve months from the date of
the receipt of such Net Available Cash shall constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $5 million (taking into
account income earned on such Excess Proceeds, if any), the Company will be
required to make an offer to purchase (the "Prepayment Offer") the Notes which
offer shall be in the amount of the Excess Proceeds, on a pro rata basis
according to principal amount, at a purchase price equal to 100% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date) in
accordance with the procedures (including prorating in the event of
oversubscription) set forth in the Indenture. To the extent that any portion
of the amount of Net Available Cash remains after compliance with the
preceding sentence and provided that all holders of Notes have been given the
opportunity to tender their Notes for purchase as described in the following
paragraph, the Company or such Restricted Subsidiary may use such remaining
amount for any purpose permitted by the Indenture and the amount of Excess
Proceeds will be reset to zero.
Within five business days after the Company is obligated to
make a Prepayment Offer as described in the preceding paragraph, the Company
will send a written notice, by first-class mail, to the holders of Notes,
accompanied by such information regarding the Company and its Subsidiaries as
the Company in good faith believes will enable such holders to make an
informed decision with respect to such Prepayment Offer. Such notice will
state, among other things, the purchase price and the purchase date, which
shall be, subject to any contrary requirements of applicable law, a business
day no earlier than 30 days nor later than 60 days from the date such notice
is mailed.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Notes pursuant to the
covenant described hereunder. To the extent that the provisions of any
securities laws or regulations conflict with provisions of the covenant
described hereunder, the Company will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
under the covenant described hereunder by virtue thereof.
Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual restriction on the right of any Restricted Subsidiary to
(a) pay dividends, in cash or otherwise, or make any other distributions on or
in respect of its Capital Stock, or pay any Debt or other obligation owed, to
the Company or any other Restricted Subsidiary, (b) make any loans or advances
to the Company or any other Restricted Subsidiary or (c) transfer any of its
Property to the Company or any other Restricted Subsidiary. The foregoing
limitations will not apply (i) with respect to clauses (a), (b) and (c), to
restrictions (A) in effect on the Issue Date, (B) relating to Debt of a
Restricted Subsidiary and existing at the time it became a Restricted
Subsidiary if such restriction was not created in connection with or in
anticipation of the transaction or series of transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by
the Company, or (C) which result from the Refinancing of Debt Incurred
pursuant to an agreement referred to in the immediately preceding clause
(i)(A) or (B) above or in clause (ii)(A) or (B) below, provided that such
restriction is no less favorable to the holders of Notes than those under the
agreement evidencing the Debt so Refinanced, or (D) on Sales Finance or any
other bankruptcy-remote special-purpose Subsidiary of the Company or any
Restricted Subsidiary that purchases or sells accounts receivable or
inventory pursuant to the Credit Facilities and (ii) with respect to clause
(c) only, to restrictions (A) relating to Debt that is permitted to be
Incurred and secured pursuant to the covenants described under "Limitation
on Debt and Restricted Subsidiary Preferred Stock" and "Limitation on
Liens" that limit the right of the debtor to dispose of the Property
securing such Debt, (B) encumbering Property at the time such Property was
acquired by the Company or any Restricted Subsidiary, so long as such
restriction relates solely to the Property so acquired and was not created
in connection with or in anticipation of such acquisition, (C) resulting
from customary provisions restricting subletting or assignment of leases or
customary provisions in other agreements that restrict assignment of such
agreements or rights thereunder or (D) customary restrictions contained in
asset sale agreements limiting the transfer of such Property pending the
closing of such sale.
Limitation on Transactions with Affiliates. The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, conduct any business or enter into or suffer to exist any
transaction or series of transactions (including the purchase, sale, transfer,
assignment, lease, conveyance or exchange of any Property or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction"), unless (a) the terms of such Affiliate Transaction
are (i) set forth in writing and (ii) no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained
in a comparable arm's-length transaction with a Person that is not an
Affiliate of the Company, (b) if such Affiliate Transaction involves aggregate
payments or value in excess of $10 million, the Board of Directors (including
a majority of the disinterested members of the Board of Directors) approves
such Affiliate Transaction and, in its good faith judgment, believes that such
Affiliate Transaction complies with clause (a) of this paragraph as evidenced
by a Board Resolution promptly delivered to the Trustee and (c) if such
Affiliate Transaction involves aggregate payments or value in excess of $25
million, the Company obtains a written opinion from an Independent Appraiser
to the effect that such Affiliate Transaction is fair, from a financial point
of view, to the Company or such Restricted Subsidiary, as the case may be.
Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may enter into or suffer to exist the following:
(i) any transaction or series of transactions between the Company
and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries, provided that no more than 5% of the total
voting power of the Voting Stock (on a fully diluted basis) of any
such Restricted Subsidiary is owned by an Affiliate of the Company
(other than a Restricted Subsidiary);
(ii) any Restricted Payment permitted to be made pursuant to the
covenant described under "Limitation on Restricted Payment;"
(iii) any issuance of securities, or other payments, awards or grants
in securities or otherwise pursuant to, or the funding of, employment
arrangements, pension plans, stock options and stock ownership plans
approved by the Board of Directors;
(iv) the payment of reasonable fees to directors of the Company or
such Restricted Subsidiary who are not employees of the Company or any
Restricted Subsidiary;
(v) loans and advances to employees made in the ordinary course of
business and consistent with the past practices of the Company or such
Restricted Subsidiary, as the case may be, provided that such loans and
advances do not exceed $5 million in the aggregate at any one time
outstanding;
(vi) any transaction or series of transactions between the
Company or any Restricted Subsidiary and any of their joint ventures,
provided that (x) such transaction or series of transactions is in
the ordinary course of business between the Company or such
Restricted Subsidiary and such joint venture and is consistent with
the past practices of the Company and the Restricted Subsidiaries
with respect to their joint ventures, (y) if such transaction or
series of transactions constitutes an Investment by the Company, such
Restricted Subsidiary or such joint venture, the other equity
investors in such joint venture (A) participate in such Investment on
the same basis as the Company or such Restricted Subsidiary, (B) have
their interests in such joint venture diluted to the extent such
investors elect not to so participate in such Investment or (C)
individually beneficially own 10% or less of the equity interests in
such joint venture and (z) such joint venture is engaged in a Related
Business; and
(vii) any transaction or series of transactions between the Company
or any Restricted Subsidiary and SMI or any of its affiliates
pursuant to the terms of the Sumitomo Securities Purchase Agreement
and any documents relating thereto, as such Agreement and documents
are in effect on the Issue Date.
Limitation on Sale and Leaseback Transactions. The Company
shall not, and shall not permit any Restricted Subsidiary to, enter into any
Sale and Leaseback Transaction with respect to any Property unless (a) the
Company or such Restricted Subsidiary would be entitled to (i) Incur Debt in
an amount equal to the Attributable Debt with respect to such Sale and
Leaseback Transaction pursuant to the covenant described under "Limitation on
Debt and Restricted Subsidiary Preferred Stock" and (ii) create a Lien on such
Property securing such Attributable Debt without securing the Notes pursuant
to the covenant described under "Limitation on Liens" and (b) such Sale and
Leaseback Transaction is effected in compliance with the covenant described
under "Limitation on Asset Sales;" provided, however, that the Company or any
Restricted Subsidiary may at any time enter into a Sale and Leaseback
Transaction if the sum of (x) the aggregate amount of Attributable Debt
outstanding at such time with respect to such Sale and Leaseback Transaction
and all other Sale and Leaseback Transactions entered into by the Company or
any Restricted Subsidiary and (y) the aggregate principal amount (in the case
of Debt sold at a discount, at Stated Maturity) of all Secured Debt
outstanding at such time (other than the USWA Secured Obligations and any
Permitted Refinancing Debt in respect thereof to the extent not exceeding $250
million in the aggregate), does not exceed 10% of Consolidated Net Tangible
Assets as determined based on the consolidated balance sheet of the Company as
of the end of the recent fiscal quarter ending at least 45 days prior thereto.
Designation of Restricted and Unrestricted Subsidiaries. The
Board of Directors may designate any Subsidiary of the Company to be an
Unrestricted Subsidiary if (a) the Subsidiary to be so designated does not own
any Capital Stock or Debt of, or own or hold any Lien on any Property of, the
Company or any other Restricted Subsidiary, (b) the Subsidiary to be so
designated is not obligated under any Debt, Lien or other obligation that, if
in default, would result (with the passage of time or notice or otherwise) in
a default on any Debt of the Company or of any Restricted Subsidiary and (c)
either (i) the Subsidiary to be so designated has total assets of $1,000 or
less or (ii) such designation is effective immediately upon such entity
becoming a Subsidiary of the Company or any Restricted Subsidiary. Unless so
designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary
of the Company or of any Wholly Owned Subsidiary will be classified as a
Restricted Subsidiary, provided that the requirements set forth in clauses (x)
and (y) of the immediately following paragraph would be satisfied after giving
pro forma effect to such classification. Any Person not permitted by the
terms of the immediately preceding sentence to be classified as a Restricted
Subsidiary shall be automatically classified as an Unrestricted Subsidiary.
Except as provided in the first sentence of this paragraph, no Restricted
Subsidiary may be redesignated as an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary if, immediately after giving pro
forma effect to such designation, (x) the Company could Incur at least $1.00
of additional Debt pursuant to clause (a) of the first paragraph of the
covenant described under "Limitation on Debt and Restricted Subsidiary
Preferred Stock" and (y) no Default or Event of Default shall have occurred
and be continuing or would result therefrom.
Any such designation or redesignation by the Board of Directors
will be evidenced to the Trustee by filing with the Trustee a Board Resolution
giving effect to such designation or redesignation and an Officers' Certificate
(a) certifying that such designation or redesignation complies with the
foregoing provisions and (b) giving the effective date of such designation or
redesignation, such filing with the Trustee to occur within 45 days after the
end of the fiscal quarter of the Company in which such designation or
redesignation is made (or, in the case of a designation or redesignation made
during the last fiscal quarter of the Company's fiscal year, within 90 days
after the end of such fiscal year).
Notwithstanding anything to the contrary in the foregoing,
Presque Isle Corporation and L-S Electro-Galvanizing Company, which had $31.3
million and $32.9 million, respectively, of total assets at December 31, 1996
will initially be Unrestricted Subsidiaries.
Merger, Consolidation and Sale of Property
The Company shall not merge, consolidate or amalgamate with or
into any other Person (other than a merger of a Wholly Owned Subsidiary into
the Company) or sell, transfer, assign, lease, convey or otherwise dispose of
all or substantially all its Property in any one transaction or series of
transactions unless: (a) the Company shall be the surviving Person (the
"Surviving Person") or the Surviving Person (if other than the Company) formed
by such merger, consolidation or amalgamation or to which such sale, transfer,
assignment, lease, conveyance or disposition is made shall be a corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia; (b) the Surviving Person (if other
than the Company) expressly assumes, by supplemental indenture in form
satisfactory to the Trustee, executed and delivered to the Trustee by such
Surviving Person, the due and punctual payment of the principal of, and
premium, if any, and interest on, all the Notes, according to their tenor, and
the due and punctual performance and observance of all the covenants and
conditions of the Indenture to be performed by the Company; (c) in the case of
a sale, transfer, assignment, lease, conveyance or other disposition of all
or substantially all the Company's Property, such Property shall have been
transferred as an entirety or virtually as an entirety to one Person; (d)
immediately before and after giving effect to such transaction or series of
transactions on a pro forma basis (and treating, for purposes of this clause
(d) and clauses (e) and (f) below, any Debt which becomes, or is anticipated
to become, an obligation of the Surviving Person or any Restricted Subsidiary
as a result of such transaction or series of transactions as having been
Incurred by the Surviving Person or such Restricted Subsidiary at the time of
such transaction or series of transactions), no Default or Event of Default
shall have occurred and be continuing; (e) immediately after giving effect to
such transaction or series of transactions on a pro forma basis, the Company
or the Surviving Person, as the case may be, would be able to Incur at least
$1.00 of additional Debt under clause (a) of the first paragraph of the
covenant described under "Certain Covenants--Limitation on Debt and Restricted
Subsidiary Preferred Stock;" (f) immediately after giving effect to such
transaction or series of transactions on a pro forma basis, the Surviving
Person shall have a Consolidated Net Worth in an amount which is not less than
the Consolidated Net Worth of the Company immediately prior to such
transaction or series of transactions; and (g) the Company shall deliver, or
cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each stating that such transaction and any supplemental indenture in
respect thereto comply with this covenant and that all conditions precedent
herein provided for relating to such transaction have been satisfied.
The Company shall not permit LTV Steel to merge, consolidate or
amalgamate with or into any other Person (other than a merger of a Wholly
Owned Subsidiary into LTV Steel) or sell, transfer, assign, lease, convey or
otherwise dispose of all or substantially all its Property in any one
transaction or series of transactions unless: (a) the Surviving Person (if
not LTV Steel) formed by such merger, consolidation or amalgamation or to
which such sale, transfer, assignment, lease, conveyance or disposition is
made shall be a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia; (b)
the Surviving Person (if other than LTV Steel) expressly assumes, by
supplemental indenture in form satisfactory to the Trustee, executed and
delivered to the Trustee by such Surviving Person, the due and punctual
performance and observances of all the obligations of LTV Steel under the
Guaranty; (c) in the case of a sale, transfer, assignment, lease, conveyance
or other disposition of all or substantially all the Property of LTV Steel,
such Property shall have been transferred as an entirety or virtually as an
entirety to one Person; (d) immediately before and after giving effect to such
transaction or series of transactions on a pro forma basis (and treating, for
purposes of this clause (d) and clauses (e) and (f) below, any Debt which
becomes, or is anticipated to become, an obligation of the Surviving Person,
the Company or any Restricted Subsidiary as a result of such transaction or
series of transactions as having been incurred by the Surviving Person, the
Company or such Restricted Subsidiary at the time of such transaction or
series of transactions), no Default or Event of Default shall have occurred
and be continuing; (e) immediately after giving effect to such transaction or
series of transactions on a pro forma basis, the Company would be able to
Incur at least $1.00 of additional Debt under clause (a) of the first
paragraph of the covenant described under "Certain Covenants--Limitation on
Debt and Restricted Subsidiary Preferred Stock;" (f) immediately after giving
effect to such transaction or series of transactions on a pro forma basis, the
Company shall have a Consolidated Net Worth in an amount which is not less
than the Consolidated Net Worth of the Company immediately prior to such
transaction or series of transactions; and (g) the Company shall deliver, or
cause to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each stating that such transaction and such supplemental indenture,
if any, in respect thereto comply with this covenant and that all conditions
precedent herein provided for relating to such transaction have been
satisfied. The foregoing provisions (other than clause (d)) shall not apply
to any transactions which constitute an Asset Sale if the Company has complied
with the covenant described under "Certain Covenants--Limitation on Asset
Sales."
The Surviving Person will succeed to, and be substituted for,
and may exercise every right and power of the Company under the Indenture (or
of LTV Steel under the Guaranty, as the case may be), but the predecessor
Company in the case of a sale, transfer, assignment, lease, conveyance or
other disposition, shall not be released from the obligation to pay the
principal of, and premium, if any, and interest on, the Notes.
SEC Reports
Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with, or furnish to, the Commission such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and reports to be so
filed at the times specified for the filing of such information, documents and
reports under such Sections (the "Required Filing Times"); provided, however,
that the Company shall not be so obligated to file such information, documents
and reports with the Commission if the Commission does not permit such
filings. The Company shall also in any event (a) within 15 days of each
Required Filing Date, provide the Trustee and the holders of Notes with copies
of such information, documents and reports and (b) if the Commission does not
permit the filing of such information, documents and reports, promptly upon
written request supply copies of such information, documents and reports to any
prospective holder of Notes.
Events of Default
Events of Default in respect of the Notes include: (a) failure
to make the payment of any interest on the Notes when the same becomes due and
payable, and such failure continues for a period of 30 days; (b) failure to
make the payment of any principal of, or premium, if any, on, any of the Notes
when the same becomes due and payable at its Stated Maturity, upon
acceleration, redemption, optional redemption, required repurchase or
otherwise; (c) failure to comply with the covenant described above under
"Merger, Consolidation and Sale of Property;" (d) failure to comply with any
other covenant or agreement in the Notes or in the Indenture (other than a
failure which is the subject of the foregoing clause (a), (b) or (c)) and such
failure continues for 30 days after written notice is given to the Company as
provided below; (e) a default under any Debt by the Company or any Restricted
Subsidiary which results in acceleration of the maturity of such Debt, or
failure to pay any such Debt at maturity, in an aggregate amount greater than
$20 million (the "cross acceleration provisions"); (f) any judgment or
judgments for the payment of money in an aggregate amount in excess of $20
million shall be rendered against the Company or any Restricted Subsidiary and
shall not be waived, satisfied or discharged for any period of 30 consecutive
days during which a stay of enforcement shall not be in effect (the "judgment
default provisions"); (g) certain events involving bankruptcy, insolvency or
reorganization of the Company or any Significant Subsidiary (the "bankruptcy
provisions"); and (h) the Guaranty ceases to be in full force and effect
(other than in accordance with the terms of the Indenture or the Guaranty) or
LTV Steel denies or disaffirms its obligations under the Guaranty (the
"guaranty provisions"). The Indenture provides that the Trustee may withhold
notice to the holders of the Notes of any Default (except in payment of
principal, premium, if any, or interest) if the Trustee considers it to be in
the best interest of the holders of the Notes to do so.
A Default under clause (d) is not an Event of Default until the
Trustee or the holders of not less than 25% in principal amount of the Notes
then outstanding notify the Company of the Default and the Company does not
cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state
that such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any event which with the giving of notice and the lapse of time would
become an Event of Default, its status and what action the Company is taking
or proposes to take with respect thereto.
The Indenture provides that if an Event of Default with respect
to the Notes (other than an Event of Default resulting from certain events
involving bankruptcy, insolvency or reorganization with respect to the Company
or any Significant Subsidiary) shall have occurred and be continuing, the
Trustee or the registered holders of not less than 25% in aggregate principal
amount of the Notes then outstanding may declare to be immediately due and
payable the principal amount of all the Notes then outstanding, plus accrued
but unpaid interest to the date of acceleration. In case an Event of Default
resulting from certain events of bankruptcy, insolvency or reorganization with
respect to the Company or any Significant Subsidiary shall occur, such amount
with respect to all the Notes shall be due and payable immediately without any
declaration or other act on the part of the Trustee or the holders of the
Notes. The holders of a majority in aggregate principal amount of the
outstanding Notes may, by notice to the Trustee and the Company, rescind any
declaration of acceleration if the rescission would not conflict with any
judgment or decree, and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of the acceleration. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
Subject to the provisions of the Indenture relating to the
duties of the Trustee, in case an Event of Default shall occur and be
continuing, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request or direction of any of the
holders of the Notes, unless such holders shall have offered to the Trustee
reasonable indemnity. Subject to such provisions for the indemnification of
the Trustee, the holders of a majority in aggregate principal amount of the
Notes then outstanding will 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
Notes.
No holder of Notes will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or trustee, or for any remedy thereunder, unless (a) such holder has
previously given to the Trustee written notice of a continuing Event of
Default, (b) the registered holders of at least 25% in aggregate principal
amount of the Notes then outstanding have made written request and offered
reasonable indemnity to the Trustee to institute such proceeding as trustee
and (c) the Trustee shall not have received from the registered holders of a
majority in aggregate principal amount of the Notes then outstanding a
direction inconsistent with such request and shall have failed to institute
such proceeding within 60 days. However, such limitations do not apply to a
suit instituted by a holder of any Note for enforcement of payment of the
principal of, and premium, if any, or interest on, such Note on or after the
respective due dates expressed in such Note.
Amendments and Waivers
Subject to certain exceptions, the Indenture may be amended
with the consent of the registered holders of a majority in aggregate
principal amount of the Notes then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Notes) and any past
default or compliance with any provisions may also be waived (except a default
in the payment of principal, premium or interest and certain covenants and
provisions of the Indenture which cannot be amended without the consent of
each holder of an outstanding Note) with the consent of the registered holders
of at least a majority in aggregate principal amount of the Notes then
outstanding. However, without the consent of each holder of an outstanding
Note, no amendment may, among other things, (a) reduce the amount of Notes
whose holders must consent to an amendment or waiver, (b) reduce the rate of
or extend the time for payment of interest on any Note, (c) reduce the
principal of or extend the Stated Maturity of any Note, (d) make any Note
payable in money other than that stated in the Note, (e) impair the right of
any holder of the Notes to receive payment of principal of and interest on
such holder's Notes on or after the due dates therefor or to institute suit
for the enforcement of any payment on or with respect to such holder's Notes
or the Guaranty, (f) subordinate the Notes to any other obligation of the
Company, (g) release any security interest that may have been granted in favor
of the holders of the Notes, (h) reduce the premium payable upon the
redemption or repurchase of any Note as described under "Optional Redemption"
or "Repurchase at the Option of Holders Upon a Change of Control," (i) at any
time after a Change of Control has occurred, change the time at which the
Change of Control Offer relating thereto must be made or at which the Notes
must be repurchased pursuant to such Change of Control Offer or Prepayment
Offer or (j) make any change in the Guaranty that could adversely affect the
holders of the Notes.
Without the consent of any holder of the Notes, the Company and
the Trustee may amend the Indenture to cure any ambiguity, omission, defect or
inconsistency, to provide for the assumption by a successor corporation of the
obligations of the Company under the Indenture, to provide for uncertificated
Notes in addition to or in place of certificated Notes (provided that the
uncertificated Notes are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code), to add additional Guarantees
with respect to the Notes or to release LTV Steel from the Guaranty as
provided by the terms of the Indenture, to secure the Notes, to add to the
covenants of the Company for the benefit of the holders of the Notes or to
surrender any right or power conferred upon the Company, to make any change
that does not adversely affect the rights of any holder of the Notes or to
comply with any requirement of the Commission in connection with the
qualification of the Indenture under the Trust Indenture Act.
The consent of the holders of the Notes is not necessary under
the Indenture to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the
Company is required to mail to each registered holder of the Notes at such
holder's address appearing in the Security Register a notice briefly
describing such amendment. However, the failure to give such notice to all
holders of the Notes, or any defect therein, will not impair or affect the
validity of the amendment.
Defeasance
The Company at any time may terminate all its obligations under
the Notes and the Indenture ("legal defeasance"), except for certain
obligations, including those respecting the defeasance trust and obligations
to register the transfer or exchange of the Notes, to replace mutilated,
destroyed, lost or stolen Notes and to maintain a registrar and paying agent
in respect of the Notes. The Company at any time may terminate its
obligations under the covenants described under "Repurchase at the Option of
Holders Upon a Change of Control" and "Certain Covenants," the operation of the
cross acceleration provisions, the judgment default provisions, the bankruptcy
provisions with respect to Significant Subsidiaries and the guaranty
provisions described under "Events of Default" above and the limitations
contained in clauses (e) and (f) under the first paragraph, or contained in
the second paragraph, of "Merger, Consolidation and Sale of Property" above
("covenant defeasance"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Notes may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Notes may not be accelerated because of an Event of Default
specified in clause (d) (with respect to the covenants described under
"Certain Covenants"), (e), (f), (g) (with respect only to Significant
Subsidiaries) or (h) under "Events of Default" above or because of the failure
of the Company to comply with clauses (e) and (f) under the first paragraph,
or with the second paragraph, of "Merger, Consolidation and Sale of Property"
above. If the Company exercises its legal or covenant defeasance option, LTV
Steel will be released from all its obligations under the Guaranty.
In order to exercise either defeasance option, the Company
must, among other things, irrevocably deposit in trust (the "defeasance
trust") with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Notes to maturity or redemption, as the case
may be, and must comply with certain other conditions, including delivery to
the Trustee of an Opinion of Counsel to the effect that holders of the Notes
will not recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and defeasance and will be subject to Federal income
tax on the same amounts and in the same manner and at the same times as would
have been the case if such deposit and defeasance had not occurred (and, in
the case of legal defeasance only, such Opinion of Counsel must be based on a
ruling of the Internal Revenue Service or other change in applicable Federal
income tax law).
Book-Entry System
The Old Notes were, and the New Notes will initially be, issued
in the form of one or more Global Securities registered in the name of DTC or
its nominee.
Upon the issuance of a Global Security, DTC or its nominee will
credit the accounts of Persons holding through it with the respective
principal amounts of the New Notes represented by such Global Security
purchased by such Persons in the Offering. Ownership of beneficial interests
in a Global Security will be limited to Persons that have accounts with DTC
("participants") or Persons that may hold interests through participants. Any
Person acquiring an interest in a Global Security through an offshore
transaction in reliance on Regulation S under the Securities Act may hold such
interest through Cedel or Euroclear. Ownership of beneficial interests in a
Global Security will be shown on, and the transfer of that ownership interest
will be effected only through, records maintained by DTC (with respect to
participants' interests) and such participants (with respect to the owners of
beneficial interests in such Global Security other than participants). The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global
Security.
Payment of principal of and interest on Notes represented by a
Global Security will be made in immediately available funds to DTC or its
nominee, as the case may be, as the sole registered owner and the sole holder
of the Notes represented thereby for all purposes under the Indenture. The
Company has been advised by DTC that upon receipt of any payment of principal
of or interest on any Global Security, DTC will immediately credit, on its
book-entry registration and transfer system, the accounts of participants with
payments in amounts proportionate to their respective beneficial interests in
the principal or face amount of such Global Security as shown on the records
of DTC. Payments by participants to owners of beneficial interests in a
Global Security held through such participants will be governed by standing
instructions and customary practices as is now the case with securities held
for customer accounts registered in "street name" and will be the sole
responsibility of such participants.
A Global Security may not be transferred except as a whole by
DTC or a nominee of DTC to a nominee of DTC or to DTC. A Global Security is
exchangeable for certificated Notes only if (a) DTC notifies the Company that
it is unwilling or unable to continue as a depositary for such Global Security
or if at any time DTC ceases to be a clearing agency registered under the
Exchange Act, (b) the Company in its discretion at any time determines not to
have all the Notes represented by such Global Security or (c) there shall have
occurred and be continuing a Default or an Event of Default with respect to
the Notes represented by such Global Security. Any Global Security that is
exchangeable for certificated Notes pursuant to the preceding sentence will be
exchanged for certificated Notes in authorized denominations and registered in
such names as DTC or any successor depositary holding such Global Security may
direct. Subject to the foregoing, a Global Security is not exchangeable,
except for a Global Security of like denomination to be registered in the name
of DTC or any successor depositary or its nominee. In the event that a Global
Security becomes exchangeable for certificated Notes, (a) certificated Notes
will be issued only in fully registered form in denominations of $1,000 or
integral multiples thereof, (b) payment of principal of, and premium, if any,
and interest on, the certificated Notes will be payable, and the transfer of
the certificated Notes will be registerable, at the office or agency of the
Company maintained for such purposes and (c) no service charge will be made
for any registration of transfer or exchange of the certificated Notes,
although the Company may require payment of a sum sufficient to cover any tax
or governmental charge imposed in connection therewith.
So long as DTC or any successor depositary for a Global
Security, or any nominee, is the registered owner of such Global Security, DTC
or such successor depositary or nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by such Global
Security for all purposes under the Indenture and the Notes. Except as set
forth above, owners of beneficial interests in a Global Security will not be
entitled to have the Notes represented by such Global Security registered in
their names, will not receive or be entitled to receive physical delivery of
certificated Notes in definitive form and will not be considered to be the
owners or holders of any Notes under such Global Security. Accordingly, each
Person owning a beneficial interest in a Global Security must rely on the
procedures of DTC or any successor depositary, and, if such Person is not a
participant, on the procedures of the participant through which such Person
owns its interest, to exercise any rights of a holder under the Indenture. The
Company understands that under existing industry practices, in the event that
the Company requests any action of holders or that an owner of a beneficial
interest in a Global Security desires to give or take any action which a holder
is entitled to give or take under the Indenture, DTC or any successor
depositary would authorize the participants holding the relevant beneficial
interest to give or take such action and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instructions of beneficial owners owning
through them.
DTC has advised the Company that DTC is a limited-purpose trust
company organized under the Banking Law of the State of New York, a member of
the Federal Reserve System, a "clearing corporation" within the meaning of the
New York Uniform Commercial Code and a "clearing agency" registered under the
Exchange Act. DTC was created to hold the securities of its participants and
to facilitate the clearance and settlement of securities transactions among
its participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical
movement of securities certificates. DTC's participants include securities
brokers and dealers (which may include the Initial Purchasers), banks, trust
companies, clearing corporations and certain other organizations some of whom
(or their representatives) own DTC. Access to DTC's book-entry system is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in Global Securities among participants of
DTC, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. None of the
Company, the Trustee or the Initial Purchasers will have any responsibility
for the performance by DTC or its participants or indirect participants of
their respective obligations under the rules and procedures governing their
operations.
Governing Law
The Indenture and the Notes are governed by the internal laws
of the State of New York without reference to principles of conflicts of law.
The Trustee
The Chase Manhattan Bank will be the Trustee under the
Indenture and has been appointed by the Company as Registrar and Paying Agent
with regard to the Notes.
The Indenture provides that, except during the continuance of
an Event of Default, the Trustee will perform only such duties as are
specifically set forth in the Indenture. During the existence of an Event of
Default, the Trustee will exercise such of the rights and powers vested in it
under the Indenture and use the same degree of care and skill in its exercise
as a prudent Person would exercise under the circumstances in the conduct of
such Person's own affairs. The Chase Manhattan Bank is a lender and agent
under the credit facility with Trico, the Company's minimill joint venture,
and engages in other general financing and banking services for the Company
and its affiliates.
Certain Definitions
Set forth below is a summary of certain of the defined terms
used in the Indenture. Reference is made to the Indenture for the full
definition of all such terms as well as any other capitalized terms used
herein for which no definition is provided.
"Additional Assets" means (a) any Property (other than cash,
cash equivalents or securities) to be owned by the Company or any Restricted
Subsidiary; or (b) Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary from any Person other than the Company or an
Affiliate of the Company.
"Affiliate" of any specified Person means (a) any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person who
is a director or officer of (i) such specified Person, (ii) any Subsidiary of
such specified Person or (iii) any Person described in clause (a) above. For
the purposes of this definition, "control" when used with respect to any
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. For purposes of the covenants
described under "Certain Covenants--Limitation on Transactions with
Affiliates", "Limitation on Asset Sales" and the definition of the term
"Additional Assets" only, "Affiliate" shall also mean any beneficial owner of
shares representing 5% or more of the total voting power of the Voting Stock
(on a fully diluted basis) of the Company or of rights or warrants to purchase
such Voting Stock (whether or not currently exercisable) and any Person who
would be an Affiliate of any such beneficial owner pursuant to the first
sentence hereof.
"Asset Sale" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction or by
means of a disposition of Capital Stock permitted by clause (iii) of the
covenant described under "Certain Covenants--Limitation on Issuance and Sale
of Capital Stock of Restricted Subsidiaries" (each referred to for the
purposes of this definition as a "disposition"), of (a) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying shares),
(b) all or substantially all the assets of any division or line of business of
the Company or any Restricted Subsidiary or (c) any other assets of the Company
or any Restricted Subsidiary outside of the ordinary course of business of the
Company or such Restricted Subsidiary (other than (i) in the case of clauses
(a), (b) and (c) above, any disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Wholly Owned
Subsidiary, (ii) in the case of clauses (b) and (c) above, (x) any disposition
of accounts receivable or inventory by or to the Company or any Restricted
Subsidiary to or from Sales Finance or any other bankruptcy-remote,
special-purpose Subsidiary of the Company in connection with the Incurrence of
Debt by such Subsidiary under the Credit Facilities or (y) any disposition of
Property having, together with other Property disposed of pursuant to such
clauses during the same fiscal year, an aggregate Fair Market Value of less
than $25 million and (iii) in the case of clause (c) above, any disposition
effected in compliance with the first paragraph of the covenant described
under "Merger, Consolidation and Sale of Property").
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at any date of determination, (a) if such Sale and
Leaseback Transaction is a Capital Lease Obligation, the amount of Debt
represented thereby according to the definition of the term "Capital Lease
Obligation" and (b) in all other instances, the present value (discounted at
the actual rate of interest implicit in such transaction, compounded annually)
of the total obligations of the lessee for rental payments during the
remaining term of the lease included in such Sale and Leaseback Transaction
(including any period for which such lease has been extended).
"Average Life" means, as of any date of determination, with
respect to any Debt or Preferred Stock, the quotient obtained by dividing (a)
the sum of the product of the numbers of years (rounded to the nearest
one-twelfth of one year) from the date of determination to the dates of each
successive scheduled principal payment of such Debt or redemption or similar
payment with respect to such Preferred Stock multiplied by the amount of such
payment by (b) the sum of all such payments.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such
Board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
"Capital Expenditure Debt" means Debt Incurred by any Person to
finance a capital expenditure so long as (a) such capital expenditure is or
should be included as an addition to "Property, Plant and Equipment" in
accordance with GAAP and (b) such Debt is Incurred within 180 days of the date
such capital expenditure is made.
"Capital Lease Obligations" means any obligation under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP; and the amount of Debt represented by such obligation
shall be the capitalized amount of such obligations determined in accordance
with GAAP; and the Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of
a penalty. For purposes of "Certain Covenants--Limitation on Liens," a
Capital Lease Obligation shall be deemed secured by a Lien on the Property
being leased.
"Capital Stock" means, with respect to any Person, any shares
or other equivalents (however designated) of corporate stock, partnership
interests or any other participations, rights, warrants, options or other
interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or exchangeable
into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate Net Cash
Proceeds received by the Company from the issuance or sale (other than to a
Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries for the benefit of their
employees) by the Company of any class of its Capital Stock (other than
Disqualified Stock) after the Issue Date.
"Change of Control" means the occurrence of any of the
following events:
(a) if any "Person" or "group" (as such terms are used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any successor provisions
to either of the foregoing), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, except that a Person will be
deemed to have "beneficial ownership" of all shares that any such Person has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 50% or more of the
total voting power of all classes of the Voting Stock of the Company (for
purposes of this clause (a), such other Person or group shall be deemed to
beneficially own any Voting Stock of a corporation (the "specified
corporation") held by any other corporation (the "parent corporation") so long
as such other Person or group beneficially owns, directly or indirectly, in
the aggregate a majority of the voting power of all classes of the Voting
Stock of such parent corporation); or
(b) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets of
the Company and the Restricted Subsidiaries, considered as a whole (other than
a disposition of such assets as an entirety or virtually as an entirety to a
Wholly Owned Subsidiary) shall have occurred, or the Company merges,
consolidates or amalgamates with or into any other Person or any other Person
merges, consolidates or amalgamates with or into the Company, in any such
event pursuant to a transaction in which the outstanding Voting Stock of the
Company is reclassified into or exchanged for cash, securities or other
Property, other than any such transaction where (i) the outstanding Voting
Stock of the Company is reclassified into or exchanged for Voting Stock of the
surviving corporation and (ii) the holders of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not less
than a majority of the Voting Stock of the surviving corporation immediately
after such transaction and in substantially the same proportion as before the
transaction; or
(c) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors (together
with any new directors whose election or appointment by such Board or whose
nomination for election by the shareholders of the Company was approved by a
vote of 66-2/3% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office; or
(d) the shareholders of the Company shall have approved any
plan of liquidation or dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Trust Agreement" means the Collateral Trust
Agreement dated as of May 15, 1993, as amended through the Issue Date, among
the Company, LTV Steel Company, Inc., the USWA and Bank One Ohio Trust
Company, N.A., as collateral trustee.
"Commodity Price Protection Agreement" means, in respect of a
Person, any forward contract, commodity swap agreement, commodity option
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in commodity prices.
"Consolidated Current Liabilities" means, as of any date of
determination, the aggregate amount of liabilities of the Company and its
consolidated Restricted Subsidiaries which may properly be classified as
current liabilities (including taxes accrued as estimated), after eliminating
(a) all intercompany items between the Company and any Restricted Subsidiary
or between Restricted Subsidiaries and (b) all current maturities of long-term
Debt.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (a) the aggregate amount of EBITDA for the period
of the most recent four consecutive fiscal quarters ending at least 45 days
prior to such determination date to (b) Consolidated Interest Expense for such
four fiscal quarters; provided, however, that (i) if the Company or any
Restricted Subsidiary has Incurred any Debt since the beginning of such period
that remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Interest Coverage Ratio is an Incurrence of Debt,
or both, Consolidated Interest Expense for such period shall be calculated
after giving effect on a pro forma basis to such Debt as if such Debt had been
Incurred on the first day of such period and the discharge of any other Debt
repaid, repurchased, defeased or otherwise discharged with the proceeds of
such new Debt as if such discharge had occurred on the first day of such
period, (ii) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Sale or if the transaction
giving rise to the need to calculate the Consolidated Interest Coverage Ratio
is an Asset Sale, or both, EBITDA for such period shall be reduced by an amount
equal to the EBITDA (if positive) directly attributable to the assets which
are the subject of such Asset Sale for such period, or increased by an amount
equal to the EBITDA (if negative) directly attributable thereto for such
period, in either case as if such Asset Sale had occurred on the first day of
such period and Consolidated Interest Expense for such period shall be reduced
by an amount equal to the Consolidated Interest Expense directly attributable
to any Debt of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its
continuing Restricted Subsidiaries in connection with such Asset Sale for such
period, as if such Asset Sale had occurred on the first day of such period
(or, if the Capital Stock of any Restricted Subsidiary is sold, by an amount
equal to the Consolidated Interest Expense for such period directly
attributable to the Debt of such Restricted Subsidiary to the extent the
Company and its continuing Restricted Subsidiaries are no longer liable for
such Debt after such sale), (iii) if since the beginning of such period the
Company or any Restricted Subsidiary (by merger or otherwise) shall have made
an Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of Property, including any
acquisition of Property occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all
of an operating unit of a business, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Debt) as if such Investment or acquisition
occurred on the first day of such period and (iv) if since the beginning of
such period any Person (that subsequently became a Restricted Subsidiary or
was merged with or into the Company or any Restricted Subsidiary since the
beginning of such period) shall have made any Asset Sale, Investment or
acquisition of Property that would have required an adjustment pursuant to
clause (ii) or (iii) above if made by the Company or a Restricted Subsidiary
during such period, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such Asset
Sale, Investment or acquisition occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of Property, the amount of income or earnings relating thereto and
the amount of Consolidated Interest Expense associated with any Debt incurred
in connection therewith, the pro forma calculations shall be determined in
good faith by a responsible financial or accounting Officer and as further
contemplated by the definition of the term "pro forma." If any Debt bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Debt shall be calculated as if the rate in effect on the date
of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Debt if such
Interest Rate Agreement has a remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries, (a)
interest expense attributable to capital leases, (b) amortization of debt
discount and debt issuance cost, (c) capitalized interest, (d) non-cash
interest expenses, (e) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, (f) net
costs associated with Hedging Obligations (including amortization of fees),
(g) Redeemable Dividends, (h) Preferred Stock dividends in respect of all
Preferred Stock of Restricted Subsidiaries held by Persons other than the
Company or a Wholly Owned Subsidiary, (i) interest incurred in connection with
Investments in discontinued operations, (j) interest accruing on any Debt of
any other Person to the extent such Debt is Guaranteed by the Company or any
Restricted Subsidiary and (k) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Debt Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income
(loss) of the Company and its consolidated Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income (a) any net
income (loss) of any Person (other than the Company) if such Person is not a
Restricted Subsidiary, except that (i) subject to the exclusion contained in
clause (d) below, the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (c) below) and (ii) the
Company's equity in a net loss of any such Person (other than an Unrestricted
Subsidiary) for such period shall be included in determining such Consolidated
Net Income, (b) any net income (loss) of any Person acquired by the Company or
any of its consolidated Subsidiaries in a pooling of interests transaction for
any period prior to the date of such acquisition, (c) any net income (loss) of
any Restricted Subsidiary to the extent that such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions, directly or indirectly, to the Company, except
that (i) subject to the exclusion contained in clause (d) below, the Company's
equity in the net income of any such Restricted Subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate amount
of cash distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another
Restricted Subsidiary, to the limitation contained in this clause) and (ii)
the Company's equity in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net Income, (d) any
gain (but not loss) realized upon the sale or other disposition of any
Property of the Company or any of its consolidated Subsidiaries (including
pursuant to any Sale and Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business, (e) any extraordinary gain or
loss, (f) any unusual or nonrecurring non-cash charge or credit separately
identified on the Company's consolidated income statement for such period,
provided that (i) to the extent any such charge (other than the charge
referred to in clause (i) below) represents an accrual of or reserve for
cash expenditures in any future period, such cash expenditure shall be
included in Consolidated Net Income for such future period or (ii) for
purposes of the covenant described under "Certain Covenants Limitation on
Restricted Payments" only, to the extent any such credit will result in the
receipt of cash payments in any future period, such cash payment shall be
included in Consolidated Net Income for such future period, (g) the
cumulative effect of a change in accounting principles, (h) any non-cash
compensation expense realized for grants of performance shares, stock
options or other stock awards to officers, directors and employees of the
Company or any Restricted Subsidiary and (i) for purposes of the covenant
described under "Certain Covenants Limitation on Restricted Payments" only,
the special charge (in an amount not to exceed $150 million) to be taken
with respect to the proposed shutdown of the Pittsburgh coke facility
announced by the Company in July 1997; provided further, however, that
there shall be added to such Consolidated Net Income any provision for
taxes not payable in cash.
"Consolidated Net Tangible Assets" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries as
the total assets (less accumulated depreciation, depletion and amortization,
allowances for doubtful receivables, adjustments for pension liabilities,
other applicable reserves and other properly deductible items) of the Company
and its Restricted Subsidiaries, after giving effect to purchase accounting
and after deducting therefrom Consolidated Current Liabilities and, to the
extent otherwise included, the amounts of (without duplication): (a) the
excess of cost over fair market value of assets or businesses acquired; (b)
any revaluation or other write-up in book value of assets subsequent to the
last day of the fiscal quarter of the Company immediately preceding the Issue
Date as a result of a change in the method of valuation in accordance with
GAAP; (c) unamortized debt discount and expenses and other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade names,
copyrights, licenses, organization or developmental expenses and other
intangible items; (d) minority interests in consolidated Subsidiaries held by
Persons other than the Company or any Restricted Subsidiary; (e) treasury
stock; (f) cash or securities set aside and held in a sinking or other
analogous fund established for the purpose of redemption or other retirement
of Capital Stock to the extent such obligation is not reflected in
Consolidated Current Liabilities; and (g) Investments in and assets of
Unrestricted Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown
on the consolidated balance sheet of the Company and its Restricted
Subsidiaries as of the end of the most recent fiscal quarter of the Company
ending at least 45 days prior to the taking of any action for the purpose of
which the determination is being made, as (a) the par or stated value of all
outstanding Capital Stock of the Company plus (b) paid-in capital or capital
surplus relating to such Capital Stock plus (c) any retained earnings or
earned surplus less (i) any accumulated deficit, (ii) any amounts attributable
to Disqualified Stock and (iii) any adjustments for pension liabilities.
"Credit Facilities" means the Receivables Credit Agreement and
the Letter of Credit Agreement, in each case together with any extensions,
revisions, refinances or replacements thereof by a lender or syndicate of
lenders (including through the sale of accounts receivable or inventory to
such lender or lenders or to Sales Finance or any other bankruptcy-remote
special-purpose Subsidiary of the Company that purchases such accounts
receivable or inventory).
"Currency Exchange Protection Agreement" means, in respect of a
Person, any foreign exchange contract, currency swap agreement, currency
option or other similar agreement or arrangement designed to protect such
Person against fluctuations in currency exchange rates.
"Debt" means, with respect to any Person on any date of
determination (without duplication), (a) the principal of and premium (if any)
in respect of (i) debt of such Person for money borrowed and (ii) debt
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable; (b) all Capital Lease
Obligations of such Person and all Attributable Debt in respect of Sale and
Leaseback Transactions entered into by such Person; (c) all obligations of
such Person issued or assumed as the deferred purchase price of Property, all
conditional sale obligations of such Person and all obligations of such Person
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business); (d) all obligations of such
Person for the reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction (other than obligations with respect
to letters of credit securing obligations (other than obligations described in
(a) through (c) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to
the extent drawn upon, such drawing is reimbursed no later than the tenth
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit); (e) the amount of all obligations
of such Person with respect to the redemption, repayment or other repurchase
of any Disqualified Stock or, with respect to any Subsidiary of such Person,
any Preferred Stock (but excluding, in each case, any accrued dividends); (f)
all obligations of the type referred to in clauses (a) through (e) of other
Persons and all dividends of other Persons for the payment of which, in either
case, such Person is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise, including by means of any Guarantee; (g) all
obligations of the type referred to in clauses (a) through (f) of other
Persons secured by any Lien on any Property or asset of such Person (whether
or not such obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of such Property or
assets or the amount of the obligation so secured; (h) to the extent not
otherwise included in this definition, Hedging Obligations of such Person; and
(i) to the extent not otherwise included in this definition, any financing of
accounts receivable or inventory of such Person (whether or not treated as a
sale or debt for accounting purposes); provided that such accounts receivable
or inventory shall be deemed to be on the consolidated balance sheet of the
Company for purposes of clause (b)(ii) of the definition of "Permitted Debt".
The amount of Debt of any Person at any date shall be the outstanding balance
at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person,
Redeemable Stock of such Person as to which the maturity, mandatory
redemption, redemption at the option of the holder thereof, conversion or
exchange occurs, or may occur, on or prior to the first anniversary of the
Stated Maturity of the Notes; provided, however, that Redeemable Stock of such
Person that would not otherwise be characterized as Disqualified Stock under
this definition shall not constitute Disqualified Stock if such Redeemable
Stock is convertible or exchangeable into Debt solely at the option of the
issuer thereof.
"EBITDA" means, for any period, an amount equal to, for the
Company and its consolidated Restricted Subsidiaries, (a) the sum of
Consolidated Net Income for such period, plus the following to the extent
reducing Consolidated Net Income for such period: (i) the provision for taxes
for such period based on income or profits or utilized in computing net loss,
(ii) Consolidated Interest Expense, (iii) depreciation and amortization of
fixed and intangible assets and (iv) any other non-cash items (other than any
such non-cash item to the extent that it represents an accrual of or reserve
for cash expenditures in any future period), minus (b) all non-cash items
increasing Consolidated Net Income for such period (other than any such
non-cash item to the extent that it will result in the receipt of cash
payments in any future period). Notwithstanding the foregoing, the provision
for taxes based on the income or profits of, and the depreciation and
amortization of, a Restricted Subsidiary shall be added to Consolidated Net
Income to compute EBITDA only to the extent (and in the same proportion) that
the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders.
"Event of Default" has the meaning set forth under "Events of
Default."
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" means, with respect to any Property, the
price (or, in the case of a lease, the rent) which could be negotiated in an
arm's-length free market transaction, for cash, between a willing seller (or
lessor) and a willing buyer (or lessee), neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will be
determined, except as otherwise provided, (a) if such Property has a Fair
Market Value equal to or less than $25 million, by any Officer of the Company
or (b) if such Property has a Fair Market Value in excess of $25 million, by a
majority of the Board of Directors and evidenced by a Board Resolution, dated
within 30 days of the relevant transaction, delivered to the Trustee.
"GAAP" means United States generally accepted accounting
principles as in effect on the Issue Date, including those set forth (a) in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) in the statements and
pronouncements of the Financial Accounting Standards Board, (c) in such other
statements by such other entity as approved by a significant segment of the
accounting profession and (d) the rules and regulations of the Commission
governing the inclusion of financial statements (including pro forma financial
statements) in periodic reports required to be filed pursuant to Section 13 of
the Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
Commission.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Debt of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
The term "Guarantor" shall mean any Person Guaranteeing any obligation.
"Guaranty" means the Guaranty on the terms set forth in the
Indenture by LTV Steel of the Company's obligations with respect to the Notes.
"Hedging Obligation" of any Person means any obligation of such
Person pursuant to any Interest Rate Agreement, Currency Exchange Protection
Agreement, Commodity Price Protection Agreement or any other similar agreement
or arrangement.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by merger, conversion, exchange or
otherwise), extend, assume, Guarantee or become liable in respect of such Debt
or other obligation or the recording, as required pursuant to GAAP or
otherwise, of any such Debt or obligation on the balance sheet of such Person
(and "Incurrence" and "Incurred" shall have meanings correlative to the
foregoing); provided, however, that a change in GAAP that results in an
obligation of such Person that exists at such time, and is not theretofore
classified as Debt, becoming Debt shall not be deemed an Incurrence of such
Debt; provided further, however, that solely for purposes of determining
compliance with "Certain Covenants--Limitation on Debt and Restricted
Subsidiary Preferred Stock," amortization of debt discount shall not be deemed
to be the Incurrence of Debt, provided that in the case of Debt sold at a
discount, the amount of such Debt Incurred shall at all times be the aggregate
principal amount at Stated Maturity.
"Independent Appraiser" means, an investment banking firm of
national standing or any third party appraiser of national standing, provided
that such firm or appraiser is not an Affiliate of the Company.
"Interest Rate Agreement" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement designed to protect against fluctuations
in interest rates.
"Investment" by any Person means any direct or indirect loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person), advance
or other extension of credit or capital contribution (by means of transfers of
cash or other Property to others or payments for Property or services for the
account or use of others, or otherwise) to, or Incurrence of a Guarantee of
any obligation of, or purchase or acquisition of Capital Stock, bonds, notes,
debentures or other securities or evidence of Debt issued by, any other
Person. In determining the amount of any Investment made by transfer of any
Property other than cash, such Property shall be valued at its Fair Market
Value at the time of such Investment.
"Investment Grade Rating" means a rating equal to or higher
than Baa3 (or the equivalent) by Moody's and BBB- (or the equivalent) by S&P.
"Investment Grade Status" shall be deemed to have been reached
on the date that the Notes have an Investment Grade Rating from both Rating
Agencies.
"Issue Date" means the date on which the Notes are initially
issued.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement (other than any
easement not materially impairing usefulness or marketability), encumbrance,
preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever on or with respect to such Property
(including any Capital Lease Obligation, conditional sale or other title
retention agreement having substantially the same economic effect as any of
the foregoing or any Sale and Leaseback Transaction, but excluding any
operating lease (except Sale and Leaseback Transactions) entered into in the
ordinary course of such Person's business).
"Moody's" means, Moody's Investors Service, Inc. or any
successor to the rating agency business thereof.
"Net Available Cash" from any Asset Sale means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Debt or other obligations relating to the Property that is the subject of such
Asset Sale or received in any other noncash form), in each case net of (a) all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial, foreign and local taxes
required to be accrued as a liability under GAAP, as a consequence of such
Asset Sale, (b) all payments made on any Debt which is secured by any Property
subject to such Asset Sale, in accordance with the terms of any Lien upon or
other security agreement of any kind with respect to such Property, or which
must by its terms, or in order to obtain a necessary consent to such Asset
Sale, or by applicable law, be repaid out of the proceeds from such Asset
Sale, (c) all distributions and other payments required to be made to minority
interest holders in Subsidiaries or joint ventures as a result of such Asset
Sale and (d) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with the GAAP, against any liabilities associated with
the Property disposed in such Asset Sale and retained by the Company or any
Restricted Subsidiary after such Asset Sale.
"Net Cash Proceeds" means, with respect to any issuance or sale
of Capital Stock, the cash proceeds of such issuance or sale, net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Officer" means the President and Chief Executive Officer, the
Chief Financial Officer or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two
Officers of the Company, at least one of whom shall be the principal executive
officer or principal financial officer of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion from legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Liens" means:
(a) Liens to secure Debt permitted to be Incurred under clause
(b) of the second paragraph of the covenant described under "Certain
Covenants--Limitation on Debt and Restricted Subsidiary Preferred Stock,"
provided that any such Lien is limited to the accounts receivable and
inventory (and insurance proceeds and other Property similarly incidental
thereto) of the Company and the Restricted Subsidiaries and any securities
issued by Sales Finance or any other bankruptcy-remote, special purpose
Subsidiary of the Company that purchases such accounts receivable or inventory
in connection with the Incurrence of such Debt;
(b) Liens to secure Debt permitted to be Incurred under clause
(c) of the second paragraph of the covenant described under "Certain
Covenants--Limitation on Debt and Restricted Subsidiary Preferred Stock,"
provided that any such Lien may not extend to any Property of the Company or
any Restricted Subsidiary other than (i) the Property acquired, constructed or
leased with the proceeds of such Debt, (ii) all improvements and accessions to
such Property and (iii) in the case of personal Property, any real Property
underlying such personal Property;
(c) Liens for taxes, assessments or governmental charges or
levies on the Property of the Company or any Restricted Subsidiary if the same
shall not at the time be delinquent or thereafter can be paid without penalty,
or are being contested in good faith and by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision that shall be required in conformity with GAAP shall
have been made therefor;
(d) Liens imposed by law, such as carriers', warehousemen's and
mechanics' Liens on the Property of the Company or any Restricted Subsidiary
arising in the ordinary course of business and securing payment of obligations
which are not more than 60 days past due or are being contested in good faith
and by appropriate proceedings;
(e) Liens on the Property of the Company or any Restricted
Subsidiary Incurred in the ordinary course of business to secure performance
of obligations with respect to statutory or regulatory requirements,
performance or return-of-money bonds, surety bonds or other obligations of a
like nature and Incurred in a manner consistent with industry practice, in
each case which are not incurred in connection with the borrowing of money,
the obtaining of advances or credit or the payment of the deferred purchase
price of Property and which do not in the aggregate impair in any material
respect the use of Property in the operation of the business of the Company
and the Restricted Subsidiaries taken as a whole;
(f) Liens on Property at the time the Company or any Restricted
Subsidiary acquired such Property, including any acquisition by means of a
merger or consolidation with or into the Company or any Restricted Subsidiary;
provided, however, that any such Lien may not extend to any other Property of
the Company or any Restricted Subsidiary; provided further, however, that such
Liens shall not have been Incurred in anticipation or in connection with the
transaction or series of transactions pursuant to which such Property was
acquired by the Company or any Restricted Subsidiary;
(g) Liens on the Property of a Person at the time such Person
becomes a Restricted Subsidiary; provided, however, that any such Lien may not
extend to any other Property of the Company or any other Restricted Subsidiary
which is not a direct Subsidiary of such Person; provided further, however,
that any such Lien was not Incurred in anticipation of or in connection with
the transaction or series of transactions pursuant to which such Person became
a Restricted Subsidiary;
(h) pledges or deposits by the Company or any Restricted
Subsidiary under workmen's compensation laws, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids, tenders,
contracts (other than for the payment of Debt) or leases to which the Company
or any Restricted Subsidiary is party, or deposits to secure public or
statutory obligations of the Company, or deposits for the payment of rent, in
each case Incurred in the ordinary course of business;
(i) utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature generally
existing with respect to properties of a similar character;
(j) Liens existing on the Issue Date not otherwise described in
clauses (a) through (i) above, including the Lien securing the USWA Secured
Obligations, provided that such Lien may be extended from time to time to
Property of the Company or any Restricted Subsidiary not subject thereto on
the Issue Date to the extent any such extension is required by the terms of
the Collateral Trust Agreement as in effect on the Issue Date;
(k) Liens on the Property of the Company or any Restricted
Subsidiary to secure any Refinancing, in whole or in part, of any Debt secured
by Liens referred to in clause (a), (b), (f), (g) or (j) above; provided,
however, that any such Lien shall be limited to all or part of the same
Property that secured the original Lien (together with improvements and
accessions to such Property) and the aggregate principal amount of Debt that
is secured by such Lien shall not be increased to an amount greater than the
sum of (i) the outstanding principal amount, or, if greater, the committed
amount, of the Debt secured by Liens described under clause (a), (b), (f), (g)
or (j) above, as the case may be, at the time the original Lien became a
Permitted Lien under the Indenture and (ii) an amount necessary to pay any
premiums, fees and other expenses incurred by the Company or such Restricted
Subsidiary in connection with such Refinancing; or
(l) Liens securing Debt not otherwise described in clauses (a)
through (k) above, provided that at the time any such Lien is Incurred the sum
of (i) the aggregate principal amount (in the case of Debt sold at a discount,
at Stated Maturity) of all Secured Debt outstanding at such time (other than
the USWA Secured Obligations and any Permitted Refinancing Debt in respect
thereof to the extent not exceeding $250 million in the aggregate) and (ii)
the aggregate amount of Attributable Debt outstanding at such time with
respect to Sale and Leaseback Transactions entered into by the Company or any
Restricted Subsidiary, does not exceed 10% of Consolidated Net Tangible
Assets, as determined based on the consolidated balance sheet of the Company
as of the end of the most recent fiscal quarter ending at least 45 days prior
thereto.
"Permitted Refinancing Debt" means any Debt that Refinances any
other Debt, including any successive Refinances, so long as (a) such Debt is
in an aggregate principal amount (or if Incurred with original issue discount,
an aggregate issue price) not in excess of the sum of (i) the aggregate
principal amount (or if Incurred with original issue discount, the aggregate
accreted value) then outstanding of the Debt being Refinanced and (ii) an
amount necessary to pay any fees and expenses, including premiums and
defeasance costs, related to such Refinancing, (b) the Average Life of such
Debt is equal to or greater than the Average Life of the Debt being
Refinanced, (c) the Stated Maturity of such Debt is no earlier than the
earlier of (i) the Stated Maturity of the Debt being Refinanced and (ii) the
date that is at least one year and one day after the Stated Maturity of the
Notes and (d) the new Debt shall not be senior in right of payment to the Debt
that is being Refinanced; provided, however, that Permitted Refinancing Debt
shall not include (a) Debt of a Subsidiary that Refinances Debt of the Company
or (b) Debt of the Company or a Restricted Subsidiary that Refinances Debt of
an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including
any limited liability or joint-stock company), partnership, joint venture,
association, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the holder thereof to a preference with respect to
the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over
shares of any other class of Capital Stock issued by such Person.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock in, and other securities
of, any other Person. For purposes of any calculation required pursuant to
the Indenture, the value of any Property shall be its Fair Market Value.
"Public Equity Offering" means an underwritten public offering
of common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Rating Agencies" mean Moody's and S&P.
"Redeemable Dividend" means, for any dividend with respect to
Redeemable Stock, the quotient of the dividend divided by the difference
between one and the maximum statutory federal income tax rate (expressed as a
decimal number between 1 and 0) then applicable to the issuer of such
Redeemable Stock.
"Redeemable Stock" means, with respect to any Person, any
Capital Stock that by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or otherwise (a) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (b)
is or may become redeemable or repurchaseable at the option of the holder
thereof, in whole or in part, or (c) is convertible or exchangeable for Debt
or Disqualified Stock.
"Refinance" means, in respect of any Debt, to refinance,
extend, renew, refund, reply, prepay, redeem, defease or retire, or to issue
other Debt, in exchange or replacement for, such Debt. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Restricted Payment" means (a) any dividend or distribution
(whether made in cash, securities or other Property) declared or paid on or
with respect to any shares of Capital Stock of the Company or any Restricted
Subsidiary (including any payment in connection with any merger or
consolidation with or into the Company or any Restricted Subsidiary), except
for any dividend or distribution which is made solely to the Company or a
Restricted Subsidiary (and, if such Restricted Subsidiary is not a Wholly
Owned Subsidiary, to the other shareholders of such Restricted Subsidiary on a
pro rata basis) or any dividend or distribution payable solely in shares of
Capital Stock (other than Redeemable Stock) of the Company; (b) any payment
made by the Company or any Restricted Subsidiary to purchase, redeem,
repurchase, acquire or retire for value any Capital Stock of the Company or
any Affiliate of the Company (other than a Restricted Subsidiary) or (c) any
payment made by the Company or any Restricted Subsidiary to purchase, redeem,
repurchase, defease or otherwise acquire or retire for value, prior to any
scheduled maturity, scheduled sinking fund or mandatory redemption payment,
any Subordinated Obligation (other than the purchase, repurchase, or other
acquisition of any Subordinated Obligation purchased in anticipation of
satisfying a sinking fund obligation, principal installment or final maturity,
in each case due within one year of the date of acquisition).
"Restricted Subsidiary" means (a) any Subsidiary of the Company
after the Issue Date unless such Subsidiary shall have been designated an
Unrestricted Subsidiary as permitted or required pursuant to "Certain
Covenants--Designation of Restricted and Unrestricted Subsidiaries" and (b) an
Unrestricted Subsidiary which is redesignated as a Restricted Subsidiary as
permitted pursuant to "Certain Covenants--Designation of Restricted and
Unrestricted Subsidiaries."
"S&P" means Standard & Poor's Ratings Service or any successor
to the rating agency business thereof.
"Sale and Leaseback Transaction" means any arrangement relating
to Property now owned or hereafter acquired whereby the Company or a
Restricted Subsidiary transfers such Property to another Person and the
Company or a Restricted Subsidiary leases it from such Person, other than any
such arrangement with respect to Property acquired or placed into service by
the Company or any Restricted Subsidiary after the Issue Date to the extent
entered into within 365 days after the date of such acquisition or placement
into service and not constituting a Capital Lease Obligation.
"Secured Debt" means any Debt of the Company or any Restricted
Subsidiary secured by a Lien.
"Senior Debt" of the Company means (a) all obligations
consisting of the principal, premium, if any, and accrued and unpaid interest
in respect of (i) Debt of the Company for borrowed money and (ii) Debt of the
Company evidenced by notes, debentures, bonds or other similar instruments
permitted under the Indenture for the payment of which the Company is
responsible or liable; (b) all Capital Expenditure Debt of the Company; (c)
all obligations of the Company (i) for the reimbursement of any obligor on any
letter of credit, bankers' acceptance or similar credit transaction or (ii)
under Hedging Obligations; and (d) all obligations of other Persons of the
type referred to in clauses (a) and (b) for the payment of which the Company
is responsible or liable as Guarantor; provided, however, that Senior Debt of
the Company shall not include (A) Debt of the Company that is by its terms
subordinate in right of payment to the Notes; (B) any Debt Incurred in
violation of the provisions of the Indenture; (C) accounts payable or any
other obligations of the Company to trade creditors created or assumed by the
Company in the ordinary course of business in connection with the obtaining of
materials or services (including Guarantees thereof or instruments evidencing
such liabilities); (D) any liability for Federal, state, local or other taxes
owed or owing by the Company; (E) any obligation of the Company to any
Subsidiary; or (F) any obligations with respect to any Capital Stock. "Senior
Debt" of LTV Steel has a correlative meaning, provided that clause (E) above
shall be deemed to refer to any obligations of LTV Steel to the Company or any
subsidiary of the Company.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the Commission.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligation" means any Debt of the Company or LTV
Steel (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes or the Guaranty
pursuant to a written agreement to that effect.
"Subsidiary" means, in respect of any specified Person, any
corporation, company, partnership, joint venture, association or other
business entity of which more than 50% of the total voting power of shares of
Capital Stock or other interests (including partnership interests) entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person, (ii) such Person and one or more
Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person.
"Unrestricted Subsidiary" means (a) any Subsidiary of the
Company in existence on the Issue Date that is not a Restricted Subsidiary;
(b) any Subsidiary of an Unrestricted Subsidiary; (c) any Subsidiary of the
Company that is designated after the Issue Date as an Unrestricted Subsidiary
as permitted pursuant to the covenant described under "Certain
Covenants--Designation of Restricted and Unrestricted Subsidiaries" and not
thereafter redesignated as a Restricted Subsidiary as permitted pursuant
thereto; and (d) Presque Isle Corporation and L-S Electro-Galvanizing Company.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"USWA Secured Obligations" means the retiree health benefit,
plan contribution and other obligations of the Company and its Subsidiaries
secured by a Lien granted to the USWA pursuant to the Collateral Trust
Agreement.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means, at any time, a Restricted
Subsidiary all the Voting Stock of which (except directors' qualifying shares)
is at such time owned, directly or indirectly, by the Company and its other
Wholly Owned Subsidiaries.
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Notes. This Prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with sales of New Notes received in exchange for
Old Notes where such Old Notes were acquired as a result of market-making
activities or other trading activities. The Company has agreed that for a
period of 90 days after the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any such broker-dealer for use in
connection with any such resale. In addition, until , 1997
(90 days after the date of this Prospectus), all dealers effecting
transactions in the New Notes may be required to deliver a prospectus.
The Company will not receive any proceeds from any sale of New
Notes by broker-dealers. New Notes received by broker-dealers for their own
account pursuant to the Exchange Offer may be sold from time to time in one or
more transactions in the over-the-counter market, in negotiated transactions,
through the writing of options on the New Notes or a combination of such
methods of resale, at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from
any such broker-dealer and/or the purchasers of any such New Notes. Any
broker-dealer that resells New Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such New Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on
any such resale of New Notes and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging
that it will deliver and by delivering a prospectus, a broker dealer will
not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
For a period of 90 days after the Expiration Date the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such
documents in the Letter of Transmittal.
The Company has agreed in the Registration Agreement to
indemnify each broker-dealer reselling New Notes pursuant to this Prospectus,
and their officers, directors and controlling persons, against certain
liabilities in connection with the offer and sale of the New Notes, including
liabilities under the Securities Act, or to contribute to payments that such
broker-dealers may be required to make in respect thereof.
LEGAL MATTERS
The validity of the New Notes offered hereby will be passed
upon for the Company by Davis Polk & Wardwell.
EXPERTS
The consolidated financial statements of The LTV Corporation
as of December 31, 1996 and 1995 and for each of the three years in the
period ended December 31, 1996 included and incorporated by reference in
this Prospectus and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
included and incorporated herein by reference. Such consolidated financial
statements are included and incorporated herein by reference in reliance
upon such report given upon the authority of such firm as experts in
accounting and auditing.
THE LTV CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Interim Financial Information (unaudited)
Consolidated Statement of Operations for the nine months ended
September 30, 1997 and 1996........................................... F-2
Consolidated Balance Sheet at September 30, 1997........................ F-3
Consolidated Statement of Cash Flows for the nine months ended
September 30, 1997 and 1996........................................... F-4
Notes to Consolidated Financial Statements.............................. F-5
Year-End Financial Information (audited)
Report of Ernst & Young LLP, Independent Auditors....................... F-10
Consolidated Statement of Income for the years ended December 31, 1996,
1995 and 1994......................................................... F-11
Consolidated Statement of Cash Flows for the years ended December 31,
1996, 1995 and 1994................................................... F-12
Consolidated Balance Sheet at December 31, 1996 and 1995................ F-13
Consolidated Statement of Shareholders' Equity for the years ended
December 31, 1996, 1995 and 1995...................................... F-15
Notes to Consolidated Financial Statements.............................. F-16
</TABLE>
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------
1997 1996
-------- --------
<S> <C> <C>
Sales................................................ $3,299.1 $3,117.1
Costs and expenses:
Cost of products sold............................... 2,827.7 2,720.9
Depreciation and amortization....................... 198.1 201.2
Selling, general and administrative................. 119.6 106.4
Results of affiliates operations.................... 26.3 --
Net interest and other income....................... (26.4) (27.9)
Special charge...................................... 150.0 --
-------- --------
Total............................................. 3,295.3 3,000.6
-------- --------
Income before income taxes........................... 3.8 116.5
Income tax provision
Taxes payable....................................... 0.6 0.2
Taxes not payable in cash........................... 0.9 41.6
-------- --------
Total............................................. 1.5 41.8
-------- --------
Income before extraordinary loss..................... 2.3 74.7
Extraordinary loss on early extinguishment of debt
(net of income taxes of $2.6)...................... (3.8) --
-------- --------
Net income (loss).................................... $ (1.5) $ 74.7
======== ========
Earnings (loss) per share:
Primary............................................. $ 0.01 $ 0.69
Extraordinary loss.................................. (0.04) --
-------- --------
Total............................................. $ (0.03) $ 0.69
======== ========
Fully diluted....................................... 0.01 0.69
Extraordinary loss.................................. (0.04) --
-------- --------
Total............................................. $ (0.03) $ 0.69
======== ========
Cash dividends paid per common share................. $ 0.09 $ 0.06
======== ========
</TABLE>
- ---------------
See notes to consolidated financial statements.
THE LTV CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
September 30,
1997
-------------
ASSETS
<S> <C>
Current assets
Cash and cash equivalents................................ $ 256.9
Marketable securities.................................... 401.0
--------
Total cash and marketable securities................. 657.9
Receivables, less allowance for doubtful accounts........ 497.1
Inventories:
Products............................................... 613.1
Materials, purchased parts and supplies................ 248.4
--------
Total inventories.................................... 861.5
Prepaid expenses, deposits and other..................... 21.0
--------
Total current assets................................. 2,037.5
--------
Investments in affiliates................................. 310.0
Other noncurrent assets................................... 257.2
Property, plant and equipment............................. 4,107.4
Allowance for depreciation............................... (940.2)
--------
Total property, plant and equipment.................. 3,167.2
--------
$5,771.9
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable......................................... $ 346.7
Accrued employee compensation and benefits............... 376.8
Other accrued liabilities................................ 327.8
--------
Total current liabilities............................ 1,051.3
--------
Noncurrent liabilities
Long-term debt........................................... 354.2
Postemployment health care and other insurance benefits.. 1,564.0
Pension benefits......................................... 608.4
Other.................................................... 531.6
--------
Total noncurrent liabilities......................... 3,058.2
--------
Shareholders' equity
Convertible preferred stock (par value $1.00 per share).. 0.5
Common stock (par value $0.50 per share)................. 52.8
Additional paid-in capital............................... 1,019.5
Retained earnings........................................ 634.1
Treasury stock (2,618,700 shares at cost)................ (34.7)
Minimum pension liability adjustment and other........... (9.8)
--------
Total shareholders' equity........................... 1,662.4
--------
$5,771.9
========
</TABLE>
- ---------------
See notes to consolidated financial statements.
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------
1997 1996
--------- --------
<S> <C> <C>
Operating activities
Net income (loss).................................... $ (1.5) $ 74.7
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Extraordinary loss................................. 3.8 --
Special charge..................................... 150.0 --
Depreciation and amortization...................... 198.1 201.2
Income tax provision not payable in cash........... 0.9 41.6
Defined benefit pension expense.................... 21.3 51.3
Postemployment benefit payments less (more)
than related expense............................. (22.0) (0.3)
VEBA Trust contributions........................... (10.0) (11.3)
Changes in assets, liabilities and other........... (82.6) (29.1)
-------- --------
Net cash provided by operating activities........ 258.0 328.1
-------- --------
Investing activities
Capital expenditures................................. (215.4) (139.1)
VP Buildings acquisition............................. (187.5) --
Investment in affiliates............................. (69.5) (69.1)
Net sales (purchases) of marketable
securities.......................................... 165.4 (76.2)
Other................................................ 14.6 (1.8)
-------- --------
Net cash used in investing activities.............. (292.4) (286.2)
-------- --------
Financing activities
Proceeds from debt offering.......................... 289.8 --
Pension funding to restored plans.................... (60.2) (144.2)
Preferred dividends paid............................. (1.7) (1.7)
Common dividends paid................................ (9.3) (6.3)
Share repurchases.................................... (34.7) --
-------- -------
Net cash provided by (used in) financing
activities....................................... 183.9 (152.2)
-------- --------
Net increase (decrease) in cash and cash
equivalents......................................... 149.5 (110.3)
Cash and cash equivalents at beginning of period...... 107.4 265.9
-------- --------
Cash and cash equivalents at end of period............ $ 256.9 $ 155.6
======== ========
Supplemental cash flow information is presented
as follows:
Interest payments.................................... $ 6.1 $ 8.4
Income tax payments.................................. 5.5 1.9
Capitalized interest................................. 11.9 7.2
Purchases of marketable securities................... 5,591.2 3,279.4
Sales and maturities of marketable securities........ 5,756.6 3,205.9
</TABLE>
- ---------------
See notes to consolidated financial statements.
THE LTV CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
(Unauditied)
NOTE (1)--The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and disclosures required by
generally accepted accounting principles for complete financial statements.
All adjustments that are, in the opinion of management, necessary for a
fair presentation have been made and are of a recurring nature unless
otherwise disclosed herein. Certain prior period amounts have been
reclassified to conform with the current period presentation. The results
of operations for the interim periods are not necessarily indicative of
results of operations for a full year. For further information, refer to
the consolidated financial statements and the notes thereto for the year
ended December 31, 1996 included in the LTV Annual Report to Shareholders
incorporated by reference into the 1996 Annual Report on Form 10-K filed
with the Securities and Exchange Commission.
NOTE (2)--In February 1997, the Financial Accounting Standards
Board ("FASB") issued Statement No. 128, "Earnings per Share," which requires
changes to the method currently used to compute earnings per share and becomes
effective at December 31, 1997. The impact of Statement No. 128 on the
calculation of primary and fully diluted earnings per share is not expected to
be material.
NOTE (3)--On July 2, 1997, the Company, through its new
wholly-owned subsidiary VP Buildings, Inc., purchased substantially all of the
assets and certain liabilities of Varco-Pruden Building Products Division of
United Dominion Industries, Inc. for cash of approximately $187.5 million,
subject to final closing adjustments and expenses. Varco-Pruden engineers and
manufactures pre-engineered, non-residential, low-rise steel building systems
for manufacturing, warehousing, school and commercial applications. This
transaction will be accounted for under the purchase method of accounting and,
accordingly, the results of operations of the acquired company are included
in the consolidated financial statements from the date of acquisition.
The following unaudited pro forma financial information for the
Company gives effect to the VP Buildings acquisition as if it had occurred on
January 1, 1997, with comparable pro forma information for 1996. These pro
forma results have been prepared for comparative purposes only and are not
necessarily representative of the results of operations that would have
resulted if the acquisition occurred at the beginning of the year or that may
result in the future. The pro forma results for the Company are as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------------
1997 1996
-------- ---------
<S> <C> <C>
Net Sales.................................. $3,443.6 $3,445.0
Income before extraordinary loss........... 5.5 87.7
Net income................................. 1.7 84.7
Earnings per share
Primary................................... $0.00 $0.78
Fully diluted............................. $0.00 $0.78
</TABLE>
NOTE (4)--In July 1997, LTV announced its intention to close
permanently its Pittsburgh coke and byproduct plant by the end of 1997.
Closure of the plant, which has been in operation for over a century and
has reached the end of its useful life, resulted in a special charge in the
third quarter of 1997 of $150 million for employee costs, demolition,
environmental matters and facilities write-down. Approximately two-thirds
is payable in cash over a period of several years. The Company has engaged
a consultant to study the environmental clean-up of the facility.
In August 1997, the United Steelworkers of America ("USWA")
filed a grievance contesting the intended plant closing. The arbitration
proceedings began October 13, 1997, and the arbitrator's decision is expected
sometime after November 1997.
NOTE (5)--In September 1997, LTV issued $298.2 million Senior
Notes ($300 million face amount) due September 2007 at 8.20% interest payable
semiannually and guaranteed by LTV's wholly-owned subsidiary, LTV Steel
Company, Inc. The unamortized original issue discount results in an effective
interest rate of 8.25%. Proceeds of the offering were used to finance the
acquisition of VP Buildings and to redeem $100 million principal amount of
Senior Secured Convertible Notes due June 2003. At September 30, 1997, the
$100 million Senior Secured Convertible Notes were reclassified as current
other accrued liabilities and were redeemed, pursuant to a binding contract,
in October 1997. The premium associated with the early redemption resulted in
an extraordinary loss of $3.8 million net of tax.
NOTE (6)--LTV's wholly-owned subsidiary, LTV Steel Company,
Inc., has fully and unconditionally guaranteed the Company's obligation to pay
principal, premium, if any, and interest with respect to the Senior Notes due
September 2007.
The following supplemental consolidating condensed financial
statements of The LTV Corporation present the balance sheets as of
September 30, 1997 and December 31, 1996 and statements of operations and
cash flows for the nine months ended September 30, 1997 and 1996. The LTV
Corporation (Parent), LTV Steel Company, Inc. (Guarantor) and the combined
Non-Guarantor Subsidiaries' investments in subsidiaries are accounted for
using the equity method. Necessary elimination entries have been made to
consolidate the Parent and all of its subsidiaries.
CONSOLIDATING CONDENSED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
September 30, 1997
---------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- ---------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and
marketable securities............... $ 617.2 $ (29.6) $ 70.3 $ -- $ 657.9
Receivables.......................... 3.5 (15.2) 508.8 -- 497.1
Inventories:
Finished goods...................... -- 570.4 42.7 -- 613.1
Raw materials and supplies.......... -- 215.0 33.4 -- 248.4
Other current assets................. 4.3 12.3 4.4 -- 21.0
-------- -------- --------- --------- --------
Total current assets................ 625.0 752.9 659.6 -- 2,037.5
Intercompany, net.................... 111.9 446.9 (558.8) -- --
Investments in affilates and other
noncurrent assets................... 1,385.9 249.9 431.8 (1,500.4) 567.2
Property, plant and equipment, net... -- 2,947.3 219.9 -- 3,167.2
-------- -------- --------- --------- --------
Total assets........................ $2,122.8 $4,397.0 $ 752.5 $(1,500.4) $5,771.9
======== ======== ========= ========= ========
Total current liabilities............ $135.5 $773.6 $ 142.2 $ -- $1,051.3
Long-term debt....................... 298.2 56.0 -- -- 354.2
Postemployment health care and
other insurance benefits............ -- 1,392.3 171.7 -- 1,564.0
Pension benefits..................... -- 576.7 31.7 -- 608.4
Other................................ 26.7 479.5 25.4 -- 531.6
Shareholders' equity................. 1,662.4 1,118.9 381.5 (1,500.4) 1,662.4
-------- -------- --------- --------- --------
Total liabilities and shareholders'
equity............................. $2,122.8 $4,397.0 $ 752.5 $(1,500.4) $5,771.9
======== ======== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
-------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and
marketable securities............... $ 628.6 $ (15.1) $ 60.3 $ -- $ 673.8
Receivables.......................... 5.1 (16.0) 411.2 -- 400.3
Inventories:
Finished goods...................... -- 531.3 39.3 -- 570.6
Raw materials and supplies.......... -- 207.9 23.8 -- 231.7
Other current assets................. 3.1 7.2 1.6 -- 11.9
-------- -------- --------- --------- --------
Total current assets................ 636.8 715.3 536.2 -- 1,888.3
Intercompany, net.................... 15.1 475.5 (490.6) -- --
Investments in affiliates and other
noncurrent assets................... 1,200.3 359.0 281.3 (1,435.2) 405.4
Property, plant and equipment, net... -- 2,933.9 182.9 -- 3,116.8
-------- -------- --------- --------- --------
Total assets........................ $1,852.2 $4,483.7 $ 509.8 $(1,435.2) $5,410.5
======== ======== ========= ========= ========
Total current liabilities............ $ 24.4 $ 759.1 $ 115.5 $ -- $ 899.0
Long-term debt....................... 100.0 52.6 -- -- 152.6
Postemployment health care and
other insurance benefits............ -- 1,430.5 165.5 -- 1,596.0
Pension benefits..................... -- 621.3 26.6 -- 647.9
Other................................ 17.1 362.2 25.0 -- 404.3
Shareholders' equity................. 1,710.7 1,258.0 177.2 (1,435.2) 1,710.7
-------- -------- --------- --------- --------
Total liabilities and shareholders'
equity............................ $1,852.2 $4,483.7 $ 509.8 $(1,435.2) $5,410.5
======== ======== ========= ========= ========
</TABLE>
CONSOLIDATING CONDENSED STATEMENTS OF OPERATIONS
(in millions)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1997
-------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............................... $ -- $2,990.1 $ 834.1 $ (525.1) $3,299.1
Costs and expenses:
Cost of products sold.................. -- 2,603.3 749.5 (525.1) 2,827.7
Depreciation and amortization.......... -- 182.5 15.6 -- 198.1
Selling, general and administrative.... 8.7 91.5 19.4 -- 119.6
Results of affiliates operations....... 13.9 (19.6) 26.3 5.7 26.3
Net interest and other.. (26.4) 5.1 (5.1) -- (26.4)
Special charge......................... -- 150.0 -- -- 150.0
-------- -------- --------- --------- --------
Total................................ (3.8) 3,012.8 805.7 (519.4) 3,295.3
-------- -------- --------- --------- --------
Income (loss) before income taxes....... 3.8 (22.7) 28.4 (5.7) 3.8
Income tax provision (credit)........... 1.5 (8.9) 11.1 (2.2) 1.5
-------- -------- --------- --------- --------
Income (loss) before extraordinary loss. 2.3 (13.8) 17.3 (3.5) 2.3
Extraordinary loss...................... (3.8) -- -- -- (3.8)
-------- -------- --------- --------- --------
Net income (loss)...................... $ (1.5) $ (13.8) $ 17.3 $ (3.5) $ (1.5)
======== ======== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
-----------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............................ $ -- $2,922.0 $ 715.2 $ (520.1) $3,117.1
Costs and expenses:
Cost of products sold............... -- 2,571.9 669.1 (520.1) 2,720.9
Depreciation and amortization....... -- 189.0 12.2 -- 201.2
Selling, general and administrative. 8.3 86.2 11.9 -- 106.4
Results of affiliates operations.... (96.7) (1.3) -- 98.0 --
Net interest and other.............. (28.1) 5.0 (4.8) -- (27.9)
-------- -------- --------- --------- --------
Total............................. (116.5) 2,850.8 688.4 (422.1) 3,000.6
-------- -------- --------- --------- --------
Income before income taxes........... 116.5 71.2 26.8 (98.0) 116.5
Income tax provision................. 41.8 25.6 9.6 (35.2) 41.8
-------- -------- --------- --------- --------
Net income.......................... $ 74.7 $ 45.6 $ 17.2 $ (62.8) $ 74.7
======== ======== ========= ========= ========
</TABLE>
CONSOLIDATING CONDENSED CASH FLOWS STATEMENTS
(in millions)
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1997
-----------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash provided by (used in) operating
activities......................... $ (61.6) $ 257.2 $ 62.4 $ -- $ 258.0
-------- -------- --------- --------- --------
Investing activities:
Capital expenditures................ -- (213.9) (1.5) -- (215.4)
Investment in VP Buildings.......... (187.5) -- -- -- (187.5)
Investment in affiliates............ -- -- (69.5) -- (69.5)
Net sales of marketable securities.. 165.4 -- -- -- 165.4
Other............................... (6.3) 0.3 20.6 -- 14.6
-------- -------- --------- --------- --------
Net cash used in investing
activities....................... (28.4) (213.6) (50.4) -- (292.4)
-------- -------- --------- --------- --------
Financing activities:
Proceeds from offering.............. 289.8 -- -- -- 289.8
Pension funding to restored plans... -- (58.1) (2.1) -- (60.2)
Dividends paid:
Preferred......................... (1.7) -- -- -- (1.7)
Common............................ (9.3) -- -- -- (9.3)
Shares repurchased.................. (34.7) -- -- -- (34.7)
-------- -------- --------- --------- --------
Net cash provided by (used in)
financing activities............ 244.1 (58.1) (2.1) -- 183.9
-------- -------- --------- --------- --------
Net increase (decrease) in cash and
cash equivalents.................... 154.1 (14.5) 9.9 -- 149.5
Cash and cash equivalents at
beginning of period................ 62.1 (15.1) 60.4 -- 107.4
-------- -------- --------- --------- --------
Cash and cash equivalents at end of
period............................. $ 216.2 $ (29.6) $ 70.3 $ -- $ 256.9
======== ======== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
---------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash provided by (used in) operating
activities......................... $ (69.2) $ 339.9 $ 57.4 $ -- $ 328.1
-------- -------- --------- --------- --------
Investing activities:
Capital expenditures................ -- (138.4) (0.7) -- (139.1)
Investment in affiliates............ -- -- (69.1) -- (69.1)
Net sales (purchases) of
marketable securities............. (76.2) -- -- -- (76.2)
Other............................... 3.3 4.5 (9.6) -- (1.8)
-------- -------- --------- --------- --------
Net cash used in investing
activities........................... (72.9) (133.9) (79.4) -- (286.2)
-------- -------- --------- --------- --------
Financing activities:
Pension funding to restored plans... -- (140.8) (3.4) -- (144.2)
Dividends paid...................... (8.0) -- -- -- (8.0)
-------- -------- --------- --------- --------
Net cash used in financing
activities........................... (8.0) (140.8) (3.4) -- (152.2)
-------- -------- --------- --------- --------
Net increase (decrease) in cash and
cash equivalents.................... (150.1) 65.2 (25.4) -- (110.3)
Cash and cash equivalents at
beginning of period................ 276.8 (89.9) 79.0 -- 265.9
-------- -------- --------- --------- --------
Cash and cash equivalents at end of
period............................. $ 126.7 $ (24.7) $ 53.6 $ -- $ 155.6
======== ======== ========= ========= ========
</TABLE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
The LTV Corporation
We have audited the accompanying consolidated balance sheet of The LTV
Corporation (the "Company") as of December 31, 1996 and 1995, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of The LTV Corporation at December 31, 1996 and 1995, and the consolidated
results of its operations and its cash flows for each of the three years in
the period ended December 31, 1996, in conformity with generally accepted
accounting principles.
Cleveland, Ohio Ernst & Young LLP
January 23, 1997
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in millions, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------
1996 1995 1994
---------- -------- --------
<S> <C> <C> <C>
Sales......................................................... $4,134.5 $4,283.2 $4,233.3
Costs and expenses:
Cost of products sold........................................ 3,587.7 3,620.9 3,668.6
Depreciation and amortization................................ 265.7 251.9 241.8
Selling, general and administrative.......................... 150.8 142.2 133.2
Net interest and other income................................ (42.4) (42.6) (13.0)
-------- -------- --------
Total...................................................... 3,961.8 3,972.4 4,030.6
-------- -------- --------
Income from continuing operations before income taxes......... 172.7 310.8 202.7
Income tax provision:
Taxes payable (refundable)................................... 0.3 2.0 (1.5)
Taxes not payable in cash.................................... 63.2 115.3 74.7
-------- -------- --------
Total...................................................... 63.5 117.3 73.2
-------- -------- --------
Income from continuing operations............................. 109.2 193.5 129.5
Discontinued operations....................................... -- (8.7) (2.4)
-------- -------- --------
Net income.................................................... $ 109.2 $ 184.8 $ 127.1
======== ======== ========
Earnings per share
Primary:
Continuing operations...................................... $ 1.01 $ 1.79 $ 1.31
Discontinued operations.................................... -- (0.08) (0.02)
-------- -------- --------
Net income............................................... $ 1.01 $ 1.71 $ 1.29
======== ======== ========
Fully diluted:
Continuing operations...................................... $ 1.01 $ 1.76 $ 1.29
Discontinued operations.................................... -- (0.08) (0.02)
-------- -------- --------
Net income............................................... $ 1.01 $ 1.68 $ 1.27
======== ======== ========
Dividends paid per common share............................... $ 0.09 $ -- $ --
======== ======== ========
</TABLE>
- ---------------
See notes to consolidated financial statements.
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Operating activities
Income from continuing operations....................................... $ 109.2 $ 193.5 $ 129.5
Adjustments to reconcile income to net cash
provided by operating activities:
Special credits....................................................... -- -- 171.0
Depreciation and amortization......................................... 265.7 251.9 241.8
Income tax provision not payable in cash.............................. 63.2 115.3 74.7
Defined benefit pension expense....................................... 64.3 124.0 119.8
Postemployment benefit payments less (more) than related expense...... 5.8 (7.6) 18.5
VEBA Trust contributions.............................................. (11.3) (19.1) --
Changes in assets and liabilities..................................... 10.8 104.0 (31.0)
Other................................................................. (13.2) (5.8) (8.2)
-------- -------- --------
Net cash provided by operating activities........................... 494.5 756.2 716.1
-------- -------- --------
Investing activities
Capital expenditures.................................................... (242.9) (204.8) (234.0)
Investment in steel-related businesses.................................. (78.5) (89.2) (0.9)
Net purchases of marketable securities.................................. (109.2) (99.7) (357.5)
Proceeds from dispositions of discontinued operations, businesses and
properties............................................................ 11.2 94.4 184.2
Other................................................................... (17.2) (9.5) (13.6)
-------- -------- --------
Net cash used in investing activities............................... (436.6) (308.8) (421.8)
-------- -------- --------
Financing activities
Issuance of common stock................................................ -- -- 257.2
Pension funding to restored plans....................................... (204.7) (472.6) (642.2)
Receipt of escrowed funds............................................... -- -- 25.8
Payments on long-term debt.............................................. -- (41.1) (2.5)
Dividends paid - common................................................. (9.5) -- --
- preferred.............................................. (2.2) (2.2) (2.3)
Other................................................................... -- (1.0) (1.2)
-------- -------- --------
Net cash used in financing activities............................... (216.4) (516.9) (365.2)
-------- -------- --------
Net decrease in cash and cash equivalents................................ (158.5) (69.5) (70.9)
Cash and cash equivalents at beginning of year........................... 265.9 335.4 406.3
-------- -------- --------
Cash and cash equivalents at end of year................................. $ 107.4 $ 265.9 $ 335.4
======== ======== ========
</TABLE>
- ---------------
See notes to consolidated financial statements.
THE LTV CORPORATION
CONSOLIDATED BALANCE SHEET
(in millions, except per share data)
<TABLE>
<CAPTION>
December 31,
-----------------------
1996 1995
-------- --------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents............................................................... $ 107.4 $ 265.9
Marketable securities................................................................... 566.4 457.2
-------- --------
673.8 723.1
Receivables, less allowance for doubtful accounts of $17.7 in 1996 and $17.1 in
1995.................................................................................. 400.3 396.1
Inventories:
Products.............................................................................. 570.6 512.6
Materials, purchased parts and supplies............................................... 231.7 229.9
-------- --------
Total inventories................................................................... 802.3 742.5
Prepaid expenses, deposits and other.................................................... 11.9 8.7
-------- --------
Total current assets................................................................ 1,888.3 1,870.4
-------- --------
Investments in affiliates................................................................ 256.3 167.8
Other noncurrent assets.................................................................. 149.1 201.7
Property, plant and equipment
Land and land improvements.............................................................. 68.7 69.5
Buildings............................................................................... 147.7 144.9
Machinery and equipment................................................................. 3,443.5 3,322.2
Construction in progress................................................................ 211.4 121.6
-------- --------
3,871.3 3,658.2
Less allowance for depreciation......................................................... (754.5) (518.0)
-------- --------
Total property, plant and equipment................................................. 3,116.8 3,140.2
-------- --------
$5,410.5 $5,380.1
======== ========
</TABLE>
- ---------------
See notes to consolidated financial statements.
<TABLE>
<CAPTION>
December 31,
-----------------------
1996 1995
-------- --------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable...................................................................... $ 351.1 $ 255.0
Accrued employee compensation and benefits............................................ 372.9 408.4
Other accrued liabilities............................................................. 175.0 183.3
-------- --------
Total current liabilities........................................................... 899.0 846.7
-------- --------
Noncurrent liabilities
Long-term debt........................................................................ 152.6 150.4
Postemployment health care and other insurance benefits............................... 1,596.0 1,598.4
Pension benefits...................................................................... 647.9 988.7
Other................................................................................. 404.3 420.7
-------- --------
Total noncurrent liabilities........................................................ 2,800.8 3,158.2
-------- --------
Shareholders' equity
Convertible preferred stock - par value $1.00 per share............................... 0.5 0.5
Common stock - par value $0.50 per share; authorized 150.0 shares; issued and
outstanding 105.5 shares in 1996 and 1995........................................... 52.8 52.8
Additional paid-in capital............................................................ 1,021.1 958.0
Retained earnings..................................................................... 646.7 549.3
Minimum pension liability adjustment.................................................. (8.9) (184.8)
Other................................................................................. (1.5) (0.6)
-------- --------
Total shareholders' equity.......................................................... 1,710.7 1,375.2
-------- --------
$5,410.5 $5,380.1
======== ========
</TABLE>
THE LTV CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in millions)
<TABLE>
<CAPTION>
Common Minimum Restricted
Convertible Stock Additional Pension Stock and Total
Preferred Held for Common Paid-In Retained Liability Marketable Shareholders'
Stock Issuance Stock Capital Earnings Adjustment Securities Equity
----------- -------- ------ ---------- -------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 1, 1994...... $ 1.0 $ 54.3 $ 41.9 $ 561.3 $ 246.1 $(364.8) $ 539.8
Net income........... 127.1 127.1
Shares issued:
Public offering... 6.8 250.4 257.2
Stock Plans....... 1.0 5.4 $ (3.2) 3.2
Conversion of stock.. (0.5) (54.3) 3.2 51.6 --
Unrealized losses.... (1.2) (1.2)
Pension liability.... 359.0 359.0
Dividends paid:
Preferred......... 0.1 4.1 (6.5) (2.3)
------- ------- ------ -------- ------- ------- ------- --------
December 31, 1994.... 0.5 -- 53.0 872.8 366.7 (5.8) (4.4) 1,282.8
Net income........... 184.8 184.8
Taxes not payable
in cash............ 84.9 84.9
Shares issued:
Stock plans....... 0.1 0.8 0.9
Unrealized gains..... 3.0 3.0
Pension liability.... (179.0) (179.0)
Dividends paid:
Preferred......... (2.2) (2.2)
Other................ (0.2) 0.2 --
------- ------- ------ -------- ------- ------- ------- --------
December 31, 1995.... 0.5 -- 52.8 958.0 549.3 (184.8) (0.6) 1,375.2
Net income........... 109.2 109.2
Taxes not payable
in cash............ 63.2 63.2
Unrealized losses.... (0.9) (0.9)
Pension liability.... 175.9 175.9
Dividends Paid:
Common............ (9.5) (9.5)
Preferred......... (2.2) (2.2)
Other................ (0.1) (0.1) (0.2)
------- ------- ------ -------- ------- ------- ------- --------
December 31, 1996.... $ 0.5 $ -- $ 52.8 $1,021.1 $ 646.7 $ (8.9) $ (1.5) $1,710.7
======= ======= ====== ======== ======= ======= ======= ========
</TABLE>
- ---------------
See notes to consolidated financial statements.
THE LTV CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
The LTV Corporation ("LTV" or the "Company") is a fully
integrated steel producer that manufactures a diversified line of carbon
steel products consisting of hot rolled and cold rolled sheet, galvanized,
tin mill and tubular products. The Company operates two integrated steel
mills (Cleveland Works and Indiana Harbor Works) and various finishing,
galvanizing and processing facilities as well as tin mill and tubular
operations. The Company is a major supplier of flat rolled steel for the
domestic transportation, appliance and electrical equipment markets.
Principles of Consolidation
The consolidated financial statements include LTV and its
majority-owned subsidiaries. Investments in joint ventures and companies
owned 20% to 50% are accounted for by the equity method. The Company's
interest in the cumulative undistributed earnings of its unconsolidated
affiliates was $19.8 million at December 31, 1996, all of which was available
for dividend or other distribution to the Company.
Cost of products sold has been reduced by the equity in
earnings of raw materials and other affiliates of $16.2 million, $17.2 million
and $14.7 million for the years ended December 31, 1996, 1995 and 1994,
respectively.
Marketable Securities
The Company determines the appropriate classification of
marketable securities at the time of purchase and reevaluates such designation
at each balance sheet date. Marketable securities have been classified as
available-for-sale and are carried at fair value, with unrealized holding
gains and losses reported as a separate component of shareholders' equity.
The cost of debt securities is adjusted for amortization of
premiums and accretion of discounts to maturity. Such amortization, interest
income, realized gains and losses and declines in value judged to be other than
temporary are included in net interest and other income. The cost of
securities sold is based on specific identification.
Inventories
Inventories are valued at the lower of cost or market, with
cost determined primarily by the "last-in, first-out" ("LIFO") method. The
amount by which inventory is reduced to state inventory at LIFO value is $26.3
million at December 31, 1996 and $26.2 million at December 31, 1995.
Liquidation of LIFO inventory quantities, carried at costs which prevailed in
earlier years, reduced cost of products sold by $1.6 million, $4.2 million and
$1.8 million during the years ended December 31, 1996, 1995 and 1994,
respectively. The current replacement value of inventories is $801.9 million
and $742.0 million at December 31, 1996 and 1995, respectively.
Property Costs and Depreciation
Fixed assets are recorded on the cost basis and include land,
buildings, machinery and equipment, and software and associated costs.
Depreciation is computed principally using a modified straight-line method
based upon estimated economic lives of assets and the levels of production
providing depreciation within a range of 80% to 120% of the straight-line
amount on individual major production facilities with decreased depreciation
at lower and increased depreciation at higher operating levels. During each of
the last three years, depreciation expense under this method has approximated
the computed straight-line amounts. In addition, a units-of-production method
is used for blast furnaces. The cost of buildings is depreciated over 45
years, and machinery and equipment is depreciated over an average life of
approximately 17 years.
When properties are retired or sold, their carrying value and
the related allowance for depreciation are eliminated from the property and
allowance for depreciation accounts, respectively. Generally, for normal
retirements, gains or losses are credited or charged to allowance for
depreciation accounts; for abnormal retirements, gains or losses are included
in income in the year of disposal.
The Company adopted Financial Accounting Standards Board
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of," which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present, and the undiscounted cash flows estimated to be generated by
those assets are less than the assets' carrying amount. The adoption did not
impact the results of operations.
Environmental Remediation Liabilities
The Company's policy is to accrue environmental remediation
liabilities when it is probable a liability exists and the costs can be
reasonably estimated. The Company's estimates of these undiscounted costs are
based on existing technology, current enacted laws and regulations, its
current legal obligations regarding remediation and site-specific costs. The
liabilities are adjusted when the effect of new facts or changes in law or
technology is determinable. The Company's liability for environmental
remediation totaled $84 million and $98 million at December 31, 1996 and 1995,
respectively.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
New Accounting Pronouncement
In October 1996, the Accounting Standards Executive Committee
of the American Institute of Certified Public Accountants issued Statement of
Position 96-1 ("SOP 96-1"), "Environmental Remediation Liabilities," which
clarifies the existing authoritative guidance on loss contingencies that apply
in determining environmental liabilities. The Company will adopt SOP 96-1 in
the first quarter of 1997 and, based on current circumstances, does not
believe the effect of adoption will be material to the results of operations.
MARKETABLE SECURITIES
The following is a summary of marketable securities at December
31 (in millions):
<TABLE>
<CAPTION>
Unrealized Unrealized
Holding Holding
Cost Gains Losses Fair Value
------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
1996
U.S. Government obligations......... $193.7 $ 0.2 $ (0.3) $193.6
Corporate obligations............... 267.8 0.3 (0.1) 268.0
Other............................... 104.8 -- -- 104.8
------ ----- ------ ------
$566.3 $ 0.5 $ (0.4) $566.4
====== ===== ====== ======
1995
U.S. Government obligations......... $291.3 $ 1.6 $ -- $292.9
Corporate obligations............... 144.1 0.2 -- 144.3
Other............................... 20.0 -- -- 20.0
------ ----- ------ ------
$455.4 $ 1.8 $ -- $457.2
====== ===== ====== ======
</TABLE>
The cost and estimated fair value of marketable securities by contractual
maturity at December 31, 1996 are as follows (in millions):
<TABLE>
<CAPTION>
Cost Fair Value
------ ----------
<S> <C> <C>
Due in one year or less................... $292.5 $292.4
Due after one year through two years...... 63.2 63.2
Due after two years....................... 210.6 210.8
------ ------
$566.3 $566.4
====== ======
</TABLE>
OTHER LIABILITIES
Current accrued employee compensation and benefits included
the following at December 31 (in millions):
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Pension benefits........................................ $ 24.1 $ 59.3
Postemployment health care and other insurance benefits. 134.5 137.6
Compensated absences.................................... 49.9 49.6
Other................................................... 164.4 161.9
------ ------
$372.9 $408.4
====== ======
</TABLE>
Current other accrued liabilities included the following at
December 31 (in millions):
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Accrued taxes other than income....................... $ 91.2 $ 83.7
Accrued income taxes.................................. 11.9 13.1
Other................................................. 71.9 86.5
------ ------
$175.0 $183.3
====== ======
</TABLE>
Noncurrent other liabilities included the following at
December 31 (in millions):
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Benefits under the Coal Industry Retiree Health
Benefit Act of 1992*............................... $133.5 $135.6
Other employee benefits.............................. 126.3 126.3
Environmental and plant rationalization.............. 87.0 105.6
Other................................................ 57.5 53.2
------ ------
$404.3 $420.7
====== ======
</TABLE>
- ---------------
* The Company accrued this obligation by recording an extraordinary charge of
$140 million in 1992.
DEBT AND CREDIT FACILITIES
Long-term debt consisted of the following at December 31 (in millions):
<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Senior secured convertible notes due June 2003..... $100.0 $100.0
Notes due December 2020............................ 52.6 50.4
------ ------
$152.6 $150.4
====== ======
</TABLE>
The Company has no required long-term debt maturities occurring
within the next five years.
The senior secured convertible notes bear interest at the rate
of 8.5% if paid in cash or 10.5% if paid with additional convertible notes.
The holders of the convertible notes have the right to convert such notes, in
whole or in part, into shares of LTV common stock at a conversion price of
$19.50 per share (potentially 5,128,205 shares).
The notes due December 2020 are required to be prepaid within
120 days after the restored pension plans become fully funded. LTV also has
the option to partially or fully prepay the notes. The notes bear interest at
8.5%, which can be paid in cash or in additional notes.
The Company has two credit facilities with banks (the
"Receivables Facility" expiring in 2000 and the "Letter of Credit Facility"
expiring in 1999) that provide the Company with up to $470 million of
financing resources at prevailing market rates.
The Receivables Facility permits borrowings of up to $320
million for working capital requirements and general corporate purposes, $100
million of which may be used to issue letters of credit. At December 31, 1996,
$285.5 million was permitted to be borrowed; however, no borrowings were
outstanding and letters of credit outstanding amounted to $22.7 million under
this facility. The borrower under the Receivables Facility is LTV Sales
Finance Company, a structured finance special purpose entity wholly owned by
LTV, which on a daily basis purchases and pledges essentially all of the
receivables generated by LTV. The creditors of LTV Sales Finance Company have
a claim on the assets of that company prior to those assets becoming available
to other creditors of LTV or its affiliates.
The Letter of Credit Facility is a separate credit facility
that provides for the issuance of up to $150 million in letters of credit. At
December 31, 1996, letters of credit totaling $82.9 million were outstanding
under this facility.
The long-term debt and Letter of Credit Facility agreements
contain various covenants that require the Company to maintain certain
financial ratios and amounts. These agreements, as well as an agreement with
the Pension Benefit Guaranty Corporation regarding the restored pension plans
("PBGC Agreement"), place certain restrictions on payments of dividends, stock
repurchases, capital expenditures, investments in subsidiaries and borrowings.
Under the terms of the most restrictive covenant, $155 million of retained
earnings are available for common stock dividend payments at December 31,
1996. Substantially all of the Company's receivables and inventories are
pledged as collateral under the convertible notes and credit facilities
agreements.
OPERATING LEASES
The Company leases certain manufacturing facilities and
equipment, office space and computer equipment under cancelable and
noncancelable leases that expire at various dates. Minimum future operating
lease obligations in effect at December 31, 1996 are as follows (in millions):
<TABLE>
<CAPTION>
<S> <C>
1997....................................... $ 41.5
1998....................................... 40.5
1999....................................... 26.7
2000....................................... 13.3
2001....................................... 11.7
Later years................................ 62.7
------
Total obligations.......................... $196.4
======
</TABLE>
Rental expense on operating leases was $61.8 million, $58.4
million and $59.0 million for the years ended December 31, 1996, 1995 and
1994, respectively.
POSTEMPLOYMENT HEALTH CARE AND OTHER INSURANCE BENEFITS
The Company provides health care and other insurance benefits,
primarily life, for substantially all active, inactive and retired employees.
The health care plans are contributory and contain other cost-sharing features
such as deductibles, lifetime maximums and copayment requirements. The
components of periodic expense and cash payments for postemployment benefits
are as follows (in millions):
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Service cost - benefits earned
during the period.............. $ 18.0 $ 14.7 $ 18.7
Interest cost on accumulated
benefit obligation............. 120.0 131.9 130.2
Actual return on plan assets..... (5.9) (0.1) --
Net amortization and deferral.... 4.3 (10.0) --
------ ------ ------
Total expense................... $136.4 $136.5 $148.9
====== ====== ======
Total cash payments............. $130.6 $144.1 $130.4
====== ====== ======
</TABLE>
The actuarial and recorded liabilities for postemployment
benefits are as follows at December 31 (in millions):
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Accumulated benefit obligation:
Retirees.................................. $1,253.7 $1,275.6
Fully eligible active plan participants... 121.3 123.9
Other active plan participants............ 312.3 323.4
-------- --------
Total................................... 1,687.3 1,722.9
Unrecognized net actuarial gains........... 79.6 32.3
Plan assets at fair value.................. (36.4) (19.2)
-------- --------
Total liability included in the
consolidated balance sheet............... 1,730.5 1,736.0
Less current portion....................... (134.5) (137.6)
-------- --------
Noncurrent liability....................... $1,596.0 $1,598.4
======== ========
</TABLE>
The actuarial assumptions used in the calculation of the
liability for postemployment benefits are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Discount rate............................ 7.5% 7.25% 9.0%
Long-term rate of return on plan assets.. 9.0% 8.5% 8.5%
Projected health care cost trend rate.... 7.5% 8.0% 8.9%
Ultimate trend rate...................... 4.5% 4.5% 5.5%
Year ultimate trend rate is achieved..... 2003 2002 2001
</TABLE>
As part of the 1994 United Steelworkers of America ("USWA")
labor agreement, the Company is required to contribute to a Voluntary
Employee Beneficiary Association ("VEBA") Trust to prefund postemployment
health care and other insurance benefits for covered employees and retirees
in addition to making cash payments for such benefits on a current basis.
The Company is required to contribute to the VEBA trust a minimum of $5
million annually ($10 million in years when common stock dividends are
declared) and additional amounts based on defined cash flow as set forth in
the labor agreement. The required contribution made in 1996 was $11.3
million. Plan assets are invested in a mutual fund, which primarily
consists of equity securities listed on national exchanges.
The effect on the present value of the accumulated benefit
obligation at December 31, 1996 of a 1% increase each year in the health care
cost trend rate used would result in an increase of $146 million in the
accumulated benefit obligation, and a $13 million increase in the total 1996
service and interest components of expense. The assumed discount rate
increase in 1996 resulted in a net decrease in the accumulated benefit
obligation of $38 million.
PENSION BENEFITS
The Company has various pension plans covering substantially
all of its employees. Current benefits for most employees are provided
through defined contribution plans with benefits based on age and compensation
levels. Pension costs for the defined contribution plans are accrued and
funded on a current basis.
The Company also has defined benefit plans, the benefits of
which are primarily for past service only, based on years of service and on
average compensation for certain years. The majority of these plans'
obligations are required to be funded by the year 2020 in accordance with the
PBGC Agreement.
The components of pension expense are as follows (in millions):
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Defined benefit plans:
Service cost - benefits earned
during the period................. $ 6.4 $ 6.6 $ 3.5
Interest cost on projected benefit
obligation........................ 247.0 274.3 250.2
Actual return on plan assets........ (405.1) (461.0) (14.8)
Net amortization and deferral....... 215.9 304.1 (119.1)
------ ------ ------
Net pension cost of defined
benefit plans................... 64.2 124.0 119.8
Defined contribution plans........... 47.9 48.4 42.8
------ ------ ------
Total expense..................... $112.1 $172.4 $162.6
====== ====== ======
</TABLE>
The following table sets forth the funded status of the
Company's defined benefit pension plans (in millions):
<TABLE>
<CAPTION>
At December 31, 1996 At December 31, 1995
----------------------------------- -----------------------------------
Plans With Plans With Plans With Plans With
Assets in Excess Obligations in Assets in Excess Obligations in
of Obligations Excess of Assets of Obligations Excess of Assets
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Actuarial present value:
Vested benefit obligation................ $215.0 $2,918.7 $16.5 $ 3,300.8
Nonvested benefit obligation............. 26.8 221.0 0.5 275.9
------ -------- ----- ---------
Accumulated benefit obligation........... $241.8 $3,139.7 $17.0 $ 3,576.7
====== ======== ===== =========
Projected benefit obligation.............. $255.5 $3,139.7 $19.2 $ 3,588.3
Plan assets at fair value................. 266.1 2,569.4 26.9 2,538.7
------ -------- ----- ---------
Plan assets in excess of (less than)
projected benefit obligation........... 10.6 (570.3) 7.7 (1,049.6)
Unrecognized initial net asset existing at
transition............................... (0.6) -- (1.0) --
Unrecognized prior service cost........... 12.4 126.9 0.4 156.3
Unrecognized net actuarial (gains) losses. (2.7) (124.2) (1.7) 190.6
Adjustment required to recognize minimum
liability-shareholders' equity........... -- (8.9) -- (184.8)
-intangible asset............... -- (86.4) -- (154.4)
------ -------- ----- ---------
Prepaid (accrued) pension expense included
in the consolidated balance sheet........ $ 19.7 $ (662.9) $ 5.4 $(1,041.9)
====== ======== ===== =========
</TABLE>
The actuarial assumptions used to determine the pension asset
(liability) are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Discount rate........................... 7.5% 7.25% 9.0%
Long-term rate of return on plan assets. 9.0% 8.5% 8.5%
</TABLE>
Plan assets consist substantially of equity securities listed
on national exchanges, fixed income securities and cash equivalents. The
increase in the 1996 assumed discount rate decreased the accumulated
benefit obligation by $68 million, and such adjustment, together with
favorable asset return, was also the primary reason for the decreases in
the shareholders' equity minimum pension liability adjustment account of
$176 million and the intangible asset minimum pension liability account of
$68 million.
TAXES
The provision for income taxes from continuing operations is as
follows (in millions):
<TABLE>
<CAPTION>
Year ended December 31
---------------------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Current:
Federal..................... $ 0.4 $ 0.4 $ 0.8
State....................... 0.4 2.0 (2.0)
Deferred..................... (0.5) (0.4) (0.3)
Amount not payable in cash... 63.2 115.3 74.7
------ ------ ------
Tax provision............... $ 63.5 $117.3 $ 73.2
====== ====== ======
</TABLE>
The Company reports federal income tax expense before
consideration of pre-reorganization net deferred tax assets ($1.35 billion
at December 31, 1996). The Company's actual income tax cash payments are,
and will continue to be, significantly less than the total financial
statement expense amounts as the tax provision required by fresh-start
financial statement reporting is in excess of the Company's actual tax
payments. As LTV realized the benefits (through reduced cash tax payments)
from pre-reorganization net deferred tax assets, such benefit amounts first
reduced the intangible asset resulting from reorganization until it was
fully amortized in 1995. Subsequently realized tax benefits increase
additional paid-in capital. Tax benefits of $63.2 million, $115.3 million
and $74.7 million were realized in 1996, 1995 and 1994, respectively.
Amounts totaling $63.2 million and $84.9 million in 1996 and 1995 were used
to increase the additional paid-in capital account of shareholders' equity.
The income tax effects of the factors accounting for the
differences between federal income tax computed at the statutory rate and the
recorded provision are as follows (in millions):
<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Tax provision at statutory rates..... $ 60.5 $108.8 $ 70.9
Increases (decreases) resulting from:
Percentage depletion deduction...... (5.0) (7.0) (6.4)
State taxes......................... 8.3 16.7 7.3
Other............................... (0.3) (1.2) 1.4
------ ------ ------
Tax provision..................... $ 63.5 $117.3 $ 73.2
====== ====== ======
</TABLE>
Significant components of the Company's deferred tax assets and
liabilities are as follows at December 31 (in millions):
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Deferred tax assets:
Postemployment health care liability......... $ 690.1 $ 692.2
Net operating loss carryforwards............. 937.1 935.0
Pension liability............................ 227.9 356.6
Other employee benefits...................... 165.7 175.0
Plant rationalization and environmental...... 62.9 70.2
Safe harbor tax leases....................... 117.6 126.1
Other........................................ 98.7 94.9
--------- ---------
Subtotal................................... 2,300.0 2,450.0
Deferred tax liabilities:
Tax over book depreciation................... (847.4) (846.7)
Inventory and other.......................... (102.6) (103.3)
--------- ---------
Subtotal................................... (950.0) (950.0)
Valuation allowance........................... (1,350.0) (1,500.0)
--------- ---------
Total deferred taxes-net................... $ -- $ --
========= =========
</TABLE>
The evaluation of the realizability of the Company's net
deferred tax assets in future periods is made based upon historical and
projected operating performance and other factors for generating future
taxable income, such as intent and ability to sell assets. At this time,
the Company has established a valuation reserve for all of its net deferred
tax assets.
For income tax reporting purposes, LTV has a net operating loss
carryforward of $2.6 billion for regular income taxes, $2.5 billion of which
is not restricted as to use and will expire in the years 2000 through 2010.
The balance of the regular income tax net operating loss carryforward expires
in 1997 and 1998 and is restricted to offsetting future taxable income of the
respective companies that generated the losses. LTV has a federal alternative
minimum tax net operating loss carryforward of $1.5 billion that is
unrestricted as to its use and will expire in the years 2000 through 2010.
The Company's ability to reduce future income tax payments through the use of
net operating loss carryforwards could be significantly limited on an annual
basis if the Company were to undergo an Ownership Change within the meaning of
Section 382 of the Internal Revenue Code of 1986.
Alternative minimum taxes paid through 1996 of approximately
$42 million are available as a credit carryforward, and the period is not
limited. Investment tax credit carryforwards of approximately $12 million at
December 31, 1996 are recognized using the "flow through" method and expire in
1997 through 2003.
SHAREHOLDERS' EQUITY
LTV has authorized for issuance 20 million shares of preferred
stock with a $1.00 par value. At December 31, 1996, the Company has 500,000
outstanding shares of Series B Convertible Preferred Stock ("Series B"). This
issue has a stated liquidation preference value of $50 million, is senior to
all common stock and has weighted voting rights equal to that number of shares
of common stock into which it can be converted. Dividends on the Series B are
payable quarterly in either cash or common stock, at the election of LTV, at
the rate of 4.5% per annum on the stated value. Holders of the Series B have
the right to convert the stated value of their shares, in whole or in part,
into common stock at a conversion price of $17.09 per share (potentially
2,925,688 shares). LTV has the right to redeem the Series B on and after June
28, 1996 at $52.3 million, declining to $50.0 million at June 28, 2000.
On June 28, 1994, the Series A Convertible Preferred Stock, and
accrued dividends thereon, were mandatorily converted into 3.3 million shares
of common stock. The common stock held for issuance represented a $50.0
million cash investment in LTV on June 28, 1993, which resulted in 3.3 million
shares of common stock being issued on June 28, 1994.
During 1994, LTV issued 13.6 million shares of common stock
pursuant to a public offering. The Company's net proceeds of $257.2 million
from the offering were contributed to the Company's pension plans. Also in
1994, LTV issued 1.9 million shares of common stock pursuant to various stock
distribution plans.
The Company has a nonleveraged Employee Stock Ownership Plan
("ESOP"), for employees covered by the USWA labor agreement, that effectively
holds 3.9 million shares of common stock at December 31, 1996.
In June 1993, the Company was reorganized and common stock
reserved for potential future issuance includes the following:
a. Conversion of the Series B and the convertible notes as previously
discussed.
b. In accordance with a settlement agreement with the Internal Revenue
Service ("IRS"), payments in six equal annual installments of cash or shares
of common stock with an aggregate value of $6.5 million are required to be
made to the IRS commencing on June 28, 1994. The first of these payments was
satisfied with the issuance of 65,183 shares of common stock, and the 1996 and
1995 payments were satisfied in cash.
c. In accordance with an agreement with the U.S. Environmental
Protection Agency ("EPA"), certain (if any) future environmental claims can be
settled in cash or common stock. Also, through June 28, 1997, if and when
shares are actually issued under this agreement, the ESOP is to receive
additional shares approximating 7.5% of such issued shares.
d. In June 1993, 8.5 million Series A Warrants were issued. Each
Series A Warrant is exercisable for 0.5582 of a share of common stock at
$16.28 per each full share purchased. The Series A Warrants are exercisable
through June 28, 1998. There have been 32,149 warrants exercised through
December 31, 1996.
The Company has also reserved for future issuance 3.5 million
shares of LTV common stock under incentive programs authorizing the granting
of stock options and restricted stock awards to directors, officers and other
key employees. The stock incentive programs are designed to encourage a
personal investment in LTV common stock from participating individuals. The
options to purchase common stock are primarily outstanding for terms of ten
years from date of grant and are granted at prices not lower than market price
at date of grant. The market value of restricted stock awarded has been
recorded as unearned compensation and is shown as a separate component of
shareholders' equity. Unearned compensation is primarily being amortized to
expense over the five-year vesting period. Transactions under these programs
are summarized as follows:
<TABLE>
Year ended December 31,
---------------------------------------------------------------------------------------------------
1996 1995 1994
------------------------------- ------------------------------ ------------------------------
Shares Price Shares Price Shares Price
--------- ---------------- --------- ---------------- --------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Stock options:
Options outstanding at
beginning of period. 1,419,950 $14.17 - $19.33 1,147,639 $15.38 - $19.33 934,000 -- $15.38
Granted............... 321,680 12.21 - 14.31 398,700 14.17 - 16.13 272,705 $16.53 - 19.33
Exercised............. -- (5,000) 15.38 (22,066) 15.38
Canceled.............. (50,871) 14.78 - 19.33 (121,389) 15.38 - 19.33 (37,000) 15.38
--------- ---------------- --------- ---------------- --------- ----------------
Options outstanding at
end of period....... 1,690,759 $12.21 - $19.33 1,419,950 $14.17 - $19.33 1,147,639 $15.38 - $19.33
========= ================ ========= ================ ========= ================
Options exercisable at
end of period....... 1,093,347 $14.74 - $19.33 684,614 $14.74 - $19.33 297,896 $15.38 - $16.53
========= ================ ========= ================ ========= ================
Restricted Stock:
Shares outstanding at
beginning of period. 186,186 $14.00 - $18.88 191,430 $15.75 - $18.88 -- -- --
Granted............... 2,348 14.13 10,856 14.00 - 15.25 191,430 $15.75 - $18.88
Unrestricted.......... (3,685) 18.88 (16,100) 18.88 -- --
Canceled.............. (815) 18.88 -- -- -- --
--------- ---------------- --------- ---------------- --------- ----------------
Shares outstanding at
end of period....... 184,034 $14.00 - $18.88 186,186 $14.00 - $18.88 191,430 $15.75 - $18.88
========= ================ ========= ================ ========= ================
</TABLE>
In 1995, the Financial Accounting Standards Board issued
Statement No. 123, "Accounting for Stock-Based Compensation," which permits
companies to recognize expense for stock-based awards in 1996 and 1995
based on their fair value on the date of grant or to continue to follow
Accounting Principles Board ("APB") Opinion No. 25 with pro-forma
disclosures. The Company continues expense recognition of stock option
programs in accordance with APB Opinion No. 25. Application of the
disclosure requirements of the new statement resulted in amounts that are
immaterial and requires no additional disclosure.
EARNINGS PER SHARE
Primary earnings per share calculations for the years ended
December 31, 1996, 1995 and 1994 are based on average common and common
equivalent shares outstanding of 108.4 million, 108.3 million and 98.7 million,
respectively. Common equivalent shares principally included common stock that
is issuable in exchange for the Series B and for outstanding Series A Warrants.
Fully diluted earnings per share calculations for the years
ended December 31, 1996, 1995 and 1994 are based on fully diluted shares
outstanding of 108.4 million, 113.4 million and 103.8 million, respectively.
Fully diluted shares were determined by increasing the primary shares
outstanding to reflect the common stock issuable upon conversion of the
convertible notes.
COMMITMENTS AND CONTINGENCIES
The Company is the subject of various threatened or pending
legal actions, contingencies and commitments in the normal course of
conducting its business. The Company provides for costs relating to these
matters when a loss is probable and the amount is reasonably estimable. The
effect of the outcome of these matters on the Company's future results of
operations and liquidity cannot be predicted because any such effect depends
on future results of operations and the amount and timing of the resolution of
such matters. While it is not possible to predict with certainty, management
believes that the ultimate resolution of such matters will not have a material
adverse effect on the consolidated financial position of the Company.
LTV is subject to changing and increasingly stringent
environmental laws and regulations concerning air emissions, water discharges,
and waste disposal, as well as remediation activities that involve the
clean-up of environmental media such as soils and groundwater ("remediation
liabilities"). As a consequence, the Company has incurred, and will continue
to incur, substantial capital expenditures and operating and maintenance
expenses in order to comply with such requirements. Additionally, if any of
the Company's facilities are unable to meet required environmental standards
or laws, those operations could be temporarily or permanently closed.
Important examples of laws referred to above are the 1990 Clean
Air Act Amendments ("CAA Amendments"), the Resource Conservation and Recovery
Act of 1976, as amended ("RCRA"), and related state and local laws. The CAA
Amendments and its state and local counterparts require progressively more
stringent air emission quality standards in the future. RCRA and related
state laws include so-called "corrective action" provisions that grant the
environmental agencies authority to require the Company to clean up
environmental media, such as soils and groundwater, under certain prescribed
conditions. These corrective action provisions, in most instances, are not
self-implementing and, in the Company's view, create no current legal
obligation. If, in the future, the Company were required to implement
corrective actions, the Company could be required to record additional
liabilities which cannot be estimated at this time, but could be substantial.
As part of LTV's reorganization in 1993, an agreement
("Environmental Settlement Agreement" or "ESA") with the EPA was reached. The
ESA resolved or provided the means to resolve a significant portion of the
Company's environmental-related liabilities and also provided a basis for
settlement agreements concerning the environmental claims of several states.
The ESA settled certain Superfund Site liabilities identified at the time of
reorganization for $33 million as general unsecured claims. Management
believes that future prepetition environmental claims, if any, that are not
covered by the ESA will be subject to the dischargeability provisions of the
Federal Bankruptcy Code or to the provisions of the Joint Plan, subject to
judicially imposed due process requirements. General liabilities from
postpetition acts were not discharged or in any manner affected by the
reorganization. In addition, the Company retains responsibility for
environmental obligations for properties owned at confirmation of the Joint
Plan regardless of when the conduct that gives rise to the liability occurred.
A 1993 agreement with the USWA provided that a portion of the
requirements with respect to certain postemployment benefits would be secured
by a junior lien of $250 million on collateral with an unencumbered fair
market value of at least $500 million. The initial security was provided by
the grant of a mortgage on facilities having a carrying value of approximately
$500 million.
FINANCIAL INSTRUMENTS
Cash equivalents are investments in highly liquid, low-risk
money market mutual funds and commercial paper with maturities of three months
or less and are classified as held-to-maturity. The carrying amount of these
assets approximates fair value. The Company carries marketable securities at
fair value. The carrying amount of the Company's long-term debt approximates
fair value at December 31, 1996 and 1995, based on current market interest
rates.
The Company has entered into futures contracts to reduce its
exposure to fluctuations in costs caused by the price volatility of certain
metal commodities and natural gas supplies. The Company does not engage in
speculation and the results of these hedging transactions become part of the
cost of the commodity or supply being hedged. At December 31, 1996 and 1995,
the purchase value of these contracts totaled $10 million in each year. The
contracts extend for periods of up to two years. At December 31, 1996 and
1995, the fair value of the contracts, which is based on quoted market prices,
approximated the carrying value of zero.
LTV owns a preferred stock asset related to the sale of its
energy products segment with an aggregate redemption price and liquidation
preference of $14.3 million, plus accrued and unpaid dividends. The preferred
stock is subject to redemption at the option of LTV or the issuer beginning
August 2000. The estimated discounted cash flow value of the preferred stock
asset approximates its stated and carrying value at December 31, 1996.
Outstanding letters of credit totaled $107.6 million and $118.6
million at December 31, 1996 and 1995, respectively. The letters of credit
guarantee performance to third parties of various trade activities and tax
benefit transfer agreements. LTV has guaranteed approximately $13 million per
year through January 1999 for a joint venture's operating lease rental
obligation. The Company does not believe it is practicable to estimate the
fair value of the guarantees and does not believe exposure to loss is likely.
DISCONTINUED OPERATIONS
On August 1, 1995, LTV sold its energy products segment,
Continental Emsco Company ("Continental Emsco"), for $74.6 million, with $38.6
million of the proceeds used to reduce LTV's long-term debt. The loss of $8.7
million on the sale of the segment was recorded in the second quarter of 1995,
and Continental Emsco is reflected as a discontinued operation in LTV's
financial statements for all periods presented. Sales by the energy products
segment were $179.2 million through August 1, 1995 and $299.2 million in 1994.
OTHER FINANCIAL DATA
Net interest and other income included the following (in
millions):
<TABLE>
<CAPTION>
Year ended December 31,
-----------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Interest and other income............... $44.1 $53.8 $27.4
Interest expense........................ (1.7) (11.2) (14.4)
----- ----- -----
Total.................................. $42.4 $42.6 $13.0
===== ===== =====
</TABLE>
The Company's sales to the transportation market have
approximated 30% of sales over each of the last three years. The Company
also sells to the steel service center and converter markets that, in turn,
sell to the transportation and other industries. Management does not
believe significant credit risk exists at December 31, 1996. Sales for the
years ended December 31, 1996, 1995 and 1994 to the Company's largest
customer, General Motors Corporation, represented approximately 11%, 12%
and 11%, respectively, of total sales.
The Company has incurred research and development expense of
$15.1 million, $14.8 million and $15.1 million for the years ended December
31, 1996, 1995 and 1994, respectively.
Supplemental cash flow information is presented as follows (in
millions):
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Changes in assets and liabilities which
provided (used) net cash:
Receivables............................... $ (7.2) $ 68.5 $ (38.8)
Inventories............................... (59.8) 9.1 13.0
Other assets.............................. 12.9 39.4 0.5
Accounts payable.......................... 96.1 (12.2) 27.3
Other liabilities......................... (31.2) (0.8) (33.0)
-------- -------- --------
Total................................... $ 10.8 $ 104.0 $ (31.0)
======== ======== ========
Interest payments.......................... $ 13.4 $ 11.4 $ 17.1
Income tax payments........................ 2.1 2.2 0.6
Capitalized interest....................... 15.0 7.6 7.7
Purchases of marketable securities......... 4,681.9 8,734.8 1,719.0
Sales of marketable securities............. 4,574.6 8,636.9 1,360.3
</TABLE>
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following table presents quarterly financial information
(in millions, except per share data):
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales
1996............................ $ 993.1 $1,075.1 $1,048.9 $1,017.4
1995............................ 1,084.9 1,113.2 1,040.2 1,044.9
Gross margin
1996............................ 114.4 146.7 139.0 146.7
1995............................ 172.1 193.7 150.4 146.1
Income from continuing operations
1996............................ 21.2 50.6 44.7 56.2
1995............................ 82.1 105.2 70.2 53.3
Net income
1996............................ 13.3 32.0 29.4 34.5
1995............................ 51.2 55.6 43.2 34.8
Market price per share
1996 -High..................... $ 15.88 $ 14.50 $ 13.50 $ 12.13
-Low...................... 12.25 11.38 10.63 10.00
1995 -High..................... 17.88 15.25 17.25 15.25
-Low...................... 12.63 13.25 13.63 13.25
Market price per Series A Warrant
1996 -High..................... $ 3.13 $ 2.25 $ 1.63 $ 1.13
-Low...................... 2.00 1.50 0.94 0.56
1995 -High..................... 4.13 3.50 3.88 3.13
-Low...................... 2.75 2.63 2.88 2.25
Earnings per share (1)
1996 - Primary:
Continuing operations......... $ 0.12 $ 0.30 $ 0.27 $ 0.32
Discontinued operations....... -- -- -- --
-------- -------- -------- --------
Net income.................. $ 0.12 $ 0.30 $ 0.27 $ 0.32
======== ======== ======== ========
1996 - Fully diluted:
Continuing operations......... $ 0.12 $ 0.29 $ 0.27 $ 0.32
Discontinued operations....... -- -- -- --
-------- -------- -------- --------
Net income.................. $ 0.12 $ 0.29 $ 0.27 $ 0.32
======== ======== ======== ========
1995 - Primary:
Continuing operations......... $ 0.47 $ 0.59 $ 0.40 $ 0.32
Discontinued operations....... -- (0.08) -- --
-------- -------- -------- --------
Net income.................. $ 0.47 $ 0.51 $ 0.40 $ 0.32
======== ======== ======== ========
1995 - Fully diluted:
Continuing operations......... $ 0.46 $ 0.58 $ 0.39 $ 0.32
Discontinued operations....... -- (0.08) -- --
-------- -------- -------- --------
Net income.................. $ 0.46 $ 0.50 $ 0.39 $ 0.32
======== ======== ======== ========
1996 - Dividends paid per common
share.......................... $ -- $ 0.03 $ 0.03 $ 0.03
======== ======== ======== ========
</TABLE>
(1) Earnings per share are computed independently for each of the quarters
based on the weighted average number of shares outstanding for each
period, and the sum of the quarters may not necessarily be equal to the
full year earnings per share amount.
SUPPLEMENTAL GUARANTOR INFORMATION
LTV's wholly-owned subsidiary, LTV Steel Company, Inc., will
fully and unconditionally guarantee the Company's obligation to pay
principal, premium, if any, and interest with respect to the Notes
offered by the Offering Memorandum.
The following supplemental consolidating condensed financial
statements of The LTV Corporation present (in millions): balance sheets as
of December 31, 1996, 1995 and 1994; statements of income for the years ended
December 31, 1996, 1995 and 1994; and statements of cash flows for the
years ended December 31, 1996, 1995 and 1994. The LTV Corporation
(Parent), LTV Steel Company, Inc. (Guarantor) and the combined Non-
Guarantor Subsidiaries investments in subsidiaries are accounted for using
the equity method. Necessary elimination entries have been made to
consolidate the Parent and all of its subsidiaries.
Management does not believe that separate financial statements
of the Guarantor for the Notes offered by the Offering Memorandum are
material to investors. Therefore, separate financial statements and other
disclosures concerning the Guarantor are not presented.
Consolidating Condensed Balance Sheet
<TABLE>
<CAPTION>
December 31, 1996
-----------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and
marketable securities............... $ 628.6 $ (15.1) $ 60.3 $ -- $ 673.8
Receivables.......................... 5.1 (16.0) 411.2 -- 400.3
Inventories:
Finished goods...................... -- 531.3 39.3 -- 570.6
Raw materials and supplies.......... -- 207.9 23.8 -- 231.7
Other current assets................. 3.1 7.2 1.6 -- 11.9
-------- -------- --------- --------- --------
Total current assets................ 636.8 715.3 536.2 -- 1,888.3
Intercompany, net.................... 15.1 475.5 (490.6) -- --
Investments in affiliates and other
noncurrent assets................... 1,200.3 359.0 281.3 (1,435.2) 405.4
Property, plant and equipment, net... -- 2,933.9 182.9 -- 3,116.8
-------- -------- --------- --------- --------
Total assets........................ $1,852.2 $4,483.7 $ 509.8 $(1,435.2) $5,410.5
======== ======== ========= ========= ========
Total current liabilities............ $ 24.4 $ 759.1 $ 115.5 $ -- $ 899.0
Long-term debt....................... 100.0 52.6 -- -- 152.6
Postemployment health care and
other insurance benefits............ -- 1,430.5 165.5 -- 1,596.0
Pension benefits..................... -- 621.3 26.6 -- 647.9
Other................................ 17.1 362.2 25.0 -- 404.3
Shareholders' equity................. 1,710.7 1,258.0 177.2 (1,435.2) 1,710.7
-------- -------- --------- --------- --------
Total liabilities and shareholders'
equity............................ $1,852.2 $4,483.7 $ 509.8 $(1,435.2) $5,410.5
======== ======== ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
-----------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and
marketable securities............... $ 734.0 $ (89.9) $ 79.0 $ -- $ 723.1
Receivables.......................... 13.4 (11.4) 394.1 -- 396.1
Inventories:
Finished goods...................... -- 476.5 36.1 -- 512.6
Raw materials and supplies.......... -- 204.5 25.4 -- 229.9
Other current assets................. 6.3 2.1 0.3 -- 8.7
-------- -------- -------- --------- --------
Total current assets................ 753.7 581.8 534.9 -- 1,870.4
Intercompany, net.................... (126.1) 541.5 (415.4) -- --
Investments in affiliates and other
noncurrent assets................... 898.2 434.6 192.3 (1,155.6) 369.5
Property, plant and equipment, net... -- 2,957.0 183.2 -- 3,140.2
-------- -------- -------- --------- --------
Total assets........................ $1,525.8 $4,514.9 $ 495.0 $(1,155.6) $5,380.1
======== ======== ======== ========= ========
Total current liabilities............ $ 24.3 $ 711.9 $ 110.5 $ -- $ 846.7
Long-term debt....................... 100.0 50.4 -- -- 150.4
Postemployment health care and
other insurance benefits............ -- 1,439.2 159.2 -- 1,598.4
Pension benefits..................... -- 950.8 37.9 -- 988.7
Other................................ 26.3 369.0 25.4 -- 420.7
Shareholders' equity................. 1,375.2 993.6 162.0 (1,155.6) 1,375.2
-------- -------- -------- --------- --------
Total liabilities and shareholders'
equity............................ $1,525.8 $4,514.9 $ 495.0 $(1,155.6) $5,380.1
======== ======== ======== ========= ========
</TABLE>
Consolidating Condensed Statement of Income
<TABLE>
<CAPTION>
Year Ended December 31, 1996
-----------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............................ $ -- $3,872.0 $ 946.9 $(684.4) $4,134.5
Costs and expenses:
Cost of products sold............... -- 3,396.2 875.9 (684.4) 3,587.7
Depreciation and amortization....... -- 249.6 16.1 -- 265.7
Selling, general and administrative. 9.8 124.8 16.2 -- 150.8
Results of affiliates operations.... (137.5) (7.4) -- 144.9 --
Net interest and other.............. (45.0) 5.2 (2.6) -- (42.4)
-------- -------- -------- ------- --------
Total............................. (172.7) 3,768.4 905.6 (539.5) 3,961.8
-------- -------- -------- ------- --------
Income before income taxes........... 172.7 103.6 41.3 (144.9) 172.7
Income tax provision................. 63.5 38.1 15.2 (53.3) 63.5
-------- -------- -------- ------- --------
Net income........................... $ 109.2 $ 65.5 $ 26.1 $ (91.6) $ 109.2
======== ======== ======== ======= ========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-----------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............................. $ -- $4,068.2 $957.5 $(742.5) $4,283.2
Costs and expenses:
Cost of products sold................ -- 3,495.9 867.5 (742.5) 3,620.9
Depreciation and amortization........ -- 236.7 15.2 -- 251.9
Selling, general and administrative.. 13.6 114.9 13.7 -- 142.2
Results of affiliates operations..... (270.1) (36.3) -- 306.4 --
Net interest and other............... (54.3) 15.8 (4.1) -- (42.6)
------- -------- ------ ------- --------
Total.............................. (310.8) 3,827.0 892.3 (436.1) 3,972.4
------- -------- ------ ------- --------
Income from continuing operations
before income taxes.................. 310.8 241.2 65.2 (306.4) 310.8
Income tax provision.................. 117.3 91.1 24.6 (115.7) 117.3
------- -------- ------ ------- --------
Income before discontinued operations. 193.5 150.1 40.6 (190.7) 193.5
Discontinued operations............... (8.7) -- -- -- (8.7)
------- -------- ------ ------- --------
Net income............................ $ 184.8 $ 150.1 $ 40.6 $(190.7) $ 184.8
======= ======== ====== ======= ========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1994
-----------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net sales............................ $ -- $4,030.6 $938.3 $(735.6) $4,233.3
Costs and expenses:
Cost of products sold............... -- 3,530.9 873.3 (735.6) 3,668.6
Depreciation and amortization....... -- 227.3 14.5 -- 241.8
Selling, general and administrative. 11.7 106.9 14.6 -- 133.2
Results of affiliates operations.... (190.8) (21.8) -- 212.6 --
Net interest and other.............. (23.6) 12.9 (2.3) -- (13.0)
------- -------- ------ ------- --------
Total............................. (202.7) 3,856.2 900.1 (523.0) 4,030.6
------- -------- ------ ------- --------
Income from continuing operations
before income taxes................. 202.7 174.4 38.2 (212.6) 202.7
Income tax provision................. 73.2 62.9 13.8 (76.7) 73.2
------- -------- ------ ------- --------
Income from continuing operations.... 129.5 111.5 24.4 (135.9) 129.5
Discontinued operations.............. (2.4) -- -- -- (2.4)
------- -------- ------ ------- --------
Net income........................... $ 127.1 $ 111.5 $ 24.4 $(135.9) $ 127.1
======= ======== ====== ======= ========
</TABLE>
Consolidating Condensed Cash Flows Statement
<TABLE>
<CAPTION>
Year Ended December 31, 1996
--------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash provided by operating activities.. $ (92.0) $ 494.3 $ 92.2 $ -- $ 494.5
------- -------- ------ ------- --------
Investing activities:
Capital expenditures.................. -- (222.1) (20.8) -- (242.9)
Investment in affiliates.............. -- -- (78.5) -- (78.5)
Net sales (purchases) of
marketable securities............... (109.2) -- -- -- (109.2)
Proceeds from dispositions of
discontinued operations,
businesses, properties and other.... -- 1.9 9.3 -- 11.2
Other................................. (1.7) -- (15.5) -- (17.2)
------- -------- ------ ------- --------
Net cash used in investing
activities........................ (110.9) (220.2) (105.5) -- (436.6)
------- -------- ------ ------- --------
Financing activities:
Pension funding to restored plans..... -- (199.3) (5.4) -- (204.7)
Dividends paid........................ (11.7) -- -- -- (11.7)
------- -------- ------ ------- --------
Net cash used in financing
activities........................ (11.7) (199.3) (5.4) -- (216.4)
------- -------- ------ ------- --------
Net increase (decrease) in cash and
cash equivalents...................... (214.6) 74.8 (18.7) -- (158.5)
Cash and cash equivalents at
beginning of period.................. 276.8 (89.9) 79.0 -- 265.9
------- -------- ------ ------- --------
Cash and cash equivalents at end of
period............................... $ 62.2 $ (15.1) $ 60.3 $ -- $ 107.4
======= ======== ====== ======= ========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash provided by operating activities. $ 70.0 $ 648.9 $ 37.3 $ -- $756.2
-------- -------- ------ ------- ------
Investing activities:
Capital expenditures................. -- (191.6) (13.2) -- (204.8)
Investment in affiliates............. -- -- (89.2) -- (89.2)
Net sales (purchases) of
marketable securities.............. (99.7) -- -- -- (99.7)
Proceeds from dispositions of
discontinued operations,
businesses, properties and other... -- 11.5 82.9 -- 94.4
Other................................ 2.9 -- (12.4) -- (9.5)
-------- -------- ------ ------- ------
Net cash used in investing
activities....................... (96.8) (180.1) (31.9) -- (308.8)
-------- -------- ------ ------- ------
Financing activities:
Pension funding to restored plans.... -- (458.3) (14.3) -- (472.6)
Dividends paid....................... (2.2) -- -- -- (2.2)
Payments on long-term debt........... (32.6) (6.0) (2.5) -- (41.1)
Other................................ -- -- (1.0) -- (1.0)
-------- -------- ------ ------- ------
Net cash used in financing
activities....................... (34.8) (464.3) (17.8) -- (516.9)
-------- -------- ------ ------- ------
Net increase (decrease) in cash and
cash equivalents..................... (61.6) 4.5 (12.4) -- (69.5)
Cash and cash equivalents at
beginning of year.................... 338.4 (94.4) 91.4 -- 335.4
-------- -------- ------ ------- ------
Cash and cash equivalents at end of
year................................ $ 276.8 $ (89.9) $ 79.0 $ -- $265.9
======== ======== ====== ======= ======
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1994
--------------------------------------------------------------------------------
Non-Guarantor
Parent Guarantor Subsidiaries Eliminations Consolidated
-------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Cash provided by operating activities. $ 78.0 $ 559.8 $ 78.3 $ -- $716.1
-------- -------- ------ ------- ------
Investing activities:
Capital expenditures................. -- (222.7) (11.3) -- (234.0)
Investment in affiliates............. -- -- (0.9) -- (0.9)
Net sales (purchases) of
marketable securities.............. (357.5) -- -- -- (357.5)
Proceeds from dispositions of
discontinued operations,
businesses, properties and other... -- 180.5 3.7 -- 184.2
Other................................ -- -- (13.6) -- (13.6)
-------- -------- ------ ------- ------
Net cash used in investing
activities....................... (357.5) (42.2) (22.1) -- (421.8)
-------- -------- ------ ------- ------
Financing activities:
Pension funding to restored plans.... -- (619.0) (23.2) -- (642.2)
Dividends paid....................... (2.3) -- -- -- (2.3)
Issuance of common stock............. 257.2 -- -- -- 257.2
Receipt of escrowed funds............ -- -- 25.8 -- 25.8
Payments on long-term debt........... -- -- 2.5 -- (2.5)
Other................................ 0.6 -- (1.8) -- (1.2)
-------- -------- ------ ------- ------
Net cash used in financing
activities....................... 255.5 (619.0) (1.7) -- (365.2)
-------- -------- ------ ------- ------
Net increase (decrease) in cash and
cash equivalents..................... (24.0) (101.4) 54.5 -- (70.9)
Cash and cash equivalents at
beginning of year.................... 362.4 7.0 36.9 -- 406.3
-------- -------- ------ ------- ------
Cash and cash equivalents at end of
year................................ $ 338.4 $ (94.4) $ 91.4 $ -- $335.4
======== ======== ====== ======== ======
</TABLE>
==============================================================================
No person has been authorized to give any information or to
make any representations, other than those contained in this Prospectus, in
connection with the offering made hereby, and, if given or made, such
information or representation must not be relied upon as having been
authorized by the Company or any other person. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create
any implication that there has been no change in the affairs of the Company
since the date hereof. This Prospectus does not constitute an offer to sell
or a solicitation of any offer to buy any securities offered hereby 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 any person to whom it is unlawful to make such offer or solicitation.
TABLE OF CONTENTS
Page
----
<TABLE>
<S> <C>
Available Information............................................... 2
Incorporation of Certain Information by Reference................... 2
The Company......................................................... 3
Risk Factors........................................................ 4
Use of Proceeds..................................................... 11
Consolidated Ratio of Earnings to Fixed Charges..................... 12
The Exchange Offer.................................................. 12
Description of Notes................................................ 17
Tax Consequences to U.S. Holders.................................... 17
Plan of Distribution................................................ 45
Legal Matters....................................................... 46
Experts............................................................. 46
Index to Financial Statements....................................... F-1
</TABLE>
Until , 1997 (90 days after the date of this
Prospectus), all dealers effecting transactions in the New Notes, whether or
not participating in this distribution, may be required to deliver a
Prospectus. This requirement is in addition to the obligation of dealers to
deliver a Prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
$300,000,000
THE LTV CORPORATION
8.20% Senior Exchange Notes due 2007
PROSPECTUS
November , 1997
==============================================================================
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Reference is made to Section 102(b)(7) of the Delaware General
Corporation Law (the "DGCL"), which enables a corporation in its original
certificate of incorporation or an amendment thereto to eliminate or limit the
personal liability of a director for violations of the director's fiduciary
duty, except (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the DGCL (providing for liability of directors for
the unlawful payment of dividends or unlawful stock purchases or redemptions)
or (iv) for any transaction from which a director derived an improper personal
benefit.
Section 145 of the DGCL empowers the Company to indemnify,
subject to the standards set forth therein, any person in connection with any
action, suit or proceeding brought before or threatened by reason of the fact
that the person was a director, officer, employee or agent of such company, or
is or was serving as such with respect to another entity at the request of
such company. The DGCL also provides that the Company may purchase insurance
of behalf of any such director, officer, employee or agent.
The Company's Amended and Restated Certificate of Incorporation
provides in effect for the indemnification by the Company of each director and
officer of the Company to the fullest extent permitted by applicable law.
Item 21. Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Document
- ------- ---------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Purchase Agreement
2.1 Restated Certificate of Incorporation of LTV dated June 28, 1993
(incorporated herein by reference to Exhibit 3.1 to LTV's
Registration Statement on Form S-1 [Registration No. 33-50217])
2.2 Amendments to LTV's Bylaws adopted on October 25, 1996
(incorporated herein by reference to Exhibit (3)-(1) to LTV's
Report on Form 10-Q for the quarter ended September 30, 1996)
2.3 Certificate of Incorporation of LTV Steel
2.4 Bylaws of LTV Steel
4.1 Form of Indenture between LTV and The Chase Manhattan Bank, as
Trustee
4.2 Form of 8.20% Senior Note due 2007 of LTV (included in Exhibit 4.1)
4.3 Form of 8.20% Senior Exchange Note due 2007 of LTV (included in
Exhibit 4.1)
4.4 Registration Rights Agreement dated September 22, 1997 among LTV,
LTV Steel and the Initial Purchasers
5.1 Opinion of Davis Polk & Wardwell regarding the validity of the
Notes being registered
12.1 Statement Re: Computation of Ratio of Earnings to Fixed Charges
21.1 Subsidiaries of LTV and LTV Steel
23.1 Consent of Davis Polk & Wardwell (included in Exhibit 5)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney for LTV (included on signature page)
24.2 Power of Attorney for LTV Steel (included on signature page)
25.1 Statement of Eligibility and Qualification on Form T-1 under the
Trust Indenture Act of The Chase Manhattan Bank, as trustee
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letters to Brokers, Dealers, Commercial Banks, Trust
Companies and other Nominees
99.4 Form of Letter to Clients
</TABLE>
Item 22. Undertakings
(a) The undersigned Registrants hereby undertake:
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this registration statement: (i)
to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (ii) to reflect in the prospectus any facts
or arising after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement; (iii) to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each 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 of any of the securities being registered which remain
unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provision,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the 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 questions whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(c) To respond to requests for information that is incorporated
by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of
this form, within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed subsequent
to the effective date of the registration statement through the date of
responding to the request.
(d) To supply by means of post-effective amendment all
information concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in the
registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
undersigned registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Cleveland, Ohio, on the 17th day of November, 1997.
THE LTV CORPORATION
By: /s/ David H. Hoag
------------------------------------
Name: David H. Hoag
Title: Chairman of the Board of
Directors and
Chief Executive Officer
(Principal Executive Officer)
The registrant and each person whose signature appears below
constitutes and appoints Glenn J. Moran, his, her or its true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, from him, her or it and in his, her, or its name, place and
stead, in any and all capacities, to sign and file any and all amendments
(including post-effective amendments) to this registration statement, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he, she, or it might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ------ ----
<S> <C> <C>
/s/ David H. Hoag Chairman of the Board of Directors November 17, 1997
- ----------------------------- and Chief Executive Officer
David H. Hoag (Principal Executive Officer)
/s/ Arthur W. Huge Senior Vice President and Chief November 17, 1997
- ----------------------------- Financial Officer (Principal
Arthur W. Huge Financial and Accounting Officer)
/s/ George T. Henning Vice President and Controller November 17, 1997
- -----------------------------
George T. Henning
/s/ J. Peter Kelly President, Chief Operating Officer November 17, 1997
- ----------------------------- and a Director
J. Peter Kelly
/s/ Edgar L. Ball Director November 17, 1997
- -----------------------------
Edgar L. Ball
/s/ Colin C. Blaydon Director November 17, 1997
- -----------------------------
Colin C. Blaydon
/s/ William H. Bricker Director November 17, 1997
- -----------------------------
William H. Bricker
/s/ John E. Jacob Director November 17, 1997
- -----------------------------
John E. Jacob
/s/ Edward C. Joullian III Director November 17, 1997
- -----------------------------
Edward C. Joullian III
/s/ M. Thomas Moore Director November 17, 1997
- -----------------------------
M. Thomas Moore
/s/ Harold A. Poling Director November 17, 1997
- -----------------------------
Harold A. Poling
/s/ Vincent A. Sarni Director November 17, 1997
- -----------------------------
Vincent A. Sarni
/s/ Samuel K. Skinner Director November 17, 1997
- -----------------------------
Samuel K. Skinner
/s/ Paul G. Stern Director November 17, 1997
- -----------------------------
Paul G. Stern
/s/ Stephen B. Timbers Director November 17, 1997
- -----------------------------
Stephen B. Timbers
/s/ Farah M. Walters Director November 17, 1997
- -----------------------------
Farah M. Walters
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the
undersigned registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Cleveland, Ohio, on the 17th day of November, 1997.
LTV STEEL COMPANY, INC.
By: /s/ David H. Hoag
------------------------------------
Name: David H. Hoag
Title: Chairman of the Board of
Directors and
Chief Executive Officer
(Principal Executive Officer)
The registrant and each person whose signature appears below
constitutes and appoints Glenn J. Moran and any agent for service named in
this registration statement and each of them, his, her or its true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, from him, her or it and in his, her, or its name, place and
stead, in any and all capacities, to sign and file any and all amendments
(including post-effective amendments) to this registration statement, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about
the premises, as fully to all intents and purposes as he, she, or it might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David H. Hoag Chairman of the Board of November 17, 1997
- ---------------------- Directors and Chief Executive
David H. Hoag Officer (Principal Executive
Officer)
/s/ Arthur W. Huge Senior Vice President November 17, 1997
- ---------------------- (Principal Financial and
Arthur W. Huge Accounting Officer) and a
Director
/s/ George T. Henning Vice President and Controller November 17, 1997
- ----------------------
George T. Henning
/s/ J. Peter Kelly Director November 17, 1997
- ----------------------
J. Peter Kelly
</TABLE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Document
- ----------------------- ---------------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Purchase Agreement
2.1 Restated Certificate of Incorporation of LTV dated June 28, 1993 (incorporated herein by
reference to Exhibit 3.1 to LTV's Registration Statement on Form S-1, Registration
File No. 33-50217)
2.2 Amendments to LTV's Bylaws as adopted on October 25, 1996 (incorporated by reference to
Exhibit (3)-(1) to the Report on Form 10-K for the quarter ended September 30, 1996.
2.3 Certificate of Incorporation of LTV Steel
2.4 Bylaws of LTV Steel
4.1 Form of Indenture between LTV and The Chase Manhattan Bank, as Trustee
4.2 Form of 8.20% Senior Note due 2007 of LTV (included in Exhibit 4.1)
4.3 Form of 8.20% Senior Exchange Note due 2007 of LTV (included in Exhibit 4.1)
4.4 Registration Rights Agreement dated September 22, 1997 among LTV, LTV Steel and the
Initial Purchasers
5.1 Opinion of Davis Polk & Wardwell regarding the validity of the Notes being registered
12.1 Statement Re: Computation of Ratio of Earnings to Fixed Charges
21.1 Subsidiaries of LTV and LTV Steel
23.1 Consent of Davis Polk & Wardwell (included in Exhibit 5)
23.2 Consent of Ernst & Young LLP
24.1 Power of Attorney for LTV (included on signature page)
24.2 Power of Attorney for LTV Steel (included on signature page)
25.1 Statement of Eligibility and Qualification on Form T-1 under the Trust Indenture Act of The
Chase Manhattan Bank, as trustee
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Letters to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees
99.4 Form of Letter to Clients
</TABLE>
Exhibit 1.1
THE LTV CORPORATION
$300,000,000
8.20% SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
New York, New York
September 17, 1997
To: SALOMON BROTHERS INC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
In care of:
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
The LTV Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to you (the "Purchasers"), $300,000,000 principal
amount of its 8.20% Senior Notes Due 2007 (the "Notes") to be unconditionally
guaranteed on a senior basis (the "Guaranty" and, together with the Notes, the
"Securities") by LTV Steel Company, Inc. (the "Guarantor"). The Securities are
to be issued under an indenture (the "Indenture") dated as of September 22,
1997, among the Company, the Guarantor and The Chase Manhattan Bank, as
trustee (the "Trustee").
The sale of the Securities to you will be made without
registration of the Securities under the Securities Act of 1933, as amended
(the "Securities Act"), in reliance upon the exemption from the registration
requirements of the Securities Act provided by Section 4(2) thereof. You have
advised the Company that you will make an offering of the Securities purchased
by you hereunder in accordance with Section 4 hereof as soon as you deem
advisable after the execution and delivery of this Agreement.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated August 29, 1997 (the
"Preliminary Memorandum"), and a final offering memorandum, dated September
17, 1997 (the "Final Memorandum"). Each of the Preliminary Memorandum and
the Final Memorandum sets forth certain information concerning the Company,
the Guarantor and the Securities. The Company and the Guarantor, jointly and
severally, hereby confirm that they have authorized the use of the Preliminary
Memorandum and the Final Memorandum, and any amendment or supplement thereto,
in connection with the offer and sale of the Securities by the Purchasers.
Unless stated to the contrary, all references herein to the Final Memorandum
are to the Final Memorandum at the Execution Time (as defined below) and are
not meant to include any amendment or supplement thereto subsequent to the
Execution Time and any references herein to the terms "amend", "amendment" or
"supplement" with respect to the Final Memorandum shall be deemed to refer to
and include any information filed under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), subsequent to the Execution Time which is
incorporated by reference therein.
Capitalized terms used herein without definition have the respective
meanings assigned to them in the Final Memorandum.
1. Representations and Warranties. The Company and the Guarantor
jointly and severally represent and warrant to, and agree with, the Purchasers
as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any
material fact (other than pricing terms and other financial terms
intentionally left blank) necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. The Final Memorandum, at the date hereof, does not, and at
the Closing Date (as defined below) will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date, will
not), contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that no representation or warranty is made as to the
information contained in or omitted from the Preliminary Memorandum or
the Final Memorandum, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Purchasers specifically for inclusion
therein, it being understood that the only such information is that
described in Section 8(b) hereof.
(b) Neither the Company nor the Guarantor has taken nor will they
take, directly or indirectly, any action prohibited by Regulation M
under the Exchange Act in connection with the offering of the Securities.
(c) None of the Company, the Guarantor, any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the
Securities Act ("Regulation D"), nor any person acting on its or their
behalf, has (i) sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as defined in the
Securities Act) that is currently or will be integrated with the sale of
the Securities in a manner that would require the registration of the
Securities under the Securities Act or (ii) engaged in any form of
general solicitation or general advertising (within the meaning of
Regulation D) in connection with any offer or sale of the Securities in
the United States.
(d) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(e) None of the Company, the Guarantor, nor any of their
respective Affiliates, nor any person acting on its or their behalf, has
engaged in any directed selling efforts with respect to the Securities,
and each of them has complied with the offering restrictions requirement
of Regulation S ("Regulation S") under the Securities Act. Terms used
in this paragraph have the meanings given to them by Regulation S.
(f) Neither the Company nor the Guarantor is an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act"), without taking account of any
exemption arising out of the number of holders of the Company's
securities.
(g) The Company is subject to and in full compliance with the
reporting requirements of Section 13 or Section 15(d) of the Exchange
Act.
(h) Neither the Company nor the Guarantor paid or agreed to pay
to any person any compensation for soliciting another to purchase any
securities of the Company or the Guarantor (except as contemplated by
this Agreement).
(i) The information provided by the Company pursuant to Section
5(i) hereof will not, at the date thereof, contain any untrue statement
of a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(j) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement
and the Final Memorandum to register the Securities under the Securities
Act or to qualify the Indenture under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act").
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to the Purchasers, and the Purchasers agree to purchase from the
Company, severally and not jointly, at a purchase price of 97.957% of the
principal amount thereof, plus accrued interest, if any, from September 22,
1997, to the Closing Date, the principal amount of Securities set forth
opposite each Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on September 22,
1997, or such later date as the Purchasers may agree or as provided in Section
9 hereof (such date and time of delivery and payment for the Securities being
herein called the "Closing Date"). Delivery of the Securities shall be made
to the Purchasers against payment by the Purchasers of the purchase price
thereof to or upon the order of the Company by wire transfer in Federal (same
day) funds to a U.S. dollar account in New York previously designated by the
Company or such other manner of payment as may be designated by the Company
and agreed to by the Purchasers not less than two business days prior to the
Closing Date. Delivery of the Securities shall be made at the office of
Cravath, Swaine & Moore ("Counsel for the Purchasers"), 825 Eighth Avenue, New
York, New York. Certificates for the Securities shall be registered in such
names and in such denominations as the Purchasers may request not less than
three full business days in advance of the Closing Date.
The Company agrees to have the certificates for the Securities
available for inspection, checking and packaging by the Purchasers in New
York, New York, not later than 1:00 PM on the business day prior to the
Closing Date.
4. Offering of Securities. Each Purchaser (i) acknowledges that
the Securities have not been registered under the Securities Act and may not
be offered or sold except pursuant to Rule 144A under the Securities Act,
Regulation S or another exemption from the registration requirements of the
Securities Act or pursuant to an effective registration statement under the
Securities Act and (ii) severally and not jointly, represents and warrants to
and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act)
and that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is
aware that such sale is being made in reliance on Rule 144A or (ii) in
accordance with the restrictions set forth in Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising (within
the meaning of Regulation D) in the United States, except pursuant to a
registered public offering, whether an exchange offer or shelf
registration, as provided in the Registration Agreement dated September
17, 1997, among the Company, the Guarantor and you (the "Registration
Agreement").
5. Agreements. The Company and the Guarantor jointly and
severally agree with the Purchasers that:
(a) At any time prior to the completion of the sale of the
Securities by the Purchasers, the Company and the Guarantor will furnish
to the Purchasers, without charge, as many copies of the Final
Memorandum and any supplements or amendments thereof or thereto as the
Purchasers may reasonably request. The Company and the Guarantor will
pay the expenses of printing or other production of all documents
relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that
are incorporated by reference therein, without prior consent of the
Purchasers. Prior to the completion of the sale of the Securities by
the Purchasers, the Company and the Guarantor will not file any document
under the Exchange Act which is incorporated by reference in the Final
Memorandum unless the Company and the Guarantor have furnished to you a
copy for your review prior to filing and will not file any such document
to which you reasonably and timely object within five days of receipt
thereof.
(c) The Company and the Guarantor promptly will advise the
Purchasers when, prior to the completion of the sale of the Securities
by the Purchasers, any document filed under the Exchange Act that is
incorporated by reference in the Final Memorandum shall have been filed
with the Securities and Exchange Commission (the "Commission").
(d) If at any time prior to the completion of the sale of the
Securities by the Purchasers, any event occurs as a result of which the
Final Memorandum, as then amended or supplemented, would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to amend or supplement the Final Memorandum (including any
document incorporated by reference therein that was filed under the
Exchange Act) to comply with the Exchange Act or the rules thereunder or
other applicable law, the Company and the Guarantor promptly will notify
the Purchasers of the same and, subject to paragraph (b) of this Section
5, will prepare and provide to the Purchasers pursuant to paragraph (a)
of this Section 5 an amendment or supplement which will correct such
statement or omission or effect such compliance, and, in the case of
such an amendment or supplement that is to be filed under the Exchange
Act and that is incorporated by reference in the Final Memorandum, will
file such amendment or supplement with the Commission.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Purchasers may designate and will maintain such qualifications in effect
so long as required for the sale of the Securities. Each of the Company
and the Guarantor promptly will advise the Purchasers of the receipt by
it of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(f) Neither the Company nor the Guarantor will, nor will they
permit any of their respective Affiliates to, resell any Securities that
have been acquired by any of them.
(g) Except pursuant to the Registration Agreement, neither the
Company, the Guarantor, any of their respective Affiliates, nor any
person acting on its or their behalf, will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the
Securities under the Securities Act.
(h) Neither the Company, the Guarantor, any of their respective
Affiliates, nor any person acting on its or their behalf, will engage in
any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with any offer or sale of the
Securities in the United States, except pursuant to a registered public
offering, whether an exchange offer or shelf registration, as provided
in the Registration Agreement.
(i) The Company will, during any period in which any of the
Securities remain "restricted securities" within the meaning of the
Securities Act and in which the Company is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act, provide to each
holder of such restricted securities and to each prospective purchaser
(as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information
required to be provided by Rule 144A(d)(4) under the Securities Act.
This covenant is intended to be for the benefit of the holders, and the
prospective purchasers designated by such holders, from time to time of
such restricted securities.
(j) None of the Company, the Guarantor, any of their respective
Affiliates, nor any person acting on its or their behalf, will engage in
any directed selling efforts with respect to the Securities except
pursuant to a registered public offering and each of them will comply
with the offering restrictions requirement of Regulation S. Terms used
in this paragraph have the meanings given to them by Regulation S.
(k) The Company will cooperate with the Purchasers and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(l) The Company will not, until 180 days following the Closing
Date, without the prior written consent of Salomon Brothers Inc, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, or file a registration
statement for, any debt securities issued or guaranteed by the Company
or the Guarantor (other than as required under the Registration
Agreement). Neither the Company nor the Guarantor will at any time
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act or the safe harbor of Regulation S thereunder
to cease to be applicable to the offer and sale of the Securities as
contemplated by this Agreement and the Final Memorandum.
(m) The Company and the Guarantor hereby agree to permit the
Securities to be designated Portal eligible securities in accordance
with the rules and regulations of the National Association of Securities
Dealers, Inc. relating to trading in The Portal Market.
(n) The Company hereby agrees to apply the net proceeds from the
sale of the Securities as set forth in the Final Memorandum under the
heading "Use of Proceeds".
6. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein at the date and time that this Agreement is executed and
delivered by the parties hereto (the "Execution Time"), and the Closing Date,
to the accuracy of the statements of the Company and the Guarantor made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and the Guarantor of their respective obligations hereunder and to the
following additional conditions:
(a) The Company shall have furnished to the Purchasers the
opinion of Davis Polk & Wardwell, counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with full corporate power and authority to own
its properties and conduct its business as described in the Final
Memorandum;
(ii) the information contained in the Final Memorandum under
the headings "Exchange Offer; Registration Rights", "Description
of Certain Financing and Security Arrangements", "Description of
PBGC Settlement Agreement" and "Certain United States Federal
Income Tax Considerations" fairly summarizes the matters therein
described;
(iii) this Agreement and the Registration Agreement have been
duly authorized, executed and delivered by the Company and the
Guarantor;
(iv) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of
the transactions contemplated herein or in the Registration
Agreement, except such as may be required under the blue sky or
securities laws of any jurisdiction in connection with the
purchase and sale of the Securities by the Purchasers and such
other approvals (specified in such opinion) as have been obtained;
(v) neither the issue and sale of the Securities, the
execution and delivery of the Indenture, this Agreement or the
Registration Agreement the consummation of any other of the
transactions herein or therein contemplated nor the fulfillment of
the terms hereof or thereof will conflict with, result in a breach
or violation of, or constitute a default under any provision of
applicable law or the charter or by-laws of the Company or any of
its subsidiaries or the terms of any indenture or other agreement
or instrument known to such counsel and to which the Company or
any of its subsidiaries is a party or bound or any judgment, order
or decree known to such counsel to be applicable to the Company or
any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries;
(vi) the Securities conform to the description thereof
contained in the Final Memorandum;
(vii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company and the Guarantor in accordance
with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time
in effect); the Certificates for the Securities are in valid form;
and the Securities have been duly and validly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Purchasers
pursuant to this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture;
(viii) the Indenture conforms as to form in all material
respects with the requirements of the Trust Indenture Act and the
rules and regulations of the Commission applicable to an indenture
which is qualified thereunder; and
(ix) assuming the accuracy of the representations and
warranties and compliance with the agreements contained herein, no
registration of the Securities under the Securities Act is
required, and no qualification of the Indenture under the Trust
Indenture Act is necessary, for the offer and sale by the
Purchasers of the Securities in the manner contemplated by this
Agreement.
(x) neither the Company nor the Guarantor is or, after giving
effect to the offering and sale of the Securities and the
application of the net proceeds therefrom, will be an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended, without taking account of any exemption arising out of
the number of holders of the Company's securities.
Such counsel shall also state that they have no reason to
believe that at the Execution Time the Final Memorandum contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that the
Final Memorandum includes an untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the State of Delaware or the United States, to
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Purchasers and (B)
as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
All references in this Section 6(a) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(b) The Company shall have furnished to the Purchasers the
opinion of Glenn J. Moran, Esq., Senior Vice President, General Counsel
and Secretary of the Company, dated the Closing Date, to the effect that:
(i) each of the Company and its Significant Subsidiaries (as
such term is defined in Regulation S-X under the Securities Act)
is validly existing as a corporation or partnership in good
standing under the laws of the jurisdiction of its incorporation or
partnership formation, has full corporate or partnership power and
authority to own its properties and conduct its business as
described in the Final Memorandum and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that
the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
(ii) except as otherwise set forth in the Final Memorandum, all
outstanding shares of capital stock of the subsidiaries of the
Company are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel any other security
interests, claims, liens or encumbrances;
(iii) this Agreement and the Registration Agreement have been
duly authorized, executed and delivered by the Company and the
Guarantor;
(iv) with respect to the corporate law of the State of
Delaware, the laws of the States of New York and New Jersey and
the laws of the United States, no consent, approval, authorization
or order of any court or governmental agency or body is required
for the consummation of the transactions contemplated herein or
in the Registration Agreement, except such as may be required
under the blue sky or securities laws of any jurisdiction in
connection with the purchase and sale of the Securities by the
Purchasers and such other approvals (specified in such opinion) as
have been obtained;
(v) neither the issue and sale of the Securities, the execution
and delivery of the Indenture, this Agreement or the Registration
Agreement, the consummation of any other of the transactions
herein or therein contemplated nor the fulfillment of the terms
hereof or thereof will conflict with, result in a breach or
violation of, or constitute a default under any provision of the
applicable corporate law of the State of Delaware, the applicable
laws of the States of New York and New Jersey or the applicable
laws of the United States or the charter or by-laws of the Company
or any of its subsidiaries or the terms of any indenture or other
agreement or instrument and to which the Company or any of its
subsidiaries is a party or bound or any judgment, order or decree
known to such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of its subsidiaries;
(vi) the Company's authorized equity capitalization is as set
forth in the Final Memorandum; the Securities conform to the
description thereof contained in the Final Memorandum; and the
holders of the outstanding shares of capital stock of the Company
are not entitled to any preemptive or, to such counsel's
knowledge, any other similar rights to subscribe for the
Securities;
(vii) the Indenture has been duly authorized, executed and
delivered, and constitutes a legal, valid and binding instrument
enforceable against the Company and the Guarantor in accordance
with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time
in effect); the Certificates for the Securities are in valid form,
the Securities have been duly and validly authorized and, when
executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Purchasers
pursuant to this Agreement, will constitute legal, valid and
binding obligations of the Company entitled to the benefits of the
Indenture; and the statements set forth under the heading
"Description of Notes" in the Final Memorandum, insofar as such
statements purport to summarize certain provisions of the
Securities and the Indenture, provide a fair summary of such
provisions; and
(viii) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body or any arbitrator
involving the Company, the Guarantor or any of their respective
subsidiaries or to which any of the properties of the Company, the
Guarantor or any of their respective subsidiaries is subject that
would be required to be disclosed or incorporated by reference in
the Final Memorandum if the Final Memorandum were a prospectus
included in a registration statement on Form S-3 under the
Securities Act, which is not adequately disclosed in the Final
Memorandum, and the statements in the Final Memorandum under the
headings "Risk Factors--Litigation", "Business--Trade Cases",
"Business--Environmental Matters", "Business--Legal Proceedings",
"Description of PBGC Settlement Agreement" and "Description of
Certain Financing and Security Arrangements", insofar as such
statements constitute summaries of the documents or proceedings,
as the case may be, referred to therein, fairly summarize, in all
material respects, the matters referred to therein;
Such counsel shall also state that they have no reason to
believe that at the Execution Time the Final Memorandum contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or that the
Final Memorandum includes an untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of New York, the State of Delaware or the United States, to
the extent he deems proper and specified in such opinion, upon the
opinion of other counsel of good standing whom he believes to be
reliable and who are satisfactory to counsel for the Purchasers and (B)
as to matters of fact, to the extent he deems proper, on certificates of
responsible officers of the Company and public officials.
All references in this Section 6(b) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(c) The Purchasers shall have received from counsel for the
Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Final Memorandum
(as amended or supplemented at the Closing Date) and other related
matters as the Purchasers may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Purchasers a
certificate of the Company, signed by the Senior Vice President and
Chief Financial Officer and the Vice President and Treasurer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any amendment
or supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company and
the Guarantor in this Agreement and in the Registration Agreement
are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date,
and the Company and the Guarantor have complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder or thereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material
adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(e) At the Execution Time and at the Closing Date, Ernst & Young
LLP shall have furnished to the Purchasers a letter or letters, dated
respectively as of the Execution Time and as of the Closing Date, in
form and substance satisfactory to the Purchasers, confirming that they
are independent accountants within the meaning of the Securities Act and
the Exchange Act and the applicable rules and regulations thereunder and
Rule 101 of the Code of Professional Conduct of the American Institute
of Certified Public Accountants (the "AICPA") and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by
reference in the Final Memorandum and reported on by them comply
in form in all material respects with the applicable accounting
requirements of the Exchange Act and the related published rules
and regulations that would apply to the Final Memorandum if the
Final Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act;
(ii) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the latest audited
financial statements included in the Final Memorandum, including
the reading of the minutes and inquiries of certain officials of
the Company who have responsibility for the financial and
accounting matters and certain other limited procedures requested
by the Purchasers and described in detail in such letter, nothing
has come to their attention that causes them to believe that:
(A) any unaudited financial statements of the Company
included or incorporated by reference in the Final
Memorandum do not comply in form in all material respects
with applicable accounting requirements of the Securities
Act that would apply to the Final Memorandum if the Final
Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities Act and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange Act; or
that such unaudited financial statements are not, in all
material respects, in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements of
the Company included or incorporated by reference in the
Final Memorandum;
(B) with respect to the period subsequent to June 30,
1997, there were, at a specified date not more than five
business days prior to the date of the letter, any changes
in the total debt of the Company and its subsidiaries or
capital stock of the Company or decreases in the
stockholders' equity of the Company or changes in other
post-employment benefit liabilities or changes in pension
liabilities or decreases in working capital of the Company
and its subsidiaries, as compared with the amounts shown on
the June 30, 1997 consolidated balance sheet included or
incorporated by reference in the Final Memorandum, or for
the period from July 1, 1997, to such specified date there
were any decreases, as compared with the corresponding
period in the preceding year in sales or income (loss) before
income taxes or net income (loss) or EBITDA, as defined in
the Indenture, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is not
deemed necessary by the Purchasers; or
(C) the information included under the headings
"Selected Consolidated Financial Information and Certain
Operating Data" and "Management's Discussion and Analysis of
Results of Operations and Financial Condition" is not in
conformity with the disclosure requirements of Regulation
S-K that would apply to the Final Memorandum if the Final
Memorandum were a prospectus included in a registration
statement on Form S-1 under the Securities; and
(iii) they have performed certain other specified procedures as
a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries)
set forth in the Final Memorandum, including the information set
forth under the captions "Offering Memorandum Summary", "Risk
Factors", "Use of Proceeds", "Capitalization and Other Significant
Obligations" "Selected Consolidated Financial Information and
Certain Operating Data", "Management's Discussion and Analysis of
Results of Operations and Financial Condition", "Business",
"Management", "Description of Certain Financing and Security
Arrangements", "Description of PBGC Settlement Agreement" and
"Description of Notes" in the Final Memorandum, agrees with the
accounting records of the Company and its subsidiaries, excluding
any questions of legal interpretation.
All references in this Section 6(e) to the Final Memorandum shall
be deemed to include any amendment or supplement thereto at the date of
the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates as
of which information is given in the Final Memorandum, there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (d) of this Section 6 or (ii) any change, or any
development involving a prospective change, in or affecting the business
or properties of the Company and its subsidiaries the effect of which,
in any case referred to in clause (i) or (ii) above, is, in the
reasonable judgment of the Purchasers, so material and adverse as to
make it impractical or inadvisable to market the Securities as
contemplated by the Final Memorandum.
(g) Subsequent to the Execution Time, there shall not have been
(i) any decrease in the rating of the Securities or any of the Company's
or the Guarantor's other debt securities by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Securities Act) or (ii) any notice given of any intended or
potential decrease in any such rating or that such organization has
under surveillance or review (other than any such notice with positive
implications of a possible upgrading) its rating of the Securities or
any of the Company's or any Guarantor's other debt securities.
(h) Prior to the Closing Date, the Company and the Guarantor
shall have furnished to the Purchasers such further information,
certificates and documents as the Purchasers may reasonably request.
(i) The Company shall have furnished evidence satisfactory to the
Purchasers that, on or before the Closing Date, the Ninth Amendment and
the Tenth Amendment to the Letter of Credit Agreement (the "Tenth
Amendment") have been duly authorized, executed and delivered by the
Borrowers, the Lenders and the Agent (each such term as defined in the
Tenth Amendment).
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchasers and counsel for the
Purchasers, this Agreement and all obligations of the Purchasers hereunder may
be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancelation shall be given to the Company in writing or by
telephone confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of counsel for the Purchasers, at 825 Eighth Avenue,
New York, New York, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because of any termination pursuant to
Section 6 or 10 hereof or because of any refusal, inability or failure on the
part of the Company or the Guarantor to perform any agreement herein or comply
with any provision hereof, in each case other than by reason of a default by
the Purchasers, the Company and the Guarantor jointly and severally will
reimburse the Purchasers upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company and the
Guarantor jointly and severally agree to indemnify and hold harmless each
Purchaser, each director, officer, employee and agent of any Purchaser and
each other person, if any, who controls any Purchaser within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act, the Exchange
Act or other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Memorandum, the Final Memorandum or any information provided by the Company to
any holder or prospective purchaser of Securities pursuant to Section 5(i), or
in any amendments thereof or supplements thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that neither the Company nor the Guarantor will be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made in the Preliminary Memorandum or the Final
Memorandum, or in any amendment thereof or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of the Purchasers specifically for inclusion therein, it being
understood that the only such information is that described in Section 8(b).
This indemnity agreement will be in addition to any liability that the Company
or the Guarantor may otherwise have. Such indemnity with respect to the
Preliminary Memorandum shall not inure to the benefit of any Initial Purchaser
(or any of the directors, officers, employees and agents of such Purchaser)
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities that are the subject thereof if such person did not
receive a copy of the Final Memorandum as amended or supplemented at or prior
to the confirmation of the sale of such Securities to such person in any case
where the untrue statement or omission of a material fact contained in such
Preliminary Memorandum was corrected in the Final Memorandum as amended or
supplemented and the sale to the person asserting any such loss, claim, damage
or liability was an initial resale of such Securities by such Initial
Purchaser.
(b) Each Purchaser severally and not jointly agrees to indemnify
and hold harmless each of the Company and the Guarantor, their respective
directors and officers, and each other person, if any, who controls the
Company or the Guarantor within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Company and the Guarantor to the Purchasers, but
only with reference to written information relating to such Purchasers
furnished to the Company by or on behalf of the Purchasers specifically for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment thereof or supplement thereto). This indemnity agreement will be in
addition to any liability which any that the Purchasers may otherwise have,
including for any violation of Section 4 hereof. The Company and the
Guarantor acknowledge that the statements set forth in the last paragraph of
the cover page and under the heading "Plan of Distribution" in the Preliminary
Memorandum and the Final Memorandum constitute the only information furnished
in writing by or on behalf of the Purchasers for inclusion in the Preliminary
Memorandum or the Final Memorandum (or in any amendment thereof or supplement
thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set forth
below); provided, however, that such counsel shall be satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel chosen
by the indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Guarantor on the one
hand and the Purchasers on the other agree to contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same)
(collectively "Losses") to which the Company and the Guarantor or the
Purchasers, as applicable, may be subject in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Guarantor or
the Purchasers, as applicable, from the offering of the Securities; provided,
however, that in no case shall the Purchasers be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such the Purchasers hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Guarantor on the one hand and the Purchasers on the other hand shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company the Guarantor or
the Purchasers, as applicable, in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Guarantor shall be
deemed to be equal to the total net proceeds from the offering of the
Securities (before deducting expenses), and benefits received by the Purchasers
shall be deemed to be equal to the total purchase discounts and commissions,
in each case as set forth on the cover page of the Final Memorandum. Relative
fault shall be determined by reference to whether any alleged untrue statement
or omission relates to information provided by the Company, the Guarantor or
the Purchasers, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Guarantor and the Purchasers agree that it would
not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute as
provided in this Section 8(d) are several in proportion to their respective
purchase obligations and not joint. For purposes of this Section 8, each
person who controls a Purchaser within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each director, officer,
employee and such agent of Purchaser shall have the same rights to
contribution as such Purchaser, and each person who controls the Company
within the meaning of either the Securities Act or the Exchange Act and each
officer and director of the Company or the Guarantor shall have the same
rights to contribution as the Company and the Guarantor, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. Default by a Purchaser. If any one or more Purchasers shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Purchaser hereunder and such failure to purchase shall constitute a
default in the performance of its or their obligations under this Agreement,
the remaining Purchasers shall be obligated severally to take up and pay for
(in the respective proportions which the principal amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of Securities set forth opposite the names of all the
remaining Purchaser(s)) the Securities that the defaulting Purchaser or
Purchasers agreed but failed to purchase; provided, however, that in the event
that the aggregate principal amount of Securities that the defaulting
Purchaser or Purchasers agreed but failed to purchase shall exceed 10% of the
aggregate principal amount of Securities set forth in Schedule I hereto, the
remaining Purchasers shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Securities, and if such
non-defaulting Purchasers do not purchase all the Securities, this Agreement
will terminate without liability to any non-defaulting Purchaser, the Company
or the Guarantor. In the event of a default by any Purchaser as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding seven days, as the Purchasers shall determine in order that the
required changes in the Final Memorandum or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting, Purchaser of its liability, if any, to the Company or
any non-defaulting Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchasers, by notice given to
the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in any of the Company's securities shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended
or limited or minimum prices shall have been established on such Exchange,
(ii) a banking moratorium shall have been declared either by Federal or New
York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Purchasers,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Memorandum.
11. Representations and Indemnities to Survive. The
respective agreements, representations, warranties, indemnities and other
statements of the Company, the Guarantor or their respective officers and of
the Purchasers set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by or on behalf of
the Purchasers, the Company or the Guarantor or any of the officers, directors
or controlling persons referred to in Section 8 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections 7 and
8 hereof shall survive the termination or cancelation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or sent by fax and confirmed to them, care of Salomon Brothers Inc,
at Seven World Trade Center, New York, New York, 10048; or, if sent to the
Company or the Guarantor, will be mailed, delivered or telegraphed and
confirmed to it at 200 Public Square, Cleveland, Ohio 44114, attention: Hal C.
Hedrick, Jr.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8
hereof, and, except as expressly set forth in Section 5(i) hereof, no other
person will have any right or obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICT OF LAW PROVISIONS THEREOF).
15. Business Day. For purposes of this Agreement, "business
day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original, but all
such counterparts will together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding
agreement among the Company, the Guarantor and the Purchasers.
Very truly yours,
THE LTV CORPORATION
by
-------------------------------
Name:
Title:
LTV STEEL COMPANY, INC.
by
-------------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
by SALOMON BROTHERS INC
by
______________________
Name:
Title:
SCHEDULE I
Principal
Amount of Securities
Purchasers to be Purchased
--------------------
Salomon Brothers Inc ..................... $180,000,000
Chase Securities Inc. .................... 60,000,000
Credit Suisse First Boston Corporation ... 60,000,000
------------
Total ..................... $300,000,000
============
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1)(a) The Securities have not been and will not be registered
under the Securities Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S or pursuant to an exemption from the registration
requirements of the Securities Act. Each Purchaser represents and agrees that,
except as otherwise permitted by Section 4(a)(i) of the Agreement to which
this is an exhibit, it has offered and sold the Securities, and will offer and
sell the Securities, (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering
and the Closing Date, only in accordance with Rule 903 of Regulation S.
Accordingly, each Purchaser represents and agrees that neither it, nor any of
its affiliates nor any person acting on its or their behalf has engaged or
will engage in any directed selling efforts with respect to the Securities,
and that it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from
it during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered
under the U.S. Securities Act of 1933 (the "Securities Act") and
may not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and September 22, 1997,
except in either case in accordance with Regulation S, Rule 144A
or another available exemption from registration under the
Securities Act. Terms used above have the meanings given to them
by Regulation S."
(b) Each Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with
its affiliates or with the prior written consent of the Company.
(c) Terms used in this Exhibit have the meanings given to them by
Regulation S.
(2) Each Purchaser represents and agrees that (i) it has not
offered or sold, and will not offer or sell, in the United Kingdom, by means
of any document, any Securities other than to persons whose ordinary business
it is to buy or sell shares or debentures, whether as principal or as agent
(except in circumstances which do not constitute an offer to the public within
the meaning of the Companies Act 1985 of Great Britain), (ii) it has complied
and will comply with all applicable provisions of the Financial Services Act
1986 of the United Kingdom with respect to anything done by it in relation to
the Securities in, from or otherwise involving the United Kingdom, and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind described in Article 9(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1988 or is a person to whom the document may otherwise lawfully be issued or
passed on.
Exhibit 2.3
[CONFORMED COPY]
RESTATED CERTIFICATE OF INCORPORATION
of
REPUBLIC STEEL CORPORATION
Named changed to
LTV STEEL COMPANY, INC.
by amendment of Art. 1 of
Certificate of Incorporation
effective December 19, 1984
May 31, 1983
As
Amended
June 29, 1984
December 19, 1984
July 15, 1987
RESTATED CERTIFICATE OF INCORPORATION
of
REPUBLIC STEEL CORPORATION
ARTICLE I
The name of the Corporation is:
LTV STEEL COMPANY, INC.
ARTICLE II
1. The current registered office of the Corporation is at 117
Main Street, in the Borough of Flemington, in the County of Hunterdon, New
Jersey (08822) and the name of the current registered agent in charge thereof
upon whom process against the Corporation may be served is Edwin K. Large, Jr.
2. The number of directors constituting the Corporation's
current Board of Directors is 14 (subject to change from time to time in such
manner as may be provided in the By-laws of the Corporation or as otherwise
provided by law). The names and addresses of the persons currently serving as
said directors are:
Name Residence of Business Address
---- -----------------------------
H. J. Bolwell c/o Midland-Ross Corporation
20600 Chagrin Boulevard
Cleveland, Ohio 44122
J. G. Breen c/o The Sherwin-Williams Company
101 Prospect Avenue, N.W.
Cleveland, Ohio 44115
W. J. De Lancey 912 Midland Building
Cleveland, Ohio 44115
W. R. Hartman c/o Interpace Corporation
260 Cherry Hill Road
Parsippany, New Jersey 07054
R. H. Holdt c/o White Consolidated Industries, Inc.
11770 Berea Road
Cleveland, Ohio 44111
E. B. Jones Republic Steel Corporation
Republic Building
Cleveland, Ohio 44115
J. R. Kerr 1175 Muirlands Drive
La Jolla, California 92097
J. J. Loftus Republic Steel Corporation
Republic Building
Cleveland, Ohio 44115
Seymour S. Mintz c/o Hogan & Hartson
815 Connecticut Avenue, N.W.
Washington, D.C. 20006
S. C. Pace c/o TRW, Inc.
23555 Euclid Avenue
Cleveland, Ohio 44117
S. K. Scovil c/o The Cleveland-Cliffs Iron Company
1460 Union Commerce Building
Cleveland, Ohio 44115
C. E. Spahr 1901 Terminal Tower Building
Cleveland, Ohio 44113
L. A. Toepfer c/o Jones, Day, Reavis & Pogue
400 LeVeque Tower
50 W. Broad Street
Columbus, Ohio 43215
W. J. Williams Republic Steel Corporation
Republic Building
Cleveland, Ohio 44115
ARTICLE III
The purposes for which the Corporation is organized are to
engage in any activity within the purposes for which corporations may be
organized under the New Jersey Business Corporation Act as in effect at the
date hereof, including without limiting the generality of the foregoing:
1. To engage in any such activity directly or through
subsidiary or subsidiaries, and to take all acts deemed appropriate to promote
the interest of such subsidiary or subsidiaries, including without limiting
the foregoing, making contracts and incurring liabilities for the benefit of
such subsidiary or subsidiaries; transferring or causing to be transferred to
any such subsidiary or subsidiaries assets of the Corporation; and
guaranteeing the bonds, debentures, notes or other evidences of indebtedness
issued, or obligations incurred, by such subsidiary or subsidiaries and
securing the same by mortgage of or security interest in the property of the
Corporation; and contracting that said bonds, debentures, notes or other
evidences of indebtedness issued by such subsidiary or subsidiaries may be
convertible into stock of the Corporation upon such terms and conditions as
may be approved by the Board of Directors; and
2. To exercise as a purpose or purposes each power granted to
corporations by the New Jersey Business Corporation Act and any amendment or
supplement thereto or any corporation act enacted to take the place thereof,
insofar as such powers authorize or may hereafter authorize corporations to
engage in activities; and to guarantee the bonds, debentures, notes or other
evidences of indebtedness issued, or obligations incurred, by any corporation,
partnership, limited partnership, joint venture or other association where the
Corporation has or may acquire a substantial interest in such corporation,
partnership, limited partnership, joint venture or other association or where
such guarantee is otherwise in furtherance of the interests of the Corporation.
ARTICLE IV
The aggregate number of shares which the Corporation is
authorized to issue is 100,000,000 shares divided into 50,000,000 shares of
Common Stock of the par value of $10 a share and 50,000,000 shares of
Preferred Stock of the par value of $.10.
A. The designation, rights, preferences, privileges and
limitations of the shares of Common Stock and shares of Preferred Stock and
the manner of determining the designations, number of classes and of series
within classes of Preferred Stock and the relative voting, dividend,
liquidation and other rights, preferences and limitations of each such class
or series are as follows:
1. Shares of Preferred Stock may be divided into classes and
series within any class. Such division into classes and series and the
determination of the designation and the number of shares of any such clues or
series and of the relative rights, preferences and limitations of the shares
of any such class or series, including whether the shares of any class shall
be shares without par value or shares with par value, and the par value of
shares of any class the shares of which are to have a par value, may be
accomplished by this certificate of incorporation or an amendment or
amendments hereof including an amendment or amendments made by action of the
Board of Directors without stockholder approval. The Board of Directors is
hereby authorized to take such action from time to time and to make such
determinations, except (a) that all shares of the same class shall be either
without par value or shall have the same par value; (b) that each class and
each series shall be designated so as to distinguish its shares from those of
every other class and series; and (c) that all shares within one class which
is not divided into series and all shares within a series shall be of equal
value and otherwise identical. Without limitation upon the foregoing, the
Corporation when so authorized in any such amendment may issue classes of
shares of Preferred Stock and series of shares of any such class: (a)
entitling the holders thereof to cumulative, non-cumulative or partially
cumulative dividends; (b) entitling the holders thereof to receive dividends
payable subordinate to or on a parity with or in preference to the dividends
payable on any other class or series; (c) entitling the holders thereof to
preferential rights upon the liquidation of, or upon any distribution of the
assets of, the Corporation; (d) convertible, at the option of the holder or of
the Corporation or both, into shares of any other class or classes or of any
series of the same or any other class or classes; (e) redeemable in whole or
in part at the option of the Corporation in cash, the Corporation's bonds,
debentures, notes and other written obligations or in other property, at such
price or prices, within such period or periods, and under such conditions as
are stated in this certificate of incorporation or any amendment hereof,
including redemption in accordance with a sinking fund or funds, which are
hereby authorized to be created; and (f) lacking voting rights or having
limited voting rights or enjoying special or multiple voting rights. The
authority granted to the Board of Directors shall include authority to
determine relative rights and preferences which are prior or subordinate to or
equal with the shares of any other class or series whether or not such other
shares are issued and outstanding at the time the Board of Directors acts,
except that the Board of Directors shall not determine that the shares of any
class or series shall have rights or preferences that would violate the Terms
or provisions of the amendment pursuant to which shares of Preferred Stock then
outstanding were issued; to increase or to decrease the number of shares of
any claim or series previously determined, provided, however, that the number
of shares of any claim or series shall not be decreased to a number less than
the number of shares of such class or series then outstanding and the number
of shares of any such class or series shall not be increased in violation of
the terms or provisions of the amendment pursuant to which shares of Preferred
Stock then outstanding were issued; and to execute and file in the office of
the Secretary of State of New Jersey a certificate of amendment to this
certificate of incorporation as theretofore amended in order that this
certificate of incorporation shall be amended so that the designation and
number of shares of each class and series and the relative voting, dividend,
liquidation and all other rights, preferences and limitations of each such
class and series shall be as stated in the certificate of amendment, but not
inconsistent with this Article IV. Shares of the Preferred Stock which shall
at any time have been retired or cancelled in any manner including shares
redeemed, treasury shares retired and shares which have been converted into or
exchanged for Common Stock or other stock shall have the status of authorized
but unissued shares of Preferred Stock and may be reissued as shares of the
class or series of which they were originally a part or may be issued as
shares of a new class or series or as shares of any other class or series.
2. Out of the assets of the Corporation legally available for
dividends, the holders of Preferred Stock of each class or series outstanding
from time to time shall be entitled to receive when and as declared by the
Board of Directors cash dividends per share in the amount per annum or at the
rate per annum specified for such class or series in the certificate of
amendment pursuant to which shares thereof were issued, and no more, payable
in each case on the first days of January, April, July and October in each
year or on such other dates specified in said certificate of amendment or as
may be fixed by the Board of Directors, and accruing in each case from such
date specified in said certificate of amendment or, if no date is so
specified, from the date of issue. Such dividends shall be cumulative,
noncumulative or partially cumulative as shall be specified in said
certificate of amendment. In case the dividends payable on any class or
series of Preferred Stock entitled to preference in the payment of dividends
over any other class or series of Preferred Stock or over the Common Stock, as
the case may be, are not paid in full, all shares of such class or series
shall share ratably in any payment of dividends thereon, in proportion to the
sums that would be payable on the shares of such class or series if all
dividends thereon were declared and paid in full (any class or series of
Preferred Stock which is entitled to a preference in payment of dividend over
any other class or series of Preferred Stock or over the Common Stock being
hereinafter sometimes referred to as "senior stock"). In no event, so long
as shares of senior stock shall be outstanding, shall any dividend or
distribution, whether in cash or property, be declared or paid or set apart
for payment on any stock ranking junior in the payment of dividends to such
senior stock (any stock so ranking junior to such senior stock being
hereinafter called "junior stock") nor shall any moneys be paid or set aside
or made available for the retirement, redemption or purchase of any junior
stock, nor shall any moneys be paid or set aside or made available for a
sinking fund for the retirement, redemption or purchase of any junior stock,
unless
(a) all dividends in arrears (if any) upon the senior stock
shall have been declared and paid in full,
(b) dividends upon the senior stock for the then current
dividend period shall have been declared and paid or set apart for
payment,
(c) all amounts, if any, theretofore required to be paid or set
apart in respect of all sinking fund, purchase fund and analogous
provisions for the senior stock shall have been paid or set apart for
payment, and
(d) the requirements, if any, for all sinking fund, purchase
fund and analogous provisions for the senior stock for the then
current period shall have been complied with.
Subject to the foregoing provisions of this Paragraph 2, dividends may be
declared and paid upon each class or series of Preferred Stock ranking
junior in the payment of dividends to the senior stock, and such dividends
(payable in cash, stock or otherwise) as may be determined by the Board of
Directors may be declared and paid upon the Common Stock out of the
remaining assets of the Corporation legally available for dividends.
3. The Corporation may at its option, at any time or from time
to time, redeem all or any part of the shares of any class or series of
Preferred Stock, if and to the extent that the shares of such class or series
shall be redeemable, by paying therefor in cash the redemption price provided
for the shares of such class or series. Notice of redemption shall be given
either by mail or by publication or both, as prescribed in respect of such
shares of such class or series to be redeemed. If at any time less than all
of the outstanding shares of any class or of any series is to be redeemed, the
particular shares to be redeemed shall be selected by lot, or in such other
manner as may be determined by the Board of Directors. Except as limited by
law or as herein or in the amendments providing for the creation and issuance
of any class or series or in the By-laws specifically provided, the Board
of Directors shall have full discretion to prescribe and regulate, from
time to time, the procedure to be followed in and all details concerning
the redemption of any such shares. Notice of redemption having been duly
given, the redemption price shall become due and payable on the date fixed
for redemption and, if on or before the redemption date stated in such
notice the funds necessary for such redemption shall have been deposited in
trust for such redemption, then the right to receive dividends on the
shares so called for redemption, except the right of the holders thereof to
receive the redemption price therefor, shall (subject to the conversion
rights, if any, of such shares that may extend to but not after the date
fixed for redemption) forthwith upon such deposit cease and terminate.
4. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation or any sale of all or
substantially all of its assets, the holders of shares of each class of
Preferred Stock and of each series within such class shall be entitled to
receive payment in cash of such amount for each share of said class or series
held by such holders respectively as shall be provided for said class or
series in the certificate of amendment authorizing the issue of such class or
series, and no more; and no sum shall be paid, and no distribution of any
assets of the Corporation shall be made, to holders of shares of Preferred
Stock of any class or series that is junior to any other class or series or to
the holders of Common Stock until such payment to the holders of each class or
series entitled to priority and in the order of their priority shall have been
made or moneys therefor deposited in trust, but after such payment in full to
the holders of each class or series entitled to priority, the remaining assets
of the Corporation may be distributed ratably among the holders of the Common
Stock. If upon such liquidation, dissolution, winding up or sale as aforesaid,
the assets thus distributable among the holders of any class or series
entitled to priority in payment shall be insufficient to permit the payment to
such holders of the amount of such priority in full, then the assets of the
Corporation to be distributed to such holders shall be distributed among the
respective holders of such class or series ratably, in proportion to the
amounts payable upon the shares of such class or series held by them,
respectively, if all such amounts were paid in full. For the purposes of this
Paragraph 4 shares shall be deemed to be junior in relation to any class or
series of Preferred Stock which, by the terms of any certificate of amendment
hereof not contrary to provisions contained in any prior certificate of
amendment, is entitled upon dissolution or liquidation to be paid prior to the
payment of the amount payable on such shares, irrespective of any priority
with respect to the payment of dividends. No merger or consolidation of the
Corporation with or into another corporation organized under the laws of New
Jersey or of any other state which shall not in fact result in the liquidation
of the enterprise and the distribution of assets to stockholders shall be
deemed to be a liquidation, dissolution or winding up of the Corporation or
sale as aforesaid.
5. At every meeting of the stockholders each holder of shares
of Common Stock shall be entitled to one vote for each share held at the time
for determining stockholders entitled to vote at such meeting, and each holder
of shares of any class or series of Preferred Stock shall have no voting
rights or full or limited voting rights or special or multiple voting rights
as shall be provided for such class or series in the certificate of amendment
creating such class or series within any class.
6. Neither the holders of shares of Common Stock nor the
holders of shares of any class or series of Preferred Stock shall have any
preferential right of subscription to any shares of Common Stock or to any
shares of Preferred Stock which the Corporation now is or hereafter may be
authorized to issue, or to any securities convertible into Common Stock or
Preferred Stock or to any rights or options to purchase or subscribe for
shares of Common Stock or Preferred Stock of the Corporation now or hereafter
authorized, nor any right of subscription to any thereof, other than such, if
any, as the Board of Directors in its discretion may determine, and at such
prices as the Board of Directors in its discretion may fix.
7. The term "dividends in arrears," whenever used in this
Article IV in respect of shares that are or hereafter may be cumulative, shall
be deemed to mean that amount which shall be equal to dividends at the rate
per share per annum to which holders of the shares in question are or may be
entitled from the date when dividends first commenced to accrue upon the shares
in question or from the date the dividends on the shares in question became
cumulative, if the certificate of amendment creating the class or series in
question provides that dividends shall commence to be cumulative other than on
the date from which dividends first accrued, to the dividend payment date next
preceding the date in question, less the aggregate amount of all dividends
paid upon the shares in question after the date upon which such dividends
became cumulative. In case any shares of any class or series shall be issued
at a time when there shall already be outstanding shares of such class or
series, all dividends theretofore paid upon the outstanding shares of such
class or series shall be deemed to have been paid upon the additional shares
of such class or series so issued. The term "dividend payment date" is used
herein to refer to the appropriate date, as specified or fixed in or pursuant
to Paragraph 2 hereof, on which dividends on the shares in question may be
payable, whether or not such dividends are paid. The term "distribution,"
whenever used in respect of shares of stock of any class or series shall be
deemed to include all dividends declared or paid and other distributions made
on the stock of such class or series and all money and/or property and/or
stock used in the retirement of stock of such class or series whether by
purchase or otherwise.
8. The Corporation shall at all times reserve and keep
available, out of its authorized and unissued stock, solely for the purpose of
effecting the conversion of all shares that by the terms of any certificate of
amendment shall be convertible into Common Stock of the Corporation, such
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all such shares from time to time outstanding. The
Corporation shall from time to time, in accordance with the laws of New
Jersey, increase the authorized amount of its Common Stock, if at any time the
number of shares of Common Stock remaining unissued shall not be sufficient to
permit the conversion of all such convertible shares then outstanding.
9. Shares of stock of the Corporation, whether authorized by
this certificate of incorporation or by any amendment hereof, may be issued
from time to time for such consideration as may be fixed from time to time by
the Board of Directors, except that the consideration for stock having a par
value shall not be less than the par value thereof, and authority to the Board
of Directors so to fix such consideration is hereby granted by the
stockholders.
B. The designation, rights, preferences, privileges and
limitations of the shares of Cumulative Exchangeable Preferred Stock are as
follows:
(1) Designation. Pursuant to the provision of this Article IV,
28,000,000 shares of Preferred Stock of the Corporation have been
classified as a series of Preferred Stock, $.10 par value designated as
"Cumulative Exchangeable Preferred Stock, $.10 Par Value" (hereinafter
called "First Series Preferred Stock").
(2) Dividends. The holders of shares of First Series Preferred Stock
shall be entitled to receive dividends in shares of First Series
Preferred Stock at the annual rate of .05 share of First Series
Preferred Stock per share (or, at the option of the Corporation, in cash
at the annual rate of $0.80 per share or in shares of Common Stock of
The LTV Corporation or any combination of cash and such shares), when
and as declared by the Board of Directors out of funds legally available
for the purpose, payable annually on the 15th day of April in each year,
commencing April 15, 1988, to holders of record on such respective dates
as may be determined by the Board of Directors in advance of the payment
of each particular dividend. Only those shares of First Series
Preferred Stock outstanding on any record date established by the Board
of Directors shall be entitled to the dividend payable on the following
dividend date, but all such outstanding shares shall be entitled to the
full annual dividend, even if some or all of such shares were not
outstanding during all the preceding calendar year. The First Series
Preferred Stock shall rank as to dividends junior to, on a party with or
prior to other series or classes of preferred stock of the Corporation
as determined in each instance by the Board of Directors of the
Corporation; provided, however, the Corporation has agreed to reach an
agreement with the United Steelworkers of America ("USWA") prior to
action by the Board of Directors regarding the ranking of all other
series or classes of preferred stock of the Corporation which would rank
as to dividends prior to the First Series Preferred Stock unless the
proceeds (net of deductions for all costs of issuance including
underwriting, attorneys and listing fees) of the issuance and sale of
such series or classes of preferred stock are to be used exclusively to
provide additional working or other capital for the exclusively to
provide additional working or other capital for the Corporation's steel
business or unless such classes or series of preferred stock are issued
during the period in which the Corporation is in bankruptcy proceedings
as a result of any filing by the Corporation under Chapter 11 of the
bankruptcy laws or as part of any plan or reorganization which follows
as a result of such filing. No dividends shall be declared on any other
series or classes of stock ranking on a parity with the First Series
Preferred Stock as to dividends in respect of any dividend period unless
there shall also be or have been declared on all shares of First Series
Preferred Stock at the time outstanding like dividends for all annual
periods ending at the same time as or before such period, ratably in
proportion to the respective annual dividend rates per annum fixed
therefor. Dividends shall be cumulative (whether or not there shall be
net profits or net assets of the Corporation legally available for the
payment of such dividends) and shall accrue on an annual basis as of the
earlier of the record date established by the Board of Directors or the
payment date specified in paragraph (2) hereof. No interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend
payment or payments which may be in arrears.
If in any annual dividend period, dividends shall not have been declared
and paid or set apart in full for payment on all outstanding shares of
First Series Preferred Stock for such annual dividend period and all
preceding annual dividend periods from and after the first day from
which dividends are cumulative, then, until the aggregate deficiency
shall be declared and fully paid or set apart for payment, the
Corporation shall not (i) declare or pay or set apart for payment any
dividend or make any other distribution on the Common Stock or any other
capital stock of the Corporation ranking junior to the First Series
Preferred Stock with respect to the payment of dividends or distribution
of assets on liquidation, dissolution or winding up of the Corporation
(the Common Stock and such other stock being herein referred to as
"Junior Stock") or (ii) make any payment on account of the purchase,
redemption or other retirement of any Junior Stock.
At the option of the Corporation and subject to the provisions hereof,
any dividend may be paid in whole or in part, in cash or in shares of
Common Stock of The LTV Corporation or in any combination of lawful
money of the United States of America and such shares. If the
Corporation desires to exercise its option to make a dividend payment of
the First Series Preferred Stock wholly or partly in shares of Common
Stock of The LTV Corporation (hereinafter sometimes called the "Stock
Payment Option"), the Board of Directors shall do so in and by a
resolution providing for the exercise of the Stock Payment Option.
If the Stock Payment Option is elected, the Corporation shall dispatch
or cause to be dispatched to each holder a certificate representing the
number of whole shares of Common Stock of the LTV Corporation arrived at
by dividing the Computed price of such Common Stock of The LTV
Corporation into the total amount of lawful money of the United States
of America which such holder would receive if the aggregate dividend on
the shares held by such holder which is being paid in shares of Common
Stock of The LTV Corporation were being paid in such lawful money.
The term "Computed Price" as of any dividend payment date means the price
equal to the arithmetical average of the per share Sale Price for the
Common Stock of The LTV Corporation for the ten consecutive trading days
ending on the fifth calendar day (or if such day is not a trading day,
then the trading day immediately preceding such calendar day) prior to
the dividend payment date; provided, that in no event shall the Computed
Price of a share of Common Stock of The LTV Corporation be less than the
par value of such Common Stock (presently $0.50 per share).
The term "Sale Price" means the average of the high and low sale prices
(or, if no sale prices are reported, the average of the high and low bid
prices) for the Common Stock of The LTV Corporation as reported in
composite trading, or, if the Common Stock of The LTV Corporation is not
listed on any national or regional stock exchange, as reported by NASDAQ
or, if such Common Stock is not quoted on NASDAQ, as reported by the
National Quotation Bureau Incorporated. If the Sale Price cannot be
established as described above, the Sale Price shall be the fair market
value of the Common Stock of The LTV Corporation as determined in good
faith by the Board of Directors of the Corporation.
No fractional shares will be issued payment of dividends. In lieu
thereof, the Corporation may issue a number of shares of First Series
Preferred Stock or Common Stock of The LTV Corporation, as the case may
be, which reflects a rounding up to the next whole number or may pay
lawful money of the United States of America in an amount equal to the
stated value of such fractional share in the case of First Series
Preferred Stock or in an amount equal to the fair value of such
fractional share in the case of Common Stock of The LTV Corporation, as
determined by the Board of Directors. The shares of Common Stock of The
LTV Corporation to be paid by the Corporation in payment of the dividend
on the First Series Preferred Stock are sometimes referred to
hereinafter as the "Dividend Shares".
The Corporation shall not exercise the Stock Payment Option with respect
to any dividend payment if:
(i) the payment of dividend has not been or will be made within
five Business Days following the dividend payment date;
(ii) the number of shares of Common Stock of The LTV Corporation
held in the Corporation's treasury is insufficient to pay the
portion of such dividend to be paid in Common Stock of The LTV
Corporation;
(iii) the issuance or delivery of shares of Common Stock of The
LTV Corporation pursuant to the Stock Payment Option would require
registration with or approval of any Governmental Authority under
any law or regulation, and such registration or approval has not
been effected or obtained; or
(iv) the Computed Price is less than the par value of the shares
of Common Stock of The LTV Corporation.
If the Corporation pays such dividend in shares of First Series
Preferred Stock or exercises the Stock Payment Option with respect to a
dividend payment, it shall deliver to the Transfer Agent, no later than
the fifth calendar day prior to the date on which shares of First Series
Preferred Stock or Dividend Shares for such dividend payment are to be
dispatched to holders, an Officers' Certificate setting forth (i) the
portion of the dividend payment being made in shares of First Series
Preferred Stock or Common Stock of The LTV Corporation and, (ii) the
number of Dividend Shares allocable to such dividend payment on each
share, as calculated pursuant to this Section 2.
(3) Liquidation Preference. The First Series Preferred Stock shall
rank upon liquidation, dissolution, or winding up of the Corporation
junior to, on a parity with or prior to other series or classes of
preferred stock of the Corporation as determined in each instance by the
Board of Directors of the Corporation; provided, however, the
Corporation has agreed to reach an agreement with the USWA prior to
action by the Board of Directors regarding the ranking of all other
series or classes of preferred stock of the Corporation which would rank
upon liquidation, dissolution or winding up of the Corporation prior to
the First Series Preferred Stock unless the proceeds (net of deductions
for all costs of issuance including underwriting, attorneys and listing
fees) of the issuance and sale of such series or classes of preferred
stock are to be exclusively to provide additional working or other
capital for the Corporation's steel business or unless such classes or
series of preferred stock are issued during the period in which the
Corporation is in bankruptcy proceedings as a result of any filing by the
Corporation under Chapter 11 of the bankruptcy laws or as part of any
plan of reorganization which follows as a result of such filing. In the
event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, before any payment or distribution of
the assets of the Corporation (whether capital or surplus) shall be made
to or set apart for the holders of the Common Stock of the Corporation
or any other series or class or classes of stock of the Corporation
ranking junior to the First Series Preferred Stock upon liquidation,
dissolution or winding up, the holders of the shares of the First Series
Preferred Stock shall be entitled to receive $16 per share plus an
amount equal to all dividends (whether or not earned or declared)
accrued and unpaid thereon to the date of final distribution to such
holders; but such holders shall not be entitled to any further payment.
If, upon any liquidation, dissolution or winding up of the Corporation,
the assets of the Corporation, or proceeds thereof, distributable among
the holders of the shares of the First Series Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other preferred stock ranking as to
liquidation, dissolution or winding up, on a parity with the First
Series Preferred Stock, then such assets and proceeds shall be
distributed among the holders of First Series Preferred Stock and any
such other preferred stock ratably in accordance with the respective
amounts which would be payable upon liquidation, dissolution or winding
up on such shares of First Series Preferred Stock and any such other
preferred stock if all amounts payable thereof were paid in full. For
the purposes of this Section (3), a consolidation or merger of the
Corporation with one or more corporations shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary.
Subject to the rights of the holders of shares of any series or class or
classes of stock ranking on a parity with or prior to the First Series
Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation, after payment
shall have been made in full to the First Series Preferred Stock as
provided in this Section (3), but not prior thereto, the holders of the
Common Stock or any other series or class or classes of stock ranking
junior to the First Series Preferred Stock upon liquidation, dissolution
or winding up of the Corporation shall, subject to the respective terms
and provisions (if any) applying thereto, be entitled to receive any and
all assets remaining to be paid or distributed, and the First Series
Preferred Stock shall not be entitled to share therein.
(4) Redemption. (a) The Corporation, at its option, may redeem
shares of the First Series Preferred Stock, as a whole or in part, at
any time or from time to time in cash at $16 per share, plus accrued
and unpaid dividends to the date fixed for redemption.
(b) In the event the Corporation shall redeem shares of the
First Series Preferred Stock, notice of such redemption shall
be given by first class mail, postage prepaid, mailed not less
than 30 days prior to the redemption date, to each holder of
record of the shares to be redeemed, at such holder's address
as the same appears on the stock register of the Corporation.
Each such notice shall state: (1) the redemption date; (2)
the number of shares of First Series Preferred Stock to be
redeemed and, if less than all the shares held by such holder
are to be redeemed, the number of such shares to be redeemed
from such holder; (3) the redemption price; (4) the place or
places where certificates for such shares are to be surrendered
for payment of the redemption price; and (5) that dividends on
the shares to be redeemed will cease to accrue on such
redemption date. Upon surrender in accordance with said notice
of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Board of Directors of
the Corporation shall so require and the notice shall so
state); such shares shall be redeemed by the Corporation at the
redemption price aforesaid.
If less than all the outstanding shares of First Series Preferred
Stock not previously called for redemption are to be redeemed on
any redemption date, shares to be redeemed shall be selected by the
Corporation from outstanding shares of First Series Preferred
Stock not previously called for redemption by lot, pro rata (as
nearly as may be) or by any other method determined by the Board
of Directors of the Corporation is its sole discretion to be
equitable to the holders of the First Series Preferred Stock.
(5) Shares to be Retired. All shares of First Series Preferred
Stock redeemed by the Corporation may be reissued.
(6) Voting. Except as otherwise from time to time required by
law, the First Series Preferred Stock shall have no voting rights.
(7) Sinking Fund. Shares of First Series Preferred Stock are
not subject or entitled to the benefit of a sinking fund.
ARTICLE V
The Corporation is to have perpetual existence.
ARTICLE VI
1. The directors of the Corporation shall hold office until the
next annual meeting of stockholders following their election and until their
respective successors are duly elected.
2. The number of directors of the Corporation shall be fixed
from time to time by, or in the manner provided in, the Corporation's By-laws
and may be increased or decreased as therein provided, but the number thereof
shall not be less than one.
3. Any directorship not filled at the annual meeting of
stockholders and any vacancy, however caused, occurring in the Board of
Directors may be filled by the affirmative vote of a majority of the remaining
directors even though less than a quorum of the Board.
4. Any directorship to be filled by reason of an increase in
the number of directors may be filled by the Board of Directors.
ARTICLE VII
Except as otherwise provided by statute, by this certificate of
incorporation as the same may be amended from time to time or by By-laws as
the same may be amended from time to time, all corporate powers may be
exercised by the Board of Directors. Without limiting the foregoing, the
Board of Directors shall have power, without stockholder action:
1. To authorize the Corporation to purchase, acquire, hold,
lease, mortgage, pledge, sell and convey such property, real, personal and
mixed, without as well as within the State of New Jersey as the Board of
Directors may from time to time determine, and in payment for any property to
issue, or cause to be issued, stock of the Corporation, or bonds, debentures,
notes or other obligations or evidences of indebtedness thereof secured by
pledge, security interest or mortgage, or unsecured.
2. To determine from time to time to what extent and at what
times and places and under what conditions and regulations the accounts and
books of the Corporation, or any of them, shall be open to the inspection of
the stockholders, and no stockholder shall have any right to inspect any
account, book or documents of the Corporation, except as conferred by statute
or by the Board of Directors.
3. To authorize the borrowing of money; the issuance of bonds,
debentures, notes and other obligations or evidences of indebtedness of the
Corporation, secured or unsecured, and the inclusion of provisions as
redeemability and convertibility into shares of stock of the Corporation or
otherwise; and, as security for money borrowed or bonds, debentures, notes and
other obligations or evidences of indebtedness issued by the Corporation, the
mortgaging or pledging of any property, real, personal or mixed, then owned or
thereafter acquired by the Corporation.
4. To loan money to, or guarantee an obligation of, or
otherwise assist any officer or other employee of the Corporation or any
subsidiary, including an officer or employee who is also a director of the
Corporation, whenever, in the judgment of the Board of Directors, such loan,
guarantee or assistance may reasonably be expected to benefit the Corporation.
5. By the affirmative vote of a majority of the directors in
office, to remove a director or directors for cause where, in the judgment of
such majority, the continuation of the director or directors in office would
be harmful to the Corporation and to suspend the director or directors for a
reasonable period pending final determination that cause exists for such
removal.
IN WITNESS WHEREOF, Republic Steel Corporation has caused this
Restated Certificate of Incorporation to be executed on behalf of the
Corporation by its Chairman of the Board this 31st day of May, 1983.
REPUBLIC STEEL CORPORATION
By E. B. JONES
Chairman and Chief Executive Officer
RESOLVED, that Article VI, paragraph 2 shall be amended to state
in its entirety as follows:
2. The number of directors of the Corporation shall be fixed from
time to time by, or in the manner provided in, the Corporation's
By-laws and may be increased or decreased as therein provided, but
the number thereof shall not be less than one.
Written Consent
Dated 6/29/84
(B) The merger of J&L into the Corporation shall result in the
amendment of Article 1 of the Certificate of Incorporation of the
surviving corporation to read as follows:
ARTICLE 1. The name of the Corporation is LTV Steel Company, Inc.
Meeting-Board-of-Directors
December 19, 1984
CERTIFICATE OF AMENDMENT TO THE RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED, OF
LTV STEEL COMPANY, INC.
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4), Section 14A:9-4(3), and
Section 14A:7-2(2) of the New Jersey Business Corporation Act, the undersigned
corporation executes the following Certificate of Amendment to its Restated
Certificate of Incorporation, as amended:
1. The name of the corporation is
LTV STEEL COMPANY, INC.
2. The following amendment to the Restated Certificate of
Incorporation, as amended, was approved by the directors and thereafter duly
adopted by the shareholders of the corporation as of the 15th day of July,
1987:
RESOLVED, that Article IV, of the Restated Certificate of Incorporation,
as amended, be amended so that the first sentence thereof and the
immediately following preface to the numbered paragraphs read as follows:
"The aggregate number of shares which the Corporation is
authorized to issued is 100,000,000 shares divided into
50,000,000 shares of Common Stock of the par value of $10 a
share and 50,000,000 shares of Preferred Stock of the par value
of $.10.
A. The designations, rights, preferences, privileges and
limitations of the shares of Common Stock and shares of
Preferred Stock and the manner of determining the designations,
number of classes and of series within classes of Preferred
Stock and the relative voting, dividend, liquidation and other
rights, preferences and limitations of each such class or
series are as follows:"
RESOLVED, that Subsection B of Article IV of the Restated Certificate of
Incorporation, as amended, be deleted in its entirety.
3. The number of shares entitled to vote upon the amendment was
100.
4. That in lieu of a meeting and vote of the shareholders and
in accordance with the provisions of Section 14A:5-6, the amendment was
adopted by the sole shareholder of the Corporation without a meeting pursuant
to the written consent of the sole shareholder and number of shares
represented by such consent is 100 shares.
5. The following resolutions, establishing and designating a
series of shares and fixing and determining the relative rights and
preferences thereof were duly adopted by the board of directors of the
Corporation as of the 15th day of July, 1987 pursuant to authority vested in it
by the Restated Certificate of Incorporation, as amended, and Section 14A:7-2
of the New Jersey Business Corporation Act:
RESOLVED, that Article IV of the Restated Certificate of Incorporation,
as amended, be and hereby is further amended by adding immediately after
Subsection A, Subsection B, which sets forth the rights, preferences and
limitations, of the Cumulative Exchangeable Preferred Stock, which
Subsection B shall read in it entirety as follows:
"B. The designation, rights, preferences, privileges and
limitations of the shares of Cumulative Exchangeable Preferred Stock
are as follows:
(1) Designation. Pursuant to the provision of this Article
IV, 28,000,000 shares of Preferred Stock of the Corporation
have been classified as a series of Preferred Stock, $.10 par
value designated as "Cumulative Exchangeable Preferred Stock,
$.10 Par Value" (hereinafter called "First Series Preferred
Stock").
(2) Dividends. The holders of shares of First Series
Preferred Stock shall be entitled to receive dividends in
shares of First Series Preferred Stock at the annual rate of
.05 share of First Series Preferred Stock per share (or, at the
option of the Corporation, in cash at the annual rate of $0.80
per share or in shares of Common Stock of The LTV Corporation
or any combination of cash and such shares), when and as
declared by the Board of Directors out of funds legally
available for the purpose, payable annually on the 15th day of
April in each year, commencing April 15, 1988, to holders of
record on such respective dates as may be determined by the
Board of Directors in advance of the payment of each particular
dividend. Only those shares of First Series Preferred Stock
outstanding on any record date established by the Board of
Directors shall be entitled to the dividend payable on the
following dividend date, but all such outstanding shares shall
be entitled to the full annual dividend, even if some or all of
such shares were not outstanding during all the preceding
calendar year. The First Series Preferred Stock shall rank as
to dividends junior to, on a parity with or prior to other
series or classes of preferred stock of the Corporation as
determined in each instance by the Board of Directors of the
Corporation; provided however, the Corporation has agreed to
reach an agreement with the United Steelworkers of America
("USWA") prior to action by the Board of Directors regarding
the ranking of all other series or classes or preferred stock
of the Corporation which would rank as to dividends prior to
the First Series Preferred Stock unless the proceeds (net of
deductions for all costs of issuance including underwriting;
attorneys and listing fees) of the issuance and sale of such
series or classes of preferred stock are to be used exclusively
to provide additional working or other capital for the
Corporation's steel business or unless such classes or series
of preferred stock are issued during the period in which the
Corporation is in bankruptcy proceedings as a result of any
filing by the Corporation under Chapter 11 of the bankruptcy
laws or as part of any plan of reorganization which follows as
a result of such filing. No dividends shall be declared on any
other series or classes of stock ranking on a parity with the
First Series Preferred Stock as to dividends in respect of any
dividend period unless there shall also be or have been
declared on all shares of First Series Preferred Stock at the
time outstanding like dividends for all annual periods ending
at the same time as or before such period, ratably in
proportion to the respective annual dividend rates per annum
fixed therefor. Dividends shall be cumulative (whether or not
there shall be net profits or net assets of the Corporation
legally available for the payment of such dividends) and shall
accrue on an annual basis as of the earlier of the record date
established by the Board of Directors or the payment date
specified in paragraph (2) hereof. No interest, or sum of
money in lieu of interest, shall be payable in respect of any
dividend payment or payments which may be in arrears.
If in any annual dividend period, dividends shall not have been
declared and paid or set apart in full for payment on all
outstanding shares of First Series Preferred Stock for such annual
dividend period and all preceding annual dividend periods from and
after the first day from which dividends are cumulative, then,
until the aggregate deficiency shall be declared and fully paid or
set apart for payment, the Corporation shall not (i) declare or
pay or set apart for payment any dividends or make any other
distribution on the Common Stock or any other capital stock of the
Corporation ranking junior to the First Series Preferred Stock
with respect to the payment of dividends or distribution of assets
on liquidation, dissolution or winding up of the Corporation (the
Common Stock and such other stock being herein referred to as
"Junior Stock") or (ii) make any payment on account of the
purchase, redemption or other retirement of any Junior Stock.
At the option of the Corporation and subject to the provisions
hereof, any dividend may be paid in whole or in part, in cash or in
shares of Common Stock of The LTV Corporation or in any
combination of lawful money of the United States of Americas and
such shares. If the Corporation desires to exercise its option to
make a dividend payment on the First Series Preferred Stock wholly
or partly in shares of Common Stock of The LTV Corporation
(hereinafter sometimes called the "Stock Payment Option"), the
Board of Directors shall do so in and by a resolution providing
for the exercise of the Stock Payment Option.
If the Stock Payment Option is elected, the Corporation shall
dispatch or cause to be dispatched to each holder a certificate
representing the number of whole shares of Common Stock of The LTV
Corporation arrived at by dividing the Computed Price of such
Common Stock of The LTV Corporation into the total amount of
lawful money of the United States of America which such holder
would receive if the aggregate dividend on the shares held by such
holder which is being paid in shares of Common Stock of The LTV
Corporation were being paid in such lawful money.
The term "Computed Price" as of any dividend payment date means
the price equal to the arithmetical average of the per share Sale
Price for the Common Stock of The LTV Corporation for the ten
consecutive trading days ending on the fifth calendar day (or if
such day is not a trading day, then the trading day immediately
preceding such calendar day) prior to the dividend payment date;
provided, that in no event shall the Computed Price of a share of
Common Stock of The LTV Corporation be less than the par value of
such Common Stock (presently $0.50 per share).
The term "Sale Price" means the average of the high and low sale
prices (or, if no sale prices are reported, the average of the
high and low bid prices) for the Common Stock of The LTV
Corporation as reported in composite trading, or, if the Common
Stock of The LTV Corporation is not listed on any national or
regional stock exchange, as reported by NASDAQ or, if such Common
Stock is not quoted on NASDAQ, as reported by the National
Quotation Bureau Incorporated. If the Sale Price cannot be
established as described above, the Sale price shall be the fair
market value of the Common Stock of The LTV Corporation as
determined in good faith by the Board of Directors of the
Corporation.
No fractional shares will be issued in payment of dividends. In
lieu thereof, the Corporation may issue a number of shares of First
Series Preferred Stock or Common Stock of The LTV Corporation, as
the case may be, which reflects a rounding up to the next whole
number or may pay lawful money of the United States of America in
an amount equal to the stated value of such fractional share in
the case of First Series Preferred Stock or in an amount equal to
the fair value of such fractional share in the case of Common
Stock of The LTV Corporation, as determined by the Board of
Directors. The shares of Common Stock of The LTV Corporation to
be paid by the Corporation in payment of the dividend on the First
Series Preferred Stock are sometimes referred to hereinafter as the
"Dividend Shares."
The Corporation shall not exercise the Stock Payment Option with
respect to any dividend payment if:
(i) the payment of dividend has not been or will not be made
within five Business Days following the dividend payment
date;
(ii) the number of shares of Common Stock of The LTV
Corporation held in the Corporation's treasury is
insufficient to pay the portion of such dividend to be paid
in Common Stock of The LTV Corporation;
(iii) the issuance or delivery of shares of Common stock of
The LTV Corporation pursuant to the Stock Payment Option
would require registration with or approval of any
Governmental Authority under any law or regulation, and such
registration or approval has not been effected or obtained;
or
(iv) the Computed Price is less than the par value of the
shares of Common Stock of The LTV Corporation.
If the Corporation pays such dividend in shares of First Series
Preferred Stock or exercises the Stock Payment Option with respect
to a dividend payment, it shall deliver to the Transfer Agent, no
later than the fifth calendar day prior to the date on which
shares of First Series Preferred Stock or Dividend Shares for such
dividend payment are to be dispatched to holders, an Officers'
Certificate setting forth (i) the portion of the dividend payment
being made in shares of First Series Preferred Stock or Common
Stock of The LTV Corporation and, (ii) the number of Dividend
Shares allocable to such dividend payment on each share, as
calculated pursuant to this Section 2.
(3) Liquidation Preference. The First Series Preferred
Stock shall rank upon liquidation, dissolution or winding up or
the Corporation junior to, on a parity with or prior to other
series or classes of preferred stock of the Corporation as
determined in each instance by the Board of Directors of the
Corporation; provided, however, the Corporation has agreed to
reach an agreement with the USWA prior to action by the Board
of Directors regarding the ranking of all other series or
classes of preferred stock of the Corporation which would rank
upon liquidation, dissolution or winding up of the Corporation
prior to the First Series Preferred Stock unless the proceeds
(net of deductions for all costs of issuance including
underwriting, attorneys and listing fees) of the issuance and
sale of such series or classes of preferred stock are to be
used exclusively to provide additional working or other capital
for the Corporation's steel business or unless such classes or
series of preferred stock are issued during the period in which
the Corporation is in bankruptcy proceedings as a result of any
filing by the Corporation under Chapter 11 of the bankruptcy
laws or as part of any plan or reorganization which follows as
a result of such filing. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary
or involuntary, before any payment or distribution of the
assets of the Corporation (whether capital or surplus) shall be
made to or set apart for the holders of the Common Stock of the
Corporation or any other series or class or classes of stock of
the Corporation ranking junior to the First Series Preferred
Stock upon liquidation, dissolution or winding up, the holders
of the shares of the First Series Preferred Stock shall be
entitled to receive $16 per share plus an amount equal to all
dividends (whether or not earned or declared) accrued and
unpaid thereon to the date of final distribution to such
holders; but such holders shall not be entitled to any further
payment. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of the
First Series Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments
on any other preferred stock ranking as to liquidation,
dissolution or winding up, on a parity with the First Series
Preferred Stock, then such assets and proceeds shall be
distributed among the holders of First Series Preferred Stock
and any such other preferred stock ratably in accordance with
the respective amounts which would be payable upon liquidation,
dissolution or winding up on such shares of First Series
Preferred Stock and any such other preferred stock if all
amounts payable thereon were paid in full. For the purposes of
this Section (3), a consolidation or merger of the Corporation
with one or more corporations shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or
involuntary.
Subject to the rights of the holders of shares of any series or
class or classes of stock ranking on a parity with or prior to the
First Series Preferred Stock upon liquidation, dissolution or
winding up, upon any liquidation, dissolution or wind up of the
Corporation, after payment shall have been made in full to the
First Series Preferred Stock as provided in this Section (3), but
not prior thereto, the holders of the Common Stock or any other
series or class or classes of stock ranking junior to the First
Series Preferred Stock upon liquidation, dissolution or winding up
of the Corporation shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any
and all assets remaining to be paid or distributed, and the First
Series Preferred Stock shall not be entitled to share therein.
(4) Redemption. (a) The Corporation, at its option, may
redeem shares of the First Series Preferred Stock, as a whole
or in part, at the time, or from time to time in cash at $16
per share, plus accrued and unpaid dividends to the date fixed
for redemption.
(b) In the event the Corporation shall redeem shares of
First Series Preferred Stock, notice of such redemption shall
be given by first class mail, postage prepaid, mailed not less
than 30 days prior to the redemption date, to each holder of
record of the shares to be redeemed, at such holder's address
as the same appears on the stock register of the Corporation.
Each such notice shall state: (1) the redemption date; (2)
the number of shares of First Series Preferred Stock to be
redeemed and, if less than all the shares held by such holder
are to be redeemed from such holder; (3) the redemption price;
(4) the place or places where certificates for such shares are
to be surrendered for payment of the redemption price; and (5)
that dividends on the shares to be redeemed will cease to
accrue on such redemption date. Upon surrender in accordance
with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice
shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid:
If less than all the outstanding shares of First Series Preferred
Stock not previously called for redemption are to be redeemed on
any redemption date, shares to be redeemed shall be selected by the
Corporation from outstanding shares of First Series Preferred
Stock not previously called for redemption by lot, pro rata (as
nearly as may be) or by any other method determined by the Board
of Directors of the Corporation in its sole discretion to be
equitable to the holders of the First Series Preferred Stock.
(5) Shares to be Retired. All shares of First Series
Preferred Stock redeemed by the Corporation may be reissued.
(6) Voting. Except as otherwise from time to time required
by law, the First Series Preferred Stock shall have no voting
rights.
(7) Sinking Fund. Shares of First Series Preferred Stock
are not subject or entitled to the benefit of a sinking fund."
6. That in lieu of meeting and vote of the directors and in accordance
with the provisions of Sections 14A:6-7(1) and 14A:7-2(1), the foregoing
resolutions were adopted by the directors by unanimous written consent without
a meeting
7. That the Restated Certificate of Incorporation, as amended, is
amended so that the designation and number of shares of each class and series
acted upon in the resolutions, and the relative rights, preferences and
limitations of each such class and series are as stated in the foregoing
resolutions.
Dated this 15th day of July, 1987.
LTV STEEL COMPANY, INC.
By /s/ W. P. Twomey
---------------------------------
W. P. Twomey
Vice President and Controller
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LTV Steel Company, Inc.
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4) and Section
14A:9-4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificate of Amendment to its Certificate
of Incorporation:
1. The name of the corporation is LTV Steel Company, Inc.
2. The following amendment to the Certificate of Incorporation
was approved by the directors and thereafter duly adopted by the shareholders
of the corporation on the 28th day of June, 1993:
RESOLVED, that the following addition is to be designated as
the last Article of the Certificate of Incorporation:
No nonvoting equity securities of the Corporation may be issued;
this provision, in compliance with Section 1123 of the United
States Bankruptcy Code, 11 U.S.C. Section 1123, shall have no
force and effect except to the extent required by such Section so
long as such Section is in effect and applicable to the
Corporation.
3. The number of shares entitled to vote upon the amendment was
110.
4. That in lieu of a meeting and vote of the shareholders and
in accordance with the provisions of Section 14A:5-6, the amendment was
adopted by the shareholders without a meeting pursuant to the written consents
of the shareholders and the number of shares represented by such consents is
110 shares.
Dated as of the 28th day of June, 1993.
LTV Steel Company, Inc.
By /s/ G. J. Moran
---------------------------------
G. J. Moran
Senior Vice President and Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
LTV Steel Company, Inc.
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4) and Section
14A:9-4(3), Corporations, General, of the New Jersey Statutes, the undersigned
corporation executes the following Certificate of Amendment to its Certificate
of Incorporation:
1. The name of the corporation is LTV Steel Company, Inc.
2. The following amendment to the Certificate of Incorporation
was approved by the directors and thereafter duly adopted by the shareholders
of the corporation on the 14th day of September, 1993.
RESOLVED, that the last Article, containing the following
provision, of the Certificate of Incorporation be deleted:
No nonvoting equity securities of the Corporation may be issued;
this provision, in compliance with Section 1123 of the United
States Bankruptcy Code, 11 U.S.C. Section 1123, shall have no
force and effect except to the extent required by such Section so
long as such Section is in effect and applicable to the
Corporation.
3. The number of shares entitled to vote upon the amendment was
110.
4. That in lieu of a meeting and vote of the shareholders and
in accordance with the provisions of Section 14A:5-6, the amendment was
adopted by the shareholders without a meeting pursuant to the written consents
of the shareholders and the number of shares represented by such consents is
110 shares.
Dated this 14th day of September, 1993.
LTV Steel Company, Inc.
By /s/ G. J. Moran
---------------------------------
G. J. Moran
Senior Vice President and Secretary
Exhibit 2.4
As Amended and Restated
November 20, 1992
BY-LAWS
OF
LTV STEEL COMPANY, INC.
ARTICLE I
1. Annual Stockholders Meeting. The annual meeting of the
stockholders for the election of directors of LTV Steel Company, Inc.
(hereinafter referred to as the "Corporation") shall be held at the registered
office of the Corporation, 28 West State Street in Trenton, New Jersey, or at
such other place within or without New Jersey, as may from time to time be
designated by the Board of Directors or the Executive Committee, on such date
and at such hour as the Board of Directors or the Executive Committee may fix
prior to notice of the meeting
2. Special Stockholders' Meetings. Special meetings of the
stockholders shall be held at 28 West State Street in Trenton, New Jersey, or
at such other place within or without New Jersey, as may be designated by the
Board of Directors or the Executive Committee, and shall be called by the
Chairman, the President, or the Secretary, upon direction of the Board of
Directors or the Executive Committee, or upon the request in writing of the
holders of 10% of the outstanding stock of the Corporation entitled to vote at
such meeting.
3. Notice of Stockholders' Meetings. The Secretary, or officer
performing his duties, shall give notice of every stockholders' meeting to
each stockholder of record by mailing such notice in writing to his last-known
post-office address at least 10 days but not more than 60 days before the date
of such meeting.
4. Quorum of Stockholders. The holders of shares of stock of
the Corporation entitled to cast a majority of the votes at the meeting must
be present in person or by proxy at each meeting of stockholders to constitute
a quorum; less than a quorum, however, shall have power to adjourn.
5. Presiding Officer and Secretary. Meetings of stockholders
shall be presided over by the Chairman, or in his absence, by the President,
or in the absence of both of these officers, by one of the Senior Vice
Presidents or Vice Presidents, or in the absence of all these officers, by a
Chairman to be elected at the meeting. The Secretary of the Corporation shall
act as the Secretary of such meetings, if present; otherwise a Secretary shall
be appointed by the Chairman of the meeting.
6. Inspectors. The Board of Directors or the Executive
Committee shall appoint two inspectors to act at meetings of stockholders, to
serve at the pleasure of the Board or the Executive Committee. If no such
appointment is made or if at any meeting the appointees or either of them fail
to appear or refuse to serve, the Chairman of the meeting may appoint two such
inspectors or an additional inspector to serve with the one appearing and
acting at the meeting.
The inspectors shall determine the number of shares outstanding
and the voting power of each, the shares represented at the meeting, the
existence of a quorum, the validity and effect of proxies, and shall receive
votes or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes or consents,
determine the result, and do such acts as are proper to conduct the election
or vote with fairness to all stockholders. On request of the person presiding
at the meeting or any stockholder entitled to vote thereat, the inspectors
shall make a report in writing of any challenge, question or matter determined
by them. Any report made by them shall be prima facie evidence of the facts
therein stated, and such report shall be filed with the minutes of the meeting.
ARTICLE II
1. Number of Directors; Quorum Requirements. The number of
directors of the Corporation shall be one or more. Within the limits above
specified, the number of directors shall be fixed from time to time by
resolution of the Board of Directors. A majority of the directors in office
and a majority of the members in office of any committee of the Board shall
constitute a quorum of the Board or committee as the case may be. A director
or directors having an interest in a contract or transaction to be considered
and acted upon by the Board or a committee thereof may be counted in
determining the presence of a quorum at a meeting of the Board or at a meeting
of a committee of the Board.
2. Indemnification. The Corporation shall indemnify (a) any
person who is or was a director, officer, employee or agent of the Corporation
or (b) any person who is or was a director, officer, employee or agent of any
constituent corporation absorbed by the Corporation by merger but only to the
extent (i) that the constituent corporation was obliged to indemnify such
person at the time the merger became effective or (ii) where the possible
claim of such person or persons for indemnification was disclosed and in the
merger instruments the Corporation agreed to pay the same, (c) any person who
is or was serving at the request of the Corporation as a director, officer,
trustee, employee or agent of any other domestic corporation or foreign
corporation or of any partnership, joint venture, sole proprietorship, trust
or other enterprise, whether or not for profit and (d) the legal
representative of any such persons (each of such persons, including such legal
representative, being herein referred to as a "Corporate Agent") to the full
extent that the Corporation is empowered or required to indemnify such
Corporate Agent under Section 14A:3-5 of the New Jersey Business Corporation
Act and any amendments thereof or supplements thereto (herein referred to as
"Section 14A:3-5"), but subject to the provisions of this Article II, Section
2. The Corporation also shall indemnify any Corporate Agent who is or was
serving at the request of the Corporation as a trustee or as a "fiduciary" or
who is or was deemed by law to be a "fiduciary" as the term "fiduciary" is
defined in the Employee Retirement Income Security Act of 1974 as the Act may
be amended ("Pension Reform Act") under any employee benefit plan (as the term
"employee benefit plan" is defined in the Pension Reform Act) at any time
established or maintained by the Corporation ("plan") and the legal
representative of any such trustee or fiduciary (1) against his expenses
incurred in connection with any proceeding or any claim, issue or matter
therein involving such person or the legal representative of such person by
reason of the fact that such person is or was such a trustee or a fiduciary,
to the extent that he or his legal representative was successful on the merits
or otherwise in such proceeding or in the defense of any claim, Issue or
matter therein and (2) against his expenses and liabilities incurred in
connection with any such proceeding or in the defense of any claim, issue or
matter charged in the proceeding in or upon which such person or the legal
representative of such person was not successful to the extent that (a) with
respect to any such proceeding or claim, issue or matter, the trustee or
fiduciary acted in good faith and in a manner he reasonably believed to be in
or not opposed to the exclusive purposes of providing benefits to participants
of the plan and their beneficiaries and defraying reasonable expenses of
administering the plan; (b) the trustee or fiduciary did not know that the
actions or omissions with which he was charged in the proceeding, claim, issue
or matter violated provisions of the Pension Reform Act; and (c) with respect
to any criminal proceeding, the trustee or fiduciary had no reasonable cause
to believe that his conduct was unlawful. This By-law shall not provide
indemnification for any bank, trust company, insurance company, partnership or
other entity or person not an officer or employee of the Corporation, even
though retained as an investment advisor, actuary, custodian, trustee or
consultant to any plan or for any director, officer, agent or employee of any
such bank, trust company, insurance company, partnership or other entity or
person. In any proceeding involving a trustee or fiduciary, no
indemnification shall be provided in respect of any claim, issue or matter as
to which the trustee or fiduciary shall have been adjudged to have dealt with
the assets of the plan in his own interest or for his own account or to have
received consideration of or his personal account from a party dealing with
the plan. Unless indemnification is ordered by a court or is mandatory under
said Section 14A:3-5 or this By-law, the determination of whether a Corporate
Agent or trustee or fiduciary met the applicable standards of conduct
prescribed by 14A:3-5 or this By-law shall be made (i) at the election of the
Board of Directors or of an authorized committee of the Board, in any manner
specified in subsection (5) of Section 14A:3-5 or (ii) if so directed by the
Board of Directors or an authorized committee of the Board, by one or more
disinterested persons designated by the Board or such committee. Expenses
incurred by a Corporate Agent or by a trustee or fiduciary or his legal
representative in connection with any proceeding may be paid by the
Corporation in advance of final disposition of such proceeding, provided (i)
the Board of Directors or an authorized committee of the Board determines that
such payment is in or not opposed to the best interests of the Corporation and
(ii) the Corporate Agent, trustee or fiduciary or his legal representative
delivers to the Corporation an undertaking by or on behalf of the Corporate
Agent, trustee or fiduciary or his legal representative to repay the amount so
advanced except to the extent that it shall be determined that the Corporate
Agent, trustee or fiduciary or his legal representative is entitled to be
indemnified by the Corporation. The Board of Directors may in its sole
discretion purchase and maintain insurance on behalf of any Corporate Agent,
trustee or fiduciary or his legal representative against any expenses incurred
in any proceeding and any liabilities asserted against him in his capacity as
a Corporate Agent, trustee or fiduciary or his legal representative whether or
not the Corporation would have the power to indemnify him against such
liability under provisions of the New Jersey Business Corporation Act or this
By-law.
A Corporate Agent, trustee or fiduciary shall be deemed to have
been "successful" as that term is used in subsection (4) of Section 14A:3-5
and this By-law (i) where he has been involved in an action, suit or
proceeding and such action, suit or proceeding or any claim, issue or matter
therein was dismissed or otherwise terminated or abandoned without any
judgment order or conviction (upon a plea of nolo contendere or its equivalent
or otherwise) against him and without any settlement having been Made by him
with respect thereto or (ii) where he has been involved in a threatened
action, suit or proceeding or any inquiry or investigation that could lead to
an action, suit or proceeding and, without his making a settlement, the
threatened action, suit or proceeding or inquiry or investigation was
abandoned or there has been a failure for any reason to institute the action,
suit or proceeding within a reasonable time after the same was threatened or
the inquiry or investigation was commenced. The Board of Directors or an
authorized committee may in each such case conclusively determine what
constitutes a "reasonable time" or an "abandonment" for the purpose of this
paragraph.
Where a Corporate Agent is a party defendant in a proceeding,
other than a proceeding by or in the right of the Corporation, and the Board
of Directors or a committee of disinterested Directors authorized by the Board
of Directors to make such determination, determines that it is in the best
interests of the Corporation that the Corporation assume the defense of the
proceedings and pay all expenses in connection therewith without requiring any
involved Corporate Agent to undertake to pay or repay any part thereof. Such
assumption shall not affect the right of any defendant Corporate Agent to
employ his own counsel or to recover indemnification under this By-law to the
extent that he may be entitled thereto.
As used in the indemnification By-law, the definitions of the
terms "proceeding", "expenses" and "liabilities" are as defined in subsection
(1) of Section 14A:3-5.
3. Vacancies in Board of Directors. Any vacancy in the Board
of Directors may be filled for the unexpired teem of the director whose office
has become vacant by a vote of a majority of the remaining directors even
though less than a quorum of the Board. Any directorship to be filled by
reason of an increase in the number of directors may be filled by the Board of
Directors.
4. Meetings of Board of Directors; Compensation. Meetings of
the Board of Directors shall be held upon the order of the Board, the
Executive Committee or the Chairman. The Secretary or officer performing his
duties shall give reasonable notice of all meetings to each director, but a
meeting may be held without notice immediately after the annual election at the
same place, or at such time and place as shall have been theretofore
designated by the Board of Directors for such meeting. No notice need be
given of regular meetings held at times fixed by resolution of the Board. No
notice of an adjourned meeting of the Board of Directors need be given if the
time and place are fixed at the meeting adjourned and if the period of
adjournment does not exceed 10 days in any one adjournment. Each director of
the Corporation shall receive such compensation for his services as director
and as a member of any committee of the Board, and such expenses of attendance
at meetings of the Board or any such committee, as the Board of Directors by
resolution, adopted by the affirmative vote of a majority of the directors in
office, shall from time to time determine; provided, however, that nothing
herein contained shall be construed to preclude any director from serving the
Corporation in any other capacity as an officer, agent or otherwise and
receiving compensation for such services.
5. Committees of Directors. The Board of Directors by
resolution adopted by a majority of the entire Board may appoint an Executive
Committee to consist of the Chairman, who shall be Chairman of the Committee,
the President and no less than four nor more than eight other directors;
provided, however, that if the offices of Chairman and President are held by
the same person, or if the office of Chairman is abolished or left vacant, the
Executive Committee shall consist of the Chairman and President, or President
alone, as the case may be, who shall be Chairman of the Committees and no less
than five nor more than nine other directors. The Board of Directors may
appoint one or more directors to serve as alternate members of the Committee
to act in the absence or disability of members with all the powers of such
absent or disabled members. Unless otherwise provided in the resolution
appointing the Committee, such Committee shall have and may exercise all the
authority of the Board, except that neither such Committee nor any other
committee shall (a) make, alter or repeal any by-law of the Corporation, (b)
elect or appoint any director or remove any officer or director, (c) submit to
stockholders any action that requires stockholders' approval, or (d) amend or
repeal any resolution theretofore adopted by the Board. The term of office of
the Executive Committee shall expire at the time of the first meeting of the
Board of Directors after the annual meeting of stockholders in each year. Such
Committee shall report to the Board and be subject to its direction, and the
Board may fill vacancies therein. The Committee may fix times for stated
meetings and adopt rules as to calling and giving notice of meetings.
The Board of Directors may appoint from among its members one
or more other committees, each of which shall have at least three members,
and, subject to the limitation aforesaid, the Board may delegate to each such
committee such authority of the Board of Directors as shall be specified in
the resolution appointing the committee. Any such committee shall report to
the Board and be subject to its direction, and the Board may fill vacancies
therein. Any such committee may fix times for meetings and the notice required
therefor.
6. Working Capital, Dividends. The Board of Directors or the
Executive Committee shall have power in its discretion from tome to time to
fix and to vary the amount of the working capital of the Corporation and to
determine what, if any, dividends shall be declared and paid to stockholders
out of the assets of the Corporation legally available for dividends.
7. Interest in Transactions. No contract or other transaction
between the Corporation and one or more of its directors or between the
Corporation and any other corporation, firm or association of any type or kind
in which one or more of its directors are directors or are otherwise
interested, shall be void or voidable solely by reason of such common
directorship or interest, or solely because such director or directors are
present at the meeting of the Board or a committee thereof which authorizes or
approves the contract or transaction, or solely because his or their votes are
counted for such purpose, if (a) the contract or other transaction is fair and
reasonable as to the Corporation at the time it in authorized, approved or
ratified, or (b) the fact of the common directorship or interest is disclosed
or known to the Board or committee and the Board or committee authorizes,
approves or ratifies the contract or transaction by a vote sufficient for the
purpose without counting the vote or votes of such common or interested
director or directors, or (c) the fact of the common directorship or interest
is disclosed or known to the stockholders and they authorize, approve or
ratify the contract or transaction.
8. Directors' Standards of Care. Directors and members of any
committee of directors shall discharge their duties to the Corporation when
they act in good faith and with that degree of diligence, care and skill which
ordinary prudent men would exercise under similar circumstances in like
positions. In discharging their duties, such directors and members of any such
committee shall not be liable if, acting in good faith, they rely (a) upon the
opinion of counsel for the Corporation, or (b) upon written reports setting
forth financial data concerning the Corporation and prepared by an independent
public accountant or certified public accountant or firm of such accountants,
or (c) upon financial statements, books of account or reports of the
Corporation represented to them to be correct by the Chairman or the
President, or the officer of the Corporation having charge of its books of
account, or the person presiding at a meeting of the Board.
ARTICLE III
1. Officers. The officers of the Corporation shall be a
Chairman, a President, one or more Senior Vice Presidents and one or more Vice
Presidents, a Treasurer, a Secretary, and a Controller, all of whom shall be
elected by the Board of Directors, and such other officers as may be appointed
by the Board of Directors or the Executive Committee. Any two or more of such
offices, except those of President and Senior Vice President or Vice
President, may be held by the same person. The term of office of every officer
shall be from the date upon which he shall be chosen until the first meeting
of the Board of Directors after the next annual meeting of the stockholders
and until his successor in office shall be chosen and has qualified. Vacancies
among the officers may be filled by the Board of Directors or the Executive
Committee, subject to the same limitations as below stated with respect to
removals. The compensation of each officer shall be determined and may be
increased or subject to any contract rights decreased at any time and from
time to time by the Board of Directors or the Executive Committee. In the
discretion of the Board of Directors or the Executive Committee, such
compensation may include the payment by the Corporation at any time and from
time to time of special compensation in addition to stated salary for the
satisfactory performance by such officer of his duties, having due regard to
the amount of business transacted or profits earned by the Corporation or any
department thereof for any period, or to any other factor or factors deemed
proper by the Board of Directors or the Executive Committee. The amount of any
such special compensation may be determined by the Board of Directors or the
Executive Committee either before, during, or upon completion of, the duties
for which such special compensation shall be paid; provided, however, that
nothing herein contained shall restrict the right of the Board of Directors or
the Executive Committee to fix the minimum compensation of an officer for a
period of years.
2. Chairman. The Chairman shall be the chief executive officer
of the Corporation and shall perform all such other duties and exercise all
such other powers as are usually incident and pertain to the chief executive
officer of a corporation, as well as such other duties and powers as the Board
of Directors may from time to time prescribe.
3. President. The President shall be the chief operating
officer of the Corporation. Under the direction of the Chairman, he shall have
general control and management of the business and affairs of the Corporation,
and general superintendence and direction of such other officers, agents and
employees of the Corporation as are assigned to him by the Chairman, and shall
have such other powers and duties as may be assigned to him by the Chairman,
the Board of Directors or the Executive Committee.
4. Senior Vice Presidents. The Senior Vice Presidents each
shall have, respectively, such designations, powers and duties as shall be
assigned to them by the Chairman, the President, the Board of Directors or the
Executive Committee.
5. Vice Presidents. The Vice Presidents each shall have,
respectively, such designations, powers and duties as shall be assigned to
then by the Chairman, the President, the Senior Vice Presidents and the Board
of Directors of the Executive Committee.
6. Other Officers. The other officers shall, in addition to
the powers and duties conferred by law, have such duties as usually pertain to
their respective offices, and such duties and powers as may be assigned to
them by the Chairman, the President, the Board of Directors or the Executive
Committee.
7. Treasurer's Bond. The Treasurer shall give a bond for the
faithful discharge of his duties, in such sum as may be fixed by the Board of
Directors an the Executive Committee, and with surety satisfactory to the
Board or the Executive Committee.
8. Signing Powers. The Chairman, the President, the Senior
Vice Presidents and the Vice Presidents each shall have, and each is hereby
given, full power and authority to sign and execute, in the name and on behalf
of the Corporation, all duly authorized contracts, agreements, deeds,
conveyances or other obligations of the Corporation
ARTICLE IV
1. Bonds of the Corporation. All duly authorized bonds of the
Corporation shall be signed on behalf of the Corporation by its Chairman, its
President, one of its Senior Vice Presidents or one of its Vice Presidents or,
if so provided by resolution of the Board of Directors or of the Executive
Committee, by one or more of such officers and such other officer or officers
designated by the Board of Directors or the Executive Committee; any or all
such signatures may be manual or, if the bond is countersigned by an officer
or other agent of a trustee or other certifying or authenticating authority,
facsimile signatures; the signature on interest coupons attached to said bonds
shall be a facsimile signature; and the corporate seal or a facsimile of such
seal may be impressed, affixed, imprinted or otherwise reproduced on said
bonds and, if attested, shall be attested by the Corporation's Secretary or an
Assistant Secretary by manual or facsimile signature. In case any person whose
signature (manual or facsimile) appears upon any said bond or coupons attached
thereto shall cease to be an officer of the Corporation, or shall cease to be
the officer specified thereon, before the bonds so signed shall have been
authenticated by the trustee under the indenture or other instrument pursuant
to which the bonds are delivered or sold, said bonds or coupons may
nevertheless be authenticated and delivered and sold as if the person or
person's who so signed or attested such bonds or coupons had not ceased to be
an officer of the Corporation or the officer specified thereon; and any bonds
may be signed as aforesaid, and the seal of the Corporation impressed,
affixed, imprinted or otherwise reproduced thereon may be attested on behalf
of the Corporation as aforesaid, and coupons attached may be signed as
aforesaid by such persons who, upon the actual date of the execution of the
bonds or coupons, shall be the proper officers of the Corporation, although
upon the date of the bonds such persons may not have been officers of the
Corporation. As used in this Article IV, Section 1, the term "bonds" shall
include bonds, debentures, notes and other written obligations for the payment
of money.
The provisions of this section with respect to bonds and
debentures signed by the manual or facsimile signature of a person holding at
the time of such signing the office of Chairman, or President of the
Corporation also shall be applicable with respect to bonds and debentures
signed by the manual or facsimile signature of a person who held at the time
of such signing the office of Chairman of the Board of the Corporation under
the By-laws of the Corporation as then in effect.
2. Stock Certificates. Except as otherwise permitted by the
New Jersey Business Corporation Act, no stock certificate shall be issued for
any share until such share is fully paid. Every stockholder shall have a
certificate signed by the Chairman or the President and the Treasurer or an
Assistant Treasurer of the Corporation, certifying that the Corporation is
organized under the laws of New Jersey, the name of the person to whom issued,
the number and class of shares, and the designation of the series, if any,
which such certificate represents; but where such certificates are
countersigned by a transfer agent or registrar who is not an officer or
employee of the Corporation, the signatures of any such Chairman, President,
Treasurer or Assistant Treasurer may be facsimile. In case any officer,
transfer agent or registrar who shall have signed, or whose facsimile
signature shall have been used on, any such certificate or certificates shall
cease to be such officer, transfer agent or registrar of the Corporation, for
whatever cause, before such certificate or certificates shall have been
delivered by the Corporation, such certificate or certificates nevertheless
may be issued and delivered as though the person or persons who signed such
certificate or certificates or whose facsimile signature or signatures shall
have been used thereon had not ceased to be such officer, transfer agent or
registrar of the Corporation. So long as the Corporation is authorized to
issue shares of more than one class, every certificate shall set forth upon
its face or back that the Corporation will furnish to any stockholder upon
request and without charge a full statement (a) of the designations, relative
rights, preferences and limitations of the shares of each class and series
authorized to be issued, so far as the same have been determined, and (b) of
the authority of the Board to divide the shares into classes or series and to
determine and change the relative rights, preferences and limitations of any
class or series.
3. Stock Transfer. Stock of the Corporation shall be
transferable in accordance with the provisions of Chapter 8 of the Uniform
Commercial Code as adopted in New Jersey (N.J.S. 12A: 8-101 et seq.) as
amended from time to time, except as otherwise provided in the New Jersey
Business Corporation Act.
4. Record Date. The Board of Directors or the Executive
Committee shall fix in advance a date not more than 60 nor less than 10 days
before the date of any meeting of stockholders nor more than 60 days prior to
any other action as the date for determining the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to or dissent from any proposal without a
meeting, or for the purpose of determining stockholders entitled to receive
payment of any dividend or allotment of any rights or the date when any change
or conversion or exchange of capital stock shall go into effect or for the
purpose of any other action, and in such case stockholders of record on the
date so fixed shall be conclusively entitled to such notice of and to vote at
such meeting or any adjournment thereof, or to express consent to or dissent
from any proposal without a meeting, or to receive payment of such dividend,
or allotment of rights, or exercise such rights, as the case may be, and
notwithstanding any transfer of any stock on the books of the Corporation
after any such record date fixed as aforesaid.
5. Replacement Certificates. Where a certificate of stock has
been lost, destroyed, stolen or seized, a new certificate may be issued upon
the Corporation's transfer agent being furnished with evidence of such loss,
destruction, theft or seizure, and a surety company bond of indemnity
satisfactory to the transfer agent effecting the replacement and the registrar
registering the replacement.
ARTICLE V
1. Notice and Waiver. Any notice required by these By-laws
shall be sufficiently given if addressed to the person to be notified and
mailed or delivered to his residence, place of business or last-known address,
or delivered to him personally, at or within the time prescribed. Notice of
any meeting of the Board of Directors or any committee thereof may be waived
before or after the meeting. Neither the business to be transacted at, nor the
purpose of, any meeting of the Board or any committee thereof need be
specified in the notice or waiver of notice of such meeting except as
otherwise provided in these By-laws.
2. Amendment of By-laws. These By-laws may be amended or added
to at any meeting of the Board of Directors, if notice of the proposed change
has been given to all the directors three days before the meeting, or if all
the directors are present, or if all not present assent in writing to such
change.
Exhibit 4.1
==============================================================================
THE LTV CORPORATION
8.20% Senior Notes Due 2007
LTV STEEL COMPANY, INC.
Guarantor
____________________
INDENTURE
Dated as of September 22, 1997
--------------------
THE CHASE MANHATTAN BANK
Trustee
==============================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions ................................................. 1
SECTION 1.02. Other Definitions ........................................... 27
SECTION 1.03. Incorporation by Reference of Trust Indenture Act ........... 28
SECTION 1.04. Rules of Construction ....................................... 29
ARTICLE 2
The Securities
SECTION 2.01. Amount of Securities........................................ 29
SECTION 2.02. Form and Dating ............................................ 29
SECTION 2.03. Execution and Authentication ............................... 30
SECTION 2.04. Registrar and Paying Agent ................................. 31
SECTION 2.05. Paying Agent To Hold Money in Trust......................... 31
SECTION 2.06. Securityholder Lists ....................................... 32
SECTION 2.07. Replacement Securities ..................................... 32
SECTION 2.08. Outstanding Securities ..................................... 32
SECTION 2.09. Temporary Securities........................................ 33
SECTION 2.10. Cancellation................................................ 33
SECTION 2.11. Defaulted Interest.......................................... 33
SECTION 2.12. CUSIP Numbers............................................... 34
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee.......................................... 34
SECTION 3.02. Selection of Securities To Be Redeemed...................... 34
SECTION 3.03. Notice of Redemption........................................ 35
SECTION 3.04. Effect of Notice of Redemption.............................. 35
SECTION 3.05. Deposit of Redemption Price................................. 36
SECTION 3.06. Securities Redeemed in Part................................. 36
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities....................................... 36
SECTION 4.02. SEC Reports................................................. 36
SECTION 4.03. Intentionally Deleted....................................... 37
SECTION 4.04. Covenant Termination........................................ 37
SECTION 4.05. Limitation on Debt and Restricted Subsidiary Preferred
Stock..................................................... 37
SECTION 4.06. Limitation on Restricted Payments........................... 37
SECTION 4.07. Limitation on Liens......................................... 40
SECTION 4.08. Limitation on Issuance or Sale of Capital Stock of
Restricted Subsidiaries................................... 40
SECTION 4.09. Change of Control........................................... 40
SECTION 4.10. Limitation on Asset Sales................................... 42
SECTION 4.11. Limitation on Restrictions on Distributions from Restricted
Subsidiaries.............................................. 46
SECTION 4.12. Limitation on Transactions with Affiliates.................. 47
SECTION 4.13. Limitation on Sale and Leaseback Transactions............... 49
SECTION 4.14. Designation of Restricted and
Unrestricted Subsidiaries................................. 49
SECTION 4.15. Compliance Certificate...................................... 50
SECTION 4.16. Further Instruments and Acts................................ 50
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets................... 51
SECTION 5.02. When LTV Steel May Merge or Transfer Assets................. 52
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default........................................... 53
SECTION 6.02. Acceleration................................................ 55
SECTION 6.03. Other Remedies.............................................. 56
SECTION 6.04. Waiver of Past Defaults..................................... 56
SECTION 6.05. Control by Majority......................................... 56
SECTION 6.06. Limitation on Suits......................................... 57
SECTION 6.07. Rights of Holders to Receive Payment........................ 57
SECTION 6.08. Collection Suit by Trustee.................................. 57
SECTION 6.09. Trustee May File Proofs of Claim............................ 58
SECTION 6.10. Priorities.................................................. 58
SECTION 6.11. Undertaking for Costs....................................... 59
SECTION 6.12. Waiver of Stay or Extension Laws............................ 59
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee........................................... 59
SECTION 7.02. Rights of Trustee........................................... 61
SECTION 7.03. Individual Rights of Trustee................................ 61
SECTION 7.04. Trustee's Disclaimer........................................ 62
SECTION 7.05. Notice of Defaults.......................................... 62
SECTION 7.06. Reports by Trustee to Holders............................... 62
SECTION 7.07. Compensation and Indemnity.................................. 62
SECTION 7.08. Replacement of Trustee...................................... 63
SECTION 7.09. Successor Trustee by Merger................................. 64
SECTION 7.10. Eligibility; Disqualification............................... 64
SECTION 7.11. Preferential Collection of Claims Against Company........... 65
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance............ 65
SECTION 8.02. Conditions to Defeasance.................................... 66
SECTION 8.03. Application of Trust Money.................................. 68
SECTION 8.04. Repayment to Company........................................ 68
SECTION 8.05. Indemnity for Government Obligations........................ 68
SECTION 8.06. Reinstatement............................................... 68
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders.................................. 69
SECTION 9.02. With Consent of Holders..................................... 70
SECTION 9.03. Compliance with Trust Indenture Act......................... 71
SECTION 9.04. Revocation and Effect of Consents and Waivers............... 71
SECTION 9.05. Notation on or Exchange of Securities....................... 71
SECTION 9.06. Trustee To Sign Amendments.................................. 72
SECTION 9.07. Payment for Consent......................................... 72
ARTICLE 10
LTV Steel Guaranty
SECTION 10.01. Guaranty................................................... 72
SECTION 10.02. Contribution............................................... 75
SECTION 10.03. Successors and Assigns..................................... 75
SECTION 10.04. No Waiver.................................................. 75
SECTION 10.05. Modification............................................... 75
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls............................... 75
SECTION 11.02. Notices.................................................... 75
SECTION 11.03. Communication by Holders with Other Holders................ 76
SECTION 11.04. Certificate and Opinion as to Conditions Precedent......... 77
SECTION 11.05. Statements Required in Certificate or Opinion.............. 77
SECTION 11.06. When Securities Disregarded................................ 77
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar............... 78
SECTION 11.08. Legal Holidays............................................. 78
SECTION 11.09. Governing Law.............................................. 78
SECTION 11.10. No Recourse Against Others................................. 78
SECTION 11.11. Successors................................................. 78
SECTION 11.12. Multiple Originals......................................... 78
SECTION 11.13. Table of Contents; Headings................................ 79
Appendix A Provisions Relating to Initial Securities and
Exchange Securities
Exhibit 1 to
Appendix A Form of Initial Security
Exhibit A Form of Exchange Security
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
- ------- ----------
310(a)(1) .............................................. 7.10
(a)(2) ........................................... 7.10
(a)(3) .............................................. N.A.
(a)(4) .............................................. N.A.
(b) .............................................. 7.08; 7.10
(c) .............................................. N.A.
311(a) .............................................. 7.11
(b) .............................................. 7.11
(c) .............................................. N.A.
312(a) .............................................. 2.06
(b) .............................................. 11.03
(c) .............................................. 11.03
313(a) .............................................. 7.06
(b)(1) .............................................. N.A.
(b)(2) .............................................. 7.06
(c) .............................................. 11.02
(d) .............................................. 7.06
314(a) .............................................. 4.02; 4.11; 11.02
(b) .............................................. N.A.
(c)(1) .............................................. 11.04
(c)(2) .............................................. 11.04
(c)(3) .............................................. N.A.
(d) .............................................. N.A.
(e) .............................................. 11.05
(f) .............................................. 4.11
315(a) .............................................. 7.01
(b) .............................................. 7.05; 13.02
(c) .............................................. 7.01
(d) .............................................. 7.01
(e) .............................................. 6.11
316(a)(last
sentence) .............................................. 11.06
(a)(1)(A) .............................................. 6.05
(a)(1)(B) .............................................. 6.04
(a)(2) .............................................. N.A.
(b) .............................................. 6.07
317(a)(1) .............................................. 6.08
(a)(2) .............................................. 6.09
(b) .............................................. 2.05
318(a) .............................................. 11.01
N.A. Means Not Applicable.
_______________
Note: This Cross-Reference Table shall not, for any purposes, be deemed to
be part of this Indenture.
INDENTURE dated as of September 22, 1997, between THE LTV
CORPORATION, a Delaware corporation (the "Company"), LTV STEEL COMPANY,
INC., a New Jersey corporation ("LTV Steel"), as Guarantor, and THE CHASE
MANHATTAN BANK, as Trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Company's 8.20%
Senior Notes Due 2007, to be issued as in this Indenture provided (the
"Initial Securities") and, if and when issued pursuant to a registered
exchange offer for the Initial Securities, the Company's 8.20% Senior Notes
Due 2007 (the "Exchange Securities" and, together with the Initial
Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means (a) any Property (other than cash, cash
equivalents or securities) to be owned by the Company or any Restricted
Subsidiary; or (b) Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or another Restricted Subsidiary from any Person other than the
Company or an Affiliate of the Company.
"Affiliate" of any specified Person means (a) any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person
who is a director or officer of (i) such specified Person, (ii) any
Subsidiary of such specified Person or (iii) any Person described in clause
(a) above. For the purposes of this definition, "control" when used with
respect to any 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. For purposes
of the covenants contained in Section 4.10, Section 4.12 and the definition
of the term "Additional Assets" only, "Affiliate" shall also mean any
beneficial owner of shares representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of the Company or of
rights or warrants to purchase such Voting Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.
"Asset Sale" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions) by the Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar transaction or
by means of a disposition of Capital Stock permitted by clause (iii) of
Section 4.08 (each referred to for the purposes of this definition as a
"disposition"), of (a) any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares), (b) all or
substantially all the assets of any division or line of business of the
Company or any Restricted Subsidiary or (c) any other assets of the Company
or any Restricted Subsidiary outside of the ordinary course of business of
the Company or such Restricted Subsidiary (other than (i) in the case of
clauses (a), (b) and (c) above, any disposition by a Restricted Subsidiary
to the Company or by the Company or a Restricted Subsidiary to a Wholly
Owned Subsidiary, (ii) in the case of clauses (b) and (c) above, (x) any
disposition of accounts receivable or inventory by or to the Company or any
Restricted Subsidiary to or from Sales Finance or any other bankruptcy-
remote, special-purpose Subsidiary of the Company in connection with the
Incurrence of Debt by such Subsidiary under the Credit Facilities or (y)
any disposition of Property having, together with other Property disposed
of pursuant to such clauses during the same fiscal year, an aggregate Fair
Market Value of less than $25,000,000 and (iii) in the case of clause (c)
above, any disposition effected in compliance with Section 5.01(a)).
"Attributable Debt" in respect of a Sale and Leaseback
Transaction means, at any date of determination, (a) if such Sale and
Leaseback Transaction is a Capital Lease Obligation, the amount of Debt
represented thereby according to the definition of the term "Capital Lease
Obligation" and (b) in all other instances, the present value (discounted
at the actual rate of interest implicit in such transaction, compounded
annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale and Leaseback
Transaction (including any period for which such lease has been extended).
"Average Life" means, as of any date of determination, with
respect to any Debt or Preferred Stock, the quotient obtained by dividing
(a) the sum of the product of the numbers of years (rounded to the nearest
one-twelfth of one year) from the date of determination to the dates of
each successive scheduled principal payment of such Debt or redemption or
similar payment with respect to such Preferred Stock multiplied by the
amount of such payment by (b) the sum of all such payments.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
"Business Day" means each day which is not a Legal Holiday.
"Capital Expenditure Debt" means Debt Incurred by any Person to
finance a capital expenditure so long as (a) such capital expenditure is or
should be included as an addition to "Property, Plant and Equipment" in
accordance with GAAP and (b) such Debt is Incurred within 180 days of the
date such capital expenditure is made.
"Capital Lease Obligations" means any obligation under a lease that
is required to be capitalized for financial reporting purposes in accordance
with GAAP; and the amount of Debt represented by such obligation shall be
the capitalized amount of such obligations determined in accordance with
GAAP; and the Stated Maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty. For purposes of Section 4.07, a Capital Lease Obligation shall be
deemed secured by a Lien on the Property being leased.
"Capital Stock" means, with respect to any Person, any shares or
other equivalents (however designated) of corporate stock, partnership
interests or any other participations, rights, warrants, options or other
interests in the nature of an equity interest in such Person, including
Preferred Stock, but excluding any debt security convertible or
exchangeable into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate Net Cash Proceeds
received by the Company from the issuance or sale (other than to a
Subsidiary of the Company or an employee stock ownership plan or trust
established by the Company or any of its Subsidiaries for the benefit of
their employees) by the Company of any class of its Capital Stock (other
than Disqualified Stock) after the Issue Date.
"Change of Control" means the occurrence of any of the following
events:
(a) if any "Person" or "group" (as such terms are used
in Sections 13(d)(3) and 14(d)(2) of the Exchange Act or any
successor provisions to either of the foregoing), including any
group acting for the purpose of acquiring, holding, voting or
disposing of securities within the meaning of Rule 13d-5(b)(1)
under the Exchange Act, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act, except that a
Person will be deemed to have "beneficial ownership" of all
shares that any such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 50% or more of the total
voting power of all classes of the Voting Stock of the Company
(for purposes of this clause (a), such other Person or group
shall be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other
corporation (the "parent corporation") so long as such other
Person or group beneficially owns, directly or indirectly, in the
aggregate a majority of the voting power of all classes of the
Voting Stock of such parent corporation); or
(b) the sale, transfer, assignment, lease, conveyance
or other disposition, directly or indirectly, of all or
substantially all the assets of the Company and the Restricted
Subsidiaries, considered as a whole (other than a disposition of
such assets as an entirety or virtually as an entirety to a
Wholly Owned Subsidiary) shall have occurred, or the Company
merges, consolidates or amalgamates with or into any other Person
or any other Person merges, consolidates or amalgamates with or
into the Company, in any such event pursuant to a transaction in
which the outstanding Voting Stock of the Company is reclassified
into or exchanged for cash, securities or other Property, other
than any such transaction where (i) the outstanding Voting Stock
of the Company is reclassified into or exchanged for Voting Stock
of the surviving corporation and (ii) the Holders of the Voting
Stock of the Company immediately prior to such transaction own,
directly or indirectly, not less than a majority of the Voting
Stock of the surviving corporation immediately after such
transaction and in substantially the same proportion as before
the transaction; or
(c) during any period of two consecutive years,
individuals who at the beginning of such period constituted the
Board of Directors (together with any new directors whose
election or appointment by such Board or whose nomination for
election by the shareholders of the Company was approved by a
vote of 66 2/3% of the directors then still in office who were
either directors at the beginning of such period or whose
election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of
Directors then in office; or
(d) the shareholders of the Company shall have approved
any plan of liquidation or dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Trust Agreement" means the Collateral Trust Agreement
dated as of May 15, 1993, as amended through the Issue Date, among the
Company, LTV Steel, the USWA and Bank One Ohio Trust Company, N.A., as
collateral trustee.
"Commodity Price Protection Agreement" means, in respect of a
Person, any forward contract, commodity swap agreement, commodity option
agreement or other similar agreement or arrangement designed to protect
such Person against fluctuations in commodity prices.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the
indenture securities.
"Consolidated Current Liabilities" means, as of any date of
determination, the aggregate amount of liabilities of the Company and its
consolidated Restricted Subsidiaries which may properly be classified as
current liabilities (including taxes accrued as estimated), after eliminating
(a) all intercompany items between the Company and any Restricted Subsidiary
or between Restricted Subsidiaries and (b) all current maturities of
long-term Debt.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (a) the aggregate amount of EBITDA for the
period of the most recent four consecutive fiscal quarters ending at least
45 days prior to such determination date to (b) Consolidated Interest
Expense for such four fiscal quarters; provided, however, that (i) if the
Company or any Restricted Subsidiary has Incurred any Debt since the
beginning of such period that remains outstanding or if the transaction
giving rise to the need to calculate the Consolidated Interest Coverage
Ratio is an Incurrence of Debt, or both, Consolidated Interest Expense for
such period shall be calculated after giving effect on a pro forma basis to
such Debt as if such Debt had been Incurred on the first day of such period
and the discharge of any other Debt repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Debt as if such
discharge had occurred on the first day of such period, (ii) if since the
beginning of such period the Company or any Restricted Subsidiary shall
have made any Asset Sale or if the transaction giving rise to the need to
calculate the Consolidated Interest Coverage Ratio is an Asset Sale, or
both, EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets which are the
subject of such Asset Sale for such period, or increased by an amount equal
to the EBITDA (if negative) directly attributable thereto for such period,
in either case as if such Asset Sale had occurred on the first day of such
period and Consolidated Interest Expense for such period shall be reduced
by an amount equal to the Consolidated Interest Expense directly
attributable to any Debt of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with such
Asset Sale for such period, as if such Asset Sale had occurred on the first
day of such period (or, if the Capital Stock of any Restricted Subsidiary
is sold, by an amount equal to the Consolidated Interest Expense for such
period directly attributable to the Debt of such Restricted Subsidiary to
the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Debt after such sale), (iii) if since the beginning
of such period the Company or any Restricted Subsidiary (by merger or
otherwise) shall have made an Investment in any Restricted Subsidiary (or
any Person which becomes a Restricted Subsidiary) or an acquisition of
Property, including any acquisition of Property occurring in connection
with a transaction causing a calculation to be made hereunder, which
constitutes all or substantially all of an operating unit of a business,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the Incurrence
of any Debt) as if such Investment or acquisition occurred on the first day
of such period and (iv) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Sale, Investment or acquisition of
Property that would have required an adjustment pursuant to clause (ii) or
(iii) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset Sale,
Investment or acquisition occurred on the first day of such period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of Property, the amount of income or earnings relating thereto
and the amount of Consolidated Interest Expense associated with any Debt
incurred in connection therewith, the pro forma calculations shall be
determined in good faith by a responsible financial or accounting Officer
and as further contemplated by the definition of the term "pro forma". If
any Debt bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Debt shall be calculated as if the
rate in effect on the date of determination had been the applicable rate
for the entire period (taking into account any Interest Rate Agreement
applicable to such Debt if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest
expense, and to the extent Incurred by the Company or its Restricted
Subsidiaries, (a) interest expense attributable to capital leases, (b)
amortization of debt discount and debt issuance cost, (c) capitalized
interest, (d) non-cash interest expenses, (e) commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (f) net costs associated with Hedging Obligations
(including amortization of fees), (g) Redeemable Dividends, (h) Preferred
Stock dividends in respect of all Preferred Stock of Restricted
Subsidiaries held by Persons other than the Company or a Wholly Owned
Subsidiary, (i) interest incurred in connection with Investments in
discontinued operations, (j) interest accruing on any Debt of any other
Person to the extent such Debt is Guaranteed by the Company or any
Restricted Subsidiary and (k) the cash contributions to any employee stock
ownership plan or similar trust to the extent such
contributions are used by such plan or trust to pay interest or fees to any
Person (other than the Company) in connection with Debt Incurred by such
plan or trust.
"Consolidated Net Income" means, for any period, the net income
(loss) of the Company and its consolidated Subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income (a) any net
income (loss) of any Person (other than the Company) if such Person is not
a Restricted Subsidiary, except that (i) subject to the exclusion contained
in clause (d) below, the Company's equity in the net income of any such
Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash distributed by such Person during such
period to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (c) below)
and (ii) the Company's equity in a net loss of any such Person (other than
an Unrestricted Subsidiary) for such period shall be included in
determining such Consolidated Net Income, (b) any net income (loss) of any
Person acquired by the Company or any of its consolidated Subsidiaries in a
pooling of interests transaction for any period prior to the date of such
acquisition, (c) any net income (loss) of any Restricted Subsidiary to the
extent that such Restricted Subsidiary is subject to restrictions, directly
or indirectly, on the payment of dividends or the making of distributions,
directly or indirectly, to the Company, except that (i) subject to the
exclusion contained in clause (d) below, the Company's equity in the net
income of any such Restricted Subsidiary for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash
distributed by such Restricted Subsidiary during such period to the Company
or another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another
Restricted Subsidiary, to the limitation contained in this clause) and (ii)
the Company's equity in a net loss of any such Restricted Subsidiary for
such period shall be included in determining such Consolidated Net Income,
(d) any gain (but not loss) realized upon the sale or other disposition of
any Property of the Company or any of its consolidated Subsidiaries
(including pursuant to any Sale and Leaseback Transaction) which is not
sold or otherwise disposed of in the ordinary course of business, (e) any
extraordinary gain or loss, (f) any unusual or nonrecurring non-cash charge
or credit separately identified on the Company's consolidated income
statement for such period, provided that (i) to the extent any such charge
(other than the charge referred to in clause (i) below) represents an
accrual of or reserve for cash expenditures in any future period, such cash
expenditure shall be included in Consolidated Net Income for such future
period or (ii) for purposes of Section 4.06 only, to the extent any such
credit will result in the receipt of cash payments in any future period,
such cash payment shall be included in Consolidated Net Income for such
future period, (g) the cumulative effect of a change in accounting
principles, (h) any non-cash compensation expense realized for grants of
performance shares, stock options or other stock awards to officers,
directors and employees of the Company or any Restricted Subsidiary and (i)
for purposes of Section 4.06 only, the special charge (in an amount not to
exceed $150,000,000) to be taken with respect to the proposed shutdown of
the Pittsburgh coke facility announced by the Company in July 1997;
provided further, however, that there shall be added to such Consolidated
Net Income any provision for taxes not payable in cash.
"Consolidated Net Tangible Assets" means, as of any date of
determination, the sum of the amounts that would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries
as the total assets (less accumulated depreciation, depletion and
amortization, allowances for doubtful receivables, adjustments for pension
liabilities, other applicable reserves and other properly deductible items)
of the Company and its Restricted Subsidiaries, after giving effect to
purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of (without
duplication): (a) the excess of cost over fair market value of assets or
businesses acquired; (b) any revaluation or other write-up in book value
of assets subsequent to the last day of the fiscal quarter of the Company
immediately preceding the Issue Date as a result of a change in the method
of valuation in accordance with GAAP; (c) unamortized debt discount and
expenses and other unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, licenses, organization
or developmental expenses and other intangible items; (d) minority
interests in consolidated Subsidiaries held by Persons other than the
Company or any Restricted Subsidiary; (e) treasury stock; (f) cash or
securities set aside and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of Capital
Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities; and (g) Investments in and assets of Unrestricted
Subsidiaries.
"Consolidated Net Worth" means the total of the amounts shown on the
consolidated balance sheet of the Company and its Restricted Subsidiaries
as of the end of the most recent fiscal quarter of the Company ending at
least 45 days prior to the taking of any action for the purpose of which
the determination is being made, as (a) the par or stated value of all
outstanding Capital Stock of the Company plus (b) paid-in capital or
capital surplus relating to such Capital Stock plus (c) any retained
earnings or earned surplus less (i) any accumulated deficit, (ii) any
amounts attributable to Disqualified Stock and (iii) any adjustments for
pension liabilities.
"Credit Facilities" means the Receivables Credit Agreement and the
Letter of Credit Agreement, in each case together with any extensions,
revisions, refinancings or replacements thereof by a lender or syndicate of
lenders (including through the sale of accounts receivable or inventory to
such lender or lenders or to Sales Finance or any other bankruptcy-remote,
special-purpose Subsidiary of the Company that purchases such accounts
receivable or inventory).
"Currency Exchange Protection Agreement" means, in respect of a
Person, any foreign exchange contract, currency swap agreement, currency
option or other similar agreement or arrangement designed to protect such
Person against fluctuations in currency exchange rates.
"Debt" means, with respect to any Person on any date of
determination (without duplication), (a) the principal in respect of (i)
debt of such Person for money borrowed and (ii) debt evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable; (b) all Capital Lease Obligations of
such Person and all Attributable Debt in respect of Sale and Leaseback
Transactions entered into by such Person; (c) all obligations of such
Person issued or assumed as the deferred purchase price of Property, all
conditional sale obligations of such Person and all obligations of such
Person under any title retention agreement (but excluding Trade Accounts
Payable arising in the ordinary course of business); (d) all obligations
of such Person for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction (other than
obligations with respect to letters of credit securing obligations (other
than obligations described in (a) through (c) above) entered into in the
ordinary course of business of such Person to the extent such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing
is reimbursed no later than the tenth Business Day following receipt by
such Person of a demand for reimbursement following payment on the letter
of credit); (e) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified Stock
or, with respect to any Subsidiary of such Person, any Preferred Stock (but
excluding, in each case, any accrued dividends); (f) all obligations of
the type referred to in clauses (a) through (e) of other Persons and all
dividends of other Persons for the payment of which, in either case, such
Person is responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise, including by means of any Guarantee; (g) all
obligations of the type referred to in clauses (a) through (f) of other
Persons secured by any Lien on any Property or asset of such Person
(whether or not such obligation is assumed by such Person), the amount of
such obligation being deemed to be the lesser of the value of such Property
or assets or the amount of the obligation so secured; (h) to the extent
not otherwise included in this definition, Hedging Obligations of such
Person; and (i) to the extent not otherwise included in this definition,
any financing of accounts receivable or inventory of such Person (whether
or not treated as a sale or debt for accounting purposes); provided that
such accounts receivable or inventory shall be deemed to be on the
consolidated balance sheet of the Company for purposes of clause (b)(ii) of
the definition of "Permitted Debt". The amount of Debt of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any
contingent obligations at such date.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person,
Redeemable Stock of such Person as to which the maturity, mandatory
redemption, redemption at the option of the holder thereof, conversion or
exchange occurs, or may occur, on or prior to the first anniversary of the
Stated Maturity of the Securities; provided, however, that Redeemable Stock
of such Person that would not otherwise be characterized as Disqualified
Stock under this definition shall not constitute Disqualified Stock if such
Redeemable Stock is convertible or exchangeable into Debt solely at the
option of the issuer thereof.
"EBITDA" means, for any period, an amount equal to, for the
Company and its consolidated Restricted Subsidiaries, (a) the sum of
Consolidated Net Income for such period, plus the following to the extent
reducing Consolidated Net Income for such period: (i) the provision for
taxes for such period based on income or profits or utilized in computing
net loss, (ii) Consolidated Interest Expense, (iii) depreciation and
amortization of fixed and intangible assets and (iv) any other non-cash
items (other than any such non-cash item to the extent that it represents
an accrual of or reserve for cash expenditures in any future period), minus
(b) all non-cash items increasing Consolidated Net Income for such period
(other than any such non-cash item to the extent that it will result in the
receipt of cash payments in any future period). Notwithstanding the
foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization of, a Restricted Subsidiary shall be
added to Consolidated Net Income to compute EBITDA only to the extent (and
in the same proportion) that the net income of such Restricted Subsidiary
was included in calculating Consolidated Net Income and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter
and all agreements, instruments, judgments, decrees, orders, statutes,
rules and governmental regulations applicable to such Restricted Subsidiary
or its stockholders.
"Exchange Act" means the Securities Exchange Act of 1934.
"Fair Market Value" means, with respect to any Property, the
price (or, in the case of a lease, the rent) which could be negotiated in
an arm's-length free market transaction, for cash, between a willing seller
(or lessor) and a willing buyer (or lessee), neither of whom is under undue
pressure or compulsion to complete the transaction. Fair Market Value will
be determined, except as otherwise provided, (a) if such Property has a
Fair Market Value equal to or less than $25,000,000, by any Officer of the
Company or (b) if such Property has a Fair Market Value in excess of
$25,000,000, by a majority of the Board of Directors and evidenced by a
Board Resolution, dated within 30 days of the relevant transaction,
delivered to the Trustee.
"GAAP" means United States generally accepted accounting
principles as in effect on the Issue Date, including those set forth (a) in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants, (b) in the statements
and pronouncements of the Financial Accounting Standards Board, (c) in such
other statements by such other entity as approved by a significant segment
of the accounting profession and (d) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma
financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in
staff accounting bulletins and similar written statements from the
accounting staff of the SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Debt of any other Person and
any obligation, direct or indirect, contingent or otherwise, of such Person
(a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee against loss in respect
thereof (in whole or in part); provided, however, that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The term "Guarantor" shall mean any Person
Guaranteeing any obligation.
"Guaranty" means the Guaranty on the terms set forth in this
Indenture by LTV Steel of the Company's obligations with respect to the
Securities.
"Hedging Obligation" of any Person means any obligation of such
Person pursuant to any Interest Rate Agreement, Currency Exchange
Protection Agreement, Commodity Price Protection Agreement or any other
similar agreement or arrangement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Security Register.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by merger, conversion, exchange or
otherwise), extend, assume, Guarantee or become liable in respect of such
Debt or other obligation or the recording, as required pursuant to GAAP or
otherwise, of any such Debt or obligation on the balance sheet of such
Person (and "Incurrence" and "Incurred" shall have meanings correlative to
the foregoing); provided, however, that a change in GAAP that results in an
obligation of such Person that exists at such time, and is not theretofore
classified as Debt, becoming Debt shall not be deemed an Incurrence of such
Debt; provided further, however, that solely for purposes of determining
compliance with Section 4.05, amortization of debt discount shall not be
deemed to be the Incurrence of Debt, provided that in the case of Debt sold
at a discount, the amount of such Debt Incurred shall at all times be the
aggregate principal amount at Stated Maturity.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Independent Appraiser" means an investment banking firm of
national standing or any third party appraiser of national standing,
provided that such firm or appraiser is not an Affiliate of the Company.
"Interest Rate Agreement" means, for any Person, any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement designed to protect against
fluctuations in interest rates.
"Investment" by any Person means any direct or indirect loan
(other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of such Person),
advance or other extension of credit or capital contribution (by means of
transfers of cash or other Property to others or payments for Property or
services for the account or use of others, or otherwise) to, or Incurrence
of a Guarantee of any obligation of, or purchase or acquisition of Capital
Stock, bonds, notes, debentures or other securities or evidence of Debt
issued by, any other Person. In determining the amount of any Investment
made by transfer of any Property other than cash, such Property shall be
valued at its Fair Market Value at the time of such Investment.
"Investment Grade Rating" means a rating equal to or higher than
Baa3 (or the equivalent) by Moody's and BBB-(or the equivalent) by S&P.
"Investment Grade Status" shall be deemed to have been reached on
the date that the Securities have an Investment Grade Rating from both
Rating Agencies.
"Issue Date" means the date on which the Securities are initially
issued.
"Letter of Credit Agreement" means the Letter of Credit Agreement
dated as of October 12, 1994, as amended through the Issue Date, among the
Company, certain Subsidiaries of the Company, various financial
institutions parties thereto as lenders and BT Commercial Corporation, as
agent.
"Lien" means, with respect to any Property of any Person, any
mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement (other than any
easement not materially impairing usefulness or marketability),
encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with
respect to such Property (including any Capital Lease Obligation,
conditional sale or other title retention agreement having substantially
the same economic effect as any of the foregoing or any Sale and Leaseback
Transaction, but excluding any operating lease (except Sale and Leaseback
Transactions) entered into in the ordinary course of such Person's
business).
"LTV Steel" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions hereof and,
thereafter, means the successor and, for the purposes of any provision
contained herein and required by the TIA, each other obligor on the
indenture securities.
"Moody's" means Moody's Investors Service, Inc. or any successor to
the rating agency business thereof.
"Net Available Cash" from any Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment
of principal pursuant to a note or installment receivable or otherwise, but
only as and when received, but excluding any other consideration received
in the form of assumption by the acquiring Person of Debt or other
obligations relating to the Property that is the subject of such Asset Sale
or received in any other non-cash form), in each case net of (a) all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes
required to be accrued as a liability under GAAP, as a consequence of such
Asset Sale, (b) all payments made on any Debt which is secured by any
Property subject to such Asset Sale, in accordance with the terms of any
Lien upon or other security agreement of any kind with respect to such
Property, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale, (c) all distributions and other payments
required to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Sale and (d) the deduction of
appropriate amounts provided by the seller as a reserve, in accordance with
GAAP, against any liabilities associated with the Property disposed in such
Asset Sale and retained by the Company or any Restricted Subsidiary after
such Asset Sale.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale, net of
attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes
paid or payable as a result thereof.
"Officer" means the President and Chief Executive Officer, the Chief
Financial Officer or any Vice President of the Company.
"Officers' Certificate" means a certificate signed by two Officers
of the Company, at least one of whom shall be the principal executive officer
or principal financial officer of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal counsel
who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Debt" means:
(a) Debt of the Company evidenced by the Securities
and of LTV Steel evidenced by the Guaranty;
(b) Debt under the Credit Facilities; provided that
the aggregate principal amount of all such Debt under the Credit
Facilities, together with all Permitted Refinancing Debt Incurred
in respect of Debt previously Incurred pursuant to this clause
(b), at any one time outstanding shall not exceed the greater of
(i) $470,000,000 less the sum of the aggregate amount of all
prepayments and required payments of principal applied to reduce
the aggregate amount available to be borrowed under the Credit
Facilities or such Permitted Refinancing Debt, including pursuant
to Section 4.10, and (ii) the sum of the amounts equal to (x) 60%
of the book value of the inventory of the Company and the
Restricted Subsidiaries and (y) 85% of the book value of the
accounts receivable of the Company and the Restricted
Subsidiaries, in each case as of the most recently ended quarter
of the Company for which financial statements of the Company have
been provided to the Holders of Securities;
(c) Capital Expenditure Debt; provided that (i) the
aggregate principal amount of such Debt does not exceed the Fair
Market Value (on the date of the Incurrence thereof) of the
Property acquired, constructed or leased and (ii) the aggregate
principal amount of all Debt Incurred and then outstanding
pursuant to this clause (c), together with all Permitted
Refinancing Debt Incurred and then outstanding in respect of Debt
previously Incurred pursuant to this clause (c), does not exceed
$300,000,000;
(d) Debt of the Company owing to and held by any
Wholly Owned Subsidiary and Debt of a Restricted Subsidiary owing
to and held by the Company or any Wholly Owned Subsidiary;
provided, however, that any subsequent issue or transfer of
Capital Stock or other event that results in any such Wholly
Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of any such Debt (except to the Company or a
Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Debt by the issuer thereof;
(e) Debt of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Restricted
Subsidiary was acquired by the Company or otherwise became a
Restricted Subsidiary (other than Debt Incurred as consideration
in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of
transactions pursuant to which such Restricted Subsidiary became
a Subsidiary of the Company or was otherwise acquired by the
Company); provided that at the time such Restricted Subsidiary
was acquired by the Company or otherwise became a Restricted
Subsidiary and after giving pro forma effect to the Incurrence of
such Debt, the Company would have been able to Incur $1.00 of
additional Debt pursuant to Section 4.05(a);
(f) Debt under Interest Rate Agreements entered into
by the Company or a Restricted Subsidiary for the purpose of
limiting interest rate risk in the ordinary course of the
financial management of the Company or such Restricted Subsidiary
and not for speculative purposes; provided that the obligations
under such agreements are directly related to payment obligations
on Debt otherwise permitted by Section 4.05;
(g) Debt under Commodity Price Protection Agreements
entered into by the Company or a Restricted Subsidiary in the
ordinary course of the financial management (including cost
control) of the Company or such Restricted Subsidiary and not for
speculative purposes;
(h) Debt in connection with one or more standby
letters of credit or performance bonds issued by the Company or a
Restricted Subsidiary in the ordinary course of business or
pursuant to self-insurance obligations and not in connection with
the borrowing of money or the obtaining of advances or credit;
(i) Debt outstanding on the Issue Date not otherwise
described in clauses (a) through (h) above and any additional
Debt Incurred after the Issue Date representing interest paid in-
kind on Debt outstanding pursuant to this clause (i);
(j) Debt of the Company or any Restricted Subsidiary
(other than Debt permitted by Section 4.05(a) or the other
clauses of this definition) in an aggregate principal amount
outstanding at any one time not to exceed $100,000,000; and
(k) Permitted Refinancing Debt Incurred in respect of
Debt Incurred pursuant to Section 4.05(a) and clauses (a), (b),
(c), (e) and (i) above, subject, in the case of clauses (b) and
(c) above, to the limitations set forth in the respective
provisos thereto.
"Permitted Liens" means:
(a) Liens to secure Debt permitted to be Incurred
under clause (b) of the definition of "Permitted Debt," provided
that any such Lien is limited to the accounts receivable and
inventory (and insurance proceeds and other Property similarly
incidental thereto) of the Company and the Restricted
Subsidiaries and any securities issued by Sales Finance or any
other bankruptcy-remote, special-purpose Subsidiary of the
Company that purchases such accounts receivable or inventory in
connection with the Incurrence of such Debt;
(b) Liens to secure Debt permitted to be Incurred
under clause (c) of the definition of "Permitted Debt," provided
that any such Lien may not extend to any Property of the Company
or any Restricted Subsidiary other than (i) the Property
acquired, constructed or leased with the proceeds of such Debt,
(ii) all improvements and accessions to such Property and (iii)
in the case of personal Property, any real Property underlying
such personal Property;
(c) Liens for taxes, assessments or governmental
charges or levies on the Property of the Company or any
Restricted Subsidiary if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision that shall be required in
conformity with GAAP shall have been made therefor;
(d) Liens imposed by law, such as carriers',
warehousemen's and mechanics' Liens on the Property of the
Company or any Restricted Subsidiary arising in the ordinary
course of business and securing payment of obligations which are
not more than 60 days past due or are being contested in good
faith and by appropriate proceedings;
(e) Liens on the Property of the Company or any
Restricted Subsidiary Incurred in the ordinary course of business
to secure performance of obligations with respect to statutory or
regulatory requirements, performance or return-of-money bonds,
surety bonds or other obligations of a like nature and Incurred
in a manner consistent with industry practice, in each case which
are not Incurred in connection with the borrowing of money, the
obtaining of advances or credit or the payment of the deferred
purchase price of Property and which do not in the aggregate
impair in any material respect the use of Property in the
operation of the business of the Company and the Restricted
Subsidiaries taken as a whole;
(f) Liens on Property at the time the Company or any
Restricted Subsidiary acquired such Property, including any
acquisition by means of a merger or consolidation with or into
the Company or any Restricted Subsidiary; provided, however, that
any such Lien may not extend to any other Property of the Company
or any Restricted Subsidiary; provided further, however, that
such Liens shall not have been Incurred in anticipation of or in
connection with the transaction or series of transactions
pursuant to which such Property was acquired by the Company or
any Restricted Subsidiary;
(g) Liens on the Property of a Person at the time such
Person becomes a Restricted Subsidiary; provided, however, that
any such Lien may not extend to any other Property of the Company
or any other Restricted Subsidiary which is not a direct
Subsidiary of such Person; provided further, however, that any
such Lien was not Incurred in anticipation of or in connection
with the transaction or series of transactions pursuant to which
such Person became a Restricted Subsidiary;
(h) pledges or deposits by the Company or any
Restricted Subsidiary under workmen's compensation laws,
unemployment insurance laws or similar legislation, or good faith
deposits in connection with bids, tenders, contracts (other than
for the payment of Debt) or leases to which the Company or any
Restricted Subsidiary is party, or deposits to secure public or
statutory obligations of the Company, or deposits for the payment
of rent, in each case Incurred in the ordinary course of
business;
(i) utility easements, building restrictions and such
other encumbrances or charges against real Property as are of a
nature generally existing with respect to properties of a similar
character;
(j) Liens existing on the Issue Date not otherwise
described in clauses (a) through (i) above, including the Lien
securing the USWA Secured Obligations, provided that such Lien
may be extended from time to time to Property of the Company or
any Restricted Subsidiary not subject thereto on the Issue Date
to the extent any such extension is required by the terms of the
Collateral Trust Agreement as in effect on the Issue Date;
(k) Liens on the Property of the Company or any
Restricted Subsidiary to secure any Refinancing, in whole or in
part, of any Debt secured by Liens referred to in clause (a),
(b), (f), (g) or (j) above; provided, however, that any such Lien
shall be limited to all or part of the same Property that secured
the original Lien (together with improvements and accessions to
such Property) and the aggregate principal amount of Debt that is
secured by such Lien shall not be increased to an amount greater
than the sum of (i) the outstanding principal amount, or, if
greater, the committed amount, of the Debt secured by Liens
described under clause (a), (b), (f), (g) or (j) above, as the
case may be, at the time the original Lien became a Permitted
Lien under the Indenture and (ii) an amount necessary to pay any
premiums, fees and other expenses incurred by the Company or such
Restricted Subsidiary in connection with such Refinancing; and
(l) Liens securing Debt not otherwise described in
clauses (a) through (k) above, provided that at the time any such
Lien is Incurred the sum of (i) the aggregate principal amount
(in the case of Debt sold at a discount, at Stated Maturity) of
all Secured Debt outstanding at such time (other than the USWA
Secured Obligations and any Permitted Refinancing Debt in respect
thereof to the extent not exceeding $250,000,000 in the
aggregate) and (ii) the aggregate amount of Attributable Debt
outstanding at such time with respect to Sale and Leaseback
Transactions entered into by the Company or any Restricted
Subsidiary, does not exceed 10% of Consolidated Net Tangible
Assets, as determined based on the consolidated balance sheet of
the Company as of the end of the most recent fiscal quarter
ending at least 45 days prior thereto.
"Permitted Refinancing Debt" means any Debt that Refinances any other
Debt, including any successive Refinancings, so long as (a) such Debt is in
an aggregate principal amount (or if Incurred with original issue discount,
an aggregate issue price) not in excess of the sum of (i) the aggregate
principal amount (or if Incurred with original issue discount, the
aggregate accreted value) then outstanding of the Debt being Refinanced and
(ii) an amount necessary to pay any fees and expenses, including premiums
and defeasance costs, related to such Refinancing, (b) the Average Life of
such Debt is equal to or greater than the Average Life of the Debt being
Refinanced, (c) the Stated Maturity of such Debt is no earlier than the
earlier of (i) the Stated Maturity of the Debt being Refinanced and (ii)
the date that is at least one year and one day after the Stated Maturity of
the Securities and (d) the new Debt shall not be senior in right of payment
to the Debt that is being Refinanced; provided, however, that Permitted
Refinancing Debt shall not include (a) Debt of a Subsidiary that
Refinances Debt of the Company or (b) Debt of the Company or a Restricted
Subsidiary that Refinances Debt of an Unrestricted Subsidiary.
"Person" means any individual, corporation, company (including any
limited liability or joint-stock company), partnership, joint venture,
association, trust, unincorporated organization, government or any agency
or political subdivision thereof or any other entity.
"Preferred Stock" means any Capital Stock of a Person, however
designated, which entitles the Holder thereof to a preference with respect
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such Person, over
shares of any other class of Capital Stock issued by such Person.
"principal" of any Debt (including the Securities) means the
principal amount of such Debt plus the premium, if any, on such Debt.
"Property" means, with respect to any Person, any interest of
such Person in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible, including Capital Stock in, and other
securities of, any other Person. For purposes of any calculation required
pursuant to the Indenture, the value of any Property shall be its Fair
Market Value.
"Public Equity Offering" means an underwritten public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Rating Agencies" mean Moody's and S&P.
"Receivables Credit Agreement" means the Receivables Credit
Agreement dated as of October 12, 1994, as amended through the Issue Date,
among Sales Finance, [Bankers Trust Company], as collateral agent and
facility agent, and various financial institutions parties thereto as
lenders and issuing banks.
"Redeemable Dividend" means, for any dividend with respect to
Redeemable Stock, the quotient of the dividend divided by the difference
between one and the maximum statutory federal income tax rate (expressed as
a decimal number between 1 and 0) then applicable to the issuer of such
Redeemable Stock.
"Redeemable Stock" means, with respect to any Person, any Capital
Stock that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or otherwise (a) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise,
(b) is or may become redeemable or repurchaseable at the option of the
holder thereof, in whole or in part, or (c) is convertible or exchangeable
for Debt or Disqualified Stock.
"Refinance" means, in respect of any Debt, to refinance, extend,
renew, refund, reply, prepay, redeem, defease or retire, or to issue other
Debt, in exchange or replacement for, such Debt. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Related Business" means (i) any business that is related,
ancillary or complementary to the businesses of the Company and the
Restricted Subsidiaries on the Issue Date, (ii) with respect to any
Restricted Subsidiary acquired by the Company or by any other Restricted
Subsidiary after the Issue Date, any other businesses in which such
Restricted Subsidiary was engaged in at the time it was so acquired so long
as such Restricted Subsidiary is at such time and continues to be primarily
engaged in such related, ancillary or complementary businesses and (iii)
any other business acquired or otherwise entered into in accordance with
the Indenture.
"Restricted Payment" means (a) any dividend or distribution
(whether made in cash, securities or other Property) declared or paid on or
with respect to any shares of Capital Stock of the Company or any
Restricted Subsidiary (including any payment in connection with any merger
or consolidation with or into the Company or any Restricted Subsidiary),
except for any dividend or distribution which is made solely to the Company
or a Restricted Subsidiary (and, if such Restricted Subsidiary is not a
Wholly Owned Subsidiary, to the other shareholders of such Restricted
Subsidiary on a pro rata basis) or any dividend or distribution payable
solely in shares of Capital Stock (other than Redeemable Stock) of the
Company; (b) any payment made by the Company or any Restricted Subsidiary
to purchase, redeem, repurchase, acquire or retire for value any Capital
Stock of the Company or any Affiliate of the Company (other than a
Restricted Subsidiary); or (c) any payment made by the Company or any
Restricted Subsidiary to purchase, redeem, repurchase, defease or otherwise
acquire or retire for value, prior to any scheduled maturity, scheduled
sinking fund or mandatory redemption payment, any Subordinated Obligation
(other than the purchase, repurchase, or other acquisition of any
Subordinated Obligation purchased in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition).
"Restricted Subsidiary" means (a) any Subsidiary of the Company in
existence on or after the Issue Date unless such Subsidiary shall have been
designated an Unrestricted Subsidiary as permitted or required pursuant to
Section 4.14 and (b) an Unrestricted Subsidiary which is redesignated as a
Restricted Subsidiary as permitted pursuant to Section 4.14.
"S&P" means Standard & Poor's Ratings Service or any successor to
the rating agency business thereof.
"Sale and Leaseback Transaction" means any arrangement relating to
Property now owned or hereafter acquired whereby the Company or a
Restricted Subsidiary transfers such Property to another Person and the
Company or a Restricted Subsidiary leases it from such Person, other than
any such arrangement with respect to Property acquired or placed into
service by the Company or any Restricted Subsidiary after the Issue Date to
the extent entered into within 365 days after the date of such acquisition
or placement into service and not constituting a Capital Lease Obligation.
"Sales Finance" means LTV Sales Finance Company, a bankruptcy-remote,
special purpose Subsidiary of the Company.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"Secured Debt" means any Debt of the Company or any Restricted
Subsidiary secured by a Lien.
"Senior Debt" of the Company means (a) all obligations consisting
of the principal, and accrued and unpaid interest in respect of (i) Debt
of the Company for borrowed money and (ii) Debt of the Company evidenced
by notes, debentures, bonds or other similar instruments permitted under
the Indenture for the payment of which the Company is responsible or
liable; (b) all Capital Expenditure Debt of the Company; (c) all
obligations of the Company (i) for the reimbursement of any obligor on any
letter of credit, bankers' acceptance or similar credit transaction or (ii)
under Hedging Obligations; and (d) all obligations of other Persons of the
type referred to in clauses (a) and (b) for the payment of which the
Company is responsible or liable as Guarantor; provided, however, that
Senior Debt of the Company shall not include (A) Debt of the Company that
is by its terms subordinate in right of payment to the Securities; (B) any
Debt Incurred in violation of the provisions of the Indenture; (C)
accounts payable or any other obligations of the Company to trade creditors
created or assumed by the Company in the ordinary course of business in
connection with the obtaining of materials or services (including
Guarantees thereof or instruments evidencing such liabilities); (D) any
liability for Federal, state, local or other taxes owed or owing by the
Company; (E) any obligation of the Company to any Subsidiary; or (F) any
obligations with respect to any Capital Stock. "Senior Debt" of LTV Steel
has a correlative meaning, provided that clause (E) above shall be deemed
to refer to any obligation of LTV Steel to the Company or any Subsidiary of
the Company.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon
the happening of any contingency beyond the control of the issuer unless
such contingency has occurred).
"Subordinated Obligation" means any Debt of the Company or LTV Steel
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities or the Guaranty
pursuant to a written agreement to that effect.
"Subsidiary" means, in respect of any specified Person, any
corporation, company, partnership, joint venture, association or other
business entity of which more than 50% of the total voting power of shares
of Capital Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person, (ii) such
Person and one or more Subsidiaries of such Person or (iii) one or more
Subsidiaries of such Person.
"Sumitomo Securities Purchase Agreement" means the Securities
Purchase Agreement dated as of May 26, 1993, as amended through the Issue
Date, by and among the Company, LTV Steel and SMI America, Inc.
"Temporary Cash Investments" means any of the following: (a)
Investments in Government Obligations, (b) Investments in time deposit
accounts, certificates of deposit and money market deposits maturing within
180 days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America
or any state thereof or any foreign country recognized by the United States
of America, which bank or trust company has capital, surplus and undivided
profits aggregating in excess of $500 million or its foreign currency
equivalent and a long-term debt rating of "A-3" or "A-" or higher according
to Moody's Investors Service, Inc. or Standard & Poor's Ratings Service (or
such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the
Securities Act)), (c) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (a)
entered into with a bank meeting the qualifications described in clause (b)
above, (d) Investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America with a rating at the time as of which any
Investment therein is made of "P-1" (or higher) according to Moody's
Investors Service, Inc. or "A-1" (or higher) according to Standard & Poor's
Ratings Service (or such similar equivalent rating by at least one
"nationally recognized statistical rating organization" (as defined in Rule
436 under the Securities Act)) and (e) Investments in money market funds
all of whose assets are comprised of securities of the types described in
clauses (a) through (d) above.
"Trade Accounts Payable" means accounts payable or other
obligations of the Company or any Restricted Subsidiary to trade creditors
created or assumed by the Company or such Restricted Subsidiary in the
ordinary course of business in connection with the obtaining of goods or
services.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
Section 77aaa-77bbbb) as in effect on the date of this Indenture except as
required by Section 9.03 hereof; provided that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Company in
existence on the Issue Date that is not a Restricted Subsidiary; (b) any
Subsidiary of an Unrestricted Subsidiary; (c) any Subsidiary of the
Company that is designated after the Issue Date as an Unrestricted
Subsidiary as permitted pursuant to Section 4.14 and not thereafter
redesignated as a Restricted Subsidiary as permitted pursuant thereto; and
(d) Presque Isle Corporation and L-S Electro-Galvanizing Company.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer's
option.
"USWA" means the United Steelworkers of America.
"USWA Secured Obligations" means the retiree health benefit, plan
contribution and other obligations of the Company and its Subsidiaries
secured by a Lien granted to the USWA pursuant to the Collateral Trust
Agreement.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means, at any time, a Restricted
Subsidiary all the Voting Stock of which (except directors' qualifying
shares) is at such time owned, directly or indirectly, by the Company and
its other Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined
Term in Section
- ---- ----------
"Affiliate Transaction"...................................... 4.12
"Bankruptcy Law"............................................. 6.01
"Change of Control Offer".................................... 4.09(a)
"Change of Control Purchase Price"........................... 4.09(a)
"Change of Control Payment Date"............................. 4.09(b)
"covenant defeasance option"................................. 8.01(b)
"Custodian".................................................. 6.01
"Event of Default"........................................... 6.01
"Excess Proceeds"............................................ 4.10(b)
"legal defeasance option".................................... 8.01(b)
"Legal Holiday".............................................. 11.08
"Obligations"................................................ 10.01
"Offer Amount"............................................... 4.10(d)(2)
"Offer Period"............................................... 4.10(d)(2)
"Paying Agent"............................................... 2.04
"Prepayment Offer"........................................... 4.10(c)
"Prepayment Offer Notice".................................... 4.10(d)(1)
"Purchase Date".............................................. 4.10(d)(1)
"Registrar".................................................. 2.04
"Surviving Person"........................................... 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The
following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, LTV Steel
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Debt shall not be deemed to be subordinate or
junior to secured Debt merely by virtue of its nature as unsecured Debt;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be the
greater of (i) the maximum liquidation value of such Preferred Stock or
(ii) the maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock.
ARTICLE 2
The Securities
SECTION 2.01. Amount of Securities. The aggregate principal
amount of Securities which may be authenticated and delivered under this
Indenture is $300,000,000. Subject to Section 2.03, the Trustee shall
authenticate Initial Securities for original issue on the Issue Date in the
aggregate principal amount of $300,000,000.
SECTION 2.02. Form and Dating. Provisions relating to the Initial
Securities and the Exchange Securities are set forth in Appendix A, which
is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to Appendix A which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage, provided that
any such notation, legend or endorsement is in a form reasonably acceptable
to the Company. Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in Exhibit 1 to
Appendix A and Exhibit A are part of the terms of this Indenture.
SECTION 2.03. Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall
be valid nevertheless.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company
to the Trustee for authentication, together with a written order of the
Company for the authentication and delivery of such Securities signed by
two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company, and the Trustee in accordance with such
written order of the Company shall authenticate and deliver such
Securities.
A Security shall not be valid until an authorized officer of the
Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited
by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as any Registrar,
Paying Agent or agent for service of notices and demands.
SECTION 2.04. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for
registration of transfer or for exchange (the "Registrar") and an office or
agency where Securities may be presented for payment (the "Paying Agent")
and an office or agency where notices and demands to or upon the Company or
LTV Steel in respect of the Securities and this Indenture may be served
(the "Notice Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company may have one or
more co-registrars and one or more additional paying agents. The term
"Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent, co-registrar or Notice Agent not a party to this
Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such agent.
The Company shall notify the Trustee of the name and address of any such
agent. If the Company fails to maintain a Registrar or Paying Agent or
Notice Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or
any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar, Paying
Agent and Notice Agent in connection with the Securities.
SECTION 2.05. Paying Agent To Hold Money in Trust. Prior to each
due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. If it fails to do so, it will notify the
Trustee. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for
the benefit of Securityholders or the Trustee all money held by the Paying
Agent for the payment of principal of or interest on the Securities, shall
notify the Trustee of any default by the Company in making any such payment
and at any time during the continuance of any such default, upon the
written request of the Trustee, it shall forthwith pay to the Trustee all
sums so held in trust by such Paying Agent. If the Company or a Wholly
Owned Subsidiary acts as Paying Agent, it shall segregate the money held by
it as Paying Agent and hold it as a separate trust fund. If it fails to do
so, it will notify the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and to account for
any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to
the Trustee.
SECTION 2.06. Securityholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list
available to it of the names and addresses of Securityholders. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee, in
writing at least five Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names
and addresses of Securityholders.
SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that
such Security has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Security if
the Holder satisfies any reasonable requirements of the Trustee. If
required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement of mutilated, lost, destroyed or wrongfully taken Securities.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described
in this Section as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient
to pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to
the Securityholders on that date pursuant to the terms of this Indenture,
then on and after that date such Securities (or portions thereof) cease to
be outstanding and interest on them ceases to accrue.
SECTION 2.09. Temporary Securities. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations
that the Company considers appropriate for temporary Securities. Without
unreasonable delay, the Company shall prepare and the Trustee shall
authenticate definitive Securities and deliver them in exchange for
temporary Securities.
SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else
shall cancel and dispose of (subject to the record retention requirements
of the Exchange Act) all Securities surrendered for registration of
transfer, exchange, payment or cancellation and deliver a certificate of
such disposition to the Company unless the Company directs the Trustee to
deliver cancelled Securities to the Company. The Company may not issue new
Securities to replace Securities it has redeemed, paid or delivered to the
Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) in
any lawful manner. The Company may pay the defaulted interest to the
persons who are Securityholders on a subsequent special record date. The
Company shall fix or cause to be fixed any such special record date and
payment date to the reasonable satisfaction of the Trustee and shall
promptly mail to each Securityholder a notice that states the special
record date, the payment date and the amount of defaulted interest to be
paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness of such numbers either
as printed on the Securities or as contained in any notice of a redemption
and that reliance may be placed only on the other identification numbers
printed on the Securities, and any such redemption shall not be affected by
any defect in or omission of such numbers.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall
notify the Trustee in writing of the redemption date, the principal amount
of Securities to be redeemed and that such redemption is being made
pursuant to paragraph 5 of the Securities.
The Company shall give each notice to the Trustee provided for in
this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an
Officers' Certificate and an Opinion of Counsel from the Company to the
effect that such redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed pro rata or by lot or by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
outstanding Securities not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of
Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
and
(7) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such
event, the Company shall provide the Trustee with the information required
by this Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and
payable on the redemption date and at the redemption price stated in the
notice. Upon surrender to the Paying Agent, such Securities shall be paid
at the redemption price stated in the notice, plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date
that is on or prior to the date of redemption). Failure to give notice or
any defect in the notice to any Holder shall not affect the validity of the
notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if
the Company or a Wholly Owned Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price
of and accrued interest (subject to the right of Holders of record on the
relevant record date to receive interest due on the related interest
payment date that is on or prior to the date of redemption) on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company
to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate for the Holder (at the Company's expense) a new
Security equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and
interest shall be considered paid on the date due if on such date the
Trustee or the Paying Agent holds in accordance with this Indenture money
sufficient to pay all principal and interest then due and the Trustee or
the Paying Agent, as the case may be, is not prohibited from paying such
money to the Securityholders on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, the Company shall file with, or furnish
to, the SEC such annual reports and such information, documents and other
reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such
information, documents and reports to be so filed at the times specified
for the filing of such information, documents and reports under such
Sections (the "Required Filing Times"); provided, however, that the Company
shall not be so obligated to file such information, documents and reports
with the SEC if the SEC does not permit such filings. The Company shall
also in any event (a) within 15 days of each Required Filing Date, provide
the Trustee and the Holders of Securities with copies of such information,
documents and reports and (b) if the SEC does not permit the filing of such
information, documents and reports, promptly upon written request by a
prospective Holder of Securities supply copies of such information,
documents and reports to such prospective Holder of Securities.
SECTION 4.03. Intentionally Deleted.
SECTION 4.04. Covenant Termination. After the Company has
reached Investment Grade Status, and notwithstanding that the Company may
later cease to have an Investment Grade Rating from either or both of the
Rating Agencies, the Company and the Restricted Subsidiaries shall be
released from their obligations to comply with Sections 4.05, 4.06, 4.08,
4.10, 4.11, 4.12, 5.01(a)(v) and (vi), 5.02(a)(v) and (vi) and clause (x)
of the second paragraph (and such clause (x) as referred to in the first
paragraph) of Section 4.14. The Company shall notify the Trustee when it
reaches Investment Grade Status.
SECTION 4.05. Limitation on Debt and Restricted Subsidiary
Preferred Stock. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, Incur any Debt (which
includes, in the case of Restricted Subsidiaries, Preferred Stock) unless,
after giving pro forma effect to the application of the proceeds thereof,
no Default or Event of Default would occur as a consequence of such
Incurrence or be continuing following such Incurrence and either (a) after
giving effect to the Incurrence of such Debt and the application of the
proceeds thereof, the Consolidated Interest Coverage Ratio would be greater
than 2.00 to 1.00 or (b) such Debt is Permitted Debt.
SECTION 4.06. Limitation on Restricted Payments. (a) The
Company shall not make, and shall not permit any Restricted Subsidiary to
make, directly or indirectly, any Restricted Payment if at the time of, and
after giving pro forma effect to, such proposed Restricted Payment:
(i) a Default or Event of Default shall have occurred
and be continuing;
(ii) the Company could not Incur at least $1.00 of
additional Debt pursuant to Section 4.05(a); or
(iii) the aggregate amount of such Restricted Payment
and all other Restricted Payments declared or made since the
Issue Date (the amount of any Restricted Payment, if made other
than in cash, to be based upon Fair Market Value) would exceed an
amount equal to the sum of:
(A) 50% of the aggregate amount of
Consolidated Net Income accrued during the period
(treated as one accounting period) from and after the
first day of the fiscal quarter following the end of
the most recent fiscal quarter ended immediately prior
to the Issue Date to the end of the most recent fiscal
quarter ending at least 45 days prior to the date of
such Restricted Payment (or if the aggregate amount of
Consolidated Net Income for such period shall be a
deficit, minus 100% of such deficit);
(B) Capital Stock Sale Proceeds; and
(C) the amount by which Debt (other than
Subordinated Obligations issued or sold prior to the
Issue Date) of the Company or LTV Steel is reduced on
the Company's balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Company)
subsequent to the Issue Date of any Debt of the Company
or LTV Steel convertible or exchangeable for Capital
Stock (other than Disqualified Stock) of the Company
(less the amount of any cash or other Property
distributed by the Company or any Restricted Subsidiary
upon such conversion or exchange).
(b) Notwithstanding the foregoing limitation, the Company may:
(i) pay dividends on its Capital Stock within 60 days
of the declaration thereof if, on said declaration date, such
dividends could have been paid in compliance with this Indenture;
provided, however, that at the time of such payment of such
dividend, no other Default or Event of Default shall have
occurred and be continuing (or would result therefrom); provided
further, however, that such dividend shall be included in the
calculation of the amount of Restricted Payments;
(ii) purchase, repurchase, redeem, legally defease,
acquire or retire for value Capital Stock of the Company or
Subordinated Obligations in exchange for, or out of the proceeds
of the substantially concurrent sale of, Capital Stock of the
Company (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary of the Company or an
employee stock ownership plan or trust established by the Company
or any of its Subsidiaries for the benefit of their employees);
provided, however, that (A) such purchase, repurchase,
redemption, legal defeasance, acquisition or retirement shall be
excluded in the calculation of the amount of Restricted Payments
and (B) the Net Cash Proceeds from such exchange or sale shall be
excluded from the calculation of the amount of Capital Stock Sale
Proceeds;
(iii) purchase, repurchase, redeem, legally defease,
acquire or retire for value any Subordinated Obligations in
exchange for, or out of the proceeds of the substantially
concurrent sale of, Permitted Refinancing Debt; provided,
however, that such purchase, repurchase, redemption, legal
defeasance, acquisition or retirement shall be excluded in the
calculation of the amount of Restricted Payments;
(iv) expend up to $43,000,000 to repurchase, prior to
the two-year anniversary of the Issue Date, common stock of the
Company pursuant to the Company's stock repurchase plan approved
on January 24, 1997, by the Board of Directors; provided,
however, that at the time of, and after giving pro forma effect
to, any such expenditure, (A) no other Default or Event of
Default shall have occurred and be continuing and (B) the Company
could Incur at least $1.00 of additional Debt pursuant to Section
4.05(a); provided further, however, that such repurchase shall be
excluded in the calculation of the amount of Restricted Payments;
(v) expend up to $5,000,000 in any fiscal year of the
Company to repurchase common stock of the Company (i) to
distribute to current or former employees, officers and directors
of the Company and its Subsidiaries, (ii) from such current or
former employees, officers or directors or (iii) otherwise in
order to distribute as employee compensation; provided, however,
that at the time of, and after giving pro forma effect to, any
such expenditure, no other Default or Event of Default shall have
occurred and be continuing; provided further, however, that such
repurchase shall be excluded in the calculation of the amount of
Restricted Payments; and
(vi) expend up to $40,000,000 for Restricted Payments
in addition to amounts permitted pursuant to clauses (i) through
(v) above; provided, however, that at the time of, and after
giving pro forma effect to, any such expenditure, no other
Default or Event of Default shall have occurred and be
continuing; provided further, however, that such expenditures
shall be excluded in the calculation of the amount of Restricted
Payments.
SECTION 4.07. Limitation on Liens. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly,
Incur or suffer to exist, any Lien (other than Permitted Liens) upon any of
its Property (including Capital Stock of a Restricted Subsidiary), whether
owned at the Issue Date or thereafter acquired, or any interest therein or
any income or profits therefrom, unless it has made or will make effective
provision whereby the Securities or the Guaranty will be secured by such
Lien equally and ratably with (or prior to) all other Debt of the Company
or any Restricted Subsidiary secured by such Lien.
SECTION 4.08. Limitation on Issuance or Sale of Capital Stock of
Restricted Subsidiaries. The Company shall not (a) sell, pledge,
hypothecate or otherwise dispose of any shares of Capital Stock of a
Restricted Subsidiary or (b) permit any Restricted Subsidiary to, directly
or indirectly, issue or sell or otherwise dispose of any shares of its
Capital Stock other than (i) directors' qualifying shares, (ii) to the
Company or a Wholly Owned Subsidiary or (iii) if, immediately after giving
effect to such disposition, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary; provided, however, that, in the case of
this clause (iii), (x) such disposition is effected in compliance with
Section 4.10 and (y) if such Restricted Subsidiary is LTV Steel, then, upon
consummation of such disposition and execution and delivery of a
supplemental indenture in form satisfactory to the Trustee, LTV Steel shall
be released from all its obligations under the Guaranty.
SECTION 4.09. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder of Securities shall have the right to
require the Company to repurchase all or any part of such Holder's
Securities pursuant to the offer described below (the "Change of Control
Offer") at a purchase price (the "Change of Control Purchase Price") equal
to 101% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the purchase date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the purchase date).
(b) Within 30 days following any Change of Control,
the Company shall (a) cause a notice of the Change of Control
Offer to be sent at least once to the Dow Jones News Service or
similar business news service in the United States and (b) send,
by first-class mail, with a copy to the Trustee, to each Holder
of Securities, at such Holder's address appearing in the Security
Register, a notice stating: (i) that a Change of Control has
occurred and a Change of Control Offer is being made pursuant to
this Section 4.09 and that all Securities timely tendered will be
accepted for payment; (ii) the Change of Control Purchase Price
and the purchase date, which shall be, subject to any contrary
requirements of applicable law, a Business Day no earlier than 30
days nor later than 60 days from the date such notice is mailed
(the "Change of Control Payment Date"); (iii) that any
Securities (or portion thereof) accepted for payment (and duly
paid on the Change of Control Payment Date) pursuant to the
Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date; (iv) that any Securities (or
portions thereof) not tendered will continue to accrue interest;
(v) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving
effect to the Change of Control); and (vi) the procedures that
Holders of Securities must follow in order to tender their
Securities (or portions thereof) for payment, and the procedures
that Holders of Securities must follow in order to withdraw an
election to tender Securities (or portions thereof) for payment.
(c) Holders electing to have a Security purchased will
be required to surrender the Security, with an appropriate form
(which may include the form on the reverse thereof) duly
completed, to the Company or its agent at the address specified
in the notice at least three Business Days prior to the Change of
Control Payment Date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives not later than
one Business Day prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security
which was delivered for purchase by the Holder and a statement
that such Holder is withdrawing his election to have such
Security purchased. Holders whose Securities are purchased only
in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(d) On or prior to the Change of Control Payment Date,
the Company shall irrevocably deposit with the Trustee or with
the Paying Agent (or, if the Company or any of its Wholly Owned
Subsidiaries is acting as the Paying Agent, segregate and hold in
trust) in cash an amount equal to the Change of Control Purchase
Price payable to the Holders entitled thereto, to be held for
payment in accordance with the provisions of this Section. On
the Change of Control Payment Date, the Company shall deliver to
the Trustee the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company for
payment. The Trustee or the Paying Agent shall, on the Change of
Control Payment Date, mail or deliver payment to each tendering
Holder of the Change of Control Purchase Price. In the event
that the aggregate Change of Control Purchase Price is less than
the amount delivered by the Company to the Trustee or the Paying
Agent, the Trustee or the Paying Agent, as the case may be, shall
deliver the excess to the Company immediately after the Change of
Control Payment Date.
(e) At the time the Company delivers Securities to the
Trustee which are to be accepted for purchase, the Company shall
also deliver an Officers' Certificate stating that such
Securities are to be accepted by the Company pursuant to and in
accordance with the terms of this Section. A Security shall be
deemed to have been accepted for purchase at the time the Trustee
or the Paying Agent mails or delivers payment therefor to the
surrendering Holder.
(f) The Company will comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and
any other securities laws or regulations in connection with the
repurchase of Securities pursuant to a Change of Control Offer.
To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section, the
Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its
obligations under this Section by virtue of such compliance.
SECTION 4.10. Limitation on Asset Sales. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale unless (i) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset Sale
(or, in the case of a lease that is an Asset Sale, the Company or such
Restricted Subsidiary is to receive over the term of such lease
consideration) at least equal to the Fair Market Value of the Property
subject to such Asset Sale; (ii) at least 75% of the consideration paid to
the Company or such Restricted Subsidiary in connection with such Asset
Sale is in the form of cash, cash equivalents, Additional Assets or the
assumption by the purchaser of liabilities of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to
the Securities or the Guaranty) as a result of which the Company and the
Restricted Subsidiaries are no longer obligated with respect to such
liabilities; and (iii) the Company delivers an Officers' Certificate to the
Trustee certifying that such Asset Sale complies with the foregoing clauses
(i) and (ii).
(b) The Net Available Cash (or any portion thereof) from Asset
Sales may be applied by the Company or a Restricted Subsidiary, to the
extent the Company or such Restricted Subsidiary elects (or is required by
the terms of any Debt): (i) to prepay, repay, legally defease or purchase
Senior Debt of the Company or LTV Steel or Debt of any other Restricted
Subsidiary (excluding, in any such case, Debt owed to the Company or an
Affiliate of the Company); or (ii) to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary); provided, however, that in connection with any
prepayment, repayment, legal defeasance or purchase of Debt pursuant to
clause (i) above, the Company, LTV Steel or such other Restricted
Subsidiary shall retire such Debt and shall cause the related loan
commitment (if any) to be permanently reduced by an amount equal to the
principal amount so prepaid, repaid, legally defeased or purchased.
(c) Any Net Available Cash from an Asset Sale not applied in
accordance with the preceding paragraph within twelve months from the date
of the receipt of such Net Available Cash shall constitute "Excess
Proceeds."
When the aggregate amount of Excess Proceeds exceeds $5,000,000
(taking into account income earned on such Excess Proceeds, if any), the
Company will be required to make an offer to purchase (the "Prepayment
Offer") the Securities which offer shall be in the amount of the Excess
Proceeds, on a pro rata basis according to principal amount, at a purchase
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the Purchase Date (subject to the right of
Holders of record on the relevant record date to receive interest due on
the relevant interest payment date that is on or prior to the purchase
date) in accordance with the procedures (including prorating in the event
of oversubscription) set forth in this Indenture. To the extent that any
portion of the amount of Net Available Cash remains after compliance with
the preceding sentence and provided that all Holders of Securities have
been given the opportunity to tender their Securities for purchase as
described in Section 4.10(d), the Company or such Restricted Subsidiary may
use such remaining amount for any purpose permitted by this Indenture and
the amount of Excess Proceeds will be reset to zero.
(d) (1) Within five Business Days after the Company is
obligated to make a Prepayment Offer as described in Section 4.10(c), the
Company will send a written notice, by first-class mail, to the Trustee and
the Holders of Securities (the "Prepayment Offer Notice"), accompanied by
such information regarding the Company and its Subsidiaries as the Company
in good faith believes will enable such Holders to make an informed
decision with respect to such Prepayment Offer (which at a minimum shall
include (i) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q of the Company and any
Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Sales
otherwise described in the offering materials, or corresponding successor
reports (or, during any time that the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act,
corresponding reports prepared pursuant to Section 4.02), (ii) a
description of material developments in the Company's business subsequent
to the date of the latest of such reports and (iii) if material,
appropriate pro forma financial information). The Prepayment Offer Notice
shall state, (A) that a Prepayment Offer is being made pursuant to this
Section 4.10 and that all Securities timely tendered will be accepted for
payment (subject to proration), (B) that any Securities (or any portion
thereof) accepted for payment (and duly paid on the Purchase Date) pursuant
to the Prepayment Offer shall cease to accrue interest after the Purchase
Date, (C) the purchase price and purchase date, which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date the
Prepayment Offer Notice is mailed (the "Purchase Date"), (D) the aggregate
principal amount of Securities (or portions thereof) to be purchased, (E)
that any Securities (or portions thereof) not tendered will continue to
accrue interest and (F) the procedures that Holders of Securities must
follow in order to tender their Securities (or portions thereof) for
payment and the procedures that Holders of Securities must follow in order
to withdraw an election to tender Securities (or portions thereof) for
payment.
(2) Not later than the date upon which written notice of a
Prepayment Offer is delivered to the Trustee as provided above, the Company
shall deliver to the Trustee an Officers' Certificate as to (i) the amount
of the Prepayment Offer (the "Offer Amount"), (ii) the allocation of the
Net Available Cash from the Asset Sales pursuant to which such Prepayment
Offer is being made and (iii) the compliance of such allocation with the
provisions of Section 4.10(b). On such date, the Company shall also
irrevocably deposit with the Trustee or with the Paying Agent (or, if the
Company or a Wholly Owned Subsidiary is the Paying Agent, shall segregate
and hold in trust) in Temporary Cash Investments, maturing on the last day
prior to the Purchase Date or on the Purchase Date if funds are immediately
available by open of business, an amount equal to the Offer Amount to be
held for payment in accordance with the provisions of this Section. Upon
the expiration of the period for which the Prepayment Offer remains open
(the "Offer Period"), the Company shall deliver to the Trustee for
cancelation the Securities or portions thereof which have been properly
tendered to and are to be accepted by the Company. The Trustee or the
Paying Agent shall, on the Purchase Date, mail or deliver payment to each
tendering Holder in the amount of the purchase price. In the event that
the aggregate purchase price of the Securities delivered by the Company to
the Trustee is less than the Offer Amount, the Trustee or the Paying Agent
shall deliver the excess to the Company immediately after the expiration of
the Offer Period for application in accordance with this Section.
(3) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form (which may
include the form on the reverse thereof) duly completed, to the Company or
its agent at the address specified in the notice at least three Business
Days prior to the Purchase Date. Holders shall be entitled to withdraw
their election if the Trustee or the Company receives not later than one
Business Day prior to the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Security which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such
Security purchased. If at the expiration of the Offer Period the aggregate
principal amount of Securities surrendered by Holders exceeds the Offer
Amount, the Company shall select the Securities to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
Company so that only Securities in denominations of $1,000, or integral
multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part shall be issued new Securities equal in principal
amount to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee
which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by
the Company pursuant to and in accordance with the terms of this Section.
A Security shall be deemed to have been accepted for purchase at the time
the Trustee or the Paying Agent mails or delivers payment therefor to the
surrendering Holder.
(e) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities
pursuant to this Section. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section,
the Company will comply with the applicable securities laws and regulations
and will not be deemed to have breached its obligations under this Section
by virtue thereof.
SECTION 4.11. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, create or otherwise cause
or suffer to exist any consensual restriction on the right of any
Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make
any other distributions on or in respect of its Capital Stock, or pay any
Debt or other obligation owed, to the Company or any other Restricted
Subsidiary, (b) make any loans or advances to the Company or any other
Restricted Subsidiary or (c) transfer any of its Property to the Company or
any other Restricted Subsidiary. The foregoing limitations will not apply
(i) with respect to clauses (a), (b) and (c), to restrictions (A) in effect
on the Issue Date, (B) relating to Debt of a Restricted Subsidiary and
existing at the time it became a Restricted Subsidiary if such restriction
was not created in connection with or in anticipation of the transaction or
series of transactions pursuant to which such Restricted Subsidiary became
a Restricted Subsidiary or was acquired by the Company, (C) which result
from the Refinancing of Debt Incurred pursuant to an agreement referred to
in the immediately preceding clause (i)(A) or (B) above or in clause
(ii)(A) or (B) below, provided that such restriction is no less favorable
to the Holders of Securities than those under the agreement evidencing the
Debt so Refinanced, or (D) on Sales Finance or any other bankruptcy-remote
special-purpose Subsidiary of the Company that purchases or sells accounts
receivable or inventory pursuant to the Credit Facilities and (ii) with
respect to clause (c) only, to restrictions (A) relating to Debt that is
permitted to be Incurred and secured pursuant to Section 4.05 and Section
4.07 that limit the right of the debtor to dispose of the Property securing
such Debt, (B) encumbering Property at the time such Property was acquired
by the Company or any Restricted Subsidiary, so long as such restriction
relates solely to the Property so acquired and was not created in
connection with or in anticipation of such acquisition, (C) resulting from
customary provisions restricting subletting or assignment of leases or
customary provisions in other agreements that restrict assignment of such
agreements or rights thereunder or (D) customary restrictions contained in
asset sale agreements limiting the transfer of such Property pending the
closing of such sale.
SECTION 4.12. Limitation on Transactions with Affiliates. (a)
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, conduct any business or enter into or suffer to
exist any transaction or series of transactions (including the purchase,
sale, transfer, assignment, lease, conveyance or exchange of any Property
or the rendering of any service) with, or for the benefit of, any Affiliate
of the Company (an "Affiliate Transaction"), unless (i) the terms of such
Affiliate Transaction are (A) set forth in writing and (B) no less
favorable to the Company or such Restricted Subsidiary, as the case may be,
than those that could be obtained in a comparable arm's-length transaction
with a Person that is not an Affiliate of the Company, (ii) if such
Affiliate Transaction involves aggregate payments or value in excess of
$10,000,000, the Board of Directors (including a majority of the
disinterested members of the Board of Directors) approves such Affiliate
Transaction and, in its good faith judgment, believes that such Affiliate
Transaction complies with clause (i) of this paragraph as evidenced by a
Board Resolution promptly delivered to the Trustee and (iii) if such
Affiliate Transaction involves aggregate payments or value in excess of
$25,000,000, the Company obtains a written opinion from an Independent
Appraiser to the effect that such Affiliate Transaction is fair, from a
financial point of view, to the Company or such Restricted Subsidiary, as
the case may be.
(b) Notwithstanding the foregoing limitation, the Company or any
Restricted Subsidiary may enter into or suffer to exist the following:
(i) any transaction or series of transactions between
the Company and one or more Restricted Subsidiaries or between
two or more Restricted Subsidiaries; provided that no more than
5% of the total voting power of the Voting Stock (on a fully
diluted basis) of any such Restricted Subsidiary is owned by an
Affiliate of the Company (other than a Restricted Subsidiary);
(ii) any Restricted Payment permitted to be made
pursuant to Section 4.06;
(iii) any issuance of securities, or other payments,
awards or grants in securities or otherwise pursuant to, or the
funding of, employment arrangements, pension plans, stock options
and stock ownership plans approved by the Board of Directors;
(iv) the payment of reasonable fees to directors of the
Company or such Restricted Subsidiary who are not employees of
the Company or any Restricted Subsidiary;
(v) loans and advances to employees made in the
ordinary course of business and consistent with the past
practices of the Company or such Restricted Subsidiary, as the
case may be, provided that such loans and advances do not exceed
$5,000,000 in the aggregate at any one time outstanding;
(vi) any transaction or series of transactions between
the Company or any Restricted Subsidiary and any of their joint
ventures, provided that (x) such transaction or series of
transactions is in the ordinary course of business between the
Company or such Restricted Subsidiary and such joint venture and
is consistent with the past practices of the Company and the
Restricted Subsidiaries with respect to their joint ventures, (y)
if such transaction or series of transactions constitutes an
Investment by the Company, such Restricted Subsidiary or such
joint venture, the other equity investors in such joint venture
(A) participate in such Investment on the same basis as the
Company or such Restricted Subsidiary, (B) have their interests
in such joint venture diluted to the extent such investors elect
not to so participate in such Investment or (C) individually
beneficially own 10% or less of the equity interests in such
joint venture and (z) such joint venture is engaged in a Related
Business; and
(vii) any transaction or series of transactions between
the Company or any Restricted Subsidiary and SMI America, Inc. or
any of its affiliates pursuant to the terms of the Sumitomo
Securities Purchase Agreement and any documents relating thereto,
as such Agreement and documents are in effect on the Issue Date.
SECTION 4.13. Limitation on Sale and Leaseback Transactions.
The Company shall not, and shall not permit any Restricted Subsidiary to,
enter into any Sale and Leaseback Transaction with respect to any Property
unless (a) the Company or such Restricted Subsidiary would be entitled to
(i) Incur Debt in an amount equal to the Attributable Debt with respect to
such Sale and Leaseback Transaction pursuant to Section 4.05 and (ii)
create a Lien on such Property securing such Attributable Debt without
securing the Securities pursuant to Section 4.07 and (b) such Sale and
Leaseback Transaction is effected in compliance with Section 4.10;
provided, however, that the Company or any Restricted Subsidiary may at any
time enter into a Sale and Leaseback Transaction if the sum of (x) the
aggregate amount of Attributable Debt outstanding at such time with respect
to such Sale and Leaseback Transaction and all other Sale and Leaseback
Transactions entered into by the Company or any Restricted Subsidiary and
(y) the aggregate principal amount (in the case of Debt sold at a discount,
at Stated Maturity) of all Secured Debt outstanding at such time (other
than the USWA Secured Obligations and any Permitted Refinancing Debt in
respect thereof to the extent not exceeding $250,000,000 in the aggregate),
does not exceed 10% of Consolidated Net Tangible Assets as determined based
on the consolidated balance sheet of the Company as of the end of the
recent fiscal quarter ending at least 45 days prior thereto.
SECTION 4.14. Designation of Restricted and Unrestricted
Subsidiaries. The Board of Directors may designate any Subsidiary of the
Company to be an Unrestricted Subsidiary if (a) the Subsidiary to be so
designated does not own any Capital Stock or Debt of, or own or hold any
Lien on any Property of, the Company or any other Restricted Subsidiary,
(b) the Subsidiary to be so designated is not obligated under any Debt,
Lien or other obligation that, if in default, would result (with the
passage of time or notice or otherwise) in a default on any Debt of the
Company or of any Restricted Subsidiary and (c) either (i) the Subsidiary
to be so designated has total assets of $1,000 or less or (ii) such
designation is effective immediately upon such entity becoming a Subsidiary
of the Company or any Restricted Subsidiary. Unless so designated as an
Unrestricted Subsidiary, any Person that becomes a Subsidiary of the
Company or of any Wholly Owned Subsidiary will be classified as a
Restricted Subsidiary, provided that the requirements set forth in clauses
(x) and (y) of the immediately following paragraph would be satisfied after
giving pro forma effect to such classification. Any Person not permitted
by the terms of the immediately preceding sentence to be classified as a
Restricted Subsidiary shall be automatically classified as an Unrestricted
Subsidiary. Except as provided in the first sentence of this paragraph, no
Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.
The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary if, immediately after giving pro forma effect
to such designation, (x) the Company could Incur at least $1.00 of
additional Debt pursuant to Section 4.05(a) and (y) no Default or Event of
Default shall have occurred and be continuing or would result therefrom.
Any such designation or redesignation by the Board of Directors
will be evidenced to the Trustee by filing with the Trustee a Board
Resolution giving effect to such designation or redesignation and an
Officers' Certificate (a) certifying that such designation or redesignation
complies with the foregoing provisions and (b) giving the effective date of
such designation or redesignation, such filing with the Trustee to occur
within 45 days after the end of the fiscal quarter of the Company in which
such designation or redesignation is made (or, in the case of a designation
or redesignation made during the last fiscal quarter of the Company's
fiscal year, within 90 days after the end of such fiscal year).
SECTION 4.15. Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the
performance by the signers of their duties as Officers of the Company they
would normally have knowledge of any Default and whether or not the signers
know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the
Company is taking or proposes to take with respect thereto. The Company
and LTV Steel also shall comply with TIA Section 314(a)(4).
SECTION 4.16. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE 5
Successor Company
SECTION 5.01. When Company May Merge or Transfer Assets. (a)
The Company shall not merge, consolidate or amalgamate with or into any
other Person (other than a merger of a Wholly Owned Subsidiary into the
Company) or sell, transfer, assign, lease, convey or otherwise dispose of
all or substantially all its Property in any one transaction or series of
transactions unless: (i) the Company shall be the surviving Person (the
"Surviving Person") or the Surviving Person (if other than the Company)
formed by such merger, consolidation or amalgamation or to which such sale,
transfer, assignment, lease, conveyance or disposition is made shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia; (ii) the Surviving
Person (if other than the Company) expressly assumes, by supplemental
indenture in form satisfactory to the Trustee, executed and delivered to
the Trustee by such Surviving Person, the due and punctual payment of the
principal of and interest on all the Securities, according to their tenor,
and the due and punctual performance and observance of all the covenants
and conditions of this Indenture to be performed by the Company; (iii) in
the case of a sale, transfer, assignment, lease, conveyance or other
disposition of all or substantially all the Company's Property, such
Property shall have been transferred as an entirety or virtually as an
entirety to one Person; (iv) immediately before and after giving effect to
such transaction or series of transactions on a pro forma basis (and
treating, for purposes of this clause (iv) and clauses (v) and (vi) below,
any Debt which becomes, or is anticipated to become, an obligation of the
Surviving Person or any Restricted Subsidiary as a result of such
transaction or series of transactions as having been Incurred by the
Surviving Person or such Restricted Subsidiary at the time of such
transaction or series of transactions), no Default or Event of Default
shall have occurred and be continuing; (v) immediately after giving effect
to such transaction or series of transactions on a pro forma basis, the
Company or the Surviving Person, as the case may be, would be able to Incur
at least $1.00 of additional Debt under Section 4.05(a); (vi) immediately
after giving effect to such transaction or series of transactions on a pro
forma basis, the Surviving Person shall have a Consolidated Net Worth in an
amount which is not less than the Consolidated Net Worth of the Company
immediately prior to such transaction or series of transactions; and (vii)
the Company shall deliver, or cause to be delivered, to the Trustee, in
form reasonably satisfactory to the Trustee, an Officers' Certificate and
an Opinion of Counsel, each stating that such transaction and any
supplemental indenture in respect thereto comply with this Section 5.01 and
that all conditions precedent herein provided for relating to such
transaction have been satisfied.
(b) The Surviving Person will succeed to, and be substituted
for, and may exercise every right and power of the Company under this
Indenture, but the predecessor Company in the case of a sale, transfer,
assignment, lease, conveyance or other disposition, shall not be released
from the obligation to pay the principal of and interest on the Securities.
SECTION 5.02. When LTV Steel May Merge or Transfer Assets. (a)
The Company shall not permit LTV Steel to merge, consolidate or amalgamate
with or into any other Person (other than a merger of a Wholly Owned
Subsidiary into LTV Steel) or sell, transfer, assign, lease, convey or
otherwise dispose of all or substantially all its Property in any one
transaction or series of transactions unless: (i) the Surviving Person (if
not LTV Steel) formed by such merger, consolidation or amalgamation or to
which such sale, transfer, assignment, lease, conveyance or disposition is
made shall be a corporation organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia;
(ii) the Surviving Person (if other than LTV Steel) expressly assumes, by
supplemental indenture in form satisfactory to the Trustee, executed and
delivered to the Trustee by such Surviving Person, the due and punctual
performance and observances of all the obligations of LTV Steel under the
Guaranty; (iii) in the case of a sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all the Property of
LTV Steel, such Property shall have been transferred as an entirety or
virtually as an entirety to one Person; (iv) immediately before and after
giving effect to such transaction or series of transactions on a pro forma
basis (and treating, for purposes of this clause (iv) and clauses (v) and
(vi) below, any Debt which becomes, or is anticipated to become, an
obligation of the Surviving Person, the Company or any Restricted
Subsidiary as a result of such transaction or series of transactions as
having been incurred by the Surviving Person, the Company or such
Restricted Subsidiary at the time of such transaction or series of
transactions), no Default or Event of Default shall have occurred and be
continuing; (v) immediately after giving effect to such transaction or
series of transactions on a pro forma basis, the Company would be able to
Incur at least $1.00 of additional Debt under Section 4.05(a); (vi)
immediately after giving effect to such transaction or series of
transactions on a pro forma basis, the Company shall have a Consolidated
Net Worth in an amount which is not less than the Consolidated Net Worth of
the Company immediately prior to such transaction or series of
transactions; and (vii) the Company shall deliver, or cause to be
delivered, to the Trustee, in form reasonably satisfactory to the Trustee,
an Officers' Certificate and an Opinion of Counsel, each stating that such
transaction and such supplemental indenture, if any, in respect thereto
comply with this covenant and that all conditions precedent herein provided
for relating to such transaction have been satisfied. The foregoing
provisions (other than clause (iv)) shall not apply to any transactions
which constitute an Asset Sale if the Company has complied with Section
4.10 and the Guaranty has been released pursuant to Section 4.08.
(b) The Surviving Person will succeed to, and be substituted
for, and may exercise every right and power of LTV Steel under the
Guaranty.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default. The following events shall be
"Events of Default":
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
optional redemption, upon required repurchase, upon acceleration or
otherwise;
(3) the Company or LTV Steel fails to comply with Article 5;
(4) the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to
in clause (1), (2) or (3) above) and such failure continues for 30 days
after notice is given to the Company as specified below;
(5) a default by the Company or any Restricted Subsidiary under
any Debt of the Company or any Restricted Subsidiary which results in the
acceleration of the maturity of such Debt, or failure to pay any such Debt
at maturity, in an aggregate amount greater than $20,000,000 or its foreign
currency equivalent at the time;
(6) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it or
for any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws
relating to insolvency;
(7) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for any substantial part of its
property;
(C) orders the winding up or liquidation of the Company
or any Significant Subsidiary; or
(D) is for any similar relief granted under any foreign
laws; and in each such case the order or decree remains unstayed
and in effect for 60 days;
(8) any judgment or judgements for the payment of money in an
aggregate amount in excess of $20,000,000 or its foreign currency
equivalent at the time is entered against the Company or any Restricted
Subsidiary, and shall not be waived, satisfied or discharged for any period
of 30 consecutive days during which a stay of enforcement shall not be in
effect; or
(9) the Guaranty ceases to be in full force and effect (other
than in accordance with the terms of this Indenture or the Guaranty) or LTV
Steel denies or disaffirms its obligations under the Guaranty.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Securities then outstanding notify the Company (and, in the case of such
notice by Holders, the Trustee) of the Default and the Company does not
cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state
that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers'
Certificate of any event which with the giving of notice or the lapse of
time would become an Event of Default, its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(6) or (7)) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Securities then outstanding
by notice to the Company and the Trustee, may declare the principal amount
of all the Securities then outstanding plus accrued but unpaid interest to
the date of acceleration to be immediately due and payable. In case an
Event of Default specified in Section 6.01(6) or (7) shall occur, such
amount with respect to all the Securities shall be due and payable
immediately without any declaration or other act on the part of the Trustee
or the Holders of the Securities. The Holders of a majority in aggregate
principal amount of the outstanding Securities may by notice to the Trustee
and the Company rescind any declaration of acceleration if the rescission
would not conflict with any judgment or decree, and if all existing Events
of Default have been cured or waived except nonpayment of principal or
interest that has become due solely because of the acceleration. No such
rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Securityholder in exercising any
right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive of any other remedy, except as provided in
the last paragraph of Section 2.07. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
majority in aggregate principal amount of the Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a
Default in the payment of the principal of or interest on a Security or
(ii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a
Default is waived, it is deemed cured, but no such waiver shall extend to
any subsequent or other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
aggregate principal amount of the Securities may direct the time, method
and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee with
respect to the Securities. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section
7.01, that the Trustee determines is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper
by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to reasonable
indemnity against all losses and expenses caused by taking or not taking
such action.
SECTION 6.06. Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(1) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of
the Securities then outstanding shall have made a written request, and such
Holder of or Holders shall have offered reasonable indemnity, to the
Trustee to pursue such proceeding as trustee; and
(3) the Trustee has failed to institute such proceeding and has
not received from the Holders of at least a majority in aggregate principal
amount of the Securities outstanding a direction inconsistent with such
request, within 60 days after such notice, request and offer.
The foregoing limitations on the pursuit of remedies by a
Securityholder shall not apply to a suit instituted by a Holder of
Securities for the enforcement of payment of the principal of or interest
on such Security on or after the applicable due date specified in such
Security. A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on the Securities
held by such Holder, on or after the respective due dates expressed in this
Securities, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
Default specified in Section 6.01(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount then due and owing (together
with interest on any unpaid interest to the extent lawful) and the amounts
provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relative to the
Company, its creditors or its property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election
of a trustee in bankruptcy or other Person performing similar functions,
and any Custodian in any such judicial proceeding is hereby authorized by
each Holder to make 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 its counsel, and any other amounts due the Trustee under Section
7.07.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property
in the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days
before such record date, the Company shall mail to each Securityholder and
the Trustee a notice that states the record date, the payment date and
amount to be paid.
SECTION 6.11. 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 or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07 or a suit by Holders of more than 10% in aggregate
principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to
the extent it may lawfully do so) shall 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 shall
not hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power
as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee. (a) If an Event of Default
has occurred and is continuing, the Trustee shall exercise 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 person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) 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. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of
paragraph (b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.05.
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur
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 to believe that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) 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 and to the provisions of the TIA.
(h) The Trustee shall not be charged with knowledge of any
Default or Event of Default or of the identity of any Significant
Subsidiary unless (i) a Trust Officer assigned to and working in the
Trustee's Corporate Trustee Administration Department shall have actual
knowledge thereof or (ii) the Trustee shall have received notice thereof in
accordance with Section 11.02 from the Company, LTV Steel or any Holder.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, however, that the Trustee's conduct does
not constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) Unless otherwise provided herein, any request or direction
of the Company mentioned herein shall be sufficiently evidenced by a
written order signed by two Officers or by an Officer and either an
Assistant Treasurer or Assistant Secretary of the Company.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with the Company or its Affiliates with
the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar or co-registrar may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company or LTV Steel in this Indenture
or in any document issued in connection with the sale of the Securities or
in the Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to
each Securityholder notice of the Default within 90 days after it is known
to a Trust Officer or written notice of it is received by the Trustee.
Except in the case of a Default in payment of principal of or interest on
any Security, the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding
the notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with May 15, 1998, and in any event
prior to July 15 in each year, the Trustee shall mail to each
Securityholder a brief report dated as of May 15 each year that complies
with TIA Section 313(a), if and to the extent required by said subsection.
The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if
any) on which the Securities are listed. The Company agrees to notify
promptly the Trustee whenever the Securities become listed on any stock
exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay
to the Trustee from time to time reasonable compensation for its services.
The Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Company shall reimburse the Trustee
upon request for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against
any and all loss, liability or expense (including attorneys' fees) incurred
by it in connection with the acceptance and administration of this trust
and the performance of its duties hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee
may have separate counsel and the Company shall pay the fees and expenses
of such counsel. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee through the
Trustee's own wilful misconduct, negligence or bad faith. The Company need
not pay for any settlement made by the Trustee without the Company's
consent, such consent not to be unreasonably withheld.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust
to pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. Without limiting any other rights
available to the Trustee under applicable law, when the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(6) or
(7) with respect to the Company, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in
aggregate principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee. The Company
shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in aggregate principal amount of the Securities and
such Holders do not reasonably promptly appoint a successor Trustee, or if
a vacancy exists in the office of Trustee for any reason (the Trustee in
such event being referred to herein as the retiring Trustee), the Company
shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to Securityholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in aggregate principal amount of the Securities may petition
any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder who has been bona fide Holder of a Security for at least six
months may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee, and
deliver such Securities so authenticated; and in case at that time any of
the Securities shall not have been authenticated, any such successor to the
Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor to the Trustee; and
in all such cases such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b), subject to the penultimate paragraph
thereof (as in existence on the date hereof); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture
or indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or
been removed shall be subject to TIA Section 311(a) to the extent
indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07) for
cancellation or (ii) all outstanding Securities have become due and
payable, whether at maturity or as a result of the mailing of a notice of
redemption pursuant to Article 3 and the Company irrevocably deposits with
the Trustee funds sufficient to pay at maturity or upon redemption all
outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07),
and if in either case the Company pays all other sums payable hereunder by
the Company, then this Indenture shall, subject to Sections 8.01(c), cease
to be of further effect. The Trustee shall acknowledge satisfaction and
discharge of this Indenture on demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with, and at the cost and
expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14,
5.01(a)(v) and (vi) and 5.02 and the operation of Sections 6.01(5),
6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01(6) and (7), with respect only to Significant Subsidiaries) ("covenant
defeasance option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default. If
the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified
in Sections 6.01(4) (with respect to the Sections of Article 4 identified
in the immediately preceding paragraph), 6.01(5), 6.01(6), 6.01(7), 6.01(8)
and 6.01(9) (but, in the case of Sections 6.01(6) and (7), with respect
only to Significant Subsidiaries) or because of the failure of the Company
to comply with Section 5.01(a)(v) or (vi) or Section 5.02. If the Company
exercises its legal defeasance option or its covenant defeasance option,
LTV Steel shall be released from all its obligations under the Guaranty.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the
discharge of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.05 and 8.06
shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.07, 8.05 and Sections 2.3 and 2.4 of
Appendix A hereto shall survive.
SECTION 8.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only
if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment of
principal of and interest on the Securities to maturity or
redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate
from a nationally recognized firm of indepen-dent accountants
expressing their opinion that the payments of principal and
interest when due and without reinvestment on the deposited U.S.
Government Obligations plus any deposited money without
investment will provide cash at such times and in such amounts as
will be sufficient to pay principal and interest when due on all
the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during
the 123-day period no Default specified in Section 6.01(6) or (7)
with respect to the Company occurs which is continuing at the end
of the period;
(4) the deposit does not constitute a default under any
other agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit
does not constitute, or is qualified as, a regulated investment
company under the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm
that, the Securityholders will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance
and will be subject to Federal income tax on the same amounts, in
the same manner and at the same times as would have been the case
if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Securityholders will not recognize income,
gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the
Securities as contemplated by this Article 8 have been complied
with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future
date in accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it
pursuant to this Article 8. It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest
on the Securities.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money
or securities held by them at any time, the existence of such excess to be
based on a certificate from a nationally recognized firm of independent
accountants delivered to the Trustee, which may include the certificate
referred to in Section 8.02(2).
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for
two years, and, thereafter, all liability of the Trustee and the Paying
Agent with respect to such money shall cease and Securityholders entitled
to the money must look to the Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government
Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance
with this Article 8 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8
until such time as the Trustee or Paying Agent is permitted to apply all
such money or U.S. Government Obligations in accordance with this Article
8; provided, however, that, if the Company has made any payment of interest
on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders
of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or
consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities; provided,
however, that the uncertificated Securities are issued in
registered form for purposes of Section 163(f) of the Code or in
a manner such that the uncertificated Securities are described in
Section 163(f)(2)(B) of the Code;
(4) to add additional Guarantees with respect to the
Securities or to release LTV Steel from the Guaranty when
permitted by the terms hereof, or to secure the Securities;
(5) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company;
(6) to comply with any requirements of the SEC in
connection with qualifying, or maintaining the qualification of,
this Indenture under the TIA; or
(7) to make any change that does not adversely affect
the rights of any Securityholder.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 9.02. With Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities. However, without
the consent of each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment or waiver;
(2) reduce the rate of or change the time for payment
of interest on any Security;
(3) reduce the principal of or extend the Stated
Maturity of any Security;
(4) reduce the amount payable upon the redemption or
repurchase of any Security under Article 3 or Section 4.09 or
4.10 or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) make any Security payable in a currency other than
that stated in the Security;
(6) subordinate the Securities to any other obligation
of the Company;
(7) make any change in the Guaranty that would
adversely affect the Securityholders;
(8) impair the right of any Holder to institute suit
for enforcement of any payment on or with respect to such
Holder's Securities or the Guaranty;
(9) release any security that may have been granted in
favor of the Holders of the Securities;
(10) at any time after a Change of Control or Asset
Sale has occurred, change the time at which the Change of Control
Offer or Prepayment Offer relating thereto must be made or at
which the Securities must be repurchased pursuant to such Change
of Control Offer or Prepayment Offer; or
(11) make any change in Section 6.04 or 6.07 or the
second sentence of this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any
defect therein, shall not impair or affect the validity of an amendment
under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security,
even if notation of the consent or waiver is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent or
waiver as to such Holder's Security or portion of the Security if the
Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective. After an amendment or waiver becomes effective,
it shall bind every Securityholder. An amendment or waiver becomes
effective upon the execution of such amendment or waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted
to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke any
consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the
Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Security shall
not affect the validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment
does not adversely affect the rights, duties, liabilities or immunities of
the Trustee. If it does, the Trustee may but need not sign it. In signing
such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.01)
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted
by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be
paid any consideration, whether by way of interest, fee or otherwise, to
any Holder for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of this Indenture or the Securities unless
such consideration is offered to be paid to all Holders that so consent,
waive or agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 10
LTV Steel Guaranty
SECTION 10.01. Guaranty. LTV Steel hereby unconditionally
guarantees to each Holder and to the Trustee and its successors and assigns
(a) the full and punctual payment of principal of and interest on the
Securities when due, whether at maturity, by acceleration, by redemption or
otherwise, and all other monetary obligations of the Company under this
Indenture and the Securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company
under this Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). LTV Steel further
agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from LTV Steel and that LTV Steel
will remain bound under this Article 10 notwithstanding any extension or
renewal of any Obligation.
LTV Steel waives presentation to, demand of, payment from and
protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. LTV Steel waives notice of any default under the
Securities or the Obligations. The obligations of LTV Steel hereunder
shall not be affected by (a) the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Securities or any
other agreement or otherwise; (b) any extension or renewal of any thereof;
(c) any rescission, waiver, amendment or modification of any of the terms
or provisions of this Indenture, the Securities or any other agreement;
(d) the release of any security held by any Holder or the Trustee for the
Obligations or any of them; (e) the failure of any Holder or the Trustee
to exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of LTV Steel.
LTV Steel further agrees that the Guaranty herein constitutes a
guarantee of payment, performance and compliance when due (and not a
guarantee of collection) and waives any right to require that any resort be
had by any Holder or the Trustee to any security held for payment of the
Obligations.
Except as expressly set forth in Sections 4.08, 5.02 and 8.01(b),
the obligations of LTV Steel hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of LTV Steel herein shall not
be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any
other act or thing or omission or delay to do any other act or thing which
may or might in any manner or to any extent vary the risk of LTV Steel or
would otherwise operate as a discharge of LTV Steel as a matter of law or
equity.
LTV Steel further agrees that the Guaranty herein shall continue
to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation
is rescinded or must otherwise be restored by any Holder or the Trustee
upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against
LTV Steel by virtue hereof, upon the failure of the Company to pay the
principal of or interest on any Obligation when and as the same shall
become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Obligation, LTV Steel
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee
an amount equal to the sum of (i) the unpaid amount of such Obligations,
(ii) accrued and unpaid interest on such Obligations (but only to the
extent not prohibited by law) and (iii) all other monetary Obligations of
the Company to the Holders and the Trustee.
LTV Steel agrees that it shall not be entitled to any right of
subrogation in respect of any Obligations guaranteed hereby until payment
in full in cash of all Obligations. LTV Steel further agrees that, as
between it, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article 6 for the purposes of LTV Steel's
Guaranty herein, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed
hereby, and (y) in the event of any declaration of acceleration of such
obligations as provided in Article 6, such Obligations (whether or not due
and payable) shall forthwith become due and payable by LTV Steel for the
purposes of this Section.
LTV Steel also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 10.02. Contribution. The Company agrees that, in the
event a payment shall be made by LTV Steel under the Guaranty, the Company
shall indemnify LTV Steel in an amount equal to the amount of such payment
multiplied by a fraction, the numerator of which shall be the net worth of
the Company on the date hereof and the denominator of which shall be the
aggregate net worth of the Company and LTV Steel on the date hereof.
SECTION 10.03. Successors and Assigns. This Article 10 shall be
binding upon LTV Steel and its successors and assigns and shall enure to
the benefit of the successors and assigns of the Trustee and the Holders
and, in the event of any transfer or assignment of rights by any Holder or
the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and conditions of
this Indenture.
SECTION 10.04. No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 10 shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and
benefits of the Trustee and the Holders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits
which either may have under this Article 10 at law, in equity, by statute
or otherwise.
SECTION 10.05. Modification. No modification, amendment or
waiver of any provision of this Article 10, nor the consent to any
departure by LTV Steel therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Trustee, and then such
waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on LTV Steel in any
case shall entitle LTV Steel to any other or further notice or demand in
the same, similar or other circumstances.
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision of
the TIA which is required under said Act to be a part of and govern this
Indenture, the required provision shall control.
SECTION 11.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail or sent by
facsimile (with a hard copy delivered in person or by mail promptly
thereafter) and addressed as follows:
if to the Company:
The LTV Corporation
200 Public Square
Cleveland, Ohio 44114
Facsimile No. (216) 622-4647
Attention: Hal C. Hedrick, Jr.
if to LTV Steel:
LTV Steel Company, Inc.
200 Public Square
Cleveland, Ohio 44114
Facsimile No. (216) 622-4647
Attention: Hal C. Hedrick, Jr.
if to the Trustee:
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Facsimile No. (212) 946-8158
Attention: Corporate Trustee Administration Department
The Company, LTV Steel or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears
on the registration books of the Registrar and shall be sufficiently given
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee
to take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee:
(1) an Officers' Certificate in form reasonably
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied
with; and
(2) an Opinion of Counsel in form reasonably
satisfactory to the Trustee stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such
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 or not, in the opinion of
such individual, such covenant or condition has been complied
with.
SECTION 11.06. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the
Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose
of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which the Trustee knows
are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders. The Registrar, the Paying Agent and any co-registrar may
make reasonable rules for their functions.
SECTION 11.08. Legal Holidays. A "Legal Holiday" is a Saturday,
a Sunday or a day on which banking institutions are not required to be open
in the State of New York. If a payment date is a Legal Holiday, payment
shall be made on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 11.09. Governing Law. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 11.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or LTV Steel shall not
have any liability for any obligations of the Company or LTV Steel under
the Securities or this Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a
Security, each Securityholder shall waive and release all such liability.
The waiver and release shall be part of the consideration for the issue of
the Securities.
SECTION 11.11. Successors. All agreements of the Company and
LTV Steel in this Indenture and the Securities shall bind their respective
successors. All agreements of the Trustee in this Indenture shall bind its
successors.
SECTION 11.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement. One signed copy is
enough to prove this Indenture.
SECTION 11.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections
of this Indenture have been inserted for convenience of reference only, are
not intended to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
THE LTV CORPORATION,
by
-------------------------------
Name:
Title:
LTV STEEL COMPANY, INC.,
by
-------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as
Trustee,
by
-------------------------------
Name:
Title:
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT
TO RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE
TRANSACTIONS IN RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES
-----------------------------------------
AND EXCHANGE SECURITIES
-----------------------
1. Definitions
1.1 Definitions
For the purposes of this Appendix A the following terms shall
have the meanings indicated below:
"Definitive Security" means a certificated Initial Security
bearing, if required, the restricted securities legend set forth in Section
2.03(d).
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 8.20% Senior Notes Due 2007 to
be issued pursuant to this Indenture in connection with a Registered Exchange
Offer or a Private Exchange pursuant to the Registration Agreement.
"JAI" means an institutional "accredited investor" as described
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Salomon Brothers Inc. Credit Suisse
First Boston Corporation and Chase Securities Inc.
"Initial Securities" means the 8.20% Senior Notes Due 2007 in
the aggregate principal amount of $300,000,000 originally issued on the Issue
Date.
"Private Exchange" means the offer by the Company, pursuant to
Section 2(f) of the Registration Agreement, to issue and deliver to the
Initial Purchasers, in exchange for the Initial Securities held by the Initial
Purchasers as part of their initial distribution, a like aggregate principal
amount of Private Exchange Securities.
"Private Exchange Securities" means the 8.20% Senior Notes Due
2007 to be issued pursuant to this Indenture in connection with a Private
Exchange pursuant to the Registration Agreement.
"Purchase Agreement" means the Purchase Agreement dated
September 17, 1997, among the Company, LTV Steel and the Initial Purchasers
relating to the Initial Securities.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities
registered under the Securities Act.
"Registration Agreement" means the Registration Agreement dated
September 17, 1997, among the Company, LTV Steel and the Initial Purchasers
relating to the Initial Securities. -
"Securities" means the Initial Securities and the Exchange
Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor person
thereto, who shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement
issued by the Company in connection with the offer and sale of Initial
Securities pursuant to the Registration Agreement.
"Transfer Restricted Securities" means Definitive Securities
and any other Securities that bear or are required to bear the legend set
forth in Section 2.3(d) hereto.
1.2 Other Definitions
Term Defined in Section:
---- -------------------
"Agent Members"................... 2.1(b)
"Global Security"................. 2.1(a)
"Regulation S".................... 2.1
"Rule 144A"....................... 2.1
2. The Securities
2.1 Form
The Initial Securities will be offered and sold by the Company
pursuant to the Purchase Agreement. The Initial Securities will be resold
initially only to QIBs in reliance on Rule 144A under the Securities Act
("Rule 144A") or in reliance on Regulation S under the Securities Act
("Regulation S"). Initial Securities may thereafter be transferred to, among
others, QIBs, IAIs and purchasers in reliance on Regulation S.
(a) Global Securities. Initial Securities shall be issued
initially in the form of one or more permanent global Securities in
definitive, fully registered form without interest coupons with the global
securities legend and restricted securities legend set forth in Exhibit 1
hereto (each, a "Global Security"), which shall be deposited on behalf of the
purchasers of the Initial Securities represented thereby with Securities
Custodian, and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
provided in this Indenture. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee as hereinafter
provided. Initial Securities, the beneficial interests in which are sold to
QIBs, will initially be represented by Global Securities bearing CUSIP number
501921AA8, and Initial Securities, the beneficial interests in which are sold
pursuant to Regulation S. will initially be represented by Global Securities
bearing CUSIP number U50221AA5. Initial Securities, beneficial interests in
which are sold to IAIs, will initially be represented by Global Securities
bearing the CUSIP number 501921AB6.
(b) Book-Entry Provisioned. This Section 2.1(b) shall apply
only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b) and pursuant to an order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company, authenticate and deliver initially one or more
Global Securities that (a) shall be registered in the name of the Depository
for such Global Security or Global Securities or the nominee of such
Depository and (b) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions or held by the Trustee as
Securities Custodian.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as
Securities Custodian or under such Global Security, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in Section 2.3
or 2.4, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and
deliver: (1) Initial Securities for original issue in an aggregate principal
amount of $300,000,000 and (2) Exchange Securities for issue only in a
Registered Exchange Offer or a Private Exchange pursuant to the Registration
Agreement, for a like principal amount of Initial Securities, upon a written
order of the Company signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the Company. Such order shall
specify the amount of the Securities to be authenticated and the date on which
the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities or Exchange Securities. The aggregate
principal amount of Securities outstanding at any time may not exceed
$300,000,000, except as provided in Section 2.08 of Indenture.
2.3 (a) Transfer and Exchange. When Securities are presented
to the Registrar or a co-registrar with a request:
(x) to register the transfer of such Securities; or
(y) to exchange such Securities for an equal principal amount of
Securities of other authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Company and the Registrar or co-registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act,
pursuant to Section 2.03(b) (in the case of Definitive
Securities) or pursuant to clause (A), (B) or (C) below as
applicable, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Securities are being delivered to the
Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from
such Holder to that effect; or
(B) if Definitive Securities are being transferred
to the Company, a certification to that effect (in the
form set forth on the reverse of the Security); or
(C) if Definitive Securities are being transferred
pursuant to an exemption from registration in
accordance with Rule 144 under the Securities Act, (i)
a certification to that effect (in the form set forth
on the reverse of the Security) and (ii) if the Company
requests, an opinion of counsel or other evidence
reasonably satisfactory to it as to the compliance with
the restrictions set forth in the legend set forth in
Section 2.03(d)(i).
(b) Restrictions on Transfer of a Definitive Security for a
Beneficial Interest in a Global Security. A Definitive Security may not be
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form reasonably satisfactory to the Company and
the Registrar or co-registrar, together with:
(i) certification, in the form set forth on the reverse
of the Security, that such Definitive Security is being
transferred (A) to a QIB in accordance with Rule 144A, (B) to
an IAI that has furnished to the Trustee a signed letter
containing certain representations and agreements (the form of
which has been approved by the Company) or (C) outside the
United States in an offshore transaction within the meaning of
Regulation S. and in compliance with Rule 904 under the
Securities Act; and
(ii) written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an
adjustment on its books and records with respect to such Global
Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Global Security,
such instructions to contain information regarding the
participant account of the Depository to be credited with such
increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the related Global
Security to be increased by the aggregate principal amount of the Definitive
Security to be exchanged and shall credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest in
such Global Security equal to the principal amount of the Definitive Security
so canceled. If the related Global Security is not then outstanding and such
Global Security has not been previously exchanged pursuant to Section 2.4, the
Company shall issue and the Trustee shall authenticate, upon written order of
the Company in the form of an Officers' Certificate, a new Global Security in
the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. (i) The
transfer and exchange of Global Securities or beneficial interests therein
shall be effected through the Depository, in accordance with this Indenture
(including applicable restrictions on transfer set forth herein, if any) and
the procedures of the Depository therefor. A transferor of a beneficial
interest in a Global Security shall deliver a written order given in
accordance with the Depository's procedures containing information regarding
the participant account of the Depository to be credited with a beneficial
interest in the Global Security and such account shall be credited in
accordance with such instructions with a beneficial interest in the Global
Security and the account of the Person making the transfer shall be debited
by an amount equal to the beneficial interest in the Global Security being
transferred. In the case of a transfer of a beneficial interest in one Global
Security to a beneficial interest in another Global Security, the transferor
and/or the transferee, as applicable, must furnish a signed letter to the
Trustee containing certain representations and agreements as to compliance
with the restrictions set forth in the legend set forth in Section 2.3(d)(i)
in connection with such transfer (the form of which letter shall be obtained
from the Company).
(ii) If the proposed transfer is a transfer of a
beneficial interest in one Global Security to a beneficial
interest in another Global Security, the Registrar shall
reflect on its books and records the date of such transfer and
an increase in the principal amount of the Global Security to
which such interest is being transferred in an amount equal to
the principal amount of the interest to be so transferred, and
the Registrar shall reflect on its books and records the date
and a corresponding decrease in the principal amount of Global
Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this
Appendix A (other than the provisions set forth in Section
2.4), a Global Security may not be transferred as a whole
except by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Security is exchanged
for Securities in definitive registered form pursuant to
Section 2.4 prior to the consummation of a Registered Exchange
Offer or the effectiveness of a Shelf Registration Statement
with respect to such Securities, such Securities may be
exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section
2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such
transfers comply with Rule 144A, Regulation S. or such other
applicable exemption from registration under the Securities
Act, as the case may be) and such other procedures as may from
time to time be adopted by the Company.
(d) Legend.
(i) Except as permitted by the following paragraphs
(ii), (iii), (iv) and (vi), each Security certificate
evidencing the Global Securities and the Definitive Securities
(and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the
following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY
OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION
S. UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR
ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY)
THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A LETTER WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT
WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT
OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTORS AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (I) UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3)
A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER)
REGULATION S. UNDER THE SECURITIES ACT."
Each Definitive Security will also bear the following
additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted Security
represented by a Global Security) pursuant to Rule 144 under
the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Security, the Registrar
shall permit the Holder thereof to exchange such
Transfer Restricted Security for a Definitive Security
that does not bear the legends set forth above and
rescind any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security that is represented by a Global Security, the
Registrar shall permit the Holder thereof to exchange
such Transfer Restricted Security for a Definitive
Security that does not bear the legends set forth above
and rescind any restriction on the transfer of such
Transfer Restricted Security,
in either case, if the Holder certifies in writing to the Registrar that its
request for such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
(iii) After a transfer of any Initial Securities
during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities, all
requirements pertaining to legends on such Initial Security
will cease to apply, the requirements requiring that any such
Initial Security be issued in global form will cease to apply,
and an Initial Security in certificated or global form without
legends will be available to the transferee of the Holder of
such Initial Securities upon exchange of such transferring
Holder's certificated Initial Security. Upon the occurrence of
any of the circumstances described in this paragraph, the
Company will deliver an Officers' Certificate to the Trustee
instructing the Trustee to issue Securities without legends.
(iv) Upon the consummation of a Registered Exchange
Offer with respect to the Initial Securities pursuant to which
certain Holders of such Initial Securities are offered Exchange
Securities in exchange for their Initial Securities, all
requirements pertaining to such Initial Securities that Initial
Securities be issued in global form will cease to apply, and
certificated Initial Securities with the restricted securities
legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their
Initial Securities, and Exchange Securities in certificated or
global form will be available to Holders that exchange such
Initial Securities in such Registered Exchange Offer. Upon the
occurrence of any of the circumstances described in this
paragraph, the Company will deliver an Officers' Certificate to
the Trustee instructing the Trustee to issue Securities without
legends.
(v) Upon the consummation of a Private Exchange with
respect to the Initial Securities pursuant to which Holders of
such Initial Securities are offered Private Exchange Securities
in exchange for their Initial Securities, all requirements
pertaining to such Initial Securities that Initial Securities
issued to certain Holders be issued in global form will
continue to apply, and Private Exchange Securities in global
form with the Restricted Securities Legend set forth in Exhibit
1 hereto will be available to Holders that exchange such
Initial Securities in such Private Exchange.
(vi) Upon a sale or transfer of any Initial Security
acquired pursuant to Regulation S. all requirements pertaining
to legends on such Initial Security will cease to apply, the
requirements requiring any such Initial Security be issued in
global form will cease to apply, and an Initial Security in
certificated or global form without the Restricted Security
Legend will be available to the transferee of the Holder of
such Initial Securities.
(e) Cancellation or Adjustment of Global Security. At such
time as all beneficial interests in a Global Security have either been
exchanged for certificated or Definitive Securities, redeemed, repurchased or
canceled, such Global Security shall be returned by the Depository to the
Trustee for cancellation or retained and canceled by the Trustee. At any time
prior to such cancellation, if any beneficial interest in a Global Security is
exchanged for certificated or Definitive Securities, redeemed, repurchased or
canceled, the principal amount of Securities represented by such Global
Security shall be reduced and an adjustment shall be made on the books and
records of the Trustee (if it is then the Securities Custodian for such Global
Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate certificated Securities, Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made for any
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any transfer tax,
assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon
exchange or transfer pursuant to Section 3.06, 4.09, 4.10 or
9.05).
(iii) The Registrar or co-registrar shall not be
required to register the transfer of or exchange of any
Security for a period beginning 15 days before the mailing of a
notice of redemption or an offer to repurchase Securities.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying
Agent, the Registrar or any co-registrar may deem and treat the
person in whose name a Security is registered as the owner of
such Security for the purpose of receiving payment of principal
of and (subject to paragraph 2 of the form of Security)
interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none
of the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or
exchange pursuant to the terms of this Indenture shall evidence
the same debt and shall be entitled to the same benefits under
this Indenture as the Securities surrendered upon such transfer
or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Security, a
member of, or a participant in the Depository or any other
Person with respect to the accuracy of the records of the
Depository or its nominee or of any participant or member
thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant,
member, beneficial owner or other Person (other than the
Depository) of any notice (including any notice of redemption
or repurchase) or the payment of any amount, under or with
respect to such Securities. All notices and communications to
be given to the Holders and all payments to be made to Holders
under the Securities shall be given or made only to the
registered Holders (which shall be the Depository or its
nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised
only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall
be fully protected in relying upon information furnished by the
Depository with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Indenture or under
applicable law with respect to any transfer of any interest in
any Security (including any transfers between or among
Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such
certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly
required by, the terms of this Indenture, and to examine the
same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Certified Securities
(a) A Global Security deposited with the Depository or with the
Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred
to the beneficial owners thereof in the form of certificated Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depository notifies the Company that it is
unwilling or unable to continue as a Depository for such Global Security or if
at any time the Depository ceases to be a "clearing agency" registered under
the Exchange Act, and a successor depositary is not appointed by the Company
within 90 days of such notice or after it becomes aware of such ineligibility,
or an Event of Default has occurred and is continuing or the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section 2.4 shall be surrendered by the
Depository to the Trustee, to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such names as the Depository shall
direct. Any certificated Initial Security delivered in exchange for an
interest in the Global Security shall, except as otherwise provided by Section
2.3(d), bear the restricted securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
EXHIBIT 1
to APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC, DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY
OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER
THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE MONTHS
PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX
CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S
UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON
THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY), (4) TO AN
INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT (AS INDICATED BY THE BOX CHECKED BY
THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS SECURITY)
THAT IS ACQUIRING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR
DISTRIBUTION, AND A LETTER WHICH MAY BE OBTAINED FROM THE COMPANY OR THE
TRUSTEE IS DELIVERED BY THE TRANSFEREE TO THE COMPANY AND THE TRUSTEE, (5)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT, OR (6) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. AN INSTITUTIONAL ACCREDITED INVESTOR HOLDING THIS SECURITY AGREES IT
WILL FURNISH TO THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY TRANSFER BY IT
OF THIS SECURITY COMPLIES WITH THE FOREGOING RESTRICTIONS. THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE
COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT AND THAT IT IS
HOLDING THIS SECURITY FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3)
A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (o)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT
MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
No. 1 [UP TO](*) $___________
8.20% Senior Note Due 2007
CUSIP No. _________
The LTV Corporation, a Delaware corporation, promises to pay to
, or registered assigns, the principal sum [set forth in the attached
Schedule of Increases or Decreases in Global Security]* [of
Dollars(**) on September 15, 2007.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on the other side
of this Security.
- ---------------
(*)Insert for Global Securities.
(**)Insert for Certificated Securities.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
THE LTV CORPORATION,
by
_____________________
Name:
Title:
by
_____________________
Name:
Title:
[CORPORATE SEAL]
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
THE CHASE MANHATTAN BANK,
as Trustee, certifies
that this is one of
the Securities referred
to in the within mentioned
Indenture.
By:_________________________
Authorized Officer
[FORM OF REVERSE SIDE OF SECURITY]
8.20% Senior Note Due 2007
1. Interest
(a) The LTV Corporation, a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on March 15 and September 15 of each year. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or duly provided for, or, if no interest has been paid or duly provided
for, from September 22, 1997. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay interest on
overdue principal at the rate borne by the Securities plus 1% per annum, and
it shall pay interest on overdue installments of interest at the same rate to
the extent lawful.
(b) Special Interest. The holder of this Security is entitled to the
benefits of a Registration Agreement dated September 17, 1997 (the
"Registration Agreement"), among the Company, the LTV Steel Company, Inc.
("LTV Steel") and the Purchasers named therein. Capitalized terms used in
this paragraph (b) but not defined herein have the meanings assigned to them
in the Registration Agreement. In the event that (i) neither the Exchange
Offer Registration Statement nor the Shelf Registration Statement has been
filed with the SEC on or prior to the 60th day following the date of original
issuance of the Securities, (ii) neither the Exchange Offer Registration
Statement nor the Shelf Registration Statement has been declared effective on
or prior to the 150th day following the date of the original issuance of the
Securities, (iii) neither the Registered Exchange Offer has been consummated
nor the Shelf Registration Statement has been declared effective on or prior
to the 180th day following the date of the original issuance of the
Securities, or (iv) after the Shelf Registration Statement has been declared
effective, such Registration Statement thereafter ceases to be effective or
usable in connection with resales of the Securities at any time that the
Company is obligated to maintain the effectiveness thereof pursuant to the
Registration Agreement (each such event referred to in clauses (i) through (iv)
above being referred to herein as a "Registration Default"), interest (the
"Special Interest") shall accrue (in addition to stated interest on the
Securities) from and including the date on which the first such Registration
Default shall occur to but excluding the date on which all Registration
Defaults have been cured, at a rate per annum equal to 0.25% of the principal
amount of the Securities; provided, however, that such rate per annum shall
increase by 0.25% per annum from and including the 91st day after the first
such Registration Default (and each successive 91st day thereafter) unless and
until all Registration Defaults have been cured; provided further, however,
that in no event shall the Special Interest accrue at a rate in excess of
1.00% per annum. The Special Interest will be payable in cash semiannually in
arrears each March 15 and September 15 in the same manner and to the same
Persons as regular interest.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the
close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on
or before the interest payment date. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States of America that at the
time of payment is legal tender for payment of public and private debts.
Payments in respect of the Securities represented by a Global Security
(including principal, premium and interest) will be made by wire transfer
of immediately available funds to the accounts specified by The Depository
Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest), by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank
in the United States if such Holder elects payment by wire transfer by
giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept
in its discretion).
3. Paying Agent and Registrar
Initially, The Chase Manhattan Bank, a New York banking corporation
(the "Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
September 22, 1997 (the "Indenture"), among the Company, LTV Steel and the
Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S.C. Section Section 77aaa-77bbbb) as in effect on the
date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred
to the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the Company limited
to $300,000,000 aggregate principal amount at any one time outstanding
(subject to Section 2.08 of the Indenture). The Securities include the Initial
Securities issued in an aggregate principal amount of $300,000,000 and any
Exchange Securities issued in exchange for Initial Securities. The Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, make certain Investments and other Restricted Payments, pay dividends
and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, issue or sell shares of capital stock of such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of the Company or LTV Steel to consolidate
or merge with or into any other Person, or sell, transfer, assign, lease,
convey or otherwise dispose of all or substantially all of the Property of the
Company or LTV Steel. Once the Company attains Investment Grade Status,
certain of the covenants in the Indenture will no longer be applicable to the
Company and its Restricted Subsidiaries, even if the Company ceases thereafter
to have an Investment Grade Rating.
Pursuant to the terms of the Indenture, LTV Steel has unconditionally
guaranteed the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities
may not be redeemed prior to September 15, 2002. On and after that date, the
Company may redeem the Securities in whole at any time or in part from time to
time at the following redemption prices (expressed in percentages of principal
amount), plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of redemption), if redeemed during the 12-
month period beginning on or after September 15 of the years set forth below:
Redemption
Period Price
- ------ ----------
2002............................................................. 104.100%
2003............................................................. 102.733%
2004............................................................. 101.367%
2005 and thereafter.............................................. 100.000%
Notwithstanding the foregoing, prior to September 15, 2000, the Company
may redeem, at any time or from time to time, up to a maximum of 35% of the
original aggregate principal amount of Securities, at a redemption price of
108.20% of the principal amount thereof plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption), with the
net proceeds of one or more Public Equity Offerings; provided, however, that
after giving effect to any such redemption, at least 65% of the original
aggregate principal amount of the Securities remains outstanding. Any such
redemption shall be made within 60 days after the date of the closing of any
such Public Equity Offering.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address.
Securities in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued interest on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
8. Repurchase of Securities at the Option of Holders upon Change of
Control
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of the Securities of such Holder at a purchase
price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is
on or prior to the date of purchase) as provided in, and subject to the
terms of, the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange,
the Registrar and the Trustee may require a Holder, among other things, to
furnish appropriate endorsements or transfer documents and to pay any taxes
required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of
the Security not to be redeemed) or to transfer or exchange any Securities
for a period of 15 days prior to a selection of Securities to be redeemed
or 15 days before an interest payment date.
10. Persons Deemed Owners
Subject to paragraph 2 hereof, the registered Holder of this Security
may be treated as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default may be waived with the written consent of the Holders of at least
a majority in principal amount of the outstanding Securities. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder of Securities, the Company, LTV Steel and the Trustee may amend the
Indenture or the Securities (i) to cure any ambiguity, omission, defect or
inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to
provide for uncertificated Securities in addition to or in place of
certificated Securities; (iv) to add additional Guarantees with respect to the
Securities or to release LTV Steel from the Guaranty as provided by the terms
thereof, or to secure the Securities; (v) to add additional covenants or to
surrender rights and powers conferred on the Company; (vi) to comply with the
requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the TIA; or (vii) to make any change that does not
adversely affect the rights of any Securityholder.
14. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities, subject to
certain limitations, may declare all the Securities to be immediately due and
payable. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Securities being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust
or power under the Indenture. The Holders of a majority in aggregate principal
amount of the outstanding Securities may by written notice to the Company and
the Trustee rescind any declaration of acceleration if the rescission would
not conflict with any judgment or decree, and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner
or pledgee of Securities and may otherwise deal with and collect obligations
owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or LTV Steel shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized Officer of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of Securities upon written
request and without charge to the Holder a copy of the Indenture which has in
it the text of this Security.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
_____________________________________________________________________________
Date: ______________________ Your Signature: ________________________________
_____________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such
Securities were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Securities are being transferred in accordance
with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under
the Securities Act of 1933; or
(3) [ ] inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities
Act of 1933) that purchases for its own account or for
the account of a qualified institutional buyer to whom
notice is given that such transfer is being made in
reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of
1933; or
(4) [ ] outside the United States in an offshore transaction
within the meaning of Regulation S under the
Securities Act in compliance with Rule 904 under the
Securities Act of 1933; or
(5) [ ] to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933) that has furnished to the
trustee a signed letter containing certain
representations and agreements (the form of which
letter to be obtained from the Company); or
(6) [ ] pursuant to another available exemption from
registration provided by Rule 144 under the Securities
Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in
the name of any person other than the registered holder thereof;
provided, however, that if box (4), (5) or (6) is checked, the
Trustee may require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of
the Securities Act of 1933.
____________________________
Your Signature
Signature Guarantee:
Date: ______________________ ____________________________________________
Signature must be guaranteed Signature of Signature Guarantee
by a participant in a
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated: ________________ ___________________________________________
NOTICE: To be executed by
an executive officer
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $200,000,000.
The following increases or decreases in this Global Security have been made:
<TABLE>
<CAPTION>
Signature of
Principal amount authorized
Amount of decrease Amount of increase of this Global signatory of
in Principal in Principal Security following Trustee or
Date of Amount of this Amount of this such decrease or Securities
Exchange Global Security Global Security increase Custodian
- -------- ------------------ ------------------- ----------------- ------------
<S> <C> <C> <C> <C>
</TABLE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.09 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.09 or 4.10 of the Indenture, state the amount:
($1,000 or an integral multiple thereof)
Date: _________________________ Your Signature: ___________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee: __________________________________________________________
Signature must be guaranteed by a participant in a
recognized signature guaranty medallion program or other
signature guarantor acceptable to the Trustee
EXHIBIT A
[FORM OF FACE OF SECURITY]
No. [UP TO](*)_____________
8.20% Senior Note Due 2007
CUSIP No. _________
The LTV Corporation, a Delaware corporation, promises to pay to
or registered assigns, the principal sum [set forth in the attached
Schedule of Increases or Decreases in Global Security]*[of
Dollars](**) on September 15, 2007.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
THE LTV CORPORATION,
by___________________________________
Name:
Title:
by___________________________________
Name:
Title:
[CORPORATE SEAL]
- ---------------
(*) Insert for Global Securities.
(**)Insert for Certificated Securities.
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
Dated:
THE CHASE MANHATTAN BANK,
as Trustee, certifies
that this is one of
the Securities referred
to in the within mentioned
Indenture.
By:_________________________
Authorized Officer
__________________
* If the Security is to be issued in global form, add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned ''TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY''.
[FORM OF REVERSE SIDE OF SECURITY]
8.20% Senior Note Due 2007
1. Interest
The LTV Corporation, a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on March 15 and September 15 of each year. Interest on
the Securities will accrue from the most recent date to which interest has been
paid or duly provided for, or, if no interest has been paid or duly provided
for, from September 22, 1997. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay interest on
overdue principal at the rate borne by the Securities plus 1% per annum, and
it shall pay interest on overdue installments of interest at the same rate to
the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the
close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on
or before the interest payment date. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States of America that at the
time of payment is legal tender for payment of public and private debts.
Payments in respect of the Securities represented by a Global Security
(including principal, premium and interest) will be made by wire transfer
of immediately available funds to the accounts specified by The Depository
Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest), by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of at least $1,000,000 aggregate principal amount of Securities, by
wire transfer to a U.S. dollar account maintained by the payee with a bank
in the United States if such Holder elects payment by wire transfer by
giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept
in its discretion).
3. Paying Agent and Registrar
Initially, The Chase Manhattan Bank, a New York banking corporation
(the "Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
September 22, 1997 (the "Indenture"), among the Company, LTV Steel and the
Trustee. The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture
Act of 1939 (15 U.S.C. Section Section 77aaa-77bbbb) as in effect on the
date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred
to the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the Company limited
to $300,000,000 aggregate principal amount at any one time outstanding
(subject to Section 2.08 of the Indenture). The Securities include the Initial
Securities issued in an aggregate principal amount of $300,000,000 and any
Exchange Securities issued in exchange for Initial Securities. The Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on
the ability of the Company and its Restricted Subsidiaries to, among other
things, make certain Investments and other Restricted Payments, pay dividends
and other distributions, incur Indebtedness, enter into consensual
restrictions upon the payment of certain dividends and distributions by such
Restricted Subsidiaries, issue or sell shares of capital stock of such
Restricted Subsidiaries, enter into or permit certain transactions with
Affiliates, create or incur Liens and make Asset Sales. The Indenture also
imposes limitations on the ability of the Company or LTV Steel to consolidate
or merge with or into any other Person, or sell, transfer, assign, lease,
convey or otherwise dispose of all or substantially all of the Property of the
Company or LTV Steel. Once the Company attains Investment Grade Status,
certain of the covenants in the Indenture will no longer be applicable to the
Company and its Restricted Subsidiaries, even if the Company ceases thereafter
to have an Investment Grade Rating.
Pursuant to the terms of the Indenture, LTV Steel has unconditionally
guaranteed the due and punctual payment of the principal and interest on the
Securities and all other amounts payable by the Company under the Indenture and
the Securities when and as the same shall be due and payable, whether at
maturity, by acceleration or otherwise, according to the terms of the
Securities and the Indenture.
5. Optional Redemption
Except as set forth in the next paragraph, the Securities
may not be redeemed prior to September 15, 2002. On and after that date, the
Company may redeem the Securities in whole at any time or in part from time to
time at the following redemption prices (expressed in percentages of principal
amount), plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date that is on or prior
to the date of redemption), if redeemed during the 12-
month period beginning on or after September 15 of the years set forth below:
Redemption
Period Price
2002............................................................... 104.100%
2003............................................................... 102.733%
2004............................................................... 101.367%
2005 and thereafter................................................ 100.000%
Notwithstanding the foregoing, prior to September 15, 2000, the Company
may redeem, at any time or from time to time, up to a maximum of 35% of the
original aggregate principal amount of Securities, at a redemption price of
108.20% of the principal amount thereof plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of Holders of record on the
relevant record date to record date to receive interest due on the relevant
interest payment date that is on or prior to the date of redemption), with the
net proceeds of one or more Public Equity Offerings; provided, however, that
after giving effect to any such redemption, at least 65% of the original
aggregate principal amount of the Securities remains outstanding. Any such
redemption shall be made within 60 days after the date of the closing of any
such Public Equity Offering.
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption will be mailed by first-class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his or her registered address.
Securities in denominations larger than $1,000 may be redeemed in part but
only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued interest on all Securities (or portions thereof) to be
redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
8. Repurchase of Securities at the Option of Holders upon Change of
Control
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at
a purchase price equal to 101% of the principal amount of the Securities to be
repurchased plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date that is
on or prior to the date of purchase) as provided in, and subject to the
terms of, the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. Upon any transfer or
exchange, the Registrar and the Trustee may require a Holder, among
otherthings, to furnish appropriate endorse ments or transfer documents and
to pay any taxes required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities
selected for redemption (except, in the case of a Security to be redeemed
in part, the portion of the Security not to be redeemed) or to transfer or
exchange any Securities for a period of 15 days prior to a selection of
Securities to be redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
Subject to paragraph 2 hereof, the registered Holder of this Security
may be treated as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only
to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the Securities to redemption or maturity,
as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended without prior notice to any
Securityholder but with the written consent of the Holders of at least a
majority in aggregate principal amount of the outstanding Securities and (ii)
any default may be waived with the written consent of the Holders of at least
a majority in principal amount of the outstanding Securities. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Holder of Securities, the Company, LTV Steel and the Trustee may amend the
Indenture or the Securities (i) to cure any ambiguity, omission, defect or
inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to
provide for uncertificated Securities in addition to or in place of
certificated Securities; (iv) to add additional Guarantees with respect to the
Securities or to release LTV Steel from the Guaranty as provided by the terms
thereof, or to secure the Securities; (v) to add additional covenants or to
surrender rights and powers conferred on the Company; (vi) to comply with the
requirements of the SEC in order to effect or maintain the qualification of
the Indenture under the TIA; or (vii) to make any change that does not
adversely affect the rights of any Securityholder.
14. Defaults and Remedies
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities, subject to
certain limitations, may declare all the Securities to be immediately due and
payable. Certain events of bankruptcy or insolvency are Events of Default and
shall result in the Securities being immediately due and payable upon the
occurrence of such Events of Default without any further act of the Trustee or
any Holder.
Holders of Securities may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or
security. Subject to certain limitations, Holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any trust
or power under the Indenture. The Holders of a majority in aggregate principal
amount of the outstanding Securities may by written notice to the Company and
the Trustee rescind any declaration of acceleration if the rescission would
not conflict with any judgment or decree, and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner
or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have
if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or LTV Steel shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
17. Authentication
This Security shall not be valid until an authorized Officer of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.
The Company will furnish to any Holder of Securities upon written
request and without charge to the Holder a copy of the Indenture which has in
it the text of this Security.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
______________________________________________________________________________
Date: ____________________ Your Signature: _______________________________
______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
Signature Guarantee:
Date: __________________________ ___________________________________________
Signature must be guaranteed Signature of Signature Guarantee
by a participant in a
recognized signature guaranty
medallion program or other
signature guarantor acceptable
to the Trustee
______________________________________________________________________________
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.09 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.09 or 4.10 of the Indenture, state the amount:
($1,000 or an integral multiple thereof)
Date: _________________________ Your Signature: ___________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee: _________________________________________________________
Signature must be guaranteed by a participant in
a recognized signature guaranty medallion
program or other signature guarantor acceptable
to the Trustee
Exhibit 4.4
THE LTV CORPORATION
8.20% Senior Notes Due 2007
REGISTRATION AGREEMENT
New York, New York
September 17, 1997
To: SALOMON BROTHERS INC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
In care of:
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
The LTV Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell to certain purchasers (the "Purchasers"), upon the
terms set forth in a purchase agreement dated the date hereof (the "Purchase
Agreement"), $300,000,000 aggregate principal amount of its 8.20% Senior Notes
Due 2007 (the "Notes") (the "Initial Placement"), to be unconditionally
guaranteed on a senior basis (the "Guaranty" and, together with the Notes, the
"Securities") by LTV Steel Company, Inc. (the "Guarantor"). As an inducement
to the Purchasers to enter into the Purchase Agreement and in satisfaction of
a condition to your obligations thereunder, the Company and the Guarantor
jointly and severally agree with you, (i) for your benefit and the benefit of
the other Purchasers and (ii) for the benefit of the holders from time to time
of the Securities (including you and the other Purchasers) (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Affiliate" of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified person. For purposes of this definition,
control of a person means the power, direct or indirect, to direct or cause
the direction of the management and policies of such person whether by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Exchange Offer Registration Period" means the one-year
period following the consummation of the Registered Exchange Offer, exclusive
of any period during which any stop order shall be in effect suspending the
effectiveness of the Exchange Offer Registration Statement.
"Exchange Offer Registration Statement" means a registration
statement of the Company on an appropriate form under the Act with respect to
the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Exchanging Dealer" means any Holder (which may include the
Purchasers) which is a broker-dealer, electing to exchange Securities acquired
for its own account as a result of market-making activities or other trading
activities, for New Securities.
"Guaranty" has the meaning set forth in the preamble hereto.
"Guarantor" has the meaning set forth in the preamble hereto.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture relating to the Securities
dated as of September 22, 1997, among the Company, the Guarantor and The Chase
Manhattan Bank, as trustee, as the same may be amended from time to time in
accordance with the terms thereof.
"Initial Placement" has the meaning set forth in the
preamble hereto.
"Majority Holders" means the Holders of a majority of the
aggregate principal amount of securities registered under a Registration
Statement.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall administer an
underwritten offering.
"New Securities" means debt securities of the Company
identical in all material respects to the Securities (except that the interest
rate step-up provisions and the transfer restrictions will be modified or
eliminated, as appropriate), to be issued under the Indenture.
"Prospectus" means the prospectus included in any
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part of an
effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the
terms of the offering of any portion of the Securities or the New Securities,
covered by such Registration Statement, and all amendments and supplements to
the Prospectus, including post-effective amendments.
"Registered Exchange Offer" means the proposed offer to the
Holders to issue and deliver to such Holders, in exchange for the Securities,
a like principal amount of the New Securities.
"Registration Statement" means any Exchange Offer
Registration Statement or Shelf Registration Statement that covers any of the
Securities or the New Securities pursuant to the provisions of this Agreement,
all amendments and supplements to such registration statement, including,
without limitation, post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Securities" has the meaning set forth in the preamble
hereto.
"Shelf Registration" means a registration effected pursuant
to Section 3 hereof.
"Shelf Registration Period" has the meaning set forth in
Section 3(b) hereof.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 3 hereof which
covers some of or all the Securities or New Securities, as applicable, on an
appropriate form under Rule 415 under the Act, or any similar rule that may be
adopted by the Commission, amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
"Trustee" means the trustee with respect to the Securities
under the Indenture.
"underwriter" means any underwriter of Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. Registered Exchange Offer; Resales of New Securities by
Exchanging Dealers; Private Exchange. (a) The Company and the Guarantor
shall prepare and, not later than 60 days after the date of the original
issuance of the Notes, shall file with the Commission the Exchange Offer
Registration Statement with respect to the Registered Exchange Offer. The
Company and the Guarantor shall cause the Exchange Offer Registration
Statement to become effective under the Act within 150 days after the date of
the original issuance of the Notes.
(b) Upon the effectiveness of the Exchange Offer
Registration Statement, the Company and the Guarantor shall promptly commence
the Registered Exchange Offer, it being the objective of such Registered
Exchange Offer to enable each Holder electing to exchange Securities for New
Securities (assuming that such Holder is not an affiliate of the Company
within the meaning of the Act, acquires the New Securities in the ordinary
course of such Holder's business and has no arrangements with any person to
participate in the distribution of the New Securities) to trade such New
Securities from and after their receipt without any limitations or
restrictions under the Act and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States.
(c) In connection with the Registered Exchange Offer, the
Company and the Guarantor shall:
(i) mail to each Holder a copy of the Prospectus forming
part of the Exchange Offer Registration Statement, together with
an appropriate letter of transmittal and related documents;
(ii) keep the Registered Exchange Offer open for not less than
30 days and not more than 45 days after the date notice thereof is
mailed to the Holders (or longer if required by applicable law);
(iii) utilize the services of a depositary for the Registered
Exchange Offer with an address in the Borough of Manhattan, The
City of New York; and
(iv) comply in all respects with all applicable laws.
(d) As soon as practicable after the close of the
Registered Exchange Offer, the Company and the Guarantor shall:
(i) accept for exchange all Securities tendered and not
validly withdrawn pursuant to the Registered Exchange Offer;
(ii) deliver to the Trustee for cancelation all Securities so
accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to
each Holder of Securities New Securities equal in principal amount
to the Securities of such Holder so accepted for exchange.
(e) The Purchasers, the Company and the Guarantor
acknowledge that, pursuant to current interpretations by the Commission's
staff of Section 5 of the Act, and in the absence of an applicable exemption
therefrom, each Exchanging Dealer is required to deliver a Prospectus in
connection with a sale of any New Securities received by such Exchanging
Dealer pursuant to the Registered Exchange Offer in exchange for Securities
acquired for its own account as a result of market-making activities or other
trading activities. Accordingly, the Company and the Guarantor shall:
(i) include the information set forth in Annex A hereto on
the cover of the Exchange Offer Registration Statement, in Annex B
hereto in the forepart of the Exchange Offer Registration
Statement in a section setting forth details of the Exchange
Offer, and in Annex C hereto in the underwriting or plan of
distribution section of the Prospectus forming a part of the
Exchange Offer Registration Statement, and include the information
set forth in Annex D hereto in the Letter of Transmittal delivered
pursuant to the Registered Exchange Offer; and
(ii) use its best efforts to keep the Exchange Offer
Registration Statement continuously effective under the Act during
the Exchange Offer Registration Period for delivery by Exchanging
Dealers in connection with sales of New Securities received
pursuant to the Registered Exchange Offer, as contemplated by
Section 4(h) below.
(f) In the event that any Purchaser determines that it is
not eligible to participate in the Registered Exchange Offer with respect to
the exchange of Securities constituting any portion of an unsold allotment, at
the request of such Purchaser, the Company and the Guarantor shall issue and
deliver to such Purchaser or the party purchasing New Securities registered
under a Shelf Registration Statement as contemplated by Section 3 hereof from
such Purchaser, in exchange for such Securities, a like principal amount of
New Securities. The Company and the Guarantor shall seek to cause the CUSIP
Service Bureau to issue the same CUSIP number for such New Securities as for
New Securities issued pursuant to the Registered Exchange Offer.
3. Shelf Registration. If, (i) because of any change in
law or applicable interpretations thereof by the Commission's staff, the
Company and the Guarantor determine upon advice of its outside counsel that
they are not permitted to effect the Registered Exchange Offer as contemplated
by Section 2 hereof, or (ii) for any other reason the Exchange Offer
Registration Statement is not declared effective within 150 days after the
Closing Date or the Registered Exchange Offer is not consummated within 180
days after the Closing Date, or (iii) any Purchaser so requests with respect
to Securities (or any New Securities received pursuant to Section 2(f)) not
eligible to be exchanged for New Securities in a Registered Exchange Offer or,
in the case of any Purchaser that participates in any Registered Exchange
Offer, such Purchaser does not receive freely tradable New Securities, or (iv)
any Holder (other than a Purchaser) is not eligible to participate in the
Registered Exchange Offer or (v) in the case of any such Holder that
participates in the Registered Exchange Offer, such Holder does not receive
freely tradable New Securities in exchange for tendered securities, other than
by reason of such Holder being an affiliate of the Company within the meaning
of the Act (it being understood that, for purposes of this Section 3, (x) the
requirement that a Purchaser deliver a Prospectus containing the information
required by Items 507 and/or 508 of Regulation S-K under the Act in connection
with sales of New Securities acquired in exchange for such Securities shall
result in such New Securities being not "freely tradeable" but (y) the
requirement that an Exchanging Dealer deliver a Prospectus in connection with
sales of New Securities acquired in the Registered Exchange Offer in exchange
for Securities acquired as a result of market-making activities or other
trading activities shall not result in such New Securities being not "freely
tradeable"), the following provisions shall apply:
(a) The Company and the Guarantor shall as promptly as
practicable (but in no event more than 30 days after so required or requested
pursuant to this Section 3), file with the Commission and thereafter shall
cause to be declared effective under the Act a Shelf Registration Statement
relating to the offer and sale of the Securities or the New Securities, as
applicable, by the Holders from time to time in accordance with the methods of
distribution elected by such Holders and set forth in such Shelf Registration
Statement; provided, however, that, with respect to New Securities received by
a Purchaser in exchange for Securities constituting any portion of an unsold
allotment, the Company and the Guarantor may, if permitted by current
interpretations by the Commission's staff, file a post-effective amendment to
the Exchange Offer Registration Statement containing the information required
by Regulation S-K Items 507 and/or 508, as applicable, in satisfaction of its
obligations under this paragraph (a) with respect thereto, and any such
Exchange Offer Registration Statement, as so amended, shall be referred to
herein as, and governed by the provisions herein applicable to, a Shelf
Registration Statement.
(b) The Company and the Guarantor shall use their best
efforts to keep the Shelf Registration Statement continuously effective in
order to permit the Prospectus forming part thereof to be usable by Holders
for a period of two years from the date the Shelf Registration Statement is
declared effective by the Commission or such shorter period that will
terminate when all the Securities or New Securities, as applicable, covered by
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement (in any such case, such period being called the "Shelf
Registration Period"). The Company and the Guarantor shall be deemed not to
have used their best efforts to keep the Shelf Registration Statement
effective during the Shelf Registration Period if they voluntarily take any
action that would result in Holders of securities covered thereby not being
able to offer and sell such securities during that period, unless (i) such
action is required by applicable law, or (ii) such action is taken by the
Company or the Guarantor in good faith and for valid business reasons (not
including avoidance of the Company's or such Guarantor's obligations
hereunder), including the acquisition or divestiture of assets, so long as the
Company and the Guarantor promptly thereafter comply with the requirements of
Section 4(k) hereof, if applicable.
4. Registration Procedures. In connection with any Shelf
Registration Statement and, to the extent applicable, any Exchange Offer
Registration Statement, the following provisions shall apply:
(a) The Company and the Guarantor shall furnish to you,
prior to the filing thereof with the Commission, a copy of any
Shelf Registration Statement and any Exchange Offer Registration
Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein and shall
use its best efforts to reflect in each such document, when so
filed with the Commission, such comments as you reasonably may
propose.
(b) The Company and the Guarantor shall ensure that (i) any
Registration Statement and any amendment thereto and any
Prospectus forming part thereof and any amendment or supplement
thereto complies in all material respects with the Act and the
rules and regulations thereunder, (ii) any Registration Statement
and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading and (iii) any Prospectus
forming part of any Registration Statement, and any amendment or
supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
(c) (1) The Company and the Guarantor shall advise you and,
in the case of a Shelf Registration Statement, the Holders of
securities covered thereby, and, if requested by you or any such
Holder, confirm such advice in writing:
(i) when a Registration Statement and any amendment
thereto has been filed with the Commission and when the
Registration Statement or any post-effective amendment
thereto has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company and the Guarantor shall advise you and, in
the case of a Shelf Registration Statement, the Holders of
securities covered thereby, and, in the case of an Exchange Offer
Registration Statement, any Exchanging Dealer which has provided
in writing to the Company a telephone or facsimile number and
address for notices, and, if requested by you or any such Holder or
Exchanging Dealer, confirm such advice in writing:
(i) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that
purpose;
(ii) of the receipt by the Company or the Guarantor of
any notification with respect to the suspension of the
qualification of the securities included therein for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(iii) of the happening of any event that requires the
making of any changes in the Registration Statement or the
Prospectus so that, as of such date, the statements therein
are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light
of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an
instruction to suspend the use of the Prospectus until the
requisite changes have been made).
(d) The Company and the Guarantor shall use their best
efforts to obtain the withdrawal of any order suspending the
effectiveness of any Registration Statement at the earliest
possible time.
(e) The Company and the Guarantor shall furnish to each
Holder of securities included within the coverage of any Shelf
Registration Statement, without charge, at least one copy of such
Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the
Holder so requests in writing, documents incorporated by reference
therein and exhibits to such Shelf Registration Statement
(including those incorporated by reference therein).
(f) The Company and the Guarantor shall, during the Shelf
Registration Period, deliver to each Holder of securities included
within the coverage of any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each
preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company and the Guarantor consent
to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of securities in connection
with the offering and sale of the securities covered by the
Prospectus or any amendment or supplement thereto.
(g) The Company and the Guarantor shall furnish to each
Exchanging Dealer which so requests, without charge, at least one
copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements
and schedules, documents incorporated by reference therein, and, if
the Exchanging Dealer so requests in writing, exhibits to such
Shelf Registration Statement (including those incorporated by
reference therein).
(h) The Company and the Guarantor shall, during the
Exchange Offer Registration Period, promptly deliver to each
Exchanging Dealer, without charge, as many copies of the
Prospectus included in such Exchange Offer Registration Statement
and any amendment or supplement thereto as such Exchanging Dealer
may reasonably request for delivery by such Exchanging Dealer in
connection with a sale of New Securities received by it pursuant
to the Registered Exchange Offer; and the Company and the
Guarantor consent to the use of the Prospectus or any amendment or
supplement thereto by any such Exchanging Dealer, as aforesaid.
(i) Prior to the Registered Exchange Offer or any other
offering of securities pursuant to any Registration Statement, the
Company and the Guarantor shall register or qualify or cooperate
with the Holders of securities included therein and their
respective counsel in connection with the registration or
qualification of such securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such
Holders reasonably requests in writing and do any and all other
acts or things necessary or advisable to enable the offer and sale
in such jurisdictions of the securities covered by such
Registration Statement; provided, however, that neither the
Company nor the Guarantor will be required to qualify generally to
do business in any jurisdiction where it is not then so qualified
or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not
then so subject.
(j) The Company and the Guarantor shall cooperate with the
Holders of Securities to facilitate the timely preparation and
delivery of certificates representing Securities to be sold
pursuant to any Registration Statement free of any restrictive
legends and in such denominations and registered in such names as
Holders may request prior to sales of securities pursuant to such
Registration Statement.
(k) Upon the occurrence of any event contemplated by
paragraph (c)(2)(iii) above, the Company and the Guarantor shall
promptly prepare a post-effective amendment to any Registration
Statement or an amendment or supplement to the related Prospectus
or file any other required document so that, as thereafter
delivered to purchasers of the securities included therein, the
Prospectus will not include an untrue statement of a material fact
or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(l) Not later than the effective date of any such
Registration Statement hereunder, the Company and the Guarantor
shall provide a CUSIP number for the Securities or New Securities,
as the case may be, registered under such Registration Statement,
and provide the Trustee with printed certificates for such
Securities or New Securities, in a form, if requested by the
applicable Holder or Holder's Counsel, eligible for deposit with
The Depository Trust Company.
(m) The Company and the Guarantor shall use their best
efforts to comply with all applicable rules and regulations of the
Commission to the extent and so long as they are applicable to the
Registered Exchange Offer or the Shelf Registration and will make
generally available to its security holders a consolidated
earnings statement (which need not be audited) covering a
twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months
thereafter, as soon as practicable after the end of such period,
which consolidated earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act.
(n) The Company and the Guarantor shall cause the Indenture
to be qualified under the Trust Indenture Act of 1939, as amended,
on or prior to the effective date of any Shelf Registration
Statement or Exchange Offer Registration Statement.
(o) The Company may require each Holder of securities to be
sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the holder and the
distribution of such securities as the Company may from time to
time reasonably require for inclusion in such Registration
Statement.
(p) The Company and the Guarantor shall, if requested,
promptly incorporate in a Prospectus supplement or post-effective
amendment to a Shelf Registration Statement, such information as
the Managing Underwriters and Majority Holders reasonably agree
should be included therein and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such Prospectus
supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the
Company and the Guarantor shall enter into such agreements
(including underwriting agreements) and take all other appropriate
actions in order to expedite or facilitate the registration or the
disposition of the Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures no less favorable than
those set forth in Section 6 (or such other provisions and
procedures acceptable to the Majority Holders and the Managing
Underwriters, if any), with respect to all parties to be
indemnified pursuant to Section 6 hereof from Holders of
Securities to the Company and the Guarantor.
(r) In the case of any Shelf Registration Statement, the
Company and the Guarantor shall (i) make reasonably available for
inspection by the Holders of securities to be registered
thereunder, any underwriter participating in any disposition
pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by the Holders or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries; (ii) cause the Company's and the Guarantor's
officers, directors and employees to supply all relevant
information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with any
such Registration Statement as is customary for similar due
diligence examinations; provided, however, that any information
that is designated in writing by the Company or the Guarantor, in
good faith, as confidential at the time of delivery of such
information shall be kept confidential by the Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure
is made in connection with a court proceeding or required by law,
or such information becomes available to the public generally or
through a third party without an accompanying obligation of
confidentiality; (iii) make such representations and warranties to
the Holders of securities registered thereunder and the
underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten
offerings; (iv) obtain opinions of counsel to the Company and the
Guarantor (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing
Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters as are customarily
covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and
underwriters; (v) obtain "cold comfort" letters (or, in the case
of any person that does not satisfy the conditions for receipt of
a "cold comfort" letter specified in Statement on Auditing
Standards No. 72, an "agreed-upon procedures" letter) and updates
thereof from the independent certified public accountants of the
Company and the Guarantor (and, if necessary, any other
independent certified public accountants of any subsidiary of the
Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each
selling Holder of securities registered thereunder and the
underwriters, if any, in customary form and covering matters of the
type customarily covered in "cold comfort" letters in connection
with primary underwritten offerings; and (vi) deliver such
documents and certificates as may be reasonably requested by the
Majority Holders and the Managing Underwriters, if any, including
those to evidence compliance with Section 4(k) and with any
customary conditions contained in the underwriting agreement or
other agreement entered into by the Company and the Guarantor.
The foregoing actions set forth in clauses (iii), (iv), (v) and
(vi) of this Section 4(r) shall be performed at (A) the
effectiveness of such Registration Statement and each
post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required
thereunder.
(s) In the case of any Exchange Offer Registration
Statement, the Company and the Guarantor shall (i) make reasonably
available for inspection by each Purchaser, and any attorney,
accountant or other agent retained by such Purchaser, all relevant
financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries; (ii) cause the
Company's and the Guarantor's officers, directors and employees to
supply all relevant information reasonably requested by such
Purchaser or any such attorney, accountant or agent in connection
with any such Registration Statement as is customary for similar
due diligence examinations; provided, however, that any
information that is designated in writing by the Company or the
Guarantor, in good faith, as confidential at the time of delivery
of such information shall be kept confidential by such Purchaser
or any such attorney, accountant or agent, unless such disclosure
is made in connection with a court proceeding or required by law,
or such information becomes available to the public generally or
through a third party without an accompanying obligation of
confidentiality; (iii) make such representations and warranties to
such Purchaser, in form, substance and scope as are customarily
made by issuers to underwriters in primary underwritten offerings;
(iv) obtain opinions of counsel to the Company and the Guarantor
(which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to such Purchaser and its counsel),
addressed to such Purchaser, covering such matters as are
customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by
such Purchaser or its counsel; (v) obtain "cold comfort" letters
and updates thereof from the independent certified public
accountants of the Company and the Guarantor (and, if necessary,
any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement),
addressed to such Purchaser, in customary form and covering
matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings, or if requested
by such Purchaser or its counsel in lieu of a "cold comfort"
letter, an agreed-upon procedures letter under Statement on
Auditing Standards No. 35, covering matters requested by such
Purchaser or its counsel; and (vi) deliver such documents and
certificates as may be reasonably requested by such Purchaser or
its counsel, including those to evidence compliance with Section
4(k) and with conditions customarily contained in underwriting
agreements. The foregoing actions set forth in clauses (iii),
(iv), (v), and (vi) of this Section 4(s) shall be performed at the
close of the Registered Exchange Offer and the effective date of
any post-effective amendment to the Exchange Offer Registration
Statement.
5. Registration Expenses. The Company and the Guarantor
shall jointly and severally bear all expenses incurred in connection with the
performance of its obligations under Sections 2, 3 and 4 hereof and, in the
event of any Shelf Registration Statement, will reimburse the Holders for the
reasonable fees and disbursements of one firm or counsel (in addition to one
local counsel in each relevant jurisdiction) designated by the Majority
Holders to act as counsel for the Holders in connection therewith ("Holders'
Counsel"), and, in the case of any Exchange Offer Registration Statement, will
reimburse the Purchasers for the reasonable fees and disbursements of counsel
acting in connection therewith.
6. Indemnification and Contribution. (a) In connection
with any Registration Statement, the Company and the Guarantor, jointly and
severally, agree to indemnify and hold harmless each Holder of securities
covered thereby (including each Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer), the
directors, officers, employees and agents of each such Holder and each other
person, if any, who controls any such Holder within the meaning of Section 15
of the Act or Section 20 of the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement as originally filed or
in any amendment thereof, or in any preliminary Prospectus or Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as incurred,
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that neither the Company nor the Guarantor will be liable
in any case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf
of any such Holder specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company and the
Guarantor may otherwise have. Such indemnity with respect to any preliminary
Prospectus shall not inure to the benefit of any Holder (or any of the
directors, officers, employees and agents of such Holder) from whom the person
asserting any such loss, claim, damage or liability purchased the Securities
that are the subject thereof if such person did not receive a copy of the
Prospectus as amended or supplemented at or prior to the confirmation of the
sale of such Securities to such person in any case where the untrue statement
or omission of a material fact contained in such preliminary Prospectus was
corrected in the Prospectus as amended or supplemented and it is finally
judicially determined that such delivery was required to be made under the
Securities Act and was not so made.
The Company also agrees to indemnify or contribute to Losses
of, as provided in Section 6(d), any underwriters of Securities registered
under a Shelf Registration Statement, their officers and directors and each
person who controls such underwriters on substantially the same basis as that
of the indemnification of the Purchasers and the selling Holders provided in
this Section 6(a) and shall, if requested by any Holder, enter into an
underwriting agreement reflecting such agreement, as provided in Section 4(q)
hereof.
(b) Each Holder of securities covered by a Registration
Statement (including each Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer)
severally and not jointly agrees to indemnify and hold harmless the Company
and the Guarantor, each of their respective directors and officers and each
other person, if any, who controls the Company or such Guarantor within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company and the Guarantor to each
such Holder, but only with reference to written information relating to such
Holder furnished to the Company by or on behalf of such Holder specifically
for inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any such Holder
may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 6 or notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph (a)
or (b) above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a) or (b) above.
The indemnifying party shall be entitled to appoint as counsel one firm of
attorneys of the indemnifying party's choice at the indemnifying party's
expense, which counsel, together with one local counsel in each jurisdiction,
shall act on behalf of all the indemnified parties in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel
to represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel (and local counsel) if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would in the reasonable
judgment of the indemnified party, present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without
the prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action, suit
or proceeding.
(d) In the event that the indemnity provided in paragraph
(a) or (b) of this Section 6 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, then each applicable
indemnifying party, in lieu of indemnifying such indemnified party, shall have
a joint and several obligation to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which such indemnified party may be subject in such proportion as is
appropriate to reflect the relative benefits received by such indemnifying
party, on the one hand, and such indemnified party, on the other hand, from
the Initial Placement and the Registration Statement which resulted in such
Losses; provided, however, that in no case shall any Purchaser or any
subsequent Holder of any Security or New Security be responsible, in the
aggregate, for any amount in excess of the purchase discount or commission
applicable to such Security, or in the case of a New Security, applicable to
the Security which was exchangeable into such New Security, as set forth on
the cover page of the Final Memorandum, nor shall any underwriter be
responsible for any amount in excess of the underwriting discount or
commission applicable to the securities purchased by such underwriter under
the Registration Statement which resulted in such Losses. If the allocation
provided by the immediately preceding sentence is unavailable for any reason,
the indemnifying party and the indemnified party shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of such indemnifying party, on the one hand, and such
indemnified party, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company and the Guarantor shall be
deemed to be equal to the sum of (x) the total net proceeds from the Initial
Placement (before deducting expenses) as set forth on the cover page of the
Final Memorandum and (y) the total amount of additional interest which the
Company was not required to pay as a result of registering the securities
covered by the Registration Statement which resulted in such Losses. Benefits
received by the Purchasers shall be deemed to be equal to the total purchase
discounts and commissions as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Securities or New Securities, as applicable,
registered under the Act. Benefits received by any underwriter shall be
deemed to be equal to the total underwriting discounts and commissions, as set
forth on the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. Relative fault shall be determined
by reference to whether any alleged untrue statement or omission relates to
information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand. The parties agree that it would not be
just and equitable if contribution were determined by pro rata allocation or
any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section 6, each person who controls a Holder within the
meaning of either the Act or the Exchange Act and each director, officer,
employee and agent of such Holder shall have the same rights to contribution
as such Holder, and each person who controls the Company or the Guarantor
within the meaning of either the Act or the Exchange Act, each officer of the
Company or the Guarantor who shall have signed the Registration Statement and
each director of the Company or the Guarantor shall have the same rights to
contribution as the Company and the Guarantor, subject in each case to the
applicable terms and conditions of this paragraph (d).
(e) The provisions of this Section 6 will remain in full
force and effect, regardless of any investigation made by or on behalf of any
Holder or the Company or the Guarantor or any of the officers, directors or
controlling persons referred to in this Section 6, and will survive the sale
by a Holder of securities covered by a Registration Statement.
7. Miscellaneous.
(a) No Inconsistent Agreements. Neither the Company nor
the Guarantor has, as of the date hereof, entered into, nor shall
it, on or after the date hereof, enter into, any agreement with
respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the
provisions hereof.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, qualified, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of the
Holders of at least a majority of the then outstanding aggregate
principal amount of Securities (or, after the consummation of any
Exchange Offer in accordance with Section 2 hereof, of New
Securities); provided that, with respect to any matter that
directly or indirectly affects the rights of any Purchaser
hereunder, the Company shall obtain the written consent of each
such Purchaser against which such amendment, qualification,
supplement, waiver or consent is to be effective. Notwithstanding
the foregoing (except the foregoing proviso), a waiver or consent
to departure from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders whose securities
are being sold pursuant to a Registration Statement and that does
not directly or indirectly affect the rights of other Holders may
be given by the Majority Holders, determined on the basis of
securities being sold rather than registered under such
Registration Statement.
(c) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail, telex, telecopier, or air courier
guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given
by such Holder to the Company in accordance with the
provisions of this Section 7(c), which address initially is,
with respect to each Holder, the address of such Holder
maintained by the Registrar under the Indenture, with a copy
in like manner to Salomon Brothers Inc by fax (212-783-2823)
and confirmed by mail to them at Seven World Trade Center,
New York, New York 10048;
(2) if to you, initially at the address set forth in
the Purchase Agreement; and
(3) if to the Company or the Guarantor, initially at
its address set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have
been duly given when received.
The Purchasers, the Company or the Guarantor by notice to
the other may designate additional or different addresses for subsequent
notices or communications.
(d) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of
each of the parties, including, without the need for an express
assignment or any consent by the Company or the Guarantor thereto,
subsequent Holders of Securities and/or New Securities. The
Company hereby agrees to extend the benefits of this Agreement to
any Holder of Securities and/or New Securities and any such Holder
may specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) Counterparts. This agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one
and the same agreement.
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS THEREOF).
(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability
of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all the rights and privileges of
the parties shall be enforceable to the fullest extent permitted
by law.
(i) Securities Held by the Company, etc. Whenever the
consent or approval of Holders of a specified percentage of
principal amount of Securities or New Securities is required
hereunder, Securities or New Securities, as applicable, held by
the Company or its Affiliates (other than subsequent Holders of
Securities or New Securities if such subsequent Holders are deemed
to be Affiliates solely by reason of their holdings of such
Securities or New Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such
required percentage.
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Guarantor and you.
Very truly yours,
THE LTV CORPORATION
By:
---------------------------------
Name:
Title:
LTV STEEL COMPANY, INC.
By:
---------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written
SALOMON BROTHERS INC
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: SALOMON BROTHERS INC
By:
_______________________
Name:
Title:
ANNEX A
Each broker-dealer that receives New Securities for its own account pursuant
to the Registered Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such New Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within
the meaning of the Act. This Prospectus, as it may be amended or supplemented
from time to time, may be used by a broker-dealer in connection with resales
of New Securities received in exchange for Securities where such New
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company and the Guarantor have
agreed that, starting on the date hereof (the "Expiration Date") and ending on
the close of business on the first anniversary of the Expiration Date, it will
make this Prospectus available to any broker-dealer for use in connection with
any such resale. See "Plan of Distribution".
ANNEX B
Each broker-dealer that receives New Securities for its own account in
exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such New Securities. See "Plan of Distribution."
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it
will deliver a prospectus in connection with any resale of such New
Securities. The Prospectus, as it may be amended or supplemented from time
to time, may be used by a broker-dealer in connection with resales of New
Securities received in exchange for Securities where such Securities were
acquired as a result of market-making activities or other trading activities.
Each of the Company and the Guarantor has agreed that, starting on the
Expiration Date and ending on the close of business on the first anniversary
following the Expiration Date, it will make this Prospectus, as amended or
supplemented, available to any broker-dealer for use in connection with any
such resale.
Neither the Company nor the Guarantor will receive any proceeds
from any sale of New Securities by broker-dealers. New Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market,
in negotiated transactions, through the writing of options on the New
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer and/or the
purchasers of any such New Securities. Any broker-dealer that resells New
Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such New Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit of any such resale of
New Securities and any commissions or concessions received by any such persons
may be deemed to be underwriting compensation under the Act. The Letter of
Transmittal states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Act.
For a period of one year after the Expiration Date, the Company
will promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company and the Guarantor have jointly and
severally agreed to pay all expenses incident to the Exchange Offer (including
the expenses of one counsel for the holders of the Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Act.
[If applicable, add information required by Regulation S-K Items
507 and/or 508.]
ANNEX D
Rider A
CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:______________________________________________________
Address:___________________________________________________
Rider B
If the undersigned is not a broker-dealer, the undersigned represents that it
is not engaged in, and does not intend to engage in, a distribution of New
Securities. If the undersigned is a broker-dealer that will receive New
Securities for its own account in exchange for Securities that were acquired
as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale
of such New Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Act.
Exhibit 5.1
______________, 1997
The LTV Corporation
200 Public Square
Cleveland, Ohio 44114
Ladies and Gentlemen::
We have acted as special counsel to The LTV Corporation, a
Delaware corporation (the "Company"), in connection with the preparation of
a Registration Statement on Form S-4 (the "Registration Statement") filed
with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Securities Act"), relating to the proposed exchange
of up to $300,000,000 aggregate principal amount of 8.20% Senior Exchange
Notes Due 2007 of the Company (the "New Notes") for a like principal amount
of the Company's issued and outstanding 8.20% Senior Notes Due 2007 (the
"Old Notes"). Capitalized terms used herein have the meanings set forth in
the Registration Statement, unless otherwise defined herein.
We have examined the originals, or certified, conformed or
reproduction copies, of all such records, agreements, instruments and
documents as we have deemed relevant or necessary as the basis for the
opinions hereinafter expressed. In all such examinations, we have relied
upon the genuineness of all signatures, the authenticity of all original or
certified copies and the conformity to original or certified copies of all
copies submitted to us as conformed or reproduction copies. We also have
assumed, with respect to all parties to agreements or instruments relevant
hereto other than the Company, that such parties had the requisite power
and authority (corporate or otherwise) to execute, deliver and perform such
agreements or instruments, that such agreements or instruments have been
duly authorized by all requisite action (corporate or otherwise), executed
and delivered by such parties and that such agreements or instruments are
the valid, binding and enforceable obligations of such parties. As to
various questions of fact relevant to such opinions, we have relied upon,
and have assumed the accuracy of, certificates and oral or written
statements and other information of or from public officials, officers or
representatives of the Company and others.
Based upon the foregoing and subject to the other
limitations, qualifications and assumptions set forth herein, we are of the
opinion that, when the Registration Statement has become effective under
the Securities Act, the New Notes have been duly authorized and executed by
the Company and duly authenticated by the Trustee in accordance with the
terms of the Indenture and delivered in exchange for the Old Notes in
accordance with the terms of the Indenture, the New Notes will constitute
valid and binding obligations of the Company, enforceable in accordance
with their terms and entitled to the benefits of the Indenture, subject to
(i) bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium
or other laws now or hereafter in effect affecting creditors' rights
generally, and (ii) general principles of equity (including, without
limitation, standards of materiality, good faith, fair dealing and
reasonableness) whether considered in a proceeding in equity or at law.
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the
federal laws of the United States of America and the General Corporation
Law of the State of Delaware.
We hereby consent to the filing of this opinion as an
Exhibit to the Registration Statement and to the reference to this firm
under the caption "Legal Matters" in the Prospectus that is included in the
Registration Statement. In giving these consents, we do not hereby admit
that we are in the category of persons whose consent is required under
Section 7 of the Securities Act.
The opinions expressed herein are solely for your benefit
and may not be relied upon for any purpose except as specifically provided
for herein, or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent.
Very truly yours,
DAVIS POLK & WARDWELL
Exhibit 12.1
<TABLE>
<CAPTION>
Statement Re: Computation of Earnings to Fixed Charges
(dollars in millions)
Nine Months
Ended Years Ended
September 30, December 31,
------------------ ----------------------------------------------
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
Earnings
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(A)
Pretax Income from continuing operations $3.8 $116.5 $172.7 $310.8 $202.7 $(43.8) $(143.3)
Earnings of unconsolidated subsidiaries (10.7) (8.2) (10.8) (12.1) (4.6) (7.9) (14.3)
Add:
Fixed Charges 52.8 46.3 61.1 62.1 65.6 64.7 62.0
Capitalized interest adjustment (13.1) (7.8) (15.0) (7.6) (7.7) (12.0) (13.9)
Minority interest 2.3 5.3 8.1 7.6 9.6 8.5 5.3
----- ------ ------ ------ ------ ---- -------
Adjusted Earnings $35.1 $152.1 $216.1 $360.8 $265.6 $9.5 $(104.2)
===== ====== ====== ====== ====== ==== =======
(B) Fixed Charges
Interest expense $13.1 $12.5 $16.7 $18.8 $22.1 $21.0 $17.1
Unconsolidated subsidiary interest expense 4.5 0.6 -- -- -- -- --
Interest portion of rent expense 17.3 15.3 20.6 19.5 19.7 19.9 21.1
Majority owned subsidiary fixed charges 17.9 17.9 23.8 23.8 23.8 23.8 21.1
----- ------ ------ ------ ------ ---- -------
Fixed Charges $52.8 $46.3 $61.1 $62.1 $65.6 $64.7 $62.0
===== ====== ====== ====== ====== ==== =======
(A)/(B) Ratio of Earnings to Fixed Charges 0.7 3.3 3.5 5.8 4.1 0.1 --
===== ====== ====== ====== ====== ==== =======
Note: Earnings were insufficient to cover fixed charges for the period ended December 31, 1992 by $168.
</TABLE>
Exhibit 21.1
LIST OF SUBSIDIARIES
--------------------
(As of November 1, 1997)
Name of Company Percentage Owned
- --------------- ----------------
THE LTV CORPORATION Parent
Georgia Tubing Corporation 100%
Vought Arabia 49%
Investment Bankers, Inc. 100%
Inmobiliaria Nueva Icacos, S.A. de C.V. 100%
Jalcite I, Inc. 100%
Black River Lime Company 25%
Cliffs and Associates Minted 46.5%
Jones & Laughlin Steel Incorporated 100%
Kingsley International Insurance Ltd. 100%
LTV Blanking Corporation 100%
TWB Company, L.L.C. 11.1%
LTV Corporation, The (Wyoming) 100%
LTV/EGL Holding Company 100%
L-S Electro-Galvinizing Company 60%
LTV Electro-Galvinizing, Inc. 100%
LTV International, Inc. (f/k/a LTV Holdings, Inc.) 100%
Reomar, Inc. 100%
Chateaugay Corporation 100%
Republic Buildings Corporation 100%
LTV International N.V. 100%
LTV Properties, Inc. 100%
LTV Sales Finance Company 100%
LTV Steel Company, Inc. 100%
Aliquippa and Southern Railroad Company 100%
Cayman Mineracao do Brazil Lula 97.5%
Chicago Short Line Railway Company 100%
Crystalane, Inc. 100%
Cuyahoga Valley Railway Company, The 100%
Mahoning Valley Railway Company, The 100%
Dearborn Leasing Company 100%
Erie B Corporation 100%
LTV Steel Mining Company 45%
Erie I Corporation 100%
LTV Steel Mining Company 10%
Fox Trail, Inc. 100%
Cayman Mineracao do Brasil Ltda. 2.5%
J&L Empire, Inc. 100%
Empire Iron Mining Partnership 25%
Marquette Range Coal Service Company 48.5%
Jalcite II, Inc. 100%
Black River Lime Company 12.5%
Jalore Mining Company, Ltd. 100%
L.A.S. Resources, Inc. 53%
LTV Pickle, Inc. 100%
Monongahela Connecting Railroad Company, The 100%
Nemacolin Mines Corporation 100%
Northern Land Company 50%
O'Hare Group, Inc., The 10%
Olga Coal Company 53%
Presque Isle Corporation 53.5%
Processing Technology, Inc. 47.6%
Republic Technology Corporation 100%
Reserve Mining Company 50%
River Terminal Railway Company, The 100%
Youngstown Erie Corporation 100%
LTV Steel Mining Company 45%
YST Erie Corporation 100%
LTV Steel de Mexico, Ltd. 100%
Lagermex S.A. de C.V. 25%
LTV Steel Tubular Products Company 100%
LTV-Trico, Inc. 100%
Trico Steel Company, L.L.C. 50%
RepSteel Overseas Finance, N.V. l00%
Trico Steel Company, Inc. 100%
VP Buildings, Inc. (f/k/a VP Acquisition Company 100%
Varco-Pruden Exports, Ltd. 100%
Varco Pruden International, Inc.
(f/k/a Buildings International Company) 100%
VP Buildings - Wisconsin, Inc. 100%
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (form S-4) and related Prospectus of The LTV
Corporation for the registration of $300,000,000 of 8.20% Senior Exchange Notes
and to the incorporation by reference and inclusion therein of our report dated
January 23, 1997, with respect to the consolidated financial statements of
The LTV Corporation included herein and in its Annual Report (Form 10-K)
for the year ended December 31, 1996, filed with the Securities and
Exchange Commission.
Cleveland, Ohio /s/ Ernst & Young LLP
November 14, 1997
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 CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
13-4994650
270 Park Avenue
New York, New York
10017
(Zip Code)
(Address of principal executive offices)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
_____________________________________________
THE LTV CORPORATION
LTV STEEL COMPANY, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-3784318
New Jersey 34-0486510
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
200 Public Square
Cleveland, Ohio 44114 44114
(Address of principal executive offices) (Zip Code)
----------
8.20% Senior Exchange Notes due 2007
(Title of the indenture securities)
______________________________________________________________________________
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
New York State Banking Department, State House, Albany, New York 12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New
York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the
Certificates of Amendment dated February 17, 1969, August 31,
1977, December 31, 1980, September 9, 1982, February 28, 1985,
December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to
Commence Business (see Exhibit 2 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is
incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving
corporation, was renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4
to Form T-1 filed in connection with Registration Statement No.
333-06249, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the
Act (see Exhibit 6 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by
reference. On July 14, 1996, in connection with the merger of
Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was
renamed The Chase Manhattan Bank).
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.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
The Chase Manhattan Bank, 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 3rd day of November 1997.
THE CHASE MANHATTAN BANK
By /s/ James P. Freeman
----------------------------------
James P. Freeman
Assistant Vice President
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 1997, 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 Millions
------ --------------
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin ...................................... $ 13,892
Interest-bearing balances .............................. 4,282
Securities:
Held to maturity securities................................... 2,857
Available for sale securities................................. 34,091
Federal Funds sold and securities purchased under agreements
to resell .............................................. 29,970
Loans and lease financing receivables:
Loans and leases, net of unearned income ............... $124,827
Less: Allowance for loan and lease losses............... 2,753
Less: Allocated transfer risk reserve .................. 13
--------
Loans and leases, net of unearned income,
allowance, and reserve ................................. 122,061
Trading Assets ............................................... 56,042
Premises and fixed assets (including capitalized leases)...... 2,904
Other real estate owned ...................................... 306
Investments in unconsolidated subsidiaries and associated
companies............................................... 232
Customers' liability to this bank on acceptances outstanding.. 2,092
Intangible assets ............................................ 1,532
Other assets ................................................. 10,448
--------
TOTAL ASSETS ................................................. $280,709
========
LIABILITIES
Deposits
In domestic offices....................................... $91,249
Noninterest-bearing ...................................... $38,157
Interest-bearing ......................................... 53,092
--------
In foreign offices, Edge and Agreement subsidiaries,
and IBF's............................................... 70,192
Noninterest-bearing....................................... 3,712
Interest-bearing.......................................... 66,480
Federal funds purchased and securities sold under agreement
to repurchase ................................................ 35,185
Demand notes issued to the U.S. Treasury ....................... 1,000
Trading liabilities............................................. 42,307
Other Borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ............ 4,593
With a remaining maturity of more than one year through
three years............................................. 260
With a remaining maturity of more than three years........ 146
Bank's liability on acceptances executed and outstanding........ 2,092
Subordinated notes and debentures .............................. 5,715
Other liabilities .............................................. 11,373
--------
TOTAL LIABILITIES .............................................. 264,112
--------
EQUITY CAPITAL
Perpetual Preferred stock and related surplus................... 0
Common stock ................................................... 1,211
Surplus (exclude all surplus related to preferred stock)....... 10,283
Undivided profits and capital reserves ......................... 5,280
Net unrealized holding gains (Losses) on available-for-sale
securities ................................................... (193)
Cumulative foreign currency translation adjustments ............ 16
TOTAL EQUITY CAPITAL ........................................... 16,597
________
TOTAL LIABILITIES AND EQUITY CAPITAL ........................... $280,709
========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do
hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the appropriate Federal
regulatory authority and is true to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
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 in-
structions issued by the appropriate Federal regulatory authority and is
true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
Exhibit 99.1
LETTER OF TRANSMITTAL
Offer to Exchange
8.20% Senior Notes Due 2007
(Registered Under The Securities Act of 1933)
For Any and All of Its Outstanding
8.20% Senior Notes Due 2007
of
THE LTV CORPORATION
Unconditionally Guaranteed By
LTV STEEL COMPANY, INC.
Pursuant to the Prospectus
Dated [_________], 1997
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON [_________], 1997, UNLESS THE OFFER IS EXTENDED.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE CHASE MANHATTAN BANK
<TABLE>
<CAPTION>
<S> <C>
By Registered or Certified Mail: By Overnight Delivery or Hand:
The Chase Manhattan Bank The Chase Manhattan Bank
55 Water Street 55 Water Street
Room 234, North Building Room 234, North Building
New York, New York 10041 New York, New York 10041
Attn: Carlos Esteves Attn: Carlos Esteves
To Confirm by Telephone
or for Information: Facsimile Transmissions:
(212) 638-0828 (212) 638-7375 or (212) 344-9367
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN
AS SET FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE
TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS
CAREFULLY BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS CONTAINED HEREIN MUST BE FOLLOWED. QUESTIONS
AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS AND
THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE AGENT.
The undersigned acknowledges receipt of the Prospectus dated
___________, 1997 (the "Prospectus") of The LTV Corporation (the "Company")
which, together with this Letter of Transmittal (the "Letter of
Transmittal") describes the Company's offer (the "Exchange Offer") to
exchange $1,000 in principal amount of 8.20% Senior Notes due 2007 (the
"New Notes") for each $1,000 in principal amount of outstanding 8.20%
Senior Notes due 2007 (the "Old Notes"). The terms of the New Notes are
identical in all material respects (including principal amount, interest
rate and maturity) to the terms of the Old Notes for which they may be
exchanged pursuant to the Exchange Offer, except that the offering of the
New Notes will have been registered under the Securities Act of 1933, as
amended and, therefore, the New Notes will not bear legends restricting the
transfer thereof.
This Letter of Transmittal is to be completed by holders of
Old Notes (as defined below) either if Old Notes are to be forwarded
herewith or if tenders of Old Notes are to be made by book-entry transfer
to an account maintained by The Chase Manhattan Bank (the "Exchange Agent")
at The Depository Trust Company ("DTC") pursuant to the procedures set
forth in "The Exchange Offer--Book-Entry Transfer" in the Prospectus,
unless tenders are being made in accordance with the Automated Tender Offer
Program ("ATOP") established by DTC, in which case a tendering holder will
become bound by the terms and conditions hereof in accordance with the
procedures established under ATOP.
Holders of Old Notes whose certificates (the "Certificates")
for such Old Notes are not immediately available or who cannot deliver
their Certificates and all other required documents to the Exchange Agent
on or prior to the Expiration Date (as defined in the Prospectus) or who
cannot complete the procedures for book-entry transfer on a timely basis,
must tender their Old Notes according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Guaranteed Delivery Procedures" in the
Prospectus. SEE INSTRUCTION 1. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE
WITH ITS PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
<CAPTION>
DESCRIPTION OF OLD NOTES TENDERED
Name(s) and address(es) of Registered Holder(s) Old Notes Tendered
(Please fill in, if blank) (attach additional list if necessary)
<S> <C> <C> <C>
Principal Amount of
Certificate Principal Amount Old Notes Tendered
Number(s)* of Old Notes* (if less than all)**
Total Amount
Tendered
</TABLE>
[FN]
* Need not be completed by book-entry holders.
** Old Notes may be tendered in whole or in part in denominations of $1,000
and integral multiples thereof. All Old Notes held shall be deemed
tendered unless a lesser number is specified in this column.
</FN>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
<TABLE>
<S> <C>
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution
-----------------------------------------
DTC Account Number
----------------------------------------------------
Transaction Code Number
-----------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF
TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s)
------------------------------------------
Window Ticket Number (if any)
-----------------------------------------
Date of Execution of Notice of Guaranteed Delivery
--------------------
Name of Institution which Guaranteed
----------------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution
-----------------------------------------
DTC Account Number
----------------------------------------------------
Transaction Code Number
-----------------------------------------------
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES
ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR
ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING
ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE
10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY
AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
-----------------------------------------------------------------
Address:
--------------------------------------------------------------
</TABLE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange
Offer, the undersigned hereby tenders to the Company the above described
principal amount of Old Notes. Subject to, and effective upon, the
acceptance for exchange of the Old Notes tendered herewith, the undersigned
hereby exchanges, assigns and transfers to, or upon the order of, the
Company all right, title and interest in and to such Old Notes. The
undersigned hereby irrevocably constitutes and appoints the Exchange Agent
as the true and lawful agent and attorney-in-fact of the undersigned (with
full knowledge that the Exchange Agent is also acting as agent of the
Company in connection with the Exchange Offer) to cause the Old Notes to be
assigned, transferred and exchanged. The undersigned represents and
warrants that it has full authority to tender, exchange, assign and
transfer the Old Notes and acquire New Notes issuable upon the exchange of
such tendered Old Notes, and that, when the same are accepted for exchange
the undersigned will acquire good and unencumbered title to the tendered
Old Notes, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim. The undersigned also
warrants that it will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the exchange, assignment and transfer of tendered Old
Notes or transfer ownership of such Old Notes on the account books
maintained by The Depository Trust Company.
The Exchange Offer is subject to certain conditions as set
forth in the Prospectus under the caption "The Exchange Offer." The
undersigned recognizes that as a result of these conditions (which may be
waived, in whole or in part, by the Company), as more particularly set
forth in the Prospectus, the Company may not be required to exchange any of
the Old Notes tendered hereby and, in such event, the Old Notes not
exchanged will be returned to the undersigned at the address shown below
the signature of the undersigned.
BY TENDERING OLD NOTES AND EXECUTING, OR OTHERWISE BECOMING
BOUND BY, THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND
AGREES THAT (I) THE NEW NOTES ACQUIRED PURSUANT TO THE EXCHANGE OFFER ARE
BEING ACQUIRED IN THE ORDINARY COURSE OF BUSINESS OF THE PERSON RECEIVING
SUCH NEW NOTES, WHETHER OR NOT SUCH PERSON IS THE HOLDER, (II) NEITHER THE
HOLDER NOR ANY SUCH OTHER PERSON HAS AN ARRANGEMENT OR UNDERSTANDING WITH
ANY PERSON TO PARTICIPATE IN THE DISTRIBUTION OF SUCH NEW NOTES, (III) IF
THE HOLDER IS NOT A BROKER-DEALER, OR IS A BROKER-DEALER BUT WILL NOT
RECEIVE NEW NOTES FOR ITS OWN ACCOUNT IN EXCHANGE FOR OLD NOTES, NEITHER
THE HOLDER NOR ANY SUCH OTHER PERSON IS ENGAGED IN OR INTENDS TO
PARTICIPATE IN THE DISTRIBUTION OF SUCH NEW NOTES AND (IV) NEITHER THE
HOLDER NOR ANY SUCH OTHER PERSON IS AN "AFFILIATE" OF THE UNDERSIGNED
WITHIN THE MEANING OF RULE 405 OF THE SECURITIES ACT. BY TENDERING OLD
NOTES PURSUANT TO THE EXCHANGE OFFER AND EXECUTING, OR OTHERWISE BECOMING
BOUND BY, THIS LETTER OF TRANSMITTAL, A HOLDER OF OLD NOTES WHICH IS A
BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE
LETTERS ISSUED BY THE STAFF OF THE DIVISION OF CORPORATION FINANCE OF THE
SECURITIES AND EXCHANGE COMMISSION TO THIRD PARTIES, THAT (A) SUCH OLD
NOTES HELD BY THE BROKER-DEALER ARE HELD ONLY AS A NOMINEE, OR (B) SUCH
OLD NOTES WERE ACQUIRED BY SUCH BROKER-DEALER FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES AND IT WILL
DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM TIME TO TIME)
MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION WITH ANY
RESALE OF SUCH NEW NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY
DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT
THAT IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
All authority herein conferred or agreed to be conferred in
this Letter of Transmittal shall survive the death, bankruptcy or
incapacity of the undersigned and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators,
personal representatives, trustees in bankruptcy, legal representatives
successors and assigns of the undersigned. Tendered Old Notes may be
withdrawn at any time prior to the Expiration Date.
Certificates for all New Notes delivered in exchange for
tendered Old Notes and any Old Notes delivered herewith but not exchanged,
in each case registered in the name of the undersigned, shall be delivered
to the undersigned at the address shown below the signature of the
undersigned.
<TABLE>
<CAPTION>
<S> <C>
HOLDER(S) SIGN HERE
(Note: Signature(s) Must be Guaranteed if Required by Instruction 3)
Must be signed by registered holder(s) exactly as name(s) appear(s) on Certificate(s) for Old
Notes hereby tendered or by any person(s) authorized to become the registered holder(s) by
endorsements and documents transmitted herewith or, if the Old Notes are held of record by DTC, the
person in whose name such Old Notes are registered on the books of DTC. If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another
acting in a fiduciary or representative capacity, please set forth the signer's full title.
See Instruction 3.
- ---------------------------------------------------------------------------------------------------
(Signature(s) of Holder(s))
Date , 1997
----------------------------------------------------------------------------------------
Name(s)--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
(Please Print)
Capacity:
------------------------------------------------------------------------------------------
(Include Full Title)
Address
--------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
---------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
GUARANTEE OF SIGNATURE(S)
(If Required -- See Instructions 3)
Authorized Signature
-------------------------------------------------------------------------------
Name
-----------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
(Please Print)
Date , 1997
-----------------------------------------------------------------------------------------
Capacity or Title
----------------------------------------------------------------------------------
Name of Firm
---------------------------------------------------------------------------------------
Address
--------------------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
---------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6) (See Instructions 1, 5 and 6)
To be completed ONLY if the New Notes are to To be completed ONLY if New Notes are to be
be issued in the name of someone other than the sent to someone other than the registered holder of
registered holder of the Old Notes whose name(s) the Old Notes whose name(s) appear(s) above, or to
appear(s) above. such registered holder(s) at an address other than
that shown above.
Issue New Notes to: Mail New Notes To:
Name Name
--------------------------------------------- ---------------------------------------------
(Please Print) (Please Print)
- ------------------------------------------------- ---------------------------------------------
Address Address
------------------------------------------ -------------------------------------------
- ------------------------------------------------- ---------------------------------------------
- ------------------------------------------------- ---------------------------------------------
(Include Zip Code) (Include Zip Code)
- ------------------------------------------------- ---------------------------------------------
(Taxpayer Identification or (Taxpayer Identification or
Social Security Number) Social Security Number)
</TABLE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES.
Certificates for all physically delivered Old Notes or confirmation of any
book-entry transfer to the Exchange Agent's account at DTC of Old Notes
tendered by book-entry transfer, as well as this Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message in lieu thereof and any other
documents required by this Letter of Transmittal, must be received by the
Exchange Agent at one of its addresses set forth herein on or prior to the
Expiration Date.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE
OLD NOTES AND ANY OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF
THE TENDERING HOLDER AND, EXCEPT AS OTHERWISE PROVIDED BELOW, THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF
SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED.
Holders whose Old Notes are not immediately available or who
cannot deliver their Old Notes and all other required documents to the
Exchange Agent on or prior to the Expiration Date or comply with the
procedures for delivery by book-entry transfer on a timely basis may tender
their Old Notes by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set
forth in "The Exchange Offer--Guaranteed Delivery Procedures" in the
Prospectus. Pursuant to such procedures: (i) such tender must be made by
or through an Eligible Institution (as defined therein); (ii) on or prior
to the Expiration Date the Exchange Agent must have received from such
Eligible Institution a letter, telegram or facsimile transmission setting
forth the name and address of the tendering holder, the names in which such
Old Notes are registered, and, if possible, the certificate numbers of the
Old Notes to be tendered; and (iii) all tendered Old Notes (or a
confirmation of any book-entry transfer of such Old Notes into the Exchange
Agent's account at the DTC) as well as this Letter of Transmittal or an
Agent's Message in lieu thereof and all other documents required by this
Letter of Transmittal, must be received by the Exchange Agent within five
New York Stock Exchange trading days after the date of execution of such
Notice of Guaranteed Delivery, all as provided in "The Exchange Offer--
Guaranteed Delivery Procedures" in the Prospectus.
No alternative, conditional, irregular or contingent tenders
will be accepted. All tendering holders, by execution of a Letter of
Transmittal (or facsimile thereof), or any Agent's Message in lieu thereof,
shall waive any right to receive any notice of the acceptance of the Old
Notes or exchange.
2. PARTIAL TENDERS AND WITHDRAWALS. Tenders of Old Notes
will be accepted in all denominations of $1,000 and integral multiples
thereof. If less than all the Old Notes evidenced by any Certificate
submitted are to be tendered, fill in the principal amount of Old Notes
which are to be tendered in the box entitled "Principal Amount of Old Notes
Tendered (if less than all)." In such case, new Certificate(s) for the
remainder of the Old Notes that were evidenced by your old Certificate(s)
will be sent to the holder of the Old Note, promptly after the Expiration
Date. All Old Notes represented by Certificates delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated.
Tenders of Old Notes pursuant to the Exchange Offer are
irrevocable, except that Old Notes tendered pursuant to the Exchange Offer
may be withdrawn at any time on or prior to the Expiration Date. In order
for a withdrawal to be effective on or prior to that time, a written notice
of withdrawal must be timely received by the Exchange Agent at one of its
addresses set forth above or in the Prospectus on or prior to the
Expiration Date. Any such notice of withdrawal must specify the name of
the person who tendered the Old Notes to be withdrawn, identify the Old
Notes to be withdrawn (including the principal amount of such Old Notes)
and (where Certificates for Old Notes have been transmitted) specify the
name in which such Old Notes are registered, if different from that of the
withdrawing holder, a statement that such holder is withdrawing its
election to have such Old Notes exchanged, and must be signed by the holder
in the same manner as the original signature on the Letter of Transmittal
(including any required signature guarantees) or be accompanied by evidence
satisfactory to the Company that the person withdrawing the tender has
succeeded to the beneficial ownership of the Old Notes being withdrawn.
The Exchange Agent will return the properly withdrawn Old Notes promptly
following receipt of notice of withdrawal. If Old Notes have been tendered
pursuant to the procedures for book-entry transfer set forth in the
Prospectus, any notice of withdrawal must specify the name and number of
the account at DTC to be credited with the withdrawal of Old Notes or
otherwise comply with DTC's procedures.
3. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered
holder(s) of the Old Notes tendered hereby, the signature(s) must
correspond exactly with the name(s) as written on the face of the
Certificate(s) without alteration, enlargement or any change whatsoever.
If any of the Old Notes tendered hereby are owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal.
If a number of Old Notes registered in different names are
tendered, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations
of Old Notes.
When this Letter of Transmittal is signed by the registered
holder(s) of the Old Notes listed and transmitted hereby, no endorsement(s)
of Certificate(s) or written instrument or instruments of transfer or
exchange are required unless New Notes are to be issued in the name of a
person other than the registered holder(s). Signature(s) on such
Certificate(s) or written instrument or instruments of transfer or exchange
must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other
than the registered holder(s) of the Old Notes listed, the Certificates
must be endorsed or accompanied by a written instrument or instruments of
transfer or exchange, in a form satisfactory to the Company and duly
executed by the registered holder, in either case signed exactly as the
name or names of the registered holder(s) appear(s) on the Certificates.
If this Letter of Transmittal, any Certificates or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary
or representative capacity, such persons should so indicate when signing
and, unless waived by the Company, proper evidence satisfactory to the
Company of such persons' authority to so act must be submitted.
Endorsements on Certificates or signatures on separate
written instruments of transfer or exchange required by this Instruction 3
must be guaranteed by an Eligible Institution.
Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed unless the Old Notes
surrendered for exchange pursuant thereto are tendered (i) by a registered
holder of the Old Notes who has not completed the box entitled "Special
Issuance Instructions" or "Special Delivery Instructions" on the Letter of
Transmittal or (ii) for the account of an Eligible Institution (as defined
below). In the event that signatures on a Letter of Transmittal or a
notice of withdrawal, as the case may be, are required to be guaranteed,
such guarantees must be by a firm which is a member of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc. or by a commercial bank or trust company having an
office or correspondent in the United States (collectively, "Eligible
Institutions"). If Old Notes are registered in the name of a person other
than the person signing the Letter of Transmittal, the Old Notes
surrendered for exchange must be endorsed by, or be accompanied by a
written instrument or instruments of transfer or exchange, in satisfactory
form as determined by the Company in its sole discretion, duly executed by
the registered holder with the signature thereon guaranteed by an Eligible
Institution.
4. TRANSFER TAXES. The Company shall pay all transfer
taxes, if any, applicable to the transfer and exchange of Old Notes to it
or its order pursuant to the Exchange Offer. If, however, New Notes are to
be delivered to, or are to be registered or issued in the name of, any
person other than the registered holder of the Old Notes tendered hereby,
the amount of any such transfer taxes (whether imposed on the registered
holder or any other person) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exception therefrom is
not submitted herewith the amount of such transfer taxes will be billed
directly to such tendering holder.
Except as provided in this Instruction 4, it will not be
necessary for transfer tax stamps to be affixed to the Old Notes listed in
this Letter of Transmittal.
5. WAIVER OF CONDITIONS. The Company reserves the absolute
right to waive, in whole or in part, any of the conditions to the Exchange
Offer set forth in the Prospectus.
6. MUTILATED, LOST, DESTROYED OR STOLEN CERTIFICATES. Any
holder whose Old Notes have been mutilated, lost, destroyed or stolen
should contact the Exchange Agent at the address indicated below for
further instructions.
7. REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
relating to the procedure for tendering, as well as requests for additional
copies of the Prospectus and this Letter of Transmittal may be directed to
the Exchange Agent at the address and telephone number set forth below. In
addition, all questions relating to the Exchange Offer, as well as requests
for assistance and additional copies of the Prospectus and this Letter of
Transmittal, may be directed to the Company at 200 Public Square,
Cleveland, Ohio 44114. Attention: Glenn J. Moran, (216) 622-5000.
8. IRREGULARITIES. All questions as to the form, validity,
eligibility (including time of receipt) and acceptance of Letters of
Transmittal or Old Notes will be resolved by the Company, whose
determination shall be final and binding. The Company reserves the
absolute right to reject any and all Letters of Transmittal or tenders that
are not in proper form or the acceptance of which would, in the judgment of
the Company or its counsel, be unlawful. The Company also reserves the
right to waive any defects or irregularities or conditions of the Exchange
Offer as to any particular Old Notes covered by any Letter of Transmittal
or tendered pursuant to such letter. None of the Company, the Exchange
Agent or any other person shall be under any duty to give notification of
any defect or irregularity with respect to any tender of Old Notes for
exchange, nor shall any of them incur any liability for failure to give
such notification. The Company's interpretation of the terms and
conditions of the Exchange Offer shall be final and binding.
9. DEFINITIONS. Capitalized terms used in this Letter of
Transmittal and not otherwise defined have the meanings given in the
Prospectus.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF),
OR AN AGENT'S MESSAGE IN LIEU THEREOF, AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT
ON OR PRIOR TO THE EXPIRATION DATE.
Exhibit 99.2
NOTICE OF GUARANTEED DELIVERY
Offer to Exchange
8.20% Senior Notes Due 2007
(Registered Under The Securities Act of 1933)
For Any and All of Its Outstanding
8.20% Senior Notes Due 2007
of
THE LTV CORPORATION
Unconditionally Guaranteed By
LTV STEEL COMPANY, INC.
This Notice of Guaranteed Delivery or one substantially equivalent
hereto may be used to accept the Exchange Offer (as defined below) if (i)
certificates for the 8.20% Senior Notes due 2007 (the "Old Notes") of The
LTV Corporation, a Delaware corporation (the "Company"), are not
immediately available, (ii) time will not permit the holder's Old Notes or
other required documents to reach The Chase Manhattan Bank (the "Exchange
Agent") before the Expiration Date (as defined in the Prospectus referred
to below) or (iii) the procedures for book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery may be
delivered by hand or sent by facsimile transmission, overnight courier,
telex, telegram or mail to the Exchange Agent. See "The Exchange Offer--
Guaranteed Delivery Procedures" in the Prospectus dated _________, 1997
(which, together with the related Letter of Transmittal, constitutes the
"Exchange Offer") of the Company.
The Exchange Agent for the Exchange Offer is:
THE CHASE MANHATTAN BANK
<TABLE>
<S> <C> <C>
By Hand or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
(Eligible Institutions Only)
The Chase Manhattan Bank (212) 638-7375 or The Chase Manhattan Bank
55 Water Street (212) 344-9367 55 Water Street
Room 234, North Building Room 234, North Building
New York, New York 10041 New York, New York 10041
Attention: Carlos Esteves To Confirm by Telephone Attention: Carlos Esteves
or for Information Call:
(212) 638-0828
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED
DELIVERY VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO,
SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED ON
THE LETTER OF TRANSMITTAL.
THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE OF DELIVERY
(Not to be used for Signature Guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States, hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the
certificates for all physically tendered Old Notes, in proper form for
transfer, or confirmation of the book-entry transfer of such Old Notes to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly executed Letter(s)
of Transmittal (or facsimile thereof) or an Agent's Message in lieu thereof
and any other documents required by such Letter of Transmittal, within 5 New
York Stock Exchange trading days after the date of execution of this Notice of
Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Letter(s) of
Transmittal or an Agent's Message in lieu thereof and the Old Notes tendered
hereby to the Exchange Agent within the time period set forth above and that
failure to do so could result in a financial loss to the undersigned.
Name of Firm:
----------------------- ----------------------------------
(Authorized Signature)
Address: Title:
---------------------------- ----------------------------
- ------------------------------------ Name: ----------------------------
(Zip Code) (Please type or print)
Area Code and Telephone Number:
Date:
- ------------------------------------ ----------------------------
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY.
ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED
BY, A PROPERLY COMPLETED AND FULLY EXECUTED LETTER OF TRANSMITTAL OR AN
AGENT'S MESSAGE IN LIEU THEREOF AND ANY OTHER REQUIRED DOCUMENTS.
Exhibit 99.3
INSTRUCTION TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM OWNER
OF
THE LTV CORPORATION
8.20% Senior Notes due 2007
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus dated
, 1997 (the "Prospectus") of The LTV Corporation, a Delaware
corporation (the "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer"). Capitalized terms used but not defined herein have the
meaning as ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to the action to be taken by you relating to the
Exchange Offer with respect to the Old Notes held by you for the account of the
undersigned.
The aggregate face amount of the Old Notes held by you for the account of
the undersigned is (fill in amount):
$___________ of the 8.20% Senior Notes due 2007.
With respect to the Exchange Offer, the undersigned hereby instructs you
(check appropriate box):
[ ] To TENDER the following Old Notes held by you for the account
of the undersigned (insert principal amount of Old Notes to be
tendered, if any):
$___________ of the 8.20% Senior Notes due 2007.
[ ] NOT to TENDER any Old Notes held by you for the account of the
undersigned.
If the undersigned instructs you to tender the Old Notes held by you
for the account of the undersigned, it is understood that you are
authorized to make, on behalf of the undersigned (and the undersigned, by
its signature below, hereby makes to you), the representations and
warranties contained in the Letter of Transmittal that are to be made with
respect to the undersigned as a beneficial owner, including but not limited
to the representations, that (i) the New Notes acquired pursuant to the
Exchange Offer are being acquired in the ordinary course of business of the
undersigned, (ii) neither the undersigned nor any such other person has an
arrangement or understanding with any person to participate in the
distribution of such New Notes, (iii) if the undersigned is not a broker-
dealer, or is a broker-dealer but will not receive New Notes for its own
account in exchange for Old Notes, neither the undersigned nor any such
other person is engaged in or intends to participate in the distribution of
such New Notes and (iv) neither the undersigned nor any such other person
is an "affiliate" of the Company within the meaning of Rule 405 of the
Securities Act of 1933, as amended (the "Securities Act"). If the
undersigned is a broker-dealer that will receive New Notes for its own
account in exchange for Old Notes, it represents that such Old Notes were
acquired as a result of market-making activities or other trading
activities, and it acknowledges that it will deliver a prospectus meeting
the requirements of the Securities Act in connection with any resale of
such New Notes. By acknowledging that it will deliver and by delivering a
prospectus meeting the requirements of the Securities Act in connection
with any resale of such New Notes, such broker-dealer is not deemed to
admit that it is an "underwriter" within the meaning of the Securities Act
of 1933, as amended.
SIGN HERE
Name of beneficial owner(s):
----------------------------------------------
Signature(s):
-------------------------------------------------------------
Name(s) (please print):
---------------------------------------------------
Address:
------------------------------------------------------------------
- --------------------------------------------------------------------------
Telephone Number:
---------------------------------------------------------
Taxpayer Identification or Social Security Number:
------------------------
- --------------------------------------------------------------------------
Date:
---------------------------------------------------------------------
Exhibit 99.4
Offer to Exchange
8.20% Senior Notes Due 2007
(Registered Under The Securities Act of 1933)
For Any and All of Its Outstanding
8.20% Senior Notes Due 2007
of
THE LTV CORPORATION
Unconditionally Guaranteed By
LTV STEEL COMPANY, INC.
To Our Clients:
We are enclosing herewith a Prospectus, dated _________ __,
1997, of The LTV Corporation, a Delaware corporation (the "Company"), and a
related Letter of Transmittal (which together constitute the "Exchange Offer")
relating to the offer by the Company to exchange its 8.20% Senior Notes due
2007 (the "New Notes"), pursuant to an offering registered under the
Securities Act of 1933, as amended (the "Securities Act"), for a like
principal amount of its issued and outstanding 8.20% Senior Notes due 2007
(the "Old Notes") upon the terms and subject to the conditions set forth in
the Exchange Offer.
Please note that the Exchange Offer will expire at 5:00 p.m.,
New York City time, on _________ __, 1997, unless extended.
The Exchange Offer is not conditioned upon any minimum number
of Old Notes being tendered.
We are the holder of record and/or participant in the
book-entry transfer facility of Old Notes held by us for your account. A
tender of such Old Notes can be made only by us as the record holder and/or
participant in the book-entry transfer facility and pursuant to your
instructions. The Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Old Notes held by us for
your account.
We request instructions as to whether you wish to tender any or
all of the Old Notes held by us for your account pursuant to the terms and
conditions of the Exchange Offer. We also request that you confirm that we
may on your behalf make the representations contained in the Letter of
Transmittal.
Pursuant to the Letter of Transmittal, each holder of Old Notes
will represent to the Company that (i) the New Notes acquired pursuant to the
Exchange Offer are being acquired in the ordinary course of business of the
person receiving such New Notes, whether or not such person is the holder, (ii)
neither the holder nor any such other person has an arrangement or
understanding with any person to participate in the distribution of such New
Notes, (iii) if the holder is not a broker-dealer, or is a broker-dealer but
will not receive New Notes for its own account in exchange for Old Notes,
neither the holder nor any such other person is engaged in or intends to
participate in the distribution of such New Notes and (iv) neither the holder
nor any such other person is an "affiliate" of the Company within the meaning
of Rule 405 of the Securities Act of 1933, as amended (the "Securities Act").
If the tendering holder is a broker-dealer that will receive New Notes for its
own account in exchange for Old Notes, we will represent on behalf of such
broker-dealer that the Old Notes to be exchanged for the New Notes were
acquired by it as a result of market-making activities or other trading
activities, and acknowledge on behalf of such broker-dealer that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Notes. By acknowledging that it will
deliver and by delivering a prospectus meeting the requirements of the
Securities Act in connection with any resale of such New Notes, such
broker-dealer is not deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
Very truly yours,
