<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 7, 1994
U.S. $100,000,000
[LOGO OF LUKENS APPEARS HERE]
Medium-Term Notes, Series A
Due from Nine Months to 30 Years from Date of Issue
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Lukens Inc. (the "Company") may offer from time to time its Medium-Term Notes,
Series A (the "Notes") in an aggregate principal amount not to exceed
$100,000,000 (or, if any Notes are to be Original Issue Discount Notes,
Foreign Currency Notes or Indexed Notes (as each such term is defined under
"Description of Notes"), such principal amount as shall result in an initial
aggregate offering price equivalent to no more than $100,000,000), subject to
reduction as a result of the sale of other Securities under the Registration
Statement of which this Prospectus Supplement and the accompanying Prospectus
form a part; provided, however, that the Company may increase the foregoing
maximum principal amount if in the future it determines that it may wish to
sell additional Notes. See "Description of Notes" and "Plan of Distribution of
Notes". Unless otherwise specified in the applicable Pricing Supplement, each
Note will mature from nine months to 30 years from its date of original
issuance ("Issue Date"), as selected by the initial purchaser and agreed to by
the Company (the "Stated Maturity"), which maturity date may be subject to
extension at the option of the Company. The Notes may be subject to optional
redemption, or obligate the Company to redeem or purchase the Notes pursuant
to sinking fund or analogous provisions or at the option of the Holder
thereof, in each case as indicated in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be issued in fully registered form in denominations of $100,000 and
integral multiples of $1,000 in excess thereof or, in the case of Foreign
Currency Notes, in such minimum denominations not less than the equivalent of
$100,000 and such other denomination or denominations in excess thereof as
shall be set forth in the applicable Pricing Supplement. See "Special
Provisions Relating to Foreign Currency Notes".
The interest rate or interest rate formula, if any, currency or currency unit,
issue price, Stated Maturity, redemption provisions, if any, and other terms
for each Note will be established by the Company at the date of issuance of
such Note and will be indicated in a Pricing Supplement. Each interest-bearing
Note will bear interest at either (a) a fixed rate (a "Fixed Rate Note") or
(b) a variable rate determined by reference to an interest rate formula (a
"Floating Rate Note"), which may be adjusted by adding or subtracting the
Spread or multiplying by the Spread Multiplier, unless otherwise indicated in
the applicable Pricing Supplement. Unless otherwise indicated in the
applicable Pricing Supplement, the interest rate formula will be the
Commercial Paper Rate, the Prime Rate, the CD Rate, the Federal Funds Rate,
LIBOR or the Treasury Rate. A Fixed Rate Note may pay a level amount in
respect of both principal and interest amortized over the life of such Note
(an "Amortizing Note"). Interest rates, or interest rate formulas, are subject
to change by the Company from time to time, but no such change will affect any
Note already issued or as to which an offer to purchase has been accepted by
the Company.
Notes may be represented either by a certificate issued in definitive form (a
"Certificated Note") or by a permanent global Note or Notes, registered in the
name of The Depository Trust Company, as Depositary, or a nominee of the
Depositary (a "Book-Entry Note"), as specified in the applicable Pricing
Supplement. Beneficial interests in Book-Entry Notes will only be evidenced
by, and transfers thereof will only be effected through, records maintained by
the Depositary and its participants. Except as described under "Description of
Notes--Book-Entry Notes", owners of beneficial interests in a Book-Entry Note
will not be entitled to receive physical delivery of Notes in definitive form
and will not be considered the Holders thereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, ANY PRICING SUPPLEMENT
HERETO OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
Distributors'
Price to Commissions or Proceeds to
Public(1) Discounts(2) Company(2)(3)
--------- -------------- -------------
<S> <C> <C> <C>
Per Note..................... 100% .125%-.750% 99.250%-99.875%
Total(4)..................... $100,000,000 $125,000-$750,000 $99,250,000-$99,875,000
</TABLE>
(1) Unless otherwise indicated in the applicable Pricing Supplement, each Note
will be issued at 100% of its principal amount. If so indicated in the
applicable Pricing Supplement, Notes may be resold by the Distributors,
acting as principals at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices.
(2) Unless otherwise specified in the applicable Pricing Supplement, the
Company will pay a commission (or grant a discount) to CS First Boston
Corporation and J.P. Morgan Securities Inc. (the "Distributors") of .125%
to .750% of the principal amount of any Note, depending on its Stated
Maturity, sold through any such Distributor, acting as agent (or sold to
the Distributor as principal in circumstances in which no other discount
is agreed).
(3) Before deducting other expenses payable by the Company estimated at
$210,000.00.
(4) Or the equivalent thereof in other currencies or currency units.
-----------
The Notes are being offered on a continuing basis by the Company through the
Distributors, each of which has agreed to use reasonable efforts to solicit
offers to purchase the Notes. The Company also may sell Notes to any
Distributor on its own behalf at negotiated discounts. The Company reserves
the right to sell Notes directly on its own behalf and accept (but not
solicit) offers to purchase Notes through additional distributors on
substantially the same terms and conditions (including commission rates) as
would apply to purchases of Notes by or through the Distributors. The Company
also reserves the right to withdraw, cancel or modify the offer made hereby
without notice. The Company or any Distributor may reject any offer to
purchase Notes, in whole or in part. The Notes will not be listed on any
securities exchange, unless otherwise indicated in the applicable Pricing
Supplement, and there can be no assurance that the Notes offered by this
Prospectus Supplement will be sold or that there will be a secondary market
for the Notes. See "Plan of Distribution of Notes".
CS First Boston J.P. Morgan Securities Inc.
The date of this Prospectus Supplement is June 7, 1994.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE DISTRIBUTORS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
IMPORTANT CURRENCY EXCHANGE INFORMATION
Unless otherwise indicated in the applicable Pricing Supplement, purchasers
are required to pay for Foreign Currency Notes in the currency or currency unit
specified in the applicable Pricing Supplement (the "Specified Currency"). At
the present time, there are limited facilities in the United States for the
conversion of U.S. dollars into foreign currencies or currency units and vice
versa, and banks do not generally offer non-U.S. dollar checking or savings
account facilities in the United States. If requested on or prior to the fifth
Market Day preceding the date of delivery of the Notes, or by such other day as
determined by the Distributor who presented such offer to purchase Notes to the
Company, such Distributor is prepared to arrange for the conversion of U.S.
dollars into the Specified Currency to enable the purchasers to pay for the
Notes. Each such conversion will be made by such Distributor on such terms and
subject to such conditions, limitations and charges as such Distributor may
from time to time establish in accordance with its regular foreign exchange
practices. All costs of exchange will be borne by the purchasers of the Foreign
Currency Notes.
References herein to "U.S. dollars" or "U.S. $" or "$" are to the currency of
the United States of America.
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes offered hereby
supplements, and to the extent inconsistent therewith, replaces, the
description of the general terms and conditions of Debt Securities set forth
under the heading "Description of Debt Securities" in the Prospectus, to which
description reference is hereby made. Capitalized terms not defined under this
heading or in the Glossary contained in this Prospectus Supplement have the
meanings assigned to them in the Prospectus or the Indenture.
GENERAL
The Notes offered hereby will be issued under the Indenture referred to in
the accompanying Prospectus between the Company and Continental Bank, National
Association, as Trustee (the "Trustee"). The Notes constitute a single series
for purposes of the Indenture, limited to an aggregate principal amount not to
exceed $100,000,000 (or, if any Notes are to be Original Issue Discount Notes
or are to be denominated in one or more foreign currencies or currency units
("Foreign Currency Notes") or with amounts payable in respect of principal of
or any premium or interest on the Notes to be determined by reference to the
value, rate or price of one or more specified indices ("Indexed Notes"), such
principal amount as shall result in an aggregate initial offering price
equivalent to no more than $100,000,000). The foregoing limit may be increased
by the Company if in the future it determines that it may wish to sell
additional Notes. The Notes offered hereby may be reduced by an amount equal to
the aggregate initial offering price of any other Debt Securities (as defined
in the accompanying Prospectus) sold by the Company (including any other series
of medium-term notes). See "Plan of Distribution of Notes". For a description
of the rights attaching to different series of Securities (including the Notes)
under the Indenture, see "Description of Debt Securities" in the Prospectus.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will mature from nine months to 30 years from its Issue Date, as selected by
the initial purchaser and agreed to by the Company (the "Stated Maturity"),
which maturity date may be subject to extension at the option of the Company.
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<PAGE>
The Notes will be issuable only in fully registered form and, unless
otherwise indicated in the applicable Pricing Supplement, only in denominations
of $100,000 and integral multiples of $1,000 in excess thereof, or, in the case
of Foreign Currency Notes, in such minimum denomination not less than the
equivalent of $100,000 and such other denomination or denominations in excess
thereof as shall be set forth in the applicable Pricing Supplement. See
"Special Provisions Relating to Foreign Currency Notes".
Notes will initially be represented either by a Certificated Note or by a
Book-Entry Note, as indicated in the applicable Pricing Supplement. See
"Description of Notes--Book-Entry Notes" below.
Unless otherwise indicated in the applicable Pricing Supplement, the Notes
will be denominated in U.S. dollars and payments of principal of and any
premium and interest on the Notes will be made in U.S. dollars in the manner
indicated in the accompanying Prospectus and this Prospectus Supplement. If any
of the Notes are to be denominated in one or more currencies or currency units
other than U.S. dollars, additional information pertaining to the terms of such
Notes and other matters relevant to the Holders thereof will be described in
the applicable Pricing Supplement. See "Payment Currency" below and "Special
Provisions Relating to Foreign Currency Notes".
In addition, Notes may be issued as Original Issue Discount Notes, as Indexed
Notes or as Amortizing Notes. See "Original Issue Discount Notes", "Indexed
Notes" and "Amortizing Notes" below.
The applicable Pricing Supplement will indicate either that a Note cannot be
redeemed prior to its Stated Maturity or that a Note will be redeemable at the
option of the Company on or after a specified date prior to its Stated Maturity
at a specified price or prices (which may include a premium), together with
accrued interest to the date of redemption or repayment. In addition, the
applicable Pricing Supplement will indicate either that the Company will not be
obligated to redeem a Note pursuant to any sinking fund or analogous provisions
or at the option of the Holder thereof or that the Company will be so
obligated. If the Company will be so obligated, the applicable Pricing
Supplement will indicate the period or periods within which and the price or
prices at which the applicable Notes will be redeemed, in whole or in part,
pursuant to such obligation and the other detailed terms and provisions of such
obligation. The applicable Pricing Supplement will also indicate whether a Note
is subject to an optional extension beyond its Stated Maturity as described
under "Extension of Maturity".
Payments of principal of, and any premium and interest on, Book-Entry Notes
will be made to the Depositary, or its nominee, as Holder thereof, in
accordance with arrangements then in effect between the Trustee and the
Depositary. Unless otherwise indicated in an applicable Pricing Supplement,
payments of principal of, and any premium and interest due at Maturity on
Certificated Notes denominated and payable in U.S. dollars will be made in
immediately available funds at the Corporate Trust Office of Continental Bank,
National Association in Chicago, Illinois or at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of
New York, provided that the Note is presented to the Paying Agent in time for
the Paying Agent to make such payments in such funds in accordance with its
normal procedures. At the option of the Company, payment of interest on such
Certificated Notes, other than interest at Maturity, may be made by check
mailed to the address of the person entitled thereto as such address shall
appear in the Security Register or by wire transfer to an account maintained by
such Holder with a bank located in the United States, provided such Holder
shall have provided in writing to the Trustee, on or prior to the relevant
Regular Record Date, appropriate payment instructions. Notwithstanding the
foregoing, a Holder of $10,000,000 or more in aggregate principal amount of
Certificated Notes denominated and payable in U.S. dollars and having the same
Interest Payment Date shall be entitled to receive such interest payments by
wire transfer of immediately payable funds to an account maintained by such
Holder with a bank located in the United States; provided that the Holder shall
have provided in writing to the Trustee, on or prior to the relevant Regular
Record Date, appropriate payment instructions. With respect to payments on
Foreign Currency Notes, see "Payment Currency".
S-3
<PAGE>
Certificated Notes may be presented for registration of transfer or exchange
at the Corporate Trust Office of Continental Bank, National Association in
Chicago, Illinois or at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York. No service charge
will be made for any registration of transfer or exchange of Certificated
Notes, but the Company may require payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith. With
respect to registration of transfer and exchange of Book-Entry Notes, see
"Description of Notes--Book-Entry Notes" below and "Description of Debt
Securities--Global Securities" in the accompanying Prospectus.
Interest rates, interest rate bases and various other variable terms of the
Notes described herein are subject to change by the Company from time to time,
but no such change will affect any Note already issued or as to which an offer
to purchase has been accepted by the Company.
Unless otherwise indicated in the applicable Pricing Supplement, Fixed Rate
Notes denominated and payable in U.S. dollars will be subject to the provisions
of the Indenture described in the Prospectus under "Description of Debt
Securities--Defeasance and Covenant Defeasance".
PAYMENT CURRENCY
The Company is obligated to make payments of principal of and any premium and
interest on Foreign Currency Notes in the Specified Currency (or, if such
Specified Currency is not at the time of such payment legal tender for the
payment of public and private debts, in such other coin or currency of the
country which issued such Specified Currency as at the time of such payment is
legal tender for the payment of such debts). Any such amounts paid by the
Company will, unless otherwise specified in the applicable Pricing Supplement,
be converted by the Exchange Rate Agent to U.S. dollars for payment to Holders.
Principal of, and any premium and interest on, a Foreign Currency Note paid in
U.S. dollars will be paid in the manner specified in the accompanying
Prospectus and this Prospectus Supplement for interest on Notes denominated and
payable in U.S. dollars.
Unless otherwise specified in the applicable Pricing Supplement, any U.S.
dollar amount to be received by a Holder of a Foreign Currency Note will be
based on the highest bid quotation in The City of New York received by the
Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the
second Market Day preceding the applicable payment date from three recognized
foreign exchange dealers (one of which may be the Exchange Rate Agent) selected
by the Exchange Rate Agent and approved by the Company for the purchase by the
quoting dealer of the Specified Currency for U.S. dollars for settlement on
such payment date in the aggregate amount of the Specified Currency payable to
all Holders of Foreign Currency Notes scheduled to receive U.S. dollar payments
and at which the applicable dealer commits to execute a contract. If three such
bid quotations are not available, payments will be made in the Specified
Currency. All currency exchange costs will be borne by the Holder of the
Foreign Currency Note by deductions from such payments.
Notwithstanding the foregoing, unless otherwise specified in the applicable
Pricing Supplement, a Holder of a Foreign Currency Note may elect to receive
payment of the principal of and any premium and interest on such Note in the
Specified Currency by transmitting a written request for such payment to the
Trustee at its Corporate Trust Office in Chicago, Illinois or at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, on or prior to the Regular Record Date in the case of an
interest payment or at least 15 days prior to Maturity in the case of a
principal or premium payment. Such request may be in writing (mailed or hand
delivered) or by cable, telex or other form of facsimile transmission. A Holder
of a Foreign Currency Note may elect to receive payment in the Specified
Currency for all principal and any premium and interest payments and need not
file a separate election for each payment. Such election will remain in effect
until revoked by written notice to the Trustee, but written notice of any such
revocation must be received by the Trustee on or prior to the relevant Regular
Record Date or at least 15 days prior to Maturity, as the case may be. Holders
of Foreign Currency Notes whose
S-4
<PAGE>
Notes are to be held in the name of a broker or nominee should contact such
broker or nominee to determine whether and how an election to receive payments
in the Specified Currency may be made.
Unless otherwise specified in the applicable Pricing Supplement, a beneficial
owner of Book-Entry Notes denominated in a Specified Currency electing to
receive payments of principal or any premium or interest in the Specified
Currency must notify the participant through which its interest is held on or
prior to the applicable Regular Record Date, in the case of a payment of
interest, and on or prior to the fifteenth day prior to Maturity, in the case
of a payment of principal or premium, of such beneficial owner's election to
receive all or a portion of such payment in a Specified Currency. Such
participant must notify the Depository of such election on or prior to the
third Market Day after such Regular Record Date. The Depository will notify the
Paying Agent of such election on or prior to the fifth Market Day after such
Regular Record Date. If complete instructions are received by the participant
and forwarded by the participant to the Depository, and by the Depository to
the Paying Agent, on or prior to such dates, the beneficial owner will receive
payments in the Specified Currency.
Interest on a Foreign Currency Note paid in the Specified Currency will be
paid by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register. All checks in a Specified
Currency will be drawn on a bank located outside the United States. Payments at
Maturity of principal of and any premium and interest on Foreign Currency Notes
in the Specified Currency will be made by wire transfer to an account with a
bank located in the country of the Specified Currency (or, in the case of
European Currency Units ("ECUs"), Brussels), as shall have been designated at
least 15 days prior to Maturity by the Holder; provided that the Note is
presented at the Corporate Trust Office of the Trustee in Chicago, Illinois or
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, in time for such Paying Agent to
make such payments in such funds in accordance with its normal procedures.
If a Specified Currency is not available for the payment of principal or any
premium or interest with respect to a Foreign Currency Note due to the
imposition of exchange controls or other circumstances beyond the control of
the Company, the Company will be entitled to satisfy its obligations to Holders
of Foreign Currency Notes by making such payment in U.S. dollars on the basis
of the Market Exchange Rate on the second Market Day prior to such payment, or
if such Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate or as otherwise specified in the
applicable Pricing Supplement. See "Foreign Currency Risks--Exchange Rates and
Exchange Controls" in the accompanying Prospectus. Any payment made under such
circumstances in U.S. dollars where the required payment is in other than U.S.
dollars will not constitute an Event of Default under the Indenture.
If payment in respect of a Note is required to be made in any currency unit
(e.g., ECU), and such currency unit is unavailable due to the imposition of
exchange controls or other circumstances beyond the Company's control, then the
Company will be entitled, but not required, to make any payments in respect of
such Note in U.S. dollars until such currency unit is again available. The
amount of each payment in U.S. dollars shall be computed on the basis of the
equivalent of the currency unit in U.S. dollars, which shall be determined by
the Company or its agent on the following basis. The component currencies of
the currency unit for the purpose (the "Component Currencies" or, individually,
a "Component Currency") shall be the currency amounts that were components of
the currency unit as of the last day on which the currency unit was used. The
equivalent of the currency unit in U.S. dollars shall be calculated by
aggregating the U.S. dollar equivalents of the Component Currencies. The U.S.
dollar equivalent of each of the Component Currencies shall be determined by
the Company or such agent on the basis of the most recently available Market
Exchange Rate for each such Component Currency, or as otherwise indicated in
the applicable Pricing Supplement.
If the official unit of any Component Currency is altered by way of
combination or subdivision, the number of units of the currency as a Component
Currency shall be divided or multiplied in the same proportion. If two or more
Component Currencies are consolidated into a single currency, the amounts of
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those currencies as Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the amounts of the consolidated Component
Currencies expressed in such single currency. If any Component Currency is
divided into two or more currencies, the amount of the original Component
Currency shall be replaced by the amounts of such two or more currencies, the
sum of which shall be equal to the amount of the original Component Currency.
All determinations referred to above made by the Company or its agent
(including the Exchange Rate Agent) shall be at its sole discretion and shall,
in the absence of manifest error, be conclusive for all purposes and binding on
the Holders of Notes.
INTEREST
Each interest-bearing Note will bear interest from and including its Issue
Date or from and including the most recent Interest Payment Date with respect
to which interest on such Note (or any predecessor Note) has been paid or duly
provided for to, but excluding, the relevant Interest Payment Date at the fixed
rate per annum, or at the rate per annum determined pursuant to the interest
rate formula, stated therein and in the applicable Pricing Supplement until the
principal thereof is paid or made available for payment. Interest payments, if
any, will be in the amount of interest accrued from and including the next
preceding Interest Payment Date in respect of which interest has been paid or
duly provided for (or from and including the date of issue, if no interest has
been paid with respect to such Note) to, but excluding, the applicable Interest
Payment Date.
Interest, if any, will be payable on each Interest Payment Date and at
Maturity; see "Description of Notes--General". Interest will be payable
generally to the person (which, in the case of a Book-Entry Note, shall be the
Depositary) in whose name a Note (or any predecessor Note) is registered at the
close of business on the Regular Record Date next preceding each Interest
Payment Date; provided, however, that interest payable at Maturity will be
payable to the person (which, in the case of a Book-Entry Note, shall be the
Depositary) to whom principal shall be payable. Unless otherwise indicated in
the applicable Pricing Supplement, the first payment of interest on any Note
originally issued between a Regular Record Date and an Interest Payment Date
will be made on the second Interest Payment Date following the date of issue of
such Note to the registered owner on the Regular Record Date immediately
preceding such Interest Payment Date. With respect to payments of interest on
Book-Entry Notes, see "Description of Notes--Book-Entry Notes".
FIXED RATE NOTES
The applicable Pricing Supplement relating to a Fixed Rate Note will
designate a fixed rate of interest per annum payable on such Note. Unless
otherwise indicated in the applicable Pricing Supplement, the Interest Payment
Date with respect to Fixed Rate Notes other than Amortizing Notes shall be May
1 and November 1 of each year and at Maturity and the Regular Record Dates for
such Notes shall be the April 15 and October 15 next preceding the relevant
Interest Payment Dates. Unless otherwise indicated in the applicable Pricing
Supplement, interest on Fixed Rate Notes will be computed on the basis of a
360-day year of twelve 30-day months.
If any Interest Payment Date or the Maturity of a Fixed Rate Note falls on a
day that is not a Market Day, the related payment of principal, premium, if
any, or interest will be made on the next succeeding Market Day as if made on
the date such payment was due, and no additional interest will accrue as a
result of such delayed payment.
FLOATING RATE NOTES
The applicable Pricing Supplement relating to a Floating Rate Note will
designate an interest rate basis for such Floating Rate Note. Such basis may
be: (a) the Commercial Paper Rate, in which case such Note
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<PAGE>
will be a Commercial Paper Rate Note, (b) the Prime Rate, in which case such
Note will be a Prime Rate Note, (c) the CD Rate, in which case such Note will
be a CD Rate Note, (d) the Federal Funds Rate, in which case such Note will be
a Federal Funds Rate Note, (e) LIBOR, in which case such Note will be a LIBOR
Note, (f) the Treasury Rate, in which case such Note will be a Treasury Rate
Note, or (g) such other interest rate basis or formula as may be agreed to
between the Company and the purchaser and set forth in the applicable Pricing
Supplement. In addition, a Floating Rate Note may bear interest at the lowest
or highest or average of two or more interest rate formulae. The applicable
Pricing Supplement for a Floating Rate Note also will specify the Spread or
Spread Multiplier, if any, and the maximum or minimum interest rate limitation,
if any, applicable to each Note. In addition, such Pricing Supplement will
define or particularize for each Floating Rate Note the following terms, if
applicable: Calculation Agent, Calculation Dates, Initial Interest Rate,
Interest Payment Dates, Regular Record Dates, Index Maturity, Interest
Determination Dates and Interest Reset Dates with respect to such Note. See
"Glossary" for definitions of certain terms used in this Prospectus Supplement.
The rate of interest on a Floating Rate Note in effect on any date will be
(a) if such day is an Interest Reset Date with respect to such Floating Rate
Note, the interest rate on such Floating Rate Note determined as of the
Interest Determination Date pertaining to such Interest Reset Date, or (b) if
such day is not an Interest Reset Date with respect to such Floating Rate Note,
the interest rate on such Floating Rate Note determined as of the Interest
Determination Date pertaining to the immediately preceding Interest Reset Date
with respect to such Floating Rate Note; provided, however, that the interest
rate in effect from the Issue Date of a Floating Rate Note (or that of a
predecessor Note) to but excluding the first Interest Reset Date with respect
to such Floating Rate Note will be the Initial Interest Rate (as set forth in
the applicable Pricing Supplement). Subject to applicable provisions of law and
except as described herein, the rate of interest on a Floating Rate Note on any
Interest Reset Date with respect thereto will be the rate of interest
determined with respect to the Interest Determination Date pertaining to such
Interest Reset Date as determined in accordance with the applicable provisions
described below.
The rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually (each an "Interest Reset Date"),
as specified in the applicable Pricing Supplement. Unless otherwise specified
in the applicable Pricing Supplement, the Interest Reset Date will be, in the
case of Floating Rate Notes which reset daily, each Market Day; in the case of
Floating Rate Notes (other than Treasury Rate Notes) which reset weekly, the
Wednesday of each week; in the case of Treasury Rate Notes which reset weekly,
except as provided in the following paragraph, the Tuesday of each week; in the
case of Floating Rate Notes which reset monthly, the third Wednesday of each
month; in the case of Floating Rate Notes which reset quarterly, the third
Wednesday of March, June, September and December; in the case of Floating Rate
Notes which reset semiannually, the third Wednesday of two months of each year,
as indicated in the applicable Pricing Supplement; and in the case of Floating
Rate Notes which reset annually, the third Wednesday of one month of each year,
as indicated in the applicable Pricing Supplement. If any Interest Reset Date
for any Floating Rate Note would otherwise be a day that is not a Market Day
with respect to such Note, such Interest Reset Date shall be the next
succeeding Market Day with respect to such Note, except that if such Note is a
LIBOR Note and the next succeeding Market Day falls in the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Market Day.
The Interest Determination Date pertaining to an Interest Reset Date for a
Commercial Paper Rate Note (the "Commercial Paper Interest Determination
Date"), a Prime Rate Note (the "Prime Rate Interest Determination Date"), a CD
Rate Note (the "CD Rate Interest Determination Date") or a Federal Funds Rate
Note (the "Federal Funds Interest Determination Date") will be the second
Market Day preceding the Interest Reset Date with respect to such Note. The
Interest Determination Date pertaining to an Interest Reset Date for a LIBOR
Note (the "LIBOR Interest Determination Date") will be the second London Market
Day preceding such Interest Reset Date. The Interest Determination Date
pertaining to an Interest Reset Date for a Treasury Rate Note (the "Treasury
Interest Determination Date") will be the day on which Treasury bills are
auctioned for the week in which such Interest Reset Date falls, or if no
auction is held for
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such week, the Monday of such week (or if Monday is a legal holiday, the next
succeeding Market Day) and the Interest Reset Date will be the Market Day
immediately following such Treasury Interest Determination Date. Treasury bills
are usually sold at auction on Monday of each week, unless that day is a legal
holiday, in which case the auction is usually held on the following Tuesday,
except that such auction may be held on the preceding Friday. If an auction for
such week is held on Monday or the preceding Friday, such Monday or preceding
Friday shall be the Treasury Interest Determination Date for such week, and the
Interest Reset Date for such week shall be the Tuesday of such week (or, if
such Tuesday is not a Market Day, the next succeeding Market Day). If the
auction for such week is held on any day of such week other than Monday, then
such day shall be the Treasury Interest Determination Date and the Interest
Reset Date for such week shall be the next succeeding Market Day.
A Floating Rate Note may have either or both of the following: (a) a maximum
numerical interest rate limitation, or ceiling, on the rate of interest which
may accrue during any interest period; and (b) a minimum numerical interest
rate limitation, or floor, on the rate of interest which may accrue during any
interest period. In addition to any maximum interest rate which may be
applicable to any Floating Rate Note, the interest rate on such Floating Rate
Note will in no event be higher than the maximum rate permitted by New York
law, as the same may be modified by United States law of general application.
Under present New York law, the maximum rate of interest, with certain
exceptions, is 25% per annum on a simple interest basis. The limit may not
apply to Notes in which $2,500,000 or more has been invested.
Unless otherwise indicated in the applicable Pricing Supplement and except as
provided below, the Interest Payment Date will be, in the case of Floating Rate
Notes which reset daily, weekly or monthly, the third Wednesday of each month
or the third Wednesday of March, June, September and December of each year (as
indicated in the applicable Pricing Supplement); in the case of Floating Rate
Notes which reset quarterly, the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes which reset
semiannually, the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and in the case of Floating Rate Notes which
reset annually, the third Wednesday of the month specified in the applicable
Pricing Supplement. If, pursuant to the preceding sentence, an Interest Payment
Date with respect to any Floating Rate Note (other than an Interest Payment
Date at Maturity) would otherwise be a day that is not a Market Day with
respect to such Note, such Interest Payment Date shall be the next succeeding
Market Day with respect to such Note, except that if such Note is a LIBOR Note
and the next succeeding Market Day falls in the next succeeding calendar month,
such Interest Payment Date shall be the immediately preceding Market Day. If
the Maturity of a Floating Rate Note falls on a day that is not a Market Day,
the payment of principal, premium, if any, and interest will be made on the
next succeeding Market Day, and no interest on such payment shall accrue from
and after such Maturity. Unless otherwise indicated in the applicable Pricing
Supplement, the Regular Record Date with respect to Floating Rate Notes shall
be the date 15 calendar days prior to each Interest Payment Date, whether or
not such date shall be a Market Day.
Unless otherwise specified in the applicable Pricing Supplement, the interest
accrued from and including the date of issue, or from and including the last
date to which interest has been paid or duly provided for, is calculated by
multiplying the face amount of such Floating Rate Note by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day in such period from and including the date of issue, or
from and including the last date to which interest has been paid or duly
provided for, to but excluding the date for which accrued interest is being
calculated. Unless otherwise specified in the Note and the applicable Pricing
Supplement, the interest factor (expressed as a decimal rounded upwards, if
necessary, as described below) for each such day is computed by dividing the
interest rate (expressed as a decimal rounded upwards, if necessary, as
described below) applicable to such date by 360 (or, in the case of Treasury
Rate Notes, by the actual number of days in the year). The interest factor for
Notes for which two or more interest rate formulae are applicable will be
calculated in each period in the same manner as if only the lowest, highest or
average of, as the case may be, such interest rate formulae applied.
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Unless otherwise specified in a Pricing Supplement, all percentages resulting
from any calculation on Floating Rate Notes will be rounded, upwards if
necessary, to the nearest one-hundred thousandth of a percentage point, with
five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or
.09876545) being rounded to 9.87655% (or .0987655) and 9.876544% (or .09876544)
being rounded to 9.87654% (or .0987654)), and all dollar amounts used in or
resulting from such calculation on Floating Rate Notes will be rounded to the
nearest cent or, in the case of Foreign Currency Notes, the nearest unit (with
one-half cent or five one-thousandths of a unit being rounded upwards).
Upon the request of the Holder of any Floating Rate Note, the Calculation
Agent will provide the interest rate then in effect, and, if determined, the
interest rate which will become effective as a result of a determination made
on the most recent Interest Determination Date with respect to such Floating
Rate Note.
Commercial Paper Rate Notes. Each Commercial Paper Rate Note will bear
interest at the interest rate (calculated with reference to the Commercial
Paper Rate and the Spread or Spread Multiplier, if any) specified on the face
of such Commercial Paper Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) or the rate on
such date for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement as published in H.15(519) under the heading
"Commercial Paper". In the event that such rate is not published prior to 3:00
p.m., New York City time, on the Calculation Date pertaining to such Commercial
Paper Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on such Commercial Paper Interest Determination
Date for commercial paper having the Index Maturity specified in the applicable
Pricing Supplement as published in Composite Quotations under the heading
"Commercial Paper". If by 3:00 p.m., New York City time, on such Calculation
Date such rate is not yet published in either H.15(519) or Composite
Quotations, the Commercial Paper Rate for that Commercial Paper Interest
Determination Date shall be the Money Market Yield of the arithmetic mean, as
calculated by the Calculation Agent on such Calculation Date, of the offered
rates, as of 11:00 a.m., New York City time, on that Commercial Paper Interest
Determination Date, of three leading dealers of commercial paper in The City of
New York selected by the Calculation Agent (which may include any Distributor
or its affiliates) for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement placed for an industrial issuer whose bond
rating is "AA", or the equivalent, from a nationally recognized rating agency;
provided, however, that if fewer than three dealers selected as aforesaid by
the Calculation Agent are quoting as mentioned in this sentence, the Commercial
Paper Rate will be the Commercial Paper Rate in effect on such Commercial Paper
Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) calculated in accordance with the following formula:
D X 360
-------------- X 100
Money Market Yield = 360-(D X M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
Prime Rate Notes. Prime Rate Notes will bear interest at the interest rates
(calculated with reference to the Prime Rate as described below, and then
applying the Spread and/or Spread Multiplier, if any, which is applicable to
the Interest Reset Period) specified in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Prime Rate"
means, with respect to any Interest Determination Date relating to a Prime Rate
Note, the rate set forth on such date in H.15(519)
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under the heading "Bank Prime Loan". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic mean of the
rates of interest publicly announced by each bank that appears on the Reuters
Screen NYMF Page as such bank's prime rate or base lending rate as in effect
for that Interest Determination Date. If fewer than four such rates appear on
the Reuters Screen NYMF Page for the Interest Determination Date, the Prime
Rate will be determined by the Calculation Agent and will be the arithmetic
mean of the prime rates quoted on the basis of the actual number of days in the
year divided by a 360-day year as of the close of business on such Interest
Determination Date by at least two of three major money center banks in The
City of New York selected by the Calculation Agent after consultation with the
Company. If fewer than two such rates are quoted as aforesaid, the Prime Rate
will be determined by the Calculation Agent on the basis of the rates furnished
in The City of New York by one or two, as the case may be, substitute banks or
trust companies organized and doing business under the laws of the United
States, or any State thereof, having total equity capital of at least U.S.
$500,000,000 and being subject to supervision or examination by federal or
state authority, selected by the Calculation Agent (after consultation with the
Company) to provide such rate or rates; provided, however, that if the banks
selected as aforesaid are not quoting as set forth above, the Prime Rate will
remain the Prime Rate then in effect on such Interest Determination Date.
CD Rate Notes. Each CD Rate Note will bear interest at the interest rate
(calculated with reference to the CD Rate and the Spread or Spread Multiplier,
if any) specified on the face of such CD Rate Note and in the applicable
Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "CD Rate"
means, with respect to any CD Rate Interest Determination Date, the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "CDs (Secondary Market)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such CD Rate Interest Determination Date, then the CD Rate shall
be the rate on such CD Rate Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified in the applicable
Pricing Supplement as published in Composite Quotations under the heading
"Certificates of Deposit". If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or
Composite Quotations, the CD Rate for that CD Interest Determination Date shall
be calculated by the Calculation Agent and shall be the arithmetic mean
(rounded upwards, if necessary, to the next higher one-hundred thousandth of a
percentage point) of the secondary market offered rates, as of 10:00 a.m., New
York City time, on that CD Rate Interest Determination Date, of three leading
nonbank dealers of negotiable U.S. dollar certificates of deposit in The City
of New York selected by the Calculation Agent (which may include any
Distributor or its affiliates) for negotiable certificates of deposit of major
United States money market banks with a remaining maturity closest to the Index
Maturity specified in the applicable Pricing Supplement in a denomination of
$5,000,000; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as mentioned in this sentence,
the CD Rate will be the CD Rate in effect on such CD Rate Interest
Determination Date.
Federal Funds Rate Notes. Each Federal Funds Rate Note will bear interest at
the interest rate (calculated with reference to the Federal Funds Rate and the
Spread or Spread Multiplier, if any) specified on the face of such Federal
Funds Rate Note and in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Federal Funds Interest Determination
Date, the rate on such date for Federal Funds having the Index Maturity
specified in the applicable Pricing Supplement as published in H.15(519) under
the heading "Federal Funds (Effective)". In the event that such rate is not
published prior to 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, then the Federal
Funds Rate will be the rate on such Federal Funds Interest Determination Date
as published in Composite Quotations under the heading "Federal Funds/Effective
Rate". If by 3:00 p.m., New York City
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time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, the Federal Funds Rate for that Federal
Funds Interest Determination Date shall be the arithmetic mean, as calculated
by the Calculation Agent on such Calculation Date, of the rates, prior to 9:00
a.m., New York City time, on that Federal Funds Interest Determination Date,
for the last transaction in overnight Federal Funds arranged by three leading
brokers of Federal Funds transactions in The City of New York (which may
include any Distributor or its affiliates) selected by the Calculation Agent;
provided, however, that if fewer than three brokers selected as aforesaid by
the Calculation Agent are quoting as mentioned in this sentence, the Federal
Funds Rate will be the Federal Funds Rate in effect on such Federal Funds
Interest Determination Date.
LIBOR Notes. Each LIBOR Note will bear interest at the interest rate
(calculated with reference to LIBOR and the Spread or Spread Multiplier, if
any) specified on the face of such LIBOR Note and in the applicable Pricing
Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, LIBOR will
be determined by the Calculation Agent in accordance with the following
provisions: On each LIBOR Interest Determination Date, LIBOR will be determined
on the basis of the offered rate for deposits in U.S. dollars having the Index
Maturity specified in the applicable Pricing Supplement, commencing on the
second London Market Day immediately following such LIBOR Interest
Determination Date, which appears on the Telerate Page 3750 as of 11:00 a.m.,
London time, on that LIBOR Interest Determination Date. If such rate does not
so appear on the Telerate Page 3750, the rate in respect of such LIBOR Interest
Determination Date will be determined on the basis of the rates at which
deposits in U.S. dollars are offered by four major banks in the London
interbank market (selected by the Calculation Agent) at approximately 11:00
a.m., London time, on the LIBOR Interest Determination Date next preceding the
relevant Interest Reset Date to prime banks in the London interbank market for
a period of the Index Maturity commencing on that Interest Reset Date and in a
principal amount equal to an amount not less than $1,000,000 that is
representative for a single transaction in such market at such time. In such
case, the Calculation Agent will request the principal London office of each of
the aforesaid major banks to provide a quotation of such rate. If at least two
such quotations are provided in respect of such LIBOR Interest Determination
Date, the rate for that Interest Reset Date will be the arithmetic mean of the
quotations, and, if fewer than two quotations are provided as requested in
respect of such LIBOR Interest Determination Date, the rate for that Interest
Reset Date will be the arithmetic mean of the rates quoted by three major banks
in The City of New York, selected by the Calculation Agent (which may include
any Distributor or its affiliates), at approximately 11:00 a.m., New York City
time, on that LIBOR Interest Determination Date for loans in U.S. dollars to
leading European banks for a period of the Index Maturity commencing on that
Interest Reset Date and in a principal amount equal to an amount not less than
$1,000,000 that is representative for a single transaction in such market at
such time; provided, however, if the aforesaid rate cannot be determined by the
Calculation Agent, LIBOR in respect of such LIBOR Interest Determination Date
will be LIBOR then in effect on such LIBOR Interest Determination Date.
Treasury Rate Notes. Each Treasury Rate Note will bear interest at the
interest rate (calculated with reference to the Treasury Rate and the Spread or
Spread Multiplier, if any) specified on the face of such Treasury Rate Note and
in the applicable Pricing Supplement.
Unless otherwise indicated in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Treasury Interest Determination Date, the rate
for the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable
Pricing Supplement as published in H.15(519) under the heading, "U.S.
Government Securities/Treasury Bills--Auction Average (Investment)" or, if not
so published by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Treasury Interest Determination Date, the auction average
rate (expressed as a bond equivalent on the basis of a year of 365 or 366 days,
as applicable, and applied on a daily basis) for such auction as otherwise
announced by the United States Department of the Treasury. In the event that
the results of the auction of Treasury bills having the Index Maturity
specified in the applicable Pricing Supplement are not published or
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reported as provided above by 3:00 p.m., New York City time, on such date, or
if no such auction is held in a particular week, then the Treasury Rate shall
be the rate as published in H.15(519) under the heading "U.S. Government
Securities/Treasury Bills/Secondary Market". In the event that such rate is not
so published by 3:00 p.m., New York City time, on its Calculation Date, then
the Treasury Rate shall be calculated by the Calculation Agent and shall be a
yield to maturity (expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean, as calculated by the Calculation Agent on such Calculation Date, of the
secondary market bid rates as of approximately 3:30 p.m., New York City time,
on such Treasury Interest Determination Date, of three leading primary United
States government securities dealers in The City of New York selected by the
Calculation Agent (which may include any Distributor or its affiliates), for
the issue of Treasury bills with a remaining maturity closest to the specified
Index Maturity; provided, however, that if the dealers selected as aforesaid by
the Calculation Agent are not quoting as mentioned in this sentence, the
Treasury Rate will be the Treasury Rate in effect on such Treasury Interest
Determination Date.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued as Original Issue Discount Notes. An Original Issue
Discount Note is a Note which is issued at a price lower than the principal
amount thereof and which provides that upon redemption or acceleration of the
Maturity thereof an amount less than the principal thereof shall become due and
payable. In the event of redemption or acceleration of the Maturity of an
Original Issue Discount Note, the amount payable to the Holder of such Note
upon such redemption or acceleration will be determined in accordance with the
terms of the Note, but will be an amount less than the amount payable at the
Stated Maturity of such Note. In addition, a Note issued at a discount may, for
United States Federal income tax purposes, be considered an original issue
discount note, regardless of the amount payable upon redemption or acceleration
of Maturity of such Note. See "United States Taxation--Original Issue
Discount".
INDEXED NOTES
Notes may be issued as Indexed Notes, of which the principal amount payable
at Maturity and/or on which the amount of interest payable on an Interest
Payment Date will be determined by reference to currencies, currency units,
commodity prices, financial or non-financial indices or other factors as
indicated in the applicable Pricing Supplement. Holders of Indexed Notes may
receive a principal amount at Maturity that is greater than or less than the
face amount of such Notes depending upon the fluctuation of the relative value,
rate or price of the specified index. Specific information pertaining to the
method for determining the principal amount payable at Maturity, a historical
comparison of the relative value, rate or price of the specified index and the
face amount of the Indexed Note and certain additional tax considerations will
be described in the applicable Pricing Supplement.
AMORTIZING NOTES
The Company may from time to time offer Amortizing Notes. Unless otherwise
specified in the applicable Pricing Supplement, interest on each Amortizing
Note will be computed on the basis of a 360-day year of twelve 30-day months.
Payments of principal and interest on Amortizing Notes, which are securities
for which payments of principal and interest are made in equal installments
over the life of the security, will be made either quarterly on each February
1, May 1, August 1 and November 1 or semiannually on each May 1 and November 1,
and on the Stated Maturity, unless otherwise specified in an applicable Pricing
Supplement. Payments with respect to Amortizing Notes will be applied first to
interest due and payable thereon and then to the reduction of the unpaid
principal amount thereof. Further information concerning additional terms and
conditions of any issue of Amortizing Notes will be provided in the applicable
Pricing Supplement. A table setting forth repayment information in respect of
each Amortizing Note will be included in the applicable Pricing Supplement and
set forth in such Notes.
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EXTENSION OF MATURITY
The Pricing Supplement relating to each Note will indicate whether the
Company has the option to extend the Stated Maturity of such Note for one or
more periods of whole years (each an "Extension Period") up to but not beyond
the date (the "Final Maturity") set forth in such Pricing Supplement.
The Company may exercise such option with respect to a Note by notifying the
Trustee for such Note at least 45 but not more than 60 days prior to the Stated
Maturity of such Note in effect prior to the exercise of such option (the
"Original Stated Maturity"). Not later than 40 days prior to the Original
Stated Maturity of such Note, the Trustee for such Note will mail to the Holder
of such Note a notice (the "Extension Notice"), first class, postage prepaid.
The Extension Notice will set forth (i) the election of the Company to extend
the Stated Maturity of such Note; (ii) the new Stated Maturity; (iii) in the
case of a Fixed Rate Note, the interest rate applicable to the Extension Period
or, in the case of a Floating Rate Note, the Spread or Spread Multiplier
applicable to the Extension Period; and (iv) the provisions, if any, for
redemption during the Extension Period, including the date or dates on which or
the period or periods during which and the price or prices at which such
redemption may occur during the Extension Period. Upon the mailing by such
Trustee of an Extension Notice to the Holder of a Note, the Stated Maturity of
such Note shall be extended automatically, and, except as modified by the
Extension Notice and as described in the next paragraph, such Note will have
the same terms as prior to the mailing of such Extension Notice.
Notwithstanding the foregoing, not later than 20 days prior to the Original
Stated Maturity of such Note, the Company may, at its option, revoke the
interest rate (in the case of a Fixed Rate Note) or the Spread or Spread
Multiplier (in the case of a Floating Rate Note) provided for in the Extension
Notice for such Note and establish a higher interest rate (in the case of a
Fixed Rate Note) or a higher Spread or Spread Multiplier (in the case of a
Floating Rate Note) for the Extension Period, by causing the Trustee for such
Note to mail notice of such higher interest rate or higher Spread or higher
Spread Multiplier, as the case may be, first class, postage prepaid, to the
Holder of such Note. Such notice shall be irrevocable. All Notes with respect
to which the Stated Maturity is extended will bear such higher interest rate
(in the case of Fixed Rate Notes) or higher Spread or Spread Multiplier (in the
case of Floating Rate Notes) for the Extension Period, whether or not tendered
for repayment.
If the Company extends the Stated Maturity of a Note, the Holder of such Note
will have the option to elect repayment of such Note by the Company on the
Original Stated Maturity at a price equal to the principal amount thereof, plus
interest accrued to such date. In order for a Note to be repaid on the Original
Stated Maturity once the Company has extended the Stated Maturity thereof, the
Holder thereof must follow the procedures set forth below under "Redemption--
Redemption (Option of Holder)" for optional repayment, except that the period
for delivery of such Note or notification to the Trustee for such Note shall be
at least 25 but not more than 35 days prior to the Original Stated Maturity and
except that a Holder who has tendered a Note for repayment pursuant to an
Extension Notice may, by written notice to the Trustee for such Note, revoke
any such tender for repayment until 5:00 p.m., New York City time on the tenth
day before the Original Stated Maturity.
REDEMPTION
Redemption (Option of Company). If one or more Redemption Dates (or range of
Redemption Dates) is specified in the applicable Pricing Supplement, the Notes
described therein will be subject to redemption, in whole or in part, as
specified in such Pricing Supplement, on any such date (or during any such
range of dates) at the option of the Company upon not less than 30 days' or
more than 60 days' notice, at the Redemption Price or Prices specified in the
applicable Pricing Supplement, together with interest accrued to the Redemption
Date; provided, however, that interest installments due prior to the date fixed
for redemption will be payable to the Holder of record at the close of business
on the Regular Record Date. If less than the entire principal amount of a Note
is redeemed, the principal amount of such Note that remains outstanding after
such redemption shall be an authorized denomination (which shall not be less
than the minimum
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authorized denomination) for the Notes. If less than all Notes of like tenor
are to be redeemed, the Notes to be redeemed shall be selected by the Trustee
by such method as the Trustee shall deem fair and appropriate.
Redemption (Option of Holder). If one or more Redemption Dates (Option of
Holder) (or range of such dates) is specified in the applicable Pricing
Supplement, the Notes described therein will be subject to redemption, in
whole, or from time to time in part, as specified in such Pricing Supplement,
on any such date (or during any such range) or, if such date is not a Market
Day, on the first Market Day following such date, at the election of Holder at
the Redemption Price determined as set forth in the applicable Pricing
Supplement, together with interest accrued to the Redemption Date; provided,
however, that interest installments due on or prior to the date fixed for
redemption will be payable to the Holder of record at the close of business on
the Regular Record Date.
Unless otherwise specified in the applicable Pricing Supplement, in order to
exercise such an election, a Holder must, unless a different notice period is
specified in the applicable Pricing Supplement, give to the Trustee not less
than 30 days' nor more than 60 days' notice. Unless otherwise specified in the
applicable Pricing Supplement, any such notice shall consist of either (i) the
Note with the form entitled "Option to Elect Redemption" duly completed, or
(ii) a telegram, facsimile transmission or a letter from a member of a national
securities exchange, or of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company in the United States, setting forth
the name of the Holder, the principal amount of the Note, the principal amount
of the Note to be redeemed, the certificate number or a description of the
tenor and terms of the Note, a statement that the option to elect redemption is
being exercised thereby and a guarantee that such Note, together with the duly
completed form entitled "Option to Elect Redemption", will be received by the
Trustee not later than the fifth Business Day after the date of such telegram,
facsimile transmission or letter; provided, however, that such telegram,
facsimile transmission or letter shall only be effective if such Note and such
form, duly completed, are received by the Trustee by such fifth Business Day.
Unless otherwise specified in the applicable Pricing Supplement, exercise of
a redemption option by a Holder will be irrevocable (except pursuant to an
Extension Notice). Such option may be exercised with respect to less than the
entire principal amount of a Note; provided that the portion remaining
Outstanding after such redemption is an authorized denomination.
If a Note is represented by a Book-Entry Note the Depositary's nominee will
be the Holder thereof entitled to exercise a right to redemption. In order to
ensure that the Depositary's nominee will timely exercise a right to repayment
with respect to a particular Note, the beneficial owner of an interest in such
Note must instruct the broker or other direct or indirect participant through
which it holds an interest in such Note to notify the Depositary of its desire
to exercise a right to repayment. Different firms have different cut-off times
for accepting instructions from their customers and, accordingly, each such
beneficial owner should consult the broker or other direct or indirect
participant through which it holds an interest in a Book-Entry Note in order to
ascertain the cut-off time by which such an instruction must be given in order
for timely notice to be delivered to the Depositary.
REPURCHASE
The Company may at any time purchase Notes at any price in the open market or
otherwise. Notes so purchased by the Company may, at its discretion, be held,
resold or surrendered to the Trustee for cancellation.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes of like tenor and having the same Issue
Date will be represented by one or more fully registered securities in
permanent global form (each a "Global Note"). Each Global Note representing
Book-Entry Notes will be deposited with, or on behalf of, The Depository Trust
Company, as Depositary (the "Depositary"), located in the Borough of Manhattan,
The City of New York, and will be
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registered in the name of the Depositary or a nominee of the Depositary.
Notwithstanding any provision of the Indenture or any Note described herein, no
Global Note may be exchanged in whole or in part for Notes registered, and no
transfer of a Global Note in whole or in part may be registered, in the name of
any Person other than the Depositary for such Global Security or any nominee of
such Depositary unless (i) the Depositary has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Note or has
ceased to be qualified to act as such as required by the Indenture or, (ii)
there shall have occurred and be continuing an Event of Default with respect to
the Notes represented by such Global Note. All Notes issued in exchange for a
Global Note or any portion thereof will be registered in such names as the
Depositary may direct. See "Description of Debt Securities--Global Securities"
in the Prospectus. Unless otherwise indicated in the applicable Pricing
Supplement, the Depositary will only accept the deposit of a Global Note
denominated in U.S. dollars.
Ownership of beneficial interests in a Global Note representing Book-Entry
Notes will be limited to institutions that have accounts with the Depositary or
its nominee ("participants") or persons that may hold interests through
participants. The Company has been advised by the Depositary that upon the
issuance of a Global Note representing Book-Entry Notes, and the deposit of
such Global Note with the Depositary, the Depositary will immediately credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Book-Entry Notes represented by such Global Note to the accounts
of participants. The accounts to be credited shall be designated by the
soliciting Distributor or, to the extent that the Book-Entry Notes are offered
and sold directly, by the Company.
The Company has been advised by the Depositary that upon receipt of any
payment of principal of or any premium or interest in respect of a Global Note,
the Depositary will immediately credit, on its book-entry registration and
transfer system, accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such Global Note as shown on the records of the Depositary. Payments by
participants to owners of beneficial interests in a Global Note held through
such participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers registered in "street name", and will be the sole responsibility of
such participants.
The Depositary has advised the Company as follows: the Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. The Depositary was created to hold securities of its
participants and to facilitate the clearance and settlement of securities
transactions, such as transfers and pledges, among its participants in such
securities through electronic computerized book-entry changes in accounts of
the participants, thereby eliminating the need for physical movement of
securities certificates. The Depositary's participants include securities
brokers and dealers (including the Distributors), banks, trust companies,
clearing corporations, and certain other organizations, some of whom (and/or
their representatives) own the Depositary. Access to the Depositary's book-
entry system is also available to others, such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly.
SPECIAL PROVISIONS RELATING TO FOREIGN CURRENCY NOTES
GENERAL
The following provisions, which apply to Foreign Currency Notes, supplement
the description of general terms and conditions of (a) Debt Securities set
forth under the heading "Description of Debt Securities" in the accompanying
Prospectus and (b) Notes set forth above under the heading "Description of
Notes" in this Prospectus Supplement.
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THIS PROSPECTUS SUPPLEMENT, THE ACCOMPANYING PROSPECTUS AND ANY PRICING
SUPPLEMENT DO NOT DESCRIBE ALL RISKS OF AN INVESTMENT IN FOREIGN CURRENCY NOTES
THAT RESULT FROM SUCH NOTES BEING DENOMINATED IN A FOREIGN CURRENCY OR CURRENCY
UNIT EITHER AS SUCH RISKS EXIST AT THE DATE OF THIS PROSPECTUS SUPPLEMENT OR AS
SUCH RISKS MAY CHANGE FROM TIME TO TIME. PROSPECTIVE PURCHASERS SHOULD CONSULT
THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED IN AN
INVESTMENT IN FOREIGN CURRENCY NOTES AND AS TO ANY MATTERS THAT MAY AFFECT THE
PURCHASE OR HOLDING OF A FOREIGN CURRENCY NOTE OR THE RECEIPT OF PAYMENTS OF
PRINCIPAL OF AND ANY PREMIUM AND INTEREST ON A FOREIGN CURRENCY NOTE IN A
SPECIFIED CURRENCY. FOREIGN CURRENCY NOTES ARE NOT AN APPROPRIATE INVESTMENT
FOR INVESTORS WHO ARE UNSOPHISTICATED WITH RESPECT TO FOREIGN CURRENCY
TRANSACTIONS.
Unless otherwise indicated in the applicable Pricing Supplement, a Foreign
Currency Note will not be sold in, or to a resident of, the country of the
Specified Currency in which such Note is denominated.
The authorized denominations of Foreign Currency Notes will be indicated in
the applicable Pricing Supplement.
Specific information pertaining to the foreign currency or currency unit in
which a particular Foreign Currency Note is denominated, including historical
exchange rates and a description of the currency and any exchange controls,
will be described in the applicable Pricing Supplement. Such information
contained therein shall be furnished as a matter of information only and should
not be regarded as indicative of the range of or trends in fluctuations in
currency exchange rates that may occur in the future.
EXCHANGE RATES AND EXCHANGE CONTROLS
An investment in Foreign Currency Notes entails significant risks that are
not associated with a similar investment in a security denominated in U.S.
dollars. Such risks include, without limitation, the possibility of significant
changes in the rate of exchange between the U.S. dollar and the currency or
currency unit designated by the Company at the time of offering (the "Specified
Currency") and the possibility of the imposition or modification of foreign
exchange controls by either the United States or foreign governments. Such
risks generally depend on economic and political events and the supply of and
demand for the relevant currencies over which the Company has no control. In
recent years, rates of exchange between the U.S. dollar and certain foreign
currencies have been highly volatile and such volatility may be expected in the
future. Fluctuations in any particular exchange rate that have occurred in the
past are not necessarily indicative, however, of fluctuations in the rate that
may occur during the term of any Foreign Currency Notes. Depreciation of the
Specified Currency applicable to a Foreign Currency Note against the U.S.
dollar would result in a decrease in the U.S. dollar-equivalent yield of such
Note, in the U.S. dollar-equivalent value of the principal repayable at
Maturity of such Note and, generally, in the U.S. dollar-equivalent market
value of such Note.
Governments have imposed from time to time exchange controls and may in the
future impose or revise exchange controls at or prior to a Foreign Currency
Note's Maturity. Even if there are no exchange controls, it is possible that
the Specified Currency for any particular Foreign Currency Note would not be
available to the Company at an Interest Payment Date for, or at Maturity of,
such Note due to other circumstances beyond the control of the Company.
GOVERNING LAW AND JUDGMENTS
The Debt Securities will be governed by and construed in accordance with the
law of the State of New York. In the event an action based on Foreign Currency
Notes were commenced in a court of the United
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States, it is likely that such court would grant judgment relating to such
Notes only in U.S. dollars. It is not clear, however, whether, in granting such
judgment, the rate of conversion into U.S. dollars would be determined with
reference to the date of default, the date judgment is rendered or some other
date. Holders of Foreign Currency Notes would bear the risk of exchange rate
fluctuations between the time the amount of the judgment is calculated and the
time the Trustee converts U.S. dollars to the Specified Currency for payment of
the judgment.
The information set forth in this Prospectus Supplement is directed to
prospective purchasers of Notes who are United States residents, and the
Company disclaims any responsibility to advise prospective purchasers who are
residents of countries other than the United States with respect to any matters
that may affect the purchase or holding of, or receipt of payments of
principal, premium or interest in respect of, Notes. Such persons should
consult their own advisors with regard to such matters.
UNITED STATES TAXATION
The following is a summary of the principal United States Federal tax
consequences resulting from the beneficial ownership of Notes by certain
persons. This summary does not purport to consider all the possible tax
consequences of the purchase, ownership or disposition of the Notes and is not
intended to reflect the individual tax position of any beneficial owner. It
deals only with Notes and currencies or composite currencies other than U.S.
dollars ("Foreign Currency") held as capital assets. Moreover, except as
expressly indicated, it deals only with initial purchasers, and it does not
deal with beneficial owners with a special tax status or special tax
situations, such as financial institutions, insurance companies, dealers in
securities or currencies, persons holding Notes (or Foreign Currency) as a
hedge against currency risks or as part of a straddle with other investments or
as part of a "synthetic security" or other integrated investment comprised of a
Note and one or more other investments, or persons whose functional currency is
not the U.S. dollar. In the event the Company intends to issue Indexed Notes,
the applicable Pricing Supplement will describe the material Federal income tax
consequences. Except to the extent discussed below under "Non-U.S. Holders",
this summary may not be applicable to non-United States persons not subject to
United States Federal income tax on their worldwide income. The summary is
based upon the United States Federal tax laws and regulations as now in effect
and as currently interpreted and does not take into account possible changes in
such tax laws or such interpretations, which may be applied retroactively. It
does not include any description of the tax laws of any state, local or foreign
governments that may be applicable to the Notes or holders thereof. Persons
considering the purchase of Notes should consult their own tax advisors
concerning the application of the United States Federal tax laws to their
particular situations as well as any consequences to them under the laws of any
other taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a Note
that is for United States Federal income tax purposes (i) a citizen or resident
of the United States, (ii) a corporation, partnership or other entity created
or organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is subject
to United States Federal income taxation regardless of its source. As used
herein, the term "Non-U.S. Holder" means a holder of a Note that is not a U.S.
Holder.
U.S. HOLDERS
Payments of Interest
In general, interest on a Note, whether payable in U.S. dollars or a Foreign
Currency (other than certain payments on a Discount Note, as defined and
described below under "Original Issue Discount"), will be taxable to a U.S.
Holder as ordinary income at the time it is received or accrued, depending on
the holder's method of accounting for tax purposes. If an interest payment is
denominated in or determined by reference to a Foreign Currency, then special
rules, described below under "Foreign Currency Notes", apply.
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Original Issue Discount
The following discussion summarizes the United States Federal income tax
consequences to holders of Notes issued with original issue discount ("OID").
The basic rules for reporting OID are contained in the Internal Revenue Code of
1986, as amended (the "Code"). On February 4, 1994, the Treasury Department
issued final regulations (the "OID Regulations"), which expand and illustrate
the rules provided by the Code.
Special rules apply to OID on a Discount Note, as defined below, that is
denominated in Foreign Currency. See "Foreign Currency Notes--Foreign Currency
Discount Notes".
General. A Note will be treated as issued with OID (a "Discount Note") if the
excess of the Note's "stated redemption price at maturity" over its "issue
price" is greater than a de minimis amount (set forth in the Code and the OID
Regulations). Generally, the "issue price" of a Note (or any Note that is part
of an issue of Notes) will be the first price at which a substantial amount of
Notes that are part of such issue of Notes are sold. Under the OID Regulations,
the "stated redemption price at maturity" of a Note is the sum of all payments
provided by the Note that are not payments of "qualified stated interest". A
"qualified stated interest" payment includes any stated interest payment on a
Note that is unconditionally payable in cash or property (other than debt
instruments of the Company) at least annually at a single fixed rate (or at
certain floating rates) that appropriately takes into account the length of the
interval between stated interest payments. The Pricing Supplement will state
whether a particular issue of Notes will constitute Discount Notes.
In general, if the excess of a Note's stated redemption price at maturity
over its issue price is de minimis, then such excess constitutes "de minimis
OID". Under the OID Regulations, unless the election described below under
"Election to Treat All Interest as Original Issue Discount" is made, such a
Note will not be treated as issued with OID (in which case the following
paragraphs under "Original Issue Discount" will not apply) and a U.S. Holder of
such a Note will recognize capital gain with respect to such de minimis OID as
stated principal payments on the Note are made. The amount of such gain with
respect to each such payment will equal the product of the total amount of the
Note's de minimis OID and a fraction, the numerator of which is the amount of
the principal payment made and the denominator of which is the stated principal
amount of the Note.
In the case of Discount Notes, the inclusion of interest in income for
Federal income tax purposes may vary from the actual cash payments of interest
made on such Notes, generally accelerating income for cash method taxpayers.
Under the OID Regulations, a Note may be a Discount Note where (i) a Floating
Rate Note provides for a maximum interest rate or a minimum interest rate that
is not fixed throughout the term of the Note and it is reasonably expected as
of the issue date to cause the yield on the debt instrument to be significantly
less, in the case of a maximum rate, or more, in the case of a minimum rate,
than the expected yield determined without the maximum or minimum rate, as the
case may be; (ii) a Floating Rate Note provides for significant front-loading
or back-loading of interest; or (iii) a Note bears interest at a floating rate
in combination with one or more floating or fixed rates. Notice will be given
in the applicable Pricing Supplement if the Company determines that a
particular Note will be a Discount Note.
A U.S. Holder of a Discount Note having a maturity of more than one year from
its date of issue must include OID in income for United States Federal income
tax purposes as it accrues under a constant yield method in advance of receipt
of cash payments attributable to such income, regardless of such holder's
method of accounting for tax purposes. Under this method, a U.S. Holder of a
Discount Note generally will have to include in income increasingly greater
amounts of OID over the life of the Note. The Company will report annually to
the Internal Revenue Service (the "IRS") and to holders of Notes the OID
accrued with respect to each Note. Prospective holders are advised to consult
their tax advisers with respect to the particular original issue discount
characteristics of the Note that is being purchased.
Acquisition Premium. A U.S. Holder that purchases a Discount Note at its
original issuance for an amount in excess of its issue price but less than or
equal to its stated redemption price at maturity (any such
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excess being "acquisition premium") is permitted to reduce the amount of OID
which such holder must include in its gross income with respect to such Note
for any taxable year (or portion thereof in which the holder holds the Note) by
the portion of the acquisition premium properly allocable to the period.
Alternatively, a U.S. Holder may make the election described below under
"Original Issue Discount--Election to Treat All Interest as Original Issue
Discount", to compute OID accruals treating the U.S. Holder's purchase price as
the issue price.
Optional Redemption. If the Company has an option to redeem a Note, or the
Holder has an option to cause a Note to be repurchased, prior to the Note's
stated maturity, such option will be presumed to be exercised if, by utilizing
any date on which such Note may be redeemed or repurchased as the maturity date
and the amount payable on such date in accordance with the terms of such Note
(the "redemption price") as the stated redemption price at maturity, the yield
on the Note would be (i) in the case of an option of the Company, lower than
its yield to stated maturity, or (ii) in the case of an option of the Holder,
higher than its yield to stated maturity. If such option is not in fact
exercised when presumed to be exercised, the Note would be treated solely for
OID purposes as if it were redeemed or repurchased, and a new Note were issued
on the presumed exercise date for an amount equal to the Note's adjusted issue
price on that date.
Short-Term Notes. Under the Code, special rules apply with respect to OID on
Notes that mature one year or less from the date of issuance ("Short-Term
Notes"). In general, an individual or other cash basis U.S. Holder of a Short-
Term Note is not required to accrue OID for United States Federal income tax
purposes unless such Holder elects to do so. Accrual basis U.S. Holders and
certain other U.S. Holders, including banks, regulated investment companies,
dealers in securities and cash basis U.S. Holders who so elect, are required to
accrue original issue discount on Short-Term Notes on a straight-line basis
unless an election is made to accrue the OID under a constant yield method
(based on daily compounding). In the case of a U.S. Holder not required and not
electing to include OID in income currently, any gain realized on the sale or
retirement of the Short-Term Note will be ordinary income to the extent of the
OID accrued on a straight-line basis (unless an election is made to accrue the
original issue discount under the constant yield method) through the date of
sale or retirement. U.S. Holders who are not required and do not elect to
accrue OID on Short-Term Notes will be required to defer deductions for
interest on borrowings allocable to Short-Term Notes in an amount not exceeding
the deferred income until the deferred income is realized.
Any U.S. Holder of a Short-Term Note can elect to apply the rules in the
preceding paragraph taking into account the amount of "acquisition discount" as
defined below, if any, with respect to the Note (rather than the OID with
respect to such Note). A cash basis U.S. Holder who makes such an election
cannot revoke such election without the consent of the IRS, and such election
shall apply to all Short-Term Notes acquired by the holder in the year the
election is made and in all subsequent years. Acquisition discount is the
excess of the stated redemption price at maturity of the Short-Term Note over
the U.S. Holder's purchase price. Acquisition discount will be treated as
accruing on a straight-line basis or, at the election of the Holder, on a
constant-yield basis.
For purposes of determining the amount of OID subject to these rules, the OID
Regulations provide that no interest payments on a Short-Term Note are
qualified stated interest, but instead such interest payments are included in
the Short-Term Note's stated redemption price at maturity.
Notes Purchased at a Premium
Under the Code, a U.S. Holder that purchases a Note for an amount in excess
of its stated redemption price at maturity will not be subject to the OID rules
and may elect to treat such excess as "amortizable bond premium", in which case
the amount of qualified stated interest required to be included in the U.S.
Holder's income each year with respect to interest on the Note will be reduced
by the amount of amortizable bond premium allocable (based on the Note's yield
to maturity) to such year. However, if the Note may be optionally redeemed
after the U.S. Holder acquires it at a price in excess of its stated redemption
price at maturity, special rules would apply, which could result in a deferral
of the amortization of some bond
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premium until later in the term of the Note. Any election to amortize bond
premium shall apply to all bonds (other than bonds the interest on which is
excludable from gross income) held by the U.S. Holder at the beginning of the
first taxable year to which the election applies or thereafter acquired by the
U.S. Holder, and is irrevocable without the consent of the Internal Revenue
Service (the "IRS"). See also "Original Issue Discount--Election to Treat All
Interest as Original Issue Discount".
Notes Purchased at a Market Discount
If a U.S. Holder purchases a Note, other than a Short-Term Note, for an
amount that is less than its stated redemption price at maturity or, in the
case of a Discount Note, its adjusted issue price (a "Market Discount Note"),
the amount of the difference generally will be treated as "market discount",
subject to a de minimis rule similar to the rule relating to de minimis OID
described under "Original Issue Discount--General".
In general, any gain recognized on the maturity or disposition of a Market
Discount Note will be treated as ordinary income to the extent that such gain
does not exceed the accrued market discount on such Note which has not
previously been included in income. Alternatively, a U.S. Holder of a Market
Discount Note may elect to include market discount in income currently over the
life of the Note, in which case the rules described above regarding the
treatment as ordinary income of gain upon disposition would not apply. Such an
election applies to all debt instruments with market discount acquired by the
electing U.S. Holder on or after the first day of the first taxable year to
which the election applies and may not be revoked without the consent of the
IRS.
Market discount accrues on a straight-line basis unless the U.S. Holder
elects to accrue such market discount on a constant yield to maturity basis.
Such an election shall apply only to the Note with respect to which it is made
and may not be revoked without the consent of the IRS. A U.S. Holder of a
Market Discount Note who does not elect to include market discount in income
currently generally will be required to defer deductions for interest on
borrowings allocable to such Note in an amount not exceeding the accrued market
discount on such Note until the maturity or disposition of such Note.
The market discount rules do not apply to a Short-Term Note.
Election To Treat All Interest as Original Issue Discount
Any U.S. Holder may elect to include in gross income all interest that
accrues on a Note using the constant yield method described above under the
heading "Original Issue Discount--General", with the modifications described
below. For purposes of this election, interest includes stated interest, OID,
de minimis OID, market discount (described above under "Notes Purchased at a
Market Discount"), acquisition discount, de minimis market discount and
unstated interest, as adjusted by any amortizable bond premium (described above
under "Notes Purchased at a Premium") or acquisition premium.
In applying the constant yield method to a Note with respect to which this
election has been made, the issue price of the Note will equal the electing
U.S. Holder's tax basis in the Note immediately after its acquisition, the
issue date of the Note will be the date of its acquisition by the electing U.S.
Holder, and no payments on the Note will be treated as payments of qualified
stated interest. This election will generally apply only to the Note with
respect to which it is made and may not be revoked without the consent of the
IRS. If this election is made with respect to a Note with amortizable bond
premium, then the electing U.S. Holder will be deemed to have elected to apply
amortizable bond premium against interest with respect to all debt instruments
with amortizable bond premium (other than debt instruments the interest on
which is excludable from gross income) held by such electing U.S. Holder as of
the beginning of the taxable year in which the Note with respect to which the
election is made is acquired or thereafter acquired. The deemed election with
respect to amortizable bond premium may not be revoked without the consent of
the IRS.
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If the election described above to apply the constant-yield method to all
interest on a Note is made with respect to a Market Discount Note, as defined
above, then the electing U.S. Holder will be treated as having made the
election discussed above under "Notes Purchased at a Market Discount" to
include market discount in income currently over the life of all debt
instruments held or thereafter acquired by such U.S. Holder.
Purchase, Sale and Retirement of the Notes
General. A U.S. Holder's tax basis in a Note will generally be its U.S.
dollar cost (which, in the case of a Note purchased with a Foreign Currency,
will be the U.S. dollar value of the purchase price on the date of purchase),
increased by the amount of any OID or market discount (or acquisition discount,
in the case of a Short-Term Note) included in the U.S. Holder's income with
respect to the Note and the amount, if any, of income attributable to de
minimis OID included in the U.S. Holder's income with respect to the Note, and
reduced by the sum of (i) the amount of any payments that are not qualified
stated interest payments, and (ii) the amount of any amortizable bond premium
applied to reduce interest on the Note. A U.S. Holder generally will recognize
gain or loss on the sale or retirement of a Note equal to the difference
between the amount realized on the sale or retirement and the tax basis of the
Note. The amount realized on a sale or retirement for an amount in Foreign
Currency will be the U.S. dollar value of such amount on the date of sale or
retirement. Except to the extent described above under "Original Issue
Discount--Short Term Notes" or "Market Discount" or in the next succeeding
paragraph, and except to the extent attributable to accrued but unpaid
interest, gain or loss recognized on the sale or retirement of a Note will be
capital gain or loss and will be long-term capital gain or loss if the Note was
held for more than one year.
Foreign Currency Notes
Interest Payments. If an interest payment on a Note is denominated in or
determined by reference to a Foreign Currency, the amount of income recognized
by a cash basis U.S. Holder will be the U.S. dollar value of the interest
payment, based on the exchange rate in effect on the date of receipt,
regardless of whether the payment is in fact converted into U.S. dollars at
that time. No exchange gain or loss will be recognized with respect to the
receipt of such payment.
Accrual basis U.S. Holders may determine the amount of income recognized with
respect to such interest payments in accordance with either of two methods.
Under the first method, the amount of income recognized will be based on the
average exchange rate in effect during the interest accrual period (or, in the
case of an accrual period that spans two taxable years, at the average exchange
rate for the partial period within the taxable year). Under the second method,
an accrual basis U.S. Holder may elect to translate interest income into U.S.
dollars at the spot exchange rate in effect on the last day of the accrual
period (or, in the case of an accrual period that spans two taxable years, at
the spot exchange rate in effect on the last day of the partial period within
the taxable year). Additionally, if a payment of interest is actually received
within five business days of the last day of the accrual period or taxable
year, an accrual basis U.S. Holder applying the second method may instead
translate such accrued interest into U.S. dollars at the spot exchange rate in
effect on the day of actual receipt (in which case no exchange gain or loss
will result). Any election to apply the second method will apply to all debt
instruments held by the U.S. Holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by the U.S. Holder, and
will be irrevocable without the consent of the IRS. Upon receipt of an interest
payment (including a payment attributable to accrued but unpaid interest upon
the sale or retirement of a Note) determined by reference to a Foreign
Currency, an accrual basis U.S. Holder will recognize exchange gain or loss
(which will be treated as ordinary income or loss) with respect to accrued
interest income. The amount of ordinary income or loss recognized will equal
the difference, if any, between the U.S. dollar value of the interest payment
received (determined on the date such payment is received) in respect of such
accrual period and the U.S. dollar value of interest income that has accrued
during such accrual period under one of the methods described above.
Exchange of Foreign Currencies. Foreign Currency received as interest on a
Note or on the sale or retirement of a Note will have a tax basis equal to its
U.S. dollar value at the time such interest is received or
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at the time of such sale or retirement, as the case may be. Foreign Currency
that is purchased will generally have a tax basis equal to the U.S. dollar
value of the Foreign Currency on the date of purchase. Any gain or loss
recognized on a sale or other disposition of a Foreign Currency (including its
use to purchase Notes or upon exchange for U.S. dollars) will be ordinary
income or loss.
Foreign Currency Discount Notes. In the case of a Discount Note or Short-Term
Note, OID or acquisition discount is determined in units of Foreign Currency
and then translated into U.S. dollars in the same manner as stated interest
accrued by an accrual basis U.S. Holder as described above in "Foreign Currency
Notes--Interest Payments". Upon receipt of an amount attributable to OID
(whether in connection with a payment of interest or the sale or retirement of
a Note), the amount of exchange gain or loss on the accrued discount generally
will equal the difference, if any, between the U.S. dollar value of the income
received at the rate of exchange on the date of receipt and the U.S. dollar
value of such income, as translated above.
Market Discount. In the case of a Note with market discount, market discount
is determined in units of the Foreign Currency. Accrued market discount taken
into account upon the sale or retirement of the Note (other than accrued market
discount required to be taken into account currently) is translated into U.S.
dollars at the exchange rate on such disposition date and no part of such
accrued market discount is treated as exchange gain or loss. Alternatively,
accrued market discount currently includible in income by a U.S. Holder for any
accrual period is translated into U.S. dollars at the average exchange rate in
effect during such accrual period, and the amount of exchange gain or loss on
the accrued discount determined upon sale or retirement of the Note generally
will equal the difference, if any, between the U.S. dollar value of the accrued
discount at the rate of exchange on the date of disposition and the U.S. dollar
value of such accrued discount, as translated above.
Amortizable Bond Premium. In the case of a Note that is denominated in a
Foreign Currency, bond premium will be computed in units of Foreign Currency
and the amortizable bond premium will reduce interest income in units of the
Foreign Currency. At the time amortized bond premium offsets interest income, a
U.S. Holder may realize ordinary income or loss, measured by the difference
between exchange rates at that time and at the time of the acquisition of the
Notes.
Exchange Gain or Loss. Gain or loss recognized by a U.S. Holder on the sale
or retirement of a Note that is attributable to changes in exchange rates will
be treated as ordinary income or loss. To the extent the amount realized on
disposition of a Note represents accrued but unpaid interest, however, such
amount must be taken into account as interest income, with exchange gain or
loss computed as described in "Foreign Currency Notes--Interest Payment".
However, exchange gain or loss is taken into account only to the extent of
total gain or loss realized on the transaction. Gain or loss attributable to
fluctuations in exchange rates will equal the difference between the U.S.
dollar value of the Foreign Currency principal amount of the Note, determined
on the date such payment is received or the date the Note is disposed of, and
the U.S. dollar value of the Foreign Currency principal amount of the Note,
determined on the date the U.S. Holder acquired the Note.
Indexed Notes
The applicable Pricing Supplement will contain a discussion of any special
United States Federal income tax rules with respect to currency indexed Notes
or other indexed Notes.
NON-U.S. HOLDERS
Under present Federal income and estate tax law, assuming certain
certification requirements are met (including identification of the beneficial
owner of the Note) and subject to the discussion of backup withholding below:
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(a) Payments of interest (including any OID) on a Note to any Non-U.S.
Holder will not be subject to Federal income or withholding tax, provided
that (1) the holder is not a direct or indirect 10% or greater stockholder
of the Company, (2) the holder is not (i) a controlled foreign corporation
related to the Company, or (ii) a bank receiving interest described in
section 881(c)(3)(A) of the Code, (3) such interest payments are not
effectively connected with a U.S. trade or business and (4) such interest
is not "contingent interest" within the meaning of section 871(h)(4) of the
Code (which generally includes interest determined by reference to certain
attributes or payments of the debtor or a related party, but not interest
determined by reference to changes in the value of or yield on certain
actively traded property or by reference to any other amount of non-
contingent interest).
(b) Generally, a Non-U.S. Holder will not be subject to Federal income or
withholding tax on any amount which constitutes capital gain upon
retirement or disposition of a Note, unless (1) the gain is effectively
connected with the conduct of a trade or business in the United States by
the Non-U.S. Holder or, if a treaty applies, generally attributable to the
United States "permanent establishment" maintained by the holder, or (2)
such holder is an individual who is present in the United States for 183
days or more during the taxable year and who has a tax home in the United
States.
(c) The Notes or any portion thereof will not be includible in the estate
of a Non-U.S. Holder unless (1) the individual is a direct or indirect 10%
or greater stockholder of the Company, (2) at the time of such individual's
death, payments in respect of the Notes would have been effectively
connected with the conduct by such individual of a trade or business in the
United States or (3) the Notes provide for contingent interest within the
meaning of section 871(h)(4) of the Code.
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current Federal income tax law, information (including a beneficial
owner's name, address and taxpayer identification number, and the aggregate
amount of interest, principal payments, and the proceeds of sales before
maturity) with respect to certain noncorporate beneficial owners of Notes must
be provided to the IRS. In addition, backup withholding tax is required with
respect to certain interest and principal payments made to, and the proceeds of
sales before maturity by, certain holders if such persons fail to supply
taxpayer identification numbers and other information. Interest paid with
respect to a Note, and payment of the proceeds from a sale of a Note to or
through the United States office of a broker, received by a Non-U.S. Holder
will not be subject to information reporting and backup withholding if the
payor has received the appropriate certification statements. The appropriate
certification procedures require that the holder certify as to its status and
provide its name and address. In addition, payments of the proceeds from the
sale of a Note to or through a foreign office of a broker or the foreign office
of a custodian, nominee or other agent acting on behalf of the beneficial owner
of a Note will not be subject to information reporting or backup withholding,
except that if the broker, custodian, nominee or other agent is a United States
person, a controlled foreign corporation for Federal income tax purposes or a
foreign person 50% or more of whose gross income is from a United States trade
or business, information reporting may be required with respect to payments
made to such owners.
Any amounts withheld under the backup withholding rules from a payment to a
beneficial owner would be allowed as a refund or a credit against such
beneficial owner's United States Federal income tax provided the required
information is furnished to the IRS.
PLAN OF DISTRIBUTION OF NOTES
Under the terms of a Distribution Agreement, dated June 7, 1994 (the
"Distribution Agreement"), the Notes are offered on a continuing basis by the
Company through the Distributors, each of which has agreed to use reasonable
efforts to solicit purchases of the Notes. Unless otherwise disclosed in the
applicable Pricing Supplement, the Company will pay a commission, or grant a
discount, to the Distributors. The Company will pay each Distributor a
commission of from .125% to .750% of the principal amount of each Note,
S-23
<PAGE>
depending on its Stated Maturity, sold through such Distributor, as agent. The
Company will have the sole right to accept offers to purchase Notes and may
reject any such offer, in whole or in part. Each Distributor shall have the
right, in its discretion reasonably exercised, without notice to the Company,
to reject any offer to purchase Notes received by it, in whole or in part.
The Company also may sell Notes to any Distributor, acting as principal, at a
discount to be agreed upon at the time of sale. Such Notes may be resold at
market prices prevailing at the time of resale, at prices related to such
prevailing market prices or at negotiated prices, as determined by such
Distributor. Such Notes may also be resold to certain securities dealers who
may resell to investors at the public offering price set forth on the cover
page of the applicable Pricing Supplement. Such dealers also may receive
compensation in the forms of discounts, concessions or commissions from the
Distributors and/or commissions from the purchasers for whom they may act as
agents. Unless otherwise specified in the applicable Pricing Supplement, any
concession allowed by any Distributor to any such dealer shall not be in excess
of the commission or discount received by such Distributor from the Company.
The offering price and other selling terms for such resales may from time to
time be varied by such Distributor.
The Distributors, whether acting as agents or as principals for their own
accounts, may also receive commissions from purchasers of Notes for whom they
may act as agent.
The Company has reserved the right to sell Notes directly on its own behalf
and to accept (but not solicit) offers to purchase Notes through additional
distributors on substantially the same terms and conditions (including
commission rates) as would apply to purchases of Notes pursuant to the
Distribution Agreement. In addition, the Company has reserved the right to
appoint additional agents for the purpose of soliciting offers to purchase
Notes. Such additional distributors or agents, as the case may be, will be
named in the applicable Pricing Supplement. No commission will be payable on
any Notes sold directly by the Company.
The Distributors and any dealers to whom the Distributors may sell Notes may
be deemed to be "underwriters" within the meaning of the Securities Act of 1933
(the "Act"). The Company has agreed to indemnify the Distributors against
certain liabilities, including civil liabilities under the Securities Act of
1933, or contribute to payments which the Distributors may be required to make
in respect thereof. The Company has agreed to reimburse the Distributors for
certain expenses.
Unless otherwise indicated in the applicable Pricing Supplement, payment of
the purchase price of Notes, other than Foreign Currency Notes, will be
required to be made in funds immediately available in The City of New York.
With respect to payment of the purchase price of Foreign Currency Notes, see
"Important Currency Exchange Information" herein.
CS First Boston Corporation and J.P. Morgan Securities Inc. engage in
transactions with or perform services for the Company in the ordinary course of
business.
VALIDITY OF NOTES
The validity of the Notes will be passed upon for the Company by Skadden,
Arps, Slate, Meagher & Flom, New York, New York, and for the Distributors by
Shearman & Sterling, New York, New York.
S-24
<PAGE>
GLOSSARY
Set forth below are definitions, or the locations elsewhere of definitions,
of some of the terms used in this Prospectus Supplement.
"Calculation Agent" means the agent appointed by the Company to calculate
interest rates for Floating Rate Notes. Unless otherwise provided in a Pricing
Supplement, the Calculation Agent will be Continental Bank, National
Association.
"Calculation Date" means the date on which the Calculation Agent is to
calculate an interest rate for a Floating Rate Note, which is the applicable
date set forth below, unless otherwise indicated in the applicable Pricing
Supplement:
Prime Rate--The Prime Rate Interest Determination Date.
CD Rate--The earlier of (i) the tenth day after the related CD Rate
Interest Determination Date or, if such day is not a Market Day, the next
succeeding Market Day; and (ii) the Market Day next preceding the relevant
Interest Payment Date or date of Maturity, as the case may be.
Commercial Paper Rate--The earlier of (i) the tenth day after the related
Commercial Paper Interest Determination Date or, if such day is not a
Market Day, the next succeeding Market Day; and (ii) the Market Day next
preceding the relevant Interest Payment Date or date of Maturity, as the
case may be.
Federal Funds Rate--The earlier of (i) the tenth day after the related
Federal Funds Interest Determination Date or, if such day is not a Market
Day, the next succeeding Market Day; and (ii) the Market Day next preceding
the relevant Interest Payment Date or date of Maturity, as the case may be.
LIBOR--The Libor Interest Determination Date.
Treasury Rate--The earlier of (i) the tenth day after the related
Treasury Interest Determination Date or, if such day is not a Market Day,
the next succeeding Market Day; and (ii) the Market Day next preceding the
relevant Interest Payment Date or date of Maturity, as the case may be.
"CD Rate" means the rate calculated as set forth under the heading
"Description of Notes--Floating Rate Notes--CD Rate Notes", unless otherwise
indicated in the applicable Pricing Supplement.
"Commercial Paper Rate" means the rate calculated as set forth under the
heading "Description of Notes--Floating Rate Notes--Commercial Paper Rate
Notes", unless otherwise indicated in the applicable Pricing Supplement.
"Composite Quotations" means the daily statistical release entitled
"Composite 3:30 p.m. Quotations for U.S. Government Securities", or any
successor publications, published by the Federal Reserve Bank of New York.
"Exchange Rate Agent" means the agent appointed by the Company to convert
principal and any premium and interest payments in respect of Foreign Currency
Notes into U.S. dollars. Unless otherwise provided in a Pricing Supplement, the
Exchange Rate Agent will be Continental Bank, National Association.
"Federal Funds Rate" means the rate calculated as set forth under the heading
"Description of Notes--Floating Rate Notes--Federal Funds Rate Notes", unless
otherwise indicated in the applicable Pricing Supplement.
"H.15(519)" means the weekly statistical release entitled "Statistical
Release H.15(519), Selected Interest Rates", or any successor publication,
published by the Board of Governors of the Federal Reserve System.
"Index Maturity" means, with respect to a Floating Rate Note, the period to
maturity of the instrument or obligation on which the interest rate formula is
based, as indicated in the applicable Pricing Supplement.
S-25
<PAGE>
"Initial Interest Rate" means the rate at which a Floating Rate Note will
bear interest from its Issue Date (or that of a predecessor Note) to the first
Reset Date, as indicated in the applicable Pricing Supplement.
"Interest Determination Date" means the date as of which the interest rate
for a Floating Rate Note is to be calculated, to be effective as of the
following Reset Date and calculated on the related Calculation Date (except in
the case of Prime Rate and LIBOR, which are calculated on the related Prime
Rate Interest Determination Date and LIBOR Interest Determination Date,
respectively). See the fourth paragraph under the heading "Description of
Notes--Floating Rate Notes" for the Interest Determination Dates for Floating
Rate Notes. The Interest Determination Dates for any Floating Rate Note will
also be indicated in the applicable Pricing Supplement.
"Interest Reset Date" means the date on which a Floating Rate Note will begin
to bear interest at the variable interest rate determined as of any Interest
Determination Date. See the third paragraph under the heading "Floating Rate
Notes" for the applicable Reset Dates for such Notes. The Reset Dates with
respect to any Floating Rate Note will also be set forth in the applicable
Pricing Supplement and in such Note.
"LIBOR" means the rate calculated as set forth under the heading "Description
of Notes--Floating Rate Notes--LIBOR Notes", unless otherwise indicated in the
applicable Pricing Supplement.
"London Market Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market.
"Market Day" means (a) with respect to any Note, any day that is not a
Saturday or Sunday and that, in The City of New York or Chicago, Illinois, is
not a day on which banking institutions generally are authorized or obligated
by law or executive order to close, and (b) with respect to LIBOR Notes only,
any such day on which dealings in deposits in U.S. Dollars are transacted in
the London interbank market, (c) with respect to Foreign Currency Notes (other
than Foreign Currency Notes denominated in European Currency Units ("ECUs"))
only, any such day that is not a Saturday or a Sunday and that, in the
principal financial center of the country of the Specified Currency is not a
day on which banking institutions generally are authorized or obligated by law
or executive order to close and (d) with respect to Foreign Currency Notes
denominated in ECU, any day that is designated as an ECU settlement day by the
ECU Banking Association in Paris or otherwise generally regarded in the ECU
interbank market as a day in which payments in ECU are made.
"Market Exchange Rate" for any Specified Currency means the noon buying rate
in The City of New York for cable transfer for such Specified Currency as
certified for customs purposes by (or if not so certified as otherwise
determined by) the Federal Reserve Bank of New York.
"Maturity", when used with respect to any Note, means the date on which the
principal of such Note or an installment of principal becomes due and payable
as provided therein or as provided in the Indenture, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or otherwise.
"Prime Rate" means the rate calculated as set forth under the heading
"Description of Notes--Floating Rate Notes--Prime Rate Notes", unless otherwise
indicated in the applicable Pricing Supplement.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on the
Reuters Monitor Money Rates Service (or such other page as may replace the NYMF
page on that service for the purpose of displaying the prime rate or base
lending rate of major United States banks).
"Specified Currency" shall have the meaning set forth under the heading
"Important Currency Exchange Information".
"Spread" means the number of basis points specified in the Note and the
applicable Pricing Supplement as being applicable to the interest rate for a
particular Floating Rate Note.
S-26
<PAGE>
"Spread Multiplier" means the percentage specified in the Note and the
applicable Pricing Supplement as being applicable to the interest rate for a
particular Floating Rate Note.
"Stated Maturity", when used with respect to any Note or any installment of
principal thereof or interest thereon, means the date specified in such Note as
the fixed date on which the principal of such Note or such installment of
principal or interest is due and payable.
"Telerate Page 3750" means the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service
or such other service as may be nominated as the information vendor, for the
purpose of displaying rates or prices relating to LIBOR).
"Treasury Rate" means the interest rate calculated as set forth under the
heading "Description of Notes--Floating Rate Notes--Treasury Rate Notes",
unless otherwise indicated in the applicable Pricing Supplement.
S-27
<PAGE>
$100,000,000
[LOGO OF LUKENS APPEARS HERE]
Debt Securities
------------
Lukens Inc. (the "Company") may offer from time to time its unsecured debt
securities consisting of notes, debentures or other evidences of indebtedness
(the "Debt Securities") at an aggregate initial offering price of not more
than $100,000,000 or, if applicable, the equivalent thereof in one or more
foreign currencies or currency units. The Debt Securities may be offered as
separate series in amounts, at prices and on terms to be determined in light
of market conditions at the time of sale and set forth in a Prospectus
Supplement or Prospectus Supplements.
The terms of each series of Debt Securities, including, where applicable,
the specific designation, aggregate principal amount, authorized
denominations, maturity, rate or rates and time or times of payment of any
interest, any terms for optional or mandatory redemption or payment of
additional amounts or any sinking fund provisions, any initial public offering
price, the proceeds to the Company and any other specific terms in connection
with the offering and sale of such series will be set forth in a Prospectus
Supplement or Prospectus Supplements. Debt Securities may be issued with
amounts payable in respect of principal of or any premium or interest on the
Debt Securities determined by reference to the value, rate or price of one or
more specified indices.
The Debt Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See
"Plan of Distribution". If any agents of the Company or any underwriters are
involved in the sale of any Debt Securities in respect of which this
Prospectus is being delivered, the names of such agents or underwriters and
any applicable commissions or discounts will be set forth in the accompanying
Prospectus Supplement.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is June 7, 1994.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY AND THEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THEIR RESPECTIVE DATES.
----------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the United States
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission, at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 13th Floor, 7
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission, Washington, D.C.
20549, at prescribed rates. The common stock of the Company is listed on, and
reports, proxy statements and other information concerning the Company can be
inspected at the offices of, the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. This Prospectus does not contain all information set
forth in the Registration Statement and Exhibits thereto which the Company has
filed with the Commission under the United States Securities Act of 1933, as
amended (the "Act"), and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
There is hereby incorporated by reference in this Prospectus the Company's
(i) Annual Report on Form 10-K for the fiscal year ended December 25, 1993 and
(ii) Quarterly Report on Form 10-Q for the fiscal quarter ended March 26, 1994
heretofore filed with the Commission by the Company pursuant to the Exchange
Act.
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 Debt Securities shall be deemed to be
incorporated by reference in this Prospectus. Any statement contained herein or
in a document all or a portion of which is incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon the written or oral request
of any such person, a copy of any and all of the foregoing documents
incorporated by reference herein, other than the exhibits to such documents
(unless such exhibits are specifically incorporated by reference in such
documents). Requests should be directed to: Lukens Inc., 50 South First Avenue,
Coatesville, Pennsylvania 19320-0911, Attention: Corporate Secretary, telephone
number (610) 383-2000.
----------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars",
"U.S. dollars" or "U.S.$").
2
<PAGE>
THE COMPANY
The Company, through its Lukens Steel Group, is a specialized producer of an
extensive range of carbon, alloy and clad plate steels and, since the
acquisition of Washington Steel Corporation in 1992, a major producer of flat
rolled stainless steel products, including stainless steel plate, sheet, strip,
hot band and slabs. The Company endeavors at both its Lukens Steel Group and
Washington Stainless Group to establish strong market positions by emphasizing
higher value specialized products and by providing superior levels of customer
service. The Company has significant market shares in certain market segments,
such as alloy, clad, heavy gauge and heat treated carbon plate steel and
certain grades of flat rolled stainless steel. Both the Lukens Steel Group and
Washington Stainless Group employ state-of-the-art electric arc furnace
technology in the production of raw steel and extensive and specialized
processing and finishing capabilities. As part of a program adopted in 1993 to
focus the Company's resources on its steel businesses, the Company recently
sold its safety products and materials handling businesses and has announced
that its other industrial businesses are for sale. These businesses are now
reported by the Company as discontinued operations.
The Lukens Steel Group's competitive strategy is to provide superior service
by meeting customer requirements for specialized grades and quality, non-
standard shapes and sizes and short delivery times, while pricing its products
competitively. Because of overcapacity in the steel industry, price competition
has been intense. Prices and availability of raw materials fluctuate
significantly and are affected by a number of factors. To support its
competitive strategy, the Company identifies and pursues capital expenditure
programs that enhance its capabilities and productivity, and employs a flexible
"job shop" manufacturing philosophy. The flexibility of its production process
allows it to produce the broadest range of plate sizes and grades in the
industry. The majority of the Lukens Steel Group's sales involve non-standard
sizes, specialized chemistries or unique finishing capabilities. As a result,
the Lukens Steel Group manufactures most of its products for a particular
customer order. The Company believes it is the largest producer of alloy and
clad plate steel in the United States. Furthermore, the Lukens Steel Group has
the production scheduling systems to provide what it believes is the highest
shipped-on-time performance in the industry. Principal end use markets for the
Lukens Steel Group's products include industrial and capital equipment, bridge
construction, power generation, process vessels and environmental control,
mining and construction equipment. The Lukens Steel Group represented 51.6% of
the Company's consolidated net sales (which excludes sales from discontinued
operations) in fiscal 1993.
The Washington Stainless Group focuses on specialized flat rolled stainless
steel products by using a customer-oriented strategy similar to that employed
by the Lukens Steel Group. The Washington Stainless Group emphasizes light
gauge, non-standard width cold rolled products for markets in which importers
and larger domestic producers are typically not as active. However, in fiscal
1993, increased foreign competition in certain segments affected prices and
volumes. The Washington Stainless Group is the largest volume distributor of
flat rolled stainless steel in North America with seven service centers
strategically located across the United States and Canada that have the
capacity to process 70,000 tons per year. Principal end uses for the Washington
Stainless Group's products include tank fabrication, tubular products and
holding vessels for the chemical and pulp paper industries, food service
equipment and architectural uses as well as consumer durables, such as
appliances, sinks and automotive wheel covers. The Washington Stainless Group
represented 48.4% of the Company's consolidated net sales (which excludes sales
from discontinued operations) in fiscal 1993.
The Company's goal is to create North America's only flexible, cost-effective
manufacturing process that can produce carbon, alloy and stainless steel
products. In 1993, Lukens launched a $400 million, five-year capital investment
program aimed primarily at promoting synergies between the Lukens Steel Group
and Washington Stainless Group and expanding product lines to take advantage of
the anticipated long-term growth in stainless steel markets. The Company began
construction in 1993 on the centerpiece of the program, a Steckel-type hot
rolling mill at Conshohocken, Pennsylvania which will produce wider and thinner
plate and sheet products. The mill is scheduled to start up in December 1994.
The Company also announced it will install a stainless steel refining system at
its Coatesville steelmaking facility that is expected
3
<PAGE>
to be completed in early 1995. This system will make Coatesville the only
melting operation in North America that can produce carbon, alloy and stainless
steels. During 1993, the Washington Stainless Group implemented a significant
capital program to increase the capacities of existing finishing lines at its
Washington, Pennsylvania and Massillon, Ohio facilities and to upgrade an
existing cold rolling mill at its Massillon, Ohio facility.
The Company was incorporated in Delaware in 1986 as the successor to a
business founded in 1810 and conducts its operations through subsidiaries. The
Company's corporate headquarters are located at 50 South First Avenue,
Coatesville, Pennsylvania 19320-0911 and its telephone number is (610) 383-
2000.
4
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below have been derived
from the consolidated financial statements of the Company, which (except for
the first fiscal quarters of 1994 and 1993 and the ratios of earnings to fixed
charges) have been audited by Arthur Andersen & Co., independent public
accountants.
The selected financial data are qualified in their entirety by, and should be
read in conjunction with, the Company's consolidated financial statements and
related notes included in the Company's Annual Report on Form 10-K for the
fiscal year ended December 25, 1993 and the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 26, 1994, incorporated herein by
reference.
<TABLE>
<CAPTION>
1ST QUARTER 1ST QUARTER
1994(1) 1993(1) 1993(1) 1992(1) 1991 1990 1989
----------- ----------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
DATA:
Net sales............... $220,914 $221,116 $862,072 $695,772 $423,154 $488,217 $476,838
Operating earnings
(loss)................. (15) 14,286 36,602 51,820 22,006 59,376 60,025
Net non-operating
(expense) income....... (4,080) (4,248) (16,319) (12,737) 225 (686) (2,758)
Income tax expense
(benefit).............. (1,597) 3,876 7,161 15,289 8,432 21,829 21,275
Earnings (loss) from
continuing operations.. (2,498) 6,162 13,122 23,794 13,799 36,861 35,992
Discontinued operations,
net of tax............. -- 16 2,780 9,261 9,197 7,291 5,502
Net earnings (loss)
before cumulative
effect of accounting
changes................ (2,498) 6,178 15,902 33,055 22,996 44,152 41,494
Per common share--pri-
mary
Continuing operations. (.21) .39 .76 1.63 .96 2.80 2.72
Discontinued
operations........... -- -- .19 .68 .72 .58 .43
Net earnings (loss)... (.21) .39 .95 2.31 1.68 3.38 3.15
Ratio of earnings to
fixed charges.......... .17(2) 3.09 2.04 3.45 8.05 17.08 13.40
BALANCE SHEET DATA:
Working capital......... 130,406 160,680 146,034 142,466 104,752 96,442 87,629
Plant and equipment, net
of depreciation........ 420,352 406,220 431,853 410,206 210,578 201,720 185,537
Total assets............ 785,004 813,032 817,178 760,045 432,360 411,919 376,660
Total debt.............. 204,891 231,250 226,589 223,275 53,262 59,034 62,683
Stockholders'
investment............. 262,027 267,246 266,754 329,073 248,323 236,239 202,893
OTHER DATA:
Cash flow from
operations............. 2,528 7,511 72,290 59,184 66,344 92,112 38,456
Depreciation and
amortization........... 11,735 11,319 45,488 39,232 25,833 25,789 23,709
Capital expenditures.... 20,751 6,773 67,424 36,002 34,696 35,018 25,471
Cash dividends--common.. 3,634 3,623 14,508 13,374 12,397 11,796 9,245
Per share.............. .25 .25 1.00 1.00 1.00 .94 .74
</TABLE>
- --------
(1) Includes results from the Washington Steel Corporation acquisition on April
24, 1992.
(2) In the first quarter of 1994, earnings were insufficient to cover fixed
charges by $4,181.
5
<PAGE>
USE OF PROCEEDS
Except as otherwise set forth in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be used for general corporate
purposes, including the repayment of debt.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the Company
as of March 26, 1994.
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
Current Maturities of Long-Term Debt............................ $ 7,685
========
Long-Term Debt
Borrowings under revolving credit agreements.................. $ 15,000
7 5/8% notes due 2004, net of unamortized discount of $663.... 149,337
Other......................................................... 32,869
--------
Total Long-Term Debt........................................ 197,206
Stockholders' Investment
Preferred stock, $.01 par value--authorized 1,000,000 shares;
issued 538,797 shares........................................ 32,328
Common stock, $.01 par value--authorized 40,000,000 shares;
issued 15,813,259 shares..................................... 158
Capital in excess of par value................................ 82,958
Earnings invested............................................. 187,344
Foreign currency translation adjustments...................... (1,077)
Deferred compensation--ESOP................................... (25,139)
Repurchased stock, at cost.................................... (14,545)
--------
Total Stockholders' Investment.............................. 262,027
Total Capitalization...................................... $459,233
========
</TABLE>
6
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DESCRIPTION OF DEBT SECURITIES
The Securities are to be issued under an Indenture, dated as of July 1, 1992
(the "Indenture"), between the Company and Continental Bank, National
Association, as successor trustee to Morgan Guaranty Trust Company of New York,
as Trustee (the "Trustee"), a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part. The Securities may
be issued from time to time in one or more series. The particular terms of each
series, or of Securities forming a part of a series, which are offered by a
Prospectus Supplement will be described in such Prospectus Supplement.
The following summaries of certain provisions of the Indenture do not purport
to be complete and are subject, and are qualified in their entirety by
reference, to all the provisions of the Indenture, including the definitions
therein of certain terms, and, with respect to any particular Securities, to
the description of the terms thereof included in the Prospectus Supplement
relating thereto. Wherever particular Sections or defined terms of the
Indenture are referred to herein or in a Prospectus Supplement, such Sections
or defined terms are incorporated by reference herein or therein, as the case
may be.
The term "Securities", as used under this caption, refers to all Securities
to be issued under the Indenture and includes the Debt Securities. In addition,
the Company's 7 5/8% Notes due 2004 were issued August 4, 1992 under the
Indenture.
GENERAL
The Indenture provides that Securities in separate series may be issued
thereunder from time to time without limitation as to aggregate principal
amount. The Company may specify a maximum aggregate principal amount for the
Securities of any series. (Section 301) The Securities are to have such terms
and provisions which are not inconsistent with the Indenture, including as to
maturity, principal and interest, as the Company may determine. The Securities
will be unsecured obligations of the Company and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company.
The applicable Prospectus Supplement will set forth the price or prices at
which the Securities to be offered will be issued and will describe the
following terms of such Securities: (i) the title of such Securities; (ii) any
limit on the aggregate principal amount of such Securities or the series of
which they are a part; (iii) the person to whom any interest on such Security
shall be payable, if other than the person in whose name that Security is
registered; (iv) the date or dates on which the principal of any of such
Securities will be payable; (v) the rate or rates at which any of such
Securities will bear interest, if any, the date or dates from which any such
interest will accrue, the Interest Payment Dates on which any such interest
will be payable and the Regular Record Date for any such interest payable on
any Interest Payment Date; (vi) the place or places where the principal of and
any premium and interest on any of such Securities will be payable; (vii) the
period or periods within which, the price or prices at which and the terms and
conditions on which any of such Securities may be redeemed, in whole or in
part, at the option of the Company; (viii) the obligation, if any, of the
Company to redeem or purchase any of such Securities pursuant to any sinking
fund or analogous provision or at the option of the Holder thereof, and the
period or periods within which, the price or prices at which and the terms and
conditions on which any of such Securities will be redeemed or purchased, in
whole or in part, pursuant to any such obligation; (ix) the denominations in
which any of such Securities will be issuable, if other than denominations of
$1,000 and any integral multiple thereof; (x) if the amount of principal of or
any premium or interest on any of such Securities may be determined with
reference to an index, the manner in which such amounts will be determined;
(xi) if other than the currency of the United States of America, the currency,
currencies or currency units in which the principal of and any premium and
interest on any of such Securities will be payable (and the manner in which the
equivalent of the principal amount thereof in the currency of the United States
of America is to be determined for the purpose of determining the principal
amount deemed to be Outstanding at any time); (xii) if the principal of or any
premium or interest on any of such Securities is to be payable, at the election
of the Company or the Holder thereof, in one or more currencies or currency
units other than those in which such Securities are
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stated to be payable, the currency, currencies or currency units in which
payment of any such amount as to which such election is made will be payable
and the periods within which and the terms and conditions upon which such
election is to be made; (xiii) if other than the principal amount thereof, the
portion of the principal amount of any of such Securities which will be payable
upon declaration of acceleration of the Maturity thereof; and (xiv) any other
terms of such Securities not inconsistent with the provisions of the
Indenture. (Section 301)
Securities, including Original Issue Discount Securities, may be sold at a
substantial discount below their principal amount. Certain special United
States federal income tax considerations (if any) applicable to Securities sold
at an original issue discount may be described in the applicable Prospectus
Supplement. In addition, certain special United States federal income tax or
other considerations (if any) applicable to any Securities which are
denominated in a currency or currency unit other than United States dollars may
be described in the applicable Prospectus Supplement.
FORM, EXCHANGE AND TRANSFER
The Securities of each series will be issuable only in fully registered form,
without coupons, and, unless otherwise specified in the applicable Prospectus
Supplement, only in denominations of $1,000 and integral multiples
thereof. (Section 302)
At the option of the Holder, subject to the terms of the Indenture,
Securities of each series will be exchangeable for other Securities of the same
series of any authorized denomination and of a like tenor and aggregate
principal amount. (Section 305)
Subject to the terms of the Indenture, Securities may be presented for
exchange as provided above or for registration of transfer (duly endorsed or
with the form of transfer endorsed thereon duly executed) at the office of the
Security Registrar or at the office of any transfer agent designated by the
Company for such purpose. No service charge will be made for any registration
of transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith. The Company has appointed the Trustee as Security
Registrar. Any transfer agent (in addition to the Security Registrar) initially
designated by the Company for any Securities will be named in the applicable
Prospectus Supplement. (Section 305) The Company may at any time designate
additional transfer agents or rescind the designation of any transfer agent or
approve a change in the office through which any transfer agent acts, except
that the Company will be required to maintain a transfer agent in each Place of
Payment for the Securities of each series. (Section 1002)
If the Securities of any series (or of any series and specified terms) are to
be redeemed in part, the Company will not be required to (i) issue, register
the transfer of or exchange any Security of that series during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption of any such Security that may be selected for redemption
and ending at the close of business on the day of such mailing or (ii) register
the transfer of or exchange any Security so selected for redemption, in whole
or in part, except the unredeemed portion of any such Security being redeemed
in part. (Section 305)
GLOBAL SECURITIES
Some or all of the Securities of any series may be represented, in whole or
in part, by one or more Global Securities which will have an aggregate
principal amount equal to that of the Securities represented thereby. Each
Global Security will be registered in the name of a Depositary or a nominee
thereof identified in the applicable Prospectus Supplement, will be deposited
with such Depositary or nominee or a custodian therefor and will bear a legend
regarding the restrictions on exchanges and registration of transfer thereof
referred to below and any such other matters as may be provided for pursuant to
the Indenture.
Notwithstanding any provision of the Indenture or any Security described
herein, no Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole
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or in part may be registered, in the name of any Person other than the
Depositary for such Global Security or any nominee of such Depositary except as
may be described in the applicable Prospectus Supplement. (Section 204)
As long as the Depositary, or its nominee, is the registered Holder of a
Global Security, the Depositary or such nominee, as the case may be, will be
considered the sole owner and Holder of such Global Security and the Securities
represented thereby for all purposes under the Securities and the Indenture.
Owners of beneficial interests in a Global Security will not be entitled to
have such Global Security or any Securities represented thereby registered in
their names, will not receive or be entitled to receive physical delivery of
certificated Securities in exchange therefor and will not be considered to be
the owners or Holders of such Global Security or any Securities represented
thereby for any purpose under the Securities or the Indenture. All payments of
principal of and any premium and interest on a Global Security will be made to
the Depositary or its nominee, as the case may be, as the Holder thereof. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. These laws may impair
the ability to transfer beneficial interests in a Global Security.
Ownership of beneficial interests in a Global Security will be limited to
institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Securities represented by the Global Security
to the accounts of its participants. Ownership of beneficial interests in a
Global Security will be shown only on, and the transfer of those ownership
interests will be effected only through, records maintained by the Depositary
(with respect to participants' interests) or any such participant (with respect
to interests of persons held by such participants on their behalf). Payments,
transfers, exchanges and other matters relating to beneficial interests in a
Global Security may be subject to various policies and procedures adopted by
the Depositary from time to time. None of the Company, the Trustee or any agent
of the Company or the Trustee will have any responsibility or liability for any
aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Security, in some cases, may trade in the Depositary's same-day
funds settlement system, in which secondary market trading activity in those
beneficial interests would be required by the Depositary to settle in
immediately available funds. There is no assurance as to the effect, if any,
that settlement in immediately available funds would have on trading activity
in such beneficial interests. Also, settlement for purchases of beneficial
interests in a Global Security upon the original issuance thereof may be
required to be made in immediately available funds.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Security on any Interest Payment Date will be made to the
Person in whose name such Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. (Section 307)
Unless otherwise indicated in the applicable Prospectus Supplement, principal
of and any premium and interest on the Securities of a particular series will
be payable at the Place of Payment as the Company may designate for such
purpose from time to time, except that at the option of the Company payment of
any interest may be made by check mailed to the address of the Person entitled
thereto as such address appears in the Security Register. The Places of Payment
initially designated by the Company for the Securities of a particular series
will be named in the applicable Prospectus Supplement. The Company may at any
time designate additional Places of Payment or rescind the designation of any
Places of Payment, except that the
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Company will be required to maintain a Place of Payment for the Securities of a
particular series. (Sections 301 and 1002)
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Security which remain unclaimed
at the end of two years after such principal, premium or interest has become
due and payable will be repaid to the Company, and the Holder of such Security
thereafter may look only to the Company for payment thereof. (Section 1003)
CERTAIN DEFINITIONS
"Attributable Debt" means, as to any particular lease under which any person
is at the time liable and at any date as of which the amount thereof is to be
determined, the total net amount of rent required to be paid under such lease
during the remaining primary term thereof, discounted from the respective due
dates thereof to such date at the rate per annum equal to the interest rate
borne by the Securities of the series with respect to which such determination
of Attributable Debt is made. The net amount of rent required to be paid under
any such lease for any such period shall be the aggregate amount of the rent
payable by the lessee with respect to such period after excluding amounts
required to be paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges and after giving appropriate
credit for lease payments payable to such person by any sublessee. In the case
of any lease which is terminable by the lessee upon the payment of a penalty,
such net amount shall also include the amount of such penalty, but no rent
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated.
"Consolidated Net Tangible Assets" means the aggregate amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities and (ii) all goodwill, trade names,
trademarks, patents, organization expenses and other like intangibles, all as
set forth on the most recent published balance sheet of the Company and its
consolidated Restricted Subsidiaries and computed in accordance with generally
accepted accounting principles.
"Funded Indebtedness" means (i) all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the determination is
made or having a maturity of 12 months or less but by its terms being renewable
or extendable beyond 12 months from such date at the option of the borrower and
(ii) rental obligations payable more than 12 months from such date under leases
which are capitalized in accordance with generally accepted accounting
principles (such rental obligations to be included as Funded Indebtedness at
the amount so capitalized and to be included for the purposes of the definition
of Consolidated Net Tangible Assets both as an asset and as Funded Indebtedness
at the amount so capitalized).
"Indebtedness" means (i) all obligations for borrowed money, (ii) all
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations in respect of letters of credit or bankers acceptances or
similar instruments (or reimbursement obligations with respect thereto), (iv)
all obligations to pay the deferred purchase price of property, except trade
accounts payable arising in the ordinary course of business, (v) all
obligations as lessee which are capitalized in accordance with generally
accepted accounting principles at the time of calculation, and (vi) all
obligations referred to in (i) through (v) of others guaranteed by the Company
or any of its subsidiaries or for which the Company or any of its subsidiaries
is otherwise responsible or liable (whether by agreement to purchase
indebtedness of, or to supply funds or to invest in, others).
"Nonrecourse Obligation" shall mean indebtedness or lease payment obligations
substantially related to (i) the acquisition of assets not currently owned by
the Company or any of its Restricted Subsidiaries or (ii) the financing of a
project involving the development or expansion of properties of the Company or
any of its Restricted Subsidiaries, as to which the obligee with respect to
such indebtedness or obligation has no recourse to the general corporate funds,
or the assets in general, of the Company or any of its Restricted Subsidiaries
or any assets of the Company or any of its Restricted Subsidiaries other than
the assets which
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were acquired with the proceeds of such transaction or the project financed
with the proceeds of such transaction (and funds generated by such assets or
project), except pursuant to a covenant to pay to such obligee an amount equal
to all or a portion of the amount of any dividends received by the obligor of
such indebtedness or obligation within the previous 12 months.
"Principal Property" means any melt shop facility, rolling mill or other
facility owned at the date of the Indenture or thereafter acquired by the
Company or any Restricted Subsidiary of the Company which is located within the
present 50 states of the United States and the gross book value (including
related land and improvements thereon and all machinery and equipment included
therein without deduction of any depreciation reserves) of which on the date as
of which the determination is being made exceeds 2 1/2% of Consolidated Net
Tangible Assets.
"Restricted Subsidiary" means a Subsidiary of the Company substantially all
the property of which is located, or substantially all the business of which is
carried on, within the present 50 states of the United States and which owns a
Principal Property.
"Subsidiary" means a corporation more than 50% of the voting stock of which
is directly or indirectly owned by the Company, one or more Subsidiaries of the
Company or the Company and one or more Subsidiaries. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no senior
class has such voting power by reason of any contingency.
CERTAIN COVENANTS OF THE COMPANY
Limitations on Liens. After the date of the Indenture and so long as any
Securities are Outstanding, the Company will not issue, assume or guarantee,
and will not permit any Restricted Subsidiary to issue, assume or guarantee,
any Indebtedness which is secured by a mortgage, pledge, security interest,
lien or encumbrance (any mortgage, pledge, security interest, lien or
encumbrance being hereinafter in this provision referred to as a "lien" or
"liens") of or upon any Principal Property, whether now owned or hereafter
acquired, of the Company or any such Restricted Subsidiary, or of or upon any
shares of capital stock or Indebtedness of any Restricted Subsidiary, without
effectively providing that the Securities (together with, if the Company shall
so determine, any other Indebtedness of the Company ranking equally with the
Securities) shall be equally and ratably secured by a lien ranking ratably with
and equal to (or at the Company's option prior to) such secured Indebtedness;
provided, however, that the foregoing restriction shall not apply to: (a) liens
on any assets of, or on any shares of capital stock of or Indebtedness of, any
corporation existing on the date hereof or at the time such corporation becomes
a Restricted Subsidiary; (b) liens on any assets, shares of capital stock or
Indebtedness existing at the time of acquisition thereof by the Company or a
Restricted Subsidiary, or liens to secure the payment of all or any part of the
purchase price of any assets upon the acquisition of such assets by the Company
or a Restricted Subsidiary or to secure any Indebtedness incurred, assumed or
guaranteed by the Company or a Restricted Subsidiary prior to, at the time of,
or within 180 days after such acquisition (or if later in the case of real
property, the completion of construction (including any improvements on an
existing asset) or commencement of full operation of such asset, whichever is
later) which Indebtedness is incurred, assumed or guaranteed for the purpose of
financing all or any part of the purchase price thereof, or, in the case of
real property, construction or improvements thereon; provided, however, that in
the case of any such acquisition, construction or improvement, the lien shall
not apply to any assets theretofore owned by the Company or a Restricted
Subsidiary, other than in the case of any such construction or improvement, any
real property on which the property so constructed, or the improvement, is
located; (c) liens on any assets to secure Indebtedness of a Restricted
Subsidiary to the Company or of the Company or a Restricted Subsidiary to any
other wholly owned Restricted Subsidiary; (d) liens on any assets, shares of
capital stock or Indebtedness of a corporation existing at the time such
corporation is merged into or consolidated with the Company or a Restricted
Subsidiary or at the time of a purchase, lease or other acquisition of the
assets of a corporation or firm as an entirety or substantially as an entirety
by the Company
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or a Restricted Subsidiary; (e) liens on any assets of the Company or a
Restricted Subsidiary in favor of any department, agency or instrumentality or
political subdivision of the United States or any state thereof, or in favor of
any other country, or any political subdivision thereof, to secure partial,
progress, advance or other payments pursuant to any contract or statute or to
secure any Indebtedness incurred or guaranteed for the purpose of financing all
or any part of the purchase price (or, in the case of real property, the cost
of construction) of the assets subject to such liens (including, but not
limited to, liens incurred in connection with pollution control, industrial
revenue or similar financings); (f) liens created in connection with a project
financed with, and created to secure, a Nonrecourse Obligation; (g) any
extension, renewal or replacement (or successive extensions, renewals or
replacements) in whole or in part of any lien referred to in the foregoing
clauses (a) to (f), inclusive; provided, however, that the principal amount of
Indebtedness secured thereby shall not exceed the principal amount of
Indebtedness so secured at the time of such extension, renewal or replacement,
and that such extension, renewal or replacement shall be limited to all or a
part of the assets which secured the lien so extended, renewed or replaced
(plus improvements and construction on real prop-erty); or (h) liens not
permitted by clauses (a) through (g) above if at the time of, and after giving
effect to, the creation or assumption of any such lien, the aggregate amount of
all Indebtedness of the Company and its Restricted Subsidiaries secured by all
such liens not so permitted by clauses (a) through (g) above together with the
Attributable Debt in respect of Sale and Leaseback Transactions permitted by
paragraph (a) of the Limitations on Sale and Leaseback covenant do not exceed
10% of Consolidated Net Tangible Assets. (Section 1008)
Limitation on Sale and Leaseback Transactions. The Company will not itself,
and will not permit any Restricted Subsidiary to, enter into any transaction
after the date of the Indenture with any bank, insurance company or other
investor, or to which any such bank, company, lender or investor is a party,
providing for the leasing by the Company or a Restricted Subsidiary of any
Principal Property which has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such bank, company, lender or
investor, or to any person to whom funds have been or are to be advanced by
such bank, company, lender or investor on the security of such Principal
Property (herein referred to as a "Sale and Leaseback Transaction") unless,
after giving effect thereto, the aggregate amount of all Attributable Debt with
respect to such transactions plus all Indebtedness secured by liens to which
paragraph (h) of the Limitation on Liens covenant is applicable would not
exceed 10% of Consolidated Net Tangible Assets. This covenant shall not apply
to, and there shall be excluded from Attributable Debt in any computation under
this provision, Attributable Debt with respect to any Sale and Leaseback
Transaction if: (1) the lease in such Sale and Leaseback Transaction is for a
period, including renewal rights, of not in excess of three years, or (2) the
Company or a Restricted Subsidiary, within 180 days after the sale or transfer
shall have been made by the Company or by a Restricted Subsidiary, applies an
amount not less than the greater of the net proceeds of the sale of the
Principal Property leased pursuant to such arrangement or the fair market value
of the Principal Property so leased at the time of entering into such
arrangement (as determined in any manner approved by the Board of Directors of
the Company) to (a) the retirement of Funded Indebtedness of the Company
ranking on a parity with or senior to the Securities or the retirement of
Funded Indebtedness of a Restricted Subsidiary; provided, however, that the
amount to be applied to the retirement of such Funded Indebtedness of the
Company or a Restricted Subsidiary shall be reduced by (x) the principal amount
of any Securities (or other notes or debentures constituting such Funded
Indebtedness) delivered within such 180-day period to the Trustee or other
applicable trustee for retirement and cancellation and (y) the principal amount
of such Funded Indebtedness, other than items referred to in the preceding
clause (x), voluntarily retired by the Company or a Restricted Subsidiary
within 180 days after such sale; and provided, further, that, notwithstanding
the foregoing, no retirement referred to in this clause (a) may be effected by
a payment at maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision, or (b) the purchase or construction of other
property which will constitute Principal Property having a fair market value,
in the opinion of the Board of Directors of the Company, at least equal to the
fair market value of the Principal Property leased in such Sale and Leaseback
Transaction, or (3) such Sale and Leaseback Transaction is entered into prior
to, at the time of, or within 180 days after the later of the acquisition of
the Principal Property or the completion of construction thereon, or (4) the
lease in such Sale and Leaseback Transaction
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secures or relates to obligations issued by a state, territory or possession of
the United States, or any political subdivision of any of the foregoing, or the
District of Columbia, to finance the acquisition or construction of property,
and on which the interest is not, in the opinion of tax counsel of recognized
standing or in accordance with a ruling issued by the Internal Revenue Service,
includible (in whole or in part) in gross income of the holder by reason of
Section 103(a)(1) of the Internal Revenue Code (or any successor to such
provision) as in effect at the time of the issuance of such obligations, or (5)
the lease payment obligation is created in connection with a project financed
with, and such obligation constitutes, a Nonrecourse Obligation, or (6) such
Sale and Leaseback Transaction is entered into between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries. (Section 1009)
Except as described above, the Indenture will not contain any covenants or
provisions that may afford holders of the Securities protection in the event of
a highly leveraged transaction.
SUCCESSOR COMPANY
The Indenture will provide that no consolidation or merger of the Company
with or into any other corporation and no conveyance, transfer or lease of its
properties and assets substantially as an entirety to any person may be made
unless (i) the Person formed by or resulting from any such consolidation or
merger or which shall have received the transfer of such property and assets
shall be a corporation, partnership or trust organized and existing under the
laws of the United States, any State thereof or the District of Columbia and
shall expressly assume by an indenture supplemental thereto, the due and
punctual payment of the principal of and any premium and interest on all the
Securities and the performance and observance of every covenant of the
Indenture on the part of the Company to be performed or observed, (ii)
immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or a Subsidiary as a
result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which after notice or lapse of time or both, would become an Event of Default
shall have occurred and be continuing, (iii) if, as a result of any such
consolidation or merger or such conveyance, transfer or lease, properties or
assets of the Company would become subject to a mortgage, pledge, lien,
security interest or other encumbrance which would not be permitted by this
Indenture, the Company or such successor Person, as the case may be, shall take
such steps as shall be necessary effectively to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby, and (iv) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that the consolidation, merger, conveyance, transfer or
lease, and, if a supplemental indenture is required for such transaction, such
supplemental indenture, complies with the above requirements of the
Indenture. (Section 801)
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the Indenture
with respect to Securities of any series: (a) default in the payment of the
principal of (or any premium, if any, on) any Security of that series at
maturity; (b) default in the payment of any interest on any Security of that
series when due, continued for 30 days; (c) default in the deposit of any
sinking fund payment, when due, in respect of any Security of that series; (d)
default in the performance or breach of any other covenant or warranty of the
Company in the Indenture (other than a covenant or warranty included in the
Indenture solely for the benefit of a series other than that series), continued
for 60 days after written notice has been given by the Trustee, or the Holders
of at least 25% in principal amount of the Outstanding Securities of that
series, as provided in the Indenture; (e) failure to pay at maturity the
principal of, or acceleration of, any Indebtedness in a principal amount in
excess of $10 million, if such Indebtedness is not discharged, or such
acceleration is not rescinded or annulled, within a period of 15 days after
there shall have been given, by overnight mail, to the Company by the Trustee,
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities, a written notice specifying such failure
or acceleration and requiring the Company to cause such Indebtedness to be
discharged or cause such acceleration to be rescinded or annulled and stating
that such
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notice is a Notice of Default under the Indenture; and (f) certain events in
bankruptcy, insolvency or reorganization. (Section 501)
If an Event of Default with respect to the Securities of any series at the
time Outstanding shall occur and be continuing, either the Trustee or the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series by written notice as provided in the Indenture may
declare the principal amount of the Securities of that series (or, in the case
of any Security that is an Original Issue Discount Security, such portion of
the principal amount of such Security, as may be specified in the terms of such
Security) to be due and payable immediately. (Section 502) For information as
to waiver of defaults, see "Modification and Waiver".
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, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Section
603) Subject to such provisions for the indemnification of the Trustee, the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of any series 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
Securities of that series. (Section 512)
No Holder of a Security of any series will have any right to institute any
proceeding with respect to the Indenture, or for the appointment of a receiver
or a trustee, or for any other remedy thereunder, unless (i) such Holder has
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Securities of that series, (ii) the Holders of at least 25%
in aggregate principal amount of the Outstanding Securities of that series have
made written request, and such Holder or Holders have offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee and (iii) the
Trustee has failed to institute such proceeding, and has not received from the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of that series a direction inconsistent with such request, within 60
days after such notice, request and offer of indemnity. (Section 507) However,
such limitations do not apply to a suit instituted by a Holder of a Security
for the enforcement of payment of the principal of or any premium or interest
on such Security on or after the applicable due date specified in such
Security. (Section 508)
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their best
knowledge, is in default in the performance or observance of any of the terms,
provisions and conditions of the Indenture and, if so, specifying all such
known defaults. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of each series affected by such
modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Security
affected thereby, (a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, (b) reduce the
principal amount of, or any premium or interest on, any Security, (c) reduce
the amount of principal of an Original Issue Discount Security payable upon
acceleration of the Maturity thereof, (d) change the place or currency of
payment of principal of, or any premium or interest on, any Security, (e)
impair the right to institute suit for the enforcement of any payment on or
after the Stated Maturity thereof, (f) reduce the percentage in principal
amount of Outstanding Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture, (g) reduce the
percentage in principal amount of Outstanding Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults or (h) modify such provisions with respect to
modification and waiver. (Section 902) The Indenture also permits the Company
to omit compliance with certain covenants
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in the Indenture with respect to Securities of any series upon waiver, before
the time of such compliance, by the Holders of a majority in principal amount
of Outstanding Securities of such series. (Section 1011)
The Holders of a majority in principal amount of the Outstanding Securities
of any series may waive any past default under the Indenture, 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 the
Holder of each Outstanding Security of such series affected. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture, (i) the principal amount of an Original Issue Discount Security that
will be deemed to be Outstanding will be the amount of the principal thereof
that would be due and payable as of such date upon acceleration of the Maturity
thereof and (ii) the principal amount of a Security denominated in one or more
foreign currencies or currency units will be the U.S. dollar equivalent,
determined in the manner prescribed for such Security, of the principal amount
of such Security (or, in the case of a Security described in clause (i) above,
of the amount described in such clause). Certain Securities, including those
for whose payment or redemption money has been deposited or set aside in trust
for the Holders and those that are owned by the Company or an Affiliate, will
not be deemed to be Outstanding. (Section 101)
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action under
the Indenture, in the manner and subject to the limitations provided in the
Indenture. If a record date is set for any action to be taken by Holders of a
particular series, such action may be taken only by persons who are Holders of
Outstanding Securities of that series on the record date. (Section 104)
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable Prospectus Supplement, the
Company may elect, at its option at any time, to have the provisions of Section
403, relating to defeasance and discharge of indebtedness, or Section 1010,
relating to defeasance of certain restrictive covenants in the Indenture,
applied to the Securities of any series, or to any specified part of a series.
Defeasance and Discharge. The Indenture provides that, upon the Company's
exercise of its option (if any) to have Section 403 of the Indenture apply to
any Securities, the Company will be discharged from all its obligations with
respect to such Securities (except for certain obligations to exchange or
register the transfer of Securities, to replace stolen, lost or mutilated
Securities, to maintain paying agencies and to hold moneys for payment in
trust) upon the 91st day after the date of deposit with the Trustee in trust
for the benefit of the Holders of such Securities of money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such
Securities on the respective Stated Maturities in accordance with the terms of
the Indenture and such Securities. Such defeasance or discharge may occur only
if, among other things, the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that the Company has
received from, or there has been published by, the United States Internal
Revenue Service a ruling, or there has been a change in tax law, in either case
to the effect that Holders of such Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to federal income tax on the same amount, in
the same manner and at the same time as would have been the case if such
deposit, defeasance and discharge were not to occur. (Section 403)
Defeasance of Certain Covenants. The Indenture provides that, upon the
Company's exercise of its option (if any) to have Section 1010 of the Indenture
apply to any Securities, the Company may omit to comply with certain
restrictive covenants described in Sections 1008 and 1009 of the Indenture. The
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Company, in order to exercise such option, will be required to deposit, in
trust with the Trustee for the benefit of the Holders of such Securities, money
or U.S. Government Obligations, or both, which, through the payment of
principal and interest in respect thereof in accordance with their terms, will
provide money in an amount sufficient to pay the principal of and any premium
and interest on such Securities on the respective Stated Maturities in
accordance with the terms of the Indenture and such Securities. The Company
will also be required, among other things, to deliver to the Trustee an
Officers' Certificate and an Opinion of Counsel to the effect that Holders of
such Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance of certain obligations and
will be subject to federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such deposit and
defeasance were not to occur. (Section 1010) In the event the Company
exercised this option with respect to any Securities and such Securities were
declared due and payable because of the occurrence of any Event of Default, the
amount of money and U.S. Government Obligations so deposited in trust would be
sufficient to pay amounts due on such Securities at the time of their
respective Stated Maturities but may not be sufficient to pay amounts due on
such Securities upon any acceleration resulting from such Event of Default. In
such case, the Company would remain liable for such payments.
NOTICES
Notices to Holders of Securities will be given by mail to the addresses of
such Holders as they may appear in the Security Register. (Sections 101 and
106)
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name a Security is registered as the absolute owner
thereof (whether or not such Security may be overdue) for the purpose of making
payment and for all other purposes. (Section 308)
GOVERNING LAW
The Indenture and the Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
Continental Bank, National Association is the Trustee under the Indenture and
also acts as the trustee for the Company's 7 5/8% Notes due 2004.
Upon the occurrence of an Event of Default, or any event of default with
respect to the 7 5/8% Notes, the Trustee may be deemed to have a conflicting
interest with respect to the Securities for purposes of the Trust Indenture Act
of 1939, as amended, and, accordingly, may be required to resign as Trustee
under the Indenture.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to one or more underwriters for public
offering and sale by them or may sell Debt Securities to investors directly or
through agents. Any such underwriter or agent involved in the offer and sale of
the Debt Securities (the "Offered Debt Securities") will be named in an
applicable Prospectus Supplement.
Underwriters may offer and sell the Offered Debt Securities at a fixed price
or prices, which may be changed, or from time to time at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices or at negotiated prices. The Company also may offer and sell the Offered
Debt Securities in exchange for one or more of its outstanding issues of debt
or convertible debt securities. The
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Company also may, from time to time, authorize underwriters acting as the
Company's agents to offer and sell the Offered Debt Securities upon the terms
and conditions as shall be set forth in any Prospectus Supplement. In
connection with the sale of Offered Debt Securities, underwriters may be deemed
to have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
Offered Debt Securities for whom they may act as agent. Underwriters may sell
Offered Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of Offered Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Debt Securities may
be deemed to be underwriters, and any discounts and commissions received by
them and any profit realized by them on resale of the Offered Debt Securities
may be deemed to be underwriting discounts and commissions, under the Act.
Underwriters, dealers and agents may be entitled, under agreements with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Act, and to reimbursement by the
Company for certain expenses.
If so indicated in an applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit offers by certain
institutions to purchase Offered Debt Securities from the Company at the public
offering price set forth in such Prospectus Supplement pursuant to Delayed
Delivery Contracts ("Contracts") providing for payment and delivery on the date
or dates stated in such Prospectus Supplement. Each Contract will be for an
amount not less than, and the aggregate principal amount of Offered Debt
Securities sold pursuant to Contracts shall be not less nor more than, the
respective amounts stated in such Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be
subject to the approval of the Company. Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Offered Debt
Securities covered by its Contracts shall not at the time of delivery be
prohibited under the laws of any jurisdiction in the United States to which
such institution is subject, and (ii) if the Offered Debt Securities are being
sold to underwriters, the Company shall have sold to such underwriters the
total principal amount of the Offered Debt Securities less the principal amount
thereof covered by Contracts. Agents and underwriters will have no
responsibility in respect of the delivery or performance of Contracts.
All Offered Debt Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Offered Debt Securities
are sold by the Company for public offering and sale may make a market in such
Offered Debt Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of or the trading markets for any Offered Debt
Securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
VALIDITY OF OFFERED DEBT SECURITIES
The validity of the Offered Debt Securities will be passed upon for the
Company by Skadden, Arps, Slate, Meagher & Flom, New York, New York. Certain
legal matters will be passed upon for any underwriters or agents by Shearman &
Sterling, New York, New York.
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EXPERTS
The audited consolidated financial statements and schedules incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen & Co., independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the reports of said firm and upon the authority of said firm as
experts in accounting and auditing. Reference is made to said reports which
include an explanatory paragraph with respect to the change in accounting for
income taxes and postretirement benefits other than pensions in fiscal 1993 as
discussed in Note 1 to the consolidated financial statements.
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NO DEALER, AGENT, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, PROSPECTUS SUPPLEMENT AND ANY PRICING SUPPLEMENT IN CONNEC-
TION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR BY ANY DISTRIBUTOR. THIS PROSPECTUS, PROSPECTUS SUPPLEMENT, AND ANY
PRICING SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS
PROSPECTUS, PROSPECTUS SUPPLEMENT OR ANY PRICING SUPPLEMENT OR AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS, PROSPECTUS SUPPLEMENT OR ANY PRICING
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUM-
STANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE DATES.
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TABLE OF CONTENTS
PAGE
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PROSPECTUS SUPPLEMENT
Important Currency Exchange Information............................... S-2
Description of Notes.................................................. S-2
Special Provisions Relating to Foreign Currency Notes................. S-15
United States Taxation................................................ S-17
Plan of Distribution of Notes......................................... S-23
Validity of Notes..................................................... S-24
Glossary.............................................................. S-25
PROSPECTUS
Available Information................................................. 2
Incorporation of Certain Documents by Reference....................... 2
The Company........................................................... 3
Selected Consolidated Financial Data.................................. 5
Use of Proceeds....................................................... 6
Capitalization........................................................ 6
Description of Debt Securities........................................ 7
Plan of Distribution.................................................. 16
Validity of Offered Debt Securities................................... 17
Experts............................................................... 18
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[LOGO OF LUKENS APPEARS HERE]
U.S. $100,000,000
Medium-Term Notes, Series A
PROSPECTUS SUPPLEMENT
CS First Boston
J.P. Morgan Securities Inc.
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