As filed with the Securities and Exchange Commission on August 15, 1995
Registration No. 33-60501
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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MAGMA COPPER COMPANY
(Exact name of registrant as specified in its charter)
Delaware 86-0219794
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) I.D. number)
7400 North Oracle Road
Suite 200
Tucson, Arizona 85704
(520) 575-5600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Douglas J. Purdom
Chief Financial Officer
Magma Copper Company
7400 North Oracle Road
Suite 200
Tucson, Arizona 85704
(520) 575-5600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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The Commission is requested to send copies of all communications to:
Steven D. Pidgeon Alison S. Ressler
Snell & Wilmer L.L.P. Sullivan & Cromwell
One Arizona Center 444 South Flower Street
Phoenix, Arizona 85004-0001 Los Angeles, CA 90071
(602) 382-6252 (213) 955-8022
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X] ---------------------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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Proposed
Title of each class of maximum
securities to be aggregate Amount of
registered offering registration
price fee
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Preferred Stock (par value
$.01 per share) . . . . (1)(2) N/A
Depositary Shares . . . . (1)(3) N/A
Preferred Stock Warrants (1)(4) N/A
Common Stock (par value
$.01 per share) . . . . (1)(5) N/A
Common Stock Warrants . . (1)(4) N/A
Debt Securities . . . . . (1)(6) N/A
Debt Warrants . . . . . . (1)(4) N/A
Total . . . . . . . $200,000,000 $68,966(7)
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(1) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$200,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies, including the European Currency Unit. If any such
Debt Securities are issued at an original issue discount, then the offering
price shall be in such greater principal amount as shall result in an
aggregate initial offering price of up to $200,000,000. Any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) Subject to Footnote (1), there are being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time
to time, by the Registrant. There are also being registered hereunder an
indeterminate number of shares of Preferred Stock and Depositary Shares
(including common stock purchase rights and preferred stock purchase
rights, if any, appurtenant to either of the foregoing) as shall be
issuable upon conversion of Debt Securities registered hereby.
(3) Subject to Footnote (1), there are being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the
Registrant elects to offer to the public fractional interests in shares of
the Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests, and the
shares of Preferred Stock will be issued to the Depositary under the
Deposit Agreement.
(4) Subject to Footnote (1), there are being registered hereunder an
indeterminate number of Preferred Stock Warrants, Common Stock Warrants and
Debt Warrants representing rights to purchase Preferred Stock, Common Stock
and Debt Securities, respectively, registered pursuant to
this Registration Statement.
(5) Subject to Footnote (1), there are being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the Registrant (including common stock purchase rights and
preferred stock purchase rights, if any, appurtenant thereto). There are
also being registered hereunder an indeterminate number of shares of Common
Stock (including common stock purchase rights and preferred stock purchase
rights, if any, appurtenant thereto) as shall be issuable upon conversion
of the Preferred Stock or Debt Securities registered hereby.
(6) Subject to Footnote (1), there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time, by the Registrant.
(7) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended (the "Securities Act").
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus relating to the $200,000,000 principal
amount of securities registered hereby and $300,000,000 principal amount of
securities registered on April 21, 1994 pursuant to Registration No. 33-53021,
of which $100,000,000 remains available for issuance thereunder. A filing fee of
$103,448.28 was paid in connection with Registration Statement No. 33-53021 of
which $34,482.76 was attributable to the $100,000,000 in securities that remain
subject to such Registration Statement.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 15, 1995
MAGMA COPPER COMPANY
Debt Securities
Preferred Stock
Common Stock
Warrants
---------------
Magma Copper Company ("Magma" or the "Company") may offer from time to time
(i) Debt Securities ("Debt Securities"), consisting of debentures, notes and/or
other unsecured evidences of indebtedness in one or more series, which may be
senior ("Senior Debt Securities"), senior subordinated ("Senior Subordinated
Debt Securities") or subordinated ("Subordinated Debt Securities"), (ii) shares
of Preferred Stock, $.01 par value per share ("Preferred Stock") in one or more
series, (iii) shares of Common Stock, $.01 par value per share ("Common Stock"),
or (iv) Warrants ("Warrants") to purchase Debt Securities, Preferred Stock or
Common Stock (Debt Securities, Preferred Stock, Common Stock and Warrants are
collectively referred to as the "Securities"), at an aggregate initial offering
price not to exceed U.S. $300,000,000, at prices and on terms to be determined
at the time of sale.
The accompanying Prospectus Supplement sets forth with regard to the
particular Securities in respect of which this Prospectus is being delivered (i)
in the case of Debt Securities, the title, aggregate principal amount,
denominations (which may be in United States dollars, or in any other currency,
currencies or currency unit, including the European Currency Unit), maturity,
rate of interest, if any (which may be fixed or variable), or method of
calculation thereof, time of payment of any interest, any terms for redemption
at the option of the Company or the holder, any terms for sinking fund payments,
subordination terms, if any, any conversion or exchange rights, any listing on a
securities exchange, the initial public offering price and any other terms in
connection with the offering and sale of such Debt Securities, (ii) in the case
of Preferred Stock, the designation, number of shares, stated value and
liquidation preference per share, initial public offering price, dividend rate
(or method of calculation thereof), dates on which dividends shall be payable
and dates from which dividends shall accrue, any redemption or sinking fund
provisions, any conversion or exchange rights, whether the Company has elected
to offer the Preferred Stock in the form of depositary shares, any listing of
the Preferred Stock on a securities exchange and any other terms in connection
with the offering and sale of such Preferred Stock, (iii) in the case of Common
Stock, the number of shares of Common Stock, the initial public offering price
and the terms of the offering thereof, and (iv) in the case of Warrants, the
number and terms thereof, the designation and the number of Securities issuable
upon their exercise, the exercise price, any listing of the Warrants or the
underlying Securities on a securities exchange, the initial public offering
price and any other terms in connection with the offering, sale and exercise of
the Warrants. The Prospectus Supplement will also contain information, as
applicable, about certain United States Federal income tax considerations
relating to the Securities in respect of which this Prospectus is being
delivered.
The Company's Common Stock is listed on the New York Stock Exchange
(Symbol: "MCU"). Any Common Stock offered will be listed, subject to notice of
issuance, on such exchange.
The Company may sell Securities to or through underwriters acting as
principals for their own account or as agents, and also may sell Securities
directly to other purchasers or through agents designated from time to time. The
accompanying Prospectus Supplement sets forth the names of any underwriters or
agents involved in the sale of the Securities in respect of which this
Prospectus is being delivered, the amounts of Securities, if any, to be
purchased by underwriters and the compensation, if any, of such underwriters or
agents. See "Plan of Distribution" herein.
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 , 1995.
AVAILABLE INFORMATION
Magma is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by Magma with the Commission can be
inspected and copied at 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: 7 World Trade Center, 13th Floor, New York, New York 10007 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such information can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Magma's Common Stock, par value $.01 per share,
5-5/8% Cumulative Convertible Preferred Stock, Series D, par value $.01 per
share, 6% Cumulative Convertible Preferred Stock, Series E, par value $.01 per
share, and Common Stock purchase warrants, $8.50 exercise price, are listed on
the New York Stock Exchange ("NYSE") and similar information can be inspected
and copied at the NYSE, 20 Broad Street, 17th Floor, New York, New York 10005.
This Prospectus constitutes a part of two registration statements on Form
S-3 (the "Registration Statements") filed by the Company with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"). As
permitted by the rules and regulations of the Commission, this Prospectus omits
certain of the information contained in the Registration Statements and
reference is hereby made to the Registration Statements and related exhibits for
further information with respect to the Company and the Securities offered
hereby. Statements contained herein concerning the provisions of any documents
filed as an exhibit to the Registration Statements or otherwise filed with the
Commission are not necessarily complete, and in each instance reference is made
to the copy of such document so filed. Each such statement is qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by Magma with the Commission and
are hereby incorporated by reference into this Prospectus: (i) Annual Report on
Form 10-K for the fiscal year ended December 31, 1994, (ii) Quarterly Report on
Form 10-Q for the period ended March 31, 1995, (iii) Notice and Proxy Statement
dated April 7, 1995 for Annual Meeting of Stockholders, (iv) Current Report on
Form 8-K dated May 24, 1995, and (v) the description of the Common Stock
contained in the Company's Form 8-A filed on October 22, 1992. All other
documents and reports filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act from the date of this Prospectus and prior to the termination
of the offering of the Securities shall be deemed to be incorporated by
reference herein and shall be deemed to be a part hereof from the date of the
filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, on written or oral request of such person, a copy
of any or all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in the document which this Prospectus incorporates).
Requests should be directed to Mr. Richard Johnson, Assistant Treasurer, at the
Company's principal executive offices located at 7400 North Oracle Road, Suite
200, Tucson, Arizona 85704, telephone number (520) 575-5600.
THE COMPANY
Magma is a fully integrated producer of electrolytic copper and ranks among
the largest U.S. copper producers. Magma's principal products are high quality
copper cathode and high quality copper rod, the latter of which is the basic
feedstock of the copper wire and cable industry.
The Company owns and operates underground copper mines at its San Manuel
and Superior Mining Divisions, an open-pit copper mine at its Pinto Valley
Mining Division, and in situ leaching operations at its San Manuel and Pinto
Valley Mining Divisions, all of which are located in southeastern Arizona.
Recently, the Company began development of its Robinson mine located near Ely,
Nevada. Production at this mine is expected to commence in the first quarter of
1996. In the fourth quarter of 1994, the Company completed the acquisition of a
company which owns one of the largest operating mines in Southern Peru
("Tintaya"). Tintaya operates an open-pit mine and is engaged in a variety of
development projects at this property.
The Company operates the largest and most modern copper smelting and
refining complex in the United States. The Company's smelter, which was expanded
in 1994, has a rated production capacity of 720 million pounds of copper anode
per year, representing approximately 25% of U.S. copper smelting capacity. In
addition to smelting and refining its own copper concentrate production, the
Company smelts and refines a substantial amount of copper concentrates on a
custom basis for, or purchased from, third parties, the profits from which
effectively reduce the Company's overall break-even cost of producing copper
from its mines.
INVESTMENT CONSIDERATIONS
Copper Price Volatility. The profitability of the Company's operations is
largely dependent upon the worldwide market price for copper. A one cent per
pound change in the average price received for the Company's 1994 output would
have affected earnings before interest, taxes, depreciation and amortization by
an estimated $6.0 million. Copper prices have historically been subject to wide
fluctuations and are affected by numerous factors beyond the control of the
Company, including international economic and political conditions, levels of
supply and demand, the availability and cost of copper substitutes, inventory
levels maintained by copper producers and others and, to a lesser degree,
inventory carrying costs (primarily interest charges) and international exchange
rates. From time to time the Company engages in hedging activities in an effort
to stabilize the Company's cash flow in the event of declining copper prices.
Depending upon the hedging program employed, market conditions and other
factors, hedging activities could reduce the cash flow which the Company would
otherwise realize.
Competition. Certain foreign and domestic copper producers benefit from
higher-grade orebodies than those owned by the Company. Further, most foreign
producers benefit from lower labor rates and less stringent environmental
regulation than United States producers. Many foreign producers maintain maximum
production to meet government-imposed employment and foreign exchange revenue
goals, sometimes without regard to the condition of the world copper market or
the profitability of their mining operations. The Company and other copper
producers also compete with manufacturers of other materials, including
aluminum, stainless steel, plastics and fiber optic cables. Should copper prices
increase, use of these alternative materials may also increase.
Environmental Regulation. The mining and mineral processing industries are
subject to extensive regulations for the protection of the environment,
including regulations relating to air and water quality, mine reclamation,
remediation, solid and hazardous waste handling and disposal and the promotion
of occupational safety. From time to time the Company is cited for noncompliance
with applicable environmental laws and regulations. However, the Company
believes that it is currently in material compliance with these laws and
regulations and, although there can be no assurance in this regard, also
believes that there is no pending environmental matter that is likely to have a
material adverse effect on its results of operations. Future regulations or
regulatory interpretations could require the Company to modify or curtail its
operations or incur substantial additional expense. In this regard, the Company
cannot predict, at this time, the level of new emissions controls and related
costs which may be required for it to comply with standards governing emissions
of sulphur, particulates and air toxics that are expected to be adopted under
the federal Clean Air Act Amendments of 1990 and the Arizona Clean Air Act.
Industry Risks; Reserves. The Company is subject to the normal risks
encountered in the mining industry, such as unusual or unexpected geological
formations, cave-ins, flooding, fires, environmental issues and water issues.
The Company's mineral reserves may not conform to geological, geomechanical,
metallurgical or other expectations with the result that the volume and grade of
reserves recovered and rates of production may be less than anticipated.
Further, market price fluctuations in copper, changes in operating and capital
costs and other factors may affect ore reserves.
Development Projects. The Company is pursuing or evaluating several
development opportunities in an effort to enhance its ore reserves. Development
of these projects will require several hundred million dollars in capital
investment. To the extent undertaken, the Company intends to finance its
development projects with internal cash flow, cash reserves and additional
financings as necessary. The success of these projects is subject to a number of
factors, some of which are outside of the Company's control. The cost estimates
for these projects are subject to change. If the Company is unable to replace
its reserves from the mine development projects being pursued or evaluated, or
with other reserves identified or acquired in the future, the Company's
dependence upon third-party sources to supply copper concentrate to its smelting
and refining operations would increase.
Investments in Foreign Mining Properties. The Company is engaged in an
ongoing program of reviewing exploratory and operating properties for
acquisition or development. Many of these properties are located outside of the
United States. There are certain risks inherent in the acquisition and operation
of foreign properties, including the risks of political instability, the
possibility of adverse economic or tax reforms, restrictions on the repatriation
of funds, and currency risks. In the fourth quarter of 1994, the Company
acquired Magma Tintaya S. A. (formerly known as Empressa Minera Especial Tintaya
S.A.), which owns one of the largest operating copper mining projects in
Southern Peru. As part of its investment in Tintaya, the Company and the
government of Peru entered into a judicial stability agreement and the Company
became a party to an existing tax stability agreement between the government and
Tintaya. These agreements provide for, among other things, free exchange of
foreign currency, remittance abroad of profits and capital, the right to use or
sell any product derived from Tintaya, and tax and legal stability. Although
these agreements do not eliminate all risk associated with its investment in
Tintaya, the Company believes that such agreements minimize a number of the
risks typically associated with an investment in a foreign property.
USE OF PROCEEDS
The Company anticipates that the net proceeds of the sales of the
Securities will be used for general corporate purposes or such other uses as may
be set forth in a Prospectus Supplement.
RATIO OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDEND REQUIREMENTS
For purposes of the following ratios: (i) "earnings" consist of income
before taxes, accounting changes and extraordinary items plus fixed charges
adjusted for capitalized interest and amortization of previously capitalized
interest; (ii) "fixed charges" consist of interest (including capitalized
interest) and the estimated interest portion of lease rental expenses,
amortization of debt expenses and write-offs of loan costs; and (iii) "preferred
stock dividend requirements" include dividends paid in zero coupon notes and
shares of Common Stock.
In calculating the ratio of earnings to combined fixed charges and
preferred stock dividend requirements, the preferred stock dividend requirements
were assumed to be equal to the pretax earnings required to cover such dividend
requirements. The amount of such pretax earnings required to cover preferred
stock dividends was computed using tax rates for the applicable year. Preferred
stock dividends are included in total "fixed charges" and deducted from
"earnings."
Three Months
ended
Year Ended December 31, March 31,
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1990 1991 1992 1993 1994 1994 1995
---- ---- ---- ---- ---- ---- ----
Ratio of earnings to fixed charges 2.9x -- 2.7x 1.5x 3.1x 1.5x 6.4x
Ratio of earnings to combined fixed
charges and preferred stock 2.5x -- 2.0x 1.4x 2.3x 1.1x 4.8x
dividend requirements
Before giving effect to the non-cash accounting adjustments taken in 1991
in connection with the Company's reorganization into distinct profit centers and
the related adoption of FASB No. 109 "Accounting for Income Taxes" and FASB No.
106 "Employers' Accounting for Postretirement Benefits Other Than Pensions," the
ratio of earnings to fixed charges for the year ended December 31, 1991 was 1.8x
and the ratio of earnings to combined fixed charges and preferred stock dividend
requirements for that year was 1.5x. After giving effect to such accounting
adjustments, earnings were inadequate to cover fixed charges by $167.5 million
for the year ended December 31, 1991 and were inadequate to cover combined fixed
charges and preferred stock dividend requirements by $179.8 million for that
year.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued from time to time in one or more series
and will constitute either Senior Debt Securities, Senior Subordinated Debt
Securities or Subordinated Debt Securities. The particular terms of each series
of Debt Securities offered hereunder, including the nature of any variations
from the following general provisions applicable to such Debt Securities, will
be described in a Prospectus Supplement relating to such Debt Securities. Senior
Debt Securities, Senior Subordinated Debt Securities and Subordinated Debt
Securities will each be issued under a separate Indenture (herein referred to as
the "Senior Indenture", "Senior Subordinated Indenture" and "Subordinated
Indenture", respectively; and individually an "Indenture" and collectively the
"Indentures") entered into by the Company prior to the issuance of such Debt
Securities. The forms of Senior Indenture and Subordinated Indenture and the
Senior Subordinated Indenture, dated as of May 15, 1995, between the Company and
State Street Bank and Trust Company, as Trustee, have been filed as exhibits to
or have been incorporated by reference into the Registration Statement to which
this Prospectus relates. To the extent not included herein, information
regarding the trustee under an Indenture (individually a "Trustee" and
collectively the "Trustees") will be included in the applicable Prospectus
Supplement relating to the Debt Securities described therein.
The following discussion includes a summary description of the material
terms of the Indentures, other than terms which are specific to a particular
series of Debt Securities and which will be described in the Prospectus
Supplement relating to such series. The following summaries do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Indentures, including the definitions therein
of certain terms capitalized in this Prospectus. Wherever particular Sections,
Articles or defined terms of the Indentures are referred to herein or in a
Prospectus Supplement, such Sections, Articles or defined terms are incorporated
herein or therein by reference.
General
The Debt Securities will be general unsecured obligations of the Company.
The Indentures do not limit the aggregate amount of Debt Securities which may be
issued thereunder, and Debt Securities may be issued thereunder from time to
time in separate series up to the aggregate amount from time to time authorized
by the Company for each series.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of such Debt Securities,
and whether such Debt Securities are Senior Debt Securities, Senior Subordinated
Debt Securities or Subordinated Debt Securities; (2) any limit on the aggregate
principal amount of such Debt Securities; (3) whether any of such Debt
Securities are to be issuable in permanent global form ("Global Security") and,
if so, the terms and conditions, if any, upon which interests in such Securities
in global form may be exchanged, in whole or in part, for the individual Debt
Securities represented thereby; (4) the person to whom any interest on any Debt
Security of the series shall be payable if other than the person in whose name
the Debt Security is registered on the Regular Record Date; (5) the date or
dates on which such Debt Securities will mature; (6) the rate or rates (which
may be fixed or variable) of interest, if any, or the method of calculation
thereof, which such Debt Securities will bear; (7) the date or dates from which
any such interest will accrue, the Interest Payment Dates on which any such
interest on such Debt Securities will be payable and the Regular Record Date for
any interest payable on any Interest Payment Date; (8) the place or places where
the principal of, premium, if any, and interest on such Debt Securities will be
payable; (9) the period or periods within which, the events upon the occurrence
of which, and the price or prices at which, such Debt Securities may, pursuant
to any optional or mandatory provisions, be redeemed or purchased, in whole or
in part, by the Company and any terms and conditions relevant thereto; (10) the
obligations of the Company, if any, to redeem or repurchase such Debt Securities
at the option of the holders; (11) the denominations in which any such Debt
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (12) the currency, currencies or currency unit or
units of payment of principal of and any premium and interest on such Debt
Securities if other than U.S. dollars; (13) any index or formula used to
determine the amount of payments of principal of and any premium and interest on
such Debt Securities; (14) if the principal of, or premium, if any, or interest
on such Debt Securities is to be payable, at the election of the Company or a
holder thereof, in one or more currencies or currency units other than that or
those in which such Debt Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Debt Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made; (15) if other than the
principal amount thereof, the portion of the principal amount of such Debt
Securities of the series which will be payable upon acceleration of the Maturity
thereof; (16) whether the subordination provisions summarized below, or
different subordination provisions, shall apply to Debt Securities that are
Senior Subordinated Debt Securities or Subordinated Debt Securities and, if so,
the aggregate principal amount of Senior Indebtedness then outstanding; (17) the
applicability of any provisions described under "Covenants with Respect to
Senior Debt Securities" or "Covenants with Respect to Senior Subordinated Debt
Securities"; (18) the applicability of any provisions described under
"Defeasance"; (19) the terms and conditions, if any, pursuant to which the Debt
Securities are convertible or exchangeable into Common Stock or other
Securities; and (20) any other terms of such Debt Securities not inconsistent
with the provisions of the respective Indentures.
Debt Securities may be issued at a discount from their principal amount.
United States Federal income tax considerations and other special considerations
applicable to any such Original Issue Discount Securities will be described in
the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or units,
the restrictions, elections, general tax considerations, specific terms and
other information with respect to such issue of Debt Securities will be set
forth in the applicable Prospectus Supplement.
The Indentures do not limit the amount of additional unsecured indebtedness
that the Company or its subsidiaries may incur. Further, certain of the
operations of the Company are and may in the future be conducted through
subsidiaries. To the extent so conducted, the ability of the Company to meet its
debt obligations, including obligations in respect of the Debt Securities, would
be dependent upon the earnings and cash flow of its subsidiaries, and the claims
of the holders of the Debt Securities will be effectively subordinated to the
claims of creditors of the Company's subsidiaries.
Unless otherwise specified in the resolutions or any supplemental indenture
establishing the terms of the offered Debt Securities, the terms of the offered
Debt Securities or the covenants contained in the Indenture do not afford
holders protection in the event of a highly leveraged or other similar
transaction involving the Company that may adversely affect securityholders.
Subordination of Senior Subordinated Debt Securities and Subordinated Debt
Securities
The term "Senior Indebtedness", when used with respect to any series of
Senior Subordinated Debt Securities, means indebtedness of the Company and
indebtedness guaranteed by the Company for principal of and premium and interest
on (a) money borrowed from banks or other lending institutions whether
outstanding on the date of the initial issuance of any Senior Subordinated Debt
Securities or thereafter incurred and (b) any other indebtedness or obligation
of the Company, whether outstanding on the date of the initial issuance of any
Senior Subordinated Debt Securities or thereafter created, incurred, assumed or
guaranteed, which is evidenced by a note or other similar instrument, including
Senior Debt Securities, unless by the terms of such note or other instrument it
is provided that such indebtedness is not superior in right of payment to the
Senior Subordinated Debt Securities; provided, however, that Senior Indebtedness
shall not include (w) any other series of Senior Subordinated Debt Securities,
(x) any trade payables or notes or other instruments evidencing the same, (y)
notes or other obligations issued in lieu of cash dividends on, or in exchange
for, Capital Stock, or (z) any liability for federal, state, local or other
taxes owed or owing by the Company. At June 12, 1995, the Company had
outstanding three series of Senior Subordinated Debt Securities, with an
aggregate principal amount outstanding of $525,000,000.
The term "Senior Indebtedness", when used with respect to any series of
Subordinated Debt Securities, means indebtedness of the Company and indebtedness
guaranteed by the Company for principal of and premium and interest on (a) money
borrowed from banks or other lending institutions whether outstanding on the
date of the initial issuance of any Subordinated Debt Securities or thereafter
incurred and (b) any other indebtedness or obligation of the Company, whether
outstanding on the date of the initial issuance of any Subordinated Debt
Securities or thereafter created, incurred, assumed or guaranteed, which is
evidenced by a note or other similar instrument, including Senior Debt
Securities and Senior Subordinated Debt Securities, unless by the terms of such
note or other instrument it is provided that such indebtedness is not superior
in right of payment to the Subordinated Debt Securities; provided, however, that
Senior Indebtedness shall not include (w) any other series of Subordinated Debt
Securities, (x) any trade payables or notes or other instruments evidencing the
same, (y) notes or other obligations issued in lieu of cash dividends on, or in
exchange for, Capital Stock, or (z) any liability for federal, state, local or
other taxes owed or owing by the Company.
In either case, the term "Senior Indebtedness" includes, without
limitation, (i) any and all interest accruing on any of the Senior Indebtedness
after the commencement of any bankruptcy, insolvency, reorganization or other
similar proceeding, notwithstanding any provision or rule of law which might
restrict the rights of any holder thereof as to such interest, and (ii) any and
all claims for principal of, premium and interest on, and fees and expenses in
respect of, Senior Indebtedness described in clause (a) above, notwithstanding
any disallowance, avoidance or subordination of such claim under any insolvency,
fraudulent conveyance or equitable subordination law.
Payment of the principal amount of and premium, if any, and interest on the
Senior Subordinated Debt Securities and Subordinated Debt Securities,
respectively, will be subordinated in right of payment to the prior payment in
full of all Senior Indebtedness with respect thereto on the terms and conditions
of the respective Indentures governing such Senior Subordinated Debt Securities
and Subordinated Debt Securities, respectively. The Company is prohibited from
making any payment of principal of or premium or interest on Senior Subordinated
Debt Securities or Subordinated Debt Securities, as the case may be, and any
payment in respect of any redemption, retirement, purchase or other acquisition
of Senior Subordinated Debt Securities or Subordinated Debt Securities, as the
case may be, (i) unless, as of the earlier to occur of the date such payment is
made and the date that provision is made for such payment in accordance with the
terms of the applicable Indenture, all amounts then due and payable for
principal of and premium, if any, and interest on Senior Indebtedness with
respect to the Senior Subordinated Debt Securities or Subordinated Debt
Securities, as the case may be, have been paid in full, or (ii) if at the
earlier to occur of the date of such payment or provision therefor, there has
occurred any event of default under the terms of such Senior Indebtedness
entitling the holder of such Senior Indebtedness to accelerate the maturity
thereof as a result of such event of default. Notwithstanding such prohibition,
the Company may make such payments, if (a) the Company or the Trustee has
received a notice of a default or an event of default under any agreement
covering such Senior Indebtedness (other than notice of a default or event of
default relating to payments of principal or interest, either at maturity, upon
redemption, by declaration or otherwise), which default or event of default
would permit the holders of such Senior Indebtedness to accelerate its maturity
(whether or not such acceleration has occurred), and (b) 179 days have passed
after the earliest date on which such notice was given with respect to such
default or event of default (a "Payment Blockage Period") so long as the
applicable Indenture otherwise permits payment at that time; provided, however,
that only one Payment Blockage Period may be commenced within one 360-day period
with respect to the Senior Subordinated Debt Securities or Subordinated Debt
Securities, as the case may be. No event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Senior Indebtedness shall be, or be made, the basis for the
commencement of a second Payment Blockage Period by the representative for the
holders of such Senior Indebtedness unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days. (Article
Fifteen of Senior Subordinated Indenture and Subordinated Indenture)
Upon any payment or distribution of assets or securities of the Company of
any kind or character upon any dissolution, winding up or total liquidation or
reorganization of the Company (in bankruptcy or otherwise), the holders of
Senior Indebtedness with respect to the Senior Subordinated Debt Securities or
Subordinated Debt Securities, as the case may be, will first be entitled to
receive payment in full of principal of and premium, if any, and interest on
such Senior Indebtedness before the holders of Senior Subordinated Debt
Securities or Subordinated Debt Securities, as the case may be, are entitled to
receive any payment of the principal of or premium or interest on such Senior
Subordinated Debt Securities or Subordinated Debt Securities, as the case may
be. (Article Fifteen of Senior Subordinated Indenture and Subordinated
Indenture)
By reason of such provisions, in the event of insolvency, holders of Senior
Subordinated Debt Securities and Subordinated Debt Securities may recover less,
ratably, than holders of Senior Indebtedness with respect
thereto.
The Senior Debt Securities, when issued, will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company.
Conversion or Exchange of Debt Securities
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, such series will be convertible or
exchangeable into Common Stock or other securities on the terms and conditions
set forth therein.
Form, Exchange, Registration, Conversion, Transfer and Payment
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued only in fully registered form in denominations of
$1,000 or integral multiples thereof. (Section 302) Unless otherwise indicated
in the applicable Prospectus Supplement, payment of principal of, premium, if
any, and interest on the Debt Securities will be payable, and the exchange,
conversion and transfer of Debt Securities will be registerable, at the office
or agency of the Company maintained for such purposes and at any other office or
agency maintained for such purpose. (Sections 301, 305 and 1002) No service
charge will be made for any registration of transfer or exchange of the Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection therewith. (Section 305)
All monies paid by the Company to a paying agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed for two years after such principal, premium or interest has become due
and payable may be repaid to the Company and thereafter the holder of such Debt
Security may look only to the Company for payment thereof.
(Section 1003)
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary ("Global Depositary") or its nominee identified in the
applicable Prospectus Supplement. In such a case, one or more Global Securities
will be issued in a denomination or aggregate denomination equal to the portion
of the aggregate principal amount of outstanding Debt Securities of the series
to be represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by the
Global Depositary for such Global Security to a nominee of such Global
Depositary or by a nominee of such Global Depositary to such Global Depositary
or another nominee of such Global Depositary or by such Global Depositary or any
nominee to a successor Global Depositary or a nominee of such successor Global
Depositary and except in the circumstances described in the applicable
Prospectus Supplement. (Sections 204 and 305)
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus Supplement. The Company expects
that the following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited with
or on behalf of a Global Depositary will be represented by a Global Security
registered in the name of such Global Depositary or its nominee. Upon the
issuance of such Global Security, and the deposit of such Global Security with
or on behalf of the Global Depositary for such Global Security, the Global
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Global
Depositary or its nominee ("participants"). The accounts to be credited will be
designated by the underwriters or agents of such Debt Securities or by the
Company, if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interest in such Global Security will be limited to
participants or Persons that may hold interests through participants. Ownership
of beneficial interests by participants in such Global Security will be shown
on, and the transfer of that ownership interest will be effected only through,
records maintained by the Global Depositary or its nominee for such Global
Security. Ownership of beneficial interests in such Global Security by Persons
that hold through participants will be shown on, and the transfer of that
ownership interest within such participant will be effected only through,
records maintained by such participant. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Global Depositary for a Global Security, or its nominee, is
the registered owner of such Global Security, such Global Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Securities represented by such Global Security for all purposes under the
applicable Indenture. Unless otherwise specified in the applicable Prospectus
Supplement, owners of beneficial interests in such Global Security will not be
entitled to have Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in certificated form and
will not be considered the holders thereof for any purposes under the applicable
Indenture. (Sections 204 and 305) Accordingly, each Person owning a beneficial
interest in such Global Security must rely on the procedures of the Global
Depositary and, if such Person is not a participant, on the procedures of the
participant through which such Person owns its interest, to exercise any rights
of a holder under the applicable Indenture. The Company understands that under
existing industry practices, if the Company requests any action of holders or an
owner of a beneficial interest in such Global Security desires to give any
notice or take any action a holder is entitled to give or take under an
Indenture, the Global Depositary would authorize the participants to give such
notice or take such action, and participants would authorize beneficial owners
owning through such participants to give such notice or take such action or
would otherwise act upon the instructions of beneficial owners owning through
them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
Covenants with Respect to Senior Debt Securities
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Senior Debt Securities, holders of such Senior Debt
Securities will be entitled to the benefit of one or both of the following
covenants.
Restrictions on Secured Debt
Neither the Company nor any Subsidiary shall incur, issue, assume or
guarantee any notes, bonds, debentures or other evidences of indebtedness for
money borrowed (collectively, "Debt") secured after the date of the Senior
Indenture by a mortgage, pledge or lien ("Mortgage") on any Principal Property
of the Company or a Significant Subsidiary or on any shares of stock or Debt of
any Significant Subsidiary, unless the Company secures, or causes such
Significant Subsidiary to secure, the Senior Debt Securities equally and ratably
with (or, at the Company's option, prior to) such secured Debt, together, at the
determination of the Company, with certain other Debt of the Company; provided,
however, that such restriction shall not apply to the incurrence of any secured
Debt if, after giving effect thereto, the aggregate outstanding principal amount
of all such Debt so secured after the date of the Senior Indenture, together
with all Attributable Debt of the Company and its Significant Subsidiaries in
respect of sale and leaseback transactions after the date of the Senior
Indenture and existing at such time involving Principal Properties owned by the
Company or a Significant Subsidiary (with the exception of such transactions
which are excluded as described in "Restrictions on Sales and Leasebacks"
below), would not exceed 10% of the Consolidated Assets of the Company and its
Subsidiaries.
This restriction will not apply to, and there shall be excluded in
computing secured Debt for the purpose of such restriction, Debt secured prior
to the date of the Senior Indenture and Debt secured by (a) Mortgages on
property of, or on any shares of stock of or Debt of, any corporation existing
at the time such corporation becomes a Significant Subsidiary; (b) Mortgages in
favor of the Company or a Significant Subsidiary; (c) Mortgages in favor of
governmental bodies to secure progress, advance or other statutory or contract
payments; Mortgages for taxes, assessments or other governmental charges or
levies; or materialmen's mechanics', carriers', workmen's, repairmen's,
landlord's and other like Mortgages; (d) Mortgages on property, equipment, mines
or facilities, or shares of stock or Debt, to secure the payment of all or any
part of the purchase price thereof or the construction, improvement or
development cost thereof, or any Debt incurred in connection therewith, existing
prior to, at the time of, or within 180 days after, the acquisition (including
any acquisition through merger or consolidation) or construction, improvement or
development thereof, provided that any such Mortgage shall only extend to the
property, equipment, mines or facilities, or shares of stock or Debt, acquired
or constructed, improved or developed, or to property or mines, including
undeveloped mineralized deposits or orebodies or segments thereof, on which the
acquired or constructed, improved or developed property, equipment, mines or
facilities is situated; (e) Mortgages securing certain tax-exempt obligations
issued by governmental bodies, including industrial revenue or pollution control
bonds; (f) Mortgages created in connection with a project financed, or assets
acquired, with, and created to secure, a Nonrecourse Obligation; (g) production
payments or other rights of others to the output of mines, refineries, smelters,
concentrators or production facilities, including project financings with
respect to any property or assets acquired, constructed or improved by the
Company or a Subsidiary with the proceeds of such project financings; or
Mortgages to secure the payment of workmen's compensation or the performance of
tenders, bids or similar contracts (including surety or appeal bonds) and
Mortgages entered into in the ordinary course of business for similar purposes;
or (h) subject to certain limitations, any extension, renewal or refunding of
any Mortgage referred to in the foregoing clauses (a) through (g) inclusive.
(Section 1006 of Senior Indenture) The Senior Indenture does not restrict the
Company or any Subsidiary from incurring unsecured Debt.
Restrictions on Sales and Leasebacks
Neither the Company nor any Significant Subsidiary may enter into any sale
and leaseback transaction involving any Principal Property, unless after giving
effect thereto the aggregate amount of all Attributable Debt with respect to all
such transactions occurring after the date of the Senior Indenture and existing
at such time plus all outstanding secured Debt incurred by the Company and its
Significant Subsidiaries after the date of the Senior Indenture (with the
exception of secured Debt which is excluded as described in "Restrictions on
Secured Debt" above) would not exceed 10% of Consolidated Assets of the Company
and its Subsidiaries.
This restriction does not apply to, and there shall be excluded from
Attributable Debt in any computation under such restriction, any sale and
leaseback transaction if (a) the lease is for a period, including renewal
rights, not in excess of three years; (b) the sale or transfer of the Principal
Property is made prior to, at the time of, or within 180 days after its
acquisition or completion of construction; (c) the lease secures or relates to
certain tax-exempt obligations issued by governmental bodies, including
industrial revenue or pollution control bonds; (d) the transaction is between
the Company and a Significant Subsidiary or between Significant Subsidiaries;
(e) the lease payment obligation is created in connection with a project
financed, or assets acquired, with, and such obligation constitutes, a
Nonrecourse Obligation; or (f) the Company or such Significant Subsidiary,
within 180 days after the sale is completed, applies to the retirement of Funded
Debt of the Company or a Significant Subsidiary, or to the purchase of other
property which will constitute Principal Property, an amount not less than the
greater of (i) the net proceeds of the sale of the Principal Property leased or
(ii) the fair market value of the Principal Property leased, as determined by
certain officers of the Company. The amount to be applied to the retirement of
Funded Debt shall be reduced by (x) the principal amount of any Funded Debt
(including the Debt Securities) of the Company or a Significant Subsidiary
retired and cancelled within 180 days after such sale with proceeds other than
the proceeds from such sale and (y) the principal amount of Funded Debt, other
than any Funded Debt referred to in the preceding clause (x), voluntarily
retired by the Company or any Significant Subsidiary within 180 days after such
sale using proceeds other than the proceeds of such sale. (Section 1007 of
Senior Indenture)
Covenants with Respect to Senior Subordinated Debt Securities
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Senior Subordinated Debt Securities, holders of such Senior
Subordinated Debt Securities will be entitled to the benefit of one or both of
the following covenants.
Limitation on Subordinated Liens
Neither the Company nor any Subsidiary shall incur, issue, assume or
guarantee any Debt which is pari passu or (by the express terms thereof)
subordinate in right of payment to the Senior Subordinated Debt Securities,
secured after the date of the Senior Subordinated Indenture by a Mortgage on any
Principal Property of the Company or a Significant Subsidiary or on any shares
of stock or Debt of any Significant Subsidiary, unless the Company secures, or
causes such Significant Subsidiary to secure, the Senior Subordinated Debt
Securities (i) equally and ratably with (or, at the Company's option, prior to)
such secured Debt or (ii) in the event such secured Debt is subordinated in
right to payment to the Senior Subordinated Securities, prior to such secured
Debt, together, at the determination of the Company, with certain other Debt of
the Company; provided, however, that such restriction shall not apply to the
incurrence of any secured Debt if, after giving effect thereto, the aggregate
amount of all such Debt so secured after the date of the Senior Subordinated
Indenture and then outstanding would not exceed 10% of the Consolidated Assets
of the Company and its Subsidiaries.
This restriction will not apply to, and there shall be excluded in
computing secured Debt for the purpose of such restriction, Debt secured prior
to the date of the Senior Subordinated Indenture and Debt secured by (a)
Mortgages on property of, or on any shares of stock of or Debt of, any
corporation existing at the time such corporation becomes a Significant
Subsidiary; (b) Mortgages in favor of the Company or a Significant Subsidiary;
(c) Mortgages in favor of governmental bodies to secure progress, advance or
other statutory or contract payments; Mortgages for taxes, assessments or other
governmental changes or levies; or materialmen's mechanics', carriers',
workmen's, repairmen's, landlord's and other like Mortgages; (d) Mortgages on
property, equipment, mines or facilities, or shares of stock or Debt, to secure
the payment of all or any part of the purchase price thereof or the
construction, improvement or development cost thereof, or any Debt incurred in
connection therewith, existing prior to, at the time of, or within 180 days
after, the acquisition (including any acquisition through merger or
consolidation) or construction, improvement or development thereof, provided
that any such Mortgage shall only extend to the property, equipment, mines or
facilities, or shares of stock or Debt, acquired or constructed, improved or
developed, or to property or mines, including undeveloped mineralized deposits
or orebodies or segments thereof, on which the acquired or constructed, improved
or developed property, equipment, mines or facilities is situated; (e) Mortgages
securing certain tax-exempt obligations issued by governmental bodies, including
industrial revenue or pollution control bonds; (f) Mortgages created in
connection with a project financed, or assets acquired, with, and created to
secure, a Nonrecourse Obligation; (g) production payments or other rights of
others to the output of mines, refineries, smelters, concentrators or production
facilities, including project financings, with respect to any property or assets
acquired, constructed or improved by the Company or a Subsidiary with the
proceeds of such project financings; or Mortgages to secure the payment of
workmen's compensation or the performance of tenders, bids or similar contracts
(including surety or appeal bonds) and Mortgages entered into in the ordinary
course of business for similar purposes; or (h) subject to certain limitations,
any extension, renewal or refunding of any Mortgage referred to in the foregoing
clauses (a) through (g) inclusive. (Section 1006 of Senior Subordinated
Indenture) The Senior Subordinated Indenture does not restrict the Company or
any Subsidiary from incurring unsecured Debt.
Limitation on Certain Debt
The Company shall not incur any Debt which by its terms is both (i)
subordinated in right of payment to any Senior Debt and (ii) senior in right of
payment to the Senior Subordinated Debt Securities.
Events of Default
The following are Events of Default under the Indentures with respect to
Debt Securities of any series: (a) failure to pay principal of or premium, if
any, on any Debt Security of that series when due; (b) failure to pay any
interest on any Debt Security of that series when due, continued for 30 days;
(c) failure to make any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform in any material respect any
other covenant of the Company in the applicable Indenture (other than a covenant
included in such Indenture solely for the benefit of a series of Debt Securities
other than that series), continued for 60 days after written notice as provided
in the respective Indentures; (e) acceleration of any indebtedness for money
borrowed by the Company in excess of $20 million, if such acceleration is not
annulled as provided in the respective Indentures; (f) certain events of
bankruptcy, insolvency or reorganization; and (g) any other Event of Default
provided with respect to Debt Securities of that series. (Section 501)
If an Event of Default with respect to outstanding Debt Securities of any
series shall occur and be continuing, either the Trustee or the holders of at
least 25% in principal amount of the outstanding Debt Securities of that series
by notice as provided in the respective Indentures may declare the principal
amount (or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all Debt Securities of that series to be due and
payable immediately. However, at any time after a declaration of acceleration
with respect to Debt Securities of any series has been made, but before a
judgment or decree based on such acceleration has been obtained, the holders of
a majority in principal amount of the outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration. (Section
502) For information as to waiver of defaults, see "Modification and Waiver"
below.
The Indentures provide that, subject to the duty of the respective Trustees
thereunder during an Event of Default to act with the required standard of care,
such Trustee will be under no obligation to exercise any of its rights or powers
under the respective Indentures at the request or direction of any of the
holders, unless such holders shall have offered to such Trustee reasonable
security or indemnity. (Sections 601 and 603) Subject to certain provisions,
including those requiring security or indemnification of the Trustees, the
holders of a majority in principal amount of the outstanding Debt 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 applicable Trustee, or
exercising any trust or power conferred on such Trustee, with respect to the
Debt Securities of that series. (Section 512)
No holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture or for any remedy
thereunder, unless such holder shall have previously given to the applicable
Trustee written notice of a continuing Event of Default (as defined) and unless
also the holders of at least 25% in aggregate principal amount of the
outstanding Debt Securities of the same series shall have made written request,
and offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee, and the Trustee shall not have received from the holders of a majority
in aggregate principal amount of the outstanding Debt Securities of the same
series a direction inconsistent with such request and shall have failed to
institute such proceeding within 60 days. (Section 507) However, such
limitations do not apply to a suit instituted by a holder of a Debt Security for
enforcement of payment of the principal of and interest on such Debt Security on
or after the respective due dates expressed in such Debt Security. (Section 508)
The Company will be required to furnish to the Trustees annually a
statement as to the performance by the Company of its obligations under the
respective Indentures and as to any default in such performance. (Section
1004)
Modification and Waiver
Without the consent of any holder of outstanding Debt Securities, the
Company and the Trustee may amend or supplement the Indentures or the Debt
Securities to cure any ambiguity, defect or inconsistency, or to make any change
that does not materially adversely affect the rights of any holder of Debt
Securities. (Section 901) Other modifications and amendments of the respective
Indentures may be made by the Company and the Trustee with the consent of the
holders of not less than a majority in aggregate principal amount of the
outstanding Debt Securities of each series affected thereby; provided, however,
that no such modification or amendment may, without the consent of the holder of
each outstanding Debt Security affected thereby: (a) change the Stated Maturity
of the principal of, or any installment of principal of, or interest on, any
Debt Security; (b) reduce the principal amount of, the rate of interest on, or
the premium, if any, payable upon the redemption of, any Debt 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 premium, if any, or interest on any Debt Security;
(e) impair the right to institute suit for the enforcement of any payment on or
with respect to any Debt Security on or after the Stated Maturity or Redemption
Date thereof; (f) modify the conversion provisions applicable to Convertible
Debt Securities in a manner adverse to the holders thereof; (g) modify the
subordination provisions applicable to Senior Subordinated Debt Securities or
Subordinated Debt Securities in a manner adverse to the holders thereof; or (h)
reduce the percentage in principal amount of outstanding Debt Securities of any
series, the consent of the holders of which is required for modification or
amendment of the applicable Indenture or for waiver of compliance with certain
provisions of the applicable Indenture or for waiver of certain defaults.
(Section 902)
The holders of at least a majority in aggregate principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain covenants of the applicable Indenture.
(Section 1009) The holders of not less than a majority in principal amount of
the outstanding Debt Securities of any series may, on behalf of the holders of
all Debt Securities of that series, waive any past default under the applicable
Indenture with respect to that series, except a default in the payment of the
principal of, or premium, if any, or interest on, any Debt Security of that
series or in respect of a provision which under the applicable Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Debt Security of that series affected. (Section 513)
Consolidation, Merger and Sale of Assets
The Company may not consolidate or merge with or into, or transfer or lease
all or substantially all of its assets to, any Person, and any other Person may
not consolidate or merge with or into, the Company, unless (i) the Person formed
by such consolidation or into which the Company is merged or which acquires or
leases all or substantially all of the assets of the Company expressly assumes
all of the Company's obligations on the Debt Securities and under the Indenture,
(ii) immediately after giving effect to such transaction no Event of Default
shall have happened and be continuing, and (iii) certain other conditions are
met. (Article Eight)
Defeasance
If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series, the Company, at its option (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace destroyed, stolen, lost or mutilated Debt
Securities of such series, and to maintain an office or agency in respect of the
Debt Securities and hold moneys for payment in trust) or (ii) will be released
from its obligations to comply with the covenants that are specified under
"Covenants with Respect to Senior Debt Securities" or "Covenants with Respect to
Senior Subordinated Debt Securities" above (and any covenants that may apply to
Subordinated Debt Securities) with respect to the Debt Securities of such
series, and the occurrence of an event described in clause (d) under "Events of
Default" above with respect to any defeased covenant, and clauses (e) and (g)
under "Events of Default" above shall no longer be Events of Default, if in
either case the Company irrevocably deposits with the Trustee, in trust, money
or U.S. Government Obligations that through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount
sufficient to pay all the principal of and premium, if any, and any interest on
the Debt Securities of such series on the dates such payments are due (which may
include one or more redemption dates designated by the Company) in accordance
with the terms of such Debt Securities. Such a trust may only be established if,
among other things, (a) no Event of Default or event which with the giving of
notice or lapse of time, or both, would become an Event of Default under the
applicable Indenture shall have occurred and be continuing on the date of such
deposit, (b) no Event of Default described under clause (f) under "Events of
Default" above or event which with the giving of notice or lapse of time, or
both, would become an Event of Default described under such clause (f) shall
have occurred and be continuing at any time during the period ending on the 91st
day following such date of deposit, and (c) the Company shall have delivered an
Opinion of Counsel to the effect that the holders of the Debt Securities will
not recognize gain or loss for United States Federal income tax purposes as a
result of such deposit or defeasance and will be subject to United States
Federal income tax in the same manner as if such defeasance had not occurred. In
the event the Company fails to comply with its remaining obligations under the
applicable Indenture after a defeasance of such Indenture with respect to the
Debt Securities of any series as described under clause (ii) above and the Debt
Securities of such series are declared due and payable because of the occurrence
of any undefeased Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee may be insufficient to pay amounts due
on the Debt Securities of such series at the time of the acceleration resulting
from such Event of Default. However, the Company will remain liable in respect
to such payments. (Article Thirteen)
Notwithstanding the description set forth under "Subordination of Senior
Subordinated Debt Securities and Subordinated Debt Securities" above, in the
event that the Company deposits money or U.S. Government Obligations in
compliance with the Indenture that governs the Senior Subordinated Debt
Securities or Subordinated Debt Securities, as the case may be, in order to
defease all or certain of its obligations with respect to the applicable series
of Debt Securities, the moneys or U.S. Government Obligations so deposited will
not be subject to the subordination provisions of the applicable Indenture and
the indebtedness evidenced by such series of Debt Securities will not be
subordinated in right of payment to the holders of applicable Senior
Indebtedness to the extent of the moneys or U.S.
Government Obligations so deposited.
Provision of Financial Information
The Company will provide to the Trustee a copy of all financial reports it
files with the Commission. If, during any reporting period, the Company is not
required to file such reports with the Commission, the Company will provide the
Trustee substantially similar financial reports concerning the Company as if the
Company were so required.
Governing Law
The Indentures and the Debt Securities will be governed by, and construed
in accordance with, the laws of the State of New York. (Section 112)
Regarding the Trustee
Chemical Trust Company of California, an affiliate of Chemical Bank, N.A.,
will serve as Trustee under the Indenture governing the Senior Debt Securities.
Chemical Bank, N.A. is a lender and the administrative agent under the Company's
Revolving Credit Agreement.
State Street Bank and Trust Company will be the Trustee under the Indenture
governing the Senior Subordinated Debt Securities. It is also the trustee under
the indentures governing the Company's 12% Senior Subordinated Notes due 2001,
its 11-1/2% Senior Subordinated Notes due 2002, and its 8.70% Senior
Subordinated Notes due May 15, 2005.
The Trustee with respect to the Indenture governing Subordinated Debt
Securities will be specified in the applicable Prospectus Supplement relating
thereto.
If any Trustee were to have any conflicting interest at the time of any
default under the Debt Securities, it would have to eliminate such conflict or
resign as Trustee. (Section 608)
Certain Definitions
The following terms have the meanings ascribed to them below, except as
otherwise provided with respect to any series of Debt Securities:
The term "Attributable Debt" shall mean, as to any particular Capitalized
Lease under which any Person is at the time liable, at any date of which the
amount thereof is to be determined, the total net amount of rent required to be
paid by such Person under such Capitalized Lease during the remaining primary
term thereof, discounted from the respective due dates thereof to such date at
the rate of interest per annum implicit in the terms of such Capitalized Lease,
as determined in good faith by the Company. The net amount of rent required to
be paid under such Capitalized Lease for any such period shall be the amount of
the rent payable by the lessee with respect to such period, after excluding
amounts required to be paid on account of maintenance, repairs, insurance,
taxes, assessments, water rates and similar charges. In the case of any
Capitalized 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
shall not include any rent required to be paid under such Capitalized Lease
subsequent to the first date upon which it may be so terminated.
The term "Consolidated Assets" shall mean the aggregate amount of assets,
all as set forth on the most recent balance sheet of the Company and its
consolidated Subsidiaries and computed in accordance with generally accepted
accounting principles.
The term "Funded Debt" shall mean all indebtedness for money borrowed
having a maturity of more than 12 months from the date as of which the amount
thereof is to be determined or having a maturity of less than 12 months but by
its terms being renewable or extendable beyond 12 months from such date at the
option of the borrower.
The term "Nonrecourse Obligation" shall mean indebtedness or lease payment
obligations substantially related to and entered into or effective before, at
the time of or after (i) the acquisition (including any acquisition by merger or
consolidation) of property or assets not currently owned by the Company or any
of its Significant Subsidiaries or (ii) the financing of the acquisition,
construction, development or improvement of property, equipment, mines or
facilities of the Company or any of its Significant Subsidiaries, as to which
the obligee with respect to such indebtedness or obligation has no recourse to
the general corporate funds of the Company or any of its Significant
Subsidiaries or to the assets, in general, of the Company or any of its
Significant Subsidiaries, other than the property, equipment, mines or
facilities acquired or constructed, improved or developed, or to property or
mines, including undeveloped mineralized deposits or orebodies or segments
thereof, on which the acquired or constructed, improved or developed property,
equipment, mines or facilities is situated or that forms, with the property,
equipment, mines or facilities acquired or constructed, improved or developed,
an integrated plan to bring into or enhance the production of minerals or metals
therefrom.
The term "Person" shall mean any individual, corporation, partnership,
joint venture, trust, association, company, joint-stock company, business trust,
unincorporated organization or government or any agency or political subdivision
thereof.
The term "Principal Property" shall mean any smelters, refineries, mines,
concentrators or other facilities, located within the present 50 states of the
United States of America (other than its territories or possessions), owned by
the Company or any Subsidiary, in each case the gross book value (without
deduction of any depreciation reserves) of which on the date as of which the
determination is being made exceeds 3% of Consolidated Assets, other than any
such portion thereof which is pollution control or other equipment or facility
financed by obligations issued by a State or local government unit; provided,
however, that Principal Property shall not include any smelters, refineries,
mines, concentrators or facilities or any portions thereof which the Board of
Directors of the Company declares by resolution are not of material importance
to the total business conducted by the Company and its Subsidiaries as an
entirety.
The term "Significant Subsidiary" shall mean any Subsidiary of the Company
which owns a Principal Property and any Subsidiary that owns directly or
indirectly stock of a Significant Subsidiary.
The term "Subsidiary" shall mean a corporation more than 50% of the
outstanding Voting Stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
The term "Voting Stock" shall mean stock which ordinarily has voting power
for the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below. Certain provisions applicable to the Preferred Stock are set
forth below under "Description of Common Stock."
The summary of terms of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Certificate of Incorporation
and the certificate of designations relating to each series of the Preferred
Stock (the "Certificate of Designations"), the form of which is an exhibit to
the Registration Statement of which this Prospectus is a part.
The Company's Certificate of Incorporation authorizes the issuance of
50,000,000 shares of preferred stock. In December 1993, the Company closed the
sale of 2.0 million shares of 6% Cumulative Convertible Preferred Stock, Series
E, $.01 par value. See "Series E Preferred Stock" below. Additionally, in July
1993, the Company issued 2.0 million shares of 5 5/8% Cumulative Convertible
Preferred Stock, Series D, $.01 par value. See "Series D Preferred Stock" below.
The Company also has 5,112,765 shares of Series C Convertible Preferred Stock,
$.01 par value, reserved for issuance in certain instances. See "Reserved but
Unissued Series C Convertible Preferred Stock" below. The Company's preferred
stock may be issued from time to time in one or more series, without stockholder
approval. Subject to limitations prescribed by law, the Board of Directors is
authorized to determine the voting powers (if any), designation, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, for each series of preferred stock that may
be issued, and to fix the number of shares of each such series. Thus, the Board
of Directors, without stockholder approval, could authorize the issuance of
preferred stock with voting, conversion and other rights that could adversely
affect the voting power and other rights of holders of Common Stock or other
series of preferred stock or that could have the effect of delaying, deferring
or preventing a change in control of the Company. See "Description of Common
Stock" herein.
The Preferred Stock shall have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. The
applicable Prospectus Supplement will describe the following terms of the series
of Preferred Stock in respect of which this Prospectus is being delivered: (1)
the designation and stated value per share of such Preferred Stock and the
number of shares offered; (2) the amount of liquidation preference per share;
(3) the initial public offering price at which such Preferred Stock will be
issued and any exchange upon which the stock will be listed; (4) the dividend
rate (or method of calculation), the dates on which dividends shall be payable
and the dates from which dividends shall commence to cumulate, if any; (5) any
redemption or sinking fund provisions; (6) any conversion or exchange rights;
(7) whether the Company has elected to offer Depositary Shares as described
below under "Description of Depositary Shares"; and (8) any additional voting,
dividend, liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions.
General
The Preferred Stock offered hereby will be issued in one or more series.
The holders of Preferred Stock will have no preemptive rights. Preferred Stock,
upon issuance against full payment of the purchase price therefor, will be fully
paid and nonassessable. Neither the par value nor the liquidation preference is
indicative of the price at which the Preferred Stock will actually trade on or
after the date of issuance.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer Depositary Shares evidenced by Depositary Receipts,
each representing a fractional interest (to be specified in the Prospectus
Supplement relating to the particular series of the Preferred Stock) in a share
of the particular series of the Preferred Stock issued and deposited with a
Depositary (as defined below).
Rank
The Preferred Stock shall, with respect to dividend rights and rights on
liquidation, winding up and dissolution of the Company, rank prior to the
Company's Common Stock and to all other classes and series of equity securities
of the Company now or hereafter authorized, issued or outstanding (the Common
Stock and such other classes and series of equity securities collectively may be
referred to herein as the "Junior Stock"), other than any classes or series of
equity securities of the Company ranking on a parity with (the "Parity Stock")
or senior to (the "Senior Stock") the Preferred Stock as to dividend rights and
rights upon liquidation, winding up or dissolution of the Company. The Preferred
Stock shall be junior to all outstanding debt of the Company. The Preferred
Stock shall be subject to creation of Senior Stock, Parity Stock and Junior
Stock to the extent not expressly prohibited by the Company's Certificate of
Incorporation.
Dividends
Holders of shares of Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds of the Company legally
available for payment, cash dividends, payable at such dates and at such rates
per share per annum as set forth in the applicable Prospectus Supplement. Such
rate may be fixed or variable or both. Each declared dividend shall be payable
to holders of record as they appear at the close of business on the stock books
of the Company (or, if applicable, on the records of the Depositary) on such
record dates, not more than 60 calendar days preceding the payment dates
therefor, as are determined by the Board of Directors (each of such dates, a
"Record Date").
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement. If dividends on a series of Preferred Stock are
noncumulative and if the Board of Directors fails to declare a dividend in
respect of a dividend period with respect to such series, then holders of such
Preferred Stock will have no right to receive a dividend in respect of such
dividend period, and the Company will have no obligation to pay the dividend for
such period, whether or not dividends are declared payable on any future
dividend payment dates. Dividends on the shares of each series of Preferred
Stock for which dividends are cumulative will accrue from the date on which the
Company initially issues shares of such series. Accumulations of dividends on
shares of Preferred Stock will not bear interest.
No full dividends shall be declared or paid or set apart for payment on
preferred stock of the Company of any series ranking, as to dividends, on a
parity with or junior to the series of Preferred Stock offered by the Prospectus
Supplement attached hereto for any period unless full dividends for the
immediately preceding dividend period on such Preferred Stock (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such Preferred Stock are cumulative) have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for such payment. When dividends are not so paid in full (or a sum
sufficient for such full payment is not so set apart) upon such Preferred Stock
and any other preferred stock of the Company ranking on a parity as to dividends
with the Preferred Stock, dividends upon shares of such Preferred Stock and
dividends on such other preferred stock shall be declared pro rata so that the
amount of dividends declared per share on such Preferred Stock and such Parity
Stock shall in all cases bear to each other the same ratio that accrued
dividends on the shares of such Preferred Stock and accrued dividends on shares
of such Parity Stock, bear to each other as of their respective immediately
preceding dividend periods. Unless full dividends on the series of Preferred
Stock offered by the Prospectus Supplement attached hereto have been declared
and paid or set apart for payment for the immediately preceding dividend period
(including any accumulation in respect of unpaid dividends for prior dividend
periods, if dividends on such Preferred Stock are cumulative), (a) no cash
dividend or distribution (other than in shares of Junior Stock) may be declared,
set aside or paid on the Junior Stock, (b) the Company may not, directly or
indirectly, repurchase, redeem or otherwise acquire any shares of its Junior
Stock (or pay any monies into a sinking fund for the redemption of any shares)
except by conversion into or exchange for Junior Stock or in connection with any
employee benefit plan or arrangement, and (c) the Company may not, directly or
indirectly, repurchase, redeem or otherwise acquire any shares of such Preferred
Stock or Parity Stock (or pay any monies into a sinking fund for the redemption
of any shares of any such stock) otherwise than pursuant to pro rata offers to
purchase or a concurrent redemption of all, or a pro rata portion, of the
outstanding shares of such Preferred Stock and Parity Stock (except by
conversion into or exchange for Junior Stock or in connection with any employee
benefit plan or arrangement).
Convertibility
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted (mandatorily or otherwise) into shares of Common
Stock of the Company or another series of preferred stock or other securities of
the Company will be set forth in the Prospectus Supplement relating thereto. See
"Description of Common Stock."
Redemption
The terms, if any, on which shares of Preferred Stock of any series may be
redeemed will be set forth in the related Prospectus Supplement.
Liquidation
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the holders of a series of Preferred Stock will be
entitled, subject to the rights of creditors, but before any distribution or
payment to the holders of Common Stock or any other security ranking junior to
the Preferred Stock on liquidation, dissolution or winding up of the Company, to
receive out of the assets of the Company, whether such assets are capital or
surplus and whether or not any dividends as such are declared, an amount per
share as set forth in the related Prospectus Supplement plus any accrued and
unpaid dividends for prior dividend periods, if dividends on such series of
Preferred Stock are cumulative. If the amounts available for distribution with
respect to the Preferred Stock and all other outstanding stock of the Company
ranking on a parity with the Preferred Stock upon liquidation are not sufficient
to satisfy the full liquidation rights of all the outstanding Preferred Stock
and stock ranking on a parity therewith, then the holders of each series of such
stock will share ratably in any such distribution of assets in proportion to the
full respective preferential amount (which in the case of preferred stock may
include accumulated dividends) to which they are entitled. After payment of the
full amount of the liquidation preference, the holders of shares of Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Company.
Voting
The Preferred Stock of a series will not be entitled to vote, except as
provided below or in the applicable Prospectus Supplement and as required by
applicable law. Unless otherwise specified in the related Prospectus Supplement,
at any time dividends in an amount equal to six quarterly dividend payments on
the Preferred Stock shall have accrued and be unpaid, holders of the Preferred
Stock shall have the right to a separate class vote (together with the holders
of shares of any Parity Stock upon which like voting rights have been conferred
and are exercisable, "Voting Parity Stock") to elect two additional members to
the Board of Directors at the next annual meeting of stockholders (or, if called
by 25% in interest of such Preferred Stock, a special meeting of stockholders)
and to maintain such director representation until dividends on the Preferred
Stock have been paid in full (including any accumulation in respect of unpaid
dividends from prior dividend periods, if dividends on such Preferred Stock are
cumulative) or declared and a sum sufficient for the payment thereof is set
apart for such payment. Additionally, without the affirmative vote of the
holders of two-thirds of the shares of Preferred Stock then outstanding (voting
separately as a class together with any Voting Parity Stock), the Company may
not, either directly or indirectly or through merger or consolidation with any
other corporation, (i) approve the authorization, creation or issuance, or an
increase in the authorized or issued amount, of any class or series of stock
ranking prior to the shares of Preferred Stock in rights and preferences, or
(ii) amend, alter or repeal its Certificate of Incorporation or the Certificate
of Designations relating to the Preferred Stock so as to materially and
adversely change the voting powers, rights or preferences of the Preferred
Stock, provided, however, that if any such amendment, alteration or repeal would
materially adversely affect any voting powers, rights or preferences of the
Preferred Stock or another series of Voting Parity Stock that are not enjoyed by
some or all of the other series otherwise entitled to vote in accordance
herewith, the affirmative vote of at least two-thirds of the votes entitled to
be cast by the holders of all series similarly affected shall be required in
lieu of the affirmative vote of at least two-thirds of the votes entitled to be
cast by the holders of the shares of Preferred Stock and the Voting Parity Stock
otherwise entitled to vote in accordance herewith; and provided, further, that
no vote of the holders of Preferred Stock shall be required if, at or prior to
the time when such amendment, alteration or repeal is to take effect, or when
the issuance of any such class or series of stock ranking prior to the shares of
Preferred Stock in rights and preferences, is to be made, as the case may be,
provision is made for the redemption of all shares of Preferred Stock at the
time outstanding. An amendment which increases the number of authorized shares
of or authorizes the creation or issuance of other classes or series of
preferred stock ranking junior to or on a parity with the Preferred Stock with
respect to the payment of dividends or distribution of assets upon liquidation,
dissolution or winding up, or substitutes the surviving entity in a merger,
consolidation, reorganization or other business combination for the Company,
shall not be considered to be an adverse change requiring the approval of the
Preferred Stock.
As more fully described under "Description of Depositary Shares" below, if
the Company elects to issue Depositary Shares, each representing a fraction of a
share of a series of the Preferred Stock, each such Depositary Share will, in
effect, be entitled to such fraction of a vote per Depositary Share.
No Other Rights
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the related Prospectus Supplement, and in the
Certificate of Incorporation and the Certificate of Designations related
thereto, or as otherwise required by law.
Transfer Agent and Registrar
The transfer agent for each series of Preferred Stock will be described in
the related Prospectus Supplement.
Series E Preferred Stock
In December 1993, the Company issued 2.0 million shares of 6% Cumulative
Convertible Preferred Stock, Series E, $.01 par value (the "Series E Preferred
Stock"). Holders of the Series E Preferred Stock are entitled to receive, when,
as, and if declared by the Company's Board of Directors out of funds legally
available therefore, cumulative cash dividends at the rate of 6% per annum (an
amount equivalent to $3.00 per annum per share), payable quarterly in arrears.
In the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of the Series E Preferred Stock will be entitled
to receive distributions in the amount of $50.00 per share, plus all accrued and
unpaid dividends. Each share of Series E Preferred Stock is convertible, in
whole or in part, at any time, unless previously redeemed, into 3.5945 shares of
Common Stock (equivalent to a conversion price of $13.91 per share of Common
Stock). The conversion rate is subject to adjustment upon the occurrence of
certain events.
The Series E Preferred Stock ranks junior to all outstanding debt of the
Company. With respect to the payment of dividends and amounts upon liquidation,
dissolution or winding up, the Series E Preferred Stock ranks on a parity with
the Company's Series D Preferred Stock and senior to the Common Stock and the
Series C Preferred Stock.
Whenever dividends on the Series E Preferred Stock are in arrears for six
quarterly dividend periods, holders of the Series E Preferred Stock (voting
separately as a class together with holders of shares of the Company's Series D
Preferred Stock and any other class or series of equity securities ranking on a
parity with the Series E Preferred Stock) will have the right to elect two
additional directors to serve on the Company's Board of Directors until such
dividend arrearage is eliminated. In addition, certain changes that would be
materially adverse to the rights of holders of the Series E Preferred Stock and
voting parity stock cannot be made without the affirmative vote of two-thirds of
the shares of Series E Preferred Stock and voting parity stock, voting as a
single class, entitled to be cast thereon.
The Series E Preferred Stock is not redeemable prior to December 1, 1996.
On and after such date, the Series E Preferred Stock is redeemable at the option
of the Company, in whole or in part, initially for $52.10 per share and
thereafter at prices declining ratably annually on each December 1 to $50.00 per
share on and after December 1, 2003.
Series D Preferred Stock
In July 1993, the Company issued 2.0 million shares of 5-5/8% Cumulative
Convertible Preferred Stock, Series D, $.01 par value (the "Series D Preferred
Stock"). Holders of the Series D Preferred Stock are entitled to receive, when,
as, and if declared by the Company's Board of Directors out of funds legally
available therefore, cumulative cash dividends at the rate of 5-5/8% per annum
(an amount equivalent to $2.8125 per annum per share), payable quarterly in
arrears. In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Company, the holders of the Series D Preferred Stock will
be entitled to receive distributions in the amount of $50.00 per share, plus all
accrued and unpaid dividends. Each share of Series D Preferred Stock is
convertible, in whole or in part, at any time, unless previously redeemed, into
3.448 shares of Common Stock (equivalent to a conversion price of $14.50 per
share of Common Stock). The conversion rate is subject to adjustment upon the
occurrence of certain events.
The Series D Preferred Stock ranks junior to all outstanding debt of the
Company. With respect to the payment of dividends and amounts upon liquidation,
dissolution or winding up, the Series D Preferred Stock ranks on a parity with
the Company's Series E Preferred Stock and senior to the Common Stock and the
Series C Preferred Stock.
Whenever dividends on the Series D Preferred Stock are in arrears for six
quarterly dividend periods, holders of the Series D Preferred Stock (voting
separately as a class together with holders of shares of the Company's Series E
Preferred Stock and any other class or series of equity securities ranking on a
parity with the Series D Preferred Stock) will have the right to elect two
additional directors to serve on the Company's Board of Directors until such
dividend arrearage is eliminated. In addition, certain changes that would be
materially adverse to the rights of holders of the Series D Preferred Stock and
voting parity stock cannot be made without the affirmative vote of two-thirds of
the shares of Series D Preferred Stock and voting parity stock, voting as a
single class, entitled to be cast thereon.
The Series D Preferred Stock is not redeemable prior to July 20, 1996. On
and after such date, the Series D Preferred Stock is redeemable at the option of
the Company, in whole or in part, initially for $51.969 per share and thereafter
at prices declining ratably annually on each July 20 to $50.00 per share on and
after July 20, 2003.
Reserved but Unissued Series C Convertible Preferred Stock
The Company has reserved 5,112,765 shares of Series C Convertible Preferred
Stock, $.01 par value per share (the "Series C Preferred Stock"), for issuance
upon exercise of outstanding warrants if, for any reason, it is unable to issue
Common Stock to satisfy applicable exercise requirements. No Series C Preferred
Stock is outstanding and the Company is not presently aware of any reason that
would require it to issue such stock or preclude it from issuing Common Stock.
The Series C Preferred Stock ranks, with respect to the payment of
dividends and the distribution of assets, junior to all series of Preferred
Stock. Subject to the rights of a superior series of preferred stock, each share
of Series C Preferred Stock is entitled to receive, when, as, and if declared by
the Board of Directors out of funds legally available for that purpose,
dividends payable in cash in an amount per share equal to the aggregate per
share amount of all cash dividends, and the aggregate per share amount of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock, declared on the Common Stock.
Each share of Series C Preferred Stock is entitled to such number of votes
as each share of Common Stock and, except as otherwise required by law, will
vote together with the Common Stock as a single class. Each share of Series C
Preferred Stock is convertible at any time into one share of fully paid and
non-assessable Common Stock.
If the Company declares any dividend on the Common Stock payable in shares
of Common Stock, or effects a subdivision or combination or consolidation of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, then the dividends and the number of votes per share to which
holders of shares of Series C Preferred Stock are entitled to will be adjusted
by multiplying the amount or number the holders were previously entitled to by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
The holders of Series C Preferred Stock have no preemptive rights and are
not subject to redemption. In the event of liquidation, dissolution, or winding
up of the Company, prior to distribution to the holders of shares of stock
ranking junior to the Series C Preferred Stock, the holders of Series C
Preferred Stock are entitled to $.10 per share plus an amount equal to any
unpaid dividends and distributions on the Series C Preferred Stock, provided
that the holders of Series C Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to certain adjustments, equal to the
aggregate amount to be distributed per share to holders of shares of Common
Stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the forms of Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock which have
been or will be filed with the Commission at or prior to the time of the
offering of such series of the Preferred Stock.
General
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
Depositary to the public of receipts for Depositary Shares, each of which will
represent a fractional interest (to be set forth in the Prospectus Supplement
relating to a particular series of the Preferred Stock which will be filed with
the Commission at or prior to the time of the offering of such series of the
Preferred Stock as described below).
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Shares, to all the rights and preferences of the Preferred Stock underlying such
Depositary Share (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the whole shares of Preferred Stock underlying the
Depositary Shares evidenced by the surrendered Depositary Receipts.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Shares.
Redemption of Depositary Shares
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever the Company redeems shares of Preferred Stock
held by the Depositary, the Depositary will redeem as of the same redemption
date the number of Depositary Shares relating to shares of Preferred Stock so
redeemed. If less than all of the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or pro rata as may be
determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. To the extent the
Depositary does not receive specific instructions from the holders of Depositary
Shares relating to such Preferred Stock, it will vote shares of Preferred Stock
in accordance with the recommendation of the Company, unless otherwise indicated
in the Prospectus Supplement.
Amendment and Termination of Depositary Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the existing holders of Depositary Shares
will not be effective unless such amendment has been approved by the record
holders of at least a majority of the Depositary Shares then outstanding. A
Deposit Agreement may be terminated by the Company or the Depositary only if (i)
all outstanding Depositary Shares relating thereto have been redeemed or (ii)
there has been a final distribution in respect of the Preferred Stock of the
relevant series in connection with any liquidation, dissolution or winding up of
the Company and such distribution has been distributed to the holders of the
related Depositary Shares.
Charges of Depositary
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for their
accounts.
Miscellaneous
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
DESCRIPTION OF COMMON STOCK
The Company's Certificate of Incorporation authorizes the issuance of
100,000,000 shares of common stock, $.01 par value per share ("Common Stock").
The holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors of the Company out of funds legally available
therefor, provided that if any shares of preferred stock are at the time
outstanding, the payment of dividends on Common Stock or other distributions
(including purchases of Common Stock) may be subject to the declaration and
payment of full cumulative dividends, and the absence of arrearages in any
mandatory sinking fund, on outstanding shares of preferred stock.
The holders of Common Stock are entitled to one vote for each share on all
matters voted on by stockholders, including elections of directors. The holders
of Common Stock do not have any conversion, redemption or preemptive rights. In
the event of the dissolution, liquidation or winding up of the Company, holders
of Common Stock are entitled to share ratably in any assets remaining after the
satisfaction in full of the prior rights of creditors, including holders of the
Company's indebtedness, and the aggregate liquidation preference of any
preferred stock then outstanding.
All outstanding shares of Common Stock are, and the shares offered hereby,
upon issuance, will be, fully paid and non-assessable.
Certain provisions of the Company's Certificate of Incorporation and Bylaws
may be considered as having an anti-takeover effect. Such provisions empower the
Board of Directors to fix the rights and preferences of and to issue shares of
preferred stock; limit certain substantial stockholders of the Company from
significantly increasing their interest in the stock or assets of the Company
without the consent of the Board of Directors and/or a supermajority of the
stockholders of the Company; prohibit stockholders of the Company from calling a
special meeting; place restrictions on the ability of stockholders to nominate
persons for the position of director; and require that the Board of Directors be
divided into three classes. In addition, certain provisions of law may have the
effect of protecting the Company against undesired takeover attempts.
Specifically, under Delaware law (and a similar provision of the Company's
Certificate of Incorporation), in certain instances, significant holders (as
specified) of the Company's voting stock may not, without approval of a
specified vote of the other stockholders, or approval of the Company's Board of
Directors (or the independent members thereof) prior to becoming a significant
holder, acquire additional interests in the Company's assets or capital stock.
The transfer agent for the Common Stock is Mellon Financial Services, whose
address is 111 Founders Plaza, 11th Floor, East Hartford, Connecticut 06108.
DESCRIPTION OF WARRANTS
General
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), as well as other types of Warrants. Warrants may
be issued independently of or together with any other Securities and may be
attached to or separate from such Securities. Each series of Warrants will be
issued under a separate warrant agreement (each a "Warrant Agreement") to be
entered into between the Company and a warrant agent ("Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in connection with the
Warrants of such series and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of Warrants. The
following sets forth certain general terms and provisions of the Warrants
offered hereby. Further terms of the Warrants and the applicable Warrant
Agreement are set forth in the applicable Prospectus Supplement.
Debt Warrants
The applicable Prospectus Supplement will describe the following terms of
the Debt Warrants in respect of which this Prospectus is being delivered: (1)
the title of such Debt Warrants; (2) the aggregate number of such Debt Warrants;
(3) the price or prices at which such Debt Warrants will be issued; (4) the
currency or currencies, including composite currencies, in which the price of
such Debt Warrants may be payable; (5) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise of such Debt
Warrants; (6) if applicable, the designation and terms of the Debt Securities
with which such Debt Warrants are issued and the number of such Debt Warrants
issued with each such Debt Security; (7) the currency or currencies, including
composite currencies, in which the principal of or any premium or interest on
the Debt Securities purchasable upon exercise of such Debt Warrant will be
payable; (8) if applicable, the date on and after which such Debt Warrants and
any related Debt Securities will be separately transferable; (9) the price at
which and currency or currencies, including composite currencies, in which the
Debt Securities purchasable upon exercise of such Debt Warrants may be
purchased; (10) the date on which the right to exercise such Debt Warrants shall
commence and the date on which such right shall expire; (11) if applicable, the
minimum or maximum amount of such Debt Warrants which may be exercised at any
one time; (12) information with respect to book-entry procedures, if any; (13)
if applicable, a discussion of certain United States Federal income tax
considerations; and (14) any other terms of such Debt Warrants, including terms,
procedures and limitations relating to the exchange and exercise of such Debt
Warrants.
Other Warrants
The Company may issue other Warrants. The applicable Prospectus Supplement
will describe the following terms of any such other Warrants in respect of which
this Prospectus is being delivered: (1) the title of such Warrants; (2) the
securities (which may include Preferred Stock or Common Stock) for which such
Warrants are exercisable; (3) the price or prices at which such Warrants will be
issued; (4) the currency or currencies, including composite currencies, in which
the price of such Warrants may be payable; (5) if applicable, the designation
and terms of the Debt Securities or Preferred Stock with which such Warrants are
issued and the number of such Warrants issued with each such Debt Security or
share of Preferred Stock; (6) if applicable, the date on and after which such
Warrants and the related Debt Securities or Preferred Stock will be separately
transferable; (7) if applicable, a discussion of certain United States Federal
income tax considerations; and (8) any other terms of such Warrants, including
terms, procedures and limitations relating to the exchange and exercise of such
Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities (and, in the case of Preferred Stock,
Depositary Shares representing fractional interests therein) to one or more
underwriters for public offering and sale by them or may sell the Securities (or
Depositary Shares) to investors directly or through agents. Any such underwriter
or agent involved in the offer and sale of the Securities (or Depositary Shares)
will be named in the applicable Prospectus Supplement. The Company has reserved
the right to sell the Securities (or Depositary Shares) directly to investors on
its own behalf in those jurisdictions where it is authorized to do so.
Underwriters may offer and sell the Securities (or Depositary Shares) at a
fixed price or prices that may be changed, 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, from time to time, authorize dealers,
acting as the Company's agents, to offer and sell the Securities (or Depositary
Shares) upon such terms and conditions as set forth in the applicable Prospectus
Supplement. In connection with the sale of the Securities (or Depositary
Shares), underwriters may receive compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the Securities (or Depositary Shares) for whom they may act as
agent. Underwriters may sell the Securities (or Depositary Shares) to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agents.
Any underwriting compensation paid by the Company to underwriters or agents
in connection with the offering of the Securities (or Depositary Shares), and
any discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in the applicable Prospectus
Supplement. Dealers and agents participating in the distribution of the
Securities (or Depositary Shares) may be deemed to be underwriters, and any
discounts and commissions received by them and any profit realized by them on
resale of the Securities (or Depositary Shares) may be deemed to be underwriting
discounts and commissions. Underwriters, dealers and agents may be entitled,
under agreements entered into with the Company, to indemnification against and
contribution toward certain civil liabilities.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers acting as the Company's agents to solicit agreements by
certain institutions to purchase the Securities (or Depositary Shares) from the
Company at the public offering price set forth in the applicable Prospectus
Supplement pursuant to delayed delivery contracts ("Contracts") providing for
payment and delivery on the date or dates stated in a Prospectus Supplement.
Each Contract will be for an amount not less than, and the aggregate amount of
the Securities (or Depositary Shares), based on the liquidation value thereof,
sold pursuant to Contracts will be not less nor more than the respective amounts
stated in a 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 be subject to the condition that the
purchase by an institution of the Securities (or Depositary Shares) covered by
Contracts will not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject.
Any Securities issued hereunder (other than Common Stock) will be new
issues of securities with no established trading market. Any underwriters or
agents to or through whom such Securities are sold by the Company for public
offering and sale may make a market in such Securities, but such underwriters or
agents will not be obligated to do so and may discontinue any market at any time
without notice. No assurance can be given as to the liquidity of the trading
market for any Securities.
Certain of the underwriters, dealers or agents and their associates may be
customers of, engage in transactions with, and perform services for, the Company
and certain of its affiliates in the ordinary course of business.
EXPERTS
The consolidated balance sheets as of December 31, 1994 and 1993, and the
consolidated statements of operations, changes in stockholders' equity and cash
flows and the related schedules for each of the three years in the period ended
December 31, 1994, incorporated into this Prospectus and elsewhere in the
Registration Statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm as experts in
giving said reports.
With respect to the unaudited interim financial information for the
quarters ended March 31, 1995 and 1994, Arthur Andersen LLP has applied limited
procedures in accordance with professional standards for review of that
information. However, their separate report thereon states that they did not
audit and they do not express an opinion on that interim financial information.
Accordingly, the degree of reliance on their report on that information should
be restricted in light of the limited nature of the review procedures applied.
In addition, the accountants are not subject to the liability provisions of
Section 11 of the Securities Act of 1933 for their report on the unaudtited
interim financial information because that report is not a "report" or a "part"
of the registration statement prepared or certified by the accountants within
the meaning of Sections 7 and 11 of the Act.
VALIDITY OF THE SECURITIES
The validity of the Securities will be passed upon for the Company by Snell
& Wilmer L.L.P., One Arizona Center, Phoenix, Arizona 85004, counsel to the
Company, and for any underwriters by the counsel named in the
applicable Prospectus Supplement.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than Underwriting Compensation, are as
follows:
SEC registration fee . . . . . . . . . . . $ 68,966
Printing and engraving expenses . . . . . . $ 100,000
Legal fees and disbursements . . . . . . . $ 120,000
Accounting fees and disbursements . . . . . $ 50,000
Trustee's fees and disbursements . . . . . $ 25,000
Blue Sky fees and expenses . . . . . . . . $ 25,000
Miscellaneous (including transfer
agent, listing and rating agency fees) . $ 100,000
---------
$ 488,966
=========
Item 15. Indemnification of Directors and Officers.
The Certificate of Incorporation provides that the directors of the Company
shall be under no liability to the Company for monetary damages for breach of
fiduciary duty as a director of the Company except for those specific breaches
and acts or omissions with respect to which the Delaware General Corporation Law
(the "Delaware Law") expressly provides that a corporation's certificate of
incorporation shall not eliminate or limit such personal liability of directors.
Section 102(b)(7) of the Delaware Law provides that a corporation's certificate
of incorporation may not limit the liability of directors for (i) breaches of
their duty of loyalty to the corporation and its stockholders, (ii) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) transactions from which a director derives improper
personal benefit and (iv) unlawful dividends or unlawful stock repurchases under
Section 174 of the Delaware Law.
Under the Delaware Law, directors and officers as well as other employees
and individuals, may be indemnified against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement in connection with
specified actions, suits or proceedings, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation, a
"derivative action"), if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interest of the Company
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe their conduct was unlawful. A similar standard of care is applicable
in the case of a derivative action, except that indemnification only extends to
expenses (including attorneys' fees) incurred in connection with defense or
settlement of such an action and the Delaware Law requires court approval before
there can be any indemnification where the person seeking indemnification has
been found liable to the Company. The Company's By-laws provide that each person
who was or is made a party to, or is involved in, any action, suit or proceeding
by reason of fact that he or she is or was a director, officer or employee of
the Company (or was serving at the request of the Company as a director,
officer, employee or agent for another entity) will be indemnified and held
harmless by the Company to the full extent authorized by the Delaware Law,
against all expense, liability or loss (including attorneys' fees, judgments,
fines or penalties and amounts to be paid in settlement) reasonably incurred by
such person in connection therewith. The Company's By-laws provide that rights
conferred thereby are contract rights and will include the right to be paid by
the Company for the expenses incurred in defending the proceedings specified
above, in advance of their final disposition, except that, if the Delaware Law
so requires, such payment will only be made upon delivery to the Company by the
indemnified party of an undertaking to repay all amounts so advanced if it is
ultimately determined that the person receiving such payments is not entitled to
be indemnified under such provision or otherwise. The Company's By-laws provide
that persons indemnified thereunder may bring suit against the Company to
recover unpaid amounts claimed thereunder, and that if such suit is successful,
the expense of bringing such a suit will be reimbursed by the Company.
<PAGE>
Item 16. Exhibits.
Exhibit Page or Method
Number Description of Filing
--------- ----------- ---------------
1.1 Form of Underwriting Agreement (for (1)
equity securities)
1.2 Form of Underwriting Agreement (for (1)
debt securities)
4.1 Form of Certificate of Designations (1)
with respect to Preferred Stock
4.2 Form of specimen certificate (1)
representing shares of Preferred
Stock
4.3 Specimen certificate representing
shares of Common Stock (2)
4.4 Form of Deposit Agreement (1)
4.5 Form of Depositary Receipt (1)
4.6 Form of Indenture for Senior Debt (3)
Securities
4.7 Form of Senior Debt Security (3)
4.8 Form of Indenture for Senior (4)
Subordinated Debt Securities
4.9 Form of Senior Subordinated Debt (5)
Security
4.10 Form of Indenture for Subordinated Debt (3)
Securities
4.11 Form of Subordinated Debt Security (3)
4.12 Form of Preferred Stock Warrant (1)
Agreement
4.13 Form of Preferred Stock Warrant (1)
Certificate
4.14 Form of Common Stock Warrant Agreement (1)
4.15 Form of Common Stock Warrant (1)
Certificate
4.16 Form of Debt Warrant Agreement (6)
4.17 Form of Debt Warrant Certificate (6)
5.1 Opinion of Snell & Wilmer L.L.P. (7)
12.1 Statement Regarding Computation of
Consolidated Ratios of Earnings to
Fixed Charges
12.2 Statement Regarding Computation of (7)
Earnings to Combined Fixed Charges
and Preferred Stock Dividend
Requirements
15.0 Letter re unaudited interim financial (7)
information
23.0 Consent of Arthur Andersen LLP (7)
23.2 Consent of Snell & Wilmer L.L.P. Included in its opinion
filed as Exhibit 5.1
24.1 Powers of Attorney Included on signature
page
25.1 Form T-1 Statement of Eligibility under (7)
the Trust Indenture Act of 1939 of
State Street Bank and Trust Company
25.2 Form T-1 Statement of Eligibility under (7)
the Trust Indenture Act of 1939 of
Chemical Trust Company of California
---------------
(1) Incorporated by reference to the corresponding Exhibit to the Registrant's
Form S-3 (Registration No. 33-64030) filed on June 8, 1993.
(2) Incorporated by reference to Exhibit 2 to the Registrant's Form 8-A dated
October 30, 1992.
(3) Incorporated by reference to the corresponding Exhibit to the Registrant's
Form S-3 (Registation No. 33-53021) initally filed on April 7, 1994.
(4) Incorporated by reference to Exhibit 99.1 to the Registrant's Current
Report on Form 8-K filed on May 24, 1995 (the "May 1995 Form 8-K").
(5) Incorporated by reference to Exhibit 99.3 to the May 1995 Form 8-K.
(6) Incorporated by reference to the corresponding Exhibit to Amendment No. 1
to the Registrant's Form S-3 (Registration No. 33-64050) filed on June 25,
1993
(7) Previously filed.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this registration statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of section 310 of the Trust Indenture Act of 1939 in accordance with the
rules and regulations prescribed by the Commission under section 305(b)(2) of
the Trust Indenture Act of 1939.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Magma Copper
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No. 1
to this Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Tucson and State of
Arizona on August 15, 1995.
MAGMA COPPER COMPANY,
a Delaware corporation
By *
-----------------------------------------
J. Burgess Winter
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to this Registration Statement has been signed below by the following
persons in the capacities and on the date indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board and August 15, 1995
--------------------------- Director (for all signatures)
Donald J. Donahue
* President, Chief
--------------------------- Executive Officer,
J. Burgess Winter Director (Principal
Executive Officer)
/s/ Douglas J. Purdom Vice President and Chief
--------------------------- Financial Officer
Douglas J. Purdom (Principal Financial and
Accounting Officer)
* Director
---------------------------
Christopher W. Brody
* Director
---------------------------
Judd R. Cool
* Director
---------------------------
John W. Goth
* Director
---------------------------
John R. Kennedy
* Director
---------------------------
Thomas W. Rollins
* Director
---------------------------
Henry B. Sargent
* Director
---------------------------
Simon D. Strauss
* Director
---------------------------
H. Wilson Sundt
* Director
---------------------------
John L. Vogelstein
* By /s/ Douglas J. Purdom
----------------------
Douglas J. Purdom
Attorney-in-fact
