AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1994
REGISTRATION NO. 33-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
MCI COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 52-0886267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
-------------------
1801 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(202) 872-1600
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
-------------------
JOHN R. WORTHINGTON, ESQ.
GENERAL COUNSEL
MCI COMMUNICATIONS CORPORATION
1801 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(202) 872-1600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------
COPIES TO:
<TABLE>
<S> <C>
PETER S. KOLEVZON, ESQ. NORMAN D. SLONAKER, ESQ.
KRAMER, LEVIN, NAFTALIS, NESSEN, BROWN & WOOD
KAMIN & FRANKEL ONE WORLD TRADE CENTER
919 THIRD AVENUE NEW YORK, NEW YORK 10048
NEW YORK, NEW YORK 10022
</TABLE>
-------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. X
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT* OFFERING PRICE** REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities................. $1,000,000,000 100% $1,000,000,000 $344,830
Common Stock, par value $0.10
per share...................... 10,000,000 shares*** -- -- --
</TABLE>
* Estimated, pursuant to Rule 457 under the Securities Act of 1933, as amended,
solely for purposes of calculating the registration fee.
** This may include an additional principal amount of Debt Securities which may
be issued with an original issue discount such that the aggregate initial
public offering price of the Debt Securities will not exceed $1,000,000,000.
The initial public offering price of any Debt Security denominated in any
foreign currency or currency unit shall be the U.S. dollar equivalent
thereof at the time of sale.
*** Issuable upon the conversion of the Debt Securities offered hereby. This
Registration Statement also covers such indeterminate number of shares of
Common Stock as may be issuable as a result of the antidilution provisions
of any convertible Debt Securities.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 30, 1994
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JANUARY , 1995)
$1,000,000,000
MCI COMMUNICATIONS CORPORATION
SENIOR/SUBORDINATED MEDIUM-TERM NOTES
DUE 9 MONTHS OR MORE FROM DATE OF ISSUE
-------------------
MCI Communications Corporation (the "Company") may offer from time to time up
to $1,000,000,000 (or the equivalent thereof in one or more foreign or composite
currencies) aggregate principal amount of its senior or subordinated Medium-Term
Notes (the "Notes" or "Medium-Term Notes"). Unless otherwise specified in an
applicable pricing supplement hereto (each, a "Pricing Supplement"), the Notes
will bear interest at fixed or variable rates ("Fixed Rate Notes" and "Floating
Rate Notes," respectively). The applicable Pricing Supplement will specify the
interest rates on Fixed Rate Notes, the method of determining the interest rates
on Floating Rate Notes and whether such Floating Rate Note is a Regular Floating
Rate Note, a Floating Rate/Fixed Rate Note or an Inverse Floating Rate Note, the
terms of redemption, if any, at the option of the Company or repayment, if any,
at the option of the holders of the Notes (the "Holders"), terms for sinking
fund payments, if any, the stated maturity and other variable terms and the
senior or subordinated ranking of the Notes. The terms of the Notes are subject
to change by the Company, but no such change will affect any Note theretofore
issued or as to which an offer to purchase has been accepted by the Company. The
Notes will have maturities of 9 months or more from their dates of issue. See
"Description of Medium-Term Notes."
The Notes will be issued in denominations of $1,000 or integral multiples
thereof, in fully registered certificated form ("Certificated Notes") or
book-entry form ("Book-Entry Notes"). Each Book-Entry Note will be represented
by one or more fully registered global securities (the "Global Securities")
deposited with or on behalf of The Depository Trust Company (or such other
depositary identified in the applicable Pricing Supplement) (the "Depositary")
and registered in the name of the Depositary or the Depositary's nominee.
Beneficial interests in Global Securities will be shown on, and transfers
thereof will be effected only through, records maintained by the Depositary
(with respect to its participants) and by its participants (with respect to
beneficial owners). Owners of beneficial interests in Global Securities will be
entitled to physical delivery of Notes in certificated form equal in principal
amount to their respective beneficial interest only under the limited
circumstances described herein. See "Description of Medium-Term Notes--Book-
Entry Notes."
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT, THE PROSPECTUS OR ANY
PRICING SUPPLEMENT RELATING HERETO. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO AGENTS' PROCEEDS TO
PUBLIC(1) COMMISSIONS AND DISCOUNTS(2) COMPANY(2)(3)
<S> <C> <C> <C>
Per Note.......................... 100% .125%-.825% 99.175%-99.875%
Total(4).......................... $1,000,000,000 $ 1,250,000-$8,250,000 $991,750,000-$998,750,000
</TABLE>
(1) Unless otherwise specified in the applicable Pricing Supplement, Notes will
be issued at 100% of their principal amount.
(2) The Company will pay a commission to the Agents in the form of a discount,
depending upon the rank and maturity of the Note, ranging from .125% to
.825% (or, with respect to Notes in which the stated maturity is in excess
of 30 years, such commission as shall be agreed upon by the Company and the
related Agent at the time of sale) of the principal amount of any Notes sold
through them as Agents and may sell Notes to the Agents, as principal, for
resale to investors and other purchasers at varying prices related to
prevailing market prices at the time of resale, to be determined by the
Agents or, if so specified in an applicable Pricing Supplement, for resale
at a fixed offering price. Unless otherwise specified in the applicable
Pricing Supplement, any Note sold to an Agent as principal shall be
purchased by such Agent at a price equal to 100% of the principal amount
thereof less a percentage equal to the commission applicable to an agency
sale of a Note of identical rank and maturity. The Company has agreed to
indemnify the Agents against or make contributions relating to certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by the Company estimated at $1,050,000.
(4) Or the equivalent thereof in one or more foreign or composite currencies.
-------------------
<PAGE>
The Notes are being offered on a continuing basis by the Company through
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Citicorp Securities, Inc., Goldman, Sachs & Co., Lehman Brothers, Lehman
Brothers Inc. (including its affiliate Lehman Government Securities Inc.) and
Salomon Brothers Inc (each, an "Agent" and together, the "Agents"), who have
agreed to use their best efforts to solicit offers to purchase the Notes, and
Notes may also be sold to the Agents, as principal, for resale to purchasers.
The Company reserves the right to sell Notes directly to purchasers on its own
behalf. The Notes will not be listed on any securities exchange, and there can
be no assurance that the Notes will be sold or that there will be a secondary
market for the Notes. The Company reserves the right to withdraw, cancel or
modify the offer made hereby without notice. No termination date for the
offering of Notes has been established. The Company or an Agent, if it solicits
the offer on an agency basis, may reject any offer to purchase Notes in whole or
in part. See "Plan of Distribution."
-------------------
MERRILL LYNCH & CO.
CITICORP SECURITIES, INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
SALOMON BROTHERS INC
-------------------
The date of this Prospectus Supplement is January , 1995.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
<PAGE>
IN CONNECTION WITH THE OFFERING OF NOTES PURCHASED BY AN AGENT AS PRINCIPAL
ON A FIXED PRICE BASIS, SUCH AGENT MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH
STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH NOTES AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF MEDIUM-TERM NOTES
GENERAL
The Notes are to be issued as one or more series of Securities (as defined
in the attached Prospectus), in an aggregate principal amount not to exceed such
maximum as may be established from time to time by the Board of Directors of the
Company, and will be either Senior Securities or Subordinated Securities of the
Company (each as defined in the attached Prospectus). Whether an offering of
Notes will constitute Senior Securities ("Senior Notes") or Subordinated
Securities ("Subordinated Notes") of the Company will be set forth in the
applicable Pricing Supplement. The Senior Notes are to be issued under an
Indenture (the "Senior Indenture") between the Company and Citibank, N.A.
("Citibank"), as Trustee, dated as of January , 1995, and the Subordinated
Notes are to be issued under an Indenture between the Company and Bankers Trust
Company ("Bankers Trust"), as Trustee, dated as of October 15, 1989, as amended
by the Trust Indenture Reform Act of 1990 (the "Subordinated Indenture" and,
together with the Senior Indenture, the "Indentures"), which are more fully
described in the attached Prospectus. The following summaries of certain
provisions of the Indentures do not purport to be complete, and are subject to,
and qualified in their entirety by reference to, all of the provisions of the
Indentures, including the definitions therein of certain terms. The terms and
provisions set forth below will apply to each Note unless otherwise specified in
the applicable Pricing Supplement or Multi-Currency and Indexed Note Prospectus
Supplement (hereafter defined).
The Indentures do not limit the aggregate principal amount of Senior
Securities or Subordinated Securities which may be issued thereunder. As of the
date of this Prospectus Supplement, $1,502,000,000 principal amount of Senior
Notes, $890,000,000 principal amount of other Senior Securities and no
Subordinated Securities are outstanding. The Company may, from time to time,
without the consent of the Holders, provide for the issuance of Notes or other
Securities under the Indentures in addition to the $1,000,000,000 principal
amount of Senior Securities and Subordinated Securities available for issuance
as of the date of this Prospectus Supplement.
All Senior Securities, including the Senior Notes, issued and to be issued
will be unsecured and will rank pari passu (equally and ratably) with all other
unsecured and unsubordinated indebtedness of the Company from time to time
outstanding.
All Subordinated Securities, including the Subordinated Notes, issued and to
be issued will be unsecured and will be subordinated as set forth under
"Description of Subordinated Securities--Subordination" in the attached
Prospectus.
Neither of the Indentures limits the amount of unsecured indebtedness of the
Company or any subsidiary. Nothing in the Indentures or in the terms of the
Securities will prohibit the issuance by the Company of securities representing
subordinated indebtedness that is senior or junior to the Subordinated
Securities or will limit the payment of dividends by the Company or its
acquisition of any of its equity securities. Nothing in the Indentures affords
Holders of Notes protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company. However, the Senior Indenture does contain certain restrictive
covenants with respect to the business of the Company and its subsidiaries and
liens on and the sale or lease of certain Company assets, which may make more
difficult or discourage any such transaction. The consummation of any highly
leveraged transaction, reorganization, restructuring, merger or similar
transaction involving the Company could cause a material decline in the credit
quality of the outstanding Notes. See "Description of Senior
Securities--Covenants" in the attached Prospectus.
S-2
<PAGE>
The Company's assets consist principally of the stock in its subsidiaries.
Therefore, its rights and the rights of its creditors, including the Holders, to
participate in the assets of any subsidiary upon the latter's liquidation or
recapitalization or otherwise will be subject to the prior claims of the
subsidiary's creditors, except to the extent that claims of the Company itself
as a creditor of the subsidiary may be recognized.
The Notes will be offered on a continuing basis and will mature on any day 9
months or more from their dates of issue, as selected by the purchaser and
agreed to by the Company. Unless otherwise
specified in the applicable Pricing Supplement, interest-bearing Notes will
either be Fixed Rate Notes or Floating Rate Notes as specified in the applicable
Pricing Supplement. The Notes may also be issued with original issue discount
and may or may not pay any interest.
The terms of the Notes are subject to change by the Company from time to
time, but no such change will affect any Note theretofore issued or as to which
an offer has been accepted by the Company.
Unless otherwise specified in the applicable Pricing Supplement, each Note
will be issued in fully registered form as a Certificated Note or a Book-Entry
Note and in denominations of $1,000 or integral multiples thereof. Unless
otherwise specified in the applicable Pricing Supplement and an accompanying
Multi-Currency and Indexed Note Prospectus Supplement, the Notes will be
denominated and payable in U.S. dollars. No service charge will be made for any
registration of transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith.
Book-Entry Notes may be transferred or exchanged only in accordance with the
rules of the Depositary. Principal, premium, if any, and interest payments on
Book-Entry Notes represented by a Global Security will be made to the Depositary
or its nominee, as the case may be, as the Holder of such Global Security. See
"Book-Entry Notes."
The principal of, and premium, if any, and interest on, Certificated Notes
will be payable, the transfer of such Certificated Notes will be registrable,
and such Certificated Notes will be exchangeable for Certificated Notes of the
same series and rank bearing identical terms and provisions, at the office or
agency of the Company in the Borough of Manhattan, The City of New York
designated for such purpose. Payment of interest on any Interest Payment Date,
other than interest at maturity (or on any date of redemption or repayment, if a
Certificated Note is redeemed or repaid prior to maturity), may be made at the
option of the Company by check mailed to the address of the Holder in whose name
the applicable Certificated Note is registered as of the close of business on
the related Regular Record Date (hereafter defined) as shown on the security
register maintained by the Company or an agent thereof. Notwithstanding the
above, a Holder of $10,000,000 (or the equivalent thereof in foreign or
composite currencies) or more in aggregate principal amount of the same series
of Notes (whether having identical or different terms and provisions) shall be
entitled to receive payments of interest (other than at maturity or upon
redemption or repayment, if applicable) by wire transfer of immediately
available funds if appropriate wire transfer instructions in writing have been
received by the appropriate Trustee at its corporate trust office in The City of
New York on or before the Regular Record Date immediately preceding the
applicable Interest Payment Date. Such wire instructions, upon receipt by the
appropriate Trustee, shall remain in effect until revoked by such Holder.
Principal, premium, if any, and interest payable at maturity (or upon
redemption or repayment, if applicable) on each Note will be paid in immediately
available funds against presentation of such Note at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York. Interest payable at maturity (or upon redemption or repayment, if
applicable) will be payable to the person to whom the principal of the
applicable Note shall be paid.
Unless otherwise specified in the applicable Pricing Supplement, interest
payable on any Interest Payment Date and at maturity (or upon redemption or
repayment, if applicable) shall be the amount of interest accrued from and
including the immediately preceding Interest Payment Date in respect of
S-3
<PAGE>
which interest has been paid or duly made available for payment (or from and
including the date of issue, if no interest has been paid or duly made available
for payment with respect to such Note) to but excluding such Interest Payment
Date or the date of maturity (or the date of redemption or repayment, if any).
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or executive order to close in The City of New
York; provided, however, that, with respect to Notes the payment of which is to
be made in a currency or composite currency other than United States dollars,
such day is also not a day on which banking institutions are authorized or
required by law or executive order to close in the Principal Financial Center
(hereafter defined) of the country issuing such currency or composite currency
(or, in the case of the European Currency Unit ("ECU"), is not a day that
appears as an ECU non-settlement day on the display designated as "ISDE" on the
Reuter Monitor Money Rates Service (or a day so designated by the ECU Banking
Association) or, if ECU non-settlement days do not appear on that page (and are
not so designated), is not a day on which payments in ECU cannot be settled in
the international interbank market); provided, further, that, with respect to
Notes as to which LIBOR or LIBID is an applicable Interest Rate Basis (hereafter
defined), such day is also a London Banking Day (hereafter defined).
"London Banking Day" means any day (i) if the Index Currency is other than
ECU, on which dealings in such Index Currency are transacted in the London
interbank market or (ii) if the Index Currency is ECU, that is not designated as
an ECU non-settlement day on the display designated as "ISDE" on the Reuter
Monitor Money Rates Service (or a day so designated by the ECU Banking
Association) or, if ECU non-settlement days do not appear on that page (and are
not so designated), is not a day on which payments in ECU cannot be settled in
the international interbank market.
"Principal Financial Center" means the capital city of the country issuing
the currency or composite currency in which any payment in respect of the Notes
is to be made or, solely with respect to the calculation of LIBOR or LIBID, the
Index Currency, except that with respect to United States dollars, Deutsche
Marks, Dutch Guilders, Italian Lire, Swiss Francs and ECUs, the Principal
Financial Center shall be The City of New York, Frankfurt, Amsterdam, Milan,
Zurich and Luxembourg, respectively.
REDEMPTION AT OPTION OF THE COMPANY
The Notes may be subject to redemption by the Company on and after the
initial redemption date, if any, fixed at the time of sale and set forth in the
applicable Pricing Supplement (the "Initial Redemption Date"). If no Initial
Redemption Date is indicated with respect to a Note, such Note will not be
redeemable prior to maturity. On and after the Initial Redemption Date with
respect to any Note, such Note will be redeemable in whole or in part in
increments of $1,000 (provided that any remaining principal amount thereof is at
least $1,000) at the option of the Company at a redemption price (the
"Redemption Price"), determined in accordance with the following paragraph,
together with interest payable thereon to the date of redemption, on notice
given not more than 60 nor less than 30 days prior to the date of redemption.
The Redemption Price for each Note subject to redemption at the option of
the Company shall initially be equal to a certain percentage (the "Initial
Redemption Percentage") of the principal amount of such Note to be redeemed and,
if so provided, shall decline at each anniversary of the Initial Redemption Date
with respect to such Note by a percentage (the "Annual Redemption Percentage
Reduction") of the principal amount to be redeemed until the Redemption Price is
100% of such principal amount. The Initial Redemption Percentage and any Annual
Redemption Percentage Reduction with respect to each Note subject to redemption
prior to maturity will be fixed at the time of sale and set forth in the
applicable Pricing Supplement.
S-4
<PAGE>
REPAYMENT AT OPTION OF THE HOLDER
The Notes may be subject to repayment at the option of the Holders thereof
in accordance with the terms of the Notes on their respective optional repayment
dates, if any, fixed at the time of sale and set forth in the applicable Pricing
Supplement (the "Repayment Dates"). If no Repayment Date is indicated with
respect to a Note, such Note will not be repayable at the option of the Holder
prior to maturity. On any Repayment Date with respect to any Note, such Note
will be repayable in whole or in part in increments of $1,000 (provided that any
remaining principal amount thereof is at least $1,000) at the option of the
Holder thereof at a price equal to 100% of the principal amount to be repaid,
together with interest thereon payable to the Repayment Date, upon receipt of a
duly completed Note and form thereon entitled "Option to Elect Repayment" at the
office or agency of the Company maintained for that purpose not more than 60 nor
less than 30 days prior to the Repayment Date. Exercise of the repayment option
by a Holder shall be irrevocable.
While the Book-Entry Notes are represented by the Global Securities held by
or on behalf of the Depositary, and registered in the name of the Depositary or
the Depositary's nominee, the option for repayment may be exercised by the
applicable Participant (hereafter defined) that has an account with the
Depositary, on behalf of the beneficial owners of the Global Security or
Securities representing such Book-Entry Notes, by delivering a written notice
substantially similar to the above-mentioned form to the appropriate Trustee at
its Corporate Trust Office (or such other address of which the Company shall
from time to time notify the Holders), not more than 60 nor less than 30 days
prior to the applicable Repayment Date. Notices of election from Participants on
behalf of beneficial owners of the Global Security or Securities representing
such Book-Entry Notes to exercise their option to have such Book-Entry Notes
repaid must be received by the appropriate Trustee by 5:00 P.M., New York City
time, on the last day for giving such notice. In order to ensure that a notice
is received by the appropriate Trustee on a particular day, the beneficial owner
of the Global Security or Securities representing such Book-Entry Notes must so
direct the applicable Participant before such Participant's deadline for
accepting instructions for that day. Different firms may have different
deadlines for accepting instructions from their customers. Accordingly, each
beneficial owner of the Global Security or Securities representing Book-Entry
Notes should consult the Participant through which it owns its interest therein
for the respective deadlines for such Participant. All notices shall be executed
by a duly authorized officer of such Participant (with signature guaranteed) and
shall be irrevocable. In addition, beneficial owners of the Global Security or
Securities representing Book-Entry Notes shall effect delivery at the time such
notices of election are given to the Depositary by causing the applicable
Participant to transfer such beneficial owner's interest in the Global Security
or Securities representing such Book-Entry Notes, on the Depositary's records,
to the Trustee. See "--Book-Entry Notes."
If applicable, the Company will comply with the requirements of Rule 14e-1
under the Securities Exchange Act of 1934, as amended, and any other securities
laws or regulations in connection with any such repayment.
The Company may, in its discretion, at any time purchase Notes at any price
or prices in the open market or otherwise. Notes so purchased by the Company
may, at the discretion of the Company, be held, resold or surrendered to the
Trustee for cancellation.
INTEREST
General
Unless otherwise specified in the applicable Pricing Supplement, each
interest-bearing Note will bear interest from its date of issue at the rate per
annum, in the case of a Fixed Rate Note, or pursuant to the interest rate
formula, in the case of a Floating Rate Note, specified in the applicable
Pricing Supplement, until the principal thereof is paid or duly made available
for payment. Unless otherwise specified in the applicable Pricing Supplement,
interest payments in respect of Fixed Rate Notes and Floating Rate Notes will
equal the amount of interest accrued from and including the immediately
S-5
<PAGE>
preceding Interest Payment Date in respect of which interest has been paid or
duly made available for payment (or from and including the date of issue, if no
interest has been paid or duly made available for payment with respect to the
applicable Note) to but excluding the applicable Interest Payment Date or the
Maturity Date, as the case may be.
Interest on Fixed Rate Notes and Floating Rate Notes will be payable in
arrears on each Interest Payment Date and on the Maturity Date. Unless otherwise
specified in the applicable Pricing Supplement, the first payment of interest on
any such Note originally issued between a Regular Record Date and the related
Interest Payment Date will be made on the Interest Payment Date immediately
following the next succeeding Regular Record Date to the Holder on such next
succeeding Regular Record Date.
FIXED RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, the
"Interest Payment Dates" for Senior Fixed Rate Notes will be June 1 and December
1 and at maturity (or upon redemption or repayment, if applicable). The "Regular
Record Date" for Senior Fixed Rate Notes will be the May 15 or November 15
immediately preceding the June 1 or December 1 Interest Payment Date. Unless
otherwise specified in an applicable Pricing Supplement, the "Interest Payment
Dates" for Subordinated Fixed Rate Notes will be June 15 and December 15 and at
maturity (or upon redemption or repayment, if applicable). The "Regular Record
Date" for Subordinated Fixed Rate Notes will be the June 1 or December 1
immediately preceding the June 15 or December 15 Interest Payment Date. Unless
otherwise specified in the applicable Pricing Supplement, interest on the Fixed
Rate Notes will be computed on the basis of a 360-day year of twelve 30-day
months.
If any Interest Payment Date or the date of maturity (or the date of
redemption or repayment, if any) on a Fixed Rate Note falls on a day that is not
a Business Day, the required payment of principal, premium, if any, and interest
shall be made on the next Business Day as if it were made on the date such
payment was due, and no interest on such payment shall accrue for the period
from and after such Interest Payment Date or the date of maturity (or the date
of redemption or repayment, if any), as the case may be, to such next Business
Day.
FLOATING RATE NOTES
Unless otherwise specified in the applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. The applicable Pricing Supplement
will specify the interest terms with respect to which each Floating Rate Note is
being delivered, including (i) whether such Floating Rate Note is a "Regular
Floating Rate Note," a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note"; (ii) the Fixed Rate Commencement Date and Fixed Interest Rate, as
applicable; (iii) Interest Rate Basis or Bases; (iv) Initial Interest Rate,
Interest Reset Period and Dates; (v) Regular Record Dates; (vi) Interest Payment
Period and Dates; (vii) Index Maturity; (viii) Maximum Interest Rate and Minimum
Interest Rate, if any; and (ix) Spread and/or Spread Multiplier, if any, each as
defined below. If one or more of the applicable Interest Rate Bases is LIBOR or
the CMT Rate, the applicable Pricing Supplement will also specify the Index
Currency and Designated LIBOR Page or the Designated CMT Maturity Index and
Designated CMT Telerate Page, respectively, as defined below.
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(i) Unless such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note," an "Inverse Floating Rate Note" or as having an
Addendum attached, such Floating Rate Note will be designated as a
"Regular Floating Rate Note" and, except as described below or in the
applicable Pricing Supplement, will bear interest at the rate determined
by reference to the applicable Interest Rate Basis or Bases (a) plus or
minus the applicable Spread, if any, and/or (b) multiplied by the
applicable Spread Multiplier, if any. Commencing on the first Interest
Reset Date, the rate at which interest on such Regular Floating Rate
Note shall be payable
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shall be reset as of each Interest Reset Date; provided, however, that
the interest rate in effect for the period from the date of issue to the
first Interest Reset Date will be the Initial Interest Rate.
(ii) If such Floating Rate Note is designated as a "Floating Rate/Fixed
Rate Note," then, except as described below or in the applicable Pricing
Supplement, such Floating Rate/Fixed Rate Note will bear interest at the
rate determined by reference to the applicable Interest Rate Basis or
Bases (a) plus or minus the applicable Spread, if any, and/or
(b) multiplied by the applicable Spread Multiplier, if any. Commencing
on the first Interest Reset Date, and on each Interest Reset Date
thereafter, the rate at which interest on such Floating Rate/Fixed Rate
Note shall be payable shall be reset as of such Interest Reset Date;
provided, however, that (y) the interest rate in effect for the period
from the date of issue to the first Interest Reset Date will be the
Initial Interest Rate and (z) the interest rate in effect commencing on
the Fixed Rate Commencement Date to the date of maturity (or the date of
redemption or repayment, if any) shall be the Fixed Interest Rate, if
such rate is specified in the applicable Pricing Supplement, or, if no
such Fixed Interest Rate is so specified, the interest rate in effect
thereon on the day immediately preceding the Fixed Rate Commencement
Date.
(iii) If such Floating Rate Note is designated as an "Inverse Floating
Rate Note," then, except as described below or in the applicable Pricing
Supplement, such Inverse Floating Rate Note will bear interest at the
Fixed Interest Rate minus the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the applicable
Spread, if any, and/or (b) multiplied by the applicable Spread
Multiplier, if any; provided, however, that, unless otherwise specified
in the applicable Pricing Supplement, the interest rate thereon will not
be less than zero. Commencing on the first Interest Reset Date, and on
each Interest Reset Date thereafter, the rate at which interest on such
Inverse Floating Rate Note shall be payable shall be reset as of such
Interest Reset Date; provided, however, that the interest rate in effect
for the period from the date of issue to the first Interest Reset Date
will be the Initial Interest Rate.
The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate Note.
The "Spread Multiplier" is the percentage of the related Interest Rate Basis or
Bases applicable to such Floating Rate Note by which such Interest Rate Basis or
Bases will be multiplied to determine the applicable interest rate on such
Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the related Interest Rate Basis
or Bases will be calculated.
Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof, such Floating Rate
Note shall bear interest in accordance with the terms described in such Addendum
and the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, the
interest rate with respect to each Interest Rate Basis will be determined in
accordance with the applicable provisions below. Except as set forth above or in
the applicable Pricing Supplement, the interest rate in effect on each day shall
be (i) if such day is an Interest Reset Date, the interest rate determined as of
the Interest Determination Date (hereafter defined) immediately preceding such
Interest Reset Date or (ii) if such day is not an Interest Reset Date, the
interest rate determined as of the Interest Determination Date immediately
preceding the most recent Interest Reset Date.
Interest on Floating Rate Notes will be determined by reference to (i) the
CD Rate, (ii) the CMT Rate, (iii) the Commercial Paper Rate, (iv) the Federal
Funds Rate, (v) LIBOR, (vi) LIBID, (vii) the Prime Rate, (viii) the Treasury
Rate, or (ix) such other interest rate basis or interest rate formula as may be
specified in the applicable Pricing Supplement (each, an "Interest Rate Basis");
provided, however, that the interest rate in effect on a Floating Rate Note for
the period from the date of issue to the first Interest Reset Date will be the
Initial Interest Rate; provided, further, that with respect to a
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Floating Rate/Fixed Rate Note, the interest rate commencing on the Fixed Rate
Commencement Date to the Maturity Date shall be the Fixed Interest Rate, if such
rate is specified in the applicable Pricing Supplement or, if no such Fixed
Interest Rate is so specified, the interest rate in effect thereon on the day
immediately preceding the Fixed Rate Commencement Date.
The applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other specified period (each, an
"Interest Reset Period") and the dates on which such rate of interest will be
reset (each, an "Interest Reset Date"). Unless otherwise specified in the
applicable Pricing Supplement, the Interest Reset Dates will be, in the case of
Floating Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the
Wednesday of each week (with the exception of weekly reset Floating Rate Notes
as to which the Treasury Rate is an applicable Interest Rate Basis, which will
reset the Tuesday of each week, except as described below); (iii) monthly, the
third Wednesday of each month; (iv) quarterly, the third Wednesday of March,
June, September and December of each year; (v) semiannually, the third Wednesday
of the two months specified in the applicable Pricing Supplement; and (vi)
annually, the third Wednesday of the month specified in the applicable Pricing
Supplement; provided however, that, with respect to Floating Rate/Fixed Rate
Notes, the rate of interest thereon will not reset after the applicable Fixed
Rate Commencement Date. If any Interest Reset Date for any Floating Rate Note
would otherwise be a day that is not a Business Day, such Interest Reset Date
shall be postponed to the next Business Day, except that in the case of a
Floating Rate Note as to which LIBOR or LIBID is an applicable Interest Rate
Basis, if such Business Day is in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day.
The interest rate applicable to each Interest Reset Period commencing on an
Interest Reset Date will be the rate determined as of the applicable Interest
Determination Date on or prior to the Calculation Date (hereafter defined)
pertaining thereto. The "Interest Determination Date" with respect to the
Commercial Paper Rate, Federal Funds Rate, Prime Rate, the CMT Rate and CD Rate
will be the second Business Day immediately preceding the applicable Interest
Reset Date. The "Interest Determination Date" with respect to LIBOR and LIBID
will be the second London Banking Day immediately preceding the applicable
Interest Reset Date, unless the Index Currency is British pounds sterling, in
which case the Interest Determination Date will be the applicable Interest Reset
Date. The "Interest Determination Date" with respect to the Treasury Rate will
be the day of the week on which the applicable Interest Reset Date falls on
which Treasury bills normally would be auctioned (Treasury Bills are normally
sold at auction on Monday of each week, unless that day is a legal holiday, in
which case the auction is normally held on the following Tuesday, except that
such auction may be held on the preceding Friday); provided, however, that if an
auction is held on the Friday of the week preceding the applicable Interest
Reset Date, the related Interest Determination Date shall be such preceding
Friday; and provided, further, that if an auction shall fall on the applicable
Interest Reset Date, then the Interest Reset Date shall instead be the first
Business Day following such auction. The "Interest Determination Date"
pertaining to a Floating Rate Note the interest rate of which is determined with
reference to two or more Interest Rate Bases will be the most recent Business
Day which is at least two Business Days prior to the applicable Interest Reset
Date on which each Interest Rate Basis shall be determinable. Each Interest Rate
Basis shall be determined and compared on such date, and the applicable interest
rate shall take effect on the applicable Interest Reset Date.
A Floating Rate Note may also have either or both of the following: (i) a
maximum numerical interest rate limit, or ceiling, on the rate of interest which
may accrue during any Interest Reset Period ("Maximum Interest Rate"); and (ii)
a minimum numerical interest rate limit, or floor, on the rate of interest which
may accrue during any Interest Reset Period ("Minimum Interest Rate"). In
addition to any Maximum Interest Rate which may be applicable to any Floating
Rate Note pursuant to the above provisions, the interest rate on the Floating
Rate Notes will in no event be higher than the maximum rate permitted by New
York law, as the same may be modified by United States law of general
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application. Under present New York law, the maximum rate of interest in any
Interest Reset Period is 25% per annum on a simple interest basis. This limit
may not apply to Floating Rate Notes in which $2,500,000 or more has been
invested.
Except as provided below, the "Interest Payment Dates" for a Floating Rate
Note will be, in the case of Floating Rate Notes which reset daily, weekly or
monthly, on the third Wednesday of each month or on the third Wednesday of
March, June, September and December, as specified in the applicable Pricing
Supplement; in the case of Floating Rate Notes which reset quarterly, on the
third Wednesday of March, June, September and December; in the case of Floating
Rate Notes which reset semi-annually, on the third Wednesday of the two months
specified in the applicable Pricing Supplement; and in the case of Floating Rate
Notes which reset annually, on the third Wednesday of the month specified in the
applicable Pricing Supplement; and, in each case, at maturity (or upon
redemption or repayment, if applicable). The "Regular Record Date" with respect
to Floating Rate Notes will be the date 15 calendar days (whether or not a
Business Day) prior to the applicable Interest Payment Date.
If any Interest Payment Date other than the date of maturity (or the date of
redemption or repayment, if any) for any Floating Rate Note would otherwise fall
on a day that is not a Business Day, such Interest Payment Date will be
postponed to the next Business Day, except that, in the case of a Floating Rate
Note as to which LIBOR or LIBID is an applicable Interest Rate Basis, if such
Business Day is in the next succeeding calendar month, such Interest Payment
Date shall be the immediately preceding Business Day. If the date of maturity
(or the date of redemption or repayment, if any) of any Floating Rate Note would
fall on a day that is not a Business Day, the required payment of principal,
premium, if any, and interest shall be made on the next Business Day as if it
were made on the date such payment was due, and no interest on such payment
shall accrue for the period from and after the date of maturity (or the date of
redemption or repayment, if any) to such next Business Day.
All percentages resulting from any calculation on Floating Rate Notes will
be rounded, if necessary, to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upward (e.g.,
9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)), and all
dollar amounts used in or resulting from such calculation on Floating Rate Notes
will be rounded to the nearest cent (with one-half cent being rounded upwards).
With respect to a Floating Rate Note, accrued interest is calculated by
multiplying the principal amount of such Floating Rate Note by an accrued
interest factor. Such accrued interest factor is computed by adding the interest
factor calculated for each day in the period for which accrued interest is being
calculated. Unless otherwise specified in an applicable Pricing Supplement, the
interest factor for each such day is computed by dividing the interest rate
applicable to such day by 360 in the case of Floating Rate Notes for which the
Interest Rate Basis is the CD Rate, the Commercial Paper Rate, the Federal Funds
Rate, LIBOR, LIBID or the Prime Rate, or by the actual number of days in the
year in the case of Floating Rate Notes for which the Interest Rate Basis is the
CMT Rate or the Treasury Rate.
Unless otherwise specified in the applicable Pricing Supplement, Citibank
will be the "Calculation Agent" with respect to Senior Floating Rate Notes and
Bankers Trust will be the "Calculation Agent" with respect to Subordinated
Floating Rate Notes. Such Calculation Agent's determination of any interest rate
will be final and binding in the absence of manifest error. The Company, upon
notification by the appropriate Calculation Agent, will notify the appropriate
Trustee of each determination of the interest rate applicable to any such
Floating Rate Note promptly after such determination is made. The "Calculation
Date", if applicable, pertaining to any Interest Determination Date will be the
earlier of (i) the tenth calendar day after such Interest Determination Date,
or, if any such day is not a Business Day, the next Business Day or (ii) the
Business Day immediately preceding the Interest Payment Date or the date of
maturity (or the date of redemption or repayment, if any) next succeeding such
Interest Determination Date. Upon the request of the Holder of a Floating Rate
Note, the appropriate
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Calculation Agent will provide the interest rate then in effect and, if
determined, the interest rate that will become effective on the next Interest
Reset Date with respect to such Floating Rate Note. Requests by Holders of
Senior Floating Rate Notes for interest rate information should be directed to
Citibank, Corporate Trust Department, 120 Wall Street-13th Floor, New York, New
York 10043 (telephone: (212) 412-6215; telecopier: (212) 480-1614). Requests by
Holders of Subordinated Floating Rate Notes for interest rate information should
be directed to Bankers Trust, Corporate Trust and Agency Group, 4 Albany Street,
New York, New York 10006 (telephone: (212) 250-6516; telecopier: (212)
250-6392).
COMMERCIAL PAPER RATE. Floating Rate Notes for which an applicable Interest
Rate Basis is the Commercial Paper Rate will bear interest at the interest rates
(calculated with reference to the Commercial Paper Rate and the Spread and/or
Spread Multiplier, if any) specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to
the applicable Floating Rate Note (a "Commercial Paper Rate Interest
Determination Date"), the Money Market Yield (hereafter defined) on such date of
the rate for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement, as such rate shall be published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates", or any successor publication ("H.15(519)"), under the
heading "Commercial Paper." In the event that such rate is not published by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Commercial Paper Rate Interest Determination Date, then the Commercial Paper
Rate shall be the Money Market Yield on such Commercial Paper Rate Interest
Determination Date of the rate for commercial paper of the specified Index
Maturity as published by the Federal Reserve Bank of New York in its daily
statistical release "Composite 3:30 P.M. Quotations for U.S. Government
Securities" ("Composite Quotations") under the heading "Commercial Paper".
If by 3:00 P.M., New York City time, on such Calculation Date such rate is
not published in either H.15(519) or Composite Quotations, then the Commercial
Paper Rate shall be the Money Market Yield of the arithmetic mean of the offered
rates as of 11:00 A.M., New York City time, on such Commercial Paper Rate
Interest Determination Date of three leading dealers of commercial paper in The
City of New York (which may include the Agents or their affiliates) selected by
the appropriate Calculation Agent (after consultation with the Company) for
commercial paper of the specified Index Maturity placed for an industrial issuer
whose bond rating from Standard & Poor's Corporation, Moody's Investors Service,
Inc., Duff & Phelps Credit Rating Co. or another nationally recognized rating
agency is the second highest investment grade bond rating given by such agency
("AA", "Aa" or the equivalent); provided, however, that if the dealers selected
as aforesaid by such Calculation Agent are not quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
rate of interest then in effect on such Commercial Paper Rate Interest
Determination Date.
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"Money Market Yield" shall be a yield (expressed as a percentage) calculated
in accordance with the following formula:
D x 360
-------------
Money Market Yield = 360 - (D x M) x 100
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
FEDERAL FUNDS RATE. Floating Rate Notes for which an applicable Interest
Rate Basis is the Federal Funds Rate will bear interest at the interest rates
(calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date relating to
the applicable Floating Rate Note (a "Federal Funds Rate Interest Determination
Date"), the rate on such date for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)" or, if not so published by 3:00
P.M., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the Federal Funds Rate will be the rate on such
Interest Determination Date as published in Composite Quotations under the
heading "Federal Funds/Effective Rate." If such rate is not yet published in
either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the Calculation Date pertaining to such Federal Funds Rate Interest
Determination Date, the Federal Funds Rate for such Interest Determination Date
will be calculated by the appropriate Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight Federal Funds
arranged by three leading brokers of Federal Funds transactions in The City of
New York (which may include the Agents or their affiliates) selected by such
Calculation Agent (after consultation with the Company) as of 11:00 A.M., New
York City time, on such Federal Funds Rate Interest Determination Date;
provided, however, that if the brokers selected as aforesaid by such Calculation
Agent are not quoting as mentioned in this sentence, the rate of interest in
effect for the applicable period will be the rate of interest then in effect on
such Federal Funds Rate Interest Determination Date.
LIBOR. Floating Rate Notes for which an applicable Interest Rate Basis is
LIBOR will bear interest at the interest rates (calculated with reference to
LIBOR and the Spread and/or Spread Multiplier, if any) specified in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means the rate determined by the appropriate Calculation Agent in accordance
with the following provisions:
(i) With respect to an Interest Determination Date relating to the
applicable Floating Rate Note (a "LIBOR Interest Determination Date"), LIBOR
will be either: (a) if "LIBOR Reuters" is specified in the applicable Pricing
Supplement, the arithmetic mean of the offered rates (unless the Designated
LIBOR Page by its terms provides only for a single rate, in which case such
single rate shall be used) for deposits in the Index Currency having the Index
Maturity designated in such Pricing Supplement, commencing on the applicable
Interest Reset Date, that appear on the Designated LIBOR Page as of 11:00 A.M.,
London time, on such LIBOR Interest Determination Date, if at least two such
offered rates appear (unless, as aforesaid, only a single rate is required) on
such Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified in the
applicable Pricing Supplement or if neither "LIBOR Reuters" nor "LIBOR Telerate"
is specified in the applicable Pricing Supplement as the method for calculating
LIBOR, the rate for deposits in the Index Currency having the Index Maturity
designated in such Pricing Supplement, commencing on such Interest Reset Date,
that appears on the Designated LIBOR Page as of 11:00 A.M., London time, on such
LIBOR Interest Determination Date. If fewer than two such offered rates appear,
or if no such rate appears, as applicable, LIBOR for such LIBOR Interest
Determination Date will be determined as if the parties had specified the rate
described in (ii) below.
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(ii) With respect to a LIBOR Interest Determination Date on which fewer than
two offered rates appear, or no rate appears, as applicable, for the applicable
Index Maturity on the applicable Designated LIBOR Page, the appropriate
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market to provide such Calculation
Agent with its offered quotation for deposits in the Index Currency for the
period of the Index Maturity, commencing on the applicable Interest Reset Date,
to prime banks in the London interbank market at approximately 11:00 A.M.,
London time, on such LIBOR Interest Determination Date and in a principal amount
that is representative for a single transaction in such Index Currency in such
market at such time. If at least two such quotations are provided, LIBOR will be
the arithmetic mean of such quotations. If fewer than two quotations are
provided, LIBOR in respect of the applicable Interest Reset Date will be the
arithmetic mean of the rates quoted by three major banks in the Principal
Financial Center selected by the appropriate Calculation Agent (after
consultation with the Company) at approximately 11:00 A.M., in the applicable
Principal Financial Center, on such LIBOR Interest Determination Date for loans
in such Index Currency to leading European banks, having the Index Maturity
designated in the applicable Pricing Supplement and in the principal amount that
is representative for a single transaction in such Index Currency in such market
at such time; provided, however, that if the banks selected as aforesaid by such
Calculation Agent are not quoting as mentioned in this sentence, the rate of
interest in effect for the applicable period will be the rate of interest in
effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency or composite currency specified in the
applicable Pricing Supplement with respect to which LIBOR shall be calculated.
If no such currency or composite currency is specified in the applicable Pricing
Supplement, the Index Currency shall be United States dollars.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified in the
applicable Pricing Supplement, the display on the Reuter Monitor Rates Service
(or any successor service) for the purpose of displaying the London interbank
rates of major banks for the applicable Index Currency, or (b) if "LIBOR
Telerate" is specified in the applicable Pricing Supplement or neither "LIBOR
Reuters" nor "LIBOR Telerate" is specified in the applicable Pricing Supplement
as the method for calculating LIBOR, the display on the Dow Jones Telerate
Service (or any successor service) for the purpose of displaying the London
interbank rates of major banks for the applicable Index Currency.
LIBID. Floating Rate Notes for which an applicable Interest Rate Basis is
LIBID will bear interest at the interest rates (calculated with reference to
LIBID and the Spread and/or Spread Multiplier, if any) specified in the
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBID"
means the rate determined by the appropriate Calculation Agent in accordance
with the following provisions:
(i) With respect to an Interest Determination Date relating to a LIBID Note
(a "LIBID Interest Determination Date"), LIBID will be determined on the basis
of the bid rates quoted to prime banks in the London interbank market at
approximately 11:00 A.M., London time, for deposits in United States dollars of
not less than U.S. $1 million that is representative for a single transaction in
such market at such time for the period of the Index Maturity specified in the
applicable Pricing Supplement, commencing on the second London Banking Day
immediately following such LIBID Interest Determination Date, by the London
offices of four major banks in the London interbank market named on the Reuter
Screen LIBO Page and selected by the appropriate Calculation Agent (after
consultation with the Company) (the "LIBID Reference Banks"), on the LIBID
Interest Determination Date. If at least two such quotations appear on the
Reuters Screen LIBO Page, LIBID for such LIBID Interest Determination Date will
be the arithmetic mean of such quotations as determined by the appropriate
Calculation Agent. If fewer than two such quotations appear, LIBID for such
LIBID Interest Determination Date will be determined as if the parties had
specified the rate described in (ii) below.
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(ii) With respect to a LIBID Interest Determination Date on which fewer than
two such quotations are provided, the appropriate Calculation Agent will request
each of the LIBID Reference Banks to provide such Calculation Agent with a
quotation of the bid rate quoted to such bank by the head offices of leading New
York City banks for deposits in United States dollars for the period of the
Index Maturity at approximately 11:00 A.M., London time, on such LIBID Interest
Determination Date and in a principal amount equal to an amount of not less than
U.S. $1 million that is representative for a single transaction in such market
at such time. If at least two such quotations are provided, LIBID will be the
arithmetic mean of such quotations. If fewer than two quotations are provided,
LIBID in respect of that Interest Reset Date will be the arithmetic mean of the
rates quoted by three major banks in The City of New York selected by the
appropriate Calculation Agent (after consultation with the Company) at
approximately 11:00 A.M., New York City time, on that LIBID Interest
Determination Date for loans in U.S. dollars to leading European banks, having
the Index Maturity designated in the applicable Pricing Supplement and in the
principal amount equal to an amount of not less than U.S. $1 million that is
representative for a single transaction in such market at such time; provided,
however, that if the banks selected as aforesaid by such Calculation Agent are
not quoting as mentioned in this sentence, the rate of interest in effect for
the applicable period will be the rate of interest in effect on such LIBID
Interest Determination Date.
TREASURY RATE. Floating Rate Notes for which an applicable Interest Rate
Basis is the Treasury Rate will bear interest at the interest rates (calculated
with reference to the Treasury Rate and the Spread and/or Spread Multiplier, if
any) specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date relating to a
Treasury Rate Note (a "Treasury Rate Interest Determination Date"), the rate
applicable to the most recent auction of direct obligations of the United States
("Treasury bills") having the Index Maturity specified in the applicable Pricing
Supplement, as such rate is published in H.15(519) under the heading "U.S.
Government Securities-Treasury Bills-Auction Average (Investment)" or, if
not so published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Treasury Rate Interest Determination Date, the applicable
auction average rate (expressed as a bond equivalent on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) at such auction as
otherwise announced by the United States Department of the Treasury. Treasury
bills are usually sold at auction on Monday of each week unless that day is a
legal holiday, in which case the auction is usually held on the following
Tuesday, except that such auction may be held on the preceding Friday. In the
event that the results of the auction of Treasury bills having the specified
Index Maturity are not reported as provided by 3:00 P.M., New York City time, on
such Calculation Date, or if no such auction is held in a particular week, then
the Treasury Rate shall be calculated by the appropriate Calculation Agent and
shall be a yield to maturity (expressed as a bond equivalent on the basis of a
year of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Treasury Rate Interest Determination Date, of
three leading primary United States government securities dealers (which may
include the Agents or their affiliates) selected by such Calculation Agent
(after consultation with the Company), for the issue of Treasury bills with a
remaining maturity closest to the applicable Index Maturity; provided, however,
that if the dealers selected as aforesaid by such Calculation Agent are not
quoting as mentioned in this sentence, the rate of interest in effect for the
applicable period will be the rate of interest in effect on such Treasury Rate
Interest Determination Date.
PRIME RATE. Floating Rate Notes for which an applicable Interest Rate Basis
is the Prime Rate will bear interest at the interest rates (calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier, if any)
specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a Prime
Rate Note (a "Prime Rate Interest Determination Date"), the arithmetic mean of
the prime rates quoted on the basis of the actual number of days in
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the year divided by 360 as of the close of business on such Prime Rate Interest
Determination Date by three major money center banks in The City of New York as
selected by the appropriate Calculation Agent (after consultation with the
Company). If fewer than three such quotations are provided, the Prime Rate shall
be calculated by the appropriate Calculation Agent and shall be determined as
the arithmetic mean on the basis of the prime rates quoted in The City of New
York by such of the three major money center banks as are quoting prime rates
and by the appropriate number of substitute banks or trust companies organized
and doing business under the laws of the United States, or any state thereof,
having total equity capital of at least $500 million and being subject to
supervision or examination by federal or state authority, selected by such
Calculation Agent (after consultation with the Company) to quote such rate or
rates; provided, however, that if the banks or trust companies selected as
aforesaid by such Calculation Agent are not quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period will be the
rate of interest in effect on such Prime Rate Interest Determination Date.
CMT RATE. Floating Rate Notes for which an applicable Interest Rate Basis is
the CMT Rate will bear interest at the interest rates (calculated with reference
to the CMT Rate and the Spread and/or Spread Multiplier, if any) specified in
the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any Interest Determination Date relating to a CMT Rate
Note (a "CMT Rate Interest Determination Date"), the rate displayed on the
Designated CMT Telerate Page under the caption " . . .Treasury Constant
Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately
3:45 P.M.," under the column for the Designated CMT Maturity Index ^ for (i) if
the Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
week, or the month, as applicable, ended immediately preceding the week in which
the related CMT Rate Interest Determination Date occurs. If such rate is no
longer displayed on the relevant page, or if not displayed by 3:00 P.M.,
New York City time, on the related Calculation Date, then the CMT Rate
for such CMT Rate Interest Determination Date will be such treasury constant
maturity rate for the Designated CMT Maturity Index as published in the relevant
H.15(519). If such rate is no longer published, or if not published by
3:00 P.M., New York City time, on the related Calculation Date, then the
CMT Rate for such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index (or other United
States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate
Interest Determination Date with respect to such Interest Reset Date as may then
be published by either the Board of Governors of the Federal Reserve System or
the United States Department of the Treasury that the appropriate Calculation
Agent determines to be comparable to the rate formerly displayed on the
Designated CMT Telerate Page and published in the relevant H.15(519). If such
information is not provided by 3:00 P.M., New York City time, on the
related Calculation Date, then the CMT Rate for the CMT Rate Interest
Determination Date will be calculated by the appropriate Calculation Agent and
will be a yield to maturity, based on the arithmetic mean of the secondary
market closing offer side prices as of approximately 3:30 P.M., New York City
time, on the CMT Rate Interest Determination Date reported, according to their
written records, by three leading primary United States government securities
dealers (each, a "Reference Dealer") in The City of New York (which may include
the Agents or their affiliates) selected by the appropriate Calculation Agent
(from five such Reference Dealers selected by such Calculation Agent (after
consultation with the Company) and eliminating the highest quotation (or, in the
event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Notes") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the appropriate Calculation Agent cannot obtain three such
Treasury Note quotations, the CMT Rate for such CMT Rate Interest Determination
Date will be calculated by such Calculation Agent and will be a yield to
maturity based on the arithmetic mean of the secondary market offer side prices
as of approximately 3:30 P.M., New York City time, on
S-14
<PAGE>
the CMT Rate Interest Determination Date of three Reference Dealers in The City
of New York (from five such Reference Dealers selected by such Calculation Agent
(after consultation with the Company) and eliminating the highest quotation (or,
in the event of equality, one of the highest) and the lowest quotation (or, in
the event of equality, one of the lowest)) for Treasury Notes with an original
maturity of the number of years that is the next highest to the Designated CMT
Maturity Index and a remaining term to maturity closest to the Designated CMT
Maturity Index and in an amount of at least $100 million. If three or four (and
not five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers selected by the appropriate
Calculation Agent as aforesaid are quoting as described herein, the CMT Rate in
effect for the applicable period will be the rate of interest in effect on such
CMT Rate Interest Determination Date. If two Treasury Notes with an original
maturity as described in the third preceding sentence have remaining terms to
maturity equally close to the Designated CMT Maturity Index, the quotes for the
Treasury Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purposes of
displaying Treasury Constant Maturities as reported in H.15(519))^ for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years) specified
in the applicable Pricing Supplement with respect to which the CMT Rate will be
calculated. If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall be 2 years.
CD RATE. CD Floating Rate Notes for which an applicable Interest Rate Basis
is the CD Rate will bear interest at the interest rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note (a "CD Rate Interest Determination Date"), the rate on such date for
negotiable certificates of deposit having the Index Maturity in the applicable
Pricing Supplement as published in H.15(519) under the heading "CDs (Secondary
Market)," or, if not so published by 3:00 P.M., New York City time, on or prior
to the Calculation Date pertaining to such CD Rate Interest Determination Date,
the CD Rate will be the rate on such CD Rate Interest Determination Date for
negotiable certificates of deposit of the Index Maturity specified in the
applicable Pricing Supplement as published in Composite Quotations under the
heading "Certificates of Deposit." If such rate is not yet published in either
H.15(519) or the Composite Quotations by 3:00 P.M., New York City time, on or
prior to the Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the appropriate Calculation Agent and
will be the arithmetic mean of the secondary market offered rates as of 3:00
P.M., New York City time, on such CD Rate Interest Determination Date, of three
leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The
City of New York selected by such Calculation Agent (after consultation with the
Company) for negotiable certificates of deposit of major United States money
center banks of the highest credit standing in the market for negotiable
certificates of deposit with a remaining maturity closest to the Index Maturity
designated in the Pricing Supplement in the denomination of $5,000,000;
provided, however, that if the dealers selected as aforesaid by such Calculation
Agent are not quoting as set forth above, the rate of interest in effect for the
applicable period will be the rate of interest in effect on such CD Rate
Interest Determination Date.
S-15
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OTHER PROVISIONS; ADDENDA
Any provisions with respect to the Notes, including the specification and
determination of one or more Interest Rate Bases, the calculation of the
interest rate applicable to a Floating Rate Note, the Interest Payment Dates,
the date of maturity, redemption and/or repayment provisions or any other term
relating thereto, may be modified as specified under "Other Provisions" on the
face thereof or in an Addendum relating thereto, if so specified on the face
thereof and in the applicable Pricing Supplement.
BOOK-ENTRY NOTES
Unless otherwise specified in the applicable Pricing Supplement, the Company
has established a depository arrangement with The Depository Trust Company with
respect to the Book-Entry Notes, the terms of which are summarized below. Any
additional or differing terms of the depository arrangement with respect to the
Book-Entry Notes will be described in the applicable Pricing Supplement.
Upon issuance, all Book-Entry Notes up to $150,000,000 aggregate principal
amount bearing interest (if any) at the same rate or pursuant to the same
formula and having the same date of issue, redemption provisions (if any),
repayment provisions (if any), date of maturity and other terms will be
represented by a single Global Security. Each Global Security representing
Book-Entry Notes will be deposited with, or on behalf of, the Depositary and
will be registered in the name of the Depositary or a nominee of the Depositary.
No Global Security may be transferred except as a whole by the Depositary to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or to another nominee of such Depositary, or by such Depositary or any such
nominee to a successor of such Depositary or a nominee of such successor.
So long as the Depositary or its nominee is the registered owner of a Global
Security, the Depositary or its nominee, as the case may be, will be the sole
Holder of the Book-Entry Notes represented thereby for all purposes under the
applicable Indenture. Except as otherwise provided in this section, the
beneficial owners of the Global Security or Securities representing Book-Entry
Notes will not be entitled to receive physical delivery of Certificated Notes
and will not be considered the Holders thereof for any purposes under the
applicable Indenture, and no Global Security representing Book-Entry Notes shall
be exchangeable or transferable. Accordingly, each person owning a beneficial
interest in a Global Security must rely on the procedures of the Depositary and,
if such person is not a Participant, on the procedures of the Participant
through which such person owns its interest in order to exercise any rights of a
Holder under such Global Security or the applicable Indenture. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in certificated form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Security
representing Book-Entry Notes.
Unless otherwise specified in the applicable Pricing Supplement, each Global
Security representing Book-Entry Notes is exchangeable for Certificated Notes of
like rank, tenor and terms and of differing authorized denominations aggregating
a like principal amount, only if (i) the Depositary notifies the Company that it
is unwilling or unable to continue as Depositary for the Global Securities or
the Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Company fails to
appoint a successor depositary within 90 days, (ii) the Company in its sole
discretion determines that the Global Securities shall be exchangeable for
Certificated Notes, or (iii) there shall have occurred and be continuing an
Event of Default under the applicable Indenture with respect to such Notes. Upon
any such exchange, the Certificated Notes shall be registered in the names of
the beneficial owners of the Global Security or Securities representing
Book-Entry Notes as provided by the Depositary's relevant Participants (as
identified by the Depositary).
S-16
<PAGE>
The following is based on information furnished by the Depositary:
The Depositary will act as securities depository for the Book-Entry
Notes. The Book-Entry Notes will be issued as fully registered securities
registered in the name of Cede & Co. (the Depositary's partnership nominee).
One fully registered Global Security will be issued for each issue of
Book-Entry Notes, each in the aggregate principal amount of such issue, and
will be deposited with the Depositary. If, however, the aggregate principal
amount of any issue exceeds $150,000,000 one Global Security will be issued
with respect to each $150,000,000 of principal amount and an additional
Global Security will be issued with respect to any remaining principal
amount of such issue.
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Exchange Act. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also
facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
Direct Participants of the Depositary ("Direct Participants") include
securities brokers and dealers (including the Agents), banks, trust
companies, clearing corporations and certain other organizations. The
Depositary is owned by a number of its Direct Participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the Depositary's
system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to the Depositary and its
Participants are on file with the Securities and Exchange Commission.
Purchases of Book-Entry Notes under the Depositary's system must be made
by or through Direct Participants, which will receive a credit for such
Book-Entry Notes on the Depositary's records. The ownership interest of each
actual purchaser of each Book-Entry Note represented by a Global Security
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchase, but Beneficial Owners
are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the
Direct or Indirect Participants through which such Beneficial Owner entered
into the transaction. Transfers of ownership interests in a Global Security
representing Book-Entry Notes are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners of a Global Security representing Book-Entry Notes will not receive
Certificated Notes representing their ownership interests therein, except in
the event that use of the book-entry system for such Book-Entry Notes is
discontinued.
To facilitate subsequent transfers, all Global Securities representing
Book-Entry Notes which are deposited with, or on behalf of, the Depositary
are registered in the name of the Depositary's nominee, Cede & Co. The
deposit of Global Securities with the Depositary and their registration in
the name of Cede & Co. effect no change in beneficial ownership. The
Depositary has no knowledge of the actual Beneficial Owners of the Global
Securities representing the Book-Entry Notes; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such
Book-Entry Notes are credited, which may or may not be the Beneficial
Owners. The Participants will remain responsible for keeping account of
their holdings on behalf of the Beneficial Owners that are their customers.
S-17
<PAGE>
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants and by
Direct and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect
to the Global Securities representing the Book-Entry Notes. Under its usual
procedures, the Depositary mails an Omnibus Proxy to the Company as soon as
possible after the applicable record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Book-Entry Notes are credited on the applicable record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the Global
Securities representing the Book-Entry Notes will be made to the Depositary.
The Depositary's practice is to credit Direct Participants' accounts on the
applicable payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe that
it will not receive payment on such date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers
in bearer form or registered in "street name", and will be the
responsibility of such Participant and not of the Depositary, the applicable
Trustee or the Company, subject to any statutory or regulatory requirements
as may be in effect from time to time. Payment of principal, premium, if
any, and interest to the Depositary is the responsibility of the Company or
the applicable Trustee, disbursement of such payments to Direct Participants
shall be the responsibility of the Depositary, and disbursement of such
payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
If applicable, redemption notices shall be sent to Cede & Co. If less
than all of the Book-Entry Notes within an issue are being redeemed, the
Depositary's practice is to determine by lot the amount of the interest of
each Direct Participant in such issue to be redeemed.
A Beneficial Owner shall give notice of any option to elect to have its
Book-Entry Notes repaid by the Company through its Participant to the
applicable Trustee, and shall effect delivery of such Book-Entry Notes by
causing the Direct Participant to transfer the Participant's interest in the
Global Security or Securities representing such Book-Entry Notes, on the
Depositary's records, to the applicable Trustee. The requirement for
physical delivery of Book-Entry Notes in connection with a demand for
repayment will be deemed satisfied when the ownership rights in the Global
Security or Securities representing such Book-Entry Notes are transferred by
Direct Participants on the Depositary's records.
The Depositary may discontinue providing its services as securities
depository with respect to the Book-Entry Notes at any time by giving
reasonable notice to the Company or the applicable Trustee. Under such
circumstances, in the event that a successor securities depository is not
obtained, Certificated Notes are required to be printed and delivered.
The Company may decide to discontinue the use of the system of
book-entry transfers through the Depositary (or a successor securities
depository). In that event, Certificated Notes will be printed and
delivered.
The information in this section concerning the Depositary and the
Depositary's system has been obtained from sources that the Company believes to
be reliable, but the Company takes no responsibility for the accuracy thereof.
S-18
<PAGE>
CERTAIN INVESTMENT CONSIDERATIONS
An investment in Notes indexed, as to principal, premium and/or interest, to
one or more currencies or composite currencies (including exchange rates and
swap indices between currencies or composite currencies), commodities, interest
rates or other indices entails significant risks that are not associated with
similar investments in a conventional fixed rate or floating rate debt security.
Such risks include, without limitation, the possibility that such index or
indices may be subject to significant changes, that the resulting interest rate
will be less than that payable on a conventional fixed rate or floating rate
debt security issued at the same time, that the repayment of principal and/or
premium, if any, can occur at times other than that expected by the investor,
and that the investor could lose all or a substantial portion of principal
and/or premium, if any, payable on the date of maturity (or the date of
redemption or repayment, if any). Such risks depend on a number of interrelated
factors, including economic, financial and political events, over which the
Company has no control. Additionally, if the formula used to determine the
amount of principal, premium and/or interest payable with respect to such Notes
contains a multiple or leverage factor, the effect of any change in the
applicable index or indices will be magnified. In recent years, values of
certain indices have been highly volatile and such volatility may be expected to
continue in the future. Fluctuations in the value of any particular index that
have occurred in the past are not necessarily indicative, however, of
fluctuations that may occur in the future. The secondary market for such Notes
will be affected by a number of factors independent of the creditworthiness of
the Company and the value of the applicable index or indices, including the
complexity and volatility of such index or indices, the method of calculating
the principal, premium, if any, and/or interest in respect of such Notes, the
time remaining to the maturity of such Notes, the outstanding amount of such
Notes and market interest rates generally. The credit ratings assigned to the
Company's medium-term note program are a reflection of the Company's credit
status and in no way reflect the potential impact of the risk factors discussed
herein, or any other factors, on the market value of the Notes. Accordingly,
prospective investors should consult their own financial and legal advisors as
to the risks entailed by an investment in the Notes and the suitability of such
Notes in light of their particular circumstances.
MULTI-CURRENCY AND INDEXED NOTES
If any Note is to be denominated or payable in a currency or composite
currency other than U.S. dollars, certain provisions with respect thereto will
be set forth in a foreign currency Prospectus Supplement (a "Multi-Currency and
Indexed Note Prospectus Supplement") and applicable Pricing Supplement, which
will specify the foreign or composite currency in which such Note is denominated
and/or payable (the "Specified Currency"), along with any other terms relating
to the non-U.S. dollar denomination.
The Notes also may be issued with the principal amount payable at maturity
to be determined with reference to the exchange rate of a Specified Currency
relative to an indexed currency (the "Indexed Currency") or other index, each as
set forth in the Multi-Currency and Indexed Note Prospectus Supplement and an
applicable Pricing Supplement. Holders of such Notes may receive a principal
payment at maturity (or upon redemption or repayment, if applicable) that is
greater than or less than the principal amount of such Notes depending upon the
relative value at maturity of the Specified Currency compared to the Indexed
Currency, or as otherwise set forth in the applicable Multi-Currency and Indexed
Note Prospectus Supplement. Information as to the method for determining the
principal amount of such Notes payable at maturity (or upon redemption or
repayment, if applicable) and certain additional risks and tax considerations
associated with investment in Indexed Notes will be set forth in the applicable
Multi-Currency and Indexed Note Prospectus Supplement.
S-19
<PAGE>
BEARER NOTES
The Company also may offer from time to time Notes in bearer form ("Bearer
Notes") outside the United States at varying prices and terms. Such offerings of
Bearer Notes may be separate from, or simultaneous with, offerings of Notes in
the United States. The Bearer Notes are not offered by this Prospectus
Supplement and the accompanying Prospectus and may not be purchased by U.S.
persons except, in certain limited circumstances, if the U.S. person is a
financial institution, a foreign branch of a U.S. financial institution, or
acquired and holds the Bearer Notes through a foreign branch of a U.S. financial
institution.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis for sale by the Company
through the Agents, which have agreed to use their best efforts to solicit
offers to purchase the Notes. The Company will pay the appropriate Agent a
commission which, depending on the rank and maturity of the Notes, will range
from .125% to .825% of the principal amount of any Note sold through such Agent.
Commissions with respect to Notes with stated maturities in excess of 30 years
that are sold through the Agents will be negotiated between the Company and the
applicable Agent at the time of such sale.
The Company may also sell Notes to the Agents, as principal, at a discount
from the principal amount thereof and the Agents may later resell such Notes to
purchasers at varying prices related to prevailing market prices at the time of
resale as determined by the Agents or, if so specified in the applicable Pricing
Supplement, for resale at a fixed offering price. After the initial offering of
Notes, the offering price (in the case of Notes to be resold on a fixed offering
price basis), any concession and any discount may be changed. The Company may
also sell Notes directly to purchasers on its own behalf.
The Company reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject orders in whole or in part, whether placed
directly by the Company or through the Agents. The Agents will have the right,
in their discretion reasonably exercised, to reject in whole or in part any
offer to purchase Notes received by it on an agency basis.
Upon issuance, the Notes will not have an established trading market. The
Notes will not be listed on any securities exchange. The Agents may from time to
time purchase and sell Notes in the secondary market, but the Agents are not
obligated to do so, and there can be no assurance that there will be a secondary
market for the Notes or that there will be liquidity in any secondary market
that may develop. From time to time, the Agents may make a market in the Notes,
but the Agents are not obligated to do so and may discontinue any market-making
activity at any time.
The Company has agreed to indemnify each of the Agents against or to make
contributions relating to certain liabilities, including liabilities under the
Securities Act of 1933. The Agents may be deemed to be underwriters within the
meaning of such Act. The Company has agreed to reimburse the Agents for certain
of their expenses.
The Agents and/or certain of their affiliates may engage in commercial
and/or investment banking transactions with, and perform services for, the
Company and certain of its affiliates, in the ordinary course of business.
S-20
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED DECEMBER 30, 1994
PROSPECTUS
$1,000,000,000
MCI COMMUNICATIONS CORPORATION
SENIOR/SUBORDINATED/CONVERTIBLE DEBT SECURITIES
-------------------
MCI Communications Corporation (the "Company" or "MCI") from time to time
may offer up to $1,000,000,000 aggregate principal amount (or its equivalent in
any other currency or composite currency) of its senior unsecured debt
securities (the "Senior Securities"), subordinated unsecured debt securities
(the "Subordinated Securities") and/or subordinated unsecured debt securities
(the "Convertible Subordinated Securities") convertible into the common stock,
par value $.10 per share, of the Company (the "Common Stock"), in separate
series in amounts, at prices and on terms to be determined at the time of sale
(the Senior Securities, the Subordinated Securities and the Convertible
Subordinated Securities being herein referred to collectively as the
"Securities"). The Company may sell Securities to one or more underwriters for
public offering and sale by them or may sell Securities to investors directly or
through agents. See "Plan of Distribution."
The terms of the Securities, including, where applicable, the specific
designation, rank, aggregate principal amount, denominations (which may be in
United States dollars, in any other currency or in a composite currency),
maturity, interest rate (which may be fixed or variable) and time of payment of
interest, if any, terms for conversion, if any, terms for redemption, if any, at
the option of the Company or repayment, if any, at the option of the holder,
terms for sinking fund payments and other variable terms of the Securities, if
any, the initial public offering price, if any, the names of, and the principal
amounts to be purchased by, dealers, if any, the compensation of such dealers
and the other terms in connection with the offering and sale of the Securities
in respect of which this Prospectus is being delivered, are set forth in one or
more accompanying Prospectus Supplements (each, a "Prospectus Supplement").
-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-------------------
The date of this Prospectus is January , 1995.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company with the Commission pursuant to the informational requirements of the
Exchange Act can be inspected and copied at the public reference facilities
maintained by the Commission at its principal offices at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
New York Regional Office, 7 World Trade Center, 13th Floor, New York, New York
10048: and Chicago Regional Office Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661: and copies of such material can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
MCI's Annual Report on Form 10-K for the fiscal year ended December 31,
1993, Quarterly Reports on Form 10-Q for the quarters ended March 31, 1994, June
30, 1994 and September 30, 1994, Current Reports on Form 8-K dated March 9,
1994, March 15, 1994 and October 4, 1994 previously filed by MCI with the
Commission, are incorporated by reference in this Prospectus and shall be deemed
to be a part hereof.
Each document filed by MCI with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of any offering of the Securities made by this
Prospectus shall be deemed to be incorporated herein by reference and to be a
part hereof from the date of filing such document.
MCI undertakes to provide without charge to each person to whom a Prospectus
is delivered, upon the written or oral request of any such person, a copy of any
and all of the documents incorporated herein by reference other than exhibits to
such documents. Request for such copies should be directed to the Secretary, MCI
Communications Corporation, 1801 Pennsylvania Avenue, N.W., Washington, D.C.
20006 (telephone: (202) 872-1600).
THE COMPANY
MCI Communications Corporation, a Delaware corporation organized in 1968,
has its principal executive offices at 1801 Pennsylvania Avenue, N.W.,
Washington, D.C. 20006 (telephone number: (202) 872-1600). Unless the context
otherwise requires, the "Company" or "MCI" means MCI Communications Corporation
and its subsidiaries. MCI provides a wide spectrum of domestic and international
voice and data communications services to its customers. It is the second
largest nationwide carrier of long distance telephone services.
2
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)(A)
NINE MONTHS
ENDED
SEPTEMBER
30, YEAR ENDED DECEMBER 31,
------------ ------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
5.15 4.38 4.12 3.63 3.37 2.22 3.30
- ------------
(a) For purposes of this ratio, earnings are calculated by adding fixed charges
(excluding capitalized interest) to income before income taxes and
extraordinary item. Fixed charges consist of interest on indebtedness
(including amortization of debt discount and premium) and the portion of
rental expense representative of an interest factor.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities will be
added to its general corporate funds and will be used for general corporate
purposes. Until so utilized, the net proceeds will be invested in income
producing securities.
THE SECURITIES
EXPLANATORY STATEMENT
(Applicable to Senior Securities, Subordinated Securities and Convertible
Subordinated Securities)
The Senior Securities are to be issued under an Indenture dated as of
January , 1995, as (the "Senior Indenture"), between the Company and
Citibank, N.A., as trustee ("Citibank"), the Subordinated Securities are to be
issued under an Indenture dated as of October 15, 1989 (the "Subordinated
Indenture"), between the Company and Bankers Trust Company, as trustee ("Bankers
Trust"), and the Convertible Subordinated Securities are to be issued under an
Indenture dated as of October 15, 1989 (the "Convertible Indenture"), between
the Company and Bankers Trust, as trustee. The form of Senior Indenture,
the Subordinated Indenture and the Convertible Indenture (being sometimes
referred to herein collectively as the "Indentures" and, individually, as an
"Indenture") are filed as exhibits to the Registration Statement relating to the
Securities (the "Registration Statement"). The Indentures are subject to the
provisions of the Trust Indenture Reform Act of 1990, as amended.
The Indentures do not limit the aggregate principal amount of the Securities
which may be issued thereunder and provide that the Securities may be issued in
one or more series up to the aggregate principal amount which may be authorized
from time to time by the Company. The Company may, from time to time, without
the consent of the holders of the Securities, provide for the issuance of
Securities under the Indentures in addition to the $1,000,000,000 (or the
equivalent thereof in one or more foreign or composite currencies) aggregate
principal amount of Securities available for issuance as of the date of this
Prospectus.
The Company's assets consist principally of the stock in its subsidiaries.
Therefore, its rights and the rights of its creditors, including the holders of
the Securities, to participate in the assets of any subsidiary upon the latter's
liquidation or recapitalization or otherwise will be subject to the prior claims
of the subsidiary's creditors, except to the extent that claims of the Company
itself as a creditor of the subsidiary may be recognized.
The Indentures do not limit the amount of unsecured indebtedness of the
Company or any subsidiary, the payment of dividends by the Company or its
acquisition of any of its equity securities.
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Nothing in the Indentures or in the terms of the Securities will prohibit the
issuance of securities representing subordinated indebtedness that is senior or
junior to the Subordinated Securities or the Convertible Subordinated
Securities. Nothing in the Indentures affords holders of Securities protection
in the event of a highly leveraged transaction, reorganization, restructuring,
merger or similar transaction involving the Company. However, the Senior
Indenture does contain certain restrictive covenants with respect to the
business of the Company and its subsidiaries and liens on and the sale or lease
of certain Company assets, which may make more difficult or discourage any such
transactions. The consummation of any highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the
Company could cause a material decline in the credit quality of the outstanding
Securities. See "Description of Senior Securities--Covenants."
The particular terms of each series of Securities, as well as any
modifications of or additions to the general terms of the Senior Securities, the
Subordinated Securities or the Convertible Subordinated Securities, as described
herein, which may be applicable in the case of a particular series of
Securities, will be described in a Prospectus Supplement relating to such series
of Securities. Accordingly, for a description of the terms of a particular
series of Securities, reference must be made to both the Prospectus Supplement
relating thereto and to the description of Senior Securities, Subordinated
Securities or Convertible Subordinated Securities, as appropriate, set forth in
this Prospectus.
BEARER SECURITIES
The Company also may offer from time to time securities in bearer form
("Bearer Securities") outside the United States at varying prices and terms.
Such offerings of Bearer Securities may be separate from, or simultaneous with,
offerings of Securities in the United States. The Bearer Securities are not
offered by this Prospectus and may not be purchased by U.S. persons other than
foreign branches of certain U.S. financial institutions. For purposes of this
Prospectus, "U.S. person" means a citizen, national or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, or an
estate or trust which is subject to United States income taxation regardless of
its source of income.
CERTAIN DEFINITIONS
"Contingent Obligation" means, with respect to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase,
repurchase or otherwise acquire such primary obligations or any property
constituting direct or indirect security therefor, or (b) to advance or provide
funds (i) for the payment or discharge of any such primary obligation, or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the Company
in good faith.
"Coupon" means any interest coupon appertaining to any Bearer Security.
"Discount Security" means any Security that is issued with "original issue
discount" within the meaning of Section 1273(a) of the Internal Revenue Code of
1986 and the regulations thereunder and
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any other Security designated by the Company as issued with original issue
discount for United States federal income tax purposes.
"Disposed Assets" means all assets of MCI Telecom other than cash and cash
equivalents, equity investments, franchises, licenses, permits, patents, patent
applications, copyrights, trademarks, trade names, goodwill, experimental or
organizational expense, and other like intangibles (but excluding rights of way
treated as assets).
"Indebtedness" means, with respect to any Person, (a) all obligations of
such Person for borrowed money (including, with limitation, reimbursement and
all other obligations with respect to surety bonds, letters of credit and
bankers' acceptances, whether or not matured); (b) all obligations evidenced by
notes, bonds, debentures or similar instruments; (c) all obligations to pay for
the deferred purchase price of property or services except trade accounts
payable and accrued liabilities arising in the ordinary course of business; (d)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller under such agreement in the event
of default are limited to repossession or sale of such property); (e) all
obligations under leases which have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases; and (f)
all indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is non-recourse to the credit of that Person.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or segregated deposit arrangement, encumbrance, lien (statutory or other)
or preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever including, without limitation, those created
by, arising under or evidenced by any conditional sale or other title retention
agreement or the filing of any financing statement naming the owner of the asset
to which such Lien shall relate as debtor (other than in connection with a
transaction in which such asset shall have been leased by the named debtor)
under the Uniform Commercial Code or comparable law of any jurisdiction.
"MCI Telecom" means MCI Telecommunications Corporation, a Delaware
corporation, and wholly-owned subsidiary of MCI.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Stated Maturity," when used with respect to any Security or any installment
of principal (including any sinking fund payment) thereof or premium thereon or
interest thereon, means the date specified in such Security or Coupon, if any,
representing such installment of interest, as the date on which the principal of
such Security or such installment of principal, premium or interest is due and
payable.
"Subsidiary," in connection with the covenants set forth below under
"Description of Senior Securities--Covenants," means, with respect to any
Person, (i) a corporation of which shares of stock having ordinary voting power
(other than stock having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person and (ii) any partnership of which such Person or any Subsidiary
is a general partner or any partnership more than 50% of the equity interests of
which are owned, directly or indirectly, by such Person or by one or more other
Subsidiaries, or by such Person and one or more other Subsidiaries.
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EVENTS OF DEFAULT; RIGHTS UPON DEFAULT
An "Event of Default" is defined in the Indentures to mean failure to pay
interest when due for 30 days; failure to pay principal or premium, if any, when
due; failure to make any sinking fund installment when due; failure on MCI's
part to observe any of its other covenants under the Indentures (other than
certain covenants solely for the benefit of holders of a different series of
Securities) for a period of 90 days after notice (from the appropriate Trustee
or holders of at least 25% in aggregate principal amount of the outstanding
Securities of a series); and certain events of bankruptcy or reorganization of
MCI. In addition, an "Event of Default" under the Senior Indenture occurs with
respect to a series of Senior Securities when an event of default in respect of
any Indebtedness or Contingent Obligation under which the Company or any of its
subsidiaries has at the date of such event of default outstanding at least
$50,000,000, or the equivalent in another currency or currencies, aggregate
principal amount of indebtedness for borrowed money, shall happen and be
continuing and such Indebtedness or Contingent Obligation shall, as a result
thereof, have been accelerated so that the same shall be or become due and
payable prior to the date on which the same would otherwise have become due and
payable, and such acceleration shall not be rescinded or annulled within 30 days
after notice of such acceleration shall have been given to the Company by the
Trustee under the Senior Indenture (if such event be known to it), or to the
Company and the Trustee under the Senior Indenture by the holders of at least
25% in aggregate principal amount of the Outstanding Securities of such series;
provided, however, that if such event of default in respect of any Indebtedness
or Contingent Obligation shall be remedied or cured by the Company or waived by
the holders of such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation, then, unless the Securities of such series shall have
been accelerated as provided in this provision, the Event of Default under this
provision by reason of such provision shall be deemed likewise to have been
thereupon remedied, cured or waived without further action upon the part of
either the Trustee under the Senior Indenture or any holders of the Securities
of such series.
If an Event of Default with respect to Securities of any series at the time
outstanding occurs and is continuing, either the appropriate Trustee or the
holders of at least 25% in aggregate principal amount of the outstanding
Securities of that series, by notice as provided in the appropriate Indenture,
may declare the principal amount (or, if the Securities of that series are
Discount Securities, such portion of the principal amount as may be specified in
the terms of that series) of and all accrued but unpaid interest on all the
Securities of that series to be due and payable immediately. At any time after a
declaration of acceleration with respect to Securities of any series has been
made, but before a judgment or decree for payment of money has been obtained by
the appropriate Trustee, the holders of a majority in aggregate principal amount
of the outstanding Securities of that series may, under certain circumstances,
rescind and annul such acceleration.
The Indentures provide that the appropriate Trustee shall, within 90 days
after the occurrence of a default, give to the holders of Securities notice of
all uncured defaults known to it; provided that, except in the case of default
in the payment of the principal of, premium, if any, or interest on any of the
Securities or in the payment of any sinking fund installment, the appropriate
Trustee shall be protected in withholding such notice if in good faith it
determines that the withholding of such notice is in the interest of the holders
of Securities.
MCI is required, pursuant to the terms of the Indentures and applicable law,
to furnish each Trustee within 120 days after the close of each fiscal year a
written statement of certain of MCI's officers to the effect that they have
reviewed MCI's activities and its performance under the Senior Indenture, the
Subordinated Indenture or the Convertible Indenture, as the case may be, and
that, to the best of their knowledge, MCI has fulfilled all its obligations
under such Indenture (or, if it has not, specifying the nature and status of
such default).
In case an Event of Default shall occur (which shall not have been cured or
waived), the appropriate Trustee will be required to exercise its rights and
powers under the appropriate Indenture
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and use in such exercise the degree of care and skill of a prudent man under the
circumstances in the conduct of his own affairs. Subject to such provisions,
such Trustee will be under no obligation to exercise any of its rights or powers
under such Indenture at the request of any of the holders of Securities, unless
they shall have offered to the Trustee reasonable security or indemnity. Except
as specifically provided in the Indentures, nothing therein relieves a Trustee
thereunder from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct.
MODIFICATION OF THE INDENTURES
Modifications and amendments of each of the Indentures may be made by the
Company and the appropriate Trustee with the consent of the holders of a
majority in principal amount of the outstanding Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each
outstanding Security affected thereby, (a) change the Stated Maturity of the
principal of, or any installment or principal of or interest on or sinking fund
payment, on any Security, (b) reduce the principal amount of, or premium or
interest on, any Security, or (c) reduce the percentage in principal amount of
outstanding Securities of any series, the consent of whose holders is required
for modification or amendment of an Indenture. In addition, no modification or
amendment of the Convertible Indenture may, without the consent of the holder of
each Convertible Subordinated Security affected thereby, adversely affect the
terms of conversion of the Convertible Subordinated Securities and no
modification or amendment of the Subordinated Indenture or the Convertible
Indenture may, without the written consent of each holder of Senior Indebtedness
(as defined in each such Indenture as set forth below), modify, directly or
indirectly, the subordination provisions therein or the definition of Senior
Indebtedness in any manner that might alter or impair the subordination of the
Subordinated Securities (and any Coupons appertaining thereto) or the
Convertible Subordinated Securities.
No modification or amendment of the Senior Indenture or the Subordinated
Indenture may, without the consent of the holder of each outstanding Security
affected thereby, (a) change the Stated Maturity of or reduce the amount of any
payment to be made with respect to a Coupon, (b) change any obligation of the
Company to pay additional interest contemplated by the Indentures, (c) reduce
the amount of principal of a Discount Security payable upon acceleration of the
maturity thereof, (d) change the currency in which any Security or any premium
or interest thereon is denominated or payable, (e) impair the right to institute
suit for the enforcement of any payment on or with respect to any Security after
the Stated Maturity or date or redemption, (f) reduce the percentage in
principal amount of outstanding Securities of any series, the consent of whose
holders is required for waiver of compliance with certain provisions of any such
Indentures or for waiver of certain defaults, (g) limit any obligation of the
Company to maintain a paying agency outside the United States for payment on
Bearer Securities, (h) limit the obligation of the Company to redeem certain
Bearer Securities or Coupons the beneficial owners of which are required by
United States law to disclose their nationality, residence or identity, or (i)
modify any of the provisions set forth in this paragraph or in the preceding
paragraph and regarding the waiver of past defaults except to increase any such
percentage.
The holders of not less than a majority in principal amount of the
outstanding Securities of each series may, on behalf of all holders of
Securities of that series and any Coupons appertaining thereto, waive any past
default under the appropriate Indenture with respect to Securities of that
series, except a default (a) in the payment of principal of, or any premium on
or any interest on, any Security of such series or in the payment of a related
Coupon or (b) in respect of a covenant or provision of such Indenture which
cannot be modified or amended without the consent of the holder of each
outstanding Security of such series affected.
The Indentures will provide that in determining whether the holders of the
requisite principal amount of the outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver thereunder (i) the
principal amount of any Discount Security deemed to be outstanding will be the
amount of the principal thereof that would be due and payable as of the date of
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such determination upon acceleration of the maturity thereof, and (ii) the
principal amount of a Security denominated in other than U.S. dollars will be
the U.S. dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount of such Security.
A meeting may be called at any time by the appropriate Trustee, or upon the
request of the Company or the holders of at least 10% in principal amount of the
outstanding Securities of a series, in any such case upon notice given in
accordance with the appropriate Indenture. Except as limited by the proviso in
the fourth preceding paragraph and by the third preceding paragraph, any
resolution presented at a meeting may be adopted by the affirmative vote of the
holders of a majority in principal amount of the outstanding Securities of that
series: provided, however, that, except as limited by the proviso in the fourth
preceding paragraph and by the third preceding paragraph, any resolution with
respect to any demand, consent, waiver or other action that may be made, given
or taken by the holders of a specified percentage, which is more or less than a
majority, in principal amount of outstanding Securities of a series may be
adopted at a meeting by the affirmative vote of the holders of at least such
specified percentage in principal amount of the outstanding Securities of that
series.
THE TRUSTEES UNDER THE INDENTURES
Citibank participates with a group of banks in a Revolving Credit Agreement
with the Company. As of September 30, 1994, Citibank had no loans outstanding to
MCI under this facility. Citicorp Securities, Inc., an affiliate of Citibank,
and Citibank serve as dealer and issuing and paying agent, respectively, for
MCI's commercial paper program. In addition, MCI maintains depository accounts
with Citibank.
Bankers Trust has been a dealer in connection with certain short-term
investments made by MCI.
Both Citibank and Bankers Trust are customers of MCI. Citicorp, the parent
of Citibank, is one of MCI's ten largest customers by revenue.
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DESCRIPTION OF SENIOR SECURITIES
REFERENCE IS MADE TO THE EXPLANATORY STATEMENT ON PAGE 3 OF THIS PROSPECTUS
The Senior Securities are to be issued under the Senior Indenture. The
following description of the Senior Indenture and the Senior Securities and
summaries of certain provisions thereof do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all provisions
of the Senior Indenture and the Senior Securities, including the definitions
therein of certain terms. Wherever particular sections of, or terms defined in,
the Senior Indenture are referred to, such sections or defined terms are
incorporated herein by reference.
GENERAL
The Senior Indenture provides that there may be more than one trustee under
the Senior Indenture, each with respect to one or more different series of
Senior Securities. In the event that there is more than one trustee under the
Senior Indenture, the powers and trust obligations of each trustee as described
herein shall extend only to the one or more series of Senior Securities for
which it is trustee. The effect of the provisions contemplating that at a
particular time there might be more than one trustee acting is that, in that
event, those Senior Securities (whether of one or more than one series) for
which each trustee is acting would be treated as if issued under a separate
indenture.
The Senior Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of and premium, if any, and interest, if any, on each series of Senior
Securities will be payable, and the Senior Securities will be exchangeable and
transfers thereof will be registrable, at the office of Citibank at 111 Wall
Street, Fifth Floor, New York, New York 10043, provided that, unless other
arrangements are made, payments of interest may be made by check mailed to the
address of the person entitled thereto as it appears in the Security Register.
LIMITATIONS ON CONSOLIDATION AND MERGER
MCI may not, nor shall it permit MCI Telecom to, merge, consolidate or
combine directly or indirectly with or into any Person, except (a) MCI Telecom
may merge, consolidate or combine with or into any other Person, if immediately
after giving effect thereto, (i) no Event of Default, and no event which, after
notice or lapse of time or both, would constitute an Event of Default, would
exist, and (ii) MCI Telecom shall be the surviving corporation in such merger,
consolidation or combination, or the successor entity is a corporation organized
and existing under the laws of the United States of America or any political
subdivision or State thereof, (b) MCI may merge, consolidate or combine with
another entity if (i) MCI shall be the corporation surviving the merger, or
the corporation into which the Company shall be merged or formed by any such
consolidation is a corporation organized and existing under the laws of the
United States of America or any political subdivision or State thereof and
expressly assumes MCI's obligations on all the Securities and any Coupons
relating thereto and under the Senior Indenture, and (ii) if immediately
after giving effect to such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would constitute an Event of
Default, would exist.
COVENANTS
Maintenance of Telecommunications Business. MCI shall maintain the business
of providing telecommunications services as a principal business of the Company
and its Subsidiaries taken as a whole and shall cause MCI Telecom to maintain
such business as its principal business.
Limitation on Liens. From and after the date of the first issuance of
Securities under the Senior Indenture, MCI may not directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any of
the capital stock of MCI Telecom, nor shall it permit MCI Telecom to,
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directly or indirectly, make, create, incur, assume or suffer to exist any Lien
upon or with respect to any part of its property or assets, whether owned as of
such date or thereafter acquired, unless the Senior Securities then outstanding
shall be equally and ratably secured with any other obligation or indebtedness
so secured, except for any of the following: (a) any Lien existing on the
property of MCI Telecom on the date of the first issuance of Securities under
the Senior Indenture securing Indebtedness outstanding on such date; (b) Liens
for taxes, assessments or other governmental charges which are not delinquent or
remain payable without material penalty, or the validity of which is contested
in good faith by appropriate proceedings (to the extent that it would be
appropriate to contest the levy or imposition of such tax as an alternative to
payment) upon stay of execution or the enforcement thereof and for which
adequate reserves or other appropriate provision has been made in accordance
with generally accepted accounting principles; (c) carriers', warehousemen's,
mechanics', landlords', materialmen's, repairmen's or other similar Liens
arising in the ordinary course of business which are not material or, if
material, are not delinquent or remain payable without penalty or which are
being contested in good faith and by appropriate proceedings; (d) pledges or
deposits in connection with workmen's compensation, unemployment insurance and
other social security legislation; (e) deposits to secure the performance of
bids, trade contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business; (f) easements,
rights-of-way, restrictions and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial in
amount, and do not materially detract from the overall value to MCI Telecom of
all property and assets of MCI Telecom subject to such Liens or interfere with
the ordinary conduct of the business of MCI Telecom; (g) Liens on assets which
shall be acquired by MCI Telecom either directly or through the acquisition of
the owner of such assets after the date of the first issuance of Securities
under the Senior Indenture, if such Liens shall have existed at the time the
assets or the owner of such assets were acquired and shall not have been created
in anticipation thereof by or with the agreement of MCI Telecom; (h) Liens on
assets (other than current assets) which shall be acquired by MCI Telecom after
the date of the first issuance of Securities under the Senior Indenture, if such
Liens shall have been created solely for the purpose of securing Indebtedness
representing, or incurred to finance, refinance or refund, the cost of the
acquisition of such assets or shall otherwise be created in anticipation of such
acquisition by or with the agreement of MCI Telecom; and (i) Liens not otherwise
permitted hereunder securing obligations of MCI Telecom in an aggregate amount
not to exceed an amount equal to % of the total assets of MCI Telecom at any
time, provided that, at the time any such Lien is created or incurred, the
aggregate book value of the assets subject to such Lien shall not exceed an
amount equal to % of the amount of the obligation secured by such assets.
Limitation on Sales and Leases of Assets. From and after the date of the
first issuance of Securities under the Senior Indenture, MCI may not, directly
or indirectly, sell, convey, transfer or otherwise dispose of (whether in one or
a series of transactions) any of the shares of capital stock of MCI Telecom, nor
shall MCI permit MCI Telecom to, directly or indirectly, sell, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
all or a material part of the assets, business or property of MCI Telecom
(including, without limitation, accounts and notes receivable, with or without
recourse), whether owned as of such date or thereafter acquired, or enter into
any agreement to do any of the foregoing, except any of the following; (a)
dispositions by MCI Telecom of obsolete or worn-out property or real property no
longer used or useful in its business; (b) sales to local exchange carriers,
with or without recourse, of customer receivables in the ordinary course of
business; (c) dispositions of assets acquired, either directly or through the
acquisition of the owner of such assets, after the date of the first issuance of
Securities under the Senior Indenture; provided, that each such disposition
shall be for fair and adequate consideration; and (d) dispositions (including,
without limitation, sales pursuant to sale-leaseback transactions) by MCI
Telecom not otherwise permitted hereunder which are made for fair market value;
provided that the book value of all Disposed Assets disposed of after the date
of the first issuance of Securities under the Senior Indenture does not exceed
% of the greater of (i) the book value of the assets of MCI Telecom as of
December 31, 1993 and (ii) the book value of the assets of MCI Telecom as of the
date of the most recent financial statements furnished to Citibank.
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DESCRIPTION OF SUBORDINATED SECURITIES
REFERENCE IS MADE TO THE EXPLANATORY STATEMENT ON PAGE 3 OF THIS PROSPECTUS
The Subordinated Securities are to be issued under the Subordinated
Indenture. The following description of the Subordinated Indenture and summaries
of certain provisions thereof do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
Subordinated Indenture, including the definitions therein of certain terms.
Wherever particular sections of, or terms defined in, the Subordinated Indenture
are referred to, such sections or defined terms are incorporated herein by
reference.
GENERAL
The Subordinated Indenture provides that there may be more than one trustee
under the Subordinated Indenture, each with respect to one or more different
series of Subordinated Securities. In the event that there is more than one
trustee under the Subordinated Indenture, the powers and trust obligations of
each trustee as described herein shall extend only to the one or more series of
Subordinated Securities for which it is trustee. The effect of the provisions
contemplating that at a particular time there might be more than one trustee
acting is that, in that event, those Subordinated Securities (whether of one or
more than one series) for which each trustee is acting would be treated as if
issued under a separate indenture.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of, premium, if any, and interest, if any, for each series of
Subordinated Securities will be payable, and the Subordinated Securities will be
exchangeable and transfers thereof will be registrable, at the office of Bankers
Trust at Four Albany Street, New York, New York 10006, provided that, unless
other arrangements are made, payments of interest may be made by check mailed to
the address of the person entitled thereto as it appears in the Security
Register.
LIMITATIONS ON CONSOLIDATION, MERGER AND SALE OF ASSETS
MCI may not consolidate with or merge into any other corporation, or convey,
transfer or lease its properties and assets substantially as an entirety to, any
Person, unless (a) the successor entity is a corporation organized and existing
under the laws of the United States of America or any political subdivision or
State thereof and expressly assumes MCI's obligations on all the Securities and
Coupons relating thereto and under the Subordinated Indenture; and (b) after
giving effect to such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, would
occur and be continuing.
SUBORDINATION
The payment of the principal of, premium, if any, and interest on the
Subordinated Securities will be subordinated in right of payment, as set forth
in the Subordinated Indenture, to the prior payment in full of all Senior
Indebtedness of MCI, whether outstanding on the date of the Subordinated
Indenture or thereafter incurred. Senior Indebtedness is defined in the
Subordinated Indenture as any liability or obligation of MCI (whether incurred
directly by MCI, by assumption or otherwise) (i) for money borrowed (except as
indicated below), or (ii) arising under a lease of property, equipment or other
assets which, pursuant to generally accepted accounting principles then in
effect, is classified upon the balance sheet of MCI or any subsidiary of MCI as
a liability of MCI or such subsidiary, or (iii) arising under an express written
guaranty by MCI of the liability or obligation of another (including any
subsidiary of MCI) of the type described in clauses (i) or (ii) above, or (iv)
arising under an express written guaranty by MCI of the liability or obligation
of another (including any subsidiary of MCI), where the liability or obligation
of MCI is, by the express terms of the guaranty, superior in right of payment to
the Subordinated Securities, or (v) created, incurred or assumed by MCI in
connection with the acquisition
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of any other business, where, but only if, the liability or obligation of MCI
is, by the express terms of the agreement or instrument creating or evidencing
such liability or obligation of MCI, superior in right of payment to the
Subordinated Securities, unless, in each such case, it is provided in the
agreement or instrument creating or evidencing such liability or obligation of
MCI or pursuant to which such liability or obligation is outstanding, that such
liability or obligation is not superior in right of payment to the Subordinated
Securities. Any Convertible Subordinated Securities issued under the Convertible
Indenture do not constitute Senior Indebtedness with respect to the Subordinated
Securities and will rank on a parity with the Subordinated Securities in right
of payment. As of September 30, 1994, the aggregate amount of Senior
Indebtedness was approximately $3,108 million. See also "The
Securities-Explanatory Statement".
By reason of the subordination described above, in the event of insolvency,
creditors of MCI who are not holders of Senior Indebtedness or of the
Subordinated Securities may recover less, ratably, than holders of Senior
Indebtedness, and may recover more, ratably, than the holders of the
Subordinated Securities.
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DESCRIPTION OF CONVERTIBLE SUBORDINATED SECURITIES
REFERENCE IS MADE TO THE EXPLANATORY STATEMENT ON PAGE 3 OF THIS PROSPECTUS
The Convertible Subordinated Securities are to be issued under the
Convertible Indenture. The following description of the Convertible Indenture
and summaries of certain provisions thereof do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all
provisions of the Convertible Indenture, including the definitions therein of
certain terms. Wherever particular sections of, or terms defined in, the
Convertible Indenture are referred to, such sections or defined terms are
incorporated herein by reference.
GENERAL
The Convertible Indenture provides that there may be more than one trustee
under the Convertible Indenture, each with respect to one or more different
series of Convertible Subordinated Securities. In the event that there is more
than one trustee under the Convertible Indenture, the powers and trust
obligations of each trustee as described herein shall extend only to the one or
more series of Convertible Subordinated Securities for which it is trustee. The
effect of the provisions contemplating that at a particular time there might be
more than one trustee acting is that, in that event, those Convertible
Subordinated Securities (whether of one or more than one series) for which each
trustee is acting would be treated as if issued under a separate indenture.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
principal of, premium, if any, and interest, if any, for each series of
Convertible Subordinated Securities will be payable, and the Convertible
Subordinated Securities will be exchangeable, transfers thereof will be
registrable and may be presented for conversion, at the office of Bankers Trust
at Four Albany Street, New York, New York 10006, provided that, unless other
arrangements are made, payments of interest may be made by check mailed to the
address of the person entitled thereto as it appears in the Security Register.
LIMITATIONS ON CONSOLIDATION, MERGER AND SALE OF ASSETS
MCI may not consolidate with or merge into any other corporation, or convey,
transfer or lease its properties and assets substantially as an entirety to, any
Person, unless (a) the successor entity is a corporation organized and existing
under the laws of the United States of America or any political subdivision or
State thereof and expressly assumes MCI's obligations on all the Securities and
Coupons relating thereto and under the Convertible Indenture and (b) after
giving effect to such transaction, no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, would
occur and be continuing.
SUBORDINATION
The payment of the principal of, premium, if any, and interest on the
Convertible Subordinated Securities will be subordinated in right of payment, as
set forth in the Convertible Indenture, to the prior payment in full of all
Senior Indebtedness of MCI, whether outstanding on the date of the Subordinated
Indenture or thereafter incurred. Senior Indebtedness is defined in the
Convertible Indenture as any liability or obligation of MCI (whether incurred
directly by MCI, by assumption or otherwise) (i) for money borrowed (except as
indicated below), or (ii) arising under a lease of property, equipment or other
assets which, pursuant to generally accepted accounting principles then in
effect, is classified upon the balance sheet of MCI or any subsidiary of MCI as
a liability of MCI or such subsidiary, or (iii) arising under an express written
guaranty by MCI of the liability or obligation of another (including any
subsidiary of MCI) of the type described in clauses (i) or (ii) above, or (iv)
arising under an express written guaranty by MCI of the liability or obligation
of another (including any subsidiary of MCI), where the liability or obligation
of MCI is, by the express terms of the guaranty, superior in right of payment to
the Convertible Subordinated Securities, or (v) created,
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incurred or assumed by MCI in connection with the acquisition of any other
business, where, but only if, the liability or obligation of MCI is, by the
express terms of the agreement or instrument creating or evidencing such
liability or obligation of MCI, superior in right of payment to the Convertible
Subordinated Securities, unless, in each such case, it is provided in the
agreement or instrument creating or evidencing such liability or obligation of
MCI or pursuant to which such liability or obligation is outstanding, that such
liability or obligation is not superior in right of payment to any Convertible
Subordinated Securities. Any Subordinated Securities issued under the
Subordinated Indenture do not constitute Senior Indebtedness with respect to the
Convertible Subordinated Securities and will rank on a parity with the
Convertible Subordinated Securities in right of payment.
By reason of the subordination described above, in the event of insolvency,
creditors of MCI who are not holders of Senior Indebtedness or of the
Convertible Subordinated Securities may recover less, ratably, than holders of
Senior Indebtedness, and may recover more, ratably, than the holders of the
Convertible Subordinated Securities. As of September 30, 1994, the aggregate
amount of Senior Indebtedness was approximately $3,108 million. See "The
Securities-Explanatory Statement".
CONVERSION
If any Convertible Subordinated Security is to be issued, certain terms and
provisions with respect thereto will be set forth in a Convertible Subordinated
Security Prospectus Supplement (a "Convertible Prospectus Supplement"). To the
extent that the description set forth herein is inconsistent with such terms and
provisions, such terms and provisions shall govern with respect to any
Convertible Subordinated Security.
Except as set forth in the applicable Convertible Prospectus Supplement, the
holders of Convertible Subordinated Securities will be entitled at any time on
or prior to the close of business on the date set forth in the applicable
Convertible Prospectus Supplement, subject to prior redemption, to convert such
Convertible Subordinated Securities or portions thereof (which are $1,000 or
integral multiples thereof) into Common Stock of the Company at the conversion
price set forth on the cover page of such Convertible Prospectus Supplement. No
adjustment will be made on conversion of any Debenture for interest accrued
thereon or for dividends on any Common Stock issued. If any Convertible
Subordinated Security is converted between a record date for the payment of
interest and the next succeeding interest payment date, such Convertible
Subordinated Security must be accompanied by funds equal to the interest payable
to the registered holder on such interest payment date on the principal amount
so converted. The Company is not required to issue fractional interests in
Common Stock upon conversion of Convertible Subordinated Securities and, in lieu
thereof, will pay a cash adjustment based upon the market price of the Common
Stock on the last business day prior to the date of conversion. In the case of
Convertible Subordinated Securities called for redemption, conversion rights
will expire at the close of business on the redemption date.
Also except as set forth in the applicable Convertible Prospectus
Supplement, the conversion price is subject to adjustment as set forth in the
Convertible Indenture in certain events, including the issuance of dividends on
the Company's Common Stock payable in its Common Stock: subdivisions,
combinations and certain reclassifications of the Common Stock; certain
consolidations, mergers and sales of the property of the Company; the issuance
to all holders of Common Stock of certain rights or warrants entitling them to
subscribe for Common Stock at less than the then current market price (as
defined) of the Common Stock; and the distribution to all holders of Common
Stock of evidences of indebtedness or of securities of the Company or of assets
(other than cash dividends or cash distributions payable out of consolidated net
earnings or retained earnings). No adjustment in the conversion price will be
required unless such adjustment would require a change of at least 1% in the
price then in effect; provided however, that any adjustment that would otherwise
be required to be made shall be carried forward and taken into account in any
subsequent adjustment. Except as stated above, the conversion price will not be
adjusted for the issuance of Common Stock or any securities convertible into
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or exchangeable for Common Stock, or carrying the right to purchase any of the
foregoing, in exchange for cash, property or services. The Convertible Indenture
will provide that in case of the reclassification or change in the outstanding
shares of Common Stock, or the consolidation or merger of the Company with or
into another corporation which is effected in such a way that holders of Common
Stock are entitled to receive stock, securities or property (including cash)
with respect to or in exchange for Common Stock, or the sale of conveyance of
its property as an entirety or substantially as an entirety to another
corporation, a supplemental indenture shall be executed providing that the
holder of a Convertible Subordinated Security shall have the right to convert
such Convertible Subordinated Security into the kind and amount of shares, of
stock or other securities or property (including cash) receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of the number of shares of Common Stock which would have been issuable upon
conversion of such Convertible Subordinated Security immediately prior thereto.
Except as set forth in the applicable Convertible Prospectus Supplement, any
Convertible Subordinated Securities called for redemption, unless surrendered
for conversion on or before the close of business on the redemption date, are
subject to being purchased from the holder of such Convertible Subordinated
Securities at the redemption price by one or more broker-dealers or other
purchasers who may agree with the Company to purchase such Convertible
Subordinated Securities and convert them into Common Stock of the Company.
In the event of a taxable distribution to holders of Common Stock which
results in an adjustment of the conversion price, the holders of the Convertible
Subordinated Securities may, in certain circumstances, be deemed to have
received a distribution subject to Federal income tax as a dividend. See the
Prospectus Supplement or Supplements relating to such Securities.
DESCRIPTION OF CAPITAL STOCK
MCI has authority to issue 2,550,000,000 shares of capital stock, par value
$.10 per share, consisting of 2 billion shares of Common Stock, 500 million
shares of Class A Common Stock ("Class A Common Stock") and 50 million shares of
Preferred Stock ("Preferred Stock"). At September 30, 1994, there were 544
million shares of Common Stock outstanding (net of treasury shares), 83 million
shares of Common Stock contingently issuable upon the exercise of options, 136
million shares of Class A Common Stock outstanding and no shares of Preferred
Stock outstanding. The board of directors of MCI has authority (without action
by its stockholders) to issue the authorized and unissued Preferred Stock in one
or more series and, within certain limitations, to determine the voting rights,
preferences as to dividends and in liquidation, conversion and other rights of
each such series.
Dividend Rights. Dividends may be paid on the Common Stock out of funds
legally available therefor when, as and if declared by MCI's board of directors.
Since May 1990, the board of directors has declared semi-annual cash dividends
(adjusted for the effect of a two-for-one stock split in July 1993) of $.025 per
share of Common Stock. The holders of Class A Common Stock are entitled to
receive out of funds legally available therefor when, as and if declared by
MCI's board of directors, dividends equal to the aggregate per share amount of
any dividend (other than a dividend payable in shares of Common Stock) paid on
the Common Stock, and MCI shall declare and pay such a dividend on the Class A
Common Stock at the same times that it declares and pays any dividend on the
Common Stock.
Voting Rights. On all propositions except the election of directors, holders
of Common Stock and Class A Common Stock may cast one vote for each share on any
matter in respect of which the holders of Common Stock are entitled to vote and
the holders of Common Stock and Class A Common Stock vote together as a single
class.
MCI's board of directors consists of thirteen persons, of whom two are
presently elected by the holders of Class A Common Stock. The holders of the
Class A Common Stock, voting together with the
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holders of any series of Preferred Stock that is accorded the right (the "Class
A Preferred Stock", and together with the Class A Common Stock, the "Class A
Shares") as a separate class, are entitled to elect a percentage of the total
number of directors (the "Class A Directors") that is equal to the percentage of
the total voting power of all voting securities of MCI that is represented by
the Class A Shares, except that if the Class A Shares' voting power represents
between 15% and 20% of the total voting power of all voting securities, the
holders of Class A Shares are entitled to elect 20% of the total number of
directors. As of the date of this Prospectus, all of the outstanding shares of
Class A Common Stock are owned by British Telecommunications plc ("BT"). The
Class A Directors are elected for a one year term. The holders of Class A Shares
may remove any Class A Director by the affirmative vote of (i) not less than
four-fifths of the holders of all outstanding shares entitled to vote thereto
if for cause, or (ii) not less than a majority of the outstanding shares of
Class A Common Stock if without cause provided that, if less than all Class A
Directors are to be removed, no Class A Director may be removed without cause
if the votes cast against such director's removal would be sufficient to elect
such director if then cumulatively voted at an election of all Class A
Directors.
The balance of MCI's board of directors is divided into three classes, each
class as nearly equal in number to the other classes as the then total number of
directors (excluding the Class A Directors) permits. As of the date of this
Prospectus, two of the three classes each have four directors and one class has
three directors. The members of each class of directors are elected for
three-year terms by the holders of Common Stock. In voting upon the election of
these directors, voting is cumulative. Each holder of Common Stock has the right
to cast as many votes in the aggregate as equals the number of votes to which
that stockholder is entitled on other matters multiplied by the number of
directors to be elected to the classes. Each holder of Common Stock may cast the
whole number of votes for one candidate or may distribute votes among the
candidates, as he or she chooses. The holders of Common Stock may remove any
director (excluding Class A Directors) for cause by an affirmative vote of four-
fifths of the outstanding shares of Common Stock.
MCI's Certificate of Incorporation provides that so long as any shares of
Class A Common Stock are outstanding, MCI shall not, without the written consent
or affirmative vote of the holders of a majority of the shares of Class A Common
Stock (a) amend its Certificate of Incorporation so as to affect adversely the
rights of holders of Class A Common Stock; (b) effect any Business Combination
(as defined in the Certificate of Incorporation) prior to September 30, 1998;
(c) issue any series or class of capital stock having either (i) more than one
vote per share (other than pursuant to the Rights Plan described below), or (ii)
a class vote on any matter, except as required by Delaware corporate law or to
the extent holders of Preferred Stock may have the right, voting separately as a
class, to elect a number of directors upon the occurrence of a default in
payment of dividends or redemption price; (d) adopt a stockholder rights plan or
amendment of the Rights Plan that would adversely affect any holder of Class A
Common Stock in relation to the Rights Plan; (e) issue, subject to certain
exceptions, voting securities representing voting power in excess of (i) 10% of
the aggregate voting power of MCI's outstanding voting securities as of the date
of such issuance, or (ii) 15% of the aggregate voting power of the average
number of MCI's voting securities outstanding over a rolling three-year period;
(f) issue voting securities (other than issuances (i) on a pro rata basis to
all holders of a class or series of capital stock, (ii) upon the exercise of
Rights under the Rights Plan, or (iii) upon exercise of any option or options to
purchase voting securities granted in connection with the execution of a
definitive agreement providing for any business combination) to any person
(other than a holder of Class A Common Stock) that beneficially owns, or as a
result thereof would beneficially own, more than 5% of MCI's then outstanding
voting securities, and transactions with any person that beneficially owns more
than 5% of MCI's then outstanding shares of capital stock, other than
transactions (i) applicable on an equal basis to all holders of a class or
series of stock generally, (ii) in accordance with the Rights Plan, or (iii)
relating to any business combination effected after September 30, 1998; (g)
effect any single or related series of acquisitions of businesses or assets or,
with certain exceptions, investments therein pursuant to which the aggregate
purchase price paid will exceed 20% (or 5% if such acquisition or investment is
in a business unrelated to all telecommunications and other electronic
information services
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and equipment for the provision of such services including, without
limitation, all forms of telecommunications access and egress (landline
and wireless), and value-added consumer and business services generated
through or as a result of underlying telecommunications services using
all technology (voice, data and image) and physical transport, network
intelligence, and software applications, and including, without limitation,
(i) information processing, (ii) systems integration and outsourcing,
(iii) transaction processing and (iv) cable television) of the market
capitalization of MCI at the time MCI executes a definitive agreement to
effect such acquisition or investment; (h) except for a sale of all or
substantially all of the assets of MCI, effect any single or related
series of sales, transfer or other dispositions or encumbrances of assets
having a fair market value in excess of 15% of the aggregate fair market
value of MCI's total assets at the time MCI executes a definitive agreement to
effect such transaction; (i) incur indebtedness for money borrowed that would
cause MCI's ratio of debt-to-total capitalization to exceed 65%; and (j) declare
any extraordinary cash dividends or other distribution to holders of any class
or classes, and/or any series thereof, of capital stock in excess of 5% of MCI's
market capitalization at the time of such dividend or other distribution.
MCI's Certificate of Incorporation also requires the written request of the
holders of not less than two-thirds of the outstanding shares entitled to vote
in the elections of directors to call a special meeting of stockholders and the
affirmative vote of not less than four-fifths of the outstanding shares (a) to
make, alter, amend or repeal by-laws by stockholder action; or (b) to effect any
changes in the provisions of the Certificate of Incorporation relating to (i)
cumulative voting; (ii) the making, altering, amending or repealing of by-laws
by stockholder action, and (iii) the calling of special meetings by
stockholders. MCI's by-laws require that notice of any proposed nominations for
election of directors (other than by the board itself) be given to MCI not less
than 60 day prior to the first anniversary of the date of the last meeting of
stockholders at which directors were elected.
Liquidation Rights and Other Provisions. After distribution in full of the
preferential amount to be distributed to the holders of any outstanding
Preferred Stock upon any voluntary or involuntary liquidation, dissolution or
winding-up of MCI, the holders of Common Stock and Class A Common Stock are
entitled to receive pro rata, on a share-for-share basis, the remaining assets
of MCI available for distribution to stockholders.
The Common Stock has no preemptive or conversion rights. The Common Stock
and Class A Common Stock are not redeemable (and there are no sinking fund
provisions therefor), except in the event that a holder whose continued holding
of such stock, in the judgment of the board of directors, may result in the loss
of or failure to secure the renewal of any license or franchise from any
governmental agency held by MCI to conduct its business, which license or
franchise is conditioned upon some or all of the holders of the stock of MCI
possessing prescribed qualifications. All outstanding shares of Common Stock
are, and the shares of Common Stock issuable upon conversion of the Convertible
Subordinated Securities will be, when issued pursuant to the terms of the
Convertible Indenture, fully paid and not liable for further calls or
assessments.
The Class A Common Stock has no preemptive rights, except that if MCI issues
voting securities, BT, so long as BT's aggregate voting power of all outstanding
voting securities of MCI is at least 10%, will have the right, exercisable in
whole or in part, to acquire from MCI an amount of such voting securities to
maintain its aggregate voting power at the same percentage prior to the issuance
of such voting securities; provided, however, such equity purchase right will
not apply (i) to grants of any options or any other rights to acquire voting
securities pursuant to MCI's employee benefit plans, (ii) upon the exercise or
exchange of any Rights, (iii) to issuances of shares of Common Stock upon the
conversion or exercise of any options, warrants, rights or other securities
convertible into or exercisable for Common Stock that are outstanding as of
September 30, 1994 to the extent that an equal number of outstanding shares of
Common Stock are repurchased by MCI through open market purchases or otherwise
within 90 days after the time that BT would otherwise be entitled to equity
purchase rights,
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(iv) upon the conversion or exercise of any options, warrants, rights or other
securities convertible into or exercisable for such voting securities, the
issuance of which was subject to this equity purchase right, (v) to certain de
minimis offerings for consideration other than cash, (vi) to the reissuance of
such voting securities purchased by MCI subsequent to September 30, 1994, (vii)
issuances of any voting securities to BT or any of its affiliates and (viii) any
pro rata stock split, stock dividend, or other combination or reclassification
of any capital stock of MCI. The Class A Common Stock is automatically converted
into Common Stock on a one-for-one basis if (i) it is transferred to a party not
affiliated with BT, (ii) the voting power of the Class A Common Stock becomes
less than 10% of the total voting power of all outstanding voting securities of
MCI, or (iii) if the holders of Class A Common Stock have transferred more than
25% of their voting securities of MCI and hold less than 15% of the total voting
power of all outstanding voting securities of MCI, or upon the occurrence of
certain other events.
Rights Plan. On September 7, 1994, the board of directors of MCI declared a
dividend of one preferred share purchase right (a "Right") for each outstanding
share of Common Stock and Class A Common Stock (collectively, the "Common
Shares") to the holders of record on October 11, 1994. Prior to the earlier of
(i) the Distribution Date (as defined below), (ii) the redemption of the Rights
and (iii) the expiration of the Rights and, in some instances, after the
Distribution Date and prior to the earlier of the redemption of the Rights and
the expiration of the Rights, the Rights will also be attached to all future
issuances of Common Shares. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of Series E Junior
Participating Preferred Stock, par value $.10 per share (the "Preferred
Shares"), of MCI at an initial price of $100 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment.
The Rights will become exercisable on the date (the "Distribution Date")
that is the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons have acquired beneficial
ownership of 10% or more of the outstanding Common Shares (more than 20.1% of
the outstanding Common Shares in the case of share acquisitions by BT), subject
to certain exceptions, (an "Acquiring Person"), or (ii) 10 business days (or
such later date as may be determined by action of the board of directors prior
to such time as any person or group of affiliated persons becomes an Acquiring
Person) following the commencement or announcement of an intention to make a
tender offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 10% or more of the outstanding
Common Shares (more than 20.1% of the outstanding Common Shares in the case of a
tender offer or exchange offer commenced or announced by BT). BT is not deemed
an Acquiring Person solely by virtue of the shares of Class A Common Stock it
presently owns.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, each holder of a Right (other than Rights
beneficially owned by the Acquiring Person, which will become void), will
thereafter have the right, subject to certain restrictions, to receive upon
exercise in lieu of Preferred Shares that number of shares of Common Stock
(or, at the option of MCI, that number of one one-hundredth of Preferred
Shares) having a market value equal to two times the exercise price of the
Right.
In the event that, after a person or group has become an Acquiring Person,
MCI is acquired in a merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold, proper provision will
be made so that each holder of a Right (other than Rights beneficially owned by
an Acquiring Person, which will have become void) will thereafter have the right
to receive, upon the exercise thereof at the then current exercise price, that
number of shares of common stock of the acquiring company which at the time of
such transaction will have a market value equal to two times the exercise price
of the Right.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Shares, (ii) upon
the
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grant to holders of the Preferred Shares of certain rights, options or warrants
to subscribe for or purchase Preferred Shares at a price, or securities
convertible into Preferred Shares with a conversion price, less than the then
current market price of the Preferred Shares, or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in preferred shares) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights is subject to adjustment in the event of
a stock dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Prior to the Distribution Date, the Rights will be transferred with and only
with the Common Shares. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), new Common Share certificates issued upon
transfer or new issuances of Common Shares will contain a notation incorporating
the Rights by reference.
The Rights are not exercisable prior to the Distribution Date. The Rights
will expire on September 30, 2004, unless extended or unless the Rights are
earlier redeemed or exchanged by MCI.
At any time prior to the time an Acquiring Person becomes such, the board of
directors may redeem the Rights in whole, but not in part, at a price of $.01
per Right, provided that pursuant to MCI's Certificate of Incorporation, until
September 30, 1998, so long as any shares of Class A Common Stock remain
outstanding, such redemption will also require the affirmative vote of the
holders of 75% of all the Company's outstanding voting securities. In addition,
until September 30, 2004, MCI has agreed with BT that, without BT's consent, it
will not redeem the Rights unless it has followed certain auction procedures.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of MCI, including, without limitation, the right to vote or to
receive dividends.
For a full description of the existing provisions of the MCI capital stock
and the Rights, reference is made to the actual provisions of the Certificate of
Incorporation, by-laws and Rights Plan of MCI which have been filed with the
Commission as exhibits to the Registration Statement of which this Prospectus is
a part. The foregoing summary of MCI's capital stock and the Rights Plan is
subject to, and qualified in its entirety by, such reference.
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FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain United States federal
income tax consequences of the ownership and disposition of the Securities. The
discussion only addresses the tax consequences to persons who hold the
Securities as capital assets and does not deal with special classes of holders,
such as dealers in securities, financial institutions, insurance companies,
tax-exempt organizations or persons holding Securities as a hedge against
currency risks. In addition, the discussion does not address the tax
consequences of the ownership and disposition of any specific series of
Securities, which consequences may be affected by the particular terms of such
series of Securities, and may require additional discussion in a prospectus
supplement relating to such series of Securities. In particular, the discussion
does not address the tax consequences of Securities that are denominated in, or
indexed to, currencies other than the United States dollar or Securities that
are convertible into Common Stock of the Company. In all cases, persons
considering the purchase of Securities should consult their own tax advisors
concerning the application of United States federal income tax laws to their
particular situations as well as any consequences arising under the laws of any
other taxing jurisdiction.
UNITED STATES HOLDER
A United States Holder is a holder that is a citizen or resident of the
United States, a corporation or partnership created or organized in or under the
laws of the United States or any political subdivision thereof or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source. As used herein, the term "Non-United States Holder"
means a holder that is not a United States Holder.
Payments of Interest. Interest on a Security (other than interest included
in the stated redemption price at maturity of a Discount Security, described
below) will be taxable to a United States Holder as ordinary interest income at
the time it is accrued or is paid in accordance with the United States Holder's
method of accounting for tax purposes.
Original Issue Discount Securities. The following summary is a general
discussion of the United States federal income tax consequences to United States
Holders of Securities issued at an original issue discount ("Discount
Securities").
For United States federal income tax purposes, the excess of the stated
redemption price at maturity of a Discount Security over its issue price
(defined as the first price at which a substantial amount of the issue of
Discount Securities is sold for money) will be original issue discount if such
excess equals or exceeds 1/4 of 1 percent of the stated redemption price at
maturity of such Discount Security multiplied by the number of complete years to
its maturity. The stated redemption price at maturity of a Discount Security
includes its principal amount and all payments provided by the Discount Security
other than payments of "qualified stated interest". The term "qualified stated
interest" generally means stated interest that is unconditionally payable in
cash or property (other than debt instruments of the Company) at least annually
at a single fixed rate or at current values of (i) one or more qualified
floating rates, (ii) a single fixed rate and one or more qualified floating
rates, (iii) a single objective rate, or (iv) a single fixed rate and a single
objective rate that is a qualified inverse floating rate. A "qualified floating
rate" is any floating rate where variations in such rate can reasonably be
expected to measure contemporaneous variations in the cost of newly borrowed
funds in the currency in which the debt instrument is denominated, as well as
certain multiples of a qualified floating rate. An "objective rate" is a rate
that is not itself a qualified floating rate but which is determined using a
single fixed formula and which is based on one or more qualified floating rates,
on one or more rates where each rate would be a qualified floating rate for a
debt instrument denominated in a currency other than the currency in which the
debt instrument is denominated, on the yield or changes in the price of actively
traded personal property, or on a combination of such rates. A "qualified
inverse floating rate" is an objective rate that is equal to a fixed rate minus
a qualified floating rate, where variations in the rate can reasonably be
expected to inversely reflect contemporaneous variations in the cost of newly
20
<PAGE>
borrowed funds. A Security which has an issue price not less than its principal
amount may, nonetheless, be considered to have original issue discount. If
interest is included in the stated redemption price at maturity, it will be
accounted for under the original issue discount rules, rather than the holder's
method of accounting.
United States Holders of Discount Securities will have to include original
issue discount in income before the receipt of cash attributable to such income.
The amount of original issue discount includible in income by the initial holder
of a Discount Security and, subject to an adjustment, by any subsequent holder
is the sum of the daily portions of original issue discount with respect to the
Discount Security for each day during the taxable year or portion of the taxable
year on which such holder holds the Discount Security. The daily portion is
determined by allocating to each day of the relevant "accrual period" a pro rata
portion of an amount equal to the excess of (i) the product of (a) the "adjusted
issue price" of the Discount Security at the beginning of that accrual period,
and (b) the "yield to maturity" of the Discount Security (determined on the
basis of compounding at the close of each accrual period and properly adjusted
for the length of the accrual period), over (ii) the sum of the qualified stated
interest payments, if any, payable during such accrual period. For these
purposes, an "accrual period" is an interval of time with respect to which the
accrual of original issue discount is measured. Accrual periods may be of any
length and may vary in length over the term of the debt instrument, provided
that each accrual period is no longer than one year and each scheduled payment
of principal or interest occurs either on the final day of an accrual period or
on the first day of an accrual period. The "adjusted issue price" of the
Discount Security at the beginning of any accrual period is the issue price of
such Discount Security plus the accrued original issue discount for each prior
accrual period, reduced by any payments made on the Discount Security other than
payments of qualified stated interest. Under these rules, United States Holders
may have to include in income increasingly greater amounts of original issue
discount in successive accrual periods. The computation of original issue
discount on a Discount Security that is subject to repayment at the option of
the Holder or redemption at the option of the Company may be affected by rules
presuming the option to be exercised, with the result that the original issue
discount may be accrued as income over a shorter period.
United States Holders may, subject to certain limitations and exceptions,
elect to include in income all interest (including stated interest, acquisition
discount, original issue discount, de minimis original issue discount, market
discount, de minimis market discount, and unstated interest, as adjusted by any
amortizable bond premium or acquisition premium) that accrues on a debt
instrument by using the constant yield method applicable to original issue
discount.
Acquisition Premium. If a United States Holder purchases a Discount Security
at a premium, i.e., at a price in excess of the adjusted issue price, the amount
includible in income in each taxable year as original issue discount is reduced
by an amount equal to the original issue discount (as otherwise determined)
multiplied by a fraction, the numerator of which is such excess and the
denominator of which is the original issue discount for the period to maturity
after the Holder's purchase. If a United States Holder purchases a Discount
Security at a price in excess of its stated redemption price at maturity, such
excess may be deductible as amortizable bond premium (discussed below).
Short-Term Obligations. In general, an individual or other cash method
United States Holder of any Discount Security that matures one year or less from
the date of its issuance (a "Short-Term Obligation") is not required to accrue
original issue discount for United States federal income tax purposes unless it
elects to do so. United States Holders who report income for federal income tax
purposes under the accrual method and certain other United States Holders,
including banks and dealers in securities, are required to accrue the original
issue discount on such Discount Securities on a straight-line basis, unless an
election is made to accrue the original issue discount under the constant yield
method based on daily compounding. In the case of a United States Holder not
required and not electing to include the original issue discount in income
currently, any gain realized on the sale or maturity of a Short-Term Obligation
will be ordinary income to the extent of the original issue discount accrued on
a straight-line basis through the date of sale or maturity. United States
Holders who are not
21
<PAGE>
required and do not elect to accrue the original issue discount on a Short-Term
Obligation will be required to defer deductions for interest on borrowings
allocable to such a Short-Term Obligation in an amount not exceeding the accrued
discount until such accrued discount is included in income.
Amortizable Bond Premium. If a United States Holder of a Security purchases
it at a cost which is in excess of its stated redemption price at maturity, the
excess cost may be deductible by the purchaser as "amortizable bond premium" on
a constant yield basis over the remaining term of the Security. The deduction is
available only if an election is made by the purchaser or is in effect. The
election applies to all debt instruments held or subsequently acquired by the
electing purchaser. Amortizable bond premium must be treated as an offset to
interest income on the Security acquired, rather than as a separate deduction.
An electing purchaser's tax basis in a Security is reduced by the amount of bond
premium amortized with respect to the Security.
Market Discount. If a United States Holder of a Security (including, in some
instances, an initial holder) purchases it at a "market discount" and thereafter
realizes gain upon a disposition or a retirement of the Security, the lesser of
such gain or the portion of the market discount that accrues on a straight-line
basis (or, if the holder so elects, on a constant interest rate basis) while the
Security was held by such holder will be treated as ordinary interest income at
the time of such disposition or retirement. In addition, a holder may be
required to include in gross income, as ordinary interest income, accrued market
discount to the extent of partial principal payments received with respect to
the Security. In such case, the amount of accrued market discount to be
recognized at the time of the disposition or retirement of the Security will be
reduced accordingly.
"Market discount" is the amount by which (i) the revised issue price of a
Discount Security (i.e., the issue price increased by the sum of daily portions
of original issue discount for each prior accrual period), or (ii) the principal
amount (or the issue price, in the case of an initial holder) of a Security not
issued at a discount, exceeds the holder's basis in such Security immediately
after acquisition. The market discount will be deemed to be zero, however, if it
is less than 1/4 of 1 percent of the revised issue price of a Discount Security,
or of the principal amount of a Security not issued at a discount, multiplied by
the number of complete years from acquisition to maturity. If a holder makes a
gift of a Security or disposes of a Security in certain nonrecognition
transactions, accrued market discount, if any, will be recognized as if such
holder had sold such Security for a price equal to its fair market value. The
market discount rules also provide that a holder who acquires a Security at a
market discount may be required to defer a portion of any interest expense that
may otherwise be deductible on any indebtedness incurred or continued to
purchase or carry such Security until the holder disposes of the Security in a
taxable transaction.
A holder of a Security acquired at a market discount may elect to include
market discount in gross income as the discount accrues, either on a
straight-line basis or on a constant interest rate basis. This current inclusion
election, once made, applies to all market discount debt instruments acquired on
or after the first day of the first taxable year to which the election applies
and may not be revoked without the consent of the Internal Revenue Service. If a
holder of a Security makes such an election, the foregoing rules with respect to
the recognition of ordinary interest income on sales and other dispositions of,
and on the receipt of partial principal payments on, the Securities and with
respect to the deferral of interest deductions on indebtedness incurred or
continued to purchase or carry such Securities would not apply.
Purchase, Sale and Retirement. A United States Holder's tax basis for
determining gain or loss on a sale or other disposition of a Security will
generally be the United States Holder's cost increased by any original issue
discount included in income (and market discount, if any, if the United States
Holder elects to include the accrued market discount in income on an annual
basis) and decreased by the amount of any payments, other than qualified stated
interest payments, received and the amount of bond premium amortized with
respect to such Security. Gain or loss on the sale or redemption of a Security
will generally be long-term capital gain or loss if the Security has been held
for more than one
22
<PAGE>
year (except to the extent that gain represents accrued interest or market
discount not previously included in the United States Holder's income).
Information Reporting. The amount of interest paid on the Securities and the
amount of original issue discount accrued on Discount Securities held of record
by United States persons (other than corporations and other exempt United States
Holders) will be reported to the Internal Revenue Service. The amount of
original issue discount required to be reported to the Internal Revenue Service
may not be equal to the amount of original issue discount required to be
reported as taxable income by a United States Holder of such Discount Securities
who is not an original purchaser.
NON-UNITED STATES HOLDERS
Under present United States federal income tax law, and subject to the
discussion of backup withholding below, payments on the Securities by the
Company or any of its Paying Agents to any non-United States Holder will not be
subject to United States federal withholding tax, provided that (a) such Holder
does not actually or constructively own 10% or more of the total combined voting
power of all classes of stock of the Company entitled to vote, (b) such Holder
is not a controlled foreign corporation that is related to the Company through
stock ownership, (c) such Holder is not a bank with respect to which the holding
of the Security is treated as the extension of credit in the ordinary course of
its trade or business, (d) the payment is not treated as contingent interest,
excluded from the definition of portfolio interest, and (e) either(1) the
beneficial owner of the Security certifies to the Company or its agent, under
penalties of perjury, that it is a non-United States Holder and provides its
name and address, and U.S. taxpayer identification number, if any, or (2) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"financial institution") and that holds the Securities certifies to the Company
or its agent under penalties of perjury that such statement has been received
from the beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes the payor with a copy thereof. The certificate
may be made on a United States Internal Revenue Service Form W-8 or
substantially similar form. A certificate described in this paragraph is
effective only with respect to interest payments and payments representing
accrued original issue discount made to the certifying non-United States Holder
after the issuance of the certificate in the calendar year of its issuance and
the two immediately succeeding calendar years.
If a non-United States Holder is engaged in a trade or business in the
United States and interest and original issue discount on the Security are
effectively connected with the conduct of such trade or business, the non-United
States Holder, although exempt from the withholding tax discussed above, may be
subject to United States income tax on such interest and original issue discount
in the same manner as if it were a United States Holder. In addition, if such a
Holder is a foreign corporation, it may be subject to a branch profits tax equal
to 30% of its effectively connected earnings and profits for the taxable year,
as adjusted for certain items; for this purpose, interest and original issue
discount on a Security will be included in earnings and profits if the interest
and original issue discount are effectively connected with the conduct of the
United States trade or business of the Holder.
Any gain or income realized by a non-United States Holder upon retirement or
disposition of a Security (not including in such gain or income amounts
representing stated interest or accrued original issue discount, the U.S. tax
treatment of which is described above) will not be subject to United States
federal income tax if (i) such gain or income is not effectively connected with
a trade or business in the United States of the Holder of such Security and (ii)
in the case of an individual Holder, the Holder is not present in the United
States for a period or periods aggregating 183 days in the taxable year of the
retirement or disposition.
23
<PAGE>
BACKUP WITHHOLDING AND INFORMATION REPORTING
A 31% "backup" withholding tax and information reporting requirements apply
to certain payments of interest and original issue discount on an obligation,
and to proceeds of the sale of an obligation before maturity, to certain
non-corporate United States Holders. The Company, and/or any paying and/or
collection agent, including a broker, as the case may be, will be required to
withhold from any payment that is subject to backup withholding a tax equal to
31% of such payment unless the Holder furnishes its taxpayer identification
number (i.e., social security number in the case of an individual) in the manner
prescribed in applicable Treasury Regulations, certifies that such number is
correct, certifies (with respect to payments of interest and original issue
discount) as to no loss of exemption from backup withholding, and meets certain
other conditions. Backup withholding, however, in any event, generally does not
apply to payments to certain "exempt recipients" such as corporations. Its
applicability to non-United States Holders is discussed more fully below.
Under current Treasury Regulations, backup withholding and information
reporting will not apply to payments made by the Company or any paying agency
thereof (in its capacity as such) to a Holder of a Security with respect to
which the Holder has provided to the Company (and/or any paying and/or
collection agent, including a broker) required certification of its non-United
States status under penalties of perjury or has otherwise established an
exemption (provided that neither the Company nor such paying agency has actual
knowledge that the Holder is a United States Holder or the conditions of any
other exemption are not in fact satisfied). Such certificate may be made on a
United States Internal Revenue Service Form W-8 or substantially similar form.
If such payment is made to the beneficial owner of a Security by the non-United
States office of a foreign custodian, foreign nominee or other foreign agent of
such beneficial owner, or if the non-United States office of a foreign "broker"
(as defined in applicable Treasury Regulations) pays the proceeds of the sale of
a Security to the seller thereof, such nominee, custodian, agent or broker is
not required to backup withhold or file an information report with respect to
such payment (provided that such nominee, custodian, agent or broker derives
less than 50% of its gross income for certain specified periods from the conduct
of a trade or business in the United States and is not a controlled foreign
corporation for United States tax purposes). Payments made to the beneficial
owner by the non-United States office of other custodians, nominees or agents,
or the payment by the foreign office of other brokers, will not be subject to
backup withholding, but will be subject to information reporting unless the
custodian, nominee, agent or broker has documentary evidence in its records that
the beneficial owner or seller is not or was not, as the case may be, a United
States Holder and certain conditions are met or the beneficial owner or seller
otherwise establishes an exemption. Payments made to the beneficial owner by the
United States office of a custodian, nominee or agent, or a broker are subject
to both backup withholding and information reporting unless the beneficial owner
or seller certifies its non-United States status under penalties of perjury or
otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules from a payment to a
Holder would be allowed as a refund or a credit against such Holder's United
States federal income tax, provided that the required information is furnished
to the United States Internal Revenue Service.
24
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors directly or
through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities offered
thereby.
In connection with the sale of the Securities, dealers may receive
compensation from the Company or from purchasers of Securities for whom they may
act as agents, in the form of discounts, concessions or commissions. The dealers
which participate in the distribution of Securities may be deemed to be
underwriters under the Securities Act of 1933 (the "Act") and any discounts or
commissions received by them and any profit on the resale of Securities by them
may be deemed to be underwriting discounts and commissions under the Act. Any
such dealer will be identified and any such compensation will be described in
the appropriate Prospectus Supplement.
Under agreements entered into with the Company, underwriters, agents and
dealers which participate in the distribution of Securities may be entitled to
indemnification or contribution from the Company against certain liabilities,
including liabilities under the Act.
If so indicated in the appropriate Prospectus Supplement, the Company will
authorize underwriters, dealers or other persons acting as the Company's agents
to solicit offers by certain institutions to purchase Securities from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the conditions that (1) the purchase
of the Securities shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject, and (2) if the
Securities are also being sold to dealers acting as principals for their own
account, such dealers shall have purchased such Securities not sold by them for
delayed delivery. The underwriters, dealers and such other persons acting as the
Company's agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL OPINIONS
The legality of each issue of the Securities will be passed upon for the
Company by Kramer, Levin, Naftalis, Nessen, Kamin & Frankel, New York, New York,
and for the agents or underwriters by Brown & Wood, New York, New York.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Annual Report on Form 10-K for the fiscal year
ended December 31, 1993 have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
25
<PAGE>
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE
PRICING SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT AND THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE AGENTS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT, THE APPLICABLE PRICING SUPPLEMENT AND THE PROSPECTUS
DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-------------------
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
Description of Medium-Term Notes..... S-2
Certain Investment Considerations.... S-19
Plan of Distribution................. S-20
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
The Company.......................... 2
Ratio of Earnings to Fixed Charges... 3
Use of Proceeds...................... 3
The Securities....................... 3
Description of Senior Securities..... 9
Description of Subordinated
Securities......................... 11
Description of Convertible
Subordinated Securities.............. 13
Federal Income Tax Consequences...... 20
Plan of Distribution................. 25
Legal Opinions....................... 25
Experts.............................. 25
$1,000,000,000
MCI COMMUNICATIONS
CORPORATION
SENIOR/SUBORDINATED
MEDIUM-TERM NOTES
------------------------
PROSPECTUS SUPPLEMENT
------------------------
MERRILL LYNCH & CO.
CITICORP SECURITIES, INC.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
SALOMON BROTHERS INC
JANUARY , 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses payable in connection with the proposed sale of Debt
Securities covered hereby (other than any underwriting discounts and
commissions) are as follows:
Securities and Exchange Commission registration fee (actual)... $ 344,830
Printing and engraving expenses................................ 75,000
Legal fees and expenses........................................ 210,000
Accounting fees and expenses................................... 130,000
Trustee's fees and expenses.................................... 35,000
Blue Sky fees and expenses (including counsel fees)............ 50,000
Rating Agency Fees............................................. 200,000
Miscellaneous.................................................. 5,170
----------
Total...................................................... $1,050,000
----------
----------
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The registrant has in effect an insurance policy covering officers' and
directors' legal liability containing a maximum limit of $50 million per loss
per policy year, including legal fees and expenses, with retained liability for
each loss of $2,000,000 for the Company.
The registrant's Certificate of Incorporation, at Section 8, provides as
follows:
(a) No director of this corporation shall be personally liable to this
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided that this provision shall not eliminate or
limit the liability of a director (i) for any breach of the director's duty
of loyalty to this corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the General Corporation
Law of the State of Delaware, or (iv) for any transaction from which the
director derived an improper personal benefit. If the General Corporation
Law of the State of Delaware is amended after approval by the stockholders
of this paragraph (a) to authorize corporate action further limiting or
eliminating the personal liability of directors, then the liability of a
director of this corporation shall be limited or eliminated to the fullest
extent permitted by the General Corporation Law of the State of Delaware, as
so amended. No amendment or repeal of this paragraph (a) shall apply to or
have any effect on the liability or alleged liability of any director of
this corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
(b) This corporation shall, to the fullest extent permitted by Delaware
law, as in effect from time to time, indemnify all persons who are or were
directors, officers and employees of this corporation or any wholly-owned
subsidiary, and all such directors, officers and employees who, at the
request of this corporation, are or were at any time serving any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise in any capacity. This corporation may also indemnify all
other persons to the fullest extent permitted by Delaware law.
The General Corporation Law of the State of Delaware, at Section 145,
provides, in pertinent part, that a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving another
II-1
<PAGE>
corporation, partnership, joint venture, trust or other enterprise, at the
request of the corporation, against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Lack of
good faith, or lack of a reasonable belief that one's actions are in or not
opposed to the best interest of the corporation, or with respect to any criminal
action or proceeding, lack of reasonable cause to believe one's conduct was
unlawful is not presumed from the termination of any action, suit or proceeding
by judgement, order, settlement, conviction, or nolo contendere plea or its
equivalent. In addition, the indemnification of expenses (including attorney's
fees) is allowed in derivative actions, except no indemnification is allowed in
respect to any claim, issue or matter as to which any such person has been
adjudged to be liable to the corporation, unless and only to the extent the
Court of Chancery or the court in which such action or suit was brought decides
that indemnification is proper. To the extent that any such person succeeds on
the merits or otherwise, he shall be indemnified against expenses (including
attorneys' fees). The determination that the person to be indemnified met the
applicable standard of conduct, if not made by a court, is made by the board of
directors of the corporation by a majority vote of a quorum consisting of
directors not party to such an action, suit or proceeding or, if a quorum is not
obtainable or a disinterested quorum so directs, by independent legal counsel in
a written opinion or by the stockholders. Expenses (including attorneys' fees)
may be paid in advance upon the receipt of undertakings to repay. A corporation
may purchase indemnity insurance.
The above described indemnification and advancement of expenses, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and inure to the benefit of
such person's heirs, executors and administrators.
The registrant has indemnification agreements with each of its directors
which have been approved by stockholders. The indemnification under the
indemnification agreements differs from that provided in Section 8 of the
registrant's Certificate of Incorporation in the following ways: (i) the
registrant is obligated to advance litigation expenses to an indemnitee, subject
to reimbursement if the Reviewing Party (as defined in the indemnification
agreements) determines that the director would not be permitted such
indemnification under applicable laws; (ii) the registrant must prove that the
applicable standard of conduct has not been met for indemnification if the
registrant denies protection to a director; (iii) upon a potential change in
control (as defined in the indemnification agreements) the registrant is
required to contribute an amount sufficient to pay all claims for which the
indemnitee is entitled to be indemnified to a trust for the benefit of the
indemnitee (subject to an overall maximum amount on such trusts); (iv) a
subsequent board of directors, hostile to an indemnitee entitled to
indemnification, will not have the right to make a final determination that the
indemnitee has not met the required standard of care; and (v) the period of time
in which the registrant may sue an indemnitee for an action is limited to two
years from the date of accrual of such cause of action.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
Reference is made to the Distribution Agreement and the Underwriting
Agreement Basic Provisions which are incorporated by reference as Exhibit 1(a)
and 1(c), respectively, to this Registration Statement.
II-2
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
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<C> <S>
1.(a) --Distribution Agreement dated as of November 9, 1989. (Incorporated by reference
to Exhibit 1 to registrant's Amendment No. 1 to Registration Statement on Form
S-3, Reg. No. 33-31600.)
(b) --Form of Underwriting Agreement Basic Provisions. (Incorporated by reference to
Exhibit 1(a) to registrant's Current Report on Form 8-K dated January 19, 1993.)
3.(i) --Restated Certificate of Incorporation of MCI Communications Corporation filed
August 1, 1989, as amended. (Incorporated by reference to Exhibit 3(i) to
registrant's Current Report on Form 8-K dated October 4, 1994.)
(ii) --Amended and Restated By-laws of registrant.
4.(a) --Indenture, dated as of October 15, 1989, between registrant and Bankers Trust
Company. (Incorporated by reference to Exhibit 4(c) to registrant's Registration
Statement on Form S-3, Reg. No. 33-31600.)
(b) --Indenture, dated as of October 15, 1989, between registrant and Bankers Trust
Company. (Incorporated by reference to Exhibit 4(d) to registrant's Registration
Statement on (b) Form S-3, Reg. No. 33-31600.)
(c) --Supplemental Indenture, dated as of December 11, 1989, between registrant and
Bankers Trust Company. (Incorporated by reference to Exhibit 4(b) to
registrant's Current Report on Form 8-K dated December 11, 1989.)
(d) --Form of Indenture, dated as of January , 1995, between registrant and Citibank, N.A.
(e) --Form of Common Stock Certificate. (Incorporated by reference to Exhibit 4(e) to
registrant's Registration Statement on Form S-3, Reg. No. 33-37740.)
(f) --Form of Senior Fixed Rate Medium-Term Note.
(g) --Form of Senior Floating Rate Medium-Term Note.
(h) --Form of Subordinated Fixed Rate Medium-Term Note. (Incorporated by reference to
Exhibit 4(g) to registrant's Registration Statement on Form S-3, Reg. No.
33-31600.)
(i) --Form of Subordinated Floating Rate Medium-Term Note. (Incorporated by reference
to Exhibit 4(i) to registrant's Registration Statement on Form S-3, Reg. No.
33-31600.)
(j) --Form of Convertible Subordinated Debenture. (Incorporated by reference to
Exhibit A to Exhibit 4(d) to Amendment No. 1 to registrant's Registration
Statement on Form S-3, Reg. No. 33-31600.)
(k) --Rights Agreement dated as of September 30, 1994, between the registrant and
Mellon Bank, N.A. (Incorporated by reference to Exhibit 4(a) to registrant's
Current Report on Form 8-K dated October 4, 1994.)
5. --Opinion of Messrs. Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.
8. --Tax Opinion of Messrs. Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.
10.(a) --Revolving Credit Agreement, dated as of July 8, 1994 among registrant and the
banks party thereto. (Incorporated by reference to Exhibit 10(a) to registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994.)
(b) --Indenture, dated as of October 15, 1989, between registrant and Citibank, N.A.
(Incorporated by reference to Exhibit 4(e) to registrant's Registration
Statement on Form S-3, Reg. No. 33-31600.)
12. --Computation of ratio of earnings to fixed charges. (Incorporated by reference to
Exhibit 12 to registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994.)
23.(a) --Consent of Price Waterhouse LLP.
(b) --Consent of Messrs. Kramer, Levin, Naftalis, Nessen, Kamin & Frankel. (Contained
in the opinions of such counsel included as Exhibit 5 and Exhibit 8 to this
Registration Statement.)
25.(a) --Statement of Eligibility on Form T-1 of Bankers Trust Company.
(b) --Statement of Eligibility on Form T-1 of Bankers Trust Company.
(c) --Statement of Eligibility on Form T-1 of Citibank, N.A.
</TABLE>
II-3
<PAGE>
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 (the "Securities Act");
(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;
(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 (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") that are incorporated by reference by in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(5) That, for purposes of determining any liability under the Securities
Act, 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 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Washington and District of Columbia on
December 30, 1994.
MCI COMMUNICATIONS CORPORATION
By /s/ BERT C. ROBERTS, JR.
...................................
(Bert C. Roberts, Jr., Chairman)
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons on December 30, 1994 in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- ---------------------------------------------
<S> <C>
/s/ BERT C. ROBERTS, JR. Principal Executive Officer, Director
.............................................
(Bert C. Roberts, Jr.)
/s/ DOUGLAS L. MAINE Principal Financial Officer
.............................................
(Douglas L. Maine)
/s/ BRADLEY E. SPARKS Principal Accounting Officer
.............................................
(Bradley E. Sparks)
/s/ CLIFFORD L. ALEXANDER, JR. Director
.............................................
(Clifford L. Alexander, Jr.)
/s/ JUDITH AREEN Director
.............................................
(Judith Areen)
/s/ MICHAEL H. BADER Director
.............................................
(Michael H. Bader)
/s/ MICHAEL HEPHER Director
.............................................
(Michael Hepher)
/s/ RICHARD M. JONES Director
.............................................
(Richard M. Jones)
/s/ GORDON S. MACKLIN Director
.............................................
(Gordon S. Macklin)
............................................. Director
(Alfred Mockett)
/s/ C. B. ROGERS, JR. Director
.............................................
(C. B. Rogers, Jr.)
/s/ RICHARD B. SAYFORD Director
.............................................
(Richard B. Sayford)
/s/ GERALD H. TAYLOR Director
.............................................
(Gerald H. Taylor)
/s/ JUDITH WHITTAKER Director
.............................................
(Judith Whittaker)
/s/ JOHN R. WORTHINGTON Director
.............................................
(John R. Worthington)
</TABLE>
II-5
EXHIBIT 3(ii)
AMENDED AND RESTATED
BY-LAWS
OF
MCI COMMUNICATIONS CORPORATION
------------------------------
Article I
---------
OFFICES
-------
Section 1. Registered Office and Agent. The name of the
---------------------------
corporation's registered agent, and the address of its registered office, in the
State of Delaware are as follows: The Prentice-Hall Corporation System, Inc.,
32 Loockerman Square, Suite L-100, Dover, Delaware 19904.
Section 2. Principal Office. The principal office of the
----------------
corporation shall be in Washington D.C.
Section 3. Other Offices. The corporation may also have an office
-------------
or offices at such other place or places, within or without the State of
Delaware, as the board of directors may from time to time designate or the
business of the corporation may require.
Article II
----------
STOCKHOLDERS
------------
Section 1. Place of Annual Meeting. The annual meeting of the
-----------------------
stockholders shall be held at such place within or without the State of Delaware
as shall be determined by the board of directors and as shall be designated in
the notice of the meeting.
Section 2. Date of Annual Meeting. Commencing with the calendar
----------------------
year 1985, the annual meeting of the stockholders shall be held during the
months of April, May or June upon such date as may from time to time be
designated by the board of directors.
Section 3. Purpose of Annual Meeting. The annual meeting of the
-------------------------
stockholders shall be for the purpose of electing directors and for the
transaction of such other business as may properly be brought before the
meeting, notice of which shall be given in the notice of the meeting.
Section 4. Failure to Elect Directors at Annual Meeting. If the
--------------------------------------------
election of directors shall not be held on the day designated for any annual
meeting, or at any adjournment thereof, the board of directors shall cause
the election to be held at a special meeting of the stockholders as soon
thereafter as convenient. At such meeting the stockholders may elect
directors and transact other business with the same force and effect as at
an annual meeting.
<PAGE>
2
Section 5. Special Meetings. Special meetings of the stockholders
----------------
shall be held at such place within or without the State of Delaware as shall be
determined by the person or persons calling the meeting and as shall be
designated in the notice of the meeting. Special meetings of the stockholders
may be called by a majority of the whole board of directors or by the Chairman
of the Board of Directors (sometimes hereafter in these by-laws, the "Chairman")
and shall be called by the Chairman, the President or the Secretary at the
request, in writing, of stockholders owning at least two-thirds of the issued
and outstanding shares of capital stock of the corporation entitled to vote in
the election of directors, such shares being considered as one class for
purposes of this Section 5. Subject to the Certificate of Incorporation,
special meetings of the holders of any one or more classes, and/or one or more
series thereof, of capital stock of the corporation entitled to vote separately
as a class or classes with respect to any matter as required law or as provided
by the Certificate of Incorporation shall be held at such place within or
without the State of Delaware as shall be determined by the person or persons
calling the meeting and as shall be designated in the notice of the meeting.
Subject to the Certificate of Incorporation, special meetings of such holders
may be called by a majority of the directors elected by such class or classes,
and/or series thereof, of capital stock, a majority of the whole board of
directors or by the Chairman and shall be called by the Chairman, the President
or the Secretary at the request in writing of holders owning at least two-thirds
of the issued and outstanding shares of such class or classes, and/or series
thereof, of the capital stock of the corporation.
Section 6. Notice of Meetings and Adjourned Meetings. Unless
-----------------------------------------
otherwise provided by law, the Certificate of Incorporation or these by-laws,
not less than ten nor more than sixty days before any stockholders meeting, the
Chairman, the President, the Secretary or an Assistant Secretary shall give each
stockholder entitled to vote at the meeting written notice of the place, date
and hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Such notice shall be mailed to each
stockholder at his address as it appears on the corporation's records. When a
meeting is adjourned to another time or place, notice need not be given if the
time and place of the adjourned meeting are announced at the meeting at which
the adjournment is taken. At the adjourned meeting any business, which might
have been transacted at the original meeting, may be transacted. If the
adjournment is for a period of more than thirty days, or if, after the
adjournment, a new record date is fixed for the adjourned meeting, notice of the
adjourned meeting shall be given to each stockholder of record entitled to
vote. Except as otherwise expressly provided by statute, no publication of
any notice of a stockholders' meeting shall be required. No notice need be
given to any person with whom communications is unlawful.
<PAGE>
3
Section 7. Quorum. Except as otherwise provided by law or the
------
Certificate of Incorporation, the presence, in person or by proxy, of the
holders of record of shares entitled to cast a majority of the votes entitled to
be cast by the holders of all shares of the capital stock of the corporation
then issued and outstanding and entitled to vote at the meeting shall constitute
a quorum at all meetings of the stockholders. In the absence of a quorum at any
meeting or any adjournment thereof, a majority of those present in person or by
proxy and entitled to vote may adjourn the meeting from time to time.
Section 8. Organization. Meetings of the stockholders shall be
------------
presided over by the Chairman, or if he is not present, by the President, or if
neither the Chairman nor the President is present, by a chairman appointed by
the board of directors, or if such appointment has not been made, by a chairman
to be chosen by a majority of the stockholders entitled to vote who are present
in person or by proxy at the meeting. The Secretary of the corporation, or in
his absence, an Assistant Secretary, shall act as secretary of every meeting of
the stockholders but, if neither the Secretary nor an Assistant Secretary is
present, the chairman of the meeting shall choose any person present in person
thereat to act as secretary of the meeting.
Section 9. Voting.
------
(a) Except as otherwise provided by law, the Certificate of
Incorporation or these by-laws, at every meeting of stockholders,
each stockholder of the corporation entitled to vote at the meeting
shall have one vote in person or by proxy for each share of stock
having voting rights held by such stockholder. Any stockholder
entitled to vote may do so either in person or by proxy appointed
by an instrument in writing, subscribed by such stockholder or by
his attorney thereunto authorized and delivered to the secretary of
the meeting; provided, however, that no proxy shall be voted on
after three years from its date unless the proxy provides for a
longer period. Each stockholder entitled to express consent or
dissent to corporate action in writing without a meeting may
authorize another person or persons to act for such stockholder by
proxy; provided, however, that no proxy shall be acted upon after
three years from its date unless the proxy provides for a longer
period. Except as otherwise required by law, the Certificate of
Incorporation or these by-laws, all matters coming before any
meeting of the stockholders shall be decided by the vote of a
<PAGE>
4
majority of the votes entitled to be cast by the holders of all
issued and outstanding shares present in person or by proxy at the
meeting and entitled to vote, a quorum being present.
(b) Anything herein contained to the contrary
notwithstanding, with regard to the election of directors, each
holder of shares entitled to be voted with respect to the election
of directors shall be entitled to as many votes as shall equal the
number of votes which (except for this provision as to cumulative
voting) such holder would be entitled to cast for the election of
directors with respect to his shares multiplied by the number of
directors to be elected by him, and he may cast all of such votes
for a single director or may distribute them among the number to be
voted for, or for any two or more of them as he sees fit.
Section 10. Voting of Shares by Certain Holders.
-----------------------------------
(a) Shares standing in the name of another corporation,
domestic or foreign, may be voted by such officer, agent or proxy
as the by-laws of the other corporation may prescribe, or, in the
absence of an appropriate provision, as the board of directors of
the other corporation may determine.
(b) Shares standing in the name of a deceased person may be
voted by his administrator or executor. Shares standing in the
name of a guardian, conservator or trustee may be voted by such
fiduciary, but no guardian, conservator or trustee shall be
entitled, as such fiduciary, to vote shares held by him without a
transfer of such shares into his name.
(c) Shares standing in the name of a receiver may be voted
by the receiver. Shares held by or under the control of a receiver
may be voted by the receiver without transfer thereof into his name
if authority so to do is contained in an appropriate order of the
court by which the receiver was appointed.
(d) A stockholder whose shares are pledged shall be entitled
to vote the pledged shares unless, in the transfer by the pledgor
or the corporation's books, he has expressly empowered the pledgee
to vote thereon, in which case only the pledgee may vote thereon.
(e) Shares of its own capital stock belonging to the
corporation or to another corporation, if a majority of the shares
entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the corporation,
shall neither be entitled to vote nor be counted for quorum
purposes; provided, however, that nothing herein shall be
constituted as limiting the right of the corporation to vote
stock, including but not limited to its own capital stock, held
by it in a fiduciary capacity.
<PAGE>
5
(f) If shares are registered in the names of two or more
persons, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy
of the instrument or order appointing such persons or creating the
relationship so providing, their acts with respect to voting shall
have the following effect:
(1) if only one votes, his act binds all;
(2) if more than one votes, the act of the majority so
voting binds all;
(3) if the vote is evenly split, each fraction may vote
the stock proportionately unless otherwise ordered by a
court pursuant to the laws of the State of Delaware.
If an instrument showing that tenancy is held in unequal shares is
filed with the Secretary, a majority or even-split shall be
determined by interest.
Section 11. List of Stockholders. A complete list of the
--------------------
stockholders entitled to vote at each meeting of the stockholders, arranged in
alphabetical order and showing the address of each stockholder, shall be
prepared by the Secretary or other officer of the corporation having charge of
the stock ledger, at least ten days before the meeting. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city, town or village where the meeting is
to be held, which place shall be specified in the notice of the meeting, or, if
not so specified, at the place where the meeting is to be held, and the list
shall be produced and kept at the time and place of the meeting during the whole
time thereof for inspection by any stockholder who may be present.
Section 12. Inspectors. At any meeting of the stockholders,
----------
if the board of directors has not previously made the appointment, the chairman
of the meeting may appoint one or more persons as inspectors for such meeting.
Such inspectors shall ascertain and report the number of shares represented at
the meeting, based upon their determination of the validity and effect of
proxies; count all votes and report the results; and do all such other
acts as are proper to conduct the election and voting with impartiality and
fairness. Each report of an inspector shall be in writing and signed by him or
by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall be
the report of the inspectors. The report of the inspector or inspectors on the
number of shares represented at the meeting and the results of the voting shall
be prima facie evidence thereof.
----- -----
<PAGE>
6
Section 13. Informal Action by Stockholders. Except as
-------------------------------
otherwise provided by the Certificate of Incorporation, any action required to
be taken at a meeting of the stockholders, or any other action which may be
taken at a meeting of the stockholders, may be taken without a meeting,
without prior notice and without a vote, if a written consent, setting forth
the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to
vote were present and voted. Prompt notice of the taking of corporate action
without a meeting by less than unanimous written consent shall be given to
those stockholders who have not consented in writing.
Section 14. Nominations. Nominations for the election of
-----------
one or more directors may be made by the board of directors or by any
stockholder entitled to vote in the election of directors. Other than
nominations by the board of directors, such nominations shall be made by notice
in writing, delivered or mailed by first class United States mail, postage
prepaid, to the secretary of the corporation not less than sixty days prior to
the first anniversary of the date of the last meeting of stockholders of the
corporation held for the election of directors.
Each notice provided for in the second sentence of the prior
paragraph shall set forth (i) the name, age, business address and, if known,
residence address of each nominee proposed in such notice, (ii) the principal
occupation or employment of each such nominee, (iii) the number of shares of
stock of the corporation which are beneficially owned by each such nominee, and
(iv) such other information as would then be required by the Federal Securities
Laws and the Rules and Regulations promulgated thereunder in respect of an
individual nominated as a director of the corporation and for whom proxies are
solicited by the board of directors of the corporation.
<PAGE>
7
Article III
-----------
DIRECTORS
---------
Section 1. Powers, Number, Classes and Terms of Directors.
----------------------------------------------
(a) Except as otherwise provided by law or the Certificate
of Incorporation, the property, affairs and business of the
corporation shall be managed by its board of directors. The number
of directors of the corporation (exclusive of directors to be
elected by the holders of one or more classes, and/or one or more
series thereof, of capital stock (other than the Class A Common
Stock) of the corporation entitled to vote separately for directors
as a class or classes), including the directors to be elected by
the holders of the Class A Common Stock of the corporation
(sometimes hereafter in these by-laws, the "Class A Directors"),
shall be not less than three nor more than sixteen. The exact
number of directors shall be as determined from time to time by
resolution adopted by the affirmative vote of a majority of the
whole board. As used in these by-laws, the term "whole board"
shall mean the total number of directors which the corporation
would have if there were no vacancies. Until otherwise determined
by the board of directors, the number of directors constituting the
whole board shall be five.
(b) The board of directors (excluding the Class A Directors)
shall be divided into three classes, each class to be as nearly
equal in number to the other classes as the then total number of
directors constituting the whole board (excluding the Class A
Directors) permits, with the term of office of one class expiring
each year. At the annual meeting of stockholders to be held in
1970, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting of
stockholders, and directors of the second and third classes shall
be elected for terms expiring, respectively, at the second and
third next succeeding annual meetings. After the annual meeting of
stockholders to be held in 1970, each class of directors shall be
elected to hold office for a term of three years, that is, until
the then third next succeeding annual meeting of stockholders.
(c) Notwithstanding the provisions of paragraph (b) of this
Section 1, and except as otherwise required by law or the
Certificate of Incorporation, in the event that the holders of any
one or more classes, and/or one or more series thereof, of the
capital stock of the corporation shall be entitled, voting
separately as a class or classes, to elect one or more directors
of the corporation, the term or terms of the director or
directors elected shall expire at the next succeeding annual
meeting of stockholders.
<PAGE>
8
(d) Subject to the Certificate of Incorporation, no decrease
in the number of directors constituting the whole board shall
shorten the term of any incumbent director.
Section 2. Qualification of Directors. Directors need not be
--------------------------
stockholders of the corporation.
Section 3. Quorum and Effective Action. One-half of the whole
---------------------------
board, acting at a meeting duly assembled, shall constitute a quorum for the
transaction of business at such meeting. If at any meeting of the board of
directors a quorum shall not be present, a majority of the directors present
may, without further notice, adjourn the meeting from time to time until a
quorum shall have been obtained. Except as otherwise required by law, the
Certificate of Incorporation or these by-laws, all matters coming before any
meeting of the board of directors shall be decided by the vote of a majority of
directors present at the meeting, a quorum being present.
Section 4. Vacancies.
---------
(a) Except as provided in paragraph (b) of this Section 4,
and except as otherwise provided in the Certificate of
Incorporation as to the filling of vacancies occurring by reason of
removal by the stockholders, in the event of one or more vacancies
in the board of directors by reason of death, resignation, increase
in the authorized number of directors or otherwise, the remaining
directors, although less than a quorum, may by majority vote, or,
if there be but one director remaining, then the sole remaining
director, may elect a successor or successors to hold office until
the next election of the class or classes for which such successor
or successors shall have been elected.
(b) Notwithstanding the provisions of paragraph (a) of this
Section 4, and except as otherwise provided in the Certificate of
Incorporation as to the filling of vacancies occurring by reason of
removal by the stockholders, in the event that any director who has
been elected by the holders of one or more classes of the capital
stock (other than the Common Stock) of the corporation, and/or by
the holders of one or more series thereof, shall die, resign from
or otherwise vacate the board of directors, the resulting vacancy
shall, except as otherwise provided by law, be filled in the
manner provided in the Certificate of Incorporation, and the
successor so determined shall serve for the term likewise provided
in the Certificate of Incorporation.
<PAGE>
9
Section 5. Meetings. Meetings of the board of directors,
--------
annual, regular and special, shall be held at such place within or without the
State of Delaware as may from time to time be fixed by resolution of the board
of directors or as may be specified in the notice of meeting. Regular meetings
of the board of directors shall be held at such times as may from time to time
be fixed by resolution of the board of directors, and no notice (other than the
resolution) need be given as to any regular meeting. Special meetings may be
held at any time upon the call of the Chairman or at least two directors, by
oral, telephonic, telegraphic or facsimile notice duly given or sent at least
one hour, or by written notice sent by express mail at least one day, before the
meeting to each director; provided that all such notices to directors located
outside the United States shall be given or sent orally or by telephone,
telegraph or facsimile transmission. An annual meeting of the board of
directors shall be held without notice immediately following the annual meeting
of shareholders. Meetings may be held at any time without notice if all the
directors are present or if, at any time before or after the meeting, those not
present waive notice of the meeting in writing. Except as otherwise specified
in the notice thereof, or as required by law, the Certificate of Incorporation
or these by-laws, any and all business may be transacted at any meeting of the
board of directors.
Section 6. Attendance by Communications Equipment. Unless
--------------------------------------
otherwise restricted by the Certificate of Incorporation, members of the board
of directors or of any committee designated by the board may participate in a
meeting of the board or any such committee by means of conference telephone or
similar communications equipment whereby all persons participating in the
meeting can hear each other. Participation in any meeting by such means shall
constitute presence in person at such meeting. Any required notice of the place
of the meeting at which participation is by means of conference telephone or
similar communications equipment shall be sufficient if such notice designates
as the place of the meeting the place at which one or more of the participants
in the meeting is located at the time the meeting is held.
Section 7. Presumption of Assent. A director of the
---------------------
corporation who is present at a meeting of the board of directors at which
action on any corporate matter is taken shall be conclusively presumed to have
assented to the action taken unless his dissent shall be entered in the minutes
of the meeting or unless he shall file his written dissent to the action with
the person acting as the secretary of the meeting before adjournment thereof
or shall forward his written dissent by registered mail to the Secretary of
the corporation immediately after the adjournment of the meeting. The right
to dissent shall not apply to a director who voted in favor of the action.
<PAGE>
10
Section 8. Committees. The board of directors may, from
----------
among its own members, in its discretion and by the affirmative vote of a
majority of the whole board, designate one or more committees, each of such
committees to consist of one or more members. The committees designated by the
board shall have such powers and authority as shall be specified in the
resolution or resolutions whereby such committees are designated. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. No
committee shall have the power or authority of the board of directors in
reference to amending the Certificate of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions providing for the
issuance of shares of stock adopted by the board pursuant to paragraph (a) of
section 4 of the Certificate of Incorporation, fix the designations and any of
the preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any series of the same or any other class or classes of stock of the
corporation or fix the number of shares of any series of stock or authorize the
increase or decrease of the shares of any series), adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending these by-laws; and, unless the
resolution of the board of directors expressly so provides, no committee shall
have the power or authority to declare a dividend, to authorize the issuance of
stock or to adopt a certificate of ownership and merger. A majority of the
members of a committee may determine its action and fix the time and place of
its meetings, unless the board of directors shall otherwise provide. Each
action taken by any committee shall be reported in writing to the board of
directors. Special meetings of any committee may be called by the Chairman of
the Board of Directors upon the same notice, which need by given only to members
of the committee, as in Section 5 of this Article III provided with regard to
special meetings of the board of directors. The board of directors shall have
the power at any time to fill vacancies in, to change the membership of or to
discharge, any committee.
<PAGE>
11
Section 9. Dividends and Reserves. Subject to the laws of
----------------------
the State of Delaware and the Certificate of Incorporation, the board of
directors shall have full power to determine whether any, and if any, what part
of any, funds legally available for the payment of dividends shall be declared
in dividends and paid to the stockholders. The division of the whole or any
part of such funds legally available shall rest wholly within the lawful
discretion of the board of directors, and it shall not be required at any time,
against such discretion, to divide or pay any part of such funds among or to the
stockholders as dividends or otherwise. The board of directors may set apart,
out of funds legally available for the payment of dividends, a reserve or
reserves for any proper purpose, and may from time to time, in its absolute
judgment and discretion, increase, abolish, diminish and vary any reserve or
reserves so set apart.
Section 10. Informal Action. Any action required or
---------------
permitted to be taken at any meeting of the board of directors or any committee
thereof may be taken without a meeting if a written consent thereto is signed by
all members of the board or of the committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the board or the
committee.
Section 11. Compensation. The directors of the corporation
------------
shall receive such compensation for their services as directors and as members
of any committee designated by the board of directors as may be fixed from time
to time by the board of directors.
Article IV
----------
WAIVER OF NOTICE
----------------
Whenever, by law, the Certificate of Incorporation or these
by-laws, notice is required to be given, a written waiver thereof, signed by the
person entitled to notice, whether before or after the date of the meeting,
shall be deemed equivalent to notice. Attendance of a person at a meeting of
the stockholders, the board of directors or any committee designated by the
board of directors shall constitute a waiver of notice of the meeting, except
when the person attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the stockholders,
directors or any committee designated thereby need be specified in any written
waiver of notice unless so required by law, the Certificate of Incorporation or
these by-laws.
<PAGE>
12
Article V
---------
OFFICERS
--------
Section 1. Number. At its annual meeting, the board of
------
directors shall elect a Chairman of the Board of Directors, a Secretary and a
Treasurer and may, from time to time as the board deems proper, elect or appoint
a Vice Chairman of the Board of Directors, a President, one or more Vice
Presidents, Assistant Secretaries, Assistant Treasurers, other officers and
agents.
Section 2. Term and Removal. The term of office of each
----------------
officer shall be until the next annual meeting of the board of directors and
until his successor is elected or chosen, but any officer may be removed from
office, either with or without cause, at any time by the affirmative vote of a
majority of the whole board. A vacancy in any office arising from any cause may
be filled for the unexpired portion of the term by the board of directors.
Section 3. Powers and Duties. Each of the officers of the
-----------------
corporation shall, unless otherwise determined by the board of directors, have,
in addition to such powers and duties as generally pertain to his respective
office, such further powers and duties as may from time to time be determined
for him by the board of directors. Unless otherwise determined by the board of
directors, the Chairman, or in event that the office of Chairman is vacant, the
President, shall be the chief executive officer of the corporation.
Section 4. Voting of Securities Held by the Corporation.
--------------------------------------------
Unless otherwise determined by the board of directors, the Chairman, the
President or any Vice President shall each have full power and authority on
behalf of the corporation, to attend, act and vote at any meetings of security
holders of corporations in which the corporation is the holder of securities,
and, at such meetings or otherwise, shall possess and may exercise any and all
rights and powers incident to the ownership of such securities. The power and
authority to attend, act and vote at meetings shall include the power and
authority to consent or dissent, on behalf of the corporation, with respect to
securities of other corporations held by the corporation. The board of
directors may, by resolution, from time to time, confer like powers upon any
other person or persons.
<PAGE>
13
Article VI
----------
STOCK CERTIFICATES
------------------
Section 1. Form of Stock Certificates. The interest of each
--------------------------
stockholder of the corporation shall be evidenced by one or more certificates,
each certifying the number of shares of each class, and/or series thereof,
represented thereby, in such form, not inconsistent with the Certificate of
Incorporation, as the board of directors may from time to time prescribe.
Section 2. Execution and Issuance of Certificates of Stock.
-----------------------------------------------
Stock certificates shall be signed by the Chairman, the President or any Vice
President and by the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary. Any of or all of the signatures on a stock certificate,
including, without limitation, that or those of any transfer agent or registrar,
may be facsimile or facsimiles. In the event any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, such certificate may be issued by the
corporation with the same effect as if such officer, transfer agent or registrar
were the officer, transfer agent or registrar at the date of issue.
Section 3. Transfer of Certificate of Stock. All transfers
--------------------------------
of shares of the capital stock of the corporation shall be subject to the terms,
conditions and restrictions, if any, set forth in the Certificate of
Incorporation. Transfers of shares of the capital stock of the corporation
shall be made only on the books of the corporation by the registered holder
thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the corporation or a transfer agent or
a transfer clerk appointed as in Section 7 of this Article VI provided, and only
upon surrender of the certificate or certificates for such shares, properly
endorsed and the payment of all taxes thereon. Except as otherwise provided by
law, the Certificate of Incorporation or these by-laws, the person in whose name
shares of stock stand on the books of the corporation shall be deemed the owner
thereof for all purposes as regards the corporation. The board may, from time
to time, make such additional rules and regulations, not inconsistent with these
by-laws, as it may deem expedient concerning the issue, transfer and
registration of certificates for shares of the capital stock of the corporation.
Section 4. Fixing the Date for Determination of Stockholders
-------------------------------------------------
of Record. To determine the stockholders entitled to notice of or to vote at
- ---------
any meeting of stockholders or any adjournment thereof, or entitled to express
consent to corporate action in writing without a meeting, or entitled to receive
<PAGE>
14
payment of any dividend or any other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change, conversion or exchange
of stock or for the purpose of any other lawful action, the board of directors
may fix in advance a record date, which shall not be more than sixty nor less
then ten days before the date of such meeting, nor more than sixty days prior to
any other action. A determination of stockholders entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting
unless the board of directors fixes a new record date for the adjourned meeting.
Section 5. Failure to Fix Record Date. If no record date is
--------------------------
fixed in accordance with Section 4 of this Article VI:
(a) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day on which notice is given or if the
notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
(b) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting,
when no prior action by the board of directors is necessary, shall
be the day on which the first written consent is expressed.
(c) The record date for determining stockholders for any
other purpose shall be at the close of business on the day on which
the board of directors adopts the resolution relating thereto.
Section 6. Lost, Stolen or Destroyed Stock Certificates. No
--------------------------------------------
stock certificate representing shares of the corporation shall be issued in
place of any certificate alleged to have been lost, stolen or destroyed except
upon delivery to the corporation of such evidence as the board of directors may
in its discretion require. The board of directors may also require a bond to be
delivered to the corporation upon such terms and secured by such surety as the
board shall deem fit.
Section 7. Transfer Agent and Registrar. The board of
----------------------------
directors may appoint one or more transfer agents or one of more transfer clerks
and one or more registrars and may require all stock certificates to bear the
signature or signatures of any of them.
<PAGE>
15
Section 8. Examination of Books by Stockholders. The board
------------------------------------
shall have the power to determine, from time to time, whether and to what extent
and at what times and places and under what conditions and regulations the
accounts and books and documents of the corporation, or any of them shall be
open to the inspection of the stockholders; and no stockholder shall have the
right to inspect any account or book or document of the corporation except as
otherwise, and only to the extent, provided by law.
Article VII
-----------
FISCAL YEAR
-----------
The fiscal year of the corporation shall be as determined by the
board of directors of the corporation.
Article VIII
------------
CORPORATE SEAL
--------------
The corporate seal of the corporation shall consist of two
concentric circles, between which shall be the name of the corporation, and in
the center shall be inscribed the year of its incorporation and the words,
"Corporate Seal, Delaware."
Article IX
----------
AMENDMENTS
----------
These by-laws may be altered, amended or repealed, or new by-laws
(not inconsistent with any provision of law or the Certificate of Incorporation)
may be made, by the affirmative vote of a majority of the whole board at any
meeting of the board, subject to the power of the stockholders to alter or
repeal any by-laws made or altered by the board of directors. Except as
otherwise required by law or the Certificate of Incorporation, these by-laws may
be altered or repealed, or new by-laws (not inconsistent with any provision of
law or the Certificate of Incorporation) may be made by the stockholders only by
the affirmative vote of the holders of not less than four-fifths of the
outstanding shares (considered as one class for purposes of this Article IX)
entitled to vote thereon. Notice of the proposal to make, alter, amend or
repeal the by-laws of the corporation, or to make new by-laws, as the case may
be, shall be included in the notice of such meeting of the board of directors or
of the stockholders, as the case may be.
<PAGE>
16
Article X
---------
IDEMNIFICATION
--------------
Section 1. Indemnification. To the fullest extent permitted
---------------
by the General Corporation Law of the State of Delaware, the corporation shall
indemnify any current or former director, officer, employee or agent of the
corporation against all expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with any threatened, pending or completed action, suit or
proceedings, or any inquiry or investigation, brought by or in the right of the
corporation or otherwise, to which such person was or is a party or threatened
to be made a party by reason of his current or former position with the
corporation or by reason of the fact that such person is or was serving, at the
request of the corporation, as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise.
Section 2. Advancement of Expenses. Expenses (including
-----------------------
attorneys' fees) incurred by a current or former director or officer of the
corporation in defending any threatened or pending action, suit or proceeding
shall be paid by the corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if it shall be ultimately
determined that such person is not entitled to be indemnified by the corporation
under the Certificate of Incorporation, these by-laws, the General Corporation
Law of the State of Delaware or otherwise. Such expenses (including attorneys'
fees) incurred by other current or former employees or agents of the corporation
may be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
September 30, 1994
Exhibit 4(d)
MCI COMMUNICATIONS CORPORATION
TO CITIBANK, N.A., TRUSTEE
INDENTURE
Dated as of January __, 1995
SENIOR DEBT SECURITIES
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE ............................................................... 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION .................................................... 1
Section 101. Definitions ......................................... 1
Section 102. Compliance Certificates and Opinions................. 7
Section 103. Form of Documents Delivered to Trustee............... 8
Section 104. Notices etc. to Trustee and Company.................. 8
Section 105. Notices to Holders; Waiver .......................... 9
Section 106. Conflict with Trust Indenture Act ................... 9
Section 107. Effect of Headings and Table of Contents............. 9
Section 108. Successors and Assign ............................... 9
Section 109. Separability Clause ................................. 10
Section 110. Benefits of Indenture ............................... 10
Section 111. Governing Law ....................................... 10
Section 112. Legal Holidays ...................................... 10
Section 113. No Security Interest Created ........................ 10
Section 114. Limitation of Individual Liability .................. 10
ARTICLE TWO
DEBT SECURITY FORMS .................................................. 11
Section 201. Forms Generally ..................................... 11
Section 202. Forms of Trustee's Certificate of
Authentication...................................... 11
Section 203. Forms of Trustee's Certificate of
Authentication by an Authenticating Agent........... 12
ARTICLE THREE
THE DEBT SECURITIES................................................... 13
Section 301. Amount Unlimited; Issuable in Series................. 14
Section 302. Denominations ....................................... 14
Section 303. Execution, Authentication, Delivery, and
Dating ............................................ 14
Section 304. Temporary Debt Securities ........................... 16
Section 305. Registration; Registration of Transfer
and Exchange ....................................... 17
Section 306. Mutilated, Destroyed, Lost and
Stolen Debt Securities.............................. 20
Section 307. Payment of Interest; Interest Rights
Preserved .......................................... 21
Section 308. Cancellation ........................................ 23
Section 309. Computation of Interest ............................. 23
Section 310. Currency of Payments................................. 23
Section 311, Certain Discharges of Obligations.................... 24
Section 312. Certification by a Person Entitled to
Delivery of a Bearer Security ...................... 24
i
<PAGE>
ARTICLE FOUR
SATISFACTION AND DISCHARGE ........................................... 24
Section 401. Satisfaction and Discharge of Indenture.............. 24
Section 402. Application of Trust Money .......................... 25
Section 403. Indemnity ........................................... 26
ARTICLE FIVE
REMEDIES ............................................................. 26
Section 501. Events of Default ................................... 26
Section 502. Acceleration of Maturity;
Rescission and Annulment ........................... 27
Section 503. Collection of Indebtedness and Suits
for Enforcement..................................... 28
Section 504. Trustee May File Proofs of Claim .................... 29
Section 505. Trustee May EnforCe Claims Without
Possession of Debt Securities or Coupons............ 29
Section 506. Application of Money Collected ...................... 29
Section 507. Limitation on Suits ................................. 30
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest............. 31
Section 509. Restoration of Rights and Remedie ................... 31
Section 510. Rights and Remedies Cumulative ...................... 31
Section 511. Delay or Omission Not Waiver ........................ 31
Section 512. Control by Holders of Debt Securities................ 31
Section 513. Waiver of Past Defaults ............................. 32
Section 514. Undertaking for Costs ............................... 32
Section 515. Waiver of Stay or Extension Laws .................... 32
ARTICLE SIX
THE TRUSTEE........................................................... 32
Section 601. Certain Duties and Responsibilities................. 32
Section 602. Notice of Defaults ................................. 33
Section 603. Certain Rights of Trustee .......................... 34
Section 604. Not Responsible for Recitals or Issuance of
Debt Securities.................................... 34
Section 605. May Hold Debt Securities or Coupons................. 34
Section 606. Money Held in Trust ................................ 35
Section 607. Compensation and Reimbursement ..................... 35
Section 608. Disqualification; Conflicting Interests............. 35
Section 609. Corporate Trustee Required; Eligibility............. 35
Section 610. Resignation and Removal; Appointment of
Successor.......................................... 36
Section 611. Acceptance of Appointment by Successor.............. 37
Section 612. Merger, Conversion, Consolidation or
Succession to Business............................. 38
Section 613. Preferential Collection of Claims................... 38
Section 614. Appointment of Authenticating Agent................. 38
ii
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..................... 39
Section 701. Company to Furnish Trustee Names and
Addresses of Holders .............................. 39
Section 702. Preservation of Information; Communications
to Holders ........................................ 39
Section 703. Reports by Trustee ................................. 40
Section 704. Reports by Company ................................. 42
ARTICLE EIGHT2
CONCERNING THE HOLDERS ............................................... 43
Section 801. Acts of Holders .................................... 43
Section 802. Proof of Ownership; Proof of
Execution of Instruments by Holders................ 44
Section 803. Persons Deemed Owners .............................. 44
Section 804. Revocation of Consents; Future Holders
Bound ............................................ 44
ARTICLE NINE
HOLDERS' MEETINGS .................................................... 45
Section 901. Purpose of Meetings ................................ 45
Section 902. Call of Meetings by Trustee ........................ 45
SectiOn 903. Call of Meetings by Company or Holders.............. 45
Section 904. Qualifications for Voting .......................... 45
Section 905. Regulations ........................................ 45
Section 906. Voting ............................................. 46
Section 907. No Delay of Rights by Meeting ...................... 46
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.................. 47
Section 1001. Company May Consolidate, etc., Only on
Certain Terms ..................................... 47
Section 1002. Successor Corporation Substituted .................. 47
Section 1003. Opinion of Counsel ................................. 47
ARTICLE ELEVEN
SUPPLEMENTAL IDENTURES................................................ 47
Section 1101. Supplemental Indentures Without Consent
of Holders......................................... 49
Section 1102. Supplemental Indentures with Consent
of Holders ........................................ 50
Section 1103. Execution of Supplemental Indentures................ 50
Section 1104. Effect of Supplemental Indentures................... 50
Section 1105. Conformity with Trust Indenture Act................. 50
Section 1106. Reference in Debt Securities to
Supplemental Indentures ........................... 50
Section 1107. Notice of Supplemental Indenture.................... 50
iii
<PAGE>
ARTICLE TWELVE
COVENANTS ............................................................ 50
Section 1201. Payment of Principal, Premium and Interest.......... 50
SectiOn 1202. Payment of Additional Interest ..................... 51
Section 1203. Maintenance of Office or Agency .................... 52
Section 1204. Provisions as to Paying Agent ...................... 53
Section 1205. Certificate to Trustee ............................. 53
Section 1206. Appointment to Fill Vacancy in
Trustee's Office .................................. 54
Section 1207. Limitation on Liens ................................ 54
Section 1208. Sale or Lease of Assets ............................ 55
Section 1209. Maintenance of Telecommunications Business.......... 55
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES ........................................ 56
Section 1301. Applicability of Article ........................... 56
Section 1302. Tax Redemption; Special Tax Redemption.............. 56
Section 1303. Election to Redeem; Notice to Trustee............... 57
Section 1304. Selection by Trustee of Debt Securities
to be Redeemed .................................... 58
Section 1305. Notice of Redemption ............................... 58
Section 1306. Deposit Of Redemption Price ........................ 59
Section 1307. Debt Securities Payable on Redemption Date.......... 59
Section 1308. Debt Securities Redeemed in Part ................... 59
ARTICLE FOURTEEN
SINKING FUNDS......................................................... 60
Section 1401. Applicability of Article............................ 60
Section 1402. Satisfaction of Sinking Fund Payment................ 60
Section 1403. Redemption of Debt Securities for
Sinking Fund ...................................... 60
ARTICLE FIFTEEN
DEFEASANCE............................................................ 61
Section 1501. Applicability of Article............................ 61
Section 1502. Defeasance Upon Deposit of Money.................... 61
Section 1503. Deposited Moneys and U.S. Government
Obligations to be Held in Trust ................... 62
Section 1504. Repayment to Company ............................... 62
ARTICLE SIXTEEN
REPAYMENT AT THE OPTION OF HOLDER..................................... 62
Section 1601. Repayment at the Option of Holders ................. 62
iv
<PAGE>
ARTICLE SEVENTEEN
SECURITY ............................................................. 63
Section 1701. Certificates and opinions........................... 63
Section 1702. Authorization of Actions to be Taken
by the Trustee .................................... 63
Section 1703. Release of Liens ................................... 64
v
<PAGE>
INDENTURE dated as of January ,1995 between MCI Communications
Corporation, a Delaware corporation (hereinafter called the "Company"), having
its principal place of business at 1801 Pennsylvania Avenue, N.W., Washington,
DC 20006, and CITIBANK, N.A., a national banking association duly incorporated
and existing under the laws of the United States (hereinafter called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its senior debentures, notes,
bonds or other evidences of senior indebtedness (herein called the "Debt
Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary have been done to make this Indenture a valid and
binding agreement of the Company, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Debt Securities and
Coupons or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;
(2) all other terms used herein that are defined in the Trust Indenture Act,
either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted in the
United States of America at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
Certain terms, used principally in Articles Three or Six, are defined in
those respective Articles.
"Act" when used with respect to any Holder has the meaning specified in
Section 801.
"Affected Security" has the meaning specified in Section 1302(b).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies such Person, directly or indirectly, whether
through the ownership of voting
<PAGE>
2
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" has the meaning specified in Section 614.
"Authorized Newspaper" means a newspaper in an official language of the
country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, and of
general circulation in such city or cities specified pursuant to Section 301
with respect to the Debt Securities of any series. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different-newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day in such city.
"Bearer Security" means any Debt Security (with or without Coupons), title
to which passes by delivery only, but does not include any Coupons.
"Board of Directors" means either the board of directors of the Company, or
the executive or any other committee of that board duly authorized to act in
respect hereof or any person to whom such authority has been duly delegated.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment specified
pursuant to Section 301 means any day that is not a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law or executive order to close in The City of New York, except
as otherwise specified pursuant to Section 301; provided, however, that, with
respect to Notes, the payment of which is to be made in a currency or composite
currency other than United States dollars, such day is also not a day on which
banking institutions are authorized or required by law or executive order to
close in the Principal Financial Center of the country issuing such currency or
composite currency (or, in the case of the ECU, is not a day that appears as an
ECU non-settlement day on the display designated as "ISDE" on the Reuter Monitor
Money Rates Service (or a day so designated by the ECU Banking Association) or,
if ECU non-settlement days do not appear on that page (and are not so
designated), is not a day on which payments in ECU cannot be settled in the
international interbank market; provided, further, that, with respect to Notes
as to which LIBOR or LIBID is an applicable Interest Rate Basis, such day is
also a London Banking Day.
"Code" means the Internal Revenue Code of 1986 as in effect on the date
hereof.
"Collateral" has the meaning specified in Section 1701.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of the Company by the Chairman of the Board, the
Vice Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"Contingent Obligation" means, with respect to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the
<PAGE>
3
"primary obligations") of another Person (the "primary obligor"), including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase, repurchase or otherwise acquire such primary obligations or any
property constituting direct or indirect security therefor, or (b) to advance or
provide funds (i) for the payment or discharge of any such primary obligation,
or (ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the company
in good faith.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office on the date of execution of this instrument is
located at 120 Wall Street, 13th Floor, New York, New York 10043, except that
for purposes of the presentation of Registered Securities for payment or
registration of transfer or exchange, such term means the office or agency of
the Trustee in said city at which at any particular time the corporate agency
business of the Trustee shall be conducted, which office on the date of
execution of this Indenture is located at 111 Wall Street, 5th Floor, New York,
New York 10043.
The term "corporation" includes corporations, associations, companies and
business trusts.
"Coupon" means any interest coupon appertaining to any Bearer Security.
"Coupon Security" means any Bearer Security authenticated and delivered with
one or more coupons appertaining thereto.
"Currency" means Dollars or Foreign currency.
"Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities authenticated and
delivered under this Indenture, but does not include any Coupons.
"Defaulted Interest" has the meaning specified in Section 307(c).
"Depositary" means with respect to the Debt Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 301 until a successor Depositary shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Depositary" shall mean
or include each Person who is then a Depositary hereunder, and if at any time
there is more than one such Person, "Depositary" as used with respect to the
Debt Securities of any such series shall mean the Depositary with respect to the
Debt Securities of that series.
"Designated Currency" has the meaning specified in Section 311.
"Determination Notice" has the meaning specified in Section 1302(b).
"Discharged" has the meaning specified in Section 1502.
"Discount Security" means any Debt Security that is issued with "original
issue discount" within the meaning of Section 1273(a) of the Code and the
regulations thereunder and any other Debt Security designated by the Company as
issued with original issue discount for United States federal income tax
purposes.
"Dollar" or "$" means such coin or currency of the United States of America
which at the time of payment is legal tender for the payment of public and
private debts.
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4
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"European Communities" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
"Fixed Rate Security" means a Debt Security that provides for the payment of
interest at a fixed rate (excluding interest payable pursuant to Section 1202 or
1302).
"Floating Rate Security" means a Debt Security that provides for the payment
of interest at a variable rate determined periodically by reference to an
interest rate index specified pursuant to Section 301.
"Foreign Currency" means such coin or currency issued by the government of a
country other than the United States of America which at the time of payment is
legal tender in the country of issuance for the payment of public and private
debts, or a composite coin or currency the value of which is determined by
reference to the values of the currencies of any group of countries.
"Global Security" means a Registered or Bearer Security evidencing all or a
part of a series of Debt Securities, issued to the Depositary for such series in
accordance with Section 303, and bearing the legend prescribed in Section
303(c).
"Holder" means, with respect to a Registered Security, the Person in whose
name such Registered Security is registered in the Security Register and, with
respect to a Bearer Security or a Coupon, means the bearer thereof.
"Indebtedness" means, with respect to any person, (a) all obligations of
such Person for borrowed money (including, without limitation, reimbursement and
all other obligations with respect to surety bonds, letters of credit and
bankers' acceptances, whether or not matured); (b) all obligations evidenced by
notes, bonds, debentures or similar instruments; (c) all obligations to pay for
the deferred purchase price of property or services except trade accounts
payable and accrued liabilities arising in the ordinary course of business; (d)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller under such agreement in the event
of default are limited to repossession or sale of such property); (e) all
obligations under leases which have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases; and (f)
all indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall have
been assumed by that Person or is non-recourse to the credit of that Person.
"Indenture" means this instrument as originally executed or the context
otherwise requires, as it may from time to time be supplemented, amended or
restated by or pursuant to one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and, unless the context
otherwise requires, shall include the terms of a particular series of Debt
Securities established as contemplated by Section 301.
The term "interest", when used with respect to a Discount Security that by
its terms bears interest only upon Maturity, means interest payable upon
Maturity and, when used with respect to a Bearer Security, includes any
additional interest payable on such Bearer Security pursuant to Section 1202 or
1302.
"Interest Payment Date", with respect to any Debt Security, means the Stated
Maturity of an installment of interest on such Debt Security.
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment,
charge or segregated deposit arrangement, encumbrance, lien (statutory or other)
or preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever (including, without
<PAGE>
5
limitation, those created by, arising under or evidenced by any conditional sale
or other title retention agreement or the filing of any financing statement
naming the owner of the asset to which such Lien shall relate as debtor (other
than in connection with a transaction in which such asset shall have been leased
by the named debtor) under the Uniform Commercial Code or comparable law of any
jurisdiction).
"London Banking Day" means any day (i) if the Index Currency is other than
ECU, on which dealings in such Index Currency are transacted in the London
interbank market or (ii) if the Index Currency is ECU, that is not designated as
an ECU non-settlement day on the display designated as "ISDE" on the Reuter
Monitor Money Rates Services (or a day so designated by the ECU Banking
Association) or, if ECU non-settlement days do not appear on that page (and are
not so designated), is not a day on which payments in ECU cannot be settled in
the international interbank market.
"Maturity", when used with respect to any Debt Security, means the date on
which the principal of such Debt Security or an installment of principal
(including any sinking fund installment) becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, repayment at the option of the Holder or
otherwise.
"MCI Telecom" means MCI Telecommunications Corporation, a Delaware
corporation, a wholly-owned subsidiary of the Company.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel to the Company, who
may be an employee of the Company or other counsel acceptable to the Trustee,
which is delivered to the Trustee.
"Outstanding" when used with respect to Debt Securities means, as of the
date of determination, all Debt Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Debt Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Debt Securities or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Debt Securities and any Coupons
appertaining thereto; provided, however, that if such Debt Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
and
(iii) Debt Securities that have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Debt Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Debt Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Debt Securities are held by a
bona fide purchaser in whose hands such Debt Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Debt Securities Outstanding have given any Act hereunder,
Debt Securities owned by the Company or any other obligor upon the Debt
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such Act, only Debt
Securities that the Trustee knows to be so owned shall be so disregarded. Debt
Securities so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Debt Securities and that the
pledgee is not the Company or any other obligor upon the
<PAGE>
6
Debt Securities or any Affiliate of the Company or of such other obligor. In
determining whether the Holders of the requisite principal amount of Outstanding
Debt Securities have performed any Act hereunder, the principal amount of a
Discount Security that shall be deemed to be Outstanding for such purpose shall
be the amount of principal thereof that would be due and payable as of the date
of such determination upon a declaration of acceleration of the maturity thereof
pursuant to Section 502 and the principal amount of a Debt Security denominated
in a Foreign Currency that shall be deemed to be Outstanding for such purpose
shall be the amount calculated pursuant to Section 310(c).
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities or to pay
Coupons on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Debt Securities of any
series means the place or places where the principal of (and premium, if any)
and interest on the Debt Securities of that series are payable as specified
pursuant to Section 301.
"Predecessor Security" of any particular Debt Security means every previous
Debt Security evidencing all or a portion of the same debt as that evidenced by
such particular Debt Security, and, for the purposes of this definition, any
Debt Security authenticated and delivered under Section 306 in lieu of a lost,
destroyed or stolen Debt Security shall be deemed to evidence the same debt as
the lost, destroyed or stolen Debt Security.
"Principal Financial Center" means the capital city of the country issuing
the currency or composite currency in which any payment in respect of the Notes
is to be made or, solely with respect to the calculation of LIBOR or LIBID, the
Index Currency, except that with respect to United States dollars, Deutsche
Marks, Dutch Guilders, Italian Lire, Swiss Francs and ECUs, the Principal
Financial Center shall be The City of New York, Frankfurt, Amsterdam, Milan,
Zurich and Luxembourg, respectively.
"Redemption Date" means the date fixed for redemption of any Debt Security
pursuant to Section 301 of this Indenture.
"Redemption Price" means, unless otherwise specified pursuant to Section
301, (i) with respect to a Discount Security, the amount of principal thereof
that would be due and payable as of the Redemption Date upon declaration of
acceleration of the Maturity thereof pursuant to Section 502 and, (ii) in the
case of any other Debt Security, the principal amount thereof, plus, in each
case, premium, if any, and accrued and unpaid interest, if any, to the
Redemption Date.
"Registered Holder" means the Person in whose name a Registered Security is
registered in the Security Register.
"Registered Security" means any Debt Security registered as to principal and
interest in the Security Register.
"Regular Record Date" for any interest payable on the Registered Securities
of any series on an Interest Payment Date means the date specified for that
purpose pursuant to Section 301 for such Interest Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer within the Corporate Trust Department (or any successor department of
the Trustee), including any Vice President, any assistant secretary, a
treasurer, any assistant treasurer, a cashier, any assistant cashier, any senior
trust officer, any trust officer or assistant trust officer, a controller or any
assistant controller or any other officer within the Corporate Trust Department
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with
<PAGE>
7
respect to a particular corporate trust matter any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305(a).
"Six Month Period" has the meaning specified in Section 1701.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 307(c).
"Stated Maturity", when used with respect to any Debt Security or any
installment of principal thereof (including any sinking fund installment) or
premium thereon or interest thereon, means the date specified in such Debt
Security or Coupon, if any, representing such installment of interest, as the
date on which the principal of such Debt Security or such installment of
principal, premium or interest is due and payable.
"Subsidiary" means, with respect to any Person, (i) a corporation of which
shares of stock having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person and (ii) any
partnership of which such Person or any Subsidiary is a general partner or any
partnership more than 50% of the equity interests of which are owned, directly
or indirectly, by such Person or by one or more other Subsidiaries, or by such
Person and one or more other Subsidiaries. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company, and all references to the
corporate form of a Subsidiary shall be deemed, in the case of any Subsidiary
that shall be a partnership, to refer to the partnership form thereof.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Debt Securities
of any series shall mean the Trustee with respect to Debt Securities of that
series.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as
in force at the date as of which this instrument was executed, except as
provided in Section 1105.
"United States" means the United States of America (including the States
thereof and the District of Columbia), its territories and possessions and other
areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal income
tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust, or a foreign
partnership.
"U.S. Government Obligations" has the meaning specified in Section 1502.
"U.S. Person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States, or an estate or trust the income of which is subject
to United States Federal income taxation regardless of its source.
"Vice President" of any Person shall mean any vice president of such Person
whether or not designated by a number or word or words added before or after the
title "Vice President."
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have
<PAGE>
8
been complied with and an opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based is
erroneous. Any such certificate or opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information--with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Notices etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid or airmail postage prepaid
if sent from outside the United States, to the Company
<PAGE>
9
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
Any such Act or other document shall be in the English language.
SECTION 105. Notices to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, (1) such
notice shall be sufficiently given to Registered Holders (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage prepaid
or airmail postage prepaid, to such Registered Holders as their names and
addresses appear in the Security Register, within the time prescribed for such
notice and (2) such notice shall be sufficiently given to Holders of Bearer
Securities or Coupons if published on two separate Business Days in an
Authorized Newspaper or Newspapers in such Place or Places of Payment specified
pursuant to Section 301, the first such publication to be not earlier than the
earliest date and not later than the latest date prescribed for the giving of
such notice; provided, however, that, in any case, any notice to Holders of
Floating Rate Securities regarding the determination of a periodic rate of
interest, if such notice is required pursuant to Section 301, shall be
sufficiently given if given in the manner specified pursuant to Section 301.
In the event of suspension of regular mail service or for any other reason
it shall be impracticable so to give such notice by mail, then such notification
as shall be given with the approval of the Trustee shall constitute notice for
every purpose hereunder.
In the event of suspension of publication of any Authorized Newspapers or by
reason of any other cause it shall be impracticable so to give such notice by
publication, then such notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance on such waiver.
In any case where notice to Holders is given by mail, neither the failure to
mail such notice nor any defect in any notice so mailed to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders, and
any notice that is mailed in the manner herein provided shall be conclusively
presumed to have been duly given. In any case where notice to Holders is given
by publication, any defect in any notice so published as to any particular
Holder shall not affect the sufficiency of such notice with respect to other
Holders, and any notice that is published in the manner herein provided shall be
conclusively presumed to have been duly given. Any notice or waiver required or
permitted in accordance with this Section shall be in the English language
except that any published notice may be in the official language of the country
of publication.
SECTION 106. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
SECTION 107. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
All covenants and agreements in this Indenture by the parties hereto shall
bind their respective successors and assigns and inure to the benefit of their
permitted successors and assigns, whether so expressed or not.
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10
SECTION 109. Separability Clause.
In case any provision in this Indenture or in the Debt Securities or Coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Debt Securities or Coupons, express or
implied, shall give to any Person, other than the parties hereto and their
respective successors hereunder, any Paying Agent and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
This Indenture, the Debt Securities and Coupons shall be deemed to be
contracts made and to be performed entirely in the State of New York, and for
all purposes shall be governed by and construed in accordance with the laws of
said State without regard to the conflicts of law rules of said State.
SECTION 112. Legal Holidays.
Unless otherwise specified pursuant to Section 301, in any case where any
Interest Payment Date, Redemption Date or Maturity of any Debt Security of any
series shall not be a Business Day at any Place of Payment for the Debt
Securities of that series, then (notwithstanding any other provision of this
Indenture or of the Debt Securities or Coupons) payment of principal (and
premium, if any) or interest need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on the Interest Payment Date
or Redemption Date, or at the Stated Maturity, and no interest shall accrue on
such payment for the period from and after such Interest Payment Date,
Redemption Date or Maturity, as the case may be, to such Business Day if such
payment is made or duly provided for on such Business Day.
SECTION 113. No Security Interest Created.
Except as may be provided in Section 1001 and Section 1207, nothing in this
Indenture or in the Debt Securities or Coupons, express or implied, shall be
construed to constitute a security interest under the Uniform Commercial Code or
similar legislation, as now or hereafter enacted and in effect in any
jurisdiction where property of the Company or its Subsidiaries is or may be
located.
SECTION 114. Limitation of Individual Liability.
No recourse under or upon any obligation, covenant or agreement contained in
this Indenture or in any Debt Security or Coupon, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, either directly or through the Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors, as such, of the Company or any successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any Debt Security or coupon or implied therefrom; and that any and all
such personal liability of every name and nature, either at common law or in
equity or by constitution or statute, of and any and all such rights and claims
against, every such incorporator, stockholder, officer or director, as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of obligations, covenants or agreements contained in this Indenture or in
any Debt Security or Coupon or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of such Debt Security or Coupon.
<PAGE>
11
ARTICLE TWO
DEBT SECURITY FORMS
SECTION 201. Forms Generally.
The Debt Securities and the Coupons, if any, of each series shall be
substantially in one of the forms established in or pursuant to a Board
Resolution and set forth in an Officers' Certificate, or one or more indentures
supplemental hereto, and shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
or designation and such legends or endorsements placed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which any series of the Debt Securities may be listed or
of any automated quotation systems on which any such series may be quoted, or to
conform to usage, all as determined by the officers executing such Debt
Securities and Coupons as conclusively evidenced by their execution of such Debt
Securities and Coupons. If the form of a series of Debt Securities is
established in or pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the form of such series.
Unless otherwise provided pursuant to Section 301, the following legend
shall appear on each Bearer Security and Coupon and, if any Bearer Security is
evidenced by a book entry, the following legend shall appear in the book or
record in which the book entry is made:
"Any United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the
limitations provided in sections 165(j) and 1287(a) of the Internal
Revenue Code."
The definitive Debt Securities and Coupons, if any, of each series shall be
printed, lithographed or engraved or produced by any combination of these
methods on steel engraved borders or may be produced in any other manner,
provided that such manner is permitted by the rules of any securities exchange
on which such series of Debt Securities may be listed or of any automated
quotation system on which such series may be quoted, all as determined by the
officers executing such Debt Securities and Coupons, as conclusively evidenced
by their execution of such Debt Securities and Coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
The form of the Trustee's certificate of authentication to be borne by the
Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities issued under the within-mentioned
Indenture.
CITIBANK, N.A., as Trustee
By
...................................
Authorized Signatory
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SECTION 203. Form of Trustee's Certificate of Authentication by an
Authenticating Agent.
If at any time there shall be an Authenticating Agent appointed with respect
to any series of Debt Securities, then the Trustee's Certificate of
Authentication by such Authenticating Agent to be borne by Debt Securities of
each such series shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities issued under the within-mentioned
Indenture.
CITIBANK, N.A., as Trustee
By
...................................
Authenticating Agent
By
...................................
Authorized Officer
ARTICLE THREE
THE DEBT SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debt Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of the series from all other Debt
Securities);
(2) the limit, if any, upon the aggregate principal amount of the Debt
Securities of the series that may be authenticated and delivered under this
Indenture (except for Debt Securities authenticated and delivered upon
transfer of, or in exchange for, or in lieu of, other Debt Securities of
such series pursuant to Section 304, 305, 306, 1106 or 1308);
(3) the dates on which or periods during which Debt Securities of the
series may be issued, and the dates on, or the range of dates within, which
the principal of (and premium, if any, on) the Debt Securities of such
series are or may be payable;
(4) the rate or rates or the method or methods of determination thereof
at which the Debt Securities of the series shall bear interest, if any, the
date or dates from which such interest shall accrue, the Interest Payment
Dates on which such interest shall be payable, and, in the case of
Registered Securities, the Regular Record Date for the interest payable on
any Interest Payment Dates;
(5) the places, if any, in addition to or instead of the Corporate Trust
Office of the Trustee (in the case of Registered Securities) or an office of
the Trustee outside of the United States to be specified (in the case of
Bearer Securities), where the principal of (and premium, if any) and
interest on Debt Securities of the series shall be payable;
<PAGE>
13
(6) the obligation, if any, of the Company to redeem or purchase Debt
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder and the periods within which or the
dates on which, the prices at which and the terms and conditions upon which
Debt Securities of the series shall be redeemed or repurchased, in whole or
in part, pursuant to such obligation;
(7) the periods within which or the dates on which, the prices at which
and the terms and conditions upon which Debt Securities of the series may be
redeemed, if any, in whole or in part, at the option of the Company;
(8) if other than denominations of $100,000 or any amount in excess
thereof which is an integral multiple of $1,000, the denominations in which
individual Debt Securities of the series shall be issuable;
(9) whether the Debt Securities of the series are to be issued as
Discount Securities and the amount of discount with which such Debt
Securities may be issued;
(10) provisions, if any, for the defeasance of Debt Securities of the
series;
(11) whether the Debt Securities of the series are to be issued in whole
or in part in the form of one or more Global Securities and, in such case,
the Depositary for such Global Security or Securities and the terms and
conditions, if any, upon which interests in such Global Security or
Securities may be exchanged, in whole or in part, for the individual Debt
Securities represented thereby;
(12) whether Debt Securities of the series are to be issued as
Registered Securities or Bearer Securities or both, and, if Bearer
Securities are issued, whether Coupons will be attached thereto, whether
Bearer securities of the series may be exchanged for Registered Securities
of the series and the circumstances under which and the places at which any
such exchanges, if permitted, may be made;
(13) if any Debt Securities of the series are to be issued as Bearer
Securities or as one or more Global Securities representing individual
Bearer Securities of the series, (w) the legend that such Bearer Securities
and any Coupons attached thereto must bear, the administrative and other
procedures that must be followed in order for the Bearer Securities and any
Coupons attached thereto to be issued under arrangements reasonably designed
to ensure that they are sold or resold in connection with their original
issuance only to a person who is not a United States Person or who is a
United States Person that is a financial institution (as defined in U.S.
Treas. Reg. Sec. 1.165-12(c)(1)(v)) purchasing for its own account or for
the account of a customer and that agrees to comply with the requirements of
section 165(j)(3)(A), (B), or (C) of the Code and the regulations thereunder
(including without limitation the procedures and other requirements
necessary to satisfy the conditions set forth in section 163(f)(2)(B) of the
Code), and any other requirements that must be complied with in order to
avoid the disallowance of an interest deduction by the Company with respect
to interest paid on the Bearer Securities or Coupons, the imposition of an
excise tax on the Company with respect to the Bearer Securities or Coupons,
or the disallowance from exemption from withholding tax on interest paid on
the Bearer Securities or Coupons; (x) whether the provisions of Sections
1202 and 1302 or other provisions for payments of additional interest or tax
redemptions shall apply and, if other provisions shall apply, such other
provisions; (y) whether interest in respect of any portion of a temporary
Bearer Security of the series (delivered pursuant to Section 304) payable in
respect of any Interest Payment Date prior to the exchange of such temporary
Bearer Security for definitive Bearer Securities of the series shall be paid
to any clearing organization with respect to the portion of such temporary
Bearer Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any such
interest payment received by a clearing organization will be credited to the
Persons entitled to interest payable on such Interest Payment Date; and (z)
the
<PAGE>
14
terms upon which a temporary Bearer Security may be exchanged for one or
more definitive Bearer Securities of the series;
(14) if other than Dollars, the Currency in which Debt Securities of the
series shall be denominated or in which payment of the principal of (and
premium, if any) and interest on Debt Securities of the series may be made
and any other terms concerning such payment;
(15) if the principal of (and premium, if any) or interest on Debt
Securities of the series are to be payable, at the election of the Company
or a Holder thereof, in a Currency other than that in which the Debt
Securities are denominated or payable without such election, the periods
within which and the terms and conditions upon which such election may be
made and the time and the manner of determining the exchange rate between
the Currency in which the Debt Securities are denominated or payable without
such election and the Currency in which the Debt Securities are to be paid
if such election is made;
(16) if the amount of payments of principal of (and premium, if any) or
interest on the Debt Securities of the series may be determined with
reference to an index including, but not limited to, an index based on a
Currency or currencies other than that in which the Debt Securities are
payable, the manner in which such amounts shall be determined;
(17) any additional Events of Default or restrictive covenants provided
for with respect to Debt Securities of the series;
(18) the attachment, if any, of warrants to purchase Debt Securities or
any other rights to purchase other securities of the Company or of any other
Person; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Debt Securities of any one series and the Coupons, if any, appertaining
thereto shall be substantially identical except as to denomination and except as
may otherwise be provided in or pursuant to such Board Resolution and set forth
in such Officers' Certificate or in any such indenture supplemental hereto. All
Debt Securities of any one series need not be issued at the same time, and
unless otherwise provided in or pursuant to such Board Resolution and set forth
in an Officers' Certificate or in any indenture supplemental hereto, a series
may be reopened for issuances of additional Debt Securities of such series or to
establish additional terms of such series of Debt Securities.
If any of the terms of a series of Debt Securities is established pursuant
to a Board Resolution, a copy of such Board Resolution shall be delivered to the
Trustee at or prior to the delivery of the Officers' Certificate setting forth
the terms of the series.
SECTION 302. Denominations.
In the absence of any specification pursuant to Section 301 with respect to
Debt Securities of any series, the Debt Securities of such series shall be
issuable only as Registered Securities in denominations of $100,000 or any
amount in excess thereof which is an integral multiple of $1,000 and shall be
payable only in Dollars.
SECTION 303. Execution, Authentication, Delivery, and Dating.
(a) The Debt Securities and the Coupons, if any, of any series shall be
executed on behalf of the Company by its Chairman, a Vice Chairman, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers may be manual or facsimile.
Debt Securities and Coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of
<PAGE>
15
such Debt Securities and Coupons or did not hold such offices at the date of
such Debt Securities or Coupons.
(b) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities, with appropriate
Coupons, if any, of any series, executed by the Company, to the Trustee for
authentication, together with a Company order for the authentication and
delivery of such Debt Securities and Coupons and the Trustee in accordance with
the Company Order shall authenticate and deliver such Debt Securities and
Coupons; provided, however, that in connection, with its original issuance, a
Bearer Security (and Coupons, if any) of any series may be delivered only
outside the United States and only if the Trustee shall have received from the
person entitled to delivery (pursuant to the Company's instruction) of such
Bearer Security or Coupons the certificate described in Section 312. The Trustee
shall be entitled to receive, prior to the authentication and delivery of the
first Debt Securities and Coupons, if any, of such series, the supplemental
indenture or the Board Resolution by or pursuant to which the form and terms of
such Debt Securities and Coupons have been approved, an Officers' Certificate as
to the absence of any event that is, or after notice or lapse of time or both
would become, an Event of Default and an opinion of Counsel stating that:
(1) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Debt Securities and
Coupons conform to the requirements of this Indenture and constitute
sufficient authority hereunder for the Trustee to authenticate and deliver
such Debt Securities and Coupons;
(2) the forms and terms of such Debt Securities and Coupons have been
established in conformity with the provisions of this Indenture;
(3) in the event that the forms or terms of such Debt Securities and
Coupons have been established in a supplemental indenture, the execution and
delivery of such supplemental indenture has been duly authorized by all
necessary corporate action of the Company, such supplemental indenture has
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Trustee, is a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in
a proceeding in equity or at law) and subject to such other exceptions as
counsel shall request and as to which the Trustee shall reasonably not
object; and
(4) the execution and delivery of such Debt Securities and Coupons have
been duly authorized by all necessary corporate action of the Company and
such Debt Securities and Coupons have been duly executed by the Company and,
assuming due authentication by the Trustee and delivery by the Company, are
valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, entitled to the benefit of the Indenture,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law) and subject to such other exceptions as
counsel shall request and as to which the Trustee shall not reasonably
object.
If all of the Debt Securities of a series are not to be originally issued at
the same time, then the documents required to be delivered pursuant to this
Section 303(b) must be delivered only once, prior to the authentication and
delivery of the first Debt Security of such series; provided, however, that any
subsequent request by the Company to the Trustee to authenticate Debt Securities
of such series upon original issuance shall constitute a representation and
warranty by the Company that, as of the date of such request, the statements
made in the Officers' Certificate delivered pursuant to this Section 303(b)
shall be true and correct as if made on such date.
<PAGE>
16
(c) If the Company shall establish pursuant to Section 301 that the Debt
Securities of a series are to be issued in whole or in part in the form of one
or more Global Securities, then the Company shall execute and the Trustee shall
authenticate and deliver one or more Global Securities that (i) shall represent
an aggregate amount equal to the aggregate principal amount of the Outstanding
Debt Securities of such series to be represented by one or more Global
Securities, (ii) shall be registered, if in registered form, in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instruction and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented hereby, this
Global Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by any such Depositary or any such nominee
to a successor Depositary or a nominee of such successor Depositary."
(d) If required by the applicable provisions of the Securities Exchange Act
of 1934, as amended, each Depositary designated pursuant to Section 301 for a
Global Security in registered form must, at the time of its designation and at
all times while it serves as Depositary, be a clearing agency registered under
such Act and any other applicable statute or regulation.
(e) The Trustee shall not be required to authenticate any Debt Securities if
the issuance of such Debt Securities pursuant to this Indenture will adversely
affect the Trustee's own rights, duties or immunities under this Indenture.
Without limiting the generality of the foregoing, the Trustee shall not be
required to authenticate Debt Securities denominated in a Foreign Currency, if
the Trustee reasonably believes that it will be unable to perform its duties
with respect to such Debt Securities.
(f) Each Debt Security shall be dated the date of its authentication, except
as otherwise provided pursuant to Section 301 with respect to the Debt
Securities of any series.
(g) No Debt Security or Coupon appertaining thereto shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Debt Security a certificate of authentication
substantially in one of the forms provided for herein duly executed by the
Trustee or by an Authenticating Agent by manual signature of one of its
authorized officers, and such certificate upon any Debt Security shall be
conclusive evidence, and the only evidence, that such Debt Security (and any
Coupons appertaining thereto) has been duly authenticated and delivered
hereunder and is entitled to the benefits of this Indenture. Except as permitted
by Section 305, 306 or 307, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant Coupons then matured have been detached
and cancelled.
SECTION 304. Temporary Debt Securities.
Pending the preparation of definitive Debt Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Debt Securities that are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Debt Securities in lieu of which
they are issued, in registered form or, if authorized, in bearer form with one
or more Coupons or without Coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Debt Securities and Coupons, if any, may determine, as conclusively evidenced by
their execution of such Debt Securities and Coupons. Any such temporary Debt
Security may be in global form, representing all or a portion of the outstanding
Debt Securities of such series. Every such temporary Debt Security shall be
executed by the Company and shall be authenticated and delivered by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Security or Securities in lieu of which it is
issued.
If temporary Debt Securities of any series are issued, the Company will
cause definitive Debt Securities of such series to be prepared without
unreasonable delay. Except as otherwise specified as
<PAGE>
17
contemplated by Section 301(13)(z) with respect to a series of Debt Securities
issuable as Bearer securities of the series, (a) after the preparation of
definitive Debt Securities of such series, the temporary Debt Securities of such
series shall be exchangeable for definitive Debt Securities of such series of
like tenor upon surrender of the temporary Debt Securities of such series at the
office or agency of the Company in a Place of Payment for such series, without
charge to the Holder except as provided in Section 305 in connection with a
transfer and except that a Person receiving definitive Bearer Securities shall
bear the cost of insurance, postage, transportation and the like unless
otherwise specified pursuant to Section 301, and (b) upon surrender or
cancellation of any one or more temporary Debt Securities of any series
(accompanied by any unmatured Coupons appertaining thereto), the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Debt Securities of the same series of
authorized denominations and of like tenor; provided, however, that no
definitive Bearer Security shall be delivered in exchange for a temporary
Registered Security; provided further that delivery of a Global Security
representing individual Bearer Securities or a Bearer Security shall occur only
outside the United States; and provided further that no Global Security
representing individual Bearer Securities and no Bearer Security shall be
delivered in exchange for a temporary Debt Security unless the Trustee shall
have received the certificate described in Section 312 from the person entitled
to receive such Global Security or definitive Bearer Security. Until so
exchanged, temporary Debt Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Debt Securities
of such series, except as otherwise specified as contemplated by Section
301(13)(y) with respect to the payment of interest on Global Securities in
temporary form.
Unless otherwise specified pursuant to Section 301, the Company will execute
and deliver each definitive Global Security representing individual Bearer
Securities and each Bearer Security to the Trustee at an office of the Trustee
outside of the United States to be specified or such other place outside the
United States specified pursuant to Section 301.
Upon any exchange of a portion of a temporary Global Security for a
definitive Global Security or for the individual Debt Securities represented
thereby pursuant to this Section 304 or Section 305, the temporary Global
Security shall be endorsed by the Trustee to reflect the reduction of the
principal amount evidenced thereby, whereupon the principal amount of such
temporary Global Security shall be reduced for all purposes by the amount so
exchanged and endorsed.
SECTION 305. Registration; Registration of Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register for each series of Registered Securities (the registers
maintained in such office and in any other office or agency of the Company in a
Place of Payment being herein sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and of the transfers and exchanges of Registered Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and registering transfers and exchanges of Registered
Securities as provided herein; provided, however, that the Company may appoint
co-Security Registrars. Such Security Register shall be in written form or in
any other form capable of being converted into written form within a reasonable
period of time. At all reasonable times the Security Register shall be open for
inspection by the Company.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained for such purpose,
the Company shall execute, and the Trustee or Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee, one or more
new Registered Securities of the same series of any authorized denomination or
denominations, of like tenor and aggregate principal amount. In no event may
Registered Securities, including Registered Securities received in exchange for
Bearer Securities, be exchanged for Bearer Securities.
<PAGE>
18
Notwithstanding any other provision of this Section, unless and until it is
exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security representing all or a portion of the Debt Securities
of a series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary for such series or by such
Depositary or any such nominee to a successor Depositary for such series or a
nominee of such successor Depositary.
At the option of the Holder, Registered Securities of any series (other than
a Global Security, except as set forth below) may be exchanged for other
Registered Securities of the same series of any authorized denomination or
denominations, of a like tenor and aggregate principal amount, upon surrender of
the Registered Securities to be exchanged at the office or agency of the Company
maintained for such purpose.
At the option of the Holder, except as otherwise specified as contemplated
by Subsections 301(11) and (13) with respect to a Global Security representing
Bearer Securities, Bearer Securities of any series may be exchanged for
Registered Securities (if the Debt Securities of such series are issuable as
Registered Securities) or Bearer Securities of the same series, of any
authorized denomination or denominations, of like tenor and aggregate principal
amount, upon surrender of the Bearer Securities to be exchanged at the office or
agency of the Company maintained for such purpose, with all unmatured Coupons
and all matured Coupons in default thereto appertaining; provided, however, that
delivery of a Bearer Security shall occur only outside the United States and
only if the Trustee shall have received from the person entitled to delivery
thereof (pursuant to the Company's instruction) the certificate described in
Section 312. If the Holder of a Bearer Security is unable to produce any such
unmatured Coupon or Coupons or matured Coupon or Coupons in default, such
exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company and the Trustee in an amount equal to the face
amount of such missing Coupon or Coupons, or the surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to any Paying Agent any such missing Coupon in respect
of which such a payment shall have been made, such Holder shall be entitled to
receive the amount of such payment; provided, however, that, except as otherwise
provided in Section 307, interest represented by Coupons shall be payable only
upon presentation and surrender of those Coupons at an office or agency located
outside the United States.
Whenever any Debt Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Debt
Securities that the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Debt Securities in effect at the time of
such exchange.
(b) If at any time the Depositary for the Debt Securities of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Debt Securities of such series or if at any time the Depositary for the
Debt Securities of such series shall no longer be eligible under Section 303(d),
the Company shall appoint a successor Depositary with respect to the Debt
Securities of such series. If a successor Depositary for the Debt Securities of
such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election pursuant to Section 301(11) shall no longer be effective with respect
to the Debt Securities of such series and the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Debt Securities of such series, will authenticate and deliver,
without service charge, Debt Securities of such series in definitive form in an
aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such series in exchange for such Global Security or
Securities.
<PAGE>
19
The company may at any time and in its sole discretion determine that the
Debt Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by such Global Security or Securities.
In such event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Debt Securities
of such series, will authenticate and deliver, without service charge,
individual Debt Securities of such series in definitive form in an aggregate
principal amount equal to the principal amount of the Global Security or
Securities representing such series in exchange for such Global Security or
Securities.
If specified by the Company pursuant to Section 301 with respect to a series
of Debt Securities, the Depositary for such series of Debt Securities may
surrender a Global Security for such series of Debt Securities in exchange in
whole or in part for Debt Securities of such series in definitive form on such
terms as are acceptable to the Company and such Depositary. Thereupon, the
Company shall execute, and the Trustee shall authenticate and deliver, without
service charge,
(i) to each Person specified by such Depositary a new Debt Security or
Securities of the same series, of any authorized denomination as requested
by such Person in aggregate principal amount equal to and in exchange for
such Person's beneficial interest in the Global Security; and
(ii) to such Depositary, a new Global Security in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Debt Securities
delivered to Holders thereof.
In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Debt
Securities (A) in definitive registered form in authorized denominations, if the
Debt Securities of such series are issuable as Registered Securities, (B) in
definitive bearer form in authorized denominations, with Coupons attached, if
the Debt Securities of such series are issuable as Bearer Securities or (C) as
either Registered or Bearer Securities, if the Debt Securities of such series
are issuable in either form; provided, however, that, in addition to such other
requirements as may be specified pursuant to Section 301, a definitive Bearer
Security shall be delivered in exchange for a Global Security only outside the
United States and only if the Trustee shall have received from the person
entitled to receive the definitive Bearer Security a certificate, substantially
in the form set forth in Exhibit A hereto.
Upon the exchange of a Global Security for Debt Securities in definitive
form, such Global Security shall be cancelled by the Trustee. Registered
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depositary, for such Global Security, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Registered Securities to the persons in whose names such Debt
Securities are so registered. The Trustee shall deliver individual Bearer
Securities issued in exchange for a Global Security pursuant to this Section to
the persons, and in such authorized denominations, as the Depositary for such
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee; provided, however, that,
in addition to such other requirements as may be specified pursuant to Section
301, individual Bearer Securities shall be delivered in exchange for a Global
Security only outside the United States and only if the Trustee shall have
received from the person entitled to receive the definitive Bearer Security the
certificate described in Section 312.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of the United States
income tax laws and regulations applicable to Debt Securities in effect at the
time of the exchange.
(c) All Debt Securities issued upon any transfer or exchange of Debt
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debt
Securities surrendered upon such registration of transfer or exchange.
<PAGE>
20
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Security
Registrar or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar and the Trustee duly executed, by the Holder thereof or his attorney
duly authorized in writing.
No service charge shall be made for any transfer or exchange of Debt
Securities except as provided in Section 304 or 306. The Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration, transfer or exchange of Debt
Securities, other than those expressly provided in this Indenture to be made at
the Company's own expense or without expense or without charge to Holders.
In the event of any redemption in part, the Company shall not be required
to: (i) issue, register the transfer of or exchange, Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending at the close of
business on (a) if Securities of the series are issuable only as Registered
Securities, the day of mailing of the relevant notice of redemption and (b) if
Securities of the series are issuable only as Bearer Securities, the day of the
first publication of the relevant notice of redemption or (c) if Securities of
the series are issuable as Registered Securities and Bearer Securities, the day
of first publication of the relevant notice of redemption, or if there is no
publication of the relevant notice of redemption, the day of mailing of the
relevant notice of redemption; (ii) register the transfer of or exchange any
Registered Security, or portion thereof, called for redemption, except the
unredeemed portion of any Registered Security being redeemed in part; or (iii)
exchange any Bearer Security called for redemption; provided, however, that, if
specified pursuant to Section 301, any Bearer Securities of any series that are
exchangeable for Registered Securities and that are called for redemption
pursuant to Section 1302 may, to the extent permitted by applicable law, be
exchanged for one or more Registered Securities of such series during the period
preceding the Redemption Date.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debt Securities.
If (i) any mutilated Debt Security or any mutilated Coupon with the Coupon
Security to which it appertains (and all unmatured Coupons attached thereto) is
surrendered to the Trustee at its Corporate Trust Office (in the case of
Registered Securities) or at an office of the Trustee outside the United States
specified pursuant to Section 301 (in the case of Bearer Securities), or (ii)
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Debt Security or any Coupon, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them and any Paying Agent harmless, then, in
the absence of notice to the Company or the Trustee that such Debt Security or
Coupon has been acquired by a bona fide purchaser, the Company shall execute and
upon a Company Request, the Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Debt Security or
in exchange for the Coupon Security to which such mutilated, destroyed, lost or
stolen Coupon appertained, a new Debt Security of the same series of like tenor,
form, terms and principal amount, bearing a number not contemporaneously
Outstanding, and, in the case of a Coupon security, with such Coupons attached
thereto such that neither gain nor loss in interest shall result from such
exchange or substitution.
In case any such mutilated, destroyed, lost or stolen Debt Security or
Coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debt Security, pay such Debt Security
or Coupon, provided, however, that payment of principal of (and premium, if any)
and any interest on Bearer Securities or payment of Coupons shall, except as
otherwise provided in Section 307, be payable only at an office or agency
located outside the United States.
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21
Upon the issuance of any new Debt Security or coupon under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debt Security of any series, with its Coupons, if any, issued pursuant
to this Section shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Debt Security or
Coupon shall at any time be enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Debt Securities of that series and their Coupons, if any, duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities or Coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
(a) Interest on any Registered Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Registered Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest notwithstanding the cancellation of such Registered Security
upon any transfer or exchange subsequent to the Regular Record Date. In case a
Coupon Security of any series is surrendered in exchange for a Registered
Security of such series after the close of business (at an office or agency in a
Place of Payment for such series) on any Regular Record Date and before the
opening of business (at such office or agency) on the next succeeding Interest
Payment Date, such Coupon Security shall be surrendered without the Coupon
relating to such Interest Payment Date and interest will not be payable on such
Interest Payment Date in respect of the Registered security issued in exchange
for such Coupon Security, but will be payable only to the Holder of such Coupon
when due in accordance with the provisions of this Indenture. Payment of
interest on any Registered Security shall be made at the Corporate Trust Office
(except as otherwise specified pursuant to Section 301) or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or, if provided pursuant to
Section 301 and in accordance with arrangements satisfactory to the Trustee, at
the option of the Registered Holder by wire transfer to an account designated by
such Registered Holder.
(b) Interest on any Coupon Security that is payable and is punctually paid
or duly provided for on any Interest Payment Date shall be paid to the Holder of
the Coupon that has matured on such Interest Payment Date upon surrender of such
Coupon on such Interest Payment Date at an office of the Trustee outside of the
United States to be specified or at such other Place of Payment outside the
United States specified pursuant to Section 301.
Interest on any Bearer Security (other than a Coupon Security) that is
payable and is punctually paid or duly provided for on any Interest Payment Date
shall be paid to the Holder of the Bearer Security upon presentation of such
Bearer Security and notation thereon on such Interest Payment Date at an office
of the Trustee outside of the United States to be specified or at such other
Place of Payment outside the United States specified pursuant to Section 301.
Unless otherwise specified pursuant to Section 301, at the direction of the
Holder of any Bearer Security or Coupon payable in Dollars, and subject to
applicable laws and regulations, payments in respect of such Bearer Security or
Coupon will be made by check drawn on a bank in The City of New York or, in
accordance with arrangements satisfactory to the Trustee, by wire transfer to a
Dollar account maintained by such Holder with a bank outside the United States.
If such payment at the offices of all Paying Agents outside the United States
becomes illegal or is effectively precluded because of imposition of exchange
controls or similar restrictions on the full payment or receipt of such amounts
in Dollars, the Company will appoint an office or agent in the United States at
which such payment may be made. Unless otherwise specified pursuant to Section
301, at the direction of the Holder of any Bearer Security or Coupon payable in
a Foreign Currency, payment on such Bearer Security or Coupon
<PAGE>
22
will be made by check drawn on a bank outside the United States or, in
accordance with arrangements satisfactory to the Trustee, by wire transfer to an
appropriate account maintained by such Holder outside the United States. Except
as provided in this paragraph, no payment on any Bearer Security or Coupon will
be made by mail to an address in the United States or by wire transfer to an
account maintained by the Holder thereof in the United States.
(c) Any interest on any Debt Security that is payable but is not punctually
paid or duly provided for on any Interest Payment Date (herein called "Defaulted
Interest") shall, if such Debt Security is a Registered Security, forthwith
cease to be payable to the Registered Holder on the relevant Regular Record Date
by virtue of his having been such a Registered Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted Interest
(a "Special Record Date"), which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Registered Security of such series and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Registered Securities of such series at his address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Registered Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following
Clause (2). In case a Coupon Security of any series is surrendered in
exchange for a Registered Security of such series after the close of
business (at the office or agency in a Place of Payment for such series) on
any Special Record Date and before the opening of business (at such office
or agency) on the related proposed date for payment of Defaulted Interest,
such Coupon Security shall be surrendered without the Coupon or Coupons
relating to such Defaulted Interest and Defaulted Interest will not be
payable on such proposed date of payment in respect of the Registered
Security issued in exchange for such Coupon Security, but will be payable
only to the Holder of such Coupon or Coupons when due in accordance with the
provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Registered Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment shall
be deemed practicable by the Trustee.
(d) Any Defaulted Interest payable in respect of Bearer Securities of any
series shall be payable pursuant to such procedures as may be satisfactory to
the Trustee in such manner that there is no discrimination between the Holders
of Registered Securities (if any) and Bearer Securities of such series, and
notice of the payment date therefor shall be given by the Trustee, in the name
and at the
<PAGE>
23
expense of the Company, in the manner provided in Section 105 not more than 25
days and not less than 20 days prior to the date of the proposed payment.
(e) Subject to the foregoing provisions of this Section, each Debt Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debt Security shall carry the rights to interest
accrued and unpaid, and to accrue, that were carried by such other Debt
Security.
SECTION 308. Cancellation.
Unless otherwise provided with respect to any series of Debt Securities, all
Debt Securities and Coupons surrendered for payment, redemption, registration,
transfer, exchange or credit against any sinking fund and all Coupons
surrendered for payment or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any Debt
Securities or Coupons previously authenticated and delivered hereunder that the
Company may have acquired in any manner whatsoever, and all Debt Securities and
Coupons so delivered shall be promptly cancelled by the Trustee. No Debt
Securities or Coupons shall be authenticated in lieu of or in exchange for any
Debt Securities or Coupons cancelled as provided in this Section, except as
expressly permitted by the form of Debt Securities of any series or pursuant to
the terms of this Indenture. All cancelled Debt Securities and Coupons held by
the Trustee shall be destroyed and certification of their destruction delivered
to the Company unless, prior to such destruction, the Company shall, by a
Company Order, direct that the cancelled Debt Securities and Coupons be returned
to it. The acquisition of any Debt Securities or Coupons by the Company shall
not operate as a redemption or satisfaction of the indebtedness represented
thereby unless and until such Debt Securities or Coupons are surrendered to the
Trustee for cancellation.
SECTION 309. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Debt
Securities of any series, interest on the Debt Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 310. Currency of Payments.
(a) Except as otherwise specified pursuant to Section 301 for Bearer
Securities of any series, payment of the principal of (and premium, if any) and
interest on Bearer Securities of such series denominated in any Currency will be
made in such Currency.
(b) Except as otherwise specified pursuant to Section 301 for Registered
Securities of any series, payment of the principal (and premium, if any) and
interest on Registered Securities of such series will be made in Dollars.
(c) Except as otherwise specified pursuant to Section 301, (i) for purposes
of any provision of the Indenture where the Holders of Outstanding Debt
Securities may perform an Act that requires that a specified percentage of the
Outstanding Debt Securities of all series perform such Act, the principal of the
Outstanding Debt Securities denominated in a Foreign Currency will be the amount
in Dollars based upon exchange rates determined as specified pursuant to Section
301 for Debt Securities of such series, as of the respective dates of original
issuance of such Debt Securities; and (ii) for the purposes of any decision or
determination by the Trustee of amounts due and unpaid for the principal of (and
premium, if any) and interest on the Debt Securities of all series in respect of
which moneys are to be disbursed ratably, the principal of (and premium, if any)
and interest on the outstanding Debt Securities denominated in a Foreign
Currency will be the amount in Dollars based upon exchange rates, determined as
specified pursuant to Section 301 for Debt Securities of such series, as of the
date of such decision or determination by the Trustee, as the case may be.
<PAGE>
24
(d) Any decision or determination to be made regarding exchange rates shall
be made by an agent appointed by the Company; provided that such agent shall
accept such appointment in writing and the terms of such appointment shall be
reasonably acceptable to the Trustee and shall, in the reasonable opinion of the
Company and the Trustee at the time of such appointment, require such agent to
make such determination by a method consistent with the method provided pursuant
to Section 301 for the making of such decision or determination. All decisions
and determinations of such agent regarding exchange rates shall be in its sole
discretion and shall, in the absence of manifest error, be conclusive for all
purposes and irrevocably binding upon the Company, the Trustee and all Holders
of the Debt Securities.
SECTION 311. Certain Discharges of Obligations.
The Company may provide, pursuant to Section 301, for the Debt Securities of
any series, that (a) the obligation, if any, of the Company to pay the principal
of (and premium, if any) and interest on the Debt Securities of any series in a
Foreign Currency or Dollars (the "Designated Currency") as may be specified
pursuant to Section 301 is of the essence and agrees that, to the fullest extent
possible under applicable law, judgments in respect of such Debt Securities
shall be given in the Designated Currency; (b) the obligation of the Company to
make payments in the Designated Currency of the principal of (and premium, if
any) and interest on such Debt Securities and any appurtenant Coupons shall,
notwithstanding any payment in any other Currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
Designated Currency that the Holder receiving such payment may, in accordance
with normal banking procedures, purchase with the sum paid in such other
Currency (after any premium and cost of exchange) on the Business Day in the
country of issue of the Designated Currency (in the case of a Currency other
than a composite currency) or in the international banking community (in the
case of a composite currency) on the date on which such payment is made or on
the next succeeding Business Day in the event such payment is made on a day
which is not a Business Day; (c) if the amount in the Designated Currency that
may be so purchased for any reason falls short of the amount originally due, the
Company shall pay such additional amounts as may be necessary to compensate for
such shortfall; and (d) any obligation of the Company not discharged by such
Payment shall be due as a separate and independent obligation and, until
discharged as provided herein, shall continue in full force and effect.
SECTION 312. Certification by a Person Entitled to Delivery of a Bearer
Security.
Whenever any provision of this Indenture or a Debt Security contemplates
that certification be given by a Person entitled to delivery of a Bearer
Security, such certification shall be provided substantially in the form of
Exhibit A hereto, with only such changes as shall be approved by the Company.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture, with respect to the Debt Securities of any series (if all
series issued under this Indenture are not to be affected), shall, upon Company
Request, cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Debt Securities herein expressly
provided for and rights to receive payments of principal of (and premium, if
any) and interest on such Debt Securities and any right to receive additional
amounts, as provided in Section 1202 or 1302) and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
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25
(1) either
(A) all Debt Securities and the Coupons, if any, of such series
theretofore authenticated and delivered (other than (i) Coupons
appertaining to Bearer Securities surrendered in exchange for Registered
Securities of such series and maturing after such exchange, surrender of
which is not required or has been waived as provided in Section 305, (ii)
Debt Securities and Coupons of such series that have been destroyed, lost
or stolen and that have been replaced or paid as provided in Section 306,
(iii) Coupons appertaining to Bearer Securities of such series called for
redemption and maturing after the relevant Redemption Date surrender of
which has been waived pursuant to this Indenture, and (iv) Debt
Securities and Coupons of such series for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1204) have been delivered to the Trustee
for cancellation; or
(B) all such Debt Securities and Coupons, if any, of such series not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice by
the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount in the Currency specified in this
Indenture or as otherwise specified pursuant to Section 301 sufficient to
pay and discharge the entire indebtedness on such Debt Securities for
principal (and premium, if any) and interest to the date of such deposit
(in the case of Debt Securities and Coupons that have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be;
provided, however, in the event a petition for relief under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or state bankruptcy, insolvency or other similar law, is filed
with respect to the Company within 91 days after the deposit, the
obligations of the Company under this Indenture with respect to such Debt
Securities shall not be deemed terminated or discharged;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
with respect to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to Subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
Subsection of Section 1204 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last Subsection of Section 1204, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Debt Securities and
Coupons, if any, and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest for
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26
whose payment such money has been deposited with the Trustee, but such money
need not be segregated from other funds except to the extent required by law.
SECTION 403. Indemnity.
The Company shall pay and indemnify the Trustee and the Holders of Debt
Securities and Coupons, if any, of any series as to which the Company's
obligations under this Indenture have terminated against any tax (other than
income tax), fee or other charge resulting from the deposit of cash in
accordance with Section 401 and termination of the Company's obligations under
this Indenture with respect to the Debt Securities and Coupons of such series.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Debt Securities of
any series, means any one of the following events:
(1) default in the payment of any installment of interest upon any Debt
Security of such series or a related Coupon, if any, when and as such
installment of interest shall become due and payable, and such default shall
continue for a period of 30 days; or
(2) default shall be made in the payment of any principal of (or
premium, if any, on) any Debt Security of such series at its Maturity; or
(3) default shall be made in the payment of any sinking fund
installment, when and as the same shall become due and payable by the terms
of a Debt Security of such series; or
(4) failure on the part of the Company duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Company in the Debt Securities of a series or in this Indenture (other than
a covenant or agreement which has expressly been included in this Indenture
solely for the benefit of Debt Securities of a series other than such
series), and such failure shall continue unremedied for a period of 90 days
after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee, or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of Outstanding Debt Securities of such series; or
(5) a decree or order for relief by a court having jurisdiction in the
premises shall have been entered in respect of the Company in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or
any other applicable Federal or State bankruptcy, insolvency or other
similar law, appointing a custodian or receiver, or liquidator or trustee or
assignee of the Company or of its property, or the winding up or liquidation
of its affairs, and such decree or order shall have remained in force,
undischarged and unstayed, for a period of 90 consecutive days; or
(6) the Company shall commence a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or other similar law, or shall
consent to the appointment of or taking possession by a custodian or
receiver or liquidator or trustee or assignee of it or of its property, or
shall make an assignment for the benefit of creditors; or
(7) an event of default in respect of any Indebtedness or Contingent
Obligation under which the Company or any of its Subsidiaries has at the
date of such event of default outstanding $50,000,000, or the equivalent in
another currency or currencies, aggregate principal amount of indebtedness
for borrowed money, shall happen and be continuing and such Indebtedness or
Contingent Obligation shall, as a result thereof, have been accelerated so
that the same shall be or
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27
become due and payable prior to the date on which the same would otherwise
have become due and payable, and such acceleration shall not be rescinded or
annulled within 30 days after notice of such acceleration shall have been
given to the Company by the Trustee (if such event be known to it), or to
the Company and the Trustee by the holders of at least 25% in aggregate
principal amount of the Outstanding Debt Securities of such series;
provided, however, that if such event of default in respect of any
Indebtedness or Contingent Obligation shall be remedied or cured by the
Company or waived by the holders of such Indebtedness or beneficiary or
beneficiaries of such Contingent Obligation, then, unless the Debt
Securities of such series shall have been accelerated as provided herein,
the Event of Default hereunder by reason hereof shall be deemed likewise to
have been thereupon remedied, cured or waived without further action upon
the part of either the Trustee or any holders of the Debt Securities of such
series; provided, further, that, subject to the provisions of Sections 601,
602 and 603, the Trustee shall not be charged with knowledge of any such
default unless written notice thereof shall have been given to the Trustee
by the Company, as provided in Section 1205, by the holder or an agent of
the holder of any such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation, by the trustee then acting under any indenture or
other instrument under which such default shall have occurred, or by the
holders of not less than 25% in the aggregate principal amount of the
Outstanding Debt Securities of such series; or
(8) any other Event of Default provided with respect to Debt Securities
of that series pursuant to Section 301.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs, then and in every such case, so long as such Event of
Default shall not have been remedied, unless the principal of all the Debt
Securities of such series shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in principal amount of Outstanding
Debt Securities of such series, by notice in writing to the Company (and to the
Trustee if given by the Holders), may declare the principal amount (or, if the
Debt Securities of such series are Discount Securities, such portion of the
principal amount of such Discount Securities as may be specified in the terms of
such series) of and all accrued but unpaid interest on all the Debt Securities
of such series to be due and payable immediately, and upon any such declaration
such principal amount (or specified amount) and interest shall become
immediately due and payable, anything in this Indenture or in the Debt
Securities contained to the contrary notwithstanding. Upon payment in full of
such amounts in the currency specified in this Indenture or as otherwise
specified pursuant to Section 301, all obligations of the company in respect of
the payment of principal of and interest on the Debt Securities of such series
shall terminate. This provision, however, is subject to the condition that if,
at any time after the principal of any series of Debt Securities shall have been
so declared due and payable, and before any judgment or decree for the payment
of the moneys due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum in the Currency
specified in this Indenture or as otherwise specified pursuant to Section 301,
sufficient to pay all matured installments of interest upon all the Debt
Securities of such series or all overdue payments with respect to any related
Coupons and the principal of and premium, if any, on any and all Debt Securities
of such series which shall have become due otherwise than by acceleration (with
interest on such principal and premium, if any, and, to the extent that payment
of such interest is enforceable under applicable law, on overdue installments of
interest, at the rate borne by each Debt Security or upon overdue payments on
any Coupons at the rate or rates prescribed therefor in such Coupons to the date
of such payment or deposit) and the expenses of the Trustee, and any and all
Events of Default under the Indenture, other than the nonpayment of principal on
such series of Debt Securities which shall have become due as a result of the
acceleration being rescinded, shall have been cured, remedied or waived, then,
and in every such case, the Holders of a majority in aggregate principal amount
of the outstanding Debt Securities of such series by written notice to the
Company and to the Trustee, may waive all defaults and rescind and annul such
<PAGE>
28
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default, or shall impair any
right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then, and in every such case, the Company
and the Trustee shall be restored respectively to their several positions and
rights hereunder, and all rights, remedies and powers of the Company and the
Trustee shall continue as though no such proceedings had been taken.
For all purposes under this Indenture, if a portion of the principal of any
Discount Securities shall have been accelerated and declared due and payable
pursuant to the provisions hereof, then, from and after such declaration, unless
such declaration has been rescinded and annulled, the principal amount of such
Discount Securities shall be deemed, for all purposes hereunder, to be such
portion of the principal thereof as shall be due and payable as a result of such
acceleration, and payment of such portion of the principal thereof as shall be
due and payable as a result of such acceleration, together with interest, if
any, thereon and all other amounts owing thereunder, shall constitute payment in
full of such Discount Securities.
SECTION 503. Collection of Indebtedness and Suits for Enforcement.
The Company covenants that:
(1) in case default occurs in the payment of any installment of interest
on any Debt Security or any payment with respect to any Coupons, as and when
such interest or payment shall become due and payable and such default shall
have continued for a period of 30 days, or
(2) in case default occurs in the payment of any principal of (or
premium, if any, on) any Debt Security at the Maturity thereof,
upon demand of the Trustee, the Company will pay to the Trustee, for the benefit
of the Holders of such Debt Securities or of such Coupons, the whole amount that
then shall have become due and payable on such Debt Securities or matured
Coupons for principal (and premium, if any) and interest, if any, and, to the
extent that payment of such interest is enforceable under applicable law,
interest upon the overdue principal (and premium, if any) and upon overdue
installments of interest, at the rate or rates prescribed therefor in such Debt
Securities or Coupons; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including reasonable
compensation to the Trustee, its agents and counsel, and all other expenses,
liabilities and advances made or incurred by the Trustee, except as a result of
its negligence or bad faith.
In case the Company shall fail to pay such amount forthwith upon demand, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
to institute any action, suit or proceeding at law or in equity and recover
judgment against the Company for the whole amount so due and unpaid, to cause
execution to issue upon such judgment and to cause the same to be collected out
of the property, interests and rights of the Company or any other obligor upon
such Debt Securities by the sale thereof or otherwise, or to exercise any one or
more appropriate legal or equitable remedies.
If an Event of Default with respect to Debt Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Debt Securities and Coupons
of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights either by suit in
equity or by action at law or by proceedings in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement in this Indenture or
in aid of the exercise of any power granted herein, or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
<PAGE>
29
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities and Coupons, if any, of a particular
series or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of such Debt
Securities shall then be due and payable as therein expressed or by declaration
of acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest owing and unpaid in respect of the Debt
Securities and Coupons of such series and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding; and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt, on behalf of any Holder, any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities or Coupons of such series or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Debt
Securities or Coupons.
All rights of action and claims under this Indenture or the Debt Securities
or Coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Debt Securities or Coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name, as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Debt Securities or
Coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal (and premium, if any)
or interest, upon presentation of the Debt Securities or Coupons of any series
in respect of which money has been collected and the notation thereon of the
payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection, and
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and of all other expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith and of all
amounts owed to the Trustee pursuant to Section 607;
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SECOND: In case any principal of the Debt Securities of any series shall
not have become due, to the payment of interest on the Debt Securities or
Coupons of such series, in the order of the maturity of the installments of
such interest, with interest (so far as may be lawful and to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by such Debt Securities or
Coupons, such payments to be made ratably to the persons entitled thereto,
without discrimination or preference;
THIRD: In case any principal of the Debt Securities of any series shall
have become due, by declaration or otherwise, to the payment of the whole
amount then owing and unpaid upon the Debt Securities of such series of
principal, premium, if any, any interest, with interest on the overdue
principal and premium, if any, and (so far as may be lawful and to the
extent that such interest has been collected by the Trustee) upon overdue
installments of interest at the rate borne by the Debt Securities or Coupons
of such series; and in case such moneys shall be insufficient to pay in full
the whole amount so due and unpaid upon such Debt Securities or Coupons,
then to the payment of such principal, premium, if any, and interest,
without preference or priority of principal or premium, if any, over
interest, or of interest over principal or premium, if any, or of any
installment of interest over any other installment of interest, or of any
Debt Security or Coupon over any other Debt Security or Coupon of such
series, ratably to the aggregate of such principal, premium, if any, and
accrued and unpaid interest; and
FOURTH: To the payment of the remainder, if any, to the Company, its
successors or assigns, or to whomsoever may be lawfully entitled to receive
the same, or as a court of competent jurisdiction may direct.
For the purposes of this Section, the Holders of any Debt Securities
denominated in ECU, any other composite currency or a Foreign Currency and any
matured Coupons relating thereto shall be entitled to receive a ratable portion
of the amount determined pursuant to 310(c)(ii) hereof.
SECTION 507. Limitation on Suits.
No Holder of any Debt Security or Coupon of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Debt Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or of the Holders of Outstanding Debt Securities or Coupons of any other
series, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders. For the protection and enforcement of the
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provisions of this Section 507, each and every Holder of Debt Securities or
Coupons of any series and the Trustee for such series shall be entitled to such
relief as can be given at law or in equity.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
The Holder of any Debt Security or of any Coupon shall have the right, which
is absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 307) interest on the respective Stated
Maturity or Maturities expressed in such Debt Security or Coupon (or, in the
case of redemption, on the Redemption Date) and, subject to Section 507, to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case the Company, the Trustee and the
Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided elsewhere in this Indenture, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder or otherwise, shall not prevent the concurrent assertion or employment
of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Debt Security or
Coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
Indenture or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 512. Control by Holders of Debt Securities.
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of such series, provided, that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture;
(2) subject to the provisions of Section 601, the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Responsible Officers of the Trustee,
determine that the proceeding so directed would be unjustly prejudicial to
the Holders of Debt Securities of such series not joining in any such
direction; and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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SECTION 513. Waiver of Past Defaults.
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
the Debt Securities of any such series and any related Coupons waive any past
default hereunder with respect to such series and its consequences, except a
default:
(1) in the payment of any principal of (or premium, if any) or interest
on any Debt Security of such series or in the payment of a related Coupon,
or
(2) in respect of a covenant or provision hereof that under Article
Eleven cannot be modified or amended without the consent of the Holder of
each Outstanding Debt Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of the Debt Securities of such series and related Coupons under this Indenture;
but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Debt Security or
any Coupon by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder or group of Holders holding in the
aggregate more than 10% in the principal amount of the Outstanding Debt
Securities of any series, or to any suit instituted by any Holder of a Debt
Security or Coupon for the enforcement of the payment of the principal of (or
premium, if any) or interest on such Debt Security or the payment of such Coupon
on or after the respective Stated Maturity or Maturities expressed in such Debt
Security or Coupon (or, in the case of redemption, on or after the Redemption
Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) With respect to Debt Securities of any series, except during the
continuance of an Event of Default with respect to the Debt Securities of such
series,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Indenture.
(b) In case an Event of Default with respect to Debt Securities of any
series or Coupons has occurred and is continuing, the Trustee shall, with
respect to the Debt Securities of such series or Coupons, if any, exercise such
of the rights and powers vested in it by this Indenture, and use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken it with respect to Debt Securities of any
series in good faith in accordance with the direction of the Holders of a
majority in principal amount of the Outstanding Debt Securities of such
series relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture.
(d) The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect to
Debt Securities or Coupons, if any, of any series the Trustee shall give to all
Holders of Debt Securities and Coupons of such series, in the manner and to the
extent provided in Section 703(c) and Section 105, notice of each default
hereunder known to the Trustee, unless such default shall have been cured or
waived; provided, however, that, except in the case of default in the payment of
any principal of (or premium, if any) or interest on any Debt Security or coupon
of such series or in the payment of any sinking fund installment with respect to
Debt Securities of such series, the Trustee shall be protected in withholding
such notice if and for so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders of Debt Securities and of Coupons of such series; and
provided further that in the case of any default of the character specified in
Section 501(4) with respect to Debt Securities of such series no-such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Debt Securities or Coupons of such series.
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SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, coupon or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel or
any opinion of Counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders of Debt Securities or Coupons of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the cost, expenses and liabilities that might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken or omitted by it in
good faith and believed by it to be authorized or within the discretion, rights
or powers conferred upon it by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Debt Securities.
The recitals contained herein, in the Debt Securities, and in any Coupons,
except the Trustee's certificates of authentication shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the legality, validity
or sufficiency of this Indenture or of the Debt Securities or Coupons, if any,
of any series. The Trustee shall not be accountable for the use or application
by the Company of any Debt Securities or the proceeds thereof.
SECTION 605. May Hold Debt Securities or Coupons.
The Trustee, any Paying Agent, the Security Registrar or any other agent of
the Company or the Trustee, in its individual or any other capacity, may become
the owner or pledgee of Debt Securities or Coupons, and, subject to Sections 608
and 613, may otherwise deal with the Company with the same rights it would have
if it were not Trustee, Paying Agent, Security Registrar or such other agent.
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SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. Neither the Trustee nor any
Paying Agent shall be under any liability for interest on any money received by
it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee in Dollars upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable compensation
and the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust or performance of its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
As security for the performance of the obligations of the Company under this
Section the Trustee shall have a claim prior to the Debt Securities and Coupons,
if any, upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of amounts due on Debt Securities and
Coupons.
The obligations of the Company under this Section 607 to compensate and
indemnify the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness under this Indenture and shall survive the satisfaction
and discharge of this Indenture.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of the Trust
Indenture Act. The Indenture dated as of October 15, 1989 between the Company
and the Trustee shall be deemed to be specifically described herein for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder that shall be a corporation
organized and doing business under the laws of the United States of America
(including any State thereof and the District of Columbia), authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, and subject to supervision or examination by
Federal, State or District of Columbia authority and having its Corporate Trust
office or an agency in New York, New York and in such other places as may be
required pursuant to any indenture supplemental hereto; provided, however, that
if Section 310(a) of the Trust Indenture Act or the rules and regulations of the
Commission under the Trust Indenture Act at any time permit a corporation
organized and doing business under the laws of any other jurisdiction to serve
as trustee of an indenture qualified under the Trust Indenture Act, this Section
609 shall be automatically amended to permit a corporation organized and doing
business under the laws of any such other jurisdiction to serve as Trustee
hereunder. If such corporation publishes a report of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set
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forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time with respect to the Debt Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debt Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Debt
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Debt Securities of such series, delivered to the Trustee and
to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a) with respect to
the Debt Securities of any series after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Debt Security
of such series for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or a decree or order
for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Trustee in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law; or a decree or order
by a court having jurisdiction in the premises shall have been entered for
the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trustee or of its property
or affairs, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, or
(4) the Trustee shall commence a voluntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law or shall consent to
the appointment of or taking possession by a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar official) of
the Trustee or its property or affairs, or shall make an assignment for the
benefit of creditors, or shall admit in writing its inability to pay its
debts generally as they become due, or shall take corporate action in
furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Debt Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Debt Security of any series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee for
the Debt Securities of such series and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Debt Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Debt Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debt Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debt Securities of any particular series) and shall
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comply with the applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debt Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Debt Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
Holders of such series and accepted appointment in the manner hereinafter
provided and if the Trustee is still incapable of acting, any Holder who has
been a bona fide Holder of a Debt Security of such series for at least six
months may, subject to Section 514, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debt Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Debt Securities of any series and each
appointment of a successor Trustee with respect to the Debt Securities of any
series in the manner and to the extent provided in Section 105, to the Holders
of Debt Securities. Each notice shall include the name of the successor Trustee
with respect to the Debt Securities of such series and the address of its
Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In the case of an appointment hereunder of a successor Trustee with
respect to all Debt Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee, but, on request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder, subject nevertheless to its
claim, if any, provided for in Section 607.
(b) In case of the appointment hereunder of a successor Trustee with respect
to the Debt Securities of one or more (but not all) series, the Company, the
retiring Trustee upon payment of its charges and each successor Trustee with
respect to the Debt Securities of one or more series shall execute and deliver
an indenture supplemental hereto wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Debt Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Debt Securities, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the Debt
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and(3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts hereunder
separate and apart from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debt Securities of that
or those series to which the appointment of such successor Trustee relates; but,
on request of the Company or any successor Trustee, such retiring Trustee shall
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duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Debt
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Debt Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debt Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such Debt
Securities. In case any Debt Securities shall not have been authenticated by
such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect that this Indenture provides for the
certificate of authentication of the Trustee.
SECTION 613. Preferential Collection of Claims Against Company.
The Trustee shall comply with the provisions of Section 311(a) and (b) of
the Trust Indenture Act.
SECTION 614. Appointment of Authenticating Agent.
As long as any Debt Securities of a series remain Outstanding, the Trustee
may, by an instrument in writing, appoint an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Debt Securities issued upon exchange, registration of
transfer, partial redemption or pursuant to Section 306. Debt Securities of each
such series authenticated by such Authenticating Agent shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by such Trustee. Wherever reference is made in this Indenture
to the authentication and delivery of Debt Securities of any series by the
Trustee for such series or to the Trustee's Certificate of Authentication, such
reference shall be deemed to include authentication and delivery on behalf of
the Trustee for such series by an Authenticating Agent for such series and a
Certificate of Authentication executed on behalf of such Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $10,000,000
(determined as provided in Section 609 with respect to the Trustee) and subject
to supervision or examination by Federal or State authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Debt Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee or such Authenticating Agent. Any Authenticating Agent may
at any time, and if it shall cease to be eligible shall, resign with respect to
one or more
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series of Debt Securities by giving written notice of resignation to the
applicable Trustee and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 614 with respect to one or more
series of Debt Securities, the Trustee shall appoint a successor Authenticating
Agent, and the Company shall provide notice of such appointment to all Holders
of Debt Securities of such series in the manner and to the extent provided in
Section 105. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if originally
named as Authenticating Agent. The Trustee agrees to pay each Authenticating
Agent for such series from time to time reasonable compensation for its
services. The Authenticating Agent for the Debt Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee for such series.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with
respect to Debt Securities of each series for which it acts as Trustee:
(a) semiannually and not more than 15 days after (i) each Regular Record
Date in respect of the Debt Securities of such series, or (ii) dates to be
determined pursuant to Section 301 in the event interest does not become payable
in a year (other than because of an Event of Default pursuant to Section
501(l)), all information in the possession or control of the Company, or the
Paying Agent or the Security Registrar, other than the Trustee, as to the names
and addresses of the Registered Holders as of such Regular Record Date or such
other dates, as the case may be, in the form of a list or in such other form as
the Trustee may reasonably require; and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
(c) For the purposes of this Section only, the term "Company" means any
obligor upon the Debt Securities of any series or any related Coupons.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of Holders of
Registered securities contained in the most recent list furnished to the Trustee
as provided in Section 701, received by it in the capacity of Paying Agent or
Security Registrar (if so acting) hereunder, and filed with it within the two
preceding years pursuant to Section 703(c)(2).
The Trustee may destroy any list furnished to it pursuant to Section 701
upon receipt of a new list so furnished, destroy any information received by it
as Paying Agent or Security Registrar (if so acting) hereunder upon delivering
to itself as Trustee, not earlier than 45 days after an Interest Payment Date, a
list containing the names and addresses of the Holders obtained from such
information since the delivery of the next previous list, if any, destroy any
list delivered to itself as Trustee which was compiled from the information
received by it as Paying Agent or Security Registrar (if so acting)
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40
hereunder upon the receipt of a new list so delivered, and destroy not earlier
than two years after filing, any information filed with it pursuant to Section
703(c)(2).
(b) If three or more Holders (hereinafter referred to as "applicants") apply
in writing to the Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Debt Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders of Debt Securities of a
particular series (in which case the applicants must hold Debt Securities of
such series) or with all Holders of Debt Securities with respect to their rights
under this Indenture or under the Debt Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of Holders of
Debt Securities of such series or of all Debt Securities, as the case may
be, whose names and addresses appear in the most recent information
preserved at the time by the Trustee in accordance with Section 702(a), and
as to the approximate cost of mailing to such Holders the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appears in the information preserved
at the time by the Trustee in accordance with Section 702(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
or would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee shall
be relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Debt Securities or Coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 702(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under Section
702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after October 15 of each year commencing with the year
following the year in which Debt Securities are first issued hereunder, and for
so long as any Debt Securities are Outstanding hereunder, the Trustee shall
transmit by mail to all Holders of Debt Securities of any series with respect
<PAGE>
41
to which it acts as Trustee, in the manner hereinafter provided in this Section
703 and to the extent required by Section 313 (a) of the Trust Indenture Act,
a brief report dated as of such October 15 with respect to the matters set
forth in said section 313 (a).
(b) The Trustee shall transmit by mail to all Holders of Debt Securities of
any series (whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 702(a)) for which it acts as the
Trustee, as hereinafter provided, a brief report with respect to:
(1) the release, or release and substitution, of property subject to a
Lien created pursuant to Section 1001(3) or Section 1207 (and the
consideration therefor, if any) unless the fair value of such property, as
set forth in the certificate or opinion required by Section 314(d) of the
Trust Indenture Act, is less than 10% of the principal amount of Debt
Securities Outstanding at the time of such release, or such release and
substitution, such report to be so transmitted within 90 days after such
time; and
(2) the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this Indenture) for the
reimbursement of which it claims or may claim a lien or charge, prior to
that of the Debt Securities of such series, on the trust estate or on
property or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this subsection, except that the Trustee for
each series shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate 10% or less of the
principal amount of the Debt Securities of such series Outstanding at such
time, such report to be transmitted within 90 days after such time.
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(c) Reports pursuant to this Section shall be transmitted by mail:
(1) to all Holders of Registered Securities, as the names and addresses
of such Holders appear in the Security Register;
(2) to such Holders of Bearer Securities as have, within the two years
preceding such transmission, filed their names and addresses with the
Trustee for that purpose; and
(3) except in the case of reports pursuant to Subsection (b) of this
Section, to each Holder of a Debt Security of any series whose name and
address is preserved at the time by the Trustee, as provided in Section
702(a).
(d) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any Debt
Securities of such series are listed, with the Commission and also with the
Company. The Company will notify the Trustee when any series of Debt Securities
are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company will:
(1) file with the Trustee, within 15 days after the Company is required
to file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, or, if the Company is not required to file
information, documents or reports pursuant to either of such Sections, then
it will file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Holders of Debt Securities, in the manner
and to the extent provided in Section 703, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs(1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
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ARTICLE EIGHT
CONCERNING THE HOLDERS
SECTION 801. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent or proxy duly appointed in
writing, and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Whenever in this Indenture it is provided that
the Holders of a specified percentage in aggregate principal amount of the
Outstanding Debt Securities of any series may take any Act, the fact that the
Holders of such specified percentage have joined therein may be evidenced (a) by
the instrument or instruments executed by Holders in person or by agent or proxy
appointed in writing, or (b) by the record of Holders voting in favor thereof at
any meeting of such Holders duly called and held in accordance with the
provisions of Article Nine, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
SECTION 802. Proof of Ownership; Proof of Execution of Instruments by
Holders.
The ownership of Registered Securities of any series shall be proved by the
Security Register for such series or by a certificate of the Security Registrar
for such series.
The ownership of Bearer Securities shall be proved by production of such
Bearer Securities or by a certificate executed by any bank or trust company,
which certificate shall be dated and shall state on the date thereof a Bearer
Security bearing a specified identifying number or other mark was deposited with
or exhibited to the person executing such certificate by the person named in
such certificate, or by any other proof of possession reasonably satisfactory to
the Trustee. The holding by the person named in any such certificate of any
Bearer security specified therein shall be presumed to continue for a period of
one year unless at the time of determination of such holding (1) another
certificate bearing a later date issued in respect of the same Bearer Security
shall be produced, (2) such Bearer Security shall be produced by some other
Person, (3) such Bearer Security shall have been registered on the Security
Register, if, pursuant to Section 301, such Bearer Security can be so
registered, or (4) such Bearer Security shall have been cancelled or paid.
Subject to the provisions of Sections 601, 603 and 905, proof of the
execution of a writing appointing an agent or proxy and the execution of any
instrument by a Holder or his agent or proxy shall be sufficient and conclusive
in favor of the Trustee and the Company if made in the following manner:
The fact and date of the execution by any such person of any instrument may
be proved by the certificate of any notary public or other officer authorized to
take acknowledgement of deeds, that the person executing such instrument
acknowledged to him the execution thereof, or by an affidavit of a witness to
such execution sworn to before any such notary or other officer. Where such
execution is by an officer of a corporation or association or partnership, as
the case may be, or by any other person acting in a representative capacity,
such certificate or affidavit shall also constitute sufficient proof of his
authority.
The record of any Holders' meeting shall be proved in the manner provided in
Section 906.
The Trustee may in any instance require further proof with respect to any of
the matters referred to in this Section so long as the request is a reasonable
one.
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If the Company shall solicit from the Holders of Debt Securities of any
series any Act, the Company may, at its option, by Board Resolution, fix in
advance a record date for the determination of Holders of Registered Securities
entitled to take such Act, but the Company shall have no obligation to do so.
Any such record date shall be fixed at the Company's discretion. If such a
record date is fixed, such Act may be sought or given before or after the record
date, but only the Holders of Registered Securities of record at the close of
business on such record date shall be deemed to be Holders of Registered
Securities for the purpose of determining whether Holders of the requisite
proportion of Outstanding Debt Securities of such series have authorized or
agreed or consented to such Act, and for that purpose the Outstanding Registered
Securities of such series shall be computed as of such record date.
SECTION 803. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 307) interest, if
any, on such Registered Security and for all other purposes whatsoever, whether
or not such Registered Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice of the
contrary. The Company, the Trustee, and any agent of the Company or the Trustee
may treat the Holder of any Bearer Security or of any Coupon as the absolute
owner of such Bearer Security or Coupon for the purposes of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Bearer Security or Coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or any Trustee shall be affected by notice
to the contrary. All payments made to any Holder, or upon his order, shall be
valid, and, to the extent of the sum or sums paid, effectual to satisfy and
discharge the liability for moneys payable upon such Debt Security or Coupon.
None of the Company, the Trustee, any Paying Agent or the Security Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
SECTION 804. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 801, of the taking of any Act by the Holders of the
percentage in aggregate principal amount of the Outstanding Debt Securities
specified in this Indenture in connection with such Act, any Holder of a Debt
Security the number, letter or other distinguishing symbol of which is shown by
the evidence to be included in the Debt Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in Section 802,
revoke such Act so far as it concerns such Debt Security. Except as aforesaid,
any such Act taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and upon all future Holders of such Debt Securities and
all past, present and future Holders of Coupons, if any, appertaining thereto
and of any Debt Securities and Coupons issued on transfer or in lieu thereof or
in exchange or substitution therefor, irrespective of whether or not any
notation in regard thereto is made upon such Debt Security or Coupons or such
other Debt Securities or Coupons.
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45
ARTICLE NINE
HOLDERS' MEETINGS
SECTION 901. Purpose of Meetings.
A meeting of Holders of any or all series may be called at any time from
time to time pursuant to the provisions of this Article Nine for any of the
following purposes:
(1) to give any notice to the Company or the Trustee for such series, or
to give any directions to the Trustee for such series, or to consent to the
waiving of any default hereunder and its consequences, or take any other
action authorized to be taken by Holders pursuant to any of the provisions
of Article Five;
(2) to remove the Trustee for such series and appoint a successor
Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 1102; or
(4) to take any other action authorized to be taken by or on behalf of
the Holders of any specified aggregate principal amount of the outstanding
Debt Securities of any one or more or all series, as the case may be, under
any other provision of this Indenture or under applicable law.
SECTION 902. Call of Meetings by Trustee.
The Trustee for any series may at any time call a meeting of Holders of such
series to take any action specified in Section 901, to be held at such time or
times and at such place or places as the Trustee for such series shall
determine. Notice of every meeting of the Holders of any series, setting forth
the time and place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be given to Holders of such series in the manner
and to the extent provided in Section 105. Such notice shall be given not less
than 20 days or more than 90 days prior to the date fixed for the meeting.
SECTION 903. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in aggregate principal amount of the outstanding Debt
Securities of a series or of all series, as the case may be, shall have
requested the Trustee for such series to call a meeting of the Holders of any or
all such series by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 20 days after receipt of such request, then the
Company or such Holders may determine the time or times and the place or places
for such meetings and may call such meetings to take any action authorized in
Section 901, by giving notice thereof as provided in Section 902.
SECTION 904. Qualifications for Voting.
To be entitled to vote at any meeting of Holders a Person shall be (a) a
Holder of a Debt Security of the series with respect to which such meeting is
being held or (b) a Person appointed by an instrument in writing as agent or
proxy by such Holder. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee for the series
with respect to which such meeting is being held and its counsel and any
representatives of the Company and its counsel.
SECTION 905. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee for any
series may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Debt Securities of such
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46
series in regard to proof of the holding of Debt Securities of such series and
of the appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall deem appropriate.
The Trustee shall, by an instrument in writing, appoint a temporary chairman
of the meeting, unless the meeting shall have been called by the Company or by
Holders of such series as provided in Section 903, in which case the Company or
the Holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by a majority vote of the meeting.
Subject to the provisos in the definition of "Outstanding", at any meeting
each Holder of a Debt Security of the series with respect to which such meeting
is being held or proxy therefor shall be entitled to vote in such manner so that
whether the specified percentage required for any Act has been voted may be
calculated by the inspectors; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Debt Security challenged to be not
Outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Outstanding Debt Securities of such series held by him or
instruments in writing duly designating him as the person to vote on behalf of
Holders of Debt Securities of such series. Any meeting of Holders with respect
to which a meeting was duly called pursuant to the provisions of Section 902 or
903 may be adjourned from time to time by a majority of such Holders present and
the meeting may be held as so adjourned without further notice.
SECTION 906. Voting.
The vote upon any resolution submitted to any meeting of Holders of any
series with respect to which such meeting is being held shall be by written
ballots on which shall be subscribed the signatures of such Holders or of their
representatives by proxy and the serial number or numbers of the Debt Securities
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of Holders
shall be prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more persons having knowledge of
the facts setting forth a copy of the notice of the meeting and showing that
said notice was transmitted as provided in Section 902. The record shall show
the serial numbers of the Debt Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and another to the Trustee to be preserved by the
Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 907. No Delay of Rights by Meeting.
Nothing in this Article Nine contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to any Holder under any of the provisions of the Indenture or of the
Debt Securities of any series.
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ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 1001. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not, nor shall it permit MCI Telecom to, merge,
consolidate or combine directly or indirectly with or into any Person except:
(1) MCI Telecom may merge, consolidate or combine with or into any other
Person, if immediately after giving effect thereto, (i) no Event of Default
would exist, and (ii) MCI Telecom shall be the surviving corporation in such
merger, consolidation or combination or the successor entity shall be a
corporation organized and existing under the laws of the United States of
America, any political subdivision or state thereof;
(2) the Company may merge, consolidate or combine with another entity if
(i) the Company shall be the corporation surviving the merger, or the
corporation into which the Company shall be merged or formed by any such
consolidation shall be a corporation organized and existing under the laws
of the United States of America, any political subdivision or state thereof
and shall assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form reasonably satisfactory to the
Trustee, the due and punctual payment of the principal of (and premium, if
any) and interest (including all additional amounts, if any, payable
pursuant to Sections 1202 and 1302) on all the Debt Securities and the due
and punctual payment of any Coupons and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed; and
(ii) if immediately after giving effect thereto, no Event of Default and no
event which, after notice or lapse of time, would constitute an Event of
Default would exist; and
(3) the Company and the successor Person have delivered to the Trustee
an Officers' Certificate and an Opinion of Counsel each stating that such
merger, consolidation or combination and such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 1002. Successor Corporation Substituted.
Upon any consolidation with or merger into any other corporation, or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 1001, the successor
corporation formed by such consolidation or into which the Company is merged or
the successor Person to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor had
been named as the Company herein, and thereafter, except in the case of a lease,
the predecessor corporation shall be relieved of all obligations and covenants
under this Indenture and the Debt Securities and Coupons.
SECTION 1003. Opinion of Counsel.
The Trustee shall be entitled to receive and, subject to Sections 601 and
603, shall be protected in relying on an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article Ten.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
SECTION 1101. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another corporation to the Company,
and the assumption by such successor of the covenants of the Company herein
and in the Debt Securities contained; or
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(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any series of Debt Securities or Coupons (and, if such
covenants are to be for the benefit of less than all series of Debt
Securities or Coupons, stating that such covenants are expressly being
included solely for the benefit of such series), or to surrender any right
or power herein conferred upon the Company; or
(3) to add any additional Events of Default (and, if such Events of
Default are to be applicable to less than all series of Debt Securities and
coupons, stating that such Events of Default are expressly being included
solely to be applicable to such series); or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change
or eliminate any restrictions on the payment of principal of (or premium, if
any, on) Registered Securities or of principal of (or premium, if any) or
any interest on Bearer Securities, provided that interest on Bearer
Securities shall, except as otherwise provided in Section 307, be payable
only outside the United States and provided further that any such action
shall not adversely affect the interests of the Holders of Debt Securities
or any Coupons of any series in any material respect, or to permit or
facilitate the issuance of Debt Securities of any series in uncertificated
form; or
(5) to add to or change any of the provisions of this Indenture as shall
be necessary or desirable to establish that Bearer Securities are issued
under arrangements reasonably designed to ensure that they are sold or
resold in connection with their original issuance only to a person who is
not a United States Person or who is a United States Person that is a
financial institution (as defined in U.S. Treas. Reg. Sec.
1.165-12(c)(1)(v)) purchasing for its own account or for the account of a
customer and that agrees to comply with the requirements of section
165(j)(3)(A), (B), or (C) of the Code and the regulations thereunder or any
successor provisions thereto (including without limitation the procedures
and other requirements necessary to satisfy the conditions set forth in
section 163(f)(2)(B) of the Code), and any other requirements that must be
complied with in order to avoid the disallowance of an interest deduction by
the Company with respect to interest paid on the Bearer Securities or
Coupons, the imposition of an excise tax on the Company with respect to the
Bearer Securities or Coupons, or the disallowance from exemption from
withholding tax on interest paid on the Bearer Securities or Coupons; or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Outstanding Debt Security or Coupon of any series created
prior to the execution of such supplemental indenture that is entitled to
the benefit of such provision and as to which such supplemental indenture
would apply; or
(7) to establish the form or terms of Debt Securities and Coupons of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Debt Securities of one or more
series and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 611; or
(9) to evidence any changes to Section 608 or 609 permitted by the terms
thereof; or
(10) to add or change or eliminate any provision of this Indenture as
shall be necessary or desirable in accordance with any amendments to the
Trust Indenture Act, provided such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series or any
appurtenant Coupons in any material respects; or
(11) to secure the Debt Securities pursuant to the requirements of
Sections 1001 or 1207, or otherwise; or
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49
(12) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions
arising under this Indenture that shall not be inconsistent with any
provision of this Indenture, provided such other provisions shall not
adversely affect the interests of the Holders of Outstanding Debt Securities
or Coupons of any series in any material respect.
SECTION 1102. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of each series affected by such
supplemental indenture voting separately, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board Resolution,
and the Trustee may enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture of such Debt Securities,
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Debt Security affected thereby:
(1) change the Stated Maturity of the principal of, or on any
installment of principal of or interest on or sinking fund payment on any
Debt Security, or reduce the principal amount thereof or the interest
thereon or any premium payable upon redemption thereof, or change the Stated
Maturity of or reduce the amount of any payment to be made with respect to a
Coupon, or change the Currency in which the principal of (and premium, if
any) or interest on such Debt Security is denominated or payable, or reduce
the amount of the principal of any Discount Security that would be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant
to Section 502, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date) or change any obligation of the
Company to pay additional interest pursuant to Section 1202 or 1302 (except
as contemplated by Section 1101(1)), or limit the obligation of the Company
to maintain a paying agency outside the United States for payment on Bearer
Securities as provided in Section 1203, or limit the obligation of the
Company to redeem an Affected Security as provided in Section 1302(b); or
(2) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture; or
(3) modify any of the provisions of this Section or Section 513, except
to increase any such percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Debt Security affected thereby, provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section, or the deletion of this provision in
accordance with the requirements of Sections 611 and 1101(7).
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Debt Securities and Coupons, if any,
or that modifies the rights of the Holders of Debt Securities and Coupons of
such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Debt Securities
and Coupons, if any, of any other series.
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50
SECTION 1103. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that adversely affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise in a material
way.
SECTION 1104. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debt Securities and Coupons theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 1105. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
SECTION 1106. Reference in Debt Securities to Supplemental Indentures.
Debt Securities and Coupons, if any, of any series authenticated and
delivered after the execution of any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Debt Securities of any series
and any appurtenant Coupons so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for outstanding Debt Securities and Coupons of such series.
SECTION 1107. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 1102, the Company shall transmit to
the Holders of Debt Securities of any series affected thereby a notice setting
forth the substance of such supplemental indenture.
ARTICLE TWELVE
COVENANTS
SECTION 1201. Payment of Principal, Premium and Interest.
The Company covenants that it will duly and punctually pay, or cause to be
paid, the principal of, premium, if any, and interest on each of the Debt
Securities and pay any Coupons in accordance with the terms of the Debt
Securities, the Coupons and this Indenture. Any interest due on Coupon
Securities on or before Maturity, other than additional amounts, if any, payable
as provided in Sections 1202 and 1302 in respect of principal of (or premium, if
any, on) such a Debt Security, shall be payable only upon presentation and
surrender of the several Coupons for such interest installments as are evidenced
thereby as they severally mature. Except with respect to Coupon Securities or as
otherwise specified pursuant to Section 301, the interest on the Debt
Securities, whether in temporary or definitive form, shall be payable without
presentation of such Debt Securities, and only to or upon the written order of
the Registered Holders thereof and may be paid by checks to the order of such
Registered Holders, mailed to their addresses as they appear upon the Security
Register.
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SECTION 1202. Payment of Additional Interest.
Unless otherwise provided pursuant to Section 301, the provisions of this
Section 1202 shall be applicable to Bearer Securities of any series.
The Company will, subject to the exceptions and limitations set forth below,
pay as additional interest to the Holder of any Bearer Security or Coupon that
is a United States Alien such amounts as may be necessary so that every net
payment on such Bearer Security or Coupon, after deduction or withholding for or
on account of any present or future tax, assessment or other governmental charge
imposed upon or as a result of such payment by the United States (which, for
purposes of this Section shall include only the United States of America, its
political subdivisions and taxing authorities thereof or therein), will not be
less than the amount provided in such Bearer Security or Coupon to be then due
and payable. However, the Company will not be required to make any such payment
of additional interest for or on account of:
(a) any tax, assessment or other governmental charge that would not have
been imposed but for (i) the existence of any present or former connection
between such Holder (or between a fiduciary, settlor or beneficiary of, or a
person holding a power over, such Holder, if such Holder is an estate or a
trust, or a member or shareholder of such Holder, if such Holder is a
partnership or corporation) and the United States, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary, person holding
a power, member or shareholder) being or having been a citizen or resident
thereof or being or having been engaged in trade or business or present therein
or having had a permanent establishment therein or (ii) such Holder's past or
present status as a personal holding company, foreign personal holding company
or private foundation or other tax-exempt organization with respect to the
United States or as a corporation that accumulates earnings to avoid United
States Federal income tax;
(b) any estate, inheritance, gift, sales, excise, gross receipts, transfer
or real or personal property tax or any similar tax, assessment or other
governmental charge;
(c) any tax, assessment or other governmental charge that would not have
been imposed but for the presentation by the Holder of a Bearer Security or
Coupon for payment more than 15 days after the date on which such payment became
due and payable or on which payment thereof was duly provided for, whichever
occurs later;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by deduction or withholding from a payment on a Bearer Security
or Coupon;
(e) any tax, assessment or other governmental charge required to be deducted
or withheld by any Paying Agent from a payment on a Bearer Security or Coupon,
if such payment can be made without such deduction or withholding by any other
Paying Agent;
(f) any tax, assessment or other governmental charge that would not have
been imposed (by reason of treaty or otherwise) but for a failure to comply with
applicable certification, documentation, information or other reporting
requirement concerning the nationality, residence, identity or connection with
the United States of the Holder or beneficial owner of a Bearer Security or
Coupon if such compliance is required by treaty, statute or regulation of the
United States as a precondition to relief or exemption from such tax, assessment
or other governmental charge;
(g) any tax, assessment or other governmental charge imposed on a Holder
that actually or constructively owns 10 percent or more of the combined voting
power of all classes of stock of the Company, that is a controlled foreign
corporation related to the Company through stock ownership, or that is a bank
with respect to which the holding of the Bearer Security or Coupon is treated as
the extension of credit in the ordinary course of its trade or business; or
(h) any tax, assessment or other governmental charge imposed on a Holder as
the result of a determination made under section 871(h)(6) or 881(c)(6) of the
Code;
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nor shall additional interest be paid with respect to a payment on a Bearer
Security or Coupon to a Holder that is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent a beneficiary or settlor
with respect to such fiduciary or a member of such partnership or a beneficial
owner would not have been entitled to the additional interest had such
beneficiary, settlor, member or beneficial owner been the Holder of such Bearer
Security or Coupon.
Whenever in this Indenture there is mentioned, in any context, the payment
of the principal of (or premium, if any) or interest on any Debt Security or
payment with respect to any Coupon of any series, such mention shall be deemed
to include mention of the payment of additional interest provided for in the
terms of such Debt Securities and this Section to the extent that, in such
context, additional interest is, was or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
additional interest (if applicable) in any provisions hereof shall not be
construed as excluding additional interest in those provisions hereof where such
express mention is not made.
If the payment of additional interest becomes required in respect of the
Debt Securities of a series, at least ten days prior to the first Interest
Payment Date with respect to which such additional interest will be payable (or
if the Debt Securities of that series will not bear interest prior to Maturity,
the first day on which a payment of principal (and premium, if any) is made and
on which such additional interest will be payable), and at least ten days prior
to each date of payment of principal (and premium, if any) or interest if there
has been any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company will furnish the Trustee and each Paying
Agent with an Officers' Certificate that shall specify by country the amount, if
any, required to be withheld on such payments to Holders of Debt Securities or
Coupons that are United States Aliens, and the Company will pay to the Trustee
or such Paying Agent the additional interest, if any, required by the terms of
such Debt Securities and this Section. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section 1202.
SECTION 1203. Maintenance of Office or Agency.
The Company covenants that, so long as any Debt Securities remain
outstanding, it will maintain in each Place of Payment for any series of Debt
Securities and Coupons an office or agency where Debt Securities of such series
(but, except as otherwise provided in Section 307, unless such Place of Payment
is located outside the United States, no Bearer Securities or Coupons) may be
presented for registration of transfer and exchange as in this Indenture
provided, and where notices and demands to or upon the Company in respect of the
Debt Securities and Coupons of such series or of this Indenture may be served,
and where Debt Securities and Coupons of such series may be presented for
payment. So long as any Bearer Securities of any series remain Outstanding, the
Company will maintain for such purposes one or more offices or agencies outside
the United States in such city or cities specified pursuant to Section 301, and,
if any Bearer Securities are listed on a securities exchange as in this
Indenture provided that requires an office or agency for the payment of
principal of (and premium, if any) or interest on such Bearer Securities in a
location other than the location of an office or agency specified pursuant to
Section 301, the Company will maintain for such purposes an office or agency in
such location for so long as any Bearer Securities are listed on such securities
exchange and such exchange so requires. The Company will give written notice to
the Trustee of the location, and any change in the location, of any such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee (in the case of Registered Securities) and
at an office of the Trustee outside of the United States to be specified (in the
case of Bearer Securities).
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53
SECTION 1204. Provisions as to Paying Agent.
(a) If the Company shall appoint a Paying Agent with respect to any series
of Debt Securities and Coupons, other than the Trustee, it will cause each such
Paying Agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to this Section 1204:
(1) that it will hold all sums held by it as such agent for the payment
of the principal of and premium, if any, or interest on the Debt Securities
of such series and the payment of any related Coupons (whether such sums
have been paid to it by the Company or by any other obligor on the Debt
Securities or related Coupons of such series) in trust for the benefit of
the Holders of such series, and will notify the Trustee of the receipt of
such sums to be so held,
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor upon the Debt Securities of such series) to make
any payment of the principal of and premium, if any, or interest on the Debt
Securities of such series and the payment on any related Coupons when the
same shall be due and payable, and
(3) that it will, at any time during the continuance of an Event of
Default, upon the written request of the Trustee, deliver to the Trustee all
sums held by it as such agent.
(b) If the Company shall act as its own paying agent, with respect to any
series of Debt Securities or Coupons, if any, it will, on or before each due
date of the principal of and premium, if any, or interest on any of the Debt
Securities of such series and any appurtenant Coupons, set aside, segregate and
hold in trust for the benefit of the Holders of such series, a sum sufficient to
pay such principal, premium, if any, or interest so becoming due and will notify
the Trustee of any failure to take such action.
(c) Anything in this Section 1204 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it, or any Paying Agent hereunder, as
required by this Section 1204, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 1204 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 1204 is subject to
the following:
(1) In connection with the satisfaction and discharge of this Indenture
all moneys then held by any Paying Agent (other than the Trustee) under this
Indenture shall, upon and in accordance with the demand of the Company, be
paid to the Trustee and thereupon such Paying Agent shall be released from
all further liability with respect to such moneys.
(2) Any moneys deposited with the Trustee or any Paying Agent remaining
unclaimed by the Holders of Debt Securities or Coupons of any series for two
years after the date upon which the principal of and premium, if any, or
interest on such Debt Securities or Coupons shall have become due and
payable, shall be repaid to the Company by the Trustee or such Paying Agent
on written demand; and the Holder entitled to receive such payment shall
thereafter look only to the Company for the payment thereof, and any and all
liability of the Trustee or of any Paying Agent with respect to such moneys
shall thereupon cease.
SECTION 1205. Certificate to Trustee.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year, commencing with the first fiscal year in which Debt Securities
are issued hereunder, a written statement signed by the Company's principal
executive officer, principal financial officer or principal accounting officer,
stating that
(a) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision and
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54
(b) to his or her knowledge, based on such review, the Company has
fulfilled all its obligations under this Indenture through such year, or, if
there has been a default in the fulfillment of any such obligation,
specifying each such default known to him and the nature and status thereof.
Such statement need not include reference to any default which has been
fully cured prior to the date as of which such statement speaks.
The Company will deliver written notice to the Trustee within five days
after any officer of the Company has actual knowledge of the occurrence of any
event that with the giving of notice to the Company and the passage of time
would become an Event of Default under Section 501(7).
SECTION 1206. Appointment to Fill Vacancy in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 610, a Trustee, so that
at all times there shall be a Trustee hereunder.
SECTION 1207. Limitation on Liens.
From and after the date of the first issue of Debt Securities under this
Indenture, the Company shall not, directly or indirectly make, create, incur,
assume or suffer to exist any Lien upon or with respect to any of the capital
stock of MCI Telecom, nor shall it permit MCI Telecom to, directly or
indirectly, make, create, incur, assume or suffer to exist any Lien upon or with
respect to any part of its property or assets, whether owned as of such date or
thereafter acquired, unless the Debt Securities then outstanding shall be
equally and ratably secured with any other obligation or indebtedness so
secured, except for any of the following:
(a) any Lien existing on the property of MCI Telecom on the date of the
first issue of Debt Securities under this Indenture securing Indebtedness
outstanding on such date;
(b) Liens for taxes, assessments or other governmental charges which are not
delinquent or remain payable without material penalty, or the validity of which
is contested in good faith by appropriate proceedings (to the extent that it
would be appropriate to contest the levy or imposition of such tax as an
alternative to payment) upon stay of execution or the enforcement thereof and
for which adequate reserves or other appropriate provision has been made in
accordance with generally accepted accounting principles;
(c) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not material or, if material, are not delinquent or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings;
(d) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and do not materially detract from the overall value to
MCI Telecom of all property and assets of MCI Telecom subject to such Liens or
interfere with the ordinary conduct of the business of MCI Telecom;
(g) Liens on assets which shall be acquired by MCI Telecom either directly
or through the acquisition of the owner of such assets after the date of the
first issue of Debt Securities under this Indenture, if such Liens shall have
existed at the time the assets or the owner of such assets were acquired and
shall not have been created in anticipation thereof by or with the agreement of
MCI Telecom;
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55
(h) Liens on assets (other than current assets) which shall be acquired by
MCI Telecom after the date of the first issue of Debt Securities under this
Indenture if such Liens shall have been created solely for the purpose of
securing Indebtedness representing, or incurred to finance, refinance or refund,
the cost of the acquisition of such assets or shall otherwise be created in
anticipation of such acquisition by or with the agreement of MCI Telecom; and
(i) Liens not otherwise permitted hereunder securing obligations of MCI
Telecom in an aggregate amount not to exceed an amount equal to __% of the total
assets of MCI Telecom at any time, provided that, at the time any such Lien is
created or incurred, the aggregate book value of the assets subject to such Lien
shall not exceed an amount equal to ___% of the amount of the obligation secured
by such assets.
SECTION 1208. Sale or Lease of Assets.
From and after the date of the first issue of Debt Securities under this
Indenture, the Company shall not, directly or indirectly, sell, convey, transfer
or otherwise dispose of (whether in one or a series of transactions) any of the
shares of capital stock of MCI Telecom, nor shall the Company permit MCI Telecom
to, directly or indirectly, sell, lease, convey, transfer or otherwise dispose
of (whether in one or a series of transactions) all or a material part of the
assets, business or property of MCI Telecom (including without limitation,
accounts and notes receivable, with or without recourse), whether owned as of
such date or thereafter acquired, or enter into any agreement to do any of the
foregoing, except any of the following:
(a) dispositions by MCI Telecom of obsolete or worn-out property or real
property no longer used or useful in its business;
(b) sales to local exchange carriers, with or without recourse, of customer
receivables in the ordinary course of business;
(c) dispositions of assets acquired, either directly or through the
acquisition of the owner of such assets, after the date of the first issue of
Debt Securities under this Indenture; provided, that each such disposition shall
be for fair and adequate consideration; and
(d) dispositions (including, without limitation, sales pursuant to
sale-leaseback transactions) by MCI Telecom not otherwise permitted hereunder
which are made for fair market value; provided that the book value of all
Disposed Assets (as hereinafter defined) disposed of pursuant to this Section
1208(d) after the date of the first issue of Debt Securities under this
Indenture does not exceed __% of the greater of (i) the book value of the assets
of MCI Telecom as of December 31, 1993 and (ii) the book value of the assets of
MCI Telecom as of the date of the most recent financial statements furnished to
the Trustee pursuant to Section 704(1).
For purposes of Section 1208(d), the term "Disposed Assets" shall mean all
assets of MCI Telecom other than cash and cash equivalents, equity investments,
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade names, goodwill, experimental or organizational expense, and
other like intangibles (but excluding rights of way treated as assets).
SECTION 1209. Maintenance of Telecommunications Business.
The Company shall maintain the business of providing telecommunications
services as a principal business of the Company and its Subsidiaries taken as a
whole and shall cause MCI Telecom to maintain such business as its principal
business.
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ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES
SECTION 1301. Applicability of Article.
Debt Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 301 for Debt Securities of any series)
in accordance with this Article.
SECTION 1302. Tax Redemption; Special Tax Redemption.
(a) Unless otherwise specified pursuant to Section 301, Bearer Securities of
any series may be redeemed at the option of the Company in whole, but not in
part, at any time, on giving not less than 30 or more than 60 days' notice in
accordance with Section 1305 (which notice shall be irrevocable), at the
Redemption Price thereof (calculated without premium), if the Company has or
will become obligated to pay additional interest on such Bearer Securities
pursuant to Section 1202 as a result of any change in, or amendment to, the laws
(or any regulations or rulings promulgated thereunder) of the United States or
any political subdivision or taxing authority thereof or therein, or any change
in the application or official interpretation of such laws, regulations or
rulings, which change or amendment becomes effective on or after the date on
which any Person (including any Person acting as underwriter, broker or dealer)
agrees to purchase any of such Bearer Securities pursuant to their original
issuance, and such obligation cannot be avoided by the Company taking reasonable
measures available to it, which measures are reasonable in terms of expense,
administrative burden and otherwise; provided that no such notice of redemption
shall be given earlier than 90 days prior to the earliest date on which the
Company would be obligated to pay such additional interest were a payment in
respect of the Bearer Securities of that series then due. At least 15 days prior
to the publication of any notice of redemption pursuant to this Section 1302(a),
the Company shall deliver to the Trustee (i) an Officers' Certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (ii) an opinion of Counsel to the effect
that the Company has or will become obligated to pay such additional interest as
a result of such change or amendment.
(b) Unless otherwise specified pursuant to Section 301, if the Company shall
determine that any payment made outside the United States by the Company or any
of its Paying Agents in respect of any Bearer Security or Coupon, if any (an
"Affected Security"), would, under any present or future laws or regulations of
the United States, be subject to any certification, documentation, information
or other reporting requirement of any kind, the effect of which requirement is
the disclosure to the Company, any Paying Agent or any governmental authority of
the nationality, residence or identity of a beneficial owner of such Affected
Security that is a United States Alien (other than such a requirement (i) that
would not be applicable to a payment made by the Company or any one of its
Paying Agents (A) directly to the beneficial owner or (B) to a custodian,
nominee or other agent of the beneficial owner, or (ii) that can be satisfied by
such custodian, nominee or other agent certifying to the effect that the
beneficial owner is a United States Alien; provided that, in any case referred
to in Clause (i)(B) or (ii), payment by the custodian, nominee or agent to the
beneficial owner is not otherwise subject to any such requirement), then the
Company shall elect either (x) to redeem such Affected Securities in whole, but
not in part, at the Redemption Price thereof (calculated without premium) or (y)
if the conditions of the next succeeding paragraph are satisfied, to pay the
additional interest specified in such paragraph. The Company shall make such
determination as soon as practicable and publish prompt notice thereof (the
"Determination Notice"), stating the effective date of such certification,
documentation, information or other reporting requirement, whether the Company
elects to redeem the Affected Securities or to pay the additional interest
specified in the next succeeding paragraph and (if applicable) the last date by
which the redemption of the Affected Securities must take place, as provided in
the next succeeding sentence. If any Affected Securities are to be redeemed
pursuant to this paragraph, the redemption shall
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57
take place on such date, not later than one year after the publication of the
Determination Notice, as the Company shall specify by notice given to the
Trustee at least 60 days before the Redemption Date. Notice of such redemption
shall be given to the Holders of the Affected Securities not more than 60 days
or less than 30 days prior to the Redemption Date. Notwithstanding the
foregoing, the Company shall not so redeem the Affected Securities if the
Company shall subsequently determine, not less than 30 days prior to the
Redemption Date, that subsequent payments on the Affected Securities would not
be subject to any such certification, documentation, information or other
reporting requirement, in which case the Company shall publish prompt notice of
such subsequent determination, and any earlier redemption notice given pursuant
to this paragraph shall be revoked and of no further effect. At least 15 days
prior to the publication of any Determination Notice pursuant to this paragraph,
the Company shall deliver to the Trustee (i) an Officers' Certificate stating
that the Company is entitled to make such determination and setting forth a
statement of that fact showing that the conditions precedent to the obligation
of the Company to redeem the Affected Securities or to pay the additional
interest specified in the next succeeding paragraph have occurred and (ii) an
Opinion of Counsel to the effect that such conditions have occurred.
If and so long as the certification, documentation, information or other
reporting requirements referred to in the preceding paragraph would be fully
satisfied by payment of a backup withholding tax or similar charge, the Company
may elect to pay as additional interest such amounts as may be necessary so that
every net payment made outside the United States following the effective date of
such requirement by the Company or any of its Paying Agents in respect of any
Affected Security of which the beneficial owner is a United States Alien (but
without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Company, any Paying Agent or any
governmental authority), after deduction or withholding for or on account of
such backup withholding tax or similar charge (other than a backup withholding
tax or similar charge that (i) would not be applicable in the circumstances
referred to in the parenthetical clause of the first sentence of the preceding
paragraph or (ii) is imposed as a result of presentation of any such Affected
Security for payment more than 15 days after the date on which such payment
became due and payable or on which payment thereof was duly provided for,
whichever occurred later) will not be less than the amount provided in any such
Affected Security to be then due and payable. If the Company elects to pay
additional interest pursuant to this paragraph, then the Company shall have the
right to redeem the Affected Securities at any time in whole, but not in part,
at the Redemption Price thereof (calculated without premium), subject to the
provisions of the last three sentences of the immediately preceding paragraph.
If the Company elects to pay additional interest pursuant to this paragraph and
the condition specified in the first sentence of this paragraph should no longer
be satisfied, then the Company shall redeem the Affected Securities in whole,
but not in part, at the Redemption Price thereof (calculated without premium),
subject to the provisions of the last three sentences of the immediately
preceding paragraph. Any redemption payments made by the Company pursuant to the
two immediately preceding sentences shall be subject to the continuing
obligation of the Company to pay additional interest pursuant to this paragraph.
If the Company elects to, or is required to, redeem the Affected Securities
pursuant to this paragraph, it shall publish prompt notice thereof. If the
Affected Securities are to be redeemed pursuant to this paragraph, the
redemption shall take place on such date, not later than one year after the
publication of the notice of redemption, as the Company shall specify by notice
to the Trustee at least 60 days prior to the Redemption Date.
SECTION 1303. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Debt Securities shall be evidenced
by or made pursuant to a Board Resolution. In case of any redemption at the
election of the Company of less than all of the Debt Securities of any series
with the same terms and conditions, the Company shall, at least 60 days prior to
the Redemption Date fixed by the Company (unless a shorter period shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Debt Securities of any such series with the same terms
and conditions to be redeemed. In the case of any
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58
redemption of Debt Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Debt Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
SECTION 1304. Selection by Trustee of Debt Securities to be Redeemed.
Except as otherwise specified pursuant to Section 301 for Debt Securities of
any series, if less than all the Debt Securities of any series with the same
terms and conditions are to be redeemed (other than a redemption pursuant to
Section 1302), the particular Debt Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee from the
Outstanding Debt Securities of such series with the same terms and conditions
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Debt Securities of
such series or any integral multiple thereof that is also an authorized
denomination, but in no event shall such portion be less than $1,000) of the
principal amount of Registered Securities or Bearer Securities (if issued in
more than one authorized denomination) of such series of a denomination larger
than the minimum authorized denomination for Debt Securities of such series. If
less than all Debt Securities of any series with differing terms and conditions
are to be redeemed, the Company, in its sole discretion, shall select the
particular Debt Securities to be redeemed and shall notify the Trustee in
writing thereof, at least 45 days prior to the relevant Redemption Date.
The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Debt Securities shall relate, in
the case of any Debt Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debt Security that has been or is to be
redeemed.
SECTION 1305. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 105
not less than 30 or more than 60 days prior to the Redemption Date, unless a
different period is specified in the form of Securities to be redeemed. All
notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Debt Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Debt Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Debt Security to be redeemed, and that interest
thereon shall cease to accrue on and after said date,
(5) the Place or Places of Payment where such Debt Securities, together
in the case of Bearer Securities with all Coupons, if any, appertaining
thereto maturing after the Redemption Date, are to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
A notice of redemption published as contemplated by Section 105 need not
identify particular Registered Securities to be redeemed.
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59
Notice of redemption of Debt Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1306. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1204) an amount of
money sufficient to pay the Redemption Price of and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Debt
Securities or portions thereof that are to be redeemed on that date.
SECTION 1307. Debt Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debt Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and, from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest on such Debt Securities), shall cease to bear interest and the Coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Debt Security for redemption in accordance with said notice, such Debt Security
shall be paid by the Company at the Redemption Price, together with accrued
interest to the Redemption Date; provided, however, that installments of
interest on Bearer Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable only upon presentation and surrender of Coupons
for such interest (at an office or agency located outside the United States
except as otherwise provided in Section 307), and provided further that
installments of interest on Registered Securities whose Stated Maturity is on
or prior to the Redemption Date shall be payable to the Holders of such Debt
Securities, or one or more Predecessor Securities, registered as such on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, such Bearer
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing Coupons, or the surrender of such missing
Coupon or Coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
Coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by Coupons shall be payable only
upon presentation and surrender of those Coupons at an office or agency located
outside of the United States except as otherwise provided in Section 307.
If any Debt Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.
SECTION 1308. Debt Securities Redeemed in Part.
Any Registered Security that is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar and the Trustee duly executed by the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Debt Security without
service charge, a new Registered Security or Registered Securities of the same
series of like tenor, of any authorized denomination as requested by such Holder
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Debt
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Security so surrendered, and any Bearer Security that is to be redeemed only in
part shall be surrendered at an office or agency of the Company located outside
the United States except as otherwise provided in Section 307, and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Debt Security outside the United States without service charge, a new
Bearer Security or Bearer Securities of the same series (or a new Registered
Security or Registered Securities of the same series if the Debt Securities of
such series are issuable as Registered Securities), of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Debt Security
so surrendered; except in either case that if a Global Security is so
surrendered, the Company shall execute, and the Trustee shall authenticate and
deliver to the Depositary for such Global Security, without service charge, a
new Global Security in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Global Security so surrendered.
ARTICLE FOURTEEN
SINKING FUNDS
SECTION 1401. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Debt Securities of a series except as otherwise specified
pursuant to Section 301 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Debt Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Debt Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of Debt Securities of any
series, the amount of any sinking fund payment may be subject to reduction as
provided in Section 1402. Each sinking fund payment shall be applied to the
redemption of Debt Securities of any series as provided for by the terms of Debt
Securities of such series.
SECTION 1402. Satisfaction of Sinking Fund Payments with Debt Securities.
The Company (1) may deliver outstanding Debt Securities of a series (other
than any previously called for redemption), together, in the case of any Bearer
Securities of such series, with all unmatured Coupons appertaining thereto, and
(2) may apply as a credit Debt Securities of a series that have been redeemed
either at the election of the Company pursuant to the terms of such Debt
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debt Securities of such series required to be made pursuant to the terms of such
Debt Securities as provided for by the terms of such series; provided that such
Debt Securities have not been previously so credited. Such Debt Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Debt Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 1403. Redemption of Debt Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series
of Debt Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, that is to be
satisfied by payment of cash, the portion thereof, if any, that is to be
satisfied by crediting Debt Securities of that series pursuant to Section 1402
and the basis for any such credit and, prior to or concurrently with the
delivery of such Officers' Certificate, will also deliver to the Trustee any
Debt Securities to be so credited and not
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theretofore delivered to the Trustee. Before each such sinking fund payment date
the Trustee shall select the Debt Securities to be redeemed upon such sinking
fund payment date in the manner specified in section 1304 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1305. Such notice having been duly
given, the redemption of such Debt Securities shall be made upon the terms and
in the manner stated in Sections 1306, 1307 and 1308.
ARTICLE FIFTEEN
DEFEASANCE
SECTION 1501. Applicability of Article.
If pursuant to Section 301, provision is made for the defeasance of Debt
Securities of a series and if the Debt Securities of such series are Registered
Securities and denominated and payable only in Dollars (except as provided
pursuant to Section 301), then the provisions of this Article shall be
applicable except as otherwise specified pursuant to Section 301 for Debt
Securities of such series. Defeasance provisions, if any, for Debt Securities
denominated in a Foreign Currency or for Bearer Securities may be specified
pursuant to Section 301.
SECTION 1502. Defeasance Upon Deposit of Money or U.S. Government
Obligations.
At the Company's option, either (a) the Company shall be deemed to have been
Discharged (as defined below) from its obligations with respect to Debt
Securities of any series on the 91st day after the applicable conditions set
forth below have been satisfied or (b) the Company shall cease to be under any
obligation to comply with any term, provision or condition set forth in Section
1001 with respect to Debt Securities of any series (and, if so specified
pursuant to Section 301, any other restrictive covenant added for the benefit of
such series pursuant to Section 301) at any time after the applicable conditions
set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Debt Securities of such series (i) money in an amount, or (ii) U.S.
Government Obligations (as defined below) that through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount or (iii) a combination of (i) and (ii), sufficient, in
the opinion (with respect to (ii) and (iii)) of a nationally recognized firm
of independent public accountants expressed;
(2) if the Debt Securities of such series are then listed on the New
York Stock Exchange, the Company shall have delivered to the trustee an
Opinion of Counsel to the effect that the Company's exercise of its option
under this Section would not cause such Debt Securities to be delisted;
(3) no event of Default or event (including such deposit) that, with
notice or lapse of time, or both, would become an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposits; and
(4) the Company shall have delivered to the trustee an Opinion of
Counsel to the effect threat Holders of the Debt Securities of such series
will not recognize income, gain or loss for Federal income tax purposes as a
result of the Company's exercise of its option under this Section and will
be subject to federal income tax on the same amounts and in the same manner
and at the same times as would have been the case if such option had not
been exercised or, in the case of the Debt Securities of such series being
Discharged, a ruling to that effect received from or published by the
Internal Revenue Service.
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"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Debt Securities of such series (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except (A) the rights of Holders of Debt Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of (and premium, if any) and interest on such Debt Securities when
such payments are due, (B) the company's obligations with respect to the Debt
Securities of such series under Sections 304, 305, 306, 1203, 1503 and 1504 and
(C) the rights, powers, trusts, duties and immunities of the Trustee hereunder.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, that, in either case under clauses (i) or (ii),
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
SECTION 1503. Deposited Moneys and U.S. Government Obligations to be Held in
Trust.
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 1502 in respect of Debt Securities of a series shall be held
in trust and a applied by it, in accordance with the provisions of such Debt
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Debt Securities, of all sums due
and to become due thereon for principal (and premium, if any) and interest, if
any, but such money need not be segregated from other funds except to the extent
required by law.
SECTION 1504. Repayment to Company.
The Trustee and any Paying Agent shall promptly pay or return to the Company
upon Company Request any moneys or U.S. Government Obligations held by them at
any time that are not required for the payment of the principal of (and premium,
if any) and interest on the Debt Securities of any series for which money or
U.S. Government Obligations have been deposited pursuant to Section 1502.
The provisions of paragraph (d) of Section 1204 shall apply to any money or
U.S. Government Obligations held by the Trustee or any Paying Agent under this
Article that remains unclaimed for two years after the Maturity of any series of
Debt Securities for which money or U.S. Government obligations have been
deposited pursuant to Section 1502.
ARTICLE SIXTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1601. Repayment at the Option of Holders.
Debt Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in accordance with
the terms of the Debt Securities of such series. The repayment of any principal
amount of Debt Securities pursuant to such option of the Holder to require
repayment of Debt Securities before their Stated Maturity, for purposes of
Section 308, shall not
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63
operate as a payment, redemption or satisfaction of the indebtedness represented
by such Debt Securities unless and until the Company, at its option, shall
deliver or surrender the same to the Trustee with a directive that such Debt
Securities be cancelled. Notwithstanding anything to the contrary contained in
this Article Sixteen, in connection with any repayment of Debt Securities, the
Company may arrange for the purchase of any Debt Securities by an agreement with
one or more investment bankers or other purchasers to purchase such Debt
Securities by paying to the Trustee for the benefit of the Holders of such Debt
Securities on or before 12:00 P.M. on the repayment date in immediately
available funds an amount not less than the repayment price payable by the
Company on repayment of such Debt Securities, and the obligation of the Company
to pay the repayment price of such Debt Securities to such Holders shall be
satisfied and discharged to the extent such payment is so paid by such
purchasers.
ARTICLE SEVENTEEN
SECURITY
SECTION 1701. Certificates and opinions.
(a) In the event that the Debt Securities become secured pursuant to Section
1001(3) or Section 1207, the Company shall cause (i) Section 314(d) of the Trust
Indenture Act, relating to Opinions of Counsel regarding the Liens on the
property or assets of the Company securing the Debt Securities ("Collateral")
and (ii) Section 314(d) of the Trust Indenture Act, relating to Officers'
Certificates or opinions regarding fair value to an obligor of the Collateral
and the release of Collateral, to be complied with to the extent applicable. If
required by Section 314(d) of the Trust Indenture Act, such certificate or
opinion shall be made by an independent engineer, appraiser or other expert
selected or approved by the Trustee in the exercise of reasonable care.
(b) Notwithstanding the provisions of Section 1701 (a), at any time and from
time to time with respect to Collateral which consists of accounts receivable or
notes receivable, the Company may, without any release or consent by the Trustee
or certificate or opinion required by Section 314(d) of the Trust Indenture Act,
collect, liquidate, sell, factor or otherwise dispose of such accounts
receivable or notes receivable in the ordinary course of the Company's business,
as the case may be, subject, however, to Articles Ten and Twelve; provided,
however, that the proceeds of any such collection, liquidation, sale, factor or
other disposition shall constitute Collateral.
(c) Notwithstanding the foregoing, the Company's right to rely on Section
1701(b) for each six month period ending on a June 30 or December 31 (a
"Six-Month Period") shall be conditioned upon that person delivering to the
Trustee, within 30 days following the end of such Six-Month Period, an Officers'
Certificate to the effect that all collections and other dispositions of
accounts receivable or notes receivable by that person during such Six-Month
Period were in the ordinary course of that person's business and that all
proceeds therefrom were used by that person in connection with its business or
to make other cash payments permitted by this Indenture.
SECTION 1702. Authorization of Actions to be Taken by the Trustee.
(a) The Trustee may take all actions it deems necessary or appropriate in
order to enforce or exercise its rights in the Collateral. Subject to the
provisions thereof, the Trustee shall have power to institute and to maintain
suits and proceedings to prevent any impairment of the Collateral by any act
which may be unlawful or in violation of this Indenture, and suits and
proceedings to preserve or protect its interests and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security hereunder or be prejudicial to the
interests of the Holders or of the Trustee).
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(b) The Trustee is authorized to receive any funds for the benefit of
Holders and to make further distributions of such funds to the Holders according
to the provisions of this Indenture.
SECTION 1703. Release of Liens.
In the event that the Debt Securities become secured, pursuant to Section
1001(3) or Section 1207, upon the payment in full of all Debt Securities, or
upon the release of any and all Liens which would trigger the securing of the
Debt Securities pursuant to Section 1001(3) or Section 1207, the Liens created
by this Indenture shall be released with respect to the Debt Securities.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
MCI COMMUNICATIONS CORPORATION
By: ..................................
Title: ...............................
[CORPORATE SEAL]
Attest:
.....................................
CITIBANK, N.A.
By: ..................................
Title: ...............................
[CORPORATE SEAL]
Attest:
.....................................
<PAGE>
CITY OF WASHINGTON
DISTRICT OF COLUMBIA ss.:
On this day of , 1994 before me appeared
to me personally known, who, being by me duly
sworn, did say that he is the of MCI COMMUNICATIONS
CORPORATION, one of the corporations described in and which executed the above
instrument, and that the seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed on behalf of
said corporation by authority of its Board of Directors, and said person
acknowledged said instrument to be the free act and deed of said corporation.
(NOTARIAL SEAL]
STATE OF
COUNTY OF ss.:
On this day of , 1994, before me personally came
to me known, who, being by me duly sworn,
did depose and say that he is of
CITIBANK, N.A., one of the corporations described in and which executed the
above instrument; that he knows the corporate seal of such corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
pursuant to authority of the Board of Directors of such corporation, and that he
signed his name thereto pursuant to like authority.
(NOTARIAL SEAL]
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE OF OWNERSHIP BY A
NON-UNITED STATES PERSON OR BY
CERTAIN OTHER PERSONS
[INSERT TITLE OR DESCRIPTION OF SECURITIES TO BE DELIVERED]
Reference is hereby made to the Indenture dated as of December , 1994
(the "Indenture") between MCI Communications Corporation and CITIBANK, N.A.
covering the above captioned Securities.
This is to certify that, as of the date hereof, the above-captioned
Securities (i) are owned by persons that are not United States persons; (ii) are
owned by United States persons that either (a) are foreign branches of United
States financial institutions (as defined in U.S. Treas. Reg. Sec.
1.165-12(c)(1)(v) ("financial institutions")) purchasing for their own account
or for resale, or (b) acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution (or, in the case where a United States person who
has an account with the United States office of a financial institution, and the
transaction is executed by a foreign office of that financial institution, or by
the foreign office of another financial institution acting on behalf of that
financial institution, the United States office of the foreign financial
institution) hereby certifies that it agrees to comply with the requirements of
section 165(j)(3)(A), (B), or (C) of the United States Internal Revenue Code and
the regulations thereunder); or (iii) are owned by financial institutions for
the purposes of resale during the restricted period (as defined in U.S. Treas.
Reg. Sec. 1.163-5(c)(2)(i)(D)(7)), which financial institutions (whether or not
also described in clause (i) or (ii)) hereby certify that they have not acquired
the Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions. If this
certificate is being provided by an entity that is in the business of holding
obligations for member organizations and transferring obligations among such
members by credit or debit to the account of a member without the necessity of
physical delivery of the obligation, the certificate is based on statements
provided to such entity by its member organizations, which statements will be
retained by such entity for a period of four calendar years following the year
in which this certificate is provided. As used herein, "United States", means
the United States of America (including the States and the District of
Columbia), its territories and possessions and other areas subject to its
jurisdiction, and "United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or organized
in or under the laws of the United States or any political subdivision thereof
and any estate or trust the income or which is subject to United States Federal
income taxation regardless of its source.
The undersigned undertakes to advise by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the
above-captioned Debt Securities in bearer form, and any coupons or warrants
attached thereto.
The undersigned understands that this certificate is required in connection
with the United States tax laws. If administrative or legal proceedings are
commenced or threatened in connection with which this certificate is or would be
relevant, the undersigned irrevocably authorizes the production of this
certificate or a copy thereof to any interested party in such proceedings.
Dated: ............................... ,
19 .
A-1
EXHIBIT 4(f)
REGISTERED REGISTERED
No. FXR U.S.$
CUSIP
MCI
MCI COMMUNICATIONS CORPORATION
SENIOR MEDIUM-TERM NOTE
(Fixed Rate)
ORIGINAL ISSUE DATE: INTEREST RATE: MATURITY DATE:
INITIAL REDEMPTION DATE: INITIAL REDEMPTION ANNUAL REDEMPTION
PERCENTAGE: PERCENTAGE REDUCTION:
REPAYMENT DATE(S):
MCI COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"),
for value received, hereby promises to pay to
, or registered assigns, the principal sum of
DOLLARS
on the Maturity Date specified above (except to the extent redeemed or
repaid prior to the Maturity Date), and to pay interest thereon at the
Interest Rate per annum specified above, semiannually on June 1 and
December 1 (each an "Interest Payment Date") in each year commencing on the
first Interest Payment Date next succeeding the Original Issue Date
specified above, unless the Original Issue Date occurs between a Regular
Record Date, as defined below, and the next succeeding Interest Payment
Date, in which case commencing on the second Interest Payment Date
succeeding the Original Issue Date, to the registered Holder of such Note
as of the close of business on the Regular Record Date with respect to such
Interest Payment Date, and on the Maturity Date shown above (or any date of
redemption or earlier repayment, either such date being referred to herein
as a "date of prepayment"), until the principal hereof and premium, if any,
hereon is paid or duly made available for payment. Interest payable on
this Note on any Interest Payment Date will include interest accrued from
the most recent Interest Payment Date to which interest has been paid or
duly provided for or, if no interest has been paid, from the Original Issue
Date specified above, to but excluding such Interest Payment Date or
Maturity Date (or date of prepayment), as the case may be. If the Maturity
Date (or any date of prepayment) or an Interest Payment Date falls on a day
which is not a Business Day, as defined below, principal, premium or
interest payable with respect to such Maturity Date (or date of prepayment)
or Interest Payment Date will be paid on the next succeeding Business Day
with the same force and effect as if made on such Maturity Date (or date of
prepayment) or Interest Payment Date, as the case may be, and no interest
shall accrue on the amount so payable for the period from and after such
Maturity Date (or date of prepayment) or Interest Payment Date. Interest
payments for this Note will be computed and paid on the basis of a 360-day
year of twelve 30-day months. The interest so payable, and punctually paid
or duly provided for, on any Interest Payment Date will, subject to certain
exceptions, be paid to the person in whose name this Note (or one or more
predecessor Senior Medium-Term Notes, as defined on the reverse hereof) is
registered as of the close of business on the Regular Record Date for such
interest, which shall be the May 15 or November 15 next preceding the June
1 or December 1 Interest Payment Date (whether or not a Business Day);
provided, however, that interest payable on the Maturity Date (or any date
of prepayment) will be payable to the person to whom the principal hereof
shall be payable. As used herein, "Business Day" means any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which banking
institutions are authorized or required by law or executive order to close in
The City of New York; provided, however, that, with respect to Notes the payment
of which is to be made in a currency or composite currency other than United
States dollars, such day is also not a day on which banking institutions are
authorized or required by law or executive order to close in the Principal
Financial Center (hereafter defined) of the country issuing such currency or
composite currency (or, in the case of the European Currency Unit ("ECU"), is
not a day that appears as an ECU non-settlement day on the display designated
as "ISDE" on the Reuter Monitor Money Rates Service (or a day so designated by
the ECU Banking Association) or, if ECU non-settlement days do not appear on
that page (and are not so designated), is not a day on which payments in ECU
cannot be settled in the international interbank market); provided, further,
that, with respect to Notes as to which LIBOR or LIBID is an applicable
Interest Rate Basis, such day is also a London Banking Day.
<PAGE>
Payment of the principal of, premium, if any, and interest due on this
Note on the Maturity Date (or any date of prepayment) will be made in
immediately available funds against presentation of the Note at the office
or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts. Payment of interest on any Interest Payment Date
other than the Maturity Date (or any date of prepayment) may be made at the
option of the Company by check mailed to the address of the person entitled
thereto at such address as shall appear in the Security Register; provided,
however, that any Holder of $10,000,000 or more in principal amount of the
same series of Senior Medium-Term Notes (whether having identical or different
terms and provisions) shall be entitled to receive payments of interest by wire
transfer of immediately available funds if appropriate wire transfer
instructions in writing have been received by the Trustee under the Senior
Indenture, as defined on the reverse hereof, at its corporate trust office
in The City of New York on or prior to the Regular Record Date immediately
preceding the applicable Interest Payment Date.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Senior Indenture, directly or through an Authenticating
Agent, by the manual signature of one of its authorized signatories, this
Note shall not be entitled to any benefit under the Senior Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal
to be imprinted hereon.
Dated: MCI COMMUNICATIONS CORPORATION
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities issued under
the within-mentioned Indenture. Chairman of the Board
CITIBANK N.A. as Trustee
By:
Attest:
Authorized Signatory Secretary
<PAGE>
This Note is one of a duly authorized Price is 100% of such
series of Senior Securities (the "Securities") principal amount.
of the Company issued and to be issued under an
Indenture dated as of January , 1994 (herein If an Event of Default
called the "Senior Indenture") between the with respect to the Senior
Company and Citibank, N.A., as Trustee (herein Medium-Term Notes shall occur
called the "Trustee", which term includes any and be continuing, the Trustee
successor trustee under the Senior Indenture), or the Holders of not less
to which Senior Indenture and all indentures than 25% in principal amount
supplemental thereto reference is hereby made of the Senior Medium-Term
for a statement of the respective rights Notes at the time Outstanding,
thereunder of the Company, the Trustee and the as defined in the Senior
Holders of the Senior Notes and the terms upon Indenture, may declare the
which the Senior Notes are, and are to be, principal of all the Senior
authenticated and delivered. This Note is one Medium-Term Notes due and
of the Series of Securities designated as payable in the manner and with
"Senior Medium-Term Notes". the effect provided in the
Senior Indenture.
The Senior Medium-Term Notes will not
be subject to any sinking fund. The Senior Indenture
permits, with certain
This Note may be subject to repayment exceptions as therein
at the option of the Holder hereof on the provided, the amendment
Repayment Date(s), if any, indicated on the thereof and the modification
face hereof. If no such date is set forth on of the rights and obligations
the face hereof, this Note may not be so repaid of the Company and the rights
at the option of the Holder hereof prior to its of the Holders of the
Maturity Date. On each Repayment Date, if any, Securities of each series to
this Note shall be repayable, in whole or in be affected under the
part, in increments of $1,000 (provided that Indenture at any time by the
any remaining principal hereof shall be at Company and the Trustee with
least $100,000) at the option of the Holder the consent of the Holders of
hereof at a repayment price equal to 100% of not less than a majority in
the principal amount to be repaid together with aggregate principal amount of
interest thereon payable to the Repayment the Securities at the time
Date. For this Note to be repaid in whole Outstanding of each series
or in part at the option of the Holder hereof, affected thereby. The Senior
this Note must be received not more than 60 nor Indenture also contains
less than 30 days prior to the Repayment Date, provisions permitting the
with the form entitled "Option to Elect Holders of specified
Repayment" below duly executed and completed, percentages in aggregate
by the Trustee at its Corporate Trust Office, principal amount of the
or such other address of which the Trustee Securities of each series at
shall from time to time notify the Holders of the time Outstanding, on
Senior Medium-Term Notes. Exercise of such behalf of the Holders of all
repayment option by the Holder hereof shall be Securities of each series, to
irrevocable. The interest and principal so waive compliance by the
payable and punctually paid or duly provided Company with certain
for on any Repayment Date will be made to such provisions of the Senior
person so surrendering this Note. Indenture and certain past
defaults under the Senior
This Note may be redeemed by the Indenture and their
Company on any date on and after the Initial consequences. Any such
Redemption Date, if any, specified on the face consent or waiver by the
hereof. If no Initial Redemption Date is set Holder of this Note shall be
forth on the face hereof, this Note may not be conclusive and binding upon
redeemed prior to its Maturity Date. On and such Holder and upon all
after the Initial Redemption Date, if any, this future Holders of this Note
Note may be redeemed at any time in whole or and of any Note issued upon
from time to time in part in increments of the registration of transfer
$1,000 (provided that any remaining principal hereof or in exchange herefor
hereof shall be at least $100,000) at the or in lieu hereof whether or
option of the Company at the applicable not notation of such consent
Redemption Price (as defined below) together or waiver is made upon this
with interest thereon payable to the Redemption Note.
Date, on notice given not more than 60 nor less
than 30 days prior to the Redemption Date. In No reference herein to
the event of redemption of this Note in part the Senior Indenture and no
only, a new Note for the unredeemed portion provision of this Note or of
hereof shall be issued in the name of the the Senior Indenture shall
Holder hereof upon the surrender hereof. alter or impair the obligation
of the Company, which is
The "Redemption Price" shall initially absolute and unconditional, to
be the Initial Redemption Percentage specified pay the principal of, premium,
on the face hereof of the principal amount of if any, and interest on this
this Note to be redeemed and shall decline at Note at the time, place, and
each anniversary of the Initial Redemption rate, and in the coin or
Date, if any, shown on the face hereof, by the currency, herein prescribed.
Annual Redemption Percentage Reduction, if any,
shown on the face hereof, of the principal The Senior Medium-Term
amount to be redeemed until the Redemption Notes are issuable only in
<PAGE>
registered form without coupons in minimum
denominations of $100,000 or any amount in
excess thereof which is an integral multiple of
$1,000.
As provided in the Senior Indenture,
and subject to certain limitations therein set
forth, the transfer of this Note may be
registered on the Security Register of the
Company upon surrender of this Note for
registration of transfer at the office or
agency of the Company in the Borough of
Manhattan, The City of New York, duly endorsed
by, or accompanied by a written instrument of
transfer in form satisfactory to the Company
and this Note duly executed by, the Holder
hereof or by his attorney duly authorized in
writing and thereupon one or more new Senior
Medium-Term Notes of the same series, in
authorized denominations, having the same terms
and conditions and for the same aggregate
principal amount, will be issued to the
designated transferee or transferees.
As provided in the Senior Indenture,
and subject to certain limitations therein set
forth, the Senior Medium-Term Notes are
exchangeable for a like aggregate principal
amount of Senior Medium-Term Notes of the same
series in authorized denominations, as
requested by the Holder surrendering the same.
No service charge will be made for any
such registration of transfer or exchange, but
the Company may require payment of a sum
sufficient to cover any tax or other
governmental charge payable in connection
therewith.
Prior to due presentment of this Note
for registration of transfer, the Company, the
Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this
Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue,
and neither the Company, the Trustee nor any
such agent shall be affected by notice to the
contrary.
The Senior Indenture and the Senior
Medium-Term Notes shall be governed by and
construed in accordance with the laws of the
State of New York applicable to agreements made
and to be performed entirely in such State.
All capitalized terms used in this Note
and not otherwise defined or specified herein
shall have the meanings assigned to them in the
Senior Indenture.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
UNIF GIFT MIN ACT-_________________ Custodian __________________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
_________________________________
(State)
TEN COM-as tenants in common
TEN ENT-as tenants by the entireties
JT TEN-as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
_____________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
<PAGE>
Please Insert Social Security or Other Identifying Number of Assignee:
___________________________________________________________________
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS
INCLUDING ZIP CODE OF ASSIGNEE:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing attorney to
transfer said Note on the books of the Company, with full
power of substitution in the premises.
Dated:_________________________
------------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of this Note in every
particular, without alteration or
enlargement or any change whatever.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof, together with interest to
the date of repayment, to the undersigned, at
---------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Trustee must receive at 111 Wall Street,
New York, New York, Corporate Trust Services, 5th Floor, or at such other place
or places of which the Trustee shall from time to time notify the Holder of this
Note, not more than 60 nor less than 30 days prior to a Repayment Date (or, if
either such day is not a Business Day, the next succeeding Business Day), if
any, shown on the face of this Note, this Note with this "Option to Elect
Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be an increment of $1,000) which the
Holder elects to have repaid: $________, and specify the denomination or
denominations (which shall be $100,000 or an integral multiple of $1,000 in
excess of $100,000) of the Senior Medium-Term Notes to be issued to the Holder
for the portion of this Note not being repaid (in the absence of any such
specification, one such Note will be issued for the portion not being repaid): $
Dated:_____________
--------------------------------------------------
NOTICE: The signature on this Option to Elect
Repayment must correspond with the name as
written upon the face of this Note in every
particular, without alteration or enlargement or
any change whatever.
EXHIBIT 4(g)
REGISTERED REGISTERED
No. FLR U.S.$
MCI
MCI COMMUNICATIONS CORPORATION
SENIOR MEDIUM-TERM NOTE
(Floating Rate)
INTEREST RATE BASIS(ES): MATURITY DATE:
INDEX MATURITY:
CALCULATION AGENT:
INITIAL INTEREST RATE:
SPREAD: REPAYMENT DATE(S):
SPREAD MULTIPLIER: INTEREST PAYMENT PERIOD:
MAXIMUM INTEREST RATE:
INTEREST PAYMENT MONTH(S):
MINIMUM INTEREST RATE:
ORIGINAL ISSUE DATE: INITIAL INTEREST RESET DATE:
INITIAL REDEMPTION DATE:
INTEREST RATE RESET PERIOD:
INITIAL REDEMPTION PERCENTAGE:
ANNUAL REDEMPTION PERCENTAGE: INTEREST RATE RESET PERIOD:
ANNUAL REDEMPTION PERCENTAGE REDUCTION: INTEREST RATE RESET MONTH(S):
MCI COMMUNICATIONS CORPORATION, a Delaware corporation (the "Company"), for
value received, hereby promises to pay to
, or registered assigns, the principal sum of
DOLLARS
<PAGE>
on the Maturity Date specified above (except to the extent redeemed or repaid
prior to the Maturity Date) and to pay interest thereon at a rate per annum
equal to the Initial Interest Rate specified above until the Initial Interest
Reset Date specified above and thereafter at a rate determined in accordance
with the provisions on the reverse hereof, depending upon the Interest Rate
Basis(es) specified above, until the principal hereof and premium, if any,
hereon is paid or duly made available for payment. The Company will pay
interest monthly, quarterly, semiannually or annually as specified above as the
Interest Payment Period on each Interest Payment Date (as defined below),
commencing with the first Interest Payment Date next succeeding the Original
Issue Date specified above, and on the Maturity Date (or any date of redemption
or repayment), provided, however, that if the Original Issue Date is between a
Regular Record Date (as defined below) and an Interest Payment Date, interest
payments will commence on the Interest Payment Date following the next
succeeding Regular Record Date and be payable to the person that is the
registered Holder as of such next succeeding Regular Record Date, and provided,
further, that if an Interest Payment Date would fall on a day that is not a
Business Day (as defined on the reverse hereof), such Interest Payment Date
shall be the following day that is a Business Day, except that in case the
Interest Rate Basis is LIBID or LIBOR, if such next Business Day falls in the
next calendar month, such Interest Payment Date will be the preceding day that
is a Business Day. If the Maturity Date (or any date of redemption or
repayment) will fall on a day that is not a Business Day, the payment of
interest and principal may be made on the next succeeding Business Day and no
interest on such payment shall accrue for the period from and after the Maturity
Date (or any date of redemption or repayment)
Interest will be payable on the third Wednesday of each month if the
Interest Payment Period specified above is monthly, on the third Wednesday of
March, June, September and December if the Interest Payment Period specified
above is quarterly, on the third Wednesday of the two months specified above as
the Interest Payment Months if the Interest Payment Period specified above is
semiannual and on the third Wednesday of the month specified above as the
Interest Payment Month if the Interest Payment Period specified above is annual
(each, an "Interest Payment Date"), and in each case at maturity (except to the
extent that the principal hereof has been redeemed or repaid prior to the
Maturity Date)
Interest payable on this Note on any interest Payment Date or Maturity
Date (or date of redemption or repayment) will include interest accrued from the
Original Issue Date, or the most recent date for which interest has been paid to
but excluding such Interest Payment Date or Maturity Date (or date of redemption
or repayment, as the case may be) provided that if the Interest Rate Reset
Period with respect to this Note is daily or weekly, interest payable on any
Interest Payment Date will include interest accrued to, but excluding, the
Maturity Date (or any date of redemption or repayment). Accrued interest hereon
shall be an amount calculated by multiplying the face amount hereof by an
accrued interest factor. Such accrued interest factor shall be computed by
adding the interest factor calculated for each day from the Original Issue Date
or from the day succeeding the last date for which interest shall have been
paid, as the case may be, to the date for which accrued interest is being
calculated. The interest factor for each such day shall be computed by dividing
the interest rate applicable to such day by 360 in the case of Senior
Medium-Term Notes having as their Interest Rate Basis the CD Rate, the
Commercial Paper Rate, the Federal Funds Rate, LIBID, LIBOR or the Prime Rate,
or by the actual number of days in the year in the case of Senior Medium-
Term Notes having as their Interest Rate Basis the Treasury Rate.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, subject to certain exceptions, be paid to the
person in whose name this Note (or one or more predecessor Subordinated Medium-
Term Notes, as defined on the reverse hereof) is registered at the close of
business on the date 15 calendar days prior to an Interest Payment Date (whether
or not a Business Day) (the "Regular Record Date"), provided, however, that
interest payable on the Maturity Date (or any date of redemption of repayment)
will be payable to the person to whom the principal hereof shall be payable
Payment of the principal of, premium, if any, and interest due on this
Note on the Maturity Date (or any date of redemption or repayment) will be made
in immediately available funds against presentation of the Note at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts. Payment of interest on any Interest Payment Date other than the Maturity
Date (or any date or redemption or repayment) may be made at the option of the
Company by check mailed to the address of the person entitled thereto as such
address shall appear in the Security Register, provided, however, that any
Holder of $10,000,000 or more in principal amount of the same series of
Subordinated Medium-Term Notes (whether having identical or different terms and
provisions) shall be entitled to receive payments of interest by wire transfer
of immediately available funds if appropriate wire transfer instructions in
writing have been received by the Trustee under the Subordinated Indenture, as
defined on the reverse hereof, at its corporate trust office in The City of New
<PAGE>
York on or prior to the Regular Record Date immediately preceding the applicable
Interest Payment Date
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as set forth at this place
Unless the Certificate of Authentication hereon has been executed by the
Trustee under the Subordinated Indenture, directly or through an Authenticating
Agent, by the manual signature of one of its authorized officers, this Note
shall not be entitled to any benefit under the Subordinated Indenture or be
valid or obligatory for any purpose
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed, manually or in facsimile, and a facsimile of its corporate seal to be
imprinted hereon
Dated: MCI COMMUNICATIONS CORPORATION
By:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities issued under
the within-mentioned Indenture
Chairman of the Board
CITIBANK, N.A. as Trustee
Attest
By:
Secretary
<PAGE>
MCI COMMUNICATIONS CORPORATION
SENIOR MEDIUM-TERM NOTE
(Floating Rate)
<TABLE>
<S> <C>
This Note is one of a duly authorized if any, shown on the face hereof,
series of Senior Securities (the "Securities") by the Annual Redemption
of the Company issued and to be issued under Percentage Reduction, if any,
an Indenture dated as of January , 1994 shown on the face hereof, of the
(herein called the "Senior Indenture") principal amount to be redeemed
between the Company and Citibank, N.A., as until the Redemption Price is
Trustee (herein called the "Trustee", which 100% of such principal amount.
term includes any successor trustee under
the Senior Indenture) to which Senior
Indenture and all indenture supplements
thereto reference is hereby made for a
statement of the respective rights If an Event of Default with
thereunder of the Company, the Trustee and respect to the Senior Medium-Term
the Holders of the Senior Notes and the terms Notes shall occur and be
upon which the Senior Notes are, and are to continuing, the Trustee or the
be, authenticated and delivered. This Note Holders of not less than 25% in
is one of the series of Securities designated principal amount of the Senior
as "Senior Medium-Term Notes". Medium-Term Notes at the time
Outstanding, as defined in the
The Senior Medium-Term Notes will not Senior Indenture, may declare the
be subject to any sinking fund. principal of all the Senior
Medium-Term Notes due and payable
This Note may be subject to repayment in the manner and with the effect
at the option of the Holder hereof on the provided in the Senior Indenture.
Repayment Date(s), if any, indicated on the
face hereof. If no such date is set forth on The Senior Indenture permits,
the face hereof, this Note may not be so with certain exceptions as
repaid at the option of the Holder hereof therein provided, the amendment
prior to its Maturity Date. On each thereof and the notification of
Repayment Date, if any, this Note shall be the rights and obligations of the
repayable, in whole or in part, in increments Company and the rights of the
of $1,000 (provided that any remaining Holders of the Securities of each
principal hereof shall be at least $100,000) series to be affected under the
at the option of the Holder hereof at a Indenture at any time by the
repayment price equal to 100% of the Company and the Trustee with the
principal amount to be repaid together with consent of the Holders of not
interest thereon payable to the Redemption less than a majority in aggregate
Date. For this Note to be repaid in principal amount of the
whole or in part at the option of the Holder Securities at the time
hereof, this Note must be received not more Outstanding of each series
than 60 or less than 30 days prior to the affected thereby. The Senior
Repayment Date, with the form entitled Indenture also contains
"Option to Elect Repayment" below duly provisions permitting the Holders
executed and completed, by the Trustee at its of specified percentages in
Corporate Trust Office, or such other address aggregate principal amount of the
of which the Trustee shall from time to time Securities of each series at the
notify the Holders of Senior Medium-Term time Outstanding, on behalf of
Notes. Exercise of such repayment option by the Holders of all Securities of
the Holder hereof shall be irrevocable. The each series, to waive compliance
interest and principal so payable and by the Company with certain
punctually paid or duly provided for on any provisions of the Senior
Repayment Date will be made to such person so Indenture and certain past
surrendering this Note. defaults under the Senior
Indenture and their consequences.
This Note may be redeemed by the Any such consent or waiver by the
Company on any date on and after the Initial Holder of this Note shall be
Redemption Date, if any, specified on the conclusive and binding upon such
face hereof. If no Initial Redemption Date Holder and upon all future
is set forth on the face hereof, this Note Holders of this Note and of any
may not be redeemed prior to its Maturity Note issued upon the registration
Date. On and after the Initial Redemption of transfer hereof or in exchange
Date, if any, this Note may be redeemed at herefor or in lieu hereof
any time in whole or from time to time in whether or not notation of such
part in increments of $1,000 (provided that consent or waiver is made upon
any remaining principal hereof shall be at this Note.
least $100,000) at the option of the Company
at the applicable Redemption Price (as No reference herein to the Senior
defined below) together with interest thereon Indenture and no provision of
payable to the Redemption Date, on notice this Note or of the Senior
given not more than 60 nor less than 30 days Indenture shall alter or impair
prior to the Redemption Date. In the event the obligation of the Company,
of redemption of this Note in part only, a which is absolute and
new Note for the unredeemed portion hereof unconditional, to pay the
shall be issued in the name of the Holder principal of, premium, if any,
hereof upon the surrender hereof. and interest on this Note at the
time, place and rate, and in the
The "Redemption Price" shall coin or currency, herein
initially be the Initial Redemption prescribed.
Percentage specified on the face hereof of
the principal amount of this Note to be The Senior Medium-Term Notes are
redeemed and shall decline at each issuable only in registered form
anniversary of the Initial Redemption Date, without coupons in minimum
</TABLE>
<PAGE>
denominations of $100,000 or any amount in All capitalized terms used in
excess thereof which is an integral multiple this Note and not otherwise
of $1,000. defined or specified herein shall
have the meanings assigned to
As provided in the Senior Indenture, and them in the Senior Indenture.
subject to certain limitations therein set
forth, the transfer of this Note may be
registered on the Security Register of the
Company upon surrender of this Note for
registration of transfer at the office or
agency of the Company in the Borough of
Manhattan, The City of New York, duly
endorsed by, or accompanied by a written
instrument of transfer in form satisfactory
to the Company and this Note duly executed
by, the Holder hereof or by his attorney duly
authorized in writing and thereupon one or
more new Senior Medium-Term Notes of the same
series, in authorized denominations, having
the same terms and conditions and for the
same aggregate principal amount, will be
issued to the designated transferee or
transferees.
As provided in the Senior Indenture,
and subject to certain limitations therein
set forth, the Senior Medium-Term Notes are
exchangeable for a like aggregate principal
amount of Senior Medium-Term Notes of the
same series in authorized denominations, as
requested by the Holder surrendering the
same.
No service charge will be made for
any such restoration of transfer, the
Company, the Trustee and any agent of the
Company or the Trustee may treat the Person
in whose name this Note is registered as the
owner hereof for all purposes, whether or not
this Note be overdue, and neither the
Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
Prior to due presentation of this
Note for registration of transfer, the
Company, the Trustee and any agent of the
Company or the Trustee may treat the Person
in whose name this Note is registered as the
owner hereof for all purposes, whether or not
this Note be overdue, and neither the
Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
The Senior Indenture and the Senior
Medium-Term Notes shall be governed by and
construed in accordance with the laws of the
State of New York applicable to agreements
made and to be performed entirely in such
State.
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations.
UNIF GIFT MIN ACT- Custodian
-------------------- ---------------------
(Cust) (Minor)
Under Uniform Gifts to Minors Act
------------------------------------------------
(State)
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
- ----------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
Please Insert Social Securities or Other Identifying Number of Assignee:
- ----------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing attorney to
transfer said Note on the books of the Company, with full power of substitution
in the premises.
Dated:
--------------------------------------------------------------------------
- ---------------------------------------------------------------
NOTICE: The signature to this
assignment must correspond with the name
as written upon the face of this Note in
every particular, without alteration or
enlargement or any change whatever.
<PAGE>
OPTION TO ELECTION REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Company to repay this Note (or portion hereof specified below) pursuant to its
terms at a price equal to the principal amount hereof, together with interest to
the date of repayment, to the undersigned, at
--------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid the Trustee must receive at 111 Wall Street,
New York, New York, Corporate Trust Services, 5th Floor, or at such other place
or places of which the Trustee shall from time to time notify the Holder of this
Note, not more than 60 nor less than 30 days prior to a Repayment Date (or, if
either such day is not a Business Day, the next succeeding Business Day), if
any, shown on the face of this Note, this Note with this "Option to Elect
Repayment" form duly completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be an increment of $1,000) which the
Holder elects to have repaid: $ ; and specify the
denomination or denominations (which shall be $100,000 or an integral multiple
of $1,000 in excess of $100,000) of the Senior Medium-Term Notes to be issued to
the Holder for the portion of this Note not being repaid (in the absence of any
such specification, one such Note will be issued for the portion not being
repaid): $
Dated:
---------------
----------------------------------------
NOTICE: The signature on this Option to
Elect Repayment must correspond with the
name as written upon the face of this
Note in every particular, without
alteration or enlargement or any change
whatever.
EXHIBIT 5
KRAMER, LEVIN, NAFTALIS, NESSEN,
KAMIN & FRANKEL
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
FAX
(212) 715-8000
______
WRITER'S DIRECT NUMBER
(212) 715-9100
December 30, 1994
MCI Communications Corporation
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Dear Sirs:
We have acted as counsel to you, MCI Communications Corporation,
a Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") of a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
proposed issuance and sale by the Company from time to time of up to an
aggregate of $1,000,000,000 principal amount of debt securities (the "Debt
Securities"). The Debt Securities are to be issued under an Indenture
between the Company and Citibank, N.A., as trustee, relating to senior Debt
Securities issuable thereunder, an Indenture, dated as of October 15, 1989,
between the Company and Bankers Trust Company, as trustee, relating to
subordinated Debt Securities issuable thereunder which are not convertible
into shares of the common stock of the Company, and an Indenture, dated as
of October 15, 1989, between the Company and Bankers Trust Company, as
trustee, relating to subordinated Debt Securities issuable thereunder (the
"Convertible Debt Securities") which are convertible into shares of common
stock, par value $.10 per share (the "Common Stock"), of the Company
(collectively, the "Indentures").
We have examined the originals, photocopies or conformed copies
of all such records of the Company and all such agreements, certificates of
public officials, certificates of officers and representatives of the Company
and such other documents as we have deemed relevant and necessary as a basis
for the opinion hereinafter expressed. In such examinations, we have assumed
the genuineness of all signatures on original documents and the conformity to
<PAGE>
MCI Communications Corporation
December 30, 1994
Page 2
the originals of all copies submitted to us as conformed copies or photocopies.
As to various questions of fact material to our opinion, we have relied upon
representations, statements or certificates of officers and representatives of
the Company and others. Based on the foregoing, it is our opinion that:
1. When a Debt Security, in the form of one of the forms of
Debt Securities included as, or incorporated by reference as, an exhibit to the
Registration Statement, has had its pricing terms completed and has been duly
executed and authenticated, in each case in accordance with the appropriate
Indenture and the resolutions of the Board of Directors of the Company
authorizing the same, and when such Debt Security has been delivered against
payment therefor, such Debt Security will be legally issued and will constitute
a binding obligation of the Company.
2. The shares of Common Stock issuable upon conversion of any
Convertible Debt Securities, when issued in accordance with the terms of the
appropriate Indenture and in accordance with the resolutions of the Board of
Directors of the Company authorizing the issuance of such Convertible Debt
Securities and Common Stock, will be validly issued, fully paid and non-
assessable.
We are members of the Bar of the State of New York and are not
members of the bar of any other state. We are not expressing any opinion as to
any matter relating to the laws of any jurisdiction other than the State of New
York, the General Corporation Law of the State of Delaware and the federal law
of the United States of America, and we assume no responsibility as to the
applicability of the laws of any other jurisdiction to the subject transaction
or the effect of such laws thereon.
In rendering the foregoing opinion, we have not expressed,
explicitly or implicitly, any opinion as to proceedings before the Federal
Communications Commission or matters arising under the Communications Act of
1934 or any similar state or local statute regulating communications.
<PAGE>
MCI Communications Corporation
December 30, 1994
Page 3
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Opinions" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not thereby concede that we are within the category
of persons whose consent is required under Section 7 of the Securities Act or
the rules and regulations promulgated thereunder.
Very truly yours,
Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel
EXHIBIT 8
KRAMER, LEVIN, NAFTALIS, NESSEN,
KAMIN & FRANKEL
919 THIRD AVENUE
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
FAX
(212) 715-8000
______
WRITER'S DIRECT NUMBER
(212) 715-9100
December 30, 1994
MCI Communications Corporation
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Dear Sirs:
We have acted as counsel to you, MCI Communications Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission of a Registration Statement
on Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended, relating to the proposed issuance and sale by the Company from time to
time of up to an aggregate of $1,000,000,000 principal amount of debt securi-
ties (the "Debt Securities"). The Debt Securities are to be issued under an
Indenture between the Company and Citibank, N.A., as trustee, relating to
senior Debt Securities issuable thereunder, an Indenture, dated as of
October 15, 1989, between the Company and Bankers Trust Company, as trustee,
relating to subordinated Debt Securities issuable thereunder which are not
convertible into shares of the common stock of the Company, and an Indenture,
dated as of October 15, 1989, between the Company and Bankers Trust Company,
as trustee, relating to subordinated Debt Securities issuable thereunder which
are convertible into shares of common stock, par value $.10 per share, of the
Company.
We have examined the originals, photocopies or conformed copies of all
such records of the Company and all such agreements, certificates of public
officials, certificates of officers and representatives of the Company and such
other documents as we have deemed relevant and necessary as a basis for the
opinion hereinafter expressed. In such examinations, we have assumed the
genuineness of all signatures on original documents and the conformity to the
originals of all copies submitted to us as conformed copies or photocopies. As
<PAGE>
KRAMER, LEVIN, NAFTALIS, NESSEN, KAMIN & FRANKEL
MCI Communications Corporation
December 30, 1994
Page 2
to various questions of fact material to our opinion, we have relied upon
representations, statements or certificates of officers and representatives of
the Company and others.
Based upon the foregoing and subject to the qualifications set forth
below, it is our opinion that the discussion under the caption "Federal Income
Tax Consequences" in the Prospectus forming a part of the Registration
Statement correctly describes the general federal income tax law applicable to
the ownership and disposition of Debt Securities that may be issued pursuant to
the Prospectus. The discussion in the Prospectus does not address the tax
consequences of the ownership and disposition of any specific series of Debt
Securities that may be issued pursuant to a supplement to the Prospectus (a
"Prospectus Supplement"), which consequences may be affected by the particular
terms of such Debt Securities and which, if materially different from the
discussion in the Prospectus, will be addressed in such Prospectus Supplement.
Our opinion, which is not binding on the Internal Revenue Service, is
based upon existing statutory, regulatory and judicial authority, any of which
may be changed at any time with retroactive effect to the detriment of the
holders of the Debt Securities. As noted above, our opinion is based solely on
the documents that we have examined, the additional information that we have
obtained, and the representations that have been made to us. Our opinion
cannot be relied upon if any of the facts contained in such documents, such
additional information, or any of the representations made to us is, or later
becomes, inaccurate. Finally, our opinion is limited to the tax matters
specifically discussed under the caption "Federal Income Tax Consequences" in
the Prospectus, and we have not been asked to address, nor have we addressed,
any other tax consequence relating to the Debt Securities.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the use of our name under the heading "Legal Opinions" in the
Prospectus forming a part of the Registration Statement.
Very truly yours,
Kramer, Levin, Naftalis, Nessen,
Kamin & Frankel
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 26, 1994, which appears on page 26 of the Annual Report on Form 10-K for
the year ended December 31, 1993. We also consent to the incorporation by
reference of our report on the Financial Statement Schedules which appears on
page 56 of the Annual Report on Form 10-K for the year ended December 31, 1993.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
Price Waterhouse LLP
Washington, DC
December 30, 1994
EXHIBIT 25(a)
______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ___________
______________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of incorporation or organization (I.R.S. Employer
if not a U.S. national bank) Identification No.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
_________________________________
MCI COMMUNICATIONS CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 52-0886267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1801 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(Address of principal executive offices) (Zip Code)
______________________________
CONVERTIBLE SUBORDINATED DEBENTURES
(Title of the indenture securities)
______________________________________________________________________________
<PAGE>
-2-
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7,
1990 and Certificate of Amendment of the
Organization Certificate of Bankers
Trust Company dated March 28, 1994 -
Incorporated herein by reference to
Exhibit 1 filed with Form T-1 Statement,
Registration No. 33-79862.
Exhibit 2 - Certificate of Authority to commence
business - Incorporated herein by
reference to Exhibit 2 filed with Form T-
1 Statement, Registration No. 33-21047.
Exhibit 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated
herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration
No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust
Company, dated as amended on September
21, 1993. - Incorporated herein by
reference to Exhibit 4 filed with Form
T-1 Statement, Registration No.
33-52359.
<PAGE>
-3-
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act. -
Incorporated herein by reference to
Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
Exhibit 7 - A copy of the latest report of condition
of Bankers Trust Company dated as of
September 30, 1994 - (Copy attached).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 30th
day of December, 1994.
BANKERS TRUST COMPANY
By:Kathleen Boyd
---------------------------
Kathleen Boyd
Vice President
<PAGE>
Initial Title of Bankers Trust Company
Bank:
Address: 130 Liberty Street
City, State, Zip: New York, NY 10006
FDIC Certificate No.: 0 0 6 2 3
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
------------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIL MIL THOU
- --------------------------------------------------------------------- ---- ------------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions (from
Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)..... 0081 1,756,000 1.a.
b. Interest-bearing balances(2).............................. 0071 3,257,000 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column
A)........................................................ 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column
D)........................................................ 1773 3,984,000 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds sold........................................ 0276 3,158,000 3.a
b. Securities purchased under agreements to resell........... 0277 572,000 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned
income (from Schedule RC-C) RCFD 2122 17,174,000 4.a.
b. LESS: Allowance for loan and
lease losses..................... RCFD 3123 1,254,000 4.b.
c. LESS: Allocated transfer risk
reserve.......................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)...................... 2125 15,920,000 4.d.
5. Assets held in trading accounts................................. 3545 35,263,000 5.
6. Premises and fixed assets (including capitalized leases)........ 2145 845,000 6.
7. Other real estate owned (from Schedule RC-M).................... 2150 301,000 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).................................. 2130 203,000 8.
9. Customers' liability to this bank on acceptances outstanding.... 2155 294,000 9.
10. Intangible assets (from Schedule RC-M).......................... 2143 10,000 10.
11. Other assets (from Schedule RC-F)............................... 2160 8,717,000 11.
12. Total assets (sum of items 1 through 11)........................ 2170 74,280,000 12.
</TABLE>
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
Initial Title of Bank: Bankers Trust Company
Address: 130 Liberty Street
City, State, Zip: New York, NY 10006
FDIC Certificate No.: 0 0 6 2 3
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS BIL MIL THOU
- -------------------------------------------------------------- ------------
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part I)............................. RCON 2200 7,733,000 13.a
(1) Noninterest-bearing(1).... RCON 6631 3,330,000 13.a.(1)
(2) Interest bearing.......... RCON 6636 4,403,000 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)...................... RCFN 2200 15,494,000 13.b.
(1) Noninterest-bearing....... RCFN 6631 466,000 13.b.(1)
(2) Interest-bearing.......... RCFN 6636 15,028,000 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased................................. RCFD 0278 8,403,000 14.a.
b. Securities sold under agreements to repurchase.......... RCFD 0279 690,000 14.b.
15.a. Demand notes issued to the U.S. Treasury................ RCON 2840 0 15.a.
b. Trading liabilities..................................... RCFD 3548 19,599,000 15.b.
16. Other borrowed money:
a. With original maturity of one year or less.............. RCFD 2332 8,073,000 16.a.
b. With original maturity of more than one year............ RCFD 2333 1,596,000 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases.................................................... RCFD 2910 35,000 17.
18. Bank's liability on acceptances executed and
outstanding............................................... RCFD 2920 294,000 18.
19. Subordinated notes and debentures......................... RCFD 3200 1,217,000 19.
20. Other liabilities (from Schedule RC-G).................... RCFD 2930 6,929,000 20.
21. Total liabilities (sum of Items 13 through 20)............ RCFD 2948 70,063,000 21.
22. Limited-life preferred stock and related surplus.......... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............. RCFD 3838 250,000 23.
24. Common stock.............................................. RCFD 3230 852,000 24.
25. Surplus (exclude all surplus related to preferred
stock).................................................... RCFD 3839 498,000 25.
26.a. Undivided profits and capital reserves.................. RCFD 3632 2,906,000 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities........................... RCFD 8434 44,000 26.b.
27. Cumulative foreign currency translation adjustments....... RCFD 3284 (333,000) 27.
28. Total equity capital (sum of items 23 through 27)......... RCFD 3210 4,217,000 28.
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21,22,and 28)................ RCFD 3300 74,280,000 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank
by independent external auditors as of any date during 1993...RCFD 6724 N/A M.1.
1. Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a
report on the bank
2. Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3. Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4. Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5. Review of the bank's financial statements by external auditors
6. Compilation of the bank's financial statements by external auditors
7. Other audit procedures (excluding tax preparation work)
8. No external audit work
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
EXHIBIT 25(b)
______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ___________
______________________________
BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of incorporation or organization (I.R.S. Employer
if not a U.S. national bank) Identification No.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
_________________________________
MCI COMMUNICATIONS CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 52-0886267
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1801 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(Address of principal executive offices) (Zip Code)
______________________________
SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)
______________________________________________________________________________
<PAGE>
-2-
Item 1. General Information.
Furnish the following information as to the trustee.
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
---- -------
Federal Reserve Bank (2nd District) New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
New York State Banking Department Albany, NY
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
Item 16. List of Exhibits.
Exhibit 1 - Restated Organization Certificate of
Bankers Trust Company dated August 7,
1990 and Certificate of Amendment of the
Organization Certificate of Bankers
Trust Company dated March 28, 1994 -
Incorporated herein by reference to
Exhibit 1 filed with Form T-1 Statement,
Registration No. 33-79862.
Exhibit 2 - Certificate of Authority to commence
business - Incorporated herein by
reference to Exhibit 2 filed with Form T-
1 Statement, Registration No. 33-21047.
Exhibit 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated
herein by reference to Exhibit 2 filed
with Form T-1 Statement, Registration
No. 33-21047.
Exhibit 4 - Existing By-Laws of Bankers Trust
Company, dated as amended on September
21, 1993. - Incorporated herein by
reference to Exhibit 4 filed with Form
T-1 Statement, Registration No.
33-52359.
<PAGE>
-3-
Exhibit 5 - Not applicable.
Exhibit 6 - Consent of Bankers Trust Company
required by Section 321(b) of the Act. -
Incorporated herein by reference to
Exhibit 4 filed with Form T-1 Statement,
Registration No. 22-18864.
Exhibit 7 - A copy of the latest report of condition
of Bankers Trust Company dated as of
September 30, 1994 - (Copy attached).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Bankers Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York, and State of New York, on the 30th
day of December, 1994.
BANKERS TRUST COMPANY
By:Kathleen Boyd
---------------------------
Kathleen Boyd
Vice President
<PAGE>
Initial Title of Bankers Trust Company
Bank:
Address: 130 Liberty Street
City, State, Zip: New York, NY 10006
FDIC Certificate No.: 0 0 6 2 3
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR SEPTEMBER 30, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
------------
DOLLAR AMOUNTS IN THOUSANDS RCFD BIL MIL THOU
- --------------------------------------------------------------------- ---- ------------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions (from
Schedule RC-A):
a. Noninterest-bearing balances and currency and coin(1)..... 0081 1,756,000 1.a.
b. Interest-bearing balances(2).............................. 0071 3,257,000 1.b.
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column
A)........................................................ 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column
D)........................................................ 1773 3,984,000 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds sold........................................ 0276 3,158,000 3.a
b. Securities purchased under agreements to resell........... 0277 572,000 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned
income (from Schedule RC-C) RCFD 2122 17,174,000 4.a.
b. LESS: Allowance for loan and
lease losses..................... RCFD 3123 1,254,000 4.b.
c. LESS: Allocated transfer risk
reserve.......................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)...................... 2125 15,920,000 4.d.
5. Assets held in trading accounts................................. 3545 35,263,000 5.
6. Premises and fixed assets (including capitalized leases)........ 2145 845,000 6.
7. Other real estate owned (from Schedule RC-M).................... 2150 301,000 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).................................. 2130 203,000 8.
9. Customers' liability to this bank on acceptances outstanding.... 2155 294,000 9.
10. Intangible assets (from Schedule RC-M).......................... 2143 10,000 10.
11. Other assets (from Schedule RC-F)............................... 2160 8,717,000 11.
12. Total assets (sum of items 1 through 11)........................ 2170 74,280,000 12.
</TABLE>
- ------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
Initial Title of Bank: Bankers Trust Company
Address: 130 Liberty Street
City, State, Zip: New York, NY 10006
FDIC Certificate No.: 0 0 6 2 3
SCHEDULE RC--CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS BIL MIL THOU
- -------------------------------------------------------------- ------------
LIABILITIES
<S> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part I)............................. RCON 2200 7,733,000 13.a
(1) Noninterest-bearing(1).... RCON 6631 3,330,000 13.a.(1)
(2) Interest bearing.......... RCON 6636 4,403,000 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)...................... RCFN 2200 15,494,000 13.b.
(1) Noninterest-bearing....... RCFN 6631 466,000 13.b.(1)
(2) Interest-bearing.......... RCFN 6636 15,028,000 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the bank
and of its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased................................. RCFD 0278 8,403,000 14.a.
b. Securities sold under agreements to repurchase.......... RCFD 0279 690,000 14.b.
15.a. Demand notes issued to the U.S. Treasury................ RCON 2840 0 15.a.
b. Trading liabilities..................................... RCFD 3548 19,599,000 15.b.
16. Other borrowed money:
a. With original maturity of one year or less.............. RCFD 2332 8,073,000 16.a.
b. With original maturity of more than one year............ RCFD 2333 1,596,000 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases.................................................... RCFD 2910 35,000 17.
18. Bank's liability on acceptances executed and
outstanding............................................... RCFD 2920 294,000 18.
19. Subordinated notes and debentures......................... RCFD 3200 1,217,000 19.
20. Other liabilities (from Schedule RC-G).................... RCFD 2930 6,929,000 20.
21. Total liabilities (sum of Items 13 through 20)............ RCFD 2948 70,063,000 21.
22. Limited-life preferred stock and related surplus.......... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............. RCFD 3838 250,000 23.
24. Common stock.............................................. RCFD 3230 852,000 24.
25. Surplus (exclude all surplus related to preferred
stock).................................................... RCFD 3839 498,000 25.
26.a. Undivided profits and capital reserves.................. RCFD 3632 2,906,000 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities........................... RCFD 8434 44,000 26.b.
27. Cumulative foreign currency translation adjustments....... RCFD 3284 (333,000) 27.
28. Total equity capital (sum of items 23 through 27)......... RCFD 3210 4,217,000 28.
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21,22,and 28)................ RCFD 3300 74,280,000 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank
by independent external auditors as of any date during 1993...RCFD 6724 N/A M.1.
1. Independent audit of the bank conducted in accordance with generally accepted
auditing standards by a certified public accounting firm which submits a
report on the bank
2. Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3. Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4. Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5. Review of the bank's financial statements by external auditors
6. Compilation of the bank's financial statements by external auditors
7. Other audit procedures (excluding tax preparation work)
8. No external audit work
- ------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
EXHIBIT 25(c)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee pursuant to
Section 305(b)(2) ____
________________________
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
_______________________
MCI COMMUNICATIONS CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 52-0886267
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(Address of principal executive office) (Zip Code)
_______________________
Senior Debt Securities
(Title of the indenture securities)
<PAGE>
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of New York, New York, NY
33 Liberty Street,
New York, NY
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as exhibits
hereto.
Exhibit 1 - Copy of Articles of Association of the
Trustee, as now in effect. (Exhibit 1
to T-1 to Registration Statement No. 2-79983)
Exhibit 2 - Copy of certificate of authority of the
Trustee to commence business. (Exhibit 2 to
T-1 to Registration Statement No. 2-29577)
Exhibit 3 - Copy of authorization of the Trustee to
exercise corporate trust powers. (Exhibit 3
to T-1 to Registration Statement No. 2-55519)
2
<PAGE>
Exhibit 4 - Copy of existing By-Laws of the Trustee.
(Exhibit 4 to T-1 to Registration
Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by
Section 321(b) of the Trust Indenture
Act of 1939. (Exhibit 6 to T-1 to
Registration Statement No. 33-19227)
Exhibit 7 - Copy of the latest Report of Condition
of Citibank, N.A. (as of September 30,
1994 - attached).
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
__________________
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 29th day
of December, 1994.
CITIBANK, N.A.
By /s/ Carol Ng
--------------------------
Carol Ng
Assistant Vice President
3
<PAGE>
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
CITIBANK, N.A.
of New York and the State of New York, of the close of
business of September 30, 1994, published in response to
call made by Comptroller of the Currency, under Title 12,
United States Code, Section 161, Charter Number 1461
Comptroller of the Currency Northeastern District.
ASSETS
Thousands
of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin . . . $ 6,482,000
Interest-bearing balances . . . . . . . . . . . . . . . . 7,724,000
Securities:
Held-to-maturity securities . . . . . . . . . . . . . . . 3,836,000
Available-for-sale securities . . . . . . . . . . . . . . 12,275,000
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank
and of its Edge and Agreement subsidiaries and in IBFs;
Federal funds sold . . . . . . . . . . . . . . . . . . . . 1,964,000
Securities purchased under agreement to resell . . . . . . 1,613,000
Loans and lease financing receivables:
Loans and leases, net of unearned income $124,721,000
LESS: Allowance for loan
and lease losses 3,871,000
---------
Loans and leases, net of unearned income and allowance . 120,850,000
Assets held in trading accounts . . . . . . . . . . . . . . . 39,855,000
Premises and fixes assets (including capitalized leases) . . 3,173,000
Other real estate owned . . . . . . . . . . . . . . . . . . . 2,689,000
Investments in unconsolidated subsidiaries and associated
companies . . . . . . . . . . . . . . . . . . . . . . . . 1,010,000
Customers' liability to this bank on acceptances
outstanding . . . . . . . . . . . . . . . . . . . . . . . 1,404,000
Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . 14,000
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 7,463,000
---------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . $210,342,000
============
LIABILITIES
Deposits:
In domestic offices . . . . . . . . . . . . . . . . . . $ 32,505,000
Noninterest-bearing $ 11,333,000
Interest-bearing 21,172,000
----------
In foreign offices, Edge and Agreement
subsidiaries, and IBFs . . . . . . . . . . . . . . . . . 105,210,000
Noninterest-bearing 7,568,000
Interest-bearing 97,642,000
----------
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased . . . . . . . . . . . . . . . . . 5,588,000
Securities sold under agreements to repurchase . . . . . . 1,390,000
Trading liabilities . . . . . . . . . . . . . . . . . . . . 25,140,000
Other borrowed money:
With original maturity of one year or less . . . . . . . . 8,448,000
With original maturity of more than one year . . . . . . . 3,751,000
Mortgage indebtedness and obligations under
capitalized leases . . . . . . . . . . . . . . . . . . . . . . 61,000
Bank's liability on acceptances executed
and outstanding . . . . . . . . . . . . . . . . . . . . . 1,425,000
Notes and debentures subordinated
to deposits . . . . . . . . . . . . . . . . . . . . . . . 5,200,000
Other liabilities . . . . . . . . . . . . . . . . . . . . . . 8,813,000
---------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . $197,531,000
------------
EQUITY CAPITAL
Common stock . . . . . . . . . . . . . . . . . . . . . . . . $ 751,000
Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . 6,006,000
Undivided profits and capital reserves . . . . . . . . . . . 6,402,000
Net unrealized holding gains (losses) on available-for-sale
securities . . . . . . . . . . . . . . . . . . . . . . . . . 228,000
Cumulative foreign currency translations adjustments . . . . (576,000)
---------
TOTAL EQUITY CAPITAL . . . . . . . . . . . . . . . . . . . $ 12,811,000
------------
TOTAL LIABILITIES AND EQUITY CAPITAL . . . . . . . . . . $ 210,342,000
=============
<PAGE>
I, Roger W. Trupin, Controller of the above-named bank, do hereby declare that
this Report of Condition is true and correct to the best of my knowledge and
belief.
ROGER W. TRUPIN
We, the undersigned Directors, attest to the correctness of this Report of
Condition. We declare that it has been examined by us and, to the best of our
knowledge and belief, has been prepared in conformance with the instructions and
is true and correct.
CRISTOPHER J. STEFFEN
WILLIAM R. RHODES Directors
PAUL J. COLLINS
