<PAGE>
PURSUANT TO RULE 424(b)(5)
FILE NO. 33-56055
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED AUGUST 29, 1995
$400,000,000
[LOGO]
6 1/2% DEBENTURES DUE SEPTEMBER 1, 2025
----------
Interest on the Debentures is payable semiannually on March 1 and September
1 of each year, commencing March 1, 1996. The Debentures may not be redeemed at
the option of the Company prior to maturity and are not entitled to a sinking
fund. The registered holder of each Debenture may elect to have that Debenture,
or any portion of the principal amount thereof that is a multiple of $1,000,
redeemed on September 1, 2005 at 100% of the principal amount, together with
accrued interest to September 1, 2005. Such election, which is irrevocable when
made, must be made within the period commencing on July 1, 2005 and ending at
the close of business on August 1, 2005. The Debentures will be issued only in
registered form in denominations of $1,000 and integral multiples thereof. See
"Description of Debentures".
---------------
The Debentures will be represented by one or more Global Securities (as
defined herein) registered in the name of the nominee of The Depository Trust
Company, which will act as Depository. Interests in Global Securities will be
shown on, and transfers thereof will be effected only though, records maintained
by The Depository Trust Company and its participants. Except as provided herein,
Debentures in definitive form will not be issued. See "Description of Debentures
- -- Book-Entry Securities".
Settlement for the Debentures will be made in immediately available funds.
The Debentures will trade in The Depository Trust Company's Same-Day Funds
Settlement System, and secondary market trading activity in the Debentures will
therefore settle in immediately available funds. All payments of principal of
and interest on the Debentures will be made by the Company in immediately
available funds or the equivalent. See "Description of Debentures -- Same-Day
Settlement and Payment".
---------------
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 OR THE PROSPECTUS TO WHICH IT RELATES.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3)
------------------ ------------------ ------------------
<S> <C> <C> <C>
Per Debenture...................................... 99.276% 0.650% 98.626%
Total.............................................. $397,104,000 $2,600,000 $394,504,000
<FN>
- ---------
(1) Plus accrued interest, if any, from September 1, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting estimated expenses of $400,000 payable by the Company.
</TABLE>
---------------
The Debentures offered hereby are offered severally by the Underwriters, as
specified herein, subject to receipt and acceptance by them and subject to their
right to reject any order in whole or in part. It is expected that the
Debentures will be ready for delivery in book-entry form only through the
facilities of The Depository Trust Company, New York, New York, on or about
September 1, 1995, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
----------
The date of this Prospectus Supplement is August 29, 1995.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF DEBENTURES
The following description of the particular terms of the Debentures offered
hereby (referred to in the accompanying Prospectus as the "Offered Securities",
"Debt Securities" or "Senior Securities") supplements and, to the extent
inconsistent therewith, replaces the description of the general terms and
provisions of the Debt Securities and Senior Securities set forth in the
accompanying Prospectus, to which description reference is hereby made. The
following summary of the Debentures is qualified in its entirety by reference to
the Senior Indenture referred to in the Prospectus.
GENERAL
The Debentures will be limited to $400,000,000 aggregate principal amount
and will mature on September 1, 2025. Each Debenture will bear interest at the
rate set forth on the cover page of this Prospectus Supplement from September 1,
1995, or the most recent interest payment date to which interest has been paid
or duly provided for, payable semi-annually on March 1 and September 1,
beginning March 1, 1996 to persons in whose names the Debentures are registered
at the close of business on the next preceding February 15 and August 15.
The Debentures may not be redeemed at the option of the Company prior to
maturity, and are not entitled to a sinking fund.
The Debentures may be redeemed on September 1, 2005, at the option of the
registered holders of the Debentures, at 100% of their principal amount,
together with accrued interest to September 1, 2005. In order for a holder to
exercise this option, the Company must receive at its office or agency in New
York, New York, during the period beginning on July 1, 2005 and ending at 5:00
PM (New York City time) on August 1, 2005 (or, if August 1, 2005 is not a
Business Day, the next succeeding Business Day), the Debenture with the form
entitled "Option to Require Redemption on September 1, 2005" on the reverse of
the Debenture duly completed. Any such notice received by the Company during the
period beginning on July 1, 2005 and ending at 5:00 PM (New York City time) on
August 1, 2005 shall be irrevocable. See "Book-Entry Securities", below. The
redemption option may be exercised by the holder of a Debenture for less than
the entire principal amount of the Debentures held by such holder, so long as
the principal amount that is to be redeemed is equal to $1,000 or an integral
multiple of $1,000. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any Debenture for redemption will
be determined by the Company, whose determination will be final and binding.
Failure by the Company to repurchase the Debentures when required as
described in the preceding paragraph will result in an Event of Default under
the Indenture.
As long as the Debentures are represented by a Global Security (as defined
below), the Depository's nominee will be the registered holder of the Debentures
and therefore will be the only entity that can exercise a right to repayment.
See "Book-Entry Securities", below.
BOOK-ENTRY SECURITIES
Except as otherwise provided in this Prospectus Supplement or the Senior
Indenture, the Debentures will be represented by one or more Global Securities
(as defined in the Senior Indenture) held in book-entry form. The Global
Security representing the Debentures will be deposited with, or on behalf of,
The Depository Trust Company ("DTC"), or other successor depository appointed by
the Company (DTC or such other depository is herein referred to as the
"Depository") and registered in the name of the Depository or its nominee.
Unless otherwise provided in this Prospectus Supplement or the Senior Indenture,
Debentures will not be issued in definitive form. One certificate will be issued
with respect to each $150 million of principal amount and an additional
certificate will be issued with respect to any remaining principal amount of
Debentures.
S-2
<PAGE>
DTC has advised the Company that DTC is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC 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. Participants which have accounts directly
with DTC ("Direct Participants") include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. DTC 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 DTC 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 DTC
and its Participants are on file with the Securities and Exchange Commission.
Upon the issuance by the Company of the Debentures represented by a Global
Security, purchases of the Debentures under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Debentures on
DTC's records. The ownership interest of each actual purchaser of each Debenture
("Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation
from DTC 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 Participant through
which the Beneficial Owner entered into the transaction. Transfers of ownership
interests in the Debentures are to be accomplished by entries made on the books
of Participants acting on behalf of Beneficial Owners. Beneficial Owners will
not receive certificates representing their ownership interests in the
Debentures, except in the event that use of the book-entry system for the
Debentures is discontinued. The laws of some states require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in the Global Security.
So long as the Depository for the Global Security, or its nominee, is the
registered owner of the Global Security, the Depository or its nominee, as the
case may be, will be considered the sole owner or holder of the Debentures
represented by such Global Security for all purposes under the Senior Indenture.
Except as provided below, owners of beneficial interest in the Debentures
represented by the Global Security will not be entitled to have Debentures
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of the Debentures in definitive form
and will not be considered the owners or holders thereof under the applicable
Indenture.
So long as the Debentures are represented by a Global Security, the
Depository's nominee will be the only entity that can exercise a right to
repayment pursuant to the Holder's option to elect redemption of its Debentures.
Notice by Participants or by owners of beneficial interest in a Global Security
held through such Participants of the exercise of the option to elect repayment
of beneficial interests in Debentures represented by a Global Security must be
transmitted to the Depository in accordance with its procedures on a form
required by the Depository and provided to Participants. In order to ensure that
the Depository's nominee will timely exercise a right to repayment with respect
to a particular Debenture, the beneficial owner of such Debenture must instruct
the broker or other Participant through which it holds an interest in such
Debenture to notify the Depository of its desire to exercise a right to
repayment. Different firms have different cut-off times for accepting
instructions from their customers and, accordingly, each beneficial owner should
consult the broker or other Participant through which it holds an interest in a
Debenture in order to ascertain the cut-off time by which such an instruction
must be given in order for timely notice to be delivered to the Depository. The
Company will not be liable for any delay in delivery to the Paying Agent of
notices of the exercise of the option to elect repayment.
To facilitate subsequent transfers, all Debentures deposited by Participants
with DTC are registered in the name of DTC's partnership nominee, Cede & Co. The
deposit of the Debentures with DTC and
S-3
<PAGE>
their registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Debentures. DTC's records reflect only the identity of the Direct Participants
to whose accounts such Debentures 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 their customers. Conveyance of notices and other
communications by DTC to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants 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 DTC nor Cede & Co. will consent or vote with respect to Debentures.
The Company has been advised that under its usual procedures, DTC mails an
Omnibus Proxy to the issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Debentures are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Payments of principal of and interest, if any, on the Debentures represented
by the Global Security registered in the name of DTC or its nominee will be made
by the Company though the Trustee under the Senior Indenture or a paying agent
(the "Paying Agent"), which may also be the Trustee under the Senior Indenture,
to DTC or its nominee, as the case may be, as the registered owner of the Global
Security. None of the Company, the Trustee, any Paying Agent or the Underwriters
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests of the Global
Security representing any Debentures or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company has been advised that DTC, upon receipt of any payment of
principal and interest in respect of a Global Security, will credit Direct
Participants' accounts on the payable date in accordance with their respective
holdings shown on DTC's records unless DTC has reason to believe that it will
not receive payment on the payable 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 Participants
and not of DTC, the Paying Agent, or the Company, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of the Company or the Paying
Agent, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
If the Depository with respect to a Global Security is at any time unwilling
or unable to continue as Depository and a successor Depository is not appointed
by the Company within 90 days, the Company will issue certificated debentures in
exchange for the Debentures represented by such Global Security.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be made
by the Company in immediately available funds or the equivalent, so long as DTC
continues to make its Same-Day Funds Settlement System available to the Company.
USE OF PROCEEDS
The net proceeds to be received by the Company from the issue and sale of
the Debentures offered hereby will be used to reduce short-term indebtedness and
for other general corporate purposes. On August 29, 1995, the Company had
outstanding approximately $1,593,448,000 of commercial paper, with a weighted
average maturity of 20.7 days and bearing a weighted average interest rate of
approximately 5.79% per annum.
S-4
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated short-term debt and
capitalization of the Company as of July 1, 1995, and as adjusted to give effect
to the sale of the Debentures offered by the Company hereby (after deducting
underwriting discounts and estimated offering expenses) and the anticipated
application of the net proceeds from such sale. From time to time, the Company
may issue additional debt or equity securities. The following information should
be read in conjunction with the Company's consolidated financial statements,
including the notes thereto, which are incorporated herein by reference. See
"Incorporation of Certain Documents by Reference".
<TABLE>
<CAPTION>
JULY 1, 1995
-----------------------
ACTUAL AS ADJUSTED
--------- ------------
(IN MILLIONS OF
DOLLARS)
<S> <C> <C>
SHORT-TERM DEBT
Commercial paper...................................................................... $ 1,546 $ 1,152
Notes payable and other short-term debt............................................... 319 319
Current portion of long-term debt..................................................... 5 5
--------- ------------
Total short-term debt............................................................... $ 1,870 $ 1,476
--------- ------------
--------- ------------
LONG-TERM DEBT (1)
Senior notes and debentures........................................................... $ 1,103 $ 1,103
Other senior debt..................................................................... 61 61
Debentures offered hereby............................................................. -- 397
LYONs due 2009 and 2013............................................................... 360 360
Less current portion of long-term debt................................................ (5) (5)
--------- ------------
Total long-term debt................................................................ 1,519 1,916
--------- ------------
STOCKHOLDERS' EQUITY (2)
Common stock.......................................................................... 1,769 1,769
Preferred stock (none issued)......................................................... -- --
Additional paid-in capital............................................................ 1,440 1,440
Retained earnings..................................................................... 6,770 6,770
--------- ------------
Total stockholders' equity.......................................................... 9,979 9,979
--------- ------------
Total capitalization.............................................................. $ 11,498 $ 11,895
--------- ------------
--------- ------------
<FN>
- ---------
(1) See Notes 3 and 4 of the Notes to Consolidated Financial Statements for
December 31, 1994, incorporated herein by reference, for additional
information on long-term debt.
(2) See the Consolidated Financial Statements for December 31, 1994,
incorporated herein by reference, and Notes 5 and 8 thereto for additional
information on stockholders' equity.
</TABLE>
S-5
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
and the Terms Agreement, the Company has agreed to sell to each of the
Underwriters named below, and each of the Underwriters, for whom Goldman, Sachs
& Co. and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as
representatives, has severally agreed to purchase, the principal amount of the
Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF DEBENTURES
- -------------------------------------------------------------------------------------- ----------------
<S> <C>
Goldman, Sachs & Co................................................................... $ 180,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................................ 180,000,000
Morgan Stanley & Co. Incorporated..................................................... 40,000,000
----------------
Total............................................................................... $ 400,000,000
----------------
----------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement and the Terms
Agreement, the Underwriters are committed to take and pay for all of the
Debentures, if any are taken.
The Underwriters propose to offer the Debentures in part directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus Supplement and in part to certain securities dealers at such price
less a concession of 0.40% of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a concession not to exceed
0.25% of the principal amount of the Debentures to certain brokers and dealers.
After the Debentures are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Company has been advised by the Underwriters that the Underwriters
intend to make a market in the Debentures but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Debentures.
Settlement for the Debentures will be made in immediately available funds
and all secondary trading in the Debentures will settle in immediately available
funds. See "Description of Debentures -- Same-Day Settlement and Payment".
The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
LEGAL OPINIONS
Certain legal matters will be passed upon for the Company by James K. Markey
of the Company's Law Department. As of August 1, 1995, Mr. Markey jointly owned
approximately 1,065 shares of Common Stock and also held options to purchase
10,800 shares of Common Stock, of which options to purchase 9,400 shares are
currently exercisable. Certain legal matters will be passed upon for the
Underwriters by Mayer, Brown & Platt, Chicago, Illinois.
S-6
<PAGE>
PROSPECTUS [LOGO]
DEBT SECURITIES AND DEBT WARRANTS
COMMON STOCK AND COMMON STOCK WARRANTS
UNITS
--------------
Motorola, Inc. (the "Company") may offer from time to time under this
Prospectus in one or more series its (i) debt securities (the "Debt
Securities"), which may be senior (the "Senior Securities") or subordinated (the
"Subordinated Securities"), (ii) warrants to purchase Debt Securities (the "Debt
Warrants"), (iii) shares of its common stock, $3 par value per share (the
"Common Stock") and (iv) warrants to purchase Common Stock ("Common Stock
Warrants," and together with the Debt Warrants, the "Securities Warrants"), with
an aggregate initial public offering price of up to $800,000,000 or the
equivalent thereof in one or more foreign currencies or composite currencies,
including European Currency Units ("ECU"), on terms to be determined at the time
of each offering hereunder. The Debt Securities, Common Stock and Securities
Warrants may be offered separately or as a part of units consisting of one or
more such securities ("Units," and together with the Debt Securities, Common
Stock and Securities Warrants, the "Offered Securities"), in separate series, in
amounts, at prices and on terms to be determined at the time of sale and to be
set forth in one or more supplements to this Prospectus (a "Prospectus
Supplement"). The Debt Securities may be convertible into shares of Common Stock
of the Company.
Certain terms of the Offered Securities in respect of which this Prospectus
is being delivered, such as, (i) in the case of Debt Securities, the specific
designation, ranking, priority, aggregate principal amount, currency or
currencies, denominations, maturity, which may be fixed or extendible, premium
or discount, if any, interest rate, which may be fixed or variable, and time of
payment of interest, terms for redemption at the option of the Company or
repayment at the option of the holder, terms for sinking fund payments, terms
for conversion or exchange and form (which may be bearer, registered or global)
and any other terms in connection with the offer and sale of Debt Securities;
(ii) in the case of Securities Warrants, the duration, offering price, exercise
price, exercise dates and detachability and any other terms in connection with
the offer and sale of the Securities Warrants; (iii) in the case of Common
Stock, the specific title, number of shares or fractional interests therein,
dividend, liquidation, voting and any other rights in connection with the offer
and sale of the Common Stock; and (iv) in the case of any Offered Security, the
net proceeds, initial public offering price and any other terms will be set
forth in the applicable Prospectus Supplement. Units may be issued in amounts,
at prices, on terms and containing such conditions, covenants and other
provisions, and consisting of such Offered Securities and other securities, as
will be set forth in the applicable Prospectus Supplement. The applicable
Prospectus Supplement will also contain information, where applicable, about
certain United States federal income tax considerations relating to the Offered
Securities and any listing on a securities exchange of the Offered Securities
covered by such Prospectus Supplement and about relationships between the
Company and the applicable trustee, in the case of the issuance of Debt
Securities or Debt Warrants.
The Offered Securities may be offered directly, through agents, to or
through underwriters or dealers, which may include affiliates of the Company, or
through any combination of the foregoing. See "Plan of Distribution." If any
agents, dealers or underwriters are involved in the sale of any of the Offered
Securities, their names, and any applicable fee, commission, purchase price or
discount arrangements with them, will be set forth, or will be calculable from
the information set forth, in the applicable Prospectus Supplement. The Company
may also issue Offered Securities to one or more persons in exchange for
outstanding securities of the Company acquired by such persons from third
parties in open market or privately negotiated transactions. The newly issued
Offered Securities sold in any such exchange may be offered pursuant to this
Prospectus and the applicable Prospectus Supplement by such persons, acting as
principal for their own accounts, at market prices prevailing at the time of
sale, at prices otherwise negotiated or at fixed prices. Unless otherwise
indicated in the applicable Prospectus Supplement, the Company will receive only
outstanding securities of the Company in any such exchange transaction and will
not receive cash proceeds in connection with the exchange or receive any
proceeds in connection with the resale by such persons of any Offered
Securities.
SEE "RISK FACTORS RELATING TO CURRENCIES," ON PAGE 6 HEREOF, FOR A
DISCUSSION OF CERTAIN CONSIDERATIONS RELEVANT TO AN INVESTMENT IN DEBT
SECURITIES AND DEBT WARRANTS.
-----------------
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 OR ANY PROSPECTUS SUPPLEMENT. ANY
REPRESENTA TION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------
The date of this Prospectus is August 29, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at 13th Floor, Seven World
Trade Center, New York, New York 10048 and 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained by mail from the Public
Reference Branch of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. In addition, reports, proxy statements and other
information concerning the Company may be inspected at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005 and the Chicago
Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605.
Additional information regarding the Company and the Offered Securities is
contained in the registration statement on Form S-3 (together with all exhibits
and amendments, the "Registration Statement") filed with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the Commission's rules.
For further information pertaining to the Company and the Offered Securities
offered hereby, reference is made to the Registration Statement which may be
inspected without charge at the office of the Commission at 450 Fifth Street
N.W., Washington, D.C. 20549, and copies thereof may be obtained from the
Commission at prescribed rates.
---------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars," "U.S.
dollars," or "U.S. $").
---------------
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 1-7221) are
incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
April 1, 1995 and July 1, 1995.
3. The Company's Current Reports on Form 8-K dated May 15, 1995 and
August 29, 1995.
4. The description of the Common Stock included in the Registration
Statement on Form 8-B dated July 2, 1973, including any amendments or
reports filed for the purpose of updating such description.
5. The description of the Company's Preferred Share Purchase Rights
included in the Registration Statement on Form 8-A dated November 15, 1988,
as amended by Forms 8 dated August 9, 1990 and December 2, 1992 and by Form
8-A/A dated February 28, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Offered Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
2
<PAGE>
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the documents incorporated herein by reference (other than
exhibits, unless such exhibits are specifically incorporated by reference in
such documents). Written requests for such copies should be directed to Richard
H. Weise, Secretary, Motorola, Inc., 1303 East Algonquin Road, Schaumburg,
Illinois 60196, telephone: (708) 576-5000.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR A PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND THEREIN, AND ANY
INFORMATION OR REPRESENTATIONS NOT CONTAINED HEREIN OR THEREIN MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER,
DEALER OR AGENT. THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF OFFERED
SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE OFFERED SECURITIES COVERED BY THIS
PROSPECTUS IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AND
THE APPLICABLE PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
3
<PAGE>
THE COMPANY
Motorola, Inc. is a corporation organized under the laws of the State of
Delaware as the successor to an Illinois corporation organized in 1928. As used
in this discussion of "The Company," "Motorola" or the "Company" refers to
Motorola, Inc. and its subsidiaries, unless otherwise indicated by the context.
Motorola's principal executive offices are located at 1303 East Algonquin Road,
Schaumburg, Illinois 60196 (telephone number 708-576-5000).
Motorola, one of the world's leading providers of electronic equipment,
systems, components and services for worldwide markets, is engaged in the
design, manufacture and sale, principally under the Motorola brand, of a
diversified line of such products. These products include two-way land mobile
communications systems, paging and wireless data systems and other forms of
electronic communication systems; cellular mobile and portable telephones and
systems; semiconductors, including integrated circuits, discrete devices and
microprocessor units; information systems products such as modems, multiplexers
and network processors; electronic equipment for military and aerospace use;
electronic engine controls and other automotive and industrial electronic
equipment; and multifunction computer systems for distributed data processing
and office automation applications. Motorola also provides services for paging,
cellular telephone and shared mobile radio. "Motorola" is a registered trademark
of Motorola, Inc.
SEMICONDUCTOR PRODUCTS
The semiconductor products manufactured by the Semiconductor Products Sector
include integrated circuit devices (metal-oxide semiconductor and bipolar) such
as dynamic and static random access memories, microcontrollers, microprocessors,
microcomputers, gate arrays, standard cells, digital signal processors, mixed
signal arrays, and other logic and analog components. In addition, the
Semiconductor Products Sector manufactures a wide variety of discrete devices
including zener and tuning diodes, radio frequency devices, power and small
signal transistors, field effect transistors, microwave devices,
optoelectronics, rectifiers and thyristors.
GENERAL SYSTEMS PRODUCTS
General systems products are designed, manufactured and sold by the General
Systems Sector which includes the Cellular Subscriber Group, the Cellular
Infrastructure Group, the Network Ventures Division, Personal Communications
Systems and the Motorola Computer Group. The Cellular Subscriber and
Infrastructure Groups manufacture, sell, install and service cellular
infrastructure and radiotelephone equipment. In addition, the Cellular
Subscriber Group resells cellular line service in the U.S., New Zealand,
Germany, France and U.K. markets. The Network Ventures Division is a joint
venture partner in cellular and telepoint operating systems in Argentina,
Uruguay, Hong Kong, Israel, Chile, Mexico, Thailand, Pakistan, Dominican
Republic, Japan, Nicaragua and other countries. The Motorola Computer Group
develops, manufactures, sells and services multifunction computer systems and
board level products, together with operating systems and system enablers.
COMMUNICATIONS PRODUCTS
As a principal supplier of mobile and portable FM two-way radio and radio
paging and wireless data systems, the Land Mobile Products Sector and the
Messaging, Information and Media Sector provide equipment and systems to meet
the communications needs of individuals and many different types of business,
institutional and governmental organizations. Products of the Land Mobile
Products Sector and certain products of the Messaging, Information and Media
Sector provide voice and data communication between vehicles, persons and base
stations. The Messaging, Information and Media Sector products provide signaling
or signaling and one-way voice communications or wireless data communications to
people away from their homes, vehicles or offices.
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Information systems products are also designed, manufactured and sold by the
Messaging, Information and Media Sector. These products include high-speed
leased-line, dial and data communications modems; digital transmission devices,
DDS service units, ISDN terminal adaptors, multiplexers; network management and
control systems; X.25 networking equipment and local area network
interconnection products.
GOVERNMENT AND SYSTEMS TECHNOLOGY PRODUCTS
The Government and Systems Technology Group's products include aerospace
telecommunications systems, military communications equipment, radar systems,
data links, display systems, positioning and navigation systems, instrumentation
products, countermeasures systems, missile guidance equipment, electronic
ordinance devices, drone electronic systems and secure telecommunication and
commercial test equipment products. Under an agreement between Motorola, Inc.
and Iridium, Inc., the Government and Systems Technology Group is also designing
and constructing the satellite network and ground control segment of the
Iridium-Registered Trademark- space system.
AUTOMOTIVE, ENERGY AND CONTROLS PRODUCTS
The products manufactured by the Automotive, Energy and Controls Group
include automotive and industrial electronics, energy storage products and
systems, and ceramic and quartz electronic components, as well as electronic
ballasts for fluorescent lighting and radio frequency identification devices.
- ------------------------------
- -Registered Trademark---Registered Trademark and Servicemark of Iridium, Inc.
5
<PAGE>
RISK FACTORS RELATING TO CURRENCIES
Debt Securities or Debt Warrants denominated or payable in foreign
currencies may entail significant risks. These risks include, without
limitation, the possibility of significant fluctuations in the foreign currency
markets, the imposition or modification of foreign exchange controls and
potential illiquidity in the secondary market. These risks will vary depending
upon the currency or currencies involved. These risks may be more fully
described in the applicable Prospectus Supplement. See "Description of Debt
Securities" and "Description of Securities Warrants."
USE OF PROCEEDS
Unless otherwise specified in an applicable Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Offered Securities
will be used for general corporate purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the unaudited consolidated ratios of earnings to fixed
charges for the quarters ended July 1, 1995 and July 2, 1994 and each of the
years in the five-year period ended December 31, 1994:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
-------------------- YEAR ENDED DECEMBER 31,
JULY 1, JULY 2, --------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- --------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges.................... 11.0 8.5 9.8 6.8 4.0 3.5 3.8
</TABLE>
For purposes of computing the ratios of earnings to fixed charges, income
before income tax expense (excluding interest costs capitalized) plus fixed
charges has been divided by fixed charges. Fixed charges consist of interest
costs (including interest costs capitalized) and estimated interest included in
rentals (one-third of net rental expense).
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities (except for
the terms of Liquid Yield Option-TM- Notes ("LYONs"-TM-), which are described
separately) sets forth certain general terms and provisions of the Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Debt Securities offered by any Prospectus Supplement and the extent, if
any, to which such general provisions may apply to such Debt Securities will be
described in such Prospectus Supplement.
The Senior Securities (except for LYONs) are to be issued under an Indenture
(the "Senior Indenture") between the Company and Harris Trust and Savings Bank,
as trustee, or the trustee named in the applicable Prospectus Supplement as
trustee (the "Senior Trustee") and the Subordinated Securities (except for
LYONs) are to be issued under an indenture (the "Subordinated Indenture"; the
Senior Indenture and the Subordinated Indenture are collectively referred to
herein as the "Indentures") between the Company and the First National Bank of
Chicago, as trustee, or the trustee named in the applicable Prospectus
Supplement as trustee (the "Subordinated Trustee"). The forms of the Senior
Indenture and the Subordinated Indenture are exhibits to the Registration
Statement. The following summary of certain provisions of the Indentures does
not purport to be complete and is qualified in its entirety by reference to the
provisions of the Indentures and the applicable Prospectus Supplement relating
to such Offered Securities. Numerical references in parentheses below are to
sections of the Indentures. Wherever particular sections or defined terms of the
Indentures are referred to, it is intended that such sections or defined terms
shall be incorporated herein by reference. Unless otherwise indicated,
capitalized terms used herein that are defined in the Indentures shall have the
meanings ascribed to them in the Indentures. As used in this "Description of
Debt Securities," the "Company" refers to Motorola, Inc. and does not, unless
the context otherwise indicates, include its subsidiaries.
- ------------------------------
- -TM---Trademark of Merrill Lynch & Co., Inc.
6
<PAGE>
GENERAL
The Senior Securities will be unsubordinated obligations of the Company.
They will be unsecured and will rank equally and PARI PASSU with each other,
unless otherwise indicated in the applicable Prospectus Supplement. (Section 301
of the Senior Indenture) The Subordinated Securities will be subordinated in
right of payment to the prior payment in full of the Senior Indebtedness of the
Company. See "Description of Debt Securities -- Subordinated Indenture
Provisions." The Subordinated Securities will be unsecured and will rank equally
and PARI PASSU with each other, unless otherwise indicated in the applicable
Prospectus Supplement. (Section 301 of the Subordinated Indenture) The
Indentures do not limit the aggregate principal amount of Debt Securities which
may be issued thereunder and provide that Debt Securities may be issued
thereunder from time to time in one or more series.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for the following terms, when
applicable, of the Offered Securities: (1) the title of the Offered Securities;
(2) any limit on the aggregate principal amount of the Offered Securities; (3)
the date or dates, or the method by which such date or dates will be determined
or extended, on which the principal (and premium, if any) of the Offered
Securities will be payable; (4) the rate or rates per annum at which the Offered
Securities will bear interest, if any, or the method by which such rate or rates
will be determined and the date or dates from which such interest will accrue;
(5) the dates on which such interest, if any, will be payable and the Regular
Record Dates for any interest payable on any Registered Security on any such
Interest Payment Dates, any circumstances in which the Company may defer
interest payments or any manner of computing interest if other than a 360-day
year of twelve 30-day months; (6) the place or places where principal and
interest (and premium, if any) on the Offered Securities may be payable, where
any Registered Securities may be surrendered for transfer and where Offered
Securities may be exchanged and notices and demands may be served or published,
(7) the price at which, the periods within which or the date or dates on which,
and the terms and conditions upon which the Offered Securities may, pursuant to
any optional or mandatory redemption provisions, be redeemed at the option of
the Company; (8) the obligation, if any, of the Company to redeem, repay or
purchase Offered Securities pursuant to any sinking fund or analogous provisions
or at the option of a Holder thereof and the period or periods, price or prices
and terms and conditions upon which such repurchase, redemption or purchase
shall occur; (9) whether Offered Securities are to be Registered Securities,
Bearer Securities or both, are to be issuable with or without coupons and the
terms upon which Bearer Securities may be exchanged for Registered Securities
and, in the case of Bearer Securities, the date as of which such Bearer
Securities shall be dated (if not the date of original issuance of the first
security of like tenor and term); (10) whether Offered Securities are to be
issued in the form of a Global Security, the Depositary and Global Exchange
Agent, whether such Global form is temporary or permanent, the circumstances
under which any temporary Global Security will be exchanged for definitive
Global Securities and any applicable Exchange Date; (11) whether any additional
amounts will be payable to Holders of the Offered Securities; (12) the
denomination of any Registered Security (if other than $1,000 or any integral
multiple thereof) and of any Bearer Security (if other than $5,000 or any
integral multiple thereof); (13) if other than Dollars, the Currency or
Currencies of denomination, including any composite Currency or index; (14) the
application, if any, of the defeasance or covenant defeasance provisions of the
applicable Indenture to the Offered Securities; (15) if other than Dollars, the
Currency, Currencies or Currency units in which payments shall be made on the
Offered Securities and the time and manner of determining any exchange rate
between the Currency or Currencies of denomination and that or those in which
they are to be paid; (16) the manner in which any payments on an Offered
Security may be determined with respect to an index; (17) the designation of any
initial Exchange Rate Agent; (18) the terms and conditions, if any, upon which
the Offered Securities are to be convertible into shares of Common Stock of the
Company; (19) the portion of the principal amount of the Offered Securities, if
other than the principal amount thereof, payable upon acceleration of maturity
thereof; (20) the Person to whom any interest on any Registered Security shall
be payable, if other than the Person in whose name such Registered Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date, the manner in which, or Person to whom, any interest on
any Bearer Security will be payable, if other than upon presentation and
surrender of the
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<PAGE>
coupons appertaining thereto as they mature, and the extent to which any
interest payable on an Interest Payment Date on any temporary Security issued in
Global form will be paid if other than the manner in the applicable Indenture;
(21) the terms of any pledge of property made to secure the obligations of the
Company under such Offered Securities and the circumstances under which such
pledge may be released, and the limitations, if any, on recourse against the
Company under such Offered Securities; (22) if other than the Trustee, the
identity of the Security Registrar and/or Paying Agent; and (23) any other terms
of the Offered Securities. (Section 301 of each Indenture)
Additional provisions of the applicable Indenture, such as rate reset and
extension provisions, may be made applicable to the Offered Securities, as
described in the applicable Prospectus Supplement.
For purposes of this Prospectus, any reference to the payment of principal
(or premium, if any) or interest, if any, on any Debt Securities will be deemed
to include mention of the payment of any additional amounts required by the
terms of such Debt Securities.
Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Federal income tax and other
considerations pertaining to any such Original Issue Discount Securities will be
discussed in the applicable Prospectus Supplement.
The Debt Securities will be obligations exclusively of the Company. Since
the operations of the Company are partially conducted through subsidiaries,
primarily overseas, the cash flow and the consequent ability to service debt,
including the Debt Securities, of the Company, are partially dependent upon the
earnings of its subsidiaries and the distribution of those earnings to, or upon
loans or other payments of funds by those subsidiaries to, the Company. The
subsidiaries are separate and distinct legal entities and have no obligation,
contingent or otherwise, to pay any amounts due pursuant to the Debt Securities
or to make any funds available therefor, whether by dividends, loans or other
payments. In addition, the payment of dividends and the making of loans and
advances to the Company by its subsidiaries may be subject to statutory or
contractual restrictions, are contingent upon the earnings of those subsidiaries
and are subject to various business considerations.
Any right of the Company to receive assets of any of its subsidiaries upon
their liquidation or reorganization (and the consequent right of the Holders of
the Debt Securities to participate in those assets) will be effectively
subordinated to the claims of that subsidiary's creditors (including trade
creditors), except to the extent that the Company is itself recognized as a
creditor of such subsidiary, in which case the claims of the Company would still
be subordinate to any security interests in the assets of such subsidiary and
any indebtedness of such subsidiary senior to that held by the Company.
The general provisions of the Indentures do not contain any provisions that
would limit the ability of the Company to incur indebtedness or that would
afford holders of Debt Securities protection in the event of a highly leveraged
or similar transaction involving the Company. However, the general provisions of
the Indentures do provide that neither the Company nor any Domestic Subsidiary
(as defined below) will subject certain of its property or assets to any
mortgage or other encumbrance unless the Securities issued thereunder are
secured equally and ratably with or prior to such other indebtedness thereby
secured. See "Description of Debt Securities -- Restrictive Covenants" below.
Under the Indentures, the Company has the ability to issue Debt Securities
with terms different from those of Debt Securities previously issued thereunder
and, without the consent of the holders thereof, to issue additional amounts of
a series of Debt Securities (with different dates for payments, different rates
of interest and in different currencies or currency), in an aggregate principal
amount determined by the Company. (Section 301 of each Indenture)
DENOMINATIONS, FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable solely as Registered Securities,
solely as Bearer Securities or as both Registered Securities and Bearer
Securities. Unless otherwise provided in the applicable Prospectus Supplement,
Registered Securities denominated in U.S. dollars (other than
8
<PAGE>
Global Securities, which may be of any denomination) are issuable in
denominations of $1,000 and any integral multiple thereof and Bearer Securities
denominated in U.S. dollars are issuable in denominations of $5,000 and any
integral multiples thereof. The Indentures also provide that Debt Securities of
a series may be issuable in global form. See "Description of Debt Securities --
Global Securities" below. Unless otherwise indicated in the applicable
Prospectus Supplement, Bearer Securities (except those in temporary or permanent
global form) will have interest coupons attached. (Section 201 of each
Indenture)
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of authorized denominations and of a
like aggregate principal amount, tenor and terms. In addition, if Debt
Securities of any series are issuable as both Registered Securities and Bearer
Securities, at the option of the Holder, but subject to applicable laws, upon
request confirmed in writing, and subject to the terms of the applicable
Indenture, Bearer Securities (with all unmatured coupons, except as provided
below, and all matured coupons in default) of such series will be exchangeable
into Registered Securities of the same series of any authorized denominations
and of a like aggregate principal amount, tenor and terms. Bearer Securities
surrendered in exchange for Registered Securities of the same series between the
close of business on a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest, and interest will not be payable
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the terms of the applicable Indenture. Unless otherwise
specified in the applicable Prospectus Supplement, Bearer Securities will not
otherwise be issued in exchange for Registered Securities. (Section 305 of each
Indenture)
In connection with its original issuance, no Bearer Security shall be mailed
or otherwise delivered to any location in the United States (as defined below
under "Description of Debt Securities -- Limitations on Issuance of Bearer
Securities") and, unless otherwise specified in the applicable Prospectus
Supplement, a Bearer Security may be delivered in connection with its original
issuance only if the person entitled to receive such Bearer Security furnishes
written certification, in the form required by the applicable Indenture, to the
effect that (i) such Bearer Security is not being acquired by or on behalf of a
United States person (as defined below under "Description of Debt Securities --
Limitations on Issuance of Bearer Securities"), or (ii) if a beneficial interest
in such Bearer Security is being acquired by or on behalf of a United States
person, that such United States person is a foreign branch of a United States
financial institution (as defined in Treasury Regulation Section
1.165-12(c)(1)(v)) that is purchasing for its own account or for resale or such
person is acquiring the Bearer Security through the foreign branch of a United
States financial institution and the financial institution agrees, in either
case, to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder or (iii) such Bearer Security is being acquired by a
United States or foreign financial institution for resale during the restricted
period (as defined in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7))
and has not been acquired for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
(Section 303 of each Indenture) See "Description of Debt Securities -- Global
Securities" and "Description of Debt Securities -- Limitations on Issuance of
Bearer Securities" below.
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (duly
endorsed or accompanied by a satisfactory written instrument of transfer), at
the office of the Security Registrar or at the office of any transfer agent
designated by the Company for such purpose with respect to such series of Debt
Securities, without service charge and upon payment of any taxes and other
governmental charges. (Section 305 of each Indenture) If the Prospectus
Supplement refers to any transfer agent (in addition to the Security Registrar)
initially designated by the Company with respect to any series of Debt
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent (or Security Registrar) acts, except that, if Debt Securities of
a series are issuable solely as Registered Securities, the Company will be
required to maintain a transfer
9
<PAGE>
agent in each Place of Payment for such series and, if Debt Securities of a
series are issuable as Bearer Securities, the Company will be required to
maintain (in addition to the Security Registrar) a transfer agent in a Place of
Payment for such series located outside the United States. The Company may at
any time designate additional transfer agents with respect to any series of Debt
Securities. (Section 1002 of each Indenture)
The Company shall not be required (i) to issue, register the transfer of or
exchange Debt Securities of any particular series to be redeemed or exchanged
for a period of 15 days preceding the first publication of the relevant notice
of redemption or, if Registered Securities are outstanding and there is no
publication, the mailing of the relevant notice of redemption or exchange, (ii)
to register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except the unredeemed portion of any Registered
Security being redeemed or exchanged in part, or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of like tenor and terms of that series,
provided that such Registered Security shall be surrendered for redemption.
(Section 305 of each Indenture)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depository (the "Depository") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued in fully registered or
bearer form and may be issued in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a Global Security may not be transferred except as a whole
by the Depository for such Global Security to a nominee of such Depository or by
a nominee of such Depository to such Depository or another nominee of such
Depository or by the Depository or any nominee of such Depository to a successor
Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series. The Company anticipates that the following provisions
will generally apply to depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered and sold
directly by the Company. Ownership of beneficial interests in a Global Security
will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in such Global Security will be
shown on, and the transfer of that ownership will be effected only through,
records maintained by the applicable Depository or its nominee (with respect to
interests of Participants) and records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to own, pledge or transfer beneficial interest in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Security will not be entitled to have any of the individual Debt
Securities of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of any such
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the applicable Indenture.
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Payments of principal of and any interest (and premium, if any) on
individual Debt Securities represented by a Global Security registered in the
name of a Depository or its nominee will be made to the Depository or its
nominee, as the case may be, as the registered owner of the Global Security
representing such Debt Securities. None of the Company, the Trustee, any Paying
Agent or the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depository for a series of Debt Securities or
its nominee, upon receipt of any payment of principal or interest (or premium,
if any) in respect of a permanent Global Security representing any of such Debt
Securities, immediately will credit Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Global Security for such Debt Securities as shown on the records
of such Depository or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
If a Depository for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depository and a successor depository is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series to Participants in exchange for the Global Security
representing such series of Debt Securities. In addition, the Company may, at
any time and in its sole discretion, subject to any limitations described in the
applicable Prospectus Supplement relating to such Debt Securities, determine not
to have any Debt Securities of such series represented by one or more Global
Securities and, in such event, will issue individual Debt Securities of such
series to Participants in exchange for the Global Security or Securities
representing such series of Debt Securities.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to United States persons (each
as defined below) other than to a Qualifying Branch of a United States Financial
Institution (as defined below) or a United States person acquiring Bearer
Securities through a Qualifying Branch of a United States Financial Institution
and any underwriters, agents and dealers participating in the offering of Debt
Securities must agree that they will not offer any Bearer Securities for sale or
resale in the United States or to United States persons (other than a Qualifying
Branch of a United States Financial Institution or a United States person
acquiring Bearer Securities through a Qualifying Branch of a United States
Financial Institution) nor deliver Bearer Securities within the United States.
In addition, any such underwriters, agents and dealers must agree to send
confirmations to each purchaser of a Bearer Security confirming that such
purchaser represents that it is not a United States person or is a Qualifying
Branch of a United States Financial Institution and, if such person is a dealer,
that it will send similar confirmations to purchasers from it. The term
"Qualifying Branch of a United States Financial Institution" means a branch
located outside the United States of a United States securities clearing
organization, bank or other financial institution listed under Treasury
Regulation Section 1.165-12(c)(1)(v) that agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "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." Under Sections 165(j) and 1287(a) of the Code, holders
that are United
11
<PAGE>
States persons, with certain exceptions, will not be entitled to deduct any loss
on Bearer Securities and must treat as ordinary income any gain realized on the
sale or other disposition (including the receipt of principal) of Bearer
Securities.
The term "United States 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 of any political subdivision thereof, and
an estate or trust the income of which is subject to United States federal
income taxation regardless of its source, and the term "United States" means the
United States of America (including the states and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction
(including the Commonwealth of Puerto Rico).
PAYMENT AND PAYING AGENTS
Unless otherwise provided in the applicable Prospectus Supplement, the Place
of Payment for a series issuable solely as Registered Securities will be
Chicago, Illinois, U.S.A., and the Company will initially designate the
corporate trust office of the Senior Trustee and the Subordinated Trustee,
respectively, for this purpose. Notwithstanding the foregoing, at the option of
the Company, interest, if any, may be paid on Registered Securities (i) by check
mailed to the address of the Person entitled thereto as such Person's address
appears in the Security Register or (ii) by wire transfer to an account located
in the United States maintained by the Person entitled thereto as specified in
the Security Register. (Sections 307, 1001 and 1002 of each Indenture) Unless
otherwise provided in the applicable Prospectus Supplement, payment of any
installment of interest on Registered Securities will be made to the Person in
whose name such Registered Security is registered at the close of business on
the Regular Record Date for such interest. (Section 307 of each Indenture)
If Debt Securities of a series are issuable solely as Bearer Securities or
as both Registered Securities and Bearer Securities, unless otherwise provided
in the applicable Prospectus Supplement, the Company will be required to
maintain an office or agency (i) outside the United States at which, subject to
any applicable laws and regulations, the principal of (and premium, if any) and
interest, if any, on such series will be payable and (ii) in Chicago, Illinois
for payments with respect to any Registered Securities of such series (and for
payments with respect to Bearer Securities of such series in the limited
circumstances described below, but not otherwise); provided that, if required in
connection with any listing of such Debt Securities on The Stock Exchange of the
United Kingdom and the Republic of Ireland, the Luxembourg Stock Exchange or any
other stock exchange located outside the United States, the Company will
maintain an office or agency for such Debt Securities in London or Luxembourg or
any city located outside the United States required by such stock exchange.
(Section 1002 of each Indenture) The initial locations of such offices and
agencies will be specified in the applicable Prospectus Supplement. Unless
otherwise provided in the applicable Prospectus Supplement, principal of (and
premium, if any) and interest, if any, on Bearer Securities may be made, at the
Holder's option by (i) check in the Currency designated by the Bearer Security
presented or mailed to an address outside the United States or (ii) paid by wire
transfer to an account in such Currency maintained by the Person entitled
thereto with a bank located outside the United States. (Sections 307 and 1002 of
each Indenture) Unless otherwise provided in the applicable Prospectus
Supplement, payment of installments of interest on any Bearer Securities on or
before Maturity will be made only against surrender of coupons for such interest
installments as they severally mature. (Section 1001 of each Indenture) Unless
otherwise provided in the applicable Prospectus Supplement, no payment with
respect to any Bearer Security will be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States. Notwithstanding the foregoing, payments of principal of (and premium, if
any) and interest, if any, on Bearer Securities payable in U.S. dollars will be
made at the office of the Company's Paying Agent in Chicago, Illinois if (but
only if) payment of the full amount thereof in U.S. dollars at all offices or
agencies outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions and the Trustee has received an
opinion of counsel that such payment within the United States is legal.
(Sections 307 and 1002 of each Indenture)
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The Company may from time to time designate additional offices or agencies
for payment with respect to any Debt Securities, approve a change in the
location of any such office or agency and, except as provided above, rescind the
designation of any such office or agency.
Unless otherwise provided in the applicable Prospectus Supplement, all
payments of principal of (and premium, if any) and interest, if any, on any Debt
Security that is payable in a Currency other than U.S. dollars will be made in
U.S. dollars in the event that such Currency (i) ceases to be used both by the
government of the country that issued the currency and by a central bank or
other public institution of or within the international banking community for
the settlement of transactions, (ii) is the ECU and ceases to be used both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities or (iii) is any
currency unit (or composite currency) other than the ECU and ceases to be used
for the purposes for which it was established (each of the events described in
clauses (i) through (iii), a "Conversion Event"). (Section 312 of each
Indenture)
All moneys deposited with a paying agent or held for the payment of
principal of (or premium, if any) or interest, if any, on any Debt Security that
remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will, at request of the Company, be
repaid to the Company, or discharged from trust, and the Holder of such Debt
Security or any coupon appertaining thereto will thereafter look only to the
Company for payment thereof. (Section 1003 of each Indenture)
DEFEASANCE AND COVENANT DEFEASANCE
Each Indenture provides that, if such provision is made applicable to the
Debt Securities of any series pursuant to Section 301 of the applicable
Indenture, the Company may elect either (A) to defease and be discharged from
any and all obligations in respect of such Debt Securities (except for certain
obligations to register the transfer or exchange of such Debt Securities, to
replace temporary, destroyed, stolen, lost or mutilated Debt Securities, to
maintain paying agencies and to hold monies for payment in trust) ("defeasance")
or (B) to omit to comply with certain restrictive covenants in Section 801
(being the restrictions described under "Description of Debt Securities --
Consolidation, Merger, Conveyance, Transfer or Lease"), Section 1007 (relating
to maintenance of the Company's existence), 1008 (Maintenance of Properties),
1009 (Payment of Taxes and Other Claims), 1010 (Restrictions on Secured Debt)
and 1011 (Restrictions on Sales and Leasebacks), and the occurrence of any event
specified in Sections 501(3) and 501(4) (with respect to any of Sections 1007
through 1011, inclusive, and Section 801) and 501(7) (described, respectively,
in clauses (c), (d) and (f) under "Description of Debt Securities -- Events of
Default") shall not be deemed to be an Event of Default under the applicable
Indenture and the Debt Securities of any series ("covenant defeasance"), in
either case upon the deposit with the applicable Trustee (or other qualifying
trustee), in trust, of money and/or U.S. Government Obligations (as defined
below) which through the payment of interest and principal in respect thereof in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any) and each installment of interest, if any,
on the Debt Securities of such series on the Stated Maturities of such payments
in accordance with the terms of the applicable Indenture and the Debt Securities
of such series. Such a trust may only be established if, among other things, the
Company has delivered to the applicable Trustee an Opinion of Counsel (who may
be counsel for the Company) to the effect that the Holders of the Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance or covenant defeasance and
will be subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such deposit and defeasance
had not occurred. Such opinion, in the case of defeasance under clause (A)
above, must refer to and be based upon a ruling of Internal Revenue Service or a
change in applicable Federal income tax law occurring after the date of the
applicable Indenture. The applicable Prospectus Supplement may further describe
the provisions, if any, permitting such defeasance or covenant defeasance with
respect to the Debt Securities of a particular series. (Article Fifteen of each
Indenture)
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In the event the Company exercises its option to omit compliance with
certain covenants of the applicable Indenture with respect to the Debt
Securities of any series as described above and the Debt Securities of such
series are declared due and payable because of the occurrence of any Event of
Default other than the Event of Default described in clause (d) under
"Description of Debt Securities -- Events of Default", the amount of money and
U.S. Government Obligations on deposit with the applicable Trustee will be
sufficient to pay amounts due on the Debt Securities of such series at the time
of their Stated Maturity but may not be sufficient to pay amounts due on the
Debt Securities of such series at the time of the acceleration resulting from
such Event of Default. However, the Company shall remain liable for such
payments. The term "U.S. Government Obligations" means direct noncallable
obligations of, or noncallable obligations guaranteed by, the United States or
an agency thereof for the payment of which guarantee or obligation the full
faith and credit of the United States is pledged.
RESTRICTIVE COVENANTS
RESTRICTIONS ON SECURED DEBT If the Company or any Domestic Subsidiary
shall incur or guarantee any Debt secured by a Mortgage on any Principal
Property or on any shares of stock of or Debt of any Domestic Subsidiary, the
Company will secure the Debt Securities of each series equally and ratably with
(or prior to) such secured Debt, unless after giving effect thereto, the
aggregate amount of all such Debt so secured, together with all Attributable
Debt (as defined below) in respect of sale and leaseback transactions involving
Principal Properties (see "Description of Debt Securities -- Restrictions on
Sales and Leasebacks" below), would not exceed 5% of the Consolidated Net
Tangible Assets of the Company and its consolidated subsidiaries. This
restriction will not apply to, and there will be excluded from secured Debt in
any computation under such restriction, Debt secured by (a) Mortgages on
property of, or on any shares of stock of or Debt of, any corporation existing
at the time such corporation becomes a Domestic Subsidiary or at the time it is
merged into or consolidated with the Company or a Domestic Subsidiary, (b)
Mortgages in favor of the Company or a Domestic Subsidiary, (c) Mortgages in
favor of governmental bodies to secure progress or advance payments, (d)
Mortgages on property, shares of stock or Debt existing at the time of
acquisition thereof (including acquisition through merger or consolidation), (e)
purchase money Mortgages and Mortgages to secure the construction cost of
property, and (f) any extension, renewal or refunding of any Mortgage referred
to in the foregoing clauses (a) through (e), inclusive. "Principal Property"
will be defined to include any single parcel of real estate, any manufacturing
plant or warehouse owned or leased by the Company or any Domestic Subsidiary
which is located within the United States and the gross book value (without
deduction of any depreciation reserves) of which on the date as of which the
determination is being made exceeds 1% of Consolidated Net Tangible Assets,
other than any manufacturing plant or warehouse or a portion thereof (a) which
is a pollution control or other facility financed by obligations issued by a
state or local government unit, or (b) which, in the opinion of the Board of
Directors of the Company, is not of material importance to the total business
conducted by the Company and its subsidiaries as an entirety. "Attributable
Debt" means the total net amount of rent required to be paid during the
remaining term of any lease, discounted at the rate per annum borne by the
Senior Securities of each series, compounded annually. "Subsidiary of the
Company" means a corporation, a majority of the outstanding voting stock of
which is owned, directly or indirectly, by the Company and/or one or more
Subsidiaries of the Company. "Domestic Subsidiary" means a Subsidiary of the
Company except a Subsidiary of the Company which neither transacts any
substantial portion of its business nor regularly maintains any substantial
portion of its fixed assets within the United States, or which is engaged
primarily in financing the operations of the Company or its Subsidiaries, or
both, outside the United States. "Consolidated Net Tangible Assets" means the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom (a) all current liabilities
(excluding any constituting Funded Debt by reason of their being renewable or
extendable) and (b) goodwill and other intangibles. (Section 1010 of each
Indenture)
RESTRICTIONS ON SALES AND LEASEBACKS Neither the Company nor any Domestic
Subsidiary may enter into any sale and leaseback transaction involving any
Principal Property, completion of construction and commencement of full
operation of which has occurred more than 180 days prior thereto,
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unless (a) the Company or such Domestic Subsidiary could mortgage such property
as provided for above under "Description of Debt Securities -- Restrictive
Covenants -- Restrictions on Secured Debt" in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing the Debt Securities of each series, or (b) the
Company, within 120 days, applies to the retirement of its Funded Debt an amount
not less than the greater of (i) the net proceeds of the sale of the Principal
Property leased pursuant to such arrangement or (ii) the fair market value of
the Principal Property so leased (subject to credits for certain voluntary
retirements of Funded Debt). This restriction will not apply to any sale and
leaseback transaction (a) between the Company and a Domestic Subsidiary or
between Domestic Subsidiaries or (b) involving the taking back of a lease for a
period, including renewals, of three years or less. (Section 1011 of each
Indenture)
EVENTS OF DEFAULT
The following are Events of Default under the Indentures with respect to
Securities of any series: (a) failure to pay principal of (or premium, if any)
on any Security of that series when due; (b) failure to pay any installment of
interest on any Security of that series when due, continued for 30 days; (c)
failure to deposit any sinking fund payment, when due, in respect of any
Security of that series; (d) failure to perform any other covenant of the
Company in the applicable Indenture (other than a covenant included in the
applicable Indenture solely for the benefit of any series of Securities other
than that series), continued for 60 days after written notice as provided in the
applicable Indenture; (e) certain events in bankruptcy, insolvency or
reorganization; and (f) any other Event of Default provided with respect to
Securities of that series. (Section 501 of each Indenture) If an Event of
Default with respect to the Outstanding Securities of any series shall occur and
be continuing either the Trustee or the Holders of at least 25% in principal
amount of the Outstanding Securities of that series may declare the principal
amount (or, if the Securities of that series are Original Issue Discount
Securities or Indexed Securities, such portion of the principal amount as may be
specified in the terms of that series) of all Securities of that series to be
due and payable immediately; provided that in the case of certain events of
bankruptcy, insolvency or reorganization, such principal amount (or portion
thereof) shall automatically become due and payable. However, at any time after
an acceleration with respect to Securities of any series has occurred, but
before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of the Outstanding Securities of that
series may, under certain circumstances, rescind and annul such acceleration.
(Section 502 of each Indenture) For information as to waiver of defaults, see
"Description of Debt Securities -- Modification and Waiver." Reference is made
to the Prospectus Supplement relating to each series of Offered Securities which
are Original Issue Discount Securities or Indexed Securities for the particular
provisions relating to acceleration of the Maturity of a portion of the
principal amount of such Original Issue Discount Securities or Indexed
Securities upon the occurrence of an Event of Default and the continuation
thereof.
The Indentures provide that, subject to the duty of the applicable Trustee
during default to act with the required standard of care, the applicable Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the applicable Trustee reasonable security or indemnity.
(Section 603 of each Indenture) Subject to such provisions for indemnification
of the Trustee and certain other limitations, the Holders of a majority in
principal amount of the Outstanding Securities of any series will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of that series. (Section 512 of the
Senior Indenture and Section 505 of the Subordinated Indenture)
The Company will be required to furnish to the applicable Trustee annually a
statement as to the performance by the Company of certain of its obligations
under the Indenture and as to any default in such performance. (Section 1006 of
each Indenture)
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MODIFICATION AND WAIVER
Modifications and amendments of each Indenture may be made by the Company
and the applicable Trustee with the consent of the Holders of 66 2/3% in
principal amount of the Outstanding Securities of each series affected thereby;
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 date of the principal of, or any installment of principal of
or interest on, any Security, (b) reduce the principal amount of (or premium, if
any) or interest, if any, on, any Security, (c) reduce the amount of principal
of any Original Issue Discount Security payable upon acceleration of the
Maturity thereof, (d) change the place or currency of payment of principal of
(or premium, if any) or interest, if any, on, any Security, (e) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Security, or (f) reduce the percentage in principal amount of Outstanding
Securities of any series, the consent of the Holders of which is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the applicable Indenture or for waiver of certain
defaults. (Section 902 of each Indenture)
The Holders of a majority in principal amount of the Outstanding Securities
of any series may on behalf of the Holders of all Securities of that series
waive, insofar as that series is concerned, compliance by the Company with
certain restrictive provisions of the applicable Indenture. (Section 1012 of
each Indenture) The Holders of a majority in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all Securities of that
series waive any past default under the applicable Indenture with respect to
Securities of that series, except a default in the payment of the principal of
(or premium, if any) or interest, if any, on any Security of that series or in
respect of any provision which under the applicable Indenture cannot be modified
or amended without the consent of the Holder of each Outstanding Security of
that series affected. (Section 513 of the Senior Indenture and Section 504 of
the Subordinated Indenture)
In addition, under the Subordinated Indenture, no modification or amendment
thereof may, without the consent of the holders of each Outstanding Subordinated
Security affected thereby, modify any of the provisions of such Indenture
relating to the subordination of the Subordinated Securities in a manner adverse
to the holders thereof without the consent of all the holders thereof and no
such modification or amendment may adversely affect the rights of the holders of
Senior Indebtedness then outstanding under Article Sixteen of such Indenture
(described under the caption "Description of Debt Securities -- Subordinated
Indenture Provisions") without the consent of the requisite holders of Senior
Indebtedness (as required pursuant to the terms of such Senior Indebtedness).
(Section 902 of the Subordinated Indenture)
In determining whether the holders of the requisite principal amount of
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver under either Indenture or whether a quorum is present
at a meeting of holders of Securities thereunder, (i) the principal amount of an
Original Issue Discount Security that will be deemed to be outstanding will be
the amount of the principal thereof that would be due and payable as of the date
of such determination upon acceleration of the Maturity thereof, (ii) the
principal amount of a Security denominated in a foreign Currency or Currencies
will be the U.S. dollar equivalent, determined on the original issuance date for
such Security, of the principal amount thereof (or, in the case of an Original
Issue Discount Security or Indexed Security, the U.S. dollar equivalent on the
original issuance date of such Security of the amount determined as provided in
(i) above or (iii) below), (iii) the principal amount of an Indexed Security
that may be counted in making such determination or calculation and that will be
deemed outstanding for such purpose will be equal to the principal face amount
of such Indexed Security at original issuance, unless otherwise provided with
respect to such Indexed Security pursuant to Section 301 of such Indenture and
(iv) Securities owned by the Company or any other obligor upon the Securities or
any Affiliate of the Company or of such other obligor will be disregarded.
(Section 101 of each Indenture)
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series issued thereunder if Debt Securities of that series
are issuable in whole or in part as Bearer
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Securities. (Section 1401 of each Indenture) A meeting may be called at any time
by the Trustee for such Debt Securities, or upon the request of the Company or
the Holders of at least 10% in principal amount of the Outstanding Debt
Securities of such series, in any such case upon notice given in accordance with
the applicable Indenture with respect thereto. (Section 1402 of each Indenture)
Except for any consent that must be given by each holder of a Debt Security
affected, any resolution presented at a meeting or adjourned meeting at which a
quorum is present may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series;
provided, however, that, except for any consent that must be given by each
holder of a Debt Security affected, any resolution with respect to any consent
which may be given by the Holders of not less than 66 2/3% in principal amount
of the Outstanding Debt Securities of a series issued under an Indenture may be
adopted at a meeting or an adjourned meeting at which a quorum is present only
by the affirmative vote of the Holders of 66 2/3% in principal amount of such
Outstanding Debt Securities of that series; and provided, further, that, except
for any consent that must be given by each holder of a Debt Security affected,
any resolution with respect to any demand, consent, waiver or other action which
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the Outstanding Debt Securities of
a series issued under an Indenture may be adopted at a meeting or adjourned
meeting at which a quorum is present by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding Debt Securities
of that series. (Section 1404 of each Indenture)
Any resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the applicable Indenture
with respect thereto will be binding on all Holders of Debt Securities of that
series and the related coupons issued under that Indenture. The quorum at any
meeting of Holders of a series of Debt Securities called to adopt a resolution,
and at any reconvened meeting, will be persons holding or representing a
majority in principal amount of the Outstanding Debt Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent which may be given by the Holders of not less than 66 2/3%
in principal amount of the Outstanding Debt Securities of a series, the Persons
holding or representing 66 2/3% in principal amount of the Outstanding Debt
Securities of such series issued under that Indenture will constitute a quorum.
(Section 1404 of each Indenture)
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
The Company, without the consent of any Holders of Outstanding Securities,
may consolidate or merge with or into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate or merge with or into, or transfer or lease its assets substantially
as an entirety to, the Company, PROVIDED that, (i) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or
which acquires or leases such assets of the Company is organized and existing
under the laws of any United States jurisdiction and assumes the Company's
obligations on the Debt Securities and under the applicable Indenture, (ii)
after giving effect to such transaction no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of Default, shall
have happened and be continuing (provided that a transaction will only be deemed
to be in violation of this condition (ii) as to any series of Debt Securities as
to which such Event of Default or such event shall have occurred and be
continuing), and (iii) certain other conditions are met. (Article Eight of each
Indenture)
HARRIS TRUST AND SAVINGS BANK, AS TRUSTEE
Harris Trust and Savings Bank is trustee under (i) an indenture with the
Company dated as of March 15, 1985 relating to the Company's 8.40% Debentures
due August 15, 2031, (ii) an indenture with the Company dated as of October 1,
1991 relating to the Company's 7.60% Notes due January 1, 2007 and the Company's
6 1/2% Notes due March 1, 2008 and (iii) an indenture with the Company dated as
of May 1, 1995 relating to the Company's 7 1/2% Debentures due May 15, 2025.
Harris Trust and Savings Bank has also extended credit facilities to the Company
and a subsidiary of the Company and conducts business with the Company and
certain of its affiliates, including cash management and stock transfer
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services and serving as trustee for the Motorola Pension Trust. Harris Trust and
Savings Bank also serves as the Rights Agent under the Rights Agreement, as
amended, with the Company (the "Rights Agreement"). See "Description of Capital
Stock -- Preferred Share Purchase Rights."
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE
The First National Bank of Chicago serves as trustee under the indentures
with the Company for the 2009 LYONs and the 2013 LYONs and would serve as
extension trustee under the extension indenture relating to the extension notes
which could be issued in the future with respect to the 2009 LYONs. The First
National Bank of Chicago would also serve as trustee under the LYONs Indenture
except as otherwise set forth in the applicable Prospectus Supplement. See
"Description of Liquid Yield Option Notes." The Company also maintains certain
banking relationships with The First National Bank of Chicago.
SUBORDINATED INDENTURE PROVISIONS
The Subordinated Securities shall be subordinate and junior in right of
payment, to the extent set forth in the Subordinated Indenture, to the prior
payment in full of all existing and future Senior Debt (as defined below) of the
Company. (Section 1601 of the Subordinated Indenture)
Senior Debt is defined in the Subordinated Indenture as the principal of
(and premium, if any) and interest on (including interest accruing after the
filing of a petition initiating any proceeding pursuant to any bankruptcy law)
and other amounts due on or in connection with any Debt incurred, assumed or
guaranteed by the Company, whether outstanding on the date of the Subordinated
Indenture or thereafter incurred, assumed or guaranteed, and all renewals,
extensions and refundings of any such Debt. Excluded from the definition of
Senior Debt are the following: (a) any Debt which expressly provides (i) that
such Debt shall not be senior in right of payment to the Subordinated
Securities, or (ii) that such Debt shall be subordinated to any other Debt of
the Company, unless such Debt expressly provides that such Debt shall be senior
in right of payment to the Subordinated Securities; (b) Debt of the Company in
respect of the Subordinated Securities; (c) Debt of the Company in respect of
its outstanding Liquid Yield Option Notes due 2009 (the "2009 LYONs") and its
outstanding Liquid Yield Option Notes due 2013 ("2013 LYONs") (which 2009 LYONs
and 2013 LYONs will rank on a parity with the Subordinated Securities); and (d)
Debt of the Company in respect of the extension notes which may be issued in the
future, at specified dates, in respect of the 2009 LYONs in payment of the
purchase price thereof (which extension notes would rank on a parity with the
Subordinated Securities and any 2009 LYONs and 2013 LYONs remaining
outstanding). (Section 101 of the Subordinated Indenture)
As of July 1, 1995, the Company had approximately $3,388 million of
consolidated indebtedness outstanding (excluding accrued interest thereon) which
would have constituted either Senior Debt or indebtedness of subsidiaries of the
Company. In addition, as of July 1, 1995, the Company had outstanding
approximately $360 million (issue price plus accrued original issue discount) of
2009 LYONs and 2013 LYONs, representing approximately $574 million in aggregate
principal amount at maturity, which would rank on a parity with the Subordinated
Securities. There are no restrictions in the Subordinated Indenture on the
creation of additional Senior Debt (or any other indebtedness). (Section 101 of
the Subordinated Indenture)
By reason of such subordination, in the event of dissolution, insolvency,
bankruptcy or other similar proceedings, upon any distribution of assets, (i)
the holders of all Senior Debt shall first be entitled to receive payment in
full of all amounts due or to become due thereon, or payment of such amounts
shall have been provided for, before the Holders of Subordinated Securities
shall be entitled to receive any payment or distribution with respect to such
securities, (ii) the Holders of Subordinated Securities will be required to pay
over their share of such distribution to the holders of Senior Debt until such
Senior Debt is paid in full, and (iii) creditors of the Company who are not
Holders of Subordinated Securities or holders of Senior Debt may recover less,
ratably, than holders of Senior Debt and may recover more, ratably, than the
Holders of Subordinated Securities. (Section 16.02 of the Subordinated
Indenture)
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Unless otherwise specified in the Prospectus Supplement, in the event that
the Subordinated Securities are declared due and payable prior to their Stated
Maturity by reason of the occurrence of an Event of Default, then the Company
would be obligated to promptly notify holders of Senior Debt of such
acceleration. Unless otherwise specified in the applicable Prospectus
Supplement, the Company may not pay the Subordinated Securities until 120 days
have passed after such acceleration occurs and may thereafter pay the
Subordinated Securities if the terms of the Subordinated Indenture otherwise
permit payment at that time. (Section 16.03 of the Subordinated Indenture)
Unless otherwise specified in the Prospectus Supplement, no payment of the
principal (and premium, if any) or interest, if any, with respect to any of the
Subordinated Securities may be made, except the Subordinated Securities may be
acquired for Common Stock or other Capital Stock or as otherwise set forth in
the Subordinated Indenture, if any default with respect to Senior Debt occurs
and is continuing that permits the acceleration of the maturity thereof and such
default is either the subject of judicial proceedings or the Company receives
notice of the default, unless (a) 120 days pass after notice of the default is
given and such default is not then the subject of judicial proceedings or the
default with respect to the Senior Debt is cured or waived and (b) the terms of
the Subordinated Indenture otherwise permit the payment or acquisition of the
Subordinated Securities at that time. (Section 16.04 of the Subordinated
Indenture)
DESCRIPTION OF LIQUID YIELD OPTION NOTES
The following description of the terms of the LYONs sets forth certain
general terms and provisions of the LYONs as to which any Prospectus Supplement
may relate. The particular terms of the LYONs and the extent, if any, to which
such general terms may apply to the LYONs so offered will be described in the
applicable Prospectus Supplement relating to such LYONs. Any Prospectus
Supplement relating to an offering of LYONs will also contain information
concerning certain United States federal income tax considerations relating
thereto.
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") has
previously marketed (and anticipates continuing to market) securities of issuers
under the trademark LYONs. Any LYONs offered by the Company pursuant to this
Prospectus and the applicable Prospectus Supplement may contain certain terms
and provisions which are different from such other previously marketed LYONs.
The LYONs are to be issued under an indenture (the "LYONs Indenture"),
between the Company and The First National Bank of Chicago, as trustee, or the
trustee named in the applicable Prospectus Supplement as trustee (the "LYONs
Trustee"). The form of the LYONs Indenture (including the Form of LYON, which is
a part thereof) is an exhibit to the Registration Statement. The following
summaries of certain provisions of the LYONs and the LYONs Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the LYONs and the LYONs Indenture,
including the definitions therein of certain terms which are not otherwise
defined in this Prospectus and the applicable Prospectus Supplement relating to
such LYONs. Wherever particular provisions or defined terms of the LYONs
Indenture (or of the Form of LYON which is a part thereof) are referred to, such
provisions or defined terms are incorporated herein by reference. References
herein are to sections in the LYONs Indenture and paragraphs in the Form of
LYON. As used in this "Description of Liquid Yield Option Notes," the "Company"
refers to Motorola, Inc. and does not, unless the context otherwise indicates,
include its subsidiaries.
GENERAL
Unless otherwise specified in the Prospectus Supplement, the LYONs will be
unsecured obligations of the Company limited to the aggregate principal amount
at maturity set forth in the applicable Prospectus Supplement and will mature on
the date set forth in such Prospectus Supplement. The principal amount at
maturity of each LYON is $1,000 and will be payable at the office of the Paying
Agent, initially the LYONs Trustee, in the Borough of Manhattan, the City of New
York, or any other office of the Paying Agent maintained for such purpose.
(Sections 2.02, 2.03 and 4.05 and Form of LYON, paragraph 3)
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The LYONs will be issued at a substantial discount from their principal
amount at maturity. There will be no periodic payments of interest. The
calculation of the accrual of Original Issue Discount (the difference between
the Issue Price and the principal amount at maturity of a LYON) in the period
during which a LYON remains outstanding will be on a semi-annual bond equivalent
basis using a 360-day year composed of twelve 30-day months; such accrual will
commence on the Issue Date of the LYONs. (Form of LYON, paragraph 1.) Maturity,
conversion, purchase by the Company at the option of a Holder, or redemption of
a LYON will cause Original Issue Discount and interest, if any, to cease to
accrue on such LYON, under the terms and subject to the conditions of the LYONs
Indenture. (Section 2.08) The Company may not reissue a LYON that has matured or
been converted, purchased by the Company at the option of a Holder, redeemed or
otherwise cancelled (except for registration of transfer, exchange or
replacement thereof). (Section 2.10)
The LYONs will be issued only in fully registered form, without coupons, in
denominations of $1,000 of principal amount at maturity or an integral multiple
thereof. (Section 2.02 and Form of LYON, paragraph 11) Unless otherwise
specified in the applicable Prospectus Supplement, the LYONs may be presented
for conversion at the office of the Conversion Agent and for exchange or
registration of transfer at the office of the Registrar, each such agent
initially being the LYONs Trustee. (Section 2.03) Unless otherwise specified in
the applicable Prospectus Supplement, the Company will not charge a service
charge for any registration of transfer or exchange of LYONs; however, the
Company may require payment by a Holder of a sum sufficient to cover any tax,
assessment or other governmental charge payable in connection therewith.
(Section 2.06)
SUBORDINATION OF LYONS
Unless otherwise specified in the applicable Prospectus Supplement, the
indebtedness evidenced by the LYONs will be subordinated in right of payment, as
set forth in the LYONs Indenture, to the prior payment in full of all existing
and future Senior Indebtedness of the Company. (Section 10.01 and Form of LYON,
paragraph 8) Senior Indebtedness is defined in the LYONs Indenture as the
principal of (and premium, if any) and interest on (including interest accruing
after the filing of a petition initiating any proceeding pursuant to any
Bankruptcy Law) and other amounts due on or in connection with any Debt
incurred, assumed or guaranteed by the Company, whether outstanding on the date
of the LYONs Indenture or thereafter incurred, assumed or guaranteed, and all
renewals, extensions and refundings of any such Debt. Excluded from the
definition of Senior Indebtedness are the following: (a) any Debt which
expressly provides (i) that such Debt shall not be senior in right of payment to
the LYONs, or (ii) that such Debt shall be subordinated to any other Debt of the
Company, unless such Debt expressly provides that such Debt shall be senior in
right of payment to the LYONs; (b) Debt of the Company in respect of the LYONs;
(c) Debt of the Company in respect of its outstanding 2009 LYONs and its
outstanding 2013 LYONs (which 2009 LYONs and 2013 LYONs will rank on a parity
with the LYONs and any Subordinated Securities) and (d) Debt of the Company in
respect of the extension notes which may be issued in the future, at specified
dates, in respect of the 2009 LYONs, in payment of the purchase price thereof
(which extension notes would rank on a parity with the LYONs, any 2009 LYONs and
2013 LYONs remaining outstanding and any Subordinated Securities). (Section
10.01)
By reason of such subordination, in the event of dissolution, insolvency,
bankruptcy or other similar proceedings, upon any distribution of assets, (i)
the holders of all Senior Indebtedness shall first be entitled to receive
payment in full of all amounts due or to become due thereon, or payment of such
amounts shall have been provided for, before the Holders of LYONs shall be
entitled to receive any payment or distribution with respect to the LYONs, (ii)
the Holders of LYONs will be required to pay over their share of such
distribution to the holders of Senior Indebtedness until such Senior
Indebtedness is paid in full; and (iii) creditors of the Company who are not
Holders of LYONs or holders of Senior Indebtedness may recover less, ratably,
than holders of Senior Indebtedness and may recover more, ratably, than the
Holders of LYONs. (Section 10.02)
Unless otherwise specified in the Prospectus Supplement, in the event that
the LYONs are declared due and payable prior to their Stated Maturity by reason
of the occurrence of an Event of Default, then
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the Company would be obligated to promptly notify holders of Senior Indebtedness
of such acceleration. Unless otherwise specified in the applicable Prospectus
Supplement, the Company may not pay the LYONs until 120 days have passed after
such acceleration occurs and may thereafter pay the LYONs if the terms of the
LYONs Indenture otherwise permit payment at that time. (Section 10.03)
Unless otherwise specified in the Prospectus Supplement, no payment of the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Change in Control Purchase Price or interest, if any, with
respect to any of the LYONs may be made, nor may the Company pay cash in respect
of the Purchase Price (or portion thereof) of any LYON (other than for
fractional shares of Common Stock) or otherwise acquire any LYONs except for
Common Stock or other Capital Stock or as otherwise set forth in the LYONs
Indenture, if any default with respect to Senior Indebtedness occurs and is
continuing that permits the acceleration of the maturity thereof and such
default is either the subject of judicial proceedings or the Company receives
notice of the default, unless (a) 120 days pass after notice of the default is
given and such default is not then the subject of judicial proceedings or the
default with respect to the Senior Indebtedness is cured or waived and (b) the
terms of the LYONs Indenture otherwise permit the payment or acquisition of the
LYONs at that time. (Section 10.04)
The LYONs will be obligations exclusively of the Company. Since the
operations of the Company are partially conducted through subsidiaries,
primarily overseas, the cash flow and the consequent ability to service debt,
including the LYONs, of the Company, are partially dependent upon the earnings
of its subsidiaries and the distribution of those earnings to, or upon loans or
other payments of funds by those subsidiaries to, the Company. The subsidiaries
are separate and distinct legal entities and have no obligation, contingent or
otherwise, to pay any amounts due pursuant to the LYONs or to make any funds
available therefor, whether by dividends, loans or other payments. In addition,
the payment of dividends and the making of loans and advances to the Company by
its subsidiaries may be subject to statutory or contractual restrictions, are
contingent upon the earnings of those subsidiaries and are subject to various
business considerations.
Any right of the Company to receive assets of any of its subsidiaries upon
their liquidation or reorganization (and the consequent right of the Holders of
the LYONs to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except to
the extent that the Company is itself recognized as a creditor of such
subsidiary, in which case the claims of the Company would still be subordinate
to any security interests in the assets of such subsidiary and any indebtedness
of such subsidiary senior to that held by the Company.
As of July 1, 1995, the Company had approximately $3,388 million of
consolidated indebtedness outstanding (excluding accrued interest thereon) which
would have constituted either Senior Indebtedness or indebtedness of
subsidiaries of the Company. In addition, as of July 1, 1995, the Company had
outstanding approximately $360 million (issue price plus accrued original issue
discount) of 2009 LYONs and 2013 LYONs, representing approximately $574 million
in aggregate principal amount at maturity, which would rank on a parity with the
LYONs. There are no restrictions in the LYONs Indenture on the creation of
additional Senior Indebtedness (or any other indebtedness).
CONVERSION RIGHTS
Except as is otherwise specified in the applicable Prospectus Supplement, a
Holder of a LYON may convert it into Common Stock of the Company at the times
specified in the Prospectus Supplement; provided, however, that if a LYON is
called for redemption, the Holder may convert it only until the close of
business on the Redemption Date. A LYON in respect of which a Holder has
delivered a Purchase Notice or a Change in Control Purchase Notice exercising
the option of such Holder to require the Company to purchase such LYONs may be
converted only if such notice is withdrawn in accordance with the terms of the
LYONs Indenture. (Form of LYON, paragraph 9) A Holder may convert a portion of
such Holder's LYONs so long as such portion is $1,000 principal amount at
maturity or an integral multiple thereof. (Section 11.01)
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The initial Conversion Rate is that number of shares of Common Stock per
LYON set forth as such in the applicable Prospectus Supplement, subject to
adjustment upon the occurrence of certain events. A Holder entitled to a
fractional share of Common Stock shall receive cash equal to the then current
market value of such fractional share. (Form of LYON, paragraph 9 and Section
11.03) Shares of Common Stock issued upon conversion of LYONs in accordance with
the terms of the LYONs Indenture, and prior to the Distribution Date (as defined
below) and the redemption or expiration of the Rights (as defined below), shall
also be entitled to receive Rights, under the terms and subject to the
conditions of the Rights Agreement (as defined below). See "Description of
Capital Stock--Preferred Share Purchase Rights."
A Holder will not receive any cash payment representing accrued Original
Issue Discount. The Company's delivery to the Holder of the number of shares of
Common Stock into which the LYON is convertible (together with the cash payment,
if any, in lieu of fractional shares of Common Stock) will be deemed to satisfy
the Company's obligation to pay the principal amount of the LYON including the
accrued Original Issue Discount attributable to the period from the Issue Date
to the Conversion Date. Thus, the accrued Original Issue Discount is deemed to
be paid in full rather than cancelled, extinguished or forfeited. The Conversion
Rate will not be adjusted at any time during the term of the LYONs for such
accrued Original Issue Discount. (Section 11.02)
Except as is otherwise specified in the applicable Prospectus Supplement, to
convert a LYON into shares of Common Stock, a Holder must (i) complete and
manually sign the conversion notice on the back of the LYON (or complete and
manually sign a facsimile thereof) and deliver such notice to the Conversion
Agent or the office of the Paying Agent, (ii) surrender the LYON to the
Conversion Agent, (iii) if required, furnish appropriate endorsements and
transfer documents, and (iv) if required, pay all transfer or similar taxes.
Pursuant to the LYONs Indenture, the date on which all of the foregoing
requirements have been satisfied is the Conversion Date. (Section 11.02 and Form
of LYON, paragraph 9)
Except as otherwise specified in the applicable Prospectus Supplement, the
Conversion Rate will be adjusted for dividends or distributions on Common Stock
payable in Common Stock or other Capital Stock of the Company; certain
subdivisions, combinations or reclassifications of Common Stock; distributions
to all holders of Common Stock of certain rights to purchase Common Stock for a
period expiring within 60 days at less than the Quoted Price at the Time of
Determination; and distributions to such holders of assets or debt securities of
the Company or certain rights, warrants or options to purchase securities of the
Company (excluding cash dividends or other cash distributions from current or
retained earnings other than any Extraordinary Cash Dividend). However, except
as otherwise specified in the applicable Prospectus Supplement, no adjustment
need be made if Holders may participate in the transaction or in certain other
cases. Except as otherwise specified in the applicable Prospectus Supplement, in
cases where the fair market value (per share of Common Stock) of assets, debt
securities or certain rights, warrants or options to purchase securities of the
Company distributed to shareholders exceeds the Average Quoted Price of the
Common Stock, or such Average Quoted Price exceeds the fair market value (per
share of Common Stock) of such assets, debt securities or rights, warrants or
options so distributed by less than $1.00, rather than being entitled to an
adjustment in the Conversion Rate, the Holder of a LYON upon conversion thereof
will be entitled to receive, in addition to the shares of Common Stock into
which such LYON is convertible, the kind and amount of assets, debt securities
or rights, warrants or options comprising the distribution that such Holder
would have received if such Holder had converted such LYON immediately prior to
the record date for determining the shareholders entitled to receive the
distribution. Except as otherwise specified in the applicable Prospectus
Supplement, none of (i) the distribution to holders of Common Stock of separate
certificates representing Rights (as defined below), (ii) the occurrence of
certain events entitling holders of such Rights to receive, upon exercise
thereof, Common Stock of the Company or Capital Stock of another corporation or
(iii) the exercise of such Rights, as described under "Description of Capital
Stock-- Preferred Share Purchase Rights," will constitute a distribution
requiring an adjustment in the Conversion Rate. In addition, any future dividend
or distribution of rights to purchase Capital Stock which the Company determines
to be comparable in purpose and in effect to the dividend and subsequent
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distribution of Rights will not constitute a distribution requiring an
adjustment in the Conversion Rate. The LYONs Indenture permits the Company to
increase the Conversion Rate from time to time. (Sections 11.06, 11.07, 11.08,
11.10, 11.12, 11.14, 11.17 and 11.19 and Form of LYON, paragraph 9)
Except as is otherwise provided in the applicable Prospectus Supplement, if
the Company is a party to a consolidation, merger or binding share exchange or a
transfer of all or substantially all of its assets, the right to convert a LYON
into Common Stock may be changed into a right to convert it into securities,
cash or other assets which the Holder would have received if the Holder had
converted such Holder's LYON immediately prior to such transaction. (Section
11.14)
Except as is otherwise provided in the applicable Prospectus Supplement, in
the event of a taxable distribution to holders of Common Stock which results in
an adjustment of the Conversion Rate or in the event the Conversion Rate is
increased at the discretion of the Company, the Holders of the LYONs may, in
certain circumstances, be deemed to have received a distribution subject to
Federal income tax as a dividend.
REDEMPTION OF LYONS AT THE OPTION OF THE COMPANY
Except as is otherwise provided in the applicable Prospectus Supplement, no
sinking fund is provided for the LYONs. Except as is otherwise provided in the
applicable Prospectus Supplement, prior to the date set forth in the applicable
Prospectus Supplement, the LYONs will not be redeemable at the option of the
Company. Beginning on the date set forth in the applicable Prospectus
Supplement, the Company may redeem the LYONs for cash as a whole at any time, or
from time to time in part at Redemption Prices set forth in the applicable
Prospectus Supplement (equal to, except as otherwise provided in the applicable
Prospectus Supplement, Issue Price plus accrued Original Issue Discount to the
Redemption Date). (Section 3.03 and Form of LYON, paragraph 5) Except as is
otherwise provided in the Prospectus Supplement, not less than 15 days' nor more
than 60 days' notice of redemption shall be given by mail to Holders of LYONs.
(Section 3.03 and Form of LYON, paragraph 7)
Except as is otherwise provided in the applicable Prospectus Supplement, if
less than all of the outstanding LYONs are to be redeemed, the Trustee shall
select the LYONs to be redeemed in principal amounts at maturity of $1,000 or
integral multiples thereof by lot, pro rata or by another method the Trustee
considers fair and appropriate (so long as such method is not prohibited by the
rules of any stock exchange on which the LYONs are then listed). If a portion of
a Holder's LYON is selected for partial redemption and such Holder converts a
portion of such LYON prior to such redemption, such converted portion shall be
deemed to be (solely for purposes of determining the aggregate principal amount
of LYONs redeemed by the Company) the portion selected for redemption. (Section
3.02)
PURCHASE OF LYONS AT THE OPTION OF THE HOLDER
Except as is otherwise provided in the applicable Prospectus Supplement, on
the date or dates set forth in the applicable Prospectus Supplement (each, a
"Purchase Date"), the Company will become obligated to purchase, at the option
of the Holder thereof, any outstanding LYON for which a written Purchase Notice
has been delivered by the Holder to the office of the Paying Agent (initially
the Trustee) at any time from the opening of business on the date that is 20
Business Days prior to such Purchase Date until the close of business on such
Purchase Date and for which such Purchase Notice has not been withdrawn, subject
to certain additional conditions.
Except as is otherwise provided in the applicable Prospectus Supplement, the
Purchase Notice shall state (i) the certificate numbers of the LYONs to be
delivered by the Holder thereof for purchase by the Company; (ii) the portion of
the principal amount at maturity of LYONs to be purchased, which portion must be
$1,000 or an integral multiple thereof; (iii) that such LYONs are to be
purchased by the Company pursuant to the applicable provisions of the LYONs; and
(iv) in the event the Company elects, pursuant to the applicable portion of the
Indenture, to pay the Purchase Price to be paid as of such Purchase Date in
Common Stock, in whole or in part, but such Purchase Price is ultimately to be
paid to such Holder entirely in cash because any of the conditions to payment of
the Purchase Price (or portion thereof) in Common Stock is not satisfied by the
Purchase Date, as described below, whether such
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Holder elects (x) to withdraw such Purchase Notice as to some or all of the
LYONs to which it relates (stating the principal amount at maturity and
certificate numbers of the LYONs as to which such withdrawal shall relate), or
(y) to receive cash in respect of the entire Purchase Price for all LYONs
subject to such Purchase Notice. Except as is otherwise specified in the
applicable Prospectus Supplement, if the Holder fails to indicate in the
Purchase Notice and in any written notice of withdrawal relating to such
Purchase Notice, such Holder's choice with respect to the election described in
clause (iv) above, such Holder shall be deemed to have elected to receive cash
in respect of the entire Purchase Price for all LYONs subject to such Purchase
Notice in such circumstances. (Section 3.08)
Except as is otherwise specified in the applicable Prospectus Supplement,
any Purchase Notice may be withdrawn by the Holder by a written notice of
withdrawal delivered to the Paying Agent prior to the close of business on the
Purchase Date. Except as is otherwise specified in the applicable Prospectus
Supplement, the notice of withdrawal shall state the principal amount at
maturity and the certificate numbers of the LYONs as to which the withdrawal
notice relates and the principal amount at maturity, if any, which remains
subject to the Purchase Notice. (Section 3.10)
Except as is otherwise specified in the applicable Prospectus Supplement,
the Purchase Price payable in respect of a LYON shall be equal to the Issue
Price plus accrued Original Issue Discount to the Purchase Date and the Company
may elect to pay the Purchase Price payable as of any Purchase Date in cash or
shares of Common Stock, or any combination thereof.
Except as is otherwise specified in the applicable Prospectus Supplement, if
the Company elects to pay the Purchase Price, in whole or in part, in shares of
Common Stock, the number of shares to be delivered in respect of the portion of
the Purchase Price to be paid in shares of Common Stock shall be equal to such
portion of the Purchase Price divided by the Market Price (as defined below) of
the Common Stock. Shares of Common Stock issued upon purchase of LYONs in
accordance with the provisions of the LYONs Indenture, and prior to the
Distribution Date (as defined below) and the redemption or expiration of the
Rights (as defined below), shall also be entitled to receive Rights, under the
terms and subject to the conditions of the Rights Agreement (as defined below).
See "Description of Capital Stock--Preferred Share Purchase Rights." Except as
is otherwise specified in the applicable Prospectus Supplement, however, no
fractional shares of Common Stock will be delivered upon any purchase by the
Company of LYONs through the delivery of shares of Common Stock in payment, in
whole or in part, of the Purchase Price and, instead, the Company will pay cash
based on the Market Price for all fractional shares of Common Stock.
Except as is otherwise specified in the Prospectus Supplement, the Company
will give notice (the "Company Notice") not less than 20 Business Days prior to
the Purchase Date (the "Company Notice Date") to all Holders at their addresses
shown in the register of the Registrar (and to beneficial owners as required by
applicable law) stating, among other things, whether the Company will pay the
Purchase Price of the LYONs in cash or Common Stock, or any combination thereof
(specifying the percentage of each) and, if the Company elects to pay in Common
Stock, in whole or in part, the method of calculating the Market Price of the
Common Stock. (Section 3.08)
Except as is otherwise specified in the Prospectus Supplement, the "Market
Price" means the average of the Sale Prices (as defined below) of the Common
Stock for the five trading day period ending on (if the third Business Day prior
to the applicable Purchase Date is a trading day or, if not, then on the last
trading day prior to) the third Business Day prior to the applicable Purchase
Date, appropriately adjusted to take into account the occurrence during the
period commencing on the first of such trading days during such five trading day
period and ending on such Purchase Date of certain events that would result in
an adjustment of the Conversion Rate with respect to the Common Stock. Except as
is otherwise specified in the Prospectus Supplement, the "Sale Price" of the
Common Stock on any date means the closing per share sale price (or if no
closing sale price is reported, the average bid and ask prices or, if more than
one in either case, the average of the average bid and average ask prices) on
such date as reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is traded or, if the Common
Stock is not listed on a United States national or
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regional stock exchange, as reported by the National Association of Securities
Dealers Automated Quotation System. Because the Market Price of the Common Stock
is determined prior to the applicable Purchase Date, Holders of LYONs bear the
market risk with respect to the value of the Common Stock to be received from
the date such Market Price is determined to such Purchase Date. Except as is
otherwise specified in the Prospectus Supplement, the Company may elect to pay
the Purchase Price in Common Stock only if the information necessary to
calculate the Market Price is reported in a daily newspaper of national
circulation. (Section 3.08)
Except as is otherwise specified in the applicable Prospectus Supplement,
upon determination of the actual number of shares of Common Stock in accordance
with the foregoing provisions, the Company will publish such determination in a
daily newspaper of national circulation. (Section 3.08)
Except as is otherwise specified in the applicable Prospectus Supplement,
the Company's right to purchase LYONs with shares of Common Stock is subject to
the Company satisfying various conditions, including: (i) any required
registration of the Common Stock under the Securities Act or Exchange Act; and
(ii) compliance with other applicable federal and state securities laws, if any.
Except as is otherwise specified in any applicable Prospectus Supplement, if
such conditions are not satisfied by a Purchase Date, the Company will pay the
Purchase Price of the LYONs to be purchased on such Purchase Date entirely in
cash. (Section 3.08) The Company will comply with the provisions of Rule 13e-4
and any other tender offer rules under the Exchange Act which may then be
applicable and will file Schedule 13E-4 or any other Schedule required
thereunder in connection with any offer by the Company to purchase LYONs at the
option of Holders. (Section 3.13)
Except as is otherwise specified in the applicable Prospectus Supplement,
payment of the Purchase Price for a LYON for which a Purchase Notice has been
delivered and not withdrawn is conditioned upon delivery of such LYON (together
with necessary endorsements) to the Paying Agent at its office in the Borough of
Manhattan, the City of New York, or any other office of the Paying Agent
maintained for such purpose, at any time (whether prior to, on or after the
Purchase Date) after delivery of such Purchase Notice. Except as is otherwise
specified in the applicable Prospectus Supplement, payment of the Purchase Price
for such LYON will be made promptly following the later of the Purchase Date or
the time of delivery of such LYON. (Section 3.10) If the Paying Agent holds, in
accordance with the terms of the LYONs Indenture, money or securities sufficient
to pay the Purchase Price of such LYON on the Business Day following the
Purchase Date, then, on and after such date, Original Issue Discount on such
LYON will cease to accrue, whether or not such LYON is delivered to the Paying
Agent, and all other rights of the Holder shall terminate (other than the right
to receive the Purchase Price upon delivery of the LYON). (Section 2.08)
Except as is otherwise specified in the Prospectus Supplement, no LYONs may
be purchased at the option of the Holder for cash if there has occurred (prior
to, on or after the giving, by the Holders of such LYONs, of the required
Purchase Notice) and is continuing an Event of Default described under
"Description of Liquid Yield Option Notes -- Events of Default; Notice and
Waiver" below (other than a default in the payment of the Purchase Price with
respect to such LYONs). (Sections 3.10 and 10.03)
CHANGE IN CONTROL PERMITS PURCHASE OF LYONS AT THE OPTION OF THE HOLDER
Except as is otherwise specified in the applicable Prospectus Supplement, in
the event of any Change in Control (as defined below) of the Company occurring
on or prior to the date set forth in the applicable Prospectus Supplement, each
Holder of LYONs will have the right, at the Holder's option, subject to the
terms and conditions of the LYONs Indenture, to require the Company to purchase
all or any part (provided that the principal amount at maturity must be $1,000
or an integral multiple thereof) of the Holder's LYONs on the date that is 35
Business Days after the occurrence of such Change in Control (the "Change in
Control Purchase Date") at a cash price equal to (except as is otherwise
specified in the applicable Prospectus Supplement) the Issue Price plus accrued
Original Issue Discount to the Change in Control Purchase Date (the "Change in
Control Purchase Price"). (Section 3.09 and Form of LYON, paragraph 6) Holders
will not have any right to require the Company to purchase LYONs in the event of
any Change in Control occurring after the date set forth in the applicable
Prospectus Supplement.
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Except as is otherwise specified in the applicable Prospectus Supplement,
within 15 Business Days after the occurrence of a Change in Control, the Company
shall mail to the Trustee and each Holder of LYONs at its address shown in the
register of the Registrar (and to beneficial owners as required by applicable
law) a notice regarding the Change in Control, which notice shall state, among
other things: (i) the date of such Change in Control and the events causing such
Change in Control; (ii) the date by which the Change in Control Purchase Notice
(as defined below) must be given; (iii) the Change in Control Purchase Price;
(iv) the Change in Control Purchase Date; (v) the name and address of the Paying
Agent and the Conversion Agent; (vi) the Conversion Rate and any adjustments
thereto; (vii) that LYONs with respect to which a Change in Control Purchase
Notice is given by the Holder may be converted into shares of Common Stock (or,
in lieu thereof, cash, if the Company shall so elect) only if the Change in
Control Purchase Notice has been withdrawn in accordance with the terms of the
LYONs Indenture; (viii) that LYONs must be surrendered to the Paying Agent to
collect payment; (ix) that the Change in Control Purchase Price for any LYON as
to which a Change in Control Purchase Notice has been given and not withdrawn
will be paid promptly following the later of the Change in Control Purchase Date
and the time the LYON is surrendered; (x) the procedures that Holders must
follow to exercise these rights; (xi) the procedures for withdrawing a Change in
Control Purchase Notice and (xii) briefly, the conversion rights of Holders of
LYONs. The Company will cause a copy of such notice to be published in the WALL
STREET JOURNAL or another daily newspaper of national circulation. (Section
3.09)
Except as is otherwise specified in the applicable Prospectus Supplement, to
exercise the purchase right, the Holder must deliver a Change in Control
Purchase Notice to the Paying Agent (initially the Trustee), at its office in
the Borough of Manhattan, the City of New York, or any other office of the
Paying Agent maintained for such purpose, prior to the close of business on the
Change in Control Purchase Date. Except as is otherwise specified in the
applicable Prospectus Supplement, the Change in Control Purchase Notice shall
state (i) the certificate numbers of the LYONs to be delivered by the Holder
thereof for purchase by the Company; (ii) the portion of the principal amount at
maturity of LYONs to be purchased, which portion must be $1,000 or an integral
multiple thereof; and (iii) that such LYONs are to be purchased by the Company
pursuant to the applicable provisions of the LYONs. (Section 3.09)
Except as is otherwise specified in the applicable Prospectus Supplement,
any Change in Control Purchase Notice may be withdrawn by the Holder by a
written notice of withdrawal delivered to the Paying Agent prior to the close of
business on the Change in Control Purchase Date. The notice of withdrawal shall
state the principal amount at maturity and the certificate numbers of the LYONs
as to which the withdrawal notice relates and the principal amount at maturity,
if any, which remains subject to a Change in Control Purchase Notice. (Section
3.10)
Except as is otherwise specified in the applicable Prospectus Supplement,
payment of the Change in Control Purchase Price for a LYON for which a Change in
Control Purchase Notice has been delivered and not withdrawn is conditioned upon
delivery of such LYON (together with necessary endorsements) to the Paying Agent
at its office in the Borough of Manhattan, the City of New York, or any other
office of the Paying Agent maintained for such purpose, at any time (whether
prior to, on or after the Change in Control Purchase Date) after the delivery of
such Change in Control Purchase Notice. Except as is otherwise specified in the
applicable Prospectus Supplement, payment of the Change in Control Purchase
Price for such LYON will be made promptly following the later of the Change in
Control Purchase Date or the time of delivery of such LYON. (Section 3.10) If
the Paying Agent holds, in accordance with the terms of the LYONs Indenture,
money sufficient to pay the Change in Control Purchase Price of such LYON on the
Business Day following the Change in Control Purchase Date, then, on and after
the Change in Control Purchase Date, such LYON will cease to be outstanding and
Original Issue Discount on such LYON will cease to accrue and be deemed paid,
whether or not such LYON is delivered to the Paying Agent, and all other rights
of the Holder shall terminate (other than the right to receive the Change in
Control Purchase Price upon delivery of the LYON). (Section 2.08)
Except as is otherwise specified in the applicable Prospectus Supplement, a
"Change in Control" of the Company is deemed to have occurred at such time as
(i) any person, including its Affiliates and
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Associates, other than the Company, its Subsidiaries or their employee benefit
plans, files a Schedule 13D or 14D-1 under the Exchange Act (or any successor
schedule, form or report) disclosing that such person has become the Beneficial
Owner of 50% or more of the voting power of the Company's Common Stock or other
Capital Stock of the Company into which the Common Stock is reclassified or
changed, with certain exceptions, or (ii) there shall be consummated any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which the Common Stock (or
such other Capital Stock) would be converted into cash, securities or other
property, other than a consolidation or merger of the Company in which the
holders of the Common Stock (or such other Capital Stock) immediately prior to
the consolidation or merger have, directly or indirectly, the same proportionate
ownership of common stock of the continuing or surviving corporation immediately
after the merger or consolidation. (Section 3.09) Except as is otherwise
specified in the applicable Prospectus Supplement, the LYONs Indenture does not
permit the Board of Directors of the Company to waive the Company's obligation
to purchase LYONs at the option of the Holders in the event of a Change in
Control of the Company.
The Company will comply with the provisions of Rule 13e-4 and any other
tender offer rules under the Exchange Act which may then be applicable and will
file Schedule 13E-4 or any other schedule required thereunder in connection with
any offer by the Company to purchase LYONs at the option of Holders upon a
Change in Control. (Section 3.13) The Change in Control purchase feature of the
LYONs may in certain circumstances make more difficult or discourage a takeover
of the Company and, thus, the removal of incumbent management. The Change in
Control purchase feature, however, unless otherwise specified in the applicable
Prospectus Supplement, is not the result of management's knowledge of any
specific effort to accumulate shares of Common Stock or to obtain control of the
Company by means of a merger, tender offer, solicitation or otherwise, or part
of a plan by management to adopt a series of anti-takeover provisions. Instead,
unless otherwise specified in the applicable Prospectus Supplement, the Change
in Control purchase feature is a standard provision contained in other LYONs
offerings that have been marketed by Merrill Lynch and the terms of such feature
result from negotiations between the Company and Merrill Lynch. The 2009 LYONs
and the 2013 LYONs have change in control provisions substantially identical to
the change in control provision described above, and which, in the case of the
2009 LYONs, expired on September 8, 1994 and which, in the case of the 2013
LYONs, expires on September 27, 1998. The Company's Preferred Share Purchase
Rights also may have an anti-takeover effect. See "Description of Capital Stock
- -- Preferred Share Purchase Rights."
The Company could, in the future, enter into certain transactions, including
certain recapitalizations of the Company, that would not constitute a Change in
Control of the Company, but that would increase the amount of Senior
Indebtedness outstanding at such time. Except as is otherwise specified in the
applicable Prospectus Supplement, no LYONs may be purchased at the option of
Holders upon a Change in Control of the Company if there has occurred (prior to,
on or after the giving, by the Holders of such LYONs, of the required Change of
Control Purchase Notice) and is continuing an Event of Default described under
"Description of Liquid Yield Option Notes -- Events of Default; Notice and
Waiver" below (other than a default in the payment of the Change in Control
Purchase Price with respect to such LYONs). (Sections 3.10 and 10.03) Further,
except as is otherwise specified in the applicable Prospectus Supplement, the
LYONs are subordinated to the prior payment of Senior Indebtedness as described
under "Description of Liquid Yield Option Notes -- Subordination of LYONs"
above.
MERGERS AND SALES OF ASSETS BY THE COMPANY
Except as is otherwise specified in the applicable Prospectus Supplement,
the Company may not consolidate with or merge into any other person or convey,
transfer or lease its properties and assets substantially as an entirety to
another person, unless, among other items, (i) the resulting, surviving or
transferee person (if other than the Company) is organized and existing under
the laws of the United States, any state thereof or the District of Columbia and
such person assumes all obligations of the Company under the LYONs and the LYONs
Indenture, and (ii) the Company or such successor person shall not immediately
thereafter be in default under the LYONs Indenture. Upon the assumption of the
Company's obligations by such a person in such circumstances, subject to certain
exceptions, the
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Company shall be discharged from all obligations under the LYONs and the LYONs
Indenture. (Section 5.01) Except as is otherwise specified in the applicable
Prospectus Supplement, certain such transactions which would constitute a Change
in Control of the Company occurring on or prior to the date set forth in the
applicable Prospectus Supplement, permit each Holder to require the Company to
purchase the LYONs of such Holder as described above (Section 3.09)
EVENTS OF DEFAULT; NOTICE AND WAIVER
Except as otherwise specified in the applicable Prospectus Supplement, if an
Event of Default specified in the LYONs Indenture shall have happened and be
continuing, either the Trustee or the Holders of not less than 25% in aggregate
principal amount at maturity of the LYONs then outstanding may declare the LYONs
to be immediately due and payable. Except as is otherwise specified in the
applicable Prospectus Supplement, the amount so payable for each LYON shall be
the amount determined by discounting the $1,000 principal amount at maturity
payable at its maturity date back to the date of such declaration at the
interest rate per annum for such LYON (computed on a semi-annual bond equivalent
basis using a 360-day year composed of twelve 30-day months). In the case of
certain events of bankruptcy or insolvency, the amount determined pursuant to
the preceding sentence shall automatically become and be immediately due and
payable. See "Description of Liquid Yield Option Notes -- Subordination of
LYONs" above. Except as is otherwise specified in any applicable Prospectus
Supplement, under certain circumstances, the Holders of a majority in aggregate
principal amount at maturity of the outstanding LYONs may rescind any such
acceleration with respect to the LYONs and its consequences. (Section 6.02)
Interest shall accrue and be payable on demand upon a default in the payment of
the Issue Price, accrued Original Issue Discount, any Redemption Price, Purchase
Price or Change in Control Purchase Price to the extent that payment of such
interest shall be legally enforceable. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount. (Form of LYON, paragraph 1)
Except as is otherwise specified in the Prospectus Supplement, under the
LYONs Indenture, Events of Default are defined as: (i) default in payment of the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price (continuing for three Business Days) or Change
in Control Purchase Price (continuing for three Business Days) with respect to
any LYON when such becomes due and payable (whether or not payment is prohibited
by the provisions of the LYONs Indenture); (ii) failure by the Company to comply
with any of its other agreements in the LYONs or the LYONs Indenture upon the
receipt by the Company of notice of such default by the Trustee or by Holders of
not less than 25% in aggregate principal amount at maturity of the LYONs then
outstanding and the Company's failure to cure such default within 60 days after
receipt by the Company of such notice; or (iii) certain events of bankruptcy or
insolvency. (Section 6.01)
Except as is otherwise specified in the applicable Prospectus Supplement,
the Trustee shall give notice to Holders of the LYONs of any continuing default
known to the Trustee within 90 days after the occurrence thereof; provided, that
the Trustee may withhold such notice if it determines in good faith that
withholding the notice is in the interests of the Holders. (Section 7.05)
Except as is otherwise specified in the Prospectus Supplement, the Holders
of a majority in aggregate principal amount at maturity of the outstanding LYONs
may 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, provided that such direction shall not be in conflict with any law
or the LYONs Indenture and subject to certain other limitations. (Section 6.05.)
Before proceeding to exercise any right or power under the LYONs Indenture at
the direction of such Holders, the Trustee shall be entitled to receive from
such Holders reasonable security or indemnity satisfactory to it against the
costs, expenses and liabilities which might be incurred by it in complying with
any such direction. Except as is otherwise specified in the applicable
Prospectus Supplement, no Holder of any LYON will have any right to pursue any
remedy with respect to the LYONs Indenture or the LYONs, unless (i) such Holder
shall have previously given the Trustee written notice of a continuing Event of
Default; (ii) the Holders of at least 25% in aggregate principal amount at
maturity of the outstanding LYONs shall have made a written request to
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the Trustee to pursue such remedy; (iii) such Holder or Holders have offered to
the Trustee reasonable indemnity satisfactory to the Trustee; (iv) the Holders
of a majority in aggregate principal amount at maturity of the outstanding LYONs
have not given the Trustee a direction inconsistent with such request within 60
days after receipt of such request; and (v) the Trustee shall have failed to
comply with the request within such 60-day period. (Section 6.06)
Except as is otherwise specified in the Prospectus Supplement, however, the
right of any Holder (x) to receive payment of the principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price, Purchase Price,
Change in Control Purchase Price and any interest in respect of a default in the
payment of any such amounts on a LYON, on or after the due date expressed in
such LYON, (y) to institute suit for the enforcement of any such payments or
conversion or (z) to convert LYONs shall not be impaired or adversely affected
without such Holder's consent. (Section 6.07) The Holders of at least a majority
in aggregate principal amount at maturity of the outstanding LYONs may waive an
existing default and its consequences, other than (i) any default in any payment
on the LYONs, (ii) any default with respect to the conversion rights of the
LYONs or (iii) any default in respect of certain covenants or provisions in the
LYONs Indenture which may not be modified without the consent of the Holder of
each LYON as described in "Description of Liquid Yield Option Notes --
Modification" below. When a default is waived, it is deemed cured and shall
cease to exist, but no such waiver shall extend to any subsequent or other
default or impair any consequent right. (Section 6.04)
Except as is otherwise specified in the Prospectus Supplement, the Company
will be required to furnish to the Trustee annually a statement as to any
default by the Company in the performance and observance of its obligations
under the LYONs Indenture. (Section 4.03)
MODIFICATION
Except as is otherwise set forth in the Prospectus Supplement, without the
consent of any Holder of LYONs, the Company and the Trustee may amend the LYONs
Indenture to cure any ambiguity, defect or inconsistency, to provide for the
assumption by a successor corporation of the obligations of the Company under
the LYONs Indenture, to provide for uncertificated LYONs in addition to
certificated LYONs so long as such uncertificated LYONs are in registered form
for purposes of the Internal Revenue Code, to make any change that does not
adversely affect the rights of any Holder of LYONs, to comply with any
requirement of the Commission in connection with the qualification of the LYONs
Indenture under the Trust Indenture Act of 1939, as amended, to add to the
covenants or obligations of the Company under the LYONs Indenture or to
surrender any right, power or option under the LYONs Indenture conferred upon
the Company. No amendment may be made to the subordination provisions of the
LYONs Indenture that adversely affects the rights of any holder of Senior
Indebtedness then outstanding, unless the holders of such Senior Indebtedness
(as required pursuant to the terms of such Senior Indebtedness) consent to such
change. (Section 9.02)
Except as is otherwise set forth in the Prospectus Supplement, modification
and amendment of the LYONs Indenture or the LYONs may be effected by the Company
and the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount at maturity of the LYONs then outstanding. However,
without the consent of each Holder affected thereby, no amendment may, among
other things: (i) reduce the principal amount at maturity, Issue Price, Purchase
Price, Change in Control Purchase Price or Redemption Price, or extend the
stated maturity of any LYON or alter the manner or rate of accrual of Original
Issue Discount or interest, or make any LYON payable in money or securities
other than that stated in the LYON; (ii) make any change to the principal amount
at maturity of LYONs whose Holders must consent to an amendment or any waiver
under the LYONs Indenture or modify the LYONs Indenture provisions relating to
such amendments or waivers; (iii) make any change that adversely affects the
right to convert any LYON or the right to require the Company to purchase a
LYON; (iv) modify the provisions of the LYONs Indenture relating to the
subordination of the LYONs in a manner adverse to the Holders of the LYONs; or
(v) impair the right to institute suit for the enforcement of any payment with
respect to, or conversion of, the LYONs. (Section 9.02)
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DISCHARGE OF THE LYONS INDENTURE
Except as otherwise set forth in the applicable Prospectus Supplement, the
Company may satisfy or discharge its obligations under the LYONs Indenture by
delivering to the LYONs Trustee for cancellation all outstanding LYONs or by
depositing with the LYONs Trustee or the Paying Agent, after the LYONs have
become due and payable, cash or Common Stock (as applicable under the LYONs
Indenture) sufficient to pay all of the outstanding LYONs and paying all other
sums payable under the LYONs Indenture by the Company. (Article 8)
LIMITATIONS OF CLAIMS IN BANKRUPTCY
If a bankruptcy proceeding is commenced in respect of the Company, the claim
of the Holder of a LYON is, under Title 11 of the United States Code, limited to
the Issue Price of the LYON plus that portion of the Original Issue Discount
that has accrued from the date of issue to the commencement of the proceeding.
In addition, the Holders of the LYONs will be subordinated in right of payment
to Senior Indebtedness and effectively subordinated to the indebtedness and
other obligations of the Company's subsidiaries. See "Description of Liquid
Yield Option Notes -- Subordination of LYONs" above.
THE FIRST NATIONAL BANK OF CHICAGO, AS TRUSTEE
The First National Bank of Chicago serves as trustee under the indentures
with the Company for the 2009 LYONs and the 2013 LYONs and would serve as
extension trustee under the extension indenture relating to the extension notes
which could be issued in the future with respect to the 2009 LYONs. The First
National Bank of Chicago would also serve as trustee under the Subordinated
Indenture except as otherwise set forth in the applicable Prospectus Supplement.
The Company also maintains certain banking relationships with The First National
Bank of Chicago.
DESCRIPTION OF CAPITAL STOCK
The following statements with respect to the Company's capital stock are
subject to the detailed provisions of the Company's restated certificate of
incorporation, as amended (the "Certificate of Incorporation"), and bylaws, as
amended (the "Bylaws"), and to the Rights Agreement (as defined below). These
statements do not purport to be complete and are qualified in their entirety by
reference to the terms of the Certificate of Incorporation, the Bylaws and the
Rights Agreement, which are incorporated by reference as exhibits to the
Registration Statement.
COMMON AND PREFERRED STOCK
The authorized capital stock of the Company consists of 1,400,000,000 shares
of Common Stock, par value $3 per share, and 500,000 shares of Preferred Stock,
par value $100 per share, issuable in series ("Preferred Stock"). There are no
shares of Preferred Stock presently outstanding. The Board of Directors of the
Company is authorized to create and issue one or more series of Preferred Stock
and to determine the rights and preferences of each series, to the extent
permitted by the Certificate of Incorporation. The holders of shares of the
Company's Common Stock are entitled to one vote for each share held and each
share of the Company's Common Stock is entitled to participate equally in
dividends out of funds legally available therefor, as and when declared by the
Board of Directors, and in the distribution of assets in the event of
liquidation. The shares of the Company's Common Stock have no preemptive or
conversion rights, redemption provisions or sinking fund provisions. The
outstanding shares of the Company's Common Stock are duly and validly issued,
fully paid and nonassessable, and any shares of Common Stock issued as Offered
Securities and any shares of Common Stock issuable upon the (i) exercise of
Common Stock Warrants, (ii) conversion or exchange of Debt Securities which are
convertible into or exchangeable for Common Stock or (iii) in the case of LYONs,
unless the applicable Prospectus Supplement specifies otherwise, upon the
purchase of the LYONs at the option of the Holder thereof will be, duly and
validly issued, fully paid and nonassessable.
PREFERRED SHARE PURCHASE RIGHTS
Each outstanding share of Common Stock of the Company is accompanied by
one-quarter of a preferred stock purchase right (a "Right"). Each Right entitles
the registered holder to purchase from the
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Company one-thousandth of a share of Junior Participating Preferred Stock,
Series A, $100 par value per share, of the Company (the "Preferred Shares") at a
price of $150 per one-thousandth of a Preferred Share (the "Preferred Share
Purchase Price"), subject to adjustment. The terms of the Rights are set forth
in the Rights Agreement, as amended, between the Company and Harris Trust and
Savings Bank as Rights Agent.
The following summary of certain provisions of the Rights and the Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all of the provisions of the Rights and the Rights
Agreement, including particular provisions or defined terms of the Rights
Agreement. A copy of the Rights Agreement has been filed with the Commission as
an exhibit to a Registration Statement on Form 8-A, which, as amended by Forms 8
and a Form 8-A/A, is incorporated herein by reference. See "Incorporation of
Certain Documents by Reference."
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") acquired, or obtained the right to acquire, beneficial ownership of 20%
or more of the outstanding shares of Common Stock and (ii) 10 days following the
commencement or announcement of a tender offer or exchange offer for 30% or more
of such outstanding shares of Common Stock (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced, with respect to
any of the Common Stock certificates outstanding as of November 20, 1988, by
such Common Stock certificate. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the shares
of Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after November
20, 1988, upon the transfer or new issuance of shares of Common Stock
(including, unless otherwise specified in the applicable Prospectus Supplement,
the shares of Common Stock issued (i) as Offered Securities, (ii) upon exercise
of any Common Stock Warrants, (iii) upon conversion or exchange of Debt
Securities which are convertible into or exchangeable for Common Stock or (iv)
upon purchase of LYONs at the option of the Holder thereof will contain a
notation incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights) the surrender for
transfer of any certificate for shares of Common Stock, outstanding as of
November 20, 1988, with or without such notation or a copy of a summary of
Rights being attached thereto, will also constitute the transfer of the Rights
associated with the shares of Common Stock represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Stock as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on November 20, 1998, unless earlier redeemed by the Company as described
below.
The Preferred Share 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 to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for Preferred Shares or convertible
securities at less than the 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 or dividends
payable in Preferred Shares) or of subscription rights or warrants (other than
those referred to above).
In the event that the Company were acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power were
sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction (I.E., before the
dilution that would result from exercise or adjustment of the Rights) would have
a market value of two times the exercise price of the Right. In the event that
the Company were the surviving corporation in a merger or other business
combination involving an
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Acquiring Person and its shares of Common Stock were not changed or exchanged,
in the event that an Acquiring Person acquires beneficial ownership of 20% or
more of the outstanding shares of Common Stock, or in the event that an
Acquiring Person engages in one of a number of self-dealing transactions
specified in the Rights Agreement, proper provision shall be made so that each
holder of a Right, other than Rights that are or were beneficially owned by the
Acquiring Person on or after the earlier of the Distribution Date or the date
the Acquiring Person acquires 20% or more of the outstanding Common Shares
(which will thereafter be void), will thereafter have the right to receive upon
exercise that number of shares of Common Stock having at the time of such
transaction (I.E., before the dilution that would result from exercise or
adjustment of the Rights) a market value of two times the exercise price of the
Right. The Company's Board of Directors, after a person becomes an Acquiring
Person by acquiring 20% or more of the outstanding shares of Common Shares, may
require all holders of Rights to exchange, without any cash payment, all
outstanding and exercisable Rights (except those held by the Acquiring Person,
which shall be void) for Common Stock (or Common Stock equivalents) at an
exchange ratio of one right for four shares of Common Stock. In order for the
Board to determine whether to exercise this exchange provision, the Board can
suspend the exercisability of the Rights for up to 90 days after a person
becomes an Acquiring Person by acquiring 20% or more of the outstanding Common
Shares.
At any time prior to the public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of 20% or
more of the outstanding shares of Common Stock, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.05 per
Right (the "Rights Redemption Price"). Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Rights Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
At any time prior to the public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of 20% or
more of the outstanding shares of Common Stock, the Company may amend or
supplement the Rights Agreement without the approval of the Rights Agent or any
holder of the Rights, except for an amendment or supplement which would change
the Rights Redemption Price, the final expiration date of the Rights, the
Preferred Share Purchase Price or the number of one-thousandths of a Preferred
Share for which a Right is then exercisable. Thereafter, the Company may amend
or supplement the Rights Agreement without such approval in order to increase
the benefits to holders of the Rights or to create new interests in such
holders. Immediately upon the action of the Board of Directors providing for any
amendment or supplement, such amendment or supplement will be deemed effective.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities or Common Stock. Securities Warrants may be issued independently or
together with Debt Securities offered by any Prospectus Supplement and may be
attached to or separate from such Debt Securities. Each series of Securities
Warrants will be issued under a separate warrant agreement (a "Securities
Warrant Agreement") to be entered into between the Company and a bank or trust
company, as Securities Warrant Agent, all as set forth in the applicable
Prospectus Supplement relating to the particular issue of Securities Warrants.
The Securities Warrant Agent will act solely as an agent of the Company in
connection with the Securities Warrant Agreement or any Certificates evidencing
the Securities Warrants ("Securities Warrant Certificates") and will not assume
any obligation or relationship of agency or trust for or with any holders of
Securities Warrant Certificates or beneficial owners of Securities Warrants.
Copies of the forms of Securities Warrant Agreements and the forms of Securities
Warrant Certificates representing the Securities Warrants are filed as exhibits
to the Registration Statement. The following summaries of certain provisions of
the forms of Securities Warrant Agreements and Securities Warrant
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Certificates do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Securities Warrant
Agreements and the Securities Warrant Certificates.
GENERAL
If Securities Warrants are offered, the applicable Prospectus Supplement
will describe the terms of such Securities Warrants, including, in the case of
Securities Warrants for the purchase of Debt Securities (the "Underlying Debt
Securities"), the following where applicable: (i) the title and aggregate number
of such Debt Warrants; (ii) the title, rank, aggregate principal amount,
denominations, and terms of the Underlying Debt Securities purchasable upon
exercise of the Debt Warrants; (iii) the currencies in which such Debt Warrants
are being offered; (iv) the designation and terms of any series of Debt
Securities with which such Debt Warrants are being offered and the number of
such Debt Warrants being offered with each such Debt Security; (v) the date, if
any, on and after which such Debt Warrants and any related series of Debt
Securities will be transferable separately; (vi) the principal amount of the
series of Debt Securities purchasable upon exercise of each such Debt Warrant
and the price, or the manner of determining the price, at which and currencies
in which such principal amount of Debt Securities of such series may be
purchased upon such exercise; (vii) the time or times, or period or periods in
which, such Debt Warrants may be exercised and the date (the "Expiration Date")
on which such exercise right shall expire; (viii) whether the Securities Warrant
Certificates will be issued in registered or bearer form; (ix) United States
federal income tax consequences; (x) the terms of any right of the Company to
redeem or accelerate the exercisability of such Debt Warrants; (xi) whether such
Debt Warrants are to be issued with any Offered Securities; (xii) the offering
price of such Debt Warrants; and (xiii) any other terms of such Debt Warrants.
In the case of Securities Warrants for the purchase of Common Stock, the
Prospectus Supplement will describe the terms of such Common Stock Warrants,
including the following where applicable: (i) title and aggregate number of such
Common Stock Warrants and whether such Common Stock Warrants will be sold with
other Offered Securities; (ii) the number of shares of Common Stock that may be
purchased on exercise of each Common Stock Warrant; (iii) the price or manner of
determining price; if other than cash, the property and manner in which the
exercise price may be paid and any minimum number of Common Stock Warrants
exercisable at one time; (iv) the terms of any right of the Company to redeem
such Common Stock Warrants; (v) the date, if any, on and after which such Common
Stock Warrants and any related series of Debt Securities will be transferable
separately; (vi) the time or times, or period or periods in which, the Common
Stock Warrants may be exercisable and the Expiration Date; (vii) the terms of
any right of the Company to accelerate the exercisability of the Common Stock
Warrants; (viii) United States federal income tax consequences; and (ix) any
other terms of such Common Stock Warrants. Securities Warrants for the purchase
of Common Stock will be offered and exercisable for U.S. dollars only.
Securities Warrants may be exchanged for new Securities Warrants of
different denominations, may (if in registered form) be presented for
registration of transfer and may be exercised at the corporate trust office of
the Securities Warrant Agent or any other office indicated in the applicable
Prospectus Supplement. No service charge will be made for any permitted transfer
or exchange of Securities Warrant Certificates, but the Company may require
payment of any tax or other governmental charge payable in connection therewith.
Prior to the exercise of any Securities Warrant to purchase Underlying Debt
Securities, holders of such Securities Warrants will not have any of the rights
of Holders of the Debt Securities purchasable upon such exercise, including the
right to receive payments of principal of (or premium, if any) or interest, if
any, on the Debt Securities purchasable upon such exercise or to enforce
covenants in the applicable indenture. Prior to the exercise of any Securities
Warrants to purchase Common Stock, holders of such Securities Warrants will not
have any rights of holders of the Common Stock purchasable upon such exercise,
including the right to receive payments of dividends, if any, on the Common
Stock purchasable upon such exercise or to exercise any applicable right to
vote.
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EXERCISE OF SECURITIES WARRANTS
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Underlying Debt Securities or number of shares of Common
Stock, as the case may be, at such exercise price as shall in each case be set
forth in, or calculable from, the Prospectus Supplement relating to the offered
Securities Warrants. After the close of business on the Expiration Date (or such
later date to which such Expiration Date may be extended by the Company),
unexercised Securities Warrants will become void.
Securities Warrants may be exercised by delivering to the Securities Warrant
Agent payment as provided in the applicable Prospectus Supplement of the amount
required to purchase the Underlying Debt Securities or Common Stock, as the case
may be, purchasable upon such exercise together with certain information set
forth on the reverse side of the Securities Warrant. Securities Warrants will be
deemed to have been exercised upon receipt of payment of the exercise price,
subject to the receipt, within five business days, of the Securities Warrant
Certificate evidencing such Securities Warrants. Upon receipt of such payment
and such Securities Warrant Certificate properly completed and duly executed at
the corporate trust office of the Securities Warrant Agent or any other office
indicated in the applicable Prospectus Supplement, the Company will, as soon as
practicable, issue and deliver the Underlying Debt Securities or Common Stock,
as the case may be, purchasable upon such exercise. If fewer than all of the
Securities Warrants represented by such Securities Warrant Certificate are
exercised, a new Securities Warrant Certificate will be issued for the remaining
amount of Securities Warrants. The holder of a Securities Warrant will be
required to pay any tax or other governmental charge that may be imposed in
connection with any transfer involved in the issuance of Underlying Debt
Securities or Common Stock purchased upon such exercise.
MODIFICATIONS
The Securities Warrant Agreements and the terms of the Securities Warrants
may be modified or amended by the Company and the Securities Warrant Agent,
without the consent of any holder, for the purpose of curing any ambiguity, or
of curing, correcting or supplementing any defective or inconsistent provision
contained therein, or in any other manner that the Company deems necessary or
desirable and that will not materially adversely affect the interests of the
holders of the Securities Warrants.
The Company and the Securities Warrant Agent may also modify or amend the
Securities Warrant Agreement and the terms of the Securities Warrants with the
consent of the holders of not less than a majority in number of the then
outstanding unexercised Securities Warrants affected thereby; provided that no
such modification or amendment that accelerates the expiration date, increases
the exercise price, reduces the number of outstanding Securities Warrants the
consent of the holders of which is required for any such modification or
amendment, or otherwise materially adversely affects the rights of the holders
of the Securities Warrants, may be made without the consent of each holder
affected thereby.
COMMON STOCK WARRANT ADJUSTMENTS
The terms and conditions on which the exercise price of and/or the number of
shares of Common Stock covered by a Common Stock Warrant are subject to
adjustment will be set forth in the Common Stock Warrant Certificate and the
applicable Prospectus Supplement. Such terms will include provisions for
adjusting the exercise price and/or the number of shares of Common Stock covered
by such Common Stock Warrant; the events requiring such adjustment; the events
upon which the Company may, in lieu of making such adjustment, make proper
provisions so that the holder of such Common Stock Warrant, upon exercise
thereof, would be treated as if such holder had exercised such Common Stock
Warrant prior to the occurrence of such events; and provisions affecting
exercise in the event of certain events affecting the Common Stock.
PLAN OF DISTRIBUTION
The Company may offer and sell the Offered Securities in any of four ways:
(i) through agents, (ii) to or through underwriters or dealers, which may
include affiliates of the Company, (iii) directly to one or more purchasers or
(iv) through any combination of the foregoing. The Prospectus Supplement with
34
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respect to any of the Offered Securities will set forth the terms of the
offering of such Offered Securities, including the name or names of any
underwriters, dealers or agents, the purchase price of such Offered Securities,
the proceeds to the Company from such sale, any underwriting discounts or agency
fees and other items constituting underwriters' or agents' compensation, the
initial public offering price, any discounts or concessions allowed or reallowed
or paid to dealers, and any securities exchanges on which such Offered
Securities may be listed.
The distribution of the Offered Securities may be effected from time to time
in one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
The Company may also issue the Offered Securities to one or more persons in
exchange for outstanding securities of the Company acquired by such persons from
third parties in open market or privately negotiated transactions. The newly
issued Offered Securities sold in any such exchange may be offered pursuant to
this Prospectus and the applicable Prospectus Supplement by such persons, acting
as principal for their own accounts, at market prices prevailing at the time of
sale, at prices otherwise negotiated or at fixed prices. Unless otherwise
indicated in the applicable Prospectus Supplement, the Company will receive only
outstanding securities of the Company in any such exchange transaction and will
not receive cash proceeds in connection with the exchange or receive any
proceeds in connection with the resale by such persons of any Offered
Securities. Any resale may be effected by the selling party to or through
underwriters or dealers, and such underwriters or dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from such selling party for whom they may act as agent. Such selling party, if a
broker-dealer, may receive commissions from purchasers of Offered Securities for
whom it may act as agent. Any discounts, concessions or commissions received by
the selling party, if a broker-dealer, or received by any other underwriters or
dealers participating in the distribution of Offered Securities, and any profit
on the resale of Offered Securities by any of them, may be deemed to be
underwriting discounts and commissions under the Securities Act. The Company may
agree to indemnify the selling party and any other underwriters or dealers from
certain civil liabilities, including liabilities under the Securities Act. The
applicable Prospectus Supplement will set forth the terms under which Offered
Securities will be issued in exchange for outstanding securities of the Company,
the name of the party that will acquire such Offered Securities for resale, as
principal for its own account, the terms of resale by such selling party, the
names of any other underwriters or dealers participating in the distribution of
such Offered Securities and material arrangements, if any, entered into between
the selling party and such other underwriters or dealers. If any expenses of the
selling party in connection with the distribution of the Offered Securities are
reimbursed by the Company, such reimbursement arrangement will be set forth in
the applicable Prospectus Supplement.
If underwriters or dealers are used in the sale, the Offered Securities will
be acquired by the underwriters or dealers for their own accounts and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price, which may be changed, or at
varying prices determined at the time of sale. The Offered Securities may be
offered to the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more of such firms. Unless
otherwise set forth in the Prospectus Supplement, the obligations of the
underwriters to purchase such Offered Securities will be subject to certain
conditions precedent, and the underwriters will be obligated to purchase all of
such Offered Securities if any are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If so indicated in the applicable Prospectus Supplement relating to any
Offered Securities, the Company will authorize underwriters, dealers and/or
agents to solicit offers by certain specified institutions to purchase such
Offered Securities from the Company at the public offering price set forth in
such Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in such
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<PAGE>
Prospectus Supplement, and such Prospectus Supplement will set forth the
commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of such contracts.
Underwriters, dealers and agents may be entitled, under agreements entered
into with the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contributions
with respect to payments which the underwriters, dealers or agents may be
required to make in respect thereof. Underwriters, dealers and agents, and
affiliates thereof, may be customers of, engage in transactions with, or perform
services for the Company and its affiliates in the ordinary course of business.
All Offered Securities (except shares of Common Stock) will be new issues of
securities with no established trading market. Any underwriters to whom Offered
Securities are sold by the Company for public offering and sale may make a
market in such Offered Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. No
assurance can be given concerning the liquidity of the trading market for any
Offered Securities.
LEGAL OPINIONS
Certain legal matters will be passed upon for the Company by James K. Markey
of the Company's Law Department. As of August 1, 1995, Mr. Markey jointly owned
approximately 1,065 shares of Common Stock and also held options to purchase
10,800 shares of Common Stock, of which options to purchase 9,400 shares are
currently exercisable.
EXPERTS
The consolidated financial statements and schedules of the Company and its
consolidated subsidiaries as of December 31, 1994 and 1993 and for each of the
years in the three-year period ended December 31, 1994 have been incorporated by
reference in this Prospectus and in the Registration Statement in reliance upon
the reports of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in auditing and accounting.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN OFFER TO BUY, THE
DEBENTURES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Description of Debentures.......................... S-2
Use of Proceeds.................................... S-4
Capitalization..................................... S-5
Underwriting....................................... S-6
Legal Opinions..................................... S-6
PROSPECTUS
Available Information.............................. 2
Incorporation of Certain Documents by
Reference......................................... 2
The Company........................................ 4
Risk Factors Relating to Currencies................ 6
Use of Proceeds.................................... 6
Ratios of Earnings to Fixed Charges................ 6
Description of Debt Securities..................... 6
Description of Liquid Yield Option Notes........... 19
Description of Capital Stock....................... 30
Description of Securities Warrants................. 32
Plan of Distribution............................... 34
Legal Opinions..................................... 36
Experts............................................ 36
</TABLE>
$400,000,000
[LOGO]
6 1/2% DEBENTURES
DUE SEPTEMBER 1, 2025
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PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
REPRESENTATIVES OF THE UNDERWRITERS
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