<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 1, 1994
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
APPLIED MATERIALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-1655526
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
3050 BOWERS AVENUE, SANTA CLARA, CALIFORNIA 95054 (408) 727-5555
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
JAMES C. MORGAN
CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER
APPLIED MATERIALS, INC.
3050 BOWERS AVENUE, SANTA CLARA, CALIFORNIA 95054 (408) 727-5555
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER OF AGENT FOR
SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
DONALD A. SLICHTER, ESQ. JOHN A. FORE, ESQ.
DANA M. KETCHAM, ESQ. WILSON, SONSINI, GOODRICH & ROSATI,
ORRICK, HERRINGTON & SUTCLIFFE PROFESSIONAL CORPORATION
400 SANSOME STREET TWO PALO ALTO SQUARE
SAN FRANCISCO, CALIFORNIA 94111 PALO ALTO, CALIFORNIA 94306
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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- -------------------------------------------------------------------------------------------------
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT PRICE(1)(2) FEE
- -------------------------------------------------------------------------------------------------
Debt Securities and Common Stock,
par value, $0.01 per share(3).... (4) (4) $250,000,000 $86,207
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) Or, (i) if any Debt Securities are issued at an original issue discount,
such greater principal amount as shall result in an aggregate initial
offering price equal to the amount to be registered or (ii) if any Debt
Securities are issued with a principal amount denominated in a foreign
currency or composite currency, such principal amount as shall result in an
aggregate initial offering price equivalent thereto in United States dollars
at the time of initial offering.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o). Exclusive of accrued interest, if
any on the Debt Securities.
(3) Includes Rights to purchase Common Stock which, prior to certain events,
will not be exercisable or evidenced separately from the Common Stock.
(4) Not applicable pursuant to General Instruction II(D) to Form S-3 under the
Securities Act of 1933.
------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
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<PAGE> 2
INTRODUCTORY NOTE
This Registration Statement includes a Base Prospectus relating to Debt
Securities or Common Stock of the Company with an initial public offering price
of up to $250,000,000. This Registration Statement also contains two Prospectus
Supplements, one related to $100,000,000 of Debt Securities and the other
related to 2,000,000 shares of Common Stock, each of which is intended to comply
with the requirements of Rule 430A. The Company may use either or both of the
Prospectus Supplements either as Preliminary Prospectus Supplements prior to
effectiveness, or if the Company intends to offer securities immediately upon
effectiveness.
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus supplement shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any State in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such State.
PROSPECTUS SUPPLEMENT (Subject to Completion, Issued March , 1994)
(To Prospectus Dated March , 1994)
$100,000,000
[LOGO] APPLIED MATERIALS
% SENIOR NOTES DUE 2004
------------------------
Interest payable March 15 and September 15
------------------------
THE SENIOR NOTES WILL MATURE ON MARCH , 2004. THE SENIOR NOTES WILL NOT BE
REDEEMABLE PRIOR TO MATURITY AND WILL NOT BE SUBJECT TO ANY SINKING FUND. THE
SENIOR NOTES WILL BE REPRESENTED BY GLOBAL SECURITIES REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR ITS NOMINEE.
INTERESTS IN SUCH GLOBAL SECURITIES WILL BE SHOWN ON, AND TRANSFER
THEREOF WILL BE EFFECTED ONLY THROUGH, RECORDS MAINTAINED BY THE
DEPOSITARY AND ITS PARTICIPANTS. EXCEPT AS DESCRIBED HEREIN, SENIOR
NOTES IN DEFINITIVE FORM WILL NOT BE ISSUED. SETTLEMENT FOR THE
SENIOR NOTES WILL BE MADE IN IMMEDIATELY AVAILABLE FUNDS. SO LONG
AS THE SENIOR NOTES ARE REGISTERED IN THE NAME OF THE DEPOSITARY
OR ITS NOMINEE, THE SENIOR NOTES WILL TRADE IN THE DEPOSITARY'S
SAME-DAY FUNDS SETTLEMENT SYSTEM AND SECONDARY MARKET TRADING
ACTIVITY IN THE SENIOR NOTES WILL THEREFORE SETTLE IN
IMMEDIATELY AVAILABLE FUNDS. SEE "DESCRIPTION OF THE SENIOR
NOTES."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
PRICE % AND ACCRUED INTEREST
------------------------
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Per Senior Note..................... % % %
Total............................... $ $ $
</TABLE>
- ---------------
(1) Plus accrued interest from March , 1994.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(3) Before deducting expenses payable by the Company estimated at $317,000.
------------------------
The Senior Notes are offered, subject to prior sale, when, as and if
accepted by the Underwriters and subject to approval of certain legal matters by
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, counsel for the
Underwriters. It is expected that delivery of the Senior Notes will be made on
or about March , 1994 through the book-entry facilities of the Depositary
against payment therefor in immediately available funds.
------------------------
MORGAN STANLEY & CO.
Incorporated
LEHMAN BROTHERS
J.P. MORGAN SECURITIES INC.
March , 1994
<PAGE> 4
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SENIOR NOTES
OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
No person is authorized by the Company or by the Underwriters or any dealer
to give information or to make any representations other than those contained or
incorporated by reference in this Prospectus Supplement or the accompanying
Prospectus and, if given or made, such information or representations must not
be relied upon as having been so authorized. Neither this Prospectus Supplement
nor the accompanying Prospectus constitutes an offer to sell or the solicitation
of an offer to buy any securities other than the securities described in this
Prospectus Supplement or an offer to sell or the solicitation of an offer to buy
such securities in any jurisdiction to any persons to whom it is unlawful to
make such offer in such jurisdiction. The delivery of this Prospectus Supplement
or the accompanying Prospectus or any sale made hereunder does not imply that
the information contained herein or therein is correct as of any time subsequent
to the date on which such information is given.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company.......................................................................... S-3
Use of Proceeds...................................................................... S-6
Selected Consolidated Financial Data................................................. S-7
Capitalization....................................................................... S-9
Description of the Senior Notes...................................................... S-10
Underwriters......................................................................... S-13
PROSPECTUS
Available Information................................................................ 2
Information Incorporated by Reference................................................ 2
The Company.......................................................................... 3
Use of Proceeds...................................................................... 3
Selected Consolidated Financial Data................................................. 4
Description of Debt Securities....................................................... 5
Description of Capital Stock......................................................... 12
Plan of Distribution................................................................. 16
Legal Opinions....................................................................... 16
Experts.............................................................................. 16
</TABLE>
S-2
<PAGE> 5
THE COMPANY
Organized in 1967, Applied Materials, Inc. ("Applied Materials" or the
"Company") develops, manufactures, markets and services semiconductor wafer
fabrication equipment and related spare parts for the worldwide semiconductor
industry. The Company's customers include both companies which manufacture
semiconductor devices for use in their own products and companies which
manufacture semiconductor devices for sale to others. The Company operates
exclusively in the semiconductor wafer fabrication equipment industry. The
Company is also a fifty percent stockholder in Applied Komatsu Technology, Inc.,
which produces thin film transistor fabrication systems for flat panel displays.
PRODUCTS
Applied Materials' products are sophisticated systems requiring
state-of-the-art technology in wafer processing chemistry and physics,
particulate control, automation, software and microprocessor control. Many of
these technologies are complementary and can be applied across all of the
Company's products. The Company's products are focused on providing enabling
technology, productivity and yield enhancements to the customer. The Company's
products are used in part of the process of fabricating semiconductor devices on
a substrate of semiconductor material (usually silicon). A finished device
consists of thin film layers which can form anywhere from one to millions of
tiny electronic components that combine to perform desired electrical functions.
The fabrication process must control film and feature quality to ensure proper
device performance while meeting yield and process throughput goals. The Company
currently manufactures equipment that addresses three major steps in wafer
fabrication: deposition, etch and ion implantation.
Single-wafer, multi-chamber architecture. The trend toward more stringent
process requirements and larger wafer sizes prompted Applied Materials to
develop the single-wafer, multi-chamber system called the Precision 5000. The
Company introduced the Precision 5000 with chemical vapor deposition (CVD)
dielectric processes in 1987, etch processes in 1988 and CVD tungsten processes
in 1989. A benefit of the single-wafer, multi-chamber architecture is its
suitability for integrated processing. Integrated processing involves the use of
several processing chambers, each of which is attached to a central handling
system. This standard platform makes it possible to do many different process
steps on the wafer without leaving a controlled environment. This integrated
processing reduces the risk of particulate contamination during sequential
manufacturing steps. The Company used its expertise in single-wafer,
multi-chamber architecture to develop an evolutionary platform called the Endura
5500 PVD (physical vapor deposition) in 1990 featuring a staged, ultra-high
vacuum architecture. In October 1991, the Company announced its second
generation Precision 5000 system, the Precision 5000 Mark II, with numerous
enhancements to the platform, process chambers and remote support equipment. The
Precision 5000 Mark II addresses customers' demands in the manufacturing of
advanced devices, such as 16 megabit DRAMs (dynamic random access memories) and
the use of 200mm (8-inch) wafers. In September 1992, the Company announced its
latest generation single-wafer, multi-chamber platform, the Centura, to target
the high temperature thin films market as well as future process applications
with 0.5 micron and below specifications. The Company has shipped more than
1,600 platforms and more than 4,700 process chambers. For the three months ended
January 30, 1994, sales of the Company's single-wafer, multi-chamber systems
accounted for approximately 86% of systems revenue.
Deposition. A fundamental step in fabricating a semiconductor device,
deposition is a process in which a layer of either electrically insulating
(dielectric) or electrically conductive material is deposited on the wafer.
Deposition can be divided into several different categories of which Applied
Materials currently participates in three: chemical vapor deposition (CVD),
physical vapor deposition (PVD), and epitaxial and polysilicon deposition.
CVD. Chemical vapor deposition is a process used in semiconductor
fabrication in which thin films (insulators, conductors and semiconductors)
are deposited from gaseous sources. The Company produces several different
types of CVD systems. In 1987, the Company introduced the Precision 5000
CVD which, with its automated multi-chamber architecture, provides the
flexibility to perform a broad range of deposition processes utilizing up
to four individual chambers on a single system. In 1989, the Company
entered the market for metal chemical vapor deposition with the
introduction of a new system for blanket
S-3
<PAGE> 6
tungsten deposition, the Precision 5000 WCVD. This system is based on the
single-wafer, multi-chamber Precision 5000 CVD system architecture and is
designed to reduce operating costs for tungsten deposition and to produce
high-quality tungsten films for interconnect applications in advanced
semiconductor devices. In 1990, the Company introduced integrated tungsten
plug fabrication capability by combining its blanket tungsten CVD
deposition and etchback capabilities onto the same system. In 1991, the
Company introduced tungsten silicide capabilities and in 1993, titanium
nitride (TiN) capabilities to further extend the Precision 5000 platform
offerings.
PVD. Physical vapor deposition is used to deposit metals on wafers
during semiconductor fabrication. Unlike CVD, the sources of the deposited
materials are solid sources called targets. Applied Materials first entered
the PVD market in April 1990 with the Endura 5500 PVD system. The system
offers a modular, single-wafer, multi-chamber platform which will
accommodate both ultra-high vacuum processes like PVD, and conventional
high vacuum processes like CVD and etch. In July of 1993, the Company
introduced the Endura High Productivity (HP) PVD system, an enhanced
version of its Endura PVD system.
Epitaxial and polysilicon deposition. Epitaxial and polysilicon
deposition involve depositing a layer of high-quality, silicon based
compounds on the surface of an existing silicon wafer to change its
electrical properties and form the base on which the integrated circuit is
built. In 1989, the Company introduced the Precision 7700 Epi system for
advanced silicon deposition. The 7700 system extends the capabilities of
radiantly-heated barrel technology and incorporates fully automated wafer
handling as well as many features for particulate control. In September
1992, the Company announced the Centura Poly, a single-wafer, multi-chamber
platform targeted at the high temperature thin film deposition of
polysilicon on wafers up to 200mm (8 inch) in diameter. The Centura Epi
system, which features deposition of epitaxial silicon, was announced in
March 1993.
Etch. In etch processing, a wafer is first patterned with photo-resist
during photolithography. Etching selectively removes material from areas which
are not covered by the photo-resist pattern. Applied Materials entered the etch
market in 1981 with the introduction of the AME 8100 etch system, which utilized
a batch process technology for dry plasma etching. In 1985, the Company
introduced the Precision Etch 8300, which featured improved levels of automation
and particulate control. The Company continues to sell the Precision Etch 8300
product and has shipped approximately 800 systems. Applied Materials' first
single-wafer, multi-chamber system for the dry etch market was the Precision
5000 Etch, introduced in 1988. In 1990, the Company introduced a metal etch
system based on the Precision 5000 architecture which provides a single-wafer
aluminum etch capabilities. In July of 1993, the Company introduced its next
generation etch platform, the Centura HDP (high density plasma) Dielectric
Etcher designed for applications requiring sub-0.5 micron design rules. This
announcement was soon followed by the October 1993 introduction of the Precision
5000 Mark II Etch MxP, a new model of the Precision 5000-series etch system with
several enhancements including process capability for .35 micron applications.
Ion Implantation. During ion implantation, silicon wafers are bombarded by
a high velocity beam of electrically charged ions. These ions are lodged within
the wafer at selected sites and change the electrical properties of the
implanted area. Applied Materials entered the high-current portion of the
implant market in 1985 with the Precision Implant 9000 and introduced the
Precision Implant 9200 in 1988. In 1989, the Company added enhancements to the
9200 series including a new option for automated selection of implant angles,
and new hardware/software options that enable customers to perform remote
monitoring and diagnostics. In 1991, the Company announced an enhanced version
of its high-current ion implanter and designated it the Precision Implant
9200XJ. In November 1992, the Company introduced a new high-current ion
implantation system, the Precision Implant 9500, to address the production of
high density semiconductor devices, such as 16 and 64 MB memory devices and
advanced microprocessors.
CUSTOMER SERVICE AND SUPPORT
The demand for improved production yields of integrated circuits requires
that semiconductor wafer processing equipment operate reliably, with maximum
uptime and within very precise tolerances. Applied
S-4
<PAGE> 7
Materials installs equipment and provides warranty service worldwide through
offices located in the United States, Japan, Europe and the Asia/Pacific region
(Korea, Taiwan, China and Singapore). Applied Materials maintains 44
service/sales offices worldwide, with 13 of those in Japan, 9 offices in Europe,
10 offices in the Asia/Pacific region and the remainder in the United States.
The Company offers a variety of service contracts to customers for maintenance
of installed equipment and provides a comprehensive training program for all
customers.
MARKETING AND SALES
Because of the highly technical nature of its products, the Company markets
its products worldwide through a direct sales force, with sales, service and
spare parts offices in the United States, Japan, Europe and the Asia/Pacific
region. For the fiscal year ended October 31, 1993, sales to customers in the
United States, Japan, Europe and Asia/Pacific accounted for approximately 38%,
25%, 20% and 17%, respectively, of the Company's net sales. For the three months
ended January 30, 1994, sales to customers in the United States, Japan, Europe
and Asia/Pacific accounted for approximately 43%, 28%, 17% and 12%,
respectively, of the Company's net sales. The Company's business is not
considered to be seasonal in nature, but it is cyclical with respect to the
capital equipment expenditures of major semiconductor manufacturers. These
expenditure patterns are based on many factors including anticipated market
demand for integrated circuits, the development of new technologies, and global
economic conditions.
RESEARCH AND DEVELOPMENT
The market served by the Company is characterized by rapid technological
change. The Company's research and development efforts are global in nature.
Engineering organizations are located in the United States, England, Israel and
Japan, with process support and customer demonstration laboratories in the
United States and Japan. In 1991, the Company announced the opening of a new
technology center in Narita, Japan. The Company also operates a technology
center in Israel which is being used to develop controller configuration and
software tools for its semiconductor processing systems. Applied Materials'
research and development activities are primarily directed toward the
development of new wafer processing systems and new process applications for
existing products. Applied Materials works closely with its global customers to
design its systems to meet its customers' planned technical and production
requirements.
JOINT VENTURE
In September 1991, the Company announced its plans to develop thin film
transistor (TFT) manufacturing systems for Active-Matrix Liquid Crystal Displays
(AMLCDs). The AMLCD market currently includes screens for laptop, notebook and
palmtop computers and instrument displays, and the Company believes in the
future may include high-resolution workstations and High Definition Television
(HDTV). In June 1993, the Company and Komatsu, Ltd. of Japan announced the
signing of a letter of intent to form a joint venture corporation to target this
equipment market. The joint venture was formed in September 1993 with the two
companies sharing a 50-50 ownership of the joint venture company, Applied
Komatsu Technology, Inc. (AKT), which is accounted for using the equity method.
The Company's management believes that systems developed by AKT have the
potential to lower the manufacturing costs of AMLCDs. The Company has granted to
AKT an exclusive license to use the Company's intellectual property to develop,
make, and sell products for the manufacture of flat panel displays, in exchange
for royalties in respect thereof.
------------------
S-5
<PAGE> 8
The Company was incorporated in California in 1967 and reincorporated in
Delaware in 1987. Its principal executive offices are located at 3050 Bowers
Avenue, Santa Clara, California 95054-3299 (telephone number (408) 727-5555).
References to the Company or to Applied Materials shall mean Applied Materials,
Inc. and its consolidated subsidiaries, unless the context requires otherwise.
Applied Materials, Precision 5000, Endura and Centura are registered trademarks
of Applied Materials, Inc. Endura 5500 PVD, Precision 5000 Mark II, Precision
5000 CVD, Precision 5000 WCVD, Endura HP PVD, Precision 7700 Epi, Centura Poly,
Centura Epi, AME 8100, Precision Etch 8300, Centura HDP Dielectic Etch,
Precision 5000 Mark II Etch MxP, Precision Implant 9000, Precision Implant 9200,
Precision Implant 9200 XJ and Precision Implant 9500 are trademarks of Applied
Materials, Inc. Applied Komatsu Technology is a trademark of Applied Komatsu
Technology, Inc.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the Senior
Notes will be used for general corporate purposes. Although the Company has no
current specific plans for the proceeds of the sale of the Senior Notes, it
believes that success in its industry requires substantial financial strength
and flexibility. In addition, the Company from time to time considers
acquisitions of complementary businesses, assets or technologies, and although
there are no current agreements or understandings with respect to any such
acquisition, the Company desires to be able to respond to opportunities as they
arise. The Company is not negotiating, discussing or planning any potential
acquisition at this time. Pending such uses, the Company will invest the net
proceeds in investment-grade, interest-bearing securities.
S-6
<PAGE> 9
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended October 31, 1993 have
been derived from the consolidated financial statements of the Company, which
have been audited by Price Waterhouse, independent accountants. The selected
consolidated financial data presented below as of January 30, 1994 and January
31, 1993, and for each of the five fiscal quarters ended January 30, 1994 have
been derived from unaudited interim consolidated financial information of the
Company. In the opinion of management, the unaudited interim consolidated
financial information have been prepared on the same basis as the audited
consolidated financial statements and include all adjustments, consisting of
only normal recurring adjustments, necessary to fairly state the information set
forth therein. The results of operations for the three months ended January 30,
1994 are not necessarily indicative of the results to be expected for the fiscal
year ending October 30, 1994. This data should be read in conjunction with the
more detailed information and consolidated financial statements and notes
thereto incorporated by reference in the accompanying Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------- FISCAL YEAR ENDED(1)
JANUARY 30, JANUARY 31, ------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
----------- ----------- ---------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(2):
Net sales.................................... $ 340,449 $ 215,574 $1,080,047 $751,383 $638,606 $567,130 $501,846
Costs and expenses:
Cost of products sold...................... 184,470 123,967 604,363 443,179 370,025 302,001 257,149
Research, development and engineering...... 39,238 30,185 140,161 109,196 102,665 97,066 72,296
Marketing and selling...................... 34,033 23,384 107,275 78,141 70,416 68,238 56,159
General and administrative................. 19,732 13,456 64,379 48,242 42,812 40,875 32,776
Other, net................................. 655 903 2,875 4,249 3,316 3,116 2,885
----------- ----------- ---------- -------- -------- -------- --------
Income from operations....................... 62,321 23,679 160,994 68,376 49,372 55,834 80,581
Interest expense........................... 3,648 3,598 14,206 15,207 13,969 6,717 2,768
Interest income............................ 2,007 1,838 6,770 5,756 4,952 4,967 6,589
----------- ----------- ---------- -------- -------- -------- --------
Income from consolidated companies before
taxes and
cumulative effect of accounting change..... 60,680 21,919 153,558 58,925 40,355 54,084 84,402
Provision for income taxes................... 21,238 7,233 50,674 19,445 14,124 20,011 32,918
----------- ----------- ---------- -------- -------- -------- --------
Income from consolidated companies before
cumulative
effect of accounting change................ 39,442 14,686 102,884 39,480 26,231 34,073 51,484
Equity in net loss of joint venture.......... 2,051 -- 3,189 -- -- -- --
----------- ----------- ---------- -------- -------- -------- --------
Income before cumulative effect of accounting
change..................................... 37,391 14,686 99,695 39,480 26,231 34,073 51,484
Cumulative effect of a change in accounting
for income taxes........................... 7,000 -- -- -- -- -- --
----------- ----------- ---------- -------- -------- -------- --------
Net income................................... $ 44,391 $ 14,686 $ 99,695 $ 39,480 $ 26,231 $ 34,073 $ 51,484
----------- ----------- ---------- -------- -------- -------- --------
----------- ----------- ---------- -------- -------- -------- --------
Earnings per share:
Income before cumulative effect of
accounting change........................ $ 0.45 $ 0.18 $ 1.21 $ 0.54 $ 0.38 $ 0.50 $ 0.77
----------- ----------- ---------- -------- -------- -------- --------
----------- ----------- ---------- -------- -------- -------- --------
Net income................................. $ 0.53 $ 0.18 $ 1.21 $ 0.54 $ 0.38 $ 0.50 $ 0.77
----------- ----------- ---------- -------- -------- -------- --------
----------- ----------- ---------- -------- -------- -------- --------
Average common shares and equivalents........ 83,245 81,592 82,294 72,680 68,900 68,144 67,028
----------- ----------- ---------- -------- -------- -------- --------
----------- ----------- ---------- -------- -------- -------- --------
RATIO OF EARNINGS TO FIXED CHARGES(3)........ 10.70x 4.83x 7.61x 3.63x 3.02x 5.89x 15.42x
BALANCE SHEET DATA (AT PERIOD END):
Cash and short-term investments.............. $ 222,524 $ 199,627 $ 266,180 $222,670 $140,134 $ 72,016 $107,108
Accounts receivable, net..................... 291,980 179,056 256,020 191,510 152,787 147,267 131,563
Inventories.................................. 177,592 122,405 154,597 110,667 101,471 102,272 77,015
Total current assets......................... 794,340 560,160 775,916 581,797 434,199 366,894 342,944
Property, plant and equipment, net........... 334,296 261,756 327,704 258,521 213,231 181,494 82,127
Total assets................................. 1,142,197 834,856 1,120,152 853,822 660,756 558,009 433,857
Short-term debt.............................. 41,493 30,918 48,662 33,947 36,704 27,413 14,302
Total current liabilities.................... 359,004 220,038 380,528 248,207 199,988 195,238 142,852
Long-term debt............................... 119,043 116,502 121,076 118,445 123,967 53,611 29,445
Stockholders' equity......................... 640,755 484,903 598,762 474,111 325,454 300,308 254,399
</TABLE>
- ---------------
(1) The Company's fiscal year ends on the last Sunday of October.
(2) Share information and per share data have been restated to reflect a
two-for-one stock split in the form of a 100% stock dividend effective April
6, 1992, and an additional two-for-one stock split in the form of a 100%
stock dividend effective October 5, 1993.
(3) For the purpose of calculating the ratio of earnings to fixed charges, (i)
earnings consists of income before taxes and cumulative effect of accounting
change plus fixed charges and (ii) fixed charges consists of interest
expense incurred, amortization of debt issuance expense and the portion of
rental expense under operating leases deemed by the Company to be
representative of the interest factor.
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<PAGE> 10
SELECTED CONSOLIDATED FINANCIAL DATA -- (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED(1)
----------------------------------------------------
JAN. 30, OCT. 31, AUG. 1, MAY 2, JAN. 31,
1994 1993 1993 1993 1993
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.................................................. $340,449 $327,411 $281,370 $255,692 $215,574
Costs and expenses:
Cost of products sold.................................... 184,470 179,822 155,398 145,176 123,967
Research, development and engineering.................... 39,238 39,089 37,058 33,829 30,185
Marketing and selling.................................... 34,033 31,623 27,056 25,212 23,384
General and administrative............................... 19,732 19,228 16,585 15,110 13,456
Other, net............................................... 655 (568) 1,365 1,175 903
-------- -------- -------- -------- --------
Income from operations..................................... 62,321 58,217 43,908 35,190 23,679
Interest expense......................................... 3,648 3,888 3,373 3,347 3,598
Interest income.......................................... 2,007 1,935 1,514 1,483 1,838
-------- -------- -------- -------- --------
Income from consolidated companies before taxes and
cumulative effect of accounting change................... 60,680 56,264 42,049 33,326 21,919
Provision for income taxes................................. 21,238 18,567 13,876 10,998 7,233
-------- -------- -------- -------- --------
Income from consolidated companies before cumulative
effect of accounting change.............................. 39,442 37,697 28,173 22,328 14,686
Equity in net loss of joint venture........................ 2,051 3,189 -- -- --
-------- -------- -------- -------- --------
Income before cumulative effect of accounting change....... 37,391 34,508 28,173 22,328 14,686
Cumulative effect of a change in accounting for income
taxes.................................................... 7,000 -- -- -- --
-------- -------- -------- -------- --------
Net income................................................. $ 44,391 $ 34,508 $ 28,173 $ 22,328 $ 14,686
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Earnings per share:
Income before cumulative effect of accounting change..... $ 0.45 $ 0.42 $ 0.34 $ 0.27 $ 0.18
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Net income............................................... $ 0.53 $ 0.42 $ 0.34 $ 0.27 $ 0.18
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Average common shares and equivalents...................... 83,245 83,016 82,532 82,034 81,592
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
- ---------------
(1) Share information and per share data have been restated to reflect a
two-for-one stock split in the form of a 100% stock dividend effective
October 5, 1993.
S-8
<PAGE> 11
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of January 30, 1994, and as adjusted to give effect to the sale of
the Senior Notes offered hereby (without giving effect to the payment of
expenses) and the application of the net proceeds therefrom:
<TABLE>
<CAPTION>
JANUARY 30, 1994
--------------------------
ACTUAL AS ADJUSTED(1)
-------- ---------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable to banks............................................. $ 34,497 $ 34,497
Current portion of long-term debt.................................. 6,996 6,996
-------- ---------------
Total short-term debt........................................... $ 41,493 $ 41,493
-------- ---------------
-------- ---------------
Long-term debt:
Secured Japanese debt.............................................. $ 44,043 $ 44,043
Unsecured senior notes............................................. 75,000 75,000
Senior Notes offered hereby........................................ -- 100,000
-------- ---------------
Total long-term debt............................................ 119,043 219,043
-------- ---------------
Stockholders' equity:
Preferred Stock; $0.01 par value; 1,000 shares authorized; no
shares issued................................................... -- --
Common Stock; $0.01 par value; 100,000 shares authorized(2); 80,674
shares issued and outstanding................................... 807 807
Additional paid-in capital......................................... 256,679 256,679
Retained earnings.................................................. 369,621 369,621
Cumulative translation adjustments................................. 13,648 13,648
-------- ---------------
Total stockholders' equity...................................... 640,755 640,755
-------- ---------------
Total capitalization.......................................... $759,798 $ 859,798
-------- ---------------
-------- ---------------
</TABLE>
- ---------------
(1) The Company intends to concurrently offer to the public 2,000,000 shares
(together with an underwriters' overallotment option consisting of 300,000
shares) of the Company's Common Stock. If the sale of the Common Stock is
consummated and, assuming a public offering price of $47 1/2 per share and
that the underwriters' overallotment option is not exercised, the Company's
Common Stock, Additional paid-in capital, Total stockholders' equity and
Total capitalization, each as adjusted, will increase to $827,000,
$347,341,000, $731,437,000 and $950,480,000, respectively. No assurances can
be given that the sale of the Common Stock will occur.
(2) Of the authorized shares, as of January 30, 1994, an aggregate of
approximately 7,176,000 shares were reserved for issuance upon exercise of
outstanding options and an aggregate of approximately 3,662,000 shares were
available for future grants under the Company's stock option plans.
S-9
<PAGE> 12
DESCRIPTION OF THE SENIOR NOTES
The following description of the particular terms of the Senior Notes
offered hereby supplements, and to the extent inconsistent therewith replaces,
the description of the general terms and provisions of the Debt Securities set
forth in the accompanying Prospectus, to which description reference is hereby
made. Capitalized terms not otherwise defined herein or in the accompanying
Prospectus have the meanings given to them in the Indenture.
GENERAL
The Senior Notes will be limited to $100,000,000 aggregate principal amount
and will mature on March , 2004. The Senior Notes will bear interest at the
rate of % per annum, computed on the basis of a 360-day year of twelve
30-day months, from March , 1994, or from the most recent Interest Payment
Date to which interest has been paid or provided for, payable semiannually on
March 15 and September 15 of each year, commencing September 15, 1994, to the
persons in whose names the Senior Notes (or any predecessor Senior Notes) are
registered at the close of business on the March 1 or September 1, as the case
may be, next preceding such Interest Payment Date. The Senior Notes will be
issued only in registered form in denominations of $1,000 and any integral
multiple thereof.
The Senior Notes will be senior unsecured general obligations of the
Company that will rank on a parity with all other unsecured and unsubordinated
indebtedness of the Company from time to time outstanding.
The Senior Notes will not be redeemable prior to maturity and will not be
entitled to any sinking fund. The defeasance and covenant defeasance provisions
of the Indenture described under the caption "Description of Debt
Securities -- Defeasance and Covenant Defeasance" in the accompanying Prospectus
will apply to the Senior Notes.
BOOK-ENTRY SYSTEM
The Senior Notes will be issued in the form of one or more fully registered
global securities (collectively, the "Global Note") which will be deposited
with, or on behalf of, The Depository Trust Company, New York, New York, as
Depositary, and registered in the name of the Depositary's nominee. Except as
set forth below, the Global Note may be transferred, in whole and not in part,
only to the Depositary or another nominee of the Depositary.
The Depositary has advised the Company and the Underwriters as follows: The
Depositary is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. The Depositary holds securities that its participants
("Participants") deposit with the Depositary. The Depositary also facilitates
the settlement among Participants of securities transactions, such as transfers
and pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include securities
brokers and dealers, banks, trust companies, clearing corporations and certain
other organizations ("Direct Participants"). The Depositary is owned by a number
of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the Depositary system is also available to others such
as securities brokers and dealers, banks, and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly ("Indirect Participants"). The rules applicable to the Depositary
and its Participants are on file with the Securities and Exchange Commission.
Purchases of interests in the Global Note under the Depositary system must
be made by or through Direct Participants, which will receive a credit for such
interests in the Depositary's records. The ownership interest of each actual
purchaser of interests in the Global Note ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written
S-10
<PAGE> 13
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Global Note 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 Global Note, except as described below.
To facilitate subsequent transfers, the Global Note deposited by
Participants with the Depositary is registered in the name of the Depositary's
partnership nominee, Cede & Co. The deposit of the Global Note with the
Depositary and its registration in the name of Cede & Co. effects no change in
beneficial ownership. The Depositary has no knowledge of the actual Beneficial
Owners of the interests in the Global Note; the Depositary's records reflect
only the identity of the Direct Participants to whose accounts interests in the
Global Note 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 the Depositary 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 the Depositary nor Cede & Co. will consent or vote with respect to
the Global Note. Under its usual procedures, the Depositary 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 interests in the Global Note are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Global Note will be made to the
Depositary. The Depositary's practice is to credit Direct Participants' accounts
on the payment date in accordance with their respective holdings shown on the
Depositary's records unless the Depositary has reason to believe that it will
not receive payment on the payment date. Payments by Participants to Beneficial
Owners will be governed by standing instructions and customary practices, as is
the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant
and not of the Depositary, the 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 the Depositary is the responsibility of the
Company or the Paying Agent, disbursement of such payments to Direct
Participants shall be the responsibility of the Depositary, and disbursement of
such payments to the Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
The Depositary may discontinue providing its services as depositary with
respect to the Senior Notes at any time by giving reasonable notice to the
Company or the Paying Agent. Under such circumstances, in the event that a
successor depositary is not obtained, definitive Senior Note certificates are
required to be printed and delivered.
The Senior Notes represented by a Global Note will be exchangeable for
Senior Notes in definitive form of like tenor as such Global Note in
denominations of $1,000 and in any greater amount that is an integral multiple
thereof if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Global Note or if at any time the
Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, (ii) the Company in its discretion at any time determines
not to have all of the Senior Notes represented by a Global Note and notifies
the Trustee thereof or (iii) an Event of Default has occurred and is continuing
with respect to the Senior Notes. Any Senior Note that is exchangeable pursuant
to the preceding sentence is exchangeable for Senior Notes issuable in
authorized denominations and registered in such names as the Depositary shall
instruct the Trustee. It is expected that such instructions may be based upon
directions received by the Depositary from its participants with respect to
ownership of beneficial interests in such Global Note. Subject to the foregoing,
a Global Note is not exchangeable, except for a Global Note or Global Notes of
the same aggregate denominations to be registered in the name of the Depositary
or its nominee.
S-11
<PAGE> 14
The information in this section concerning the Depositary and the
Depositary'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 Senior Notes will be made by the Underwriters in
immediately available or same-day funds.
Secondary trading on long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the Senior
Notes will trade in the Depositary's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Senior Notes will
therefore be required by the Depositary to settle in same-day funds. No
assurance can be given as to the effect, if any, of settlement in same-day funds
on trading activity in the Senior Notes.
S-12
<PAGE> 15
UNDERWRITERS
Under the terms and subject to the conditions contained in an Underwriting
Agreement, dated the date hereof, the Underwriters named below have severally
agreed to purchase, and the Company has agreed to sell to them, severally, the
respective principal amounts of Senior Notes set forth opposite their respective
names below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
NAME OF SENIOR NOTES
------------------------------------------------------------- ----------------
<S> <C>
Morgan Stanley & Co. Incorporated............................ $
Lehman Brothers Inc. ........................................
J.P. Morgan Securities Inc. .................................
----------------
Total........................................ $100,000,000
----------------
----------------
</TABLE>
The Underwriting Agreement provides that the obligation of the several
Underwriters to pay for and accept delivery of the Senior Notes is subject to
the approval of certain legal matters by their counsel and to certain other
conditions. The Underwriters are obligated to take and pay for all of the Senior
Notes if any are taken.
The Underwriters initially propose to offer part of the Senior Notes
directly to the public at the public offering price set forth on the cover page
hereof and part to certain dealers at a price that represents a concession not
in excess of % of the principal amount of the Senior Notes. Any Underwriter
may allow, and such dealers may reallow, a concession not in excess of % of
the principal amount of the Senior Notes to certain other dealers. After the
initial offering of the Senior Notes, the offering price and other selling terms
may from time to time be varied by the Underwriters.
The Company has agreed to indemnify the several Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended.
The Company does not intend to apply for listing of the Senior Notes on a
national securities exchange, but has been advised by the Underwriters that they
presently intend to make a market in the Senior Notes, as permitted by
applicable laws and regulations. The Underwriters are not obligated, however, to
make a market in the Senior Notes and any such market-making may be discontinued
at any time at the sole discretion of the Underwriters. Accordingly, no
assurance can be given as to the liquidity of, or trading markets for, the
Senior Notes. The Underwriters do not intend to confirm sales to accounts over
which they exercise discretionary authority.
From time to time, certain of the Underwriters or their affiliates have
provided, and may continue to provide, investment banking and/or commercial
banking services to the Company.
S-13
<PAGE> 16
[LOGO] APPLIED MATERIALS
<PAGE> 17
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus supplement shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any State in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such State.
SUBJECT TO COMPLETION, DATED MARCH , 1994
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MARCH , 1994)
2,000,000 SHARES
[LOGO] APPLIED MATERIALS
COMMON STOCK
---------------------------
All of the 2,000,000 shares of Common Stock offered hereby are being sold
by Applied Materials, Inc. ("Applied Materials" or the "Company").
The Company's Common Stock is quoted on the Nasdaq National Market under
the symbol "AMAT." On February 28, 1994, the last reported sale price of the
Common Stock as reported on the Nasdaq National Market was $47 1/2 per share.
See "Price Range of Common Stock."
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING DISCOUNTS PROCEEDS TO
PUBLIC AND COMMISSIONS(1) COMPANY(2)
- ----------------------------------------------------------------------------------------------------
Per Share.............................. $ $ $
- ----------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933. See
"Underwriting."
(2) Before deducting estimated expenses of $238,000 payable by the Company.
(3) The Company has granted the Underwriters a 30-day option to purchase up to
300,000 additional shares of Common Stock on the same terms and conditions
as set forth above, solely to cover over-allotments, if any. If such option
is exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and proceeds to Company will be $ , $ and
$ , respectively. See "Underwriting."
---------------------------
The shares of Common Stock offered by this Prospectus Supplement are
offered by the Underwriters subject to prior sale, to withdrawal, cancellation
or modification of the offer without notice, to delivery and acceptance by the
Underwriters and to certain other conditions. It is expected that delivery of
the shares will be made at the offices of Lehman Brothers Inc., New York, New
York on or about March , 1994.
---------------------------
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
COWEN & COMPANY
NEEDHAM & COMPANY, INC.
ROBERTSON, STEPHENS & COMPANY
March , 1994
<PAGE> 18
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
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.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP
MEMBERS, IF ANY, MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON
STOCK OFFERED HEREBY ON NASDAQ IN ACCORDANCE WITH RULE 10B-6A UNDER THE
SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING."
S-2
<PAGE> 19
THE COMPANY
Organized in 1967, Applied Materials, Inc. ("Applied Materials" or the
"Company") develops, manufactures, markets and services semiconductor wafer
fabrication equipment and related spare parts for the worldwide semiconductor
industry. The Company's customers include both companies which manufacture
semiconductor devices for use in their own products and companies which
manufacture semiconductor devices for sale to others. The Company operates
exclusively in the semiconductor wafer fabrication equipment industry. The
Company is also a fifty percent stockholder in Applied Komatsu Technology, Inc.,
which produces thin film transistor fabrication systems for flat panel displays.
PRODUCTS
Applied Materials' products are sophisticated systems requiring
state-of-the-art technology in wafer processing chemistry and physics,
particulate control, automation, software and microprocessor control. Many of
these technologies are complementary and can be applied across all of the
Company's products. The Company's products are focused on providing enabling
technology, productivity and yield enhancements to the customer. The Company's
products are used in part of the process of fabricating semiconductor devices on
a substrate of semiconductor material (usually silicon). A finished device
consists of thin film layers which can form anywhere from one to millions of
tiny electronic components that combine to perform desired electrical functions.
The fabrication process must control film and feature quality to ensure proper
device performance while meeting yield and process throughput goals. The Company
currently manufactures equipment that addresses three major steps in wafer
fabrication: deposition, etch and ion implantation.
Single-wafer, multi-chamber architecture. The trend toward more stringent
process requirements and larger wafer sizes prompted Applied Materials to
develop the single-wafer, multi-chamber system called the Precision 5000. The
Company introduced the Precision 5000 with chemical vapor deposition (CVD)
dielectric processes in 1987, etch processes in 1988 and CVD tungsten processes
in 1989. A benefit of the single-wafer, multi-chamber architecture is its
suitability for integrated processing. Integrated processing involves the use of
several processing chambers, each of which is attached to a central handling
system. This standard platform makes it possible to do many different process
steps on the wafer without leaving a controlled environment. This integrated
processing reduces the risk of particulate contamination during sequential
manufacturing steps. The Company used its expertise in single-wafer,
multi-chamber architecture to develop an evolutionary platform called the Endura
5500 PVD (physical vapor deposition) in 1990 featuring a staged, ultra-high
vacuum architecture. In October 1991, the Company announced its second
generation Precision 5000 system, the Precision 5000 Mark II, with numerous
enhancements to the platform, process chambers and remote support equipment. The
Precision 5000 Mark II addresses customers' demands in the manufacturing of
advanced devices, such as 16 megabit DRAMs (dynamic random access memories) and
the use of 200mm (8-inch) wafers. In September 1992, the Company announced its
latest generation single-wafer, multi-chamber platform, the Centura, to target
the high temperature thin films market as well as future process applications
with 0.5 micron and below specifications. The Company has shipped more than
1,600 platforms and more than 4,700 process chambers. For the three months ended
January 30, 1994, sales of the Company's single-wafer, multi-chamber systems
accounted for approximately 86% of systems revenue.
Deposition. A fundamental step in fabricating a semiconductor device,
deposition is a process in which a layer of either electrically insulating
(dielectric) or electrically conductive material is deposited on the wafer.
Deposition can be divided into several different categories of which Applied
Materials currently participates in three: chemical vapor deposition (CVD),
physical vapor deposition (PVD), and epitaxial and polysilicon deposition.
CVD. Chemical vapor deposition is a process used in semiconductor
fabrication in which thin films (insulators, conductors and semiconductors)
are deposited from gaseous sources. The Company produces several different
types of CVD systems. In 1987, the Company introduced the Precision 5000
CVD which, with its automated multi-chamber architecture, provides the
flexibility to perform a broad range of deposition processes utilizing up
to four individual chambers on a single system. In 1989, the Company
entered the market for metal chemical vapor deposition with the
introduction of a new system for blanket
S-3
<PAGE> 20
tungsten deposition, the Precision 5000 WCVD. This system is based on the
single-wafer, multi-chamber Precision 5000 CVD system architecture and is
designed to reduce operating costs for tungsten deposition and to produce
high-quality tungsten films for interconnect applications in advanced
semiconductor devices. In 1990, the Company introduced integrated tungsten
plug fabrication capability by combining its blanket tungsten CVD
deposition and etchback capabilities onto the same system. In 1991, the
Company introduced tungsten silicide capabilities and in 1993, titanium
nitride (TiN) capabilities to further extend the Precision 5000 platform
offerings.
PVD. Physical vapor deposition is used to deposit metals on wafers
during semiconductor fabrication. Unlike CVD, the sources of the deposited
materials are solid sources called targets. Applied Materials first entered
the PVD market in April 1990 with the Endura 5500 PVD system. The system
offers a modular, single-wafer, multi-chamber platform which will
accommodate both ultra-high vacuum processes like PVD, and conventional
high vacuum processes like CVD and etch. In July of 1993, the Company
introduced the Endura High Productivity (HP) PVD system, an enhanced
version of its Endura PVD system.
Epitaxial and polysilicon deposition. Epitaxial and polysilicon
deposition involve depositing a layer of high-quality, silicon based
compounds on the surface of an existing silicon wafer to change its
electrical properties and form the base on which the integrated circuit is
built. In 1989, the Company introduced the Precision 7700 Epi system for
advanced silicon deposition. The 7700 system extends the capabilities of
radiantly-heated barrel technology and incorporates fully automated wafer
handling as well as many features for particulate control. In September
1992, the Company announced the Centura Poly, a single-wafer, multi-chamber
platform targeted at the high temperature thin film deposition of
polysilicon on wafers up to 200mm (8 inch) in diameter. The Centura Epi
system, which features deposition of epitaxial silicon, was announced in
March 1993.
Etch. In etch processing, a wafer is first patterned with photo-resist
during photolithography. Etching selectively removes material from areas which
are not covered by the photo-resist pattern. Applied Materials entered the etch
market in 1981 with the introduction of the AME 8100 etch system, which utilized
a batch process technology for dry plasma etching. In 1985, the Company
introduced the Precision Etch 8300, which featured improved levels of automation
and particulate control. The Company continues to sell the Precision Etch 8300
product and has shipped approximately 800 systems. Applied Materials' first
single-wafer, multi-chamber system for the dry etch market was the Precision
5000 Etch, introduced in 1988. In 1990, the Company introduced a metal etch
system based on the Precision 5000 architecture which provides a single-wafer
aluminum etch capabilities. In July of 1993, the Company introduced its next
generation etch platform, the Centura HDP (high density plasma) Dielectric
Etcher designed for applications requiring sub-0.5 micron design rules. This
announcement was soon followed by the October 1993 introduction of the Precision
5000 Mark II Etch MxP, a new model of the Precision 5000-series etch system with
several enhancements including process capability for .35 micron applications.
Ion Implantation. During ion implantation, silicon wafers are bombarded by
a high velocity beam of electrically charged ions. These ions are lodged within
the wafer at selected sites and change the electrical properties of the
implanted area. Applied Materials entered the high-current portion of the
implant market in 1985 with the Precision Implant 9000 and introduced the
Precision Implant 9200 in 1988. In 1989, the Company added enhancements to the
9200 series including a new option for automated selection of implant angles,
and new hardware/software options that enable customers to perform remote
monitoring and diagnostics. In 1991, the Company announced an enhanced version
of its high-current ion implanter and designated it the Precision Implant
9200XJ. In November 1992, the Company introduced a new high-current ion
implantation system, the Precision Implant 9500, to address the production of
high density semiconductor devices, such as 16 and 64 MB memory devices and
advanced microprocessors.
CUSTOMER SERVICE AND SUPPORT
The demand for improved production yields of integrated circuits requires
that semiconductor wafer processing equipment operate reliably, with maximum
uptime and within very precise tolerances. Applied Materials installs equipment
and provides warranty service worldwide through offices located in the United
S-4
<PAGE> 21
States, Japan, Europe and the Asia/Pacific region (Korea, Taiwan, China and
Singapore). Applied Materials maintains 44 service/sales offices worldwide, with
13 of those in Japan, 9 offices in Europe, 10 offices in the Asia/Pacific region
and the remainder in the United States. The Company offers a variety of service
contracts to customers for maintenance of installed equipment and provides a
comprehensive training program for all customers.
MARKETING AND SALES
Because of the highly technical nature of its products, the Company markets
its products worldwide through a direct sales force, with sales, service and
spare parts offices in the United States, Japan, Europe and the Asia/Pacific
region. For the fiscal year ended October 31, 1993, sales to customers in the
United States, Japan, Europe and Asia/Pacific accounted for approximately 38%,
25%, 20% and 17%, respectively, of the Company's net sales. For the three months
ended January 30, 1994, sales to customers in the United States, Japan, Europe
and Asia/Pacific accounted for approximately 43%, 28%, 17% and 12%,
respectively, of the Company's net sales. The Company's business is not
considered to be seasonal in nature, but it is cyclical with respect to the
capital equipment expenditures of major semiconductor manufacturers. These
expenditure patterns are based on many factors including anticipated market
demand for integrated circuits, the development of new technologies, and global
economic conditions.
RESEARCH AND DEVELOPMENT
The market served by the Company is characterized by rapid technological
change. The Company's research and development efforts are global in nature.
Engineering organizations are located in the United States, England, Israel and
Japan, with process support and customer demonstration laboratories in the
United States and Japan. In 1991, the Company announced the opening of a new
technology center in Narita, Japan. The Company also operates a technology
center in Israel which is being used to develop controller configuration and
software tools for its semiconductor processing systems. Applied Materials'
research and development activities are primarily directed toward the
development of new wafer processing systems and new process applications for
existing products. Applied Materials works closely with its global customers to
design its systems to meet its customers' planned technical and production
requirements.
JOINT VENTURE
In September 1991, the Company announced its plans to develop thin film
transistor (TFT) manufacturing systems for Active-Matrix Liquid Crystal Displays
(AMLCDs). The AMLCD market currently includes screens for laptop, notebook and
palmtop computers and instrument displays, and the Company believes in the
future may include high-resolution workstations and High Definition Television
(HDTV). In June 1993, the Company and Komatsu, Ltd. of Japan announced the
signing of a letter of intent to form a joint venture corporation to target this
equipment market. The joint venture was formed in September 1993 with the two
companies sharing a 50-50 ownership of the joint venture company, Applied
Komatsu Technology, Inc. (AKT), which is accounted for using the equity method.
The Company's management believes that systems developed by AKT have the
potential to lower the manufacturing costs of AMLCDs. The Company has granted to
AKT an exclusive license to use the Company's intellectual property to develop,
make, and sell products for the manufacture of flat panel displays, in exchange
for royalties in respect thereof.
------------------
The Company was incorporated in California in 1967 and reincorporated in
Delaware in 1987. Its principal executive offices are located at 3050 Bowers
Avenue, Santa Clara, California 95054-3299 (telephone number (408) 727-5555).
References to the Company or to Applied Materials shall mean Applied Materials,
Inc. and its consolidated subsidiaries, unless the context requires otherwise.
Applied Materials, Precision 5000, Endura and Centura are registered trademarks
of Applied Materials, Inc. Endura 5500 PVD, Precision 5000 Mark II, Precision
5000 CVD, Precision 5000 WCVD, Endura HP PVD, Precision 7700 Epi, Centura Poly,
Centura Epi, AME 8100, Precision Etch 8300, Centura HDP Dielectic Etch,
Precision 5000 Mark II Etch MxP, Precision Implant 9000, Precision Implant 9200,
Precision Implant 9200 XJ and Precision Implant 9500 are trademarks of Applied
Materials, Inc. Applied Komatsu Technology is a trademark of Applied Komatsu
Technology, Inc.
S-5
<PAGE> 22
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
2,000,000 shares of Common Stock offered hereby are estimated to be $90,682,000
($104,320,000 if the Underwriters' over-allotment option is exercised in full),
assuming a public offering price of $47 1/2 per share and after deducting
estimated underwriting discounts and commissions and expenses of the offering.
The net proceeds will be used for general corporate purposes. Although the
Company has no current specific plans for the proceeds of the sale of the shares
of Common Stock offered hereby, it believes that success in its industry
requires substantial financial strength and flexibility. In addition, the
Company from time to time considers acquisitions of complementary businesses,
assets or technologies, and although there are no current agreements or
understandings with respect to any such acquisition, the Company desires to be
able to respond to opportunities as they arise. The Company is not negotiating,
discussing or planning any potential acquisition at this time. Pending such
uses, the Company will invest the net proceeds in investment-grade,
interest-bearing securities.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol AMAT. The following table sets forth, for the periods indicated, high
and low closing sale prices for the Common Stock, as reported by Nasdaq. All
prices have been restated to reflect a two-for-one stock split in the form of a
100% stock dividend effective April 6, 1992 and an additional two-for-one stock
split in the form of a 100% stock dividend effective October 5, 1993.
<TABLE>
<CAPTION>
FISCAL YEAR HIGH LOW
---------------------------------------------------------- ---------- ---------
<S> <C> <C>
1992:
First Quarter........................................... $ 9 5/8 $ 5 3/4
Second Quarter.......................................... 11 13/16 9 1/8
Third Quarter........................................... 11 1/4 8 5/8
Fourth Quarter.......................................... 14 5/8 10
1993:
First Quarter........................................... 19 3/8 14 7/16
Second Quarter.......................................... 22 5/8 17 1/2
Third Quarter........................................... 33 21 1/2
Fourth Quarter.......................................... 39 1/4 28 5/8
1994:
First Quarter........................................... 43 3/4 30
Second Quarter
(through February 28, 1994).......................... 50 1/4 42 1/4
</TABLE>
On February 28, 1994, the closing sale price for the Common Stock as
reported by Nasdaq was $47 1/2 per share.
DIVIDEND POLICY
The Company has paid no cash dividends on its Common Stock since its
incorporation and anticipates that for the foreseeable future it will continue
to retain any earnings for use in its business. Certain of the Company's debt
agreements limit the Company's ability to pay dividends on its Common Stock.
S-6
<PAGE> 23
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company as of January 30, 1994, and as adjusted to give effect to the issuance
and sale by the Company of the shares of Common Stock offered hereby (assuming a
public offering price of $47 1/2 per share), and the application of the
estimated net proceeds therefrom:
<TABLE>
<CAPTION>
JANUARY 30, 1994
-------------------------
AS
ACTUAL ADJUSTED(1)
-------- ------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt:
Notes payable to banks.......................................... $ 34,497 $ 34,497
Current portion of long-term debt............................... 6,996 6,996
-------- ------------
Total short-term debt...................................... $ 41,493 $ 41,493
-------- ------------
-------- ------------
Long-term debt:
Secured Japanese debt........................................... $ 44,043 $ 44,043
Unsecured senior notes.......................................... 75,000 75,000
-------- ------------
Total long-term debt....................................... 119,043 119,043
-------- ------------
Stockholders' equity:
Preferred Stock; $0.01 par value; 1,000 shares authorized;
no shares issued............................................. -- --
Common Stock; $0.01 par value; 100,000 shares authorized(2);
80,674 shares issued and outstanding;
82,674 shares outstanding as adjusted........................ 807 827
Additional paid-in capital...................................... 256,679 347,341
Retained earnings............................................... 369,621 369,621
Cumulative translation adjustments.............................. 13,648 13,648
-------- ------------
Total stockholders' equity.............................. 640,755 731,437
-------- ------------
Total capitalization.................................... $759,798 $850,480
-------- ------------
-------- ------------
</TABLE>
- ---------------
(1) The Company intends to concurrently offer to the public $100,000,000 of
unsecured senior notes with a ten year maturity. For a description of
certain terms of the senior notes, see "Description of Debt Securities" in
the accompanying Prospectus. If the sale of the senior notes is consummated,
the Company's Unsecured senior notes, Total long-term debt and Total
capitalization, each as adjusted, will increase to $175,000,000,
$219,043,000 and $950,480,000, respectively. No assurances can be given that
the sale of the senior notes will occur.
(2) Of the authorized shares, as of January 30, 1994, an aggregate of
approximately 7,176,000 shares were reserved for issuance upon exercise of
outstanding options and an aggregate of approximately 3,662,000 shares were
available for future grants under the Company's stock option plans.
S-7
<PAGE> 24
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended October 31, 1993 have
been derived from the consolidated financial statements of the Company, which
have been audited by Price Waterhouse, independent accountants. The selected
consolidated financial data presented below as of January 30, 1994 and January
31, 1993, and for each of the five fiscal quarters ended January 30, 1994 have
been derived from unaudited interim consolidated financial information of the
Company. In the opinion of management, the unaudited interim consolidated
financial information have been prepared on the same basis as the audited
consolidated financial statements and include all adjustments, consisting of
only normal recurring adjustments, necessary to fairly state the information set
forth therein. The results of operations for the three months ended January 30,
1994 are not necessarily indicative of the results to be expected for the fiscal
year ending October 30, 1994. This data should be read in conjunction with the
more detailed information and consolidated financial statements and notes
thereto incorporated by reference in the accompanying Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------- FISCAL YEAR ENDED(1)
JAN. 30, JAN. 31, ------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- -------- ---------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(2):
Net sales........................................ $ 340,449 $215,574 $1,080,047 $751,383 $638,606 $567,130 $501,846
Costs and expenses:
Cost of products sold.......................... 184,470 123,967 604,363 443,179 370,025 302,001 257,149
Research, development and engineering.......... 39,238 30,185 140,161 109,196 102,665 97,066 72,296
Marketing and selling.......................... 34,033 23,384 107,275 78,141 70,416 68,238 56,159
General and administrative..................... 19,732 13,456 64,379 48,242 42,812 40,875 32,776
Other, net..................................... 655 903 2,875 4,249 3,316 3,116 2,885
---------- -------- ---------- -------- -------- -------- --------
Income from operations........................... 62,321 23,679 160,994 68,376 49,372 55,834 80,581
Interest expense............................... 3,648 3,598 14,206 15,207 13,969 6,717 2,768
Interest income................................ 2,007 1,838 6,770 5,756 4,952 4,967 6,589
---------- -------- ---------- -------- -------- -------- --------
Income from consolidated companies before taxes
and
cumulative effect of accounting change......... 60,680 21,919 153,558 58,925 40,355 54,084 84,402
Provision for income taxes....................... 21,238 7,233 50,674 19,445 14,124 20,011 32,918
---------- -------- ---------- -------- -------- -------- --------
Income from consolidated companies before
cumulative
effect of accounting change.................... 39,442 14,686 102,884 39,480 26,231 34,073 51,484
Equity in net loss of joint venture.............. 2,051 -- 3,189 -- -- -- --
---------- -------- ---------- -------- -------- -------- --------
Income before cumulative effect of accounting
change......................................... 37,391 14,686 99,695 39,480 26,231 34,073 51,484
Cumulative effect of a change in accounting for
income taxes................................... 7,000 -- -- -- -- -- --
---------- -------- ---------- -------- -------- -------- --------
Net income....................................... $ 44,391 $ 14,686 $ 99,695 $ 39,480 $ 26,231 $ 34,073 $ 51,484
---------- -------- ---------- -------- -------- -------- --------
---------- -------- ---------- -------- -------- -------- --------
Earnings per share:
Income before cumulative effect of
accounting change............................ $ 0.45 $ 0.18 $ 1.21 $ 0.54 $ 0.38 $ 0.50 $ 0.77
---------- -------- ---------- -------- -------- -------- --------
---------- -------- ---------- -------- -------- -------- --------
Net income..................................... $ 0.53 $ 0.18 $ 1.21 $ 0.54 $ 0.38 $ 0.50 $ 0.77
---------- -------- ---------- -------- -------- -------- --------
---------- -------- ---------- -------- -------- -------- --------
Average common shares and equivalents............ 83,245 81,592 82,294 72,680 68,900 68,144 67,028
---------- -------- ---------- -------- -------- -------- --------
---------- -------- ---------- -------- -------- -------- --------
BALANCE SHEET DATA (AT PERIOD END):
Cash and short-term investments.................. $ 222,524 $199,627 $ 266,180 $222,670 $140,134 $ 72,016 $107,108
Accounts receivable, net......................... 291,980 179,056 256,020 191,510 152,787 147,267 131,563
Inventories...................................... 177,592 122,405 154,597 110,667 101,471 102,272 77,015
Total current assets............................. 794,340 560,160 775,916 581,797 434,199 366,894 342,944
Property, plant and equipment, net............... 334,296 261,756 327,704 258,521 213,231 181,494 82,127
Total assets..................................... 1,142,197 834,856 1,120,152 853,822 660,756 558,009 433,857
Short-term debt.................................. 41,493 30,918 48,662 33,947 36,704 27,413 14,302
Total current liabilities........................ 359,004 220,038 380,528 248,207 199,988 195,238 142,852
Long-term debt................................... 119,043 116,502 121,076 118,445 123,967 53,611 29,445
Stockholders' equity............................. 640,755 484,903 598,762 474,111 325,454 300,308 254,399
</TABLE>
- ---------------
(1) The Company's fiscal year ends on the last Sunday of October.
(2) Share information and per share data have been restated to reflect a
two-for-one stock split in the form of a 100% stock dividend effective April
6, 1992, and an additional two-for-one stock split in the form of a 100%
stock dividend effective October 5, 1993.
S-8
<PAGE> 25
SELECTED CONSOLIDATED FINANCIAL DATA -- (CONTINUED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED(1)
----------------------------------------------------
JAN. 30, OCT. 31, AUG. 1, MAY 2, JAN. 31,
1994 1993 1993 1993 1993
-------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales............................................. $340,449 $327,411 $281,370 $255,692 $215,574
Costs and expenses:
Cost of products sold............................... 184,470 179,822 155,398 145,176 123,967
Research, development and engineering............... 39,238 39,089 37,058 33,829 30,185
Marketing and selling............................... 34,033 31,623 27,056 25,212 23,384
General and administrative.......................... 19,732 19,228 16,585 15,110 13,456
Other, net.......................................... 655 (568) 1,365 1,175 903
-------- -------- -------- -------- --------
Income from operations................................ 62,321 58,217 43,908 35,190 23,679
Interest expense.................................... 3,648 3,888 3,373 3,347 3,598
Interest income..................................... 2,007 1,935 1,514 1,483 1,838
-------- -------- -------- -------- --------
Income from consolidated companies before taxes and
cumulative effect of accounting change.............. 60,680 56,264 42,049 33,326 21,919
Provision for income taxes............................ 21,238 18,567 13,876 10,998 7,233
-------- -------- -------- -------- --------
Income from consolidated companies before cumulative
effect of accounting change......................... 39,442 37,697 28,173 22,328 14,686
Equity in net loss of joint venture................... 2,051 3,189 -- -- --
-------- -------- -------- -------- --------
Income before cumulative effect of accounting
change.............................................. 37,391 34,508 28,173 22,328 14,686
Cumulative effect of a change in accounting for income
taxes............................................... 7,000 -- -- -- --
-------- -------- -------- -------- --------
Net income............................................ $ 44,391 $ 34,508 $ 28,173 $ 22,328 $ 14,686
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Earnings per share:
Income before cumulative effect of accounting
change........................................... $ 0.45 $ 0.42 $ 0.34 $ 0.27 $ 0.18
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Net income.......................................... $ 0.53 $ 0.42 $ 0.34 $ 0.27 $ 0.18
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Average common shares and equivalents................. 83,245 83,016 82,532 82,034 81,592
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
- ---------------
(1) Share information and per share data have been restated to reflect a
two-for-one stock split in the form of a 100% stock dividend effective
October 5, 1993.
S-9
<PAGE> 26
UNDERWRITING
The Underwriters named below (the "Underwriters") have severally agreed,
subject to the terms and conditions of the Underwriting Agreement (the form of
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part), to purchase from the Company, and the Company has agreed
to sell to each Underwriter, the aggregate number of shares of Common Stock set
forth opposite their respective names below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
---------------------------------------------------------------------- ---------
<S> <C>
Lehman Brothers Inc...................................................
Morgan Stanley & Co. Incorporated.....................................
Cowen & Company.......................................................
Needham & Company, Inc................................................
Robertson, Stephens & Company, L.P....................................
---------
Total....................................................... 2,000,000
---------
---------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters to purchase shares of Common Stock are subject to certain
conditions, and that if any of the foregoing shares of Common Stock are
purchased by the Underwriters pursuant to the Underwriting Agreement, all shares
of Common Stock agreed to be purchased by the Underwriters pursuant to the
Underwriting Agreement, must be so purchased.
The Company has been advised that the Underwriters propose to offer the
shares of Common Stock directly to the public initially at the public offering
price set forth on the cover page of this Prospectus, and to certain selected
dealers (who may include the Underwriters) at such public offering price less a
concession not in excess of $ per share. The Underwriters may allow and
the selected dealers may reallow a concession not in excess of $ per
share to certain other brokers and dealers. After the public offering, the
public offering price, the concession to selected dealers and the reallowance to
other dealers may be changed by the Underwriters.
The Company has granted to the Underwriters an option to purchase up to an
additional 300,000 shares of Common Stock at the public offering price, less the
aggregate underwriting discounts and commissions, shown on the cover page of
this Prospectus Supplement, solely to cover over-allotments, if any. The option
may be exercised at any time up to 30 days after the date of this Prospectus
Supplement. To the extent that the Underwriters exercise such option, each of
the Underwriters will be committed, subject to certain conditions, to purchase a
number of option shares proportionate to such Underwriter's initial commitment.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in respect thereof.
The Company has agreed that without the written consent of the
Underwriters, it will not offer, sell, contract to sell or otherwise dispose of
any shares of Common Stock or any securities, convertible or exchangeable
therefor, for a period of 90 days from the date of this Prospectus Supplement,
subject to limited exceptions.
From time to time, certain of the Underwriters or their affiliates have
provided, and may continue to provide, investment banking services to the
Company.
Certain of the Underwriters and selling group members (if any) that
currently act as market makers for the Common Stock may engage in "passive
market making" in the Common Stock on Nasdaq in accordance with Rule 10b-6A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Rule
10b-6A permits, upon the satisfaction of certain conditions, underwriters and
selling group members participating in a distribution that are also Nasdaq
market makers in the security being distributed to engage in limited market
making transactions during the period when Rule 10b-6 under the Exchange Act
would otherwise prohibit such activity. Rule 10b-6A prohibits underwriters and
selling group members engaged in
S-10
<PAGE> 27
passive market making generally from entering a bid or effecting a purchase at a
price that exceeds the highest bid for those securities displayed on Nasdaq by a
market maker that is not participating in the distribution. Under Rule 10b-6A
each underwriter or selling group member engaged in passive market making is
subject to a daily net purchase limitation equal to 30% of such entity's average
daily trading volume during the two full consecutive calendar months immediately
preceding the date of the filing of the registration statement under the
Securities Act pertaining to the security to be distributed.
S-11
<PAGE> 28
- ---------------------------------------------------------
- ---------------------------------------------------------
NO DEALER, SALESPERSON, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED
HEREIN OR THEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE
UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR COMMON STOCK
SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
---------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company............................. S-3
Use of Proceeds......................... S-6
Price Range of Common Stock............. S-6
Dividend Policy......................... S-6
Capitalization.......................... S-7
Selected Consolidated Financial Data.... S-8
Underwriting............................ S-10
PROSPECTUS
Available Information................... 2
Information Incorporated by Reference... 2
The Company............................. 3
Use of Proceeds......................... 3
Selected Consolidated Financial Data.... 4
Description of Debt Securities.......... 5
Description of Capital Stock............ 12
Plan of Distribution.................... 16
Legal Opinions.......................... 16
Experts................................. 16
- ----------------------------------------------
- ----------------------------------------------
</TABLE>
- ---------------------------------------------------------
- ---------------------------------------------------------
2,000,000 SHARES
[LOGO]
APPLIED MATERIALS
COMMON STOCK
---------------------------
PROSPECTUS SUPPLEMENT
MARCH , 1994
---------------------------
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
COWEN & COMPANY
NEEDHAM & COMPANY, INC.
ROBERTSON, STEPHENS & COMPANY
- ---------------------------------------------------------
- ---------------------------------------------------------
<PAGE> 29
PROSPECTUS
[LOGO]
APPLIED MATERIALS
DEBT SECURITIES AND COMMON STOCK
------------------------
Applied Materials, Inc. ("Applied Materials" or the "Company") from time to
time may offer its debt securities consisting of senior debentures, notes, bonds
and/or other evidences of indebtedness in one or more series ("Debt Securities")
and shares of Common Stock, $.01 par value, of the Company ("Common Stock") with
an aggregate initial public offering price of up to $250,000,000 or the
equivalent thereof in one or more foreign currencies or composite currencies,
including European Currency Units ("ECU"). The Debt Securities and the Common
Shares (collectively, the "Securities") may be offered, separately or together,
in separate series in amounts, at prices, and on terms to be set forth in a
supplement to this Prospectus (a "Prospectus Supplement").
The Securities may be sold for U.S. Dollars, one or more foreign currencies
or amounts determined by reference to an index and the principal of and any
interest on the Debt Securities may likewise be payable in U.S. Dollars, one or
more foreign currencies or amounts determined by reference to an index.
The Debt Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. See "Description of Debt Securities."
The specific terms of the Securities in respect of which this Prospectus is
being delivered, such as where applicable, (i) in the case of Debt Securities,
the specific designation, aggregate principal amount, currency, denomination,
maturity, premium, rate (or manner of calculation thereof) and time of payment
of interest, terms for redemption at the option of the Company or the holder or
for sinking fund payments, and the initial public offering price and (ii) in the
case of Common Stock, the number of shares and the initial public offering price
or method of determining the initial public offering price, will be set forth in
an accompanying Prospectus Supplement. See "Description of Debt Securities" and
"Description of Capital Stock."
The Securities may be sold through underwriting syndicates led by one or
more managing underwriters or through one or more underwriters acting alone. The
Securities may also be sold directly by the Company or through agents designated
from time to time. If any underwriters or agents are involved in the sale of the
Securities, their names, the principal amount of Securities to be purchased by
them and any applicable fee, commission or discount arrangements with them will
be set forth in the Prospectus Supplement. See "Plan of Distribution."
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS , 1994.
<PAGE> 30
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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such 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
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington D.C. 20549, and
at Regional Offices of the Commission located at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661 and at Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington D.C. 20549, at prescribed rates. Such reports, proxy
statements and other information may also be inspected at the offices of the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington D.C. 20006.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (the "Registration Statement") of which this
Prospectus is a part, including exhibits relating thereto, which has been filed
with the Commission in Washington, D.C. Statements made in this Prospectus as to
the contents of any referenced contract, agreement or other document are not
necessarily complete, and each such statement shall be deemed qualified in its
entirety by reference thereto. Copies of the Registration Statement and the
exhibits and schedules thereto may be obtained, upon payment of the fee
prescribed by the Commission, or may be examined without charge, at the office
of the Commission.
INFORMATION INCORPORATED BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
October 31, 1993 (which incorporates by reference portions of the Company's
definitive Proxy Statement dated January 28, 1994 for the Company's Annual
Meeting of Stockholders to be held on March 3, 1994 and portions of its
1993 Annual Report to Stockholders for the year ended October 31, 1993);
(b) The Company's Quarterly Report on Form 10-Q for quarter ended
January 30, 1994; and
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form 10, dated March 14, 1973 and the description
of the Common Stock Purchase Rights contained in its Registration Statement
on Form 8-A, dated June 15, 1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus.
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 the Registration Statement or this Prospectus to the extent that
a statement contained herein, in a Prospectus Supplement or in any other
document subsequently filed with the Commission which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superceded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed to
Director, Investor Relations, Applied Materials, Inc., 3050 Bowers Avenue, Santa
Clara, California 95054-3299; telephone number (408) 727-5555.
2
<PAGE> 31
THE COMPANY
Applied Materials, Inc. ("Applied Materials" or the "Company") develops,
manufactures, markets and services semiconductor wafer fabrication equipment and
related spare parts for the worldwide semiconductor industry. The Company's
customers include both companies which manufacture semiconductor devices for use
in their own products and companies which manufacture semiconductor devices for
sale to others. The Company operates exclusively in the semiconductor wafer
fabrication equipment industry. The Company is also a fifty percent stockholder
in Applied Komatsu Technology, Inc., which produces thin film transistor
fabrication systems for flat panel displays.
Applied Materials' products are sophisticated systems requiring
state-of-the-art technology in wafer processing chemistry and physics,
particulate control, automation, software and microprocessor control. Many of
these technologies are complementary and can be applied across all of the
Company's products. The Company's products are focused on providing enabling
technology, productivity and yield enhancements to the customer. The Company's
products are used in part of the process of fabricating semiconductor devices on
a substrate of semiconductor material (usually silicon). A finished device
consists of thin film layers which can form anywhere from one to millions of
tiny electronic components that combine to perform desired electrical functions.
The fabrication process must control film and feature quality to ensure proper
device performance while meeting yield and process throughput goals. The Company
currently manufactures equipment that addresses three major steps in wafer
fabrication: deposition, etch and ion implantation.
The Company was incorporated in California in 1967 and reincorporated in
Delaware in 1987. Its principal executive offices are located at 3050 Bowers
Avenue, Santa Clara, California 95054-3299 (telephone number (408) 727-5555).
References to the Company or to Applied Materials shall mean Applied Materials,
Inc. and its consolidated subsidiaries, unless the context requires otherwise.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Securities will be used for general corporate purposes. Although the Company has
no current specific plans for the proceeds of the sale of the Securities, it
believes that success in its industry requires substantial financial strength
and flexibility. In addition, the Company from time to time considers
acquisitions of complementary businesses, assets or technologies, and although
there are no current agreements or understandings with respect to any such
acquisition, the Company desires to be able to respond to opportunities as they
arise. The Company is not negotiating, discussing or planning any potential
acquisition at this time. Pending such uses, the Company will invest the net
proceeds in investment-grade, interest-bearing securities.
3
<PAGE> 32
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data presented below for, and as of the
end of, each of the years in the five-year period ended October 31, 1993 have
been derived from the consolidated financial statements of the Company, which
have been audited by Price Waterhouse, independent accountants. The selected
consolidated financial data presented below as of and for the three-month
periods ended January 30, 1994 and January 31, 1993, have been derived from
unaudited interim consolidated financial information of the Company. In the
opinion of management, the unaudited interim consolidated financial information
have been prepared on the same basis as the audited consolidated financial
statements and include all adjustments, consisting of only normal recurring
adjustments, necessary to fairly state the information set forth therein. The
results of operations for the three months ended January 30, 1994 are not
necessarily indicative of the results to be expected for the fiscal year ending
October 30, 1994. This data should be read in conjunction with the more detailed
information and consolidated financial statements and the notes thereto
incorporated by reference in the accompanying Prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------- FISCAL YEAR ENDED(1)
JANUARY 30, JANUARY 31, ------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------------ ------------ ---------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(2):
Net sales.................................. $ 340,449 $215,574 $1,080,047 $751,383 $638,606 $567,130 $501,846
Costs and expenses:
Cost of products sold.................... 184,470 123,967 604,363 443,179 370,025 302,001 257,149
Research, development and engineering.... 39,238 30,185 140,161 109,196 102,665 97,066 72,296
Marketing and selling.................... 34,033 23,384 107,275 78,141 70,416 68,238 56,159
General and administrative............... 19,732 13,456 64,379 48,242 42,812 40,875 32,776
Other, net............................... 655 903 2,875 4,249 3,316 3,116 2,885
------------ ------------ ---------- -------- -------- -------- --------
Income from operations..................... 62,321 23,679 160,994 68,376 49,372 55,834 80,581
Interest expense......................... 3,648 3,598 14,206 15,207 13,969 6,717 2,768
Interest income.......................... 2,007 1,838 6,770 5,756 4,952 4,967 6,589
------------ ------------ ---------- -------- -------- -------- --------
Income from consolidated companies before
taxes and
cumulative effect of accounting change... 60,680 21,919 153,558 58,925 40,355 54,084 84,402
Provision for income taxes................. 21,238 7,233 50,674 19,445 14,124 20,011 32,918
------------ ------------ ---------- -------- -------- -------- --------
Income from consolidated companies before
cumulative
effect of accounting change.............. 39,442 14,686 102,884 39,480 26,231 34,073 51,484
Equity in net loss of joint venture........ 2,051 -- 3,189 -- -- -- --
------------ ------------ ---------- -------- -------- -------- --------
Income before cumulative effect of
accounting change........................ 37,391 14,686 99,695 39,480 26,231 34,073 51,484
Cumulative effect of a change in accounting
for income taxes......................... 7,000 -- -- -- -- -- --
------------ ------------ ---------- -------- -------- -------- --------
Net income................................. $ 44,391 $ 14,686 $ 99,695 $ 39,480 $ 26,231 $ 34,073 $ 51,484
------------ ------------ ---------- -------- -------- -------- --------
------------ ------------ ---------- -------- -------- -------- --------
Earnings per share:
Income before cumulative effect of
accounting change...................... $ 0.45 $ 0.18 $ 1.21 $ 0.54 $ 0.38 $ 0.50 $ 0.77
------------ ------------ ---------- -------- -------- -------- --------
------------ ------------ ---------- -------- -------- -------- --------
Net income............................... $ 0.53 $ 0.18 $ 1.21 $ 0.54 $ 0.38 $ 0.50 $ 0.77
------------ ------------ ---------- -------- -------- -------- --------
------------ ------------ ---------- -------- -------- -------- --------
Average common shares and equivalents...... 83,245 81,592 82,294 72,680 68,900 68,144 67,028
------------ ------------ ---------- -------- -------- -------- --------
------------ ------------ ---------- -------- -------- -------- --------
RATIO OF EARNINGS TO FIXED CHARGES(3)...... 10.70x 4.83x 7.61x 3.63x 3.02x 5.89x 15.42x
BALANCE SHEET DATA (AT PERIOD END):
Cash and short-term investments............ $ 222,524 $199,627 $ 266,180 $222,670 $140,134 $ 72,016 $107,108
Accounts receivable, net................... 291,980 179,056 256,020 191,510 152,787 147,267 131,563
Inventories................................ 177,592 122,405 154,597 110,667 101,471 102,272 77,015
Total current assets....................... 794,340 560,160 775,916 581,797 434,199 366,894 342,944
Property, plant and equipment, net......... 334,296 261,756 327,704 258,521 213,231 181,494 82,127
Total assets............................... 1,142,197 834,856 1,120,152 853,822 660,756 558,009 433,857
Short-term debt............................ 41,493 30,918 48,662 33,947 36,704 27,413 14,302
Total current liabilities.................. 359,004 220,038 380,528 248,207 199,988 195,238 142,852
Long-term debt............................. 119,043 116,502 121,076 118,445 123,967 53,611 29,445
Stockholders' equity....................... 640,755 484,903 598,762 474,111 325,454 300,308 254,399
</TABLE>
- ---------------
(1) The Company's fiscal year ends on the last Sunday of October.
(2) Share information and per share data have been restated to reflect a
two-for-one stock split in the form of a 100% stock dividend effective April
6, 1992, and an additional two-for-one stock split in the form of a 100%
stock dividend effective October 5, 1993.
(3) For the purpose of calculating the ratio of earnings to fixed charges, (i)
earnings consists of income before taxes and cumulative effect of accounting
change plus fixed charges and (ii) fixed charges consists of interest
expense incurred, amortization of debt issuance expense and the portion of
rental expense under operating leases deemed by the Company to be
representative of the interest factor.
4
<PAGE> 33
DESCRIPTION OF DEBT SECURITIES
The following statements with respect to the Debt Securities are summaries
of, and subject to, the detailed provisions of an indenture (the "Indenture") to
be entered into by the Company and Harris Trust Company of California, as
trustee (the "Trustee"), a copy of which is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all of the provisions of the Indenture,
including the definitions therein of certain terms. Wherever particular Sections
or defined terms of the Indenture are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated herein or therein by
reference. Section and Article references used herein are references to the
Indenture.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any Prospectus
Supplement or Prospectus Supplements will be described in such Prospectus
Supplement or Prospectus Supplements relating to such series.
GENERAL
The Indenture will not limit the aggregate amount of Debt Securities which
may be issued thereunder and Debt Securities may be issued thereunder from time
to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series. The Debt Securities will be senior
unsecured obligations of the Company.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the series of Debt Securities in respect of
which this Prospectus is being delivered: (1) the title of the Debt Securities;
(2) any limit on the aggregate principal amount of the Debt Securities; (3) the
Person to whom any interest on an Debt Security shall be payable, if other than
the person in whose name that Debt Security is registered on the Regular Record
Date; (4) the date or dates on which the principal of the Debt Securities will
be payable; (5) the rate or rates at which the Debt Securities will bear
interest, if any, or the method by which such rate or rates are determined, the
date or dates from which such interest will accrue, the Interest Payment Dates
on which any such interest on the Debt Securities will be payable and the
Regular Record Date for any interest payable on any Interest Payment Date, and
the basis upon which interest will be calculated if other than that of a 360-day
year of twelve 30-day months; (6) the place or places where the principal of and
any premium and interest on the Debt Securities will be payable; (7) the period
or periods within which, the price or prices at which, and the terms and
conditions upon which the Debt Securities may be redeemed, in whole or in part,
at the option of the Company; (8) the obligation of the Company, if any, to
redeem or repurchase the Debt Securities pursuant to any sinking fund or
analogous provisions or at the option of the Holders and the period or periods
within which, the price or prices at which and the terms and conditions upon
which such Debt Securities shall be redeemed or purchased, in whole or in part,
pursuant to such obligation, and any provisions for the remarketing of such Debt
Securities; (9) the denominations in which any Debt Securities will be issuable,
if other than denominations of $1,000 and any integral multiple thereof; (10)
the currency, currencies or currency units in which payment of principal of and
any premium and interest on any Debt Securities shall be payable if other than
United States dollars; (11) any index, formula or other method used to determine
the amount of payments of principal of and any premium and interest on the Debt
Securities; (12) if the principal of or any premium or interest on any Debt
Securities is to be payable, at the election of the Company or the Holders, in
one or more currencies or currency units other than that or those in which such
Debt Securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on such
Debt Securities shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made; (13) if other than the
principal amount thereof, the portion of the principal amount of the Debt
Securities which will be payable upon declaration of the acceleration of the
Maturity thereof; (14) the applicability of any provisions described under
"Defeasance and Covenant Defeasance"; (15) whether any of the Debt Securities
are to be issuable in permanent global form and, if so, the Depositary or
Depositaries for such Global Security and the terms and conditions, if any, upon
which interests in such Debt Securities in global form may be exchanged, in
whole or in part, for the individual Debt Securities represented thereby; (16)
any Events of Default, with respect to the
5
<PAGE> 34
Debt Securities of such series, if not otherwise set forth under "Events of
Default"; and (17) any other terms of the Debt Securities not inconsistent with
the provisions of the Indenture. (Section 301)
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount from their principal amount. (Section 301) United
States Federal income tax consequences and other special considerations
applicable to any such Original Issue Discount Securities will be described in
the Prospectus Supplement relating thereto.
If any of the Debt Securities are sold for any foreign currency or currency
unit or if principal of, premium, if any, or interest, if any, on any of the
Debt Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such Debt Securities and such foreign currency or currency unit
will be specified in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium, if any, and interest, if any, on the Debt Securities will
be payable, and the exchange of and the transfer of Debt Securities will be
registrable, at the office or agency of the Company maintained for such purpose
and at any other office or agency maintained for such purpose. (Sections 305 and
1002) Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities will be issued in denominations of $1,000 or integral multiples
thereof. (Section 302) No service charge will be made for any registration of
transfer or exchange of Debt Securities, but the Company may require payment of
a sum sufficient to cover any tax or other governmental charge imposed in
connection therewith. (Section 305)
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium, if any, or interest, if any, on any Debt Security which
remain unclaimed for two years after such principal, premium, or interest has
become due and payable may be repaid to the Company, and thereafter the Holder
of such Debt Security may look only to the Company for payment thereof. (Section
1003)
In the event of any redemption, the Company shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Debt Securities of that series to be
redeemed and ending at the close of business on the day of such mailing or (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part. (Section 305)
GLOBAL SECURITIES
If any Debt Securities of a series are issuable as Global Securities, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such Global Security may exchange
such interests for Debt Securities of such series and of like tenor and
principal amount of any authorized form and denomination. Principal of and any
premium and interest on a Global Security will be payable in the manner
described in the Prospectus Supplement relating thereto.
COVENANTS OF THE COMPANY
Except as set forth below or as otherwise provided in the applicable
Prospectus Supplement with respect to any series of Debt Securities, the Company
is not restricted by the Indenture from incurring, assuming or becoming liable
for any type of debt or other obligations, from paying dividends or making
distributions on its capital stock or purchasing or redeeming its capital stock.
The Indenture does not require the maintenance of any financial ratios or
specified levels of net worth or liquidity. In addition, the Indenture does not
contain any provision that would require the Company to repurchase or redeem or
otherwise modify the terms or any of its Debt Securities upon a change in
control or other events involving the Company which may adversely affect the
creditworthiness of the Debt Securities.
6
<PAGE> 35
Unless otherwise indicated in the applicable Prospectus Supplement, certain
covenants contained in the Indenture which are summarized below will be
applicable (unless waived or amended) to the series of Debt Securities to which
such Prospectus Supplement relates so long as any of the Debt Securities of such
series are outstanding.
Limitations on Liens. The Company covenants that it will not issue, incur,
create, assume or guarantee, and will not permit any Restricted Subsidiary to
issue, incur, create, assume or guarantee, any debt for borrowed money secured
by a mortgage, security interest, pledge, lien, charge or other encumbrance
("mortgages") upon any Principal Property of the Company or any Restricted
Subsidiary or upon any shares of stock or indebtedness of any Restricted
Subsidiary (whether such Principal Property, shares or indebtedness are now
existing or owed or hereafter created or acquired) without in any such case
effectively providing concurrently with the issuance, incurrence, creation,
assumption or guaranty of any such secured debt that the Debt Securities
(together with, if the Company shall so determine, any other indebtedness of or
guarantee by the Company or such Restricted Subsidiary ranking equally with the
Debt Securities) shall be secured equally and ratably with (or, at the option of
the Company, prior to) such secured debt. The foregoing restriction, however,
will not apply to: (a) mortgages on property, shares of stock or indebtedness or
other assets of any corporation existing at the time such corporation becomes a
Restricted Subsidiary, provided that such mortgages or liens are not incurred in
anticipation of such corporation becoming a Restricted Subsidiary; (b)(i)
mortgages on property, shares of stock, indebtedness or other assets existing at
the time of acquisition thereof by the Company or a Restricted Subsidiary or
mortgages thereon to secure the payment of all or any part of the purchase price
thereof, or (ii) mortgages on property, shares of stock, indebtedness or other
assets to secure any indebtedness for borrowed money incurred prior to, at the
time of, or within 270 days after, the latest of the acquisition thereof, or, in
the case of property, the completion of construction, the completion of
improvements or the commencement of substantial commercial operation of such
property for the purpose of financing all or any part of the purchase price
thereof, such construction or the making of such improvements; (c) mortgages to
secure indebtedness owing to the Company or to a Restricted Subsidiary; (d)
mortgages existing at the date of the initial issuance of the Securities of such
series; (e) mortgages on property or other assets of a corporation existing at
the time such corporation is merged into or consolidated with the Company or a
Restricted Subsidiary or at the time of a sale, lease or other disposition of
the properties of a corporation as an entirety or substantially as an entirety
to the Company or a Restricted Subsidiary, provided that such mortgage was not
incurred in anticipation of such merger or consolidation or sale, lease or other
disposition; (f) mortgages in favor of the United States of America or any
State, territory or possession thereof (or the District of Columbia), or any
department, agency, instrumentality or political subdivision of the United
States of America or any State, territory or possession thereof (or the District
of Columbia), to secure partial, progress, advance or other payments pursuant to
any contract or statute or to secure any indebtedness incurred for the purpose
of financing all or any part of the purchase price or the cost of constructing
or improving the property subject to such mortgages; or (g) extensions, renewals
or replacements of any mortgage referred to in the foregoing clauses (a) through
(f); provided, however, that any mortgages permitted by any of the foregoing
clauses (a) through (f) shall not extend to or cover any property of the Company
or such Restricted Subsidiary, as the case may be, other than the property
specified in such clauses and improvements thereto. (Section 1008)
Notwithstanding the restrictions outlined in the preceding paragraph, the
Company or any Restricted Subsidiary will be permitted to issue, incur, create,
assume or guarantee debt secured by a mortgage which would otherwise be subject
to such restrictions, without equally and ratably securing the Debt Securities,
provided that after giving effect thereto, the aggregate amount of all debt so
secured by mortgages (not including mortgages permitted under clauses (a)
through (g) above) does not exceed 5% of the Consolidated Net Tangible Assets of
the Company. (Section 1008)
Limitations on Sale and Lease-Back Transactions. The Company covenants
that it will not, nor will it permit any Restricted Subsidiary to, enter into
any Sale and Lease-Back Transaction with respect to any Principal Property,
other than any such transaction involving a lease for a term of not more than
three years or any such transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries, unless: (a) the Company or such
Restricted Subsidiary would be entitled to incur indebtedness secured by a
7
<PAGE> 36
mortgage on the Principal Property involved in such transaction at least equal
in amount to the Attributable Debt with respect to such sale and lease-back
transaction, without equally and ratably securing the Debt Securities, pursuant
to the limitation in the Indenture on liens; or (b) the Company shall apply an
amount equal to the greater of the net proceeds of such sale or the Attributable
Debt with respect to such sale and lease-back transaction within 180 days of
such sale to either (or a combination of) the retirement (other than any
mandatory retirement, mandatory prepayment or sinking fund payment or by payment
at maturity) of debt for borrowed money of the Company or a Restricted
Subsidiary that matures more than twelve months after the creation of such
indebtedness or the purchase, construction or development of other comparable
property. (Section 1009)
Certain Definitions Applicable to Covenants. The term "Attributable Debt"
when used in connection with a Sale and Lease-Back Transaction involving a
Principal Property shall mean, at the time of determination, the lesser of: (a)
the fair value of such property (as determined in good faith by the Board of
Directors of the Company); or (b) the present value of the total net amount of
rent required to be paid under such lease during the remaining term thereof
(including any renewal term or period for which such lease has been extended),
discounted at the rate of interest set forth or implicit in the terms of such
lease or, if not practicable to determine such rate, the weighted average
interest rate per annum borne by the Debt Securities of each series outstanding
pursuant to the Indenture compounded semi-annually. For purposes of the
foregoing definition, rent shall not include amounts required to be paid by the
lessee, whether or not designated as rent or additional rent, on account of or
contingent upon maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall be the lesser of the
net amount determined assuming termination upon the first date such lease may be
terminated (in which case the net amount shall also include the amount of the
penalty, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) or the net
amount determined assuming no such termination.
The term "Consolidated Net Tangible Assets" shall mean, as of any
particular time, the aggregate amount of assets (less applicable reserves and
other properly deductible items) after deducting therefrom: (a) all current
liabilities, except for (1) notes and loans payable, (2) current maturities of
long-term debt and (3) current maturities of obligations under capital leases;
and (b) certain intangible assets, to the extent included in said aggregate
amount of assets, all as set forth on the most recent consolidated balance sheet
of the Company and its consolidated subsidiaries and computed in accordance with
generally accepted accounting principles.
The term "Principal Property" shall mean the land, land improvements,
buildings and fixtures (to the extent they constitute real property interests)
(including any leasehold interest therein) constituting the principal corporate
office, any manufacturing plant or any manufacturing facility (whether now owned
or hereafter acquired) and the equipment located thereon which: (a) is owned by
the Company or any Subsidiary; (b) is located within any of the present 50
States of the United States of America (or the District of Columbia); (c) has
not been determined in good faith by the Board of Directors of the Company not
to be materially important to the total business conducted by the Company and
its Subsidiaries taken as a whole; and (d) has a book value on the date as of
which the determination is being made in excess of 0.75% of Consolidated Net
Tangible Assets of the Company as most recently determined on or prior to such
date (including for purposes of such calculation the land, land improvements,
buildings and such fixtures compromising such office, plant or facilities, as
the case may be).
The term "Restricted Subsidiary" shall mean any Subsidiary which owns any
Principal Property; provided, however, that the term "Restricted Subsidiary"
shall not include any Subsidiary which is principally engaged in financing
receivables, or which is principally engaged in financing the Company's
operations outside the United States of America; and provided, further, that the
term "Restricted Subsidiary" shall not include any Subsidiary less than 80% of
the voting stock of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries if the common stock of such Subsidiary is traded on any national
securities exchange or quoted on the Nasdaq National Market or in the
over-the-counter market.
8
<PAGE> 37
The term "Sale and Lease-Back Transaction" shall mean any arrangement with
any Person providing for the leasing by the Company or any Restricted Subsidiary
of any Principal Property which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person.
The term "Subsidiary" shall mean any corporation of which at least 66 2/3%
of the outstanding stock having the voting power to elect a majority of the
board of directors of such corporation is at the time owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition,
"voting stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock has
such voting power by reason of any contingency.
DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that, if such provision is made applicable to the
Debt Securities of any series pursuant to the provisions of the Indenture, the
Company may elect (i) 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 (ii) (A) to
omit to comply with certain restrictive covenants in Sections 1005 through 1009
(including the covenants referred to above under "Covenants of the Company") and
(B) to deem the occurrence of any event referred to in clauses (d) (with respect
to Sections 1005 through 1009 inclusive) and (f) under "Events of Default" below
not to be or result in an Event of Default if, in each case with respect to the
Outstanding Debt Securities of such series as provided in Section 1303 on or
after the date the conditions set forth in Section 1304 are satisfied ("covenant
defeasance"), in either case upon the deposit with the Trustee (or other
qualifying trustee), in trust, of money and/or U.S. Government Obligations,
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 any premium and interest on the Debt Securities of such
series on the respective Stated Maturities and any mandatory sinking fund
payments or analogous payments on the days payable, in accordance with the terms
of the 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 Trustee
an Opinion of Counsel to the effect that the Holders of the Outstanding Debt
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit, 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, defeasance or covenant defeasance had not occurred. Such opinion, in
the case of defeasance under clause (i) above, must refer to and be based upon a
ruling of the Internal Revenue Service or a change in applicable Federal income
tax laws occurring after the date of the Indenture. The Prospectus Supplement
relating to a series may further describe the provisions, if any, permitting
such defeasance or covenant defeasance with respect to the Debt Securities of a
particular series. (Article Thirteen)
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series (unless such event
is specifically inapplicable to a particular series as described in the
Prospectus Supplement relating thereto): (a) failure to pay any interest on any
Debt Security of that series when due, continued for 30 days; (b) failure to pay
principal of or any premium on any Debt Security of that series when due; (c)
failure to deposit any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the Indenture (other than a covenant included in the Indenture solely
for the benefit of a series of Debt Securities other than that series),
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization involving the
Company; (f)(i) failure of the Company to make any payment at maturity,
including any applicable grace period, in respect of indebtedness, which term as
used in the Indenture means obligations (other than non-recourse obligations or
the Debt Securities of such series) of the Company for borrowed money or
evidenced by bonds, debentures, notes or similar instruments ("Indebted-
9
<PAGE> 38
ness") in an amount in excess of $10,000,000 and continuance of such failure or
(ii) a default with respect to any Indebtedness, which default results in the
acceleration of Indebtedness in an amount in excess of $10,000,000 without such
Indebtedness having been discharged or such acceleration having been cured,
waived, rescinded or annulled, in the case of (i) or (ii) above, for a period of
30 days after written notice thereof to the Company by the Trustee or to the
Company and the Trustee by the holders of not less than 15% in principal amount
of Debt Securities of such series; provided, however, that if any such failure,
default or acceleration referred to in (i) or (ii) above shall cease or be
cured, waived, rescinded or annulled, then the Event of Default by reason
thereof shall be deemed likewise to have been thereupon cured; and (g) any other
Event of Default provided with respect to Debt Securities of that series.
(Section 501)
Subject to the provisions of the Indenture relating to the duties of the
Trustee during default to act with the required standard of care, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity. (Sections 601 and 603)
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in principal amount of the Outstanding Debt Securities of any
series will have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee, with respect to the Debt Securities of that
series. (Section 512)
The Indenture provides that the Company will deliver to the Trustee, within
120 days after the end of each fiscal year, a brief certificate from the
principal executive, financial or accounting officer of the Company as to his or
her knowledge of the Company's compliance (without regard to any period of grace
or requirement of notice) with all conditions and covenants of the Indenture.
(Section 1004)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in principal amount of the Outstanding Debt Securities of that
series by notice as provided in the Indenture may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Debt Securities of that series to be due and
payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment or
decree for payment of money has been obtained by the Trustee, the Holders of a
majority in principal amount of the Outstanding Debt Securities of that series
may, under certain circumstances, rescind and annul such acceleration. (Section
502)
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default and unless the Holders of at
least 25% in principal amount of the Outstanding Debt Securities of that series
shall have made written request, and offered reasonable indemnity, to the
Trustee to institute such proceeding as trustee, and the Trustee shall not have
received from the Holders of a majority in principal amount of the Outstanding
Debt Securities of that series a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days. (Section 507)
However, such limitations generally do not apply to a suit instituted by a
Holder of a Debt Security for the enforcement of payment of the principal or
interest on such Debt Security on or after the respective due dates expressed in
such Debt Security. (Section 508)
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment; provided, however that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security, (b) reduce
the principal amount of, rate of interest on or any premium payable upon the
redemption of any Debt Security, (c) reduce the amount of principal of an
Original Issue Discount Security payable upon acceleration of the Maturity
thereof, (d) change the Place of Payment where, or the coin or currency in
10
<PAGE> 39
which, any Debt Security or any premium or interest thereon is payable, (e)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security after the Stated Maturity, Redemption Date or
Repayment Date, (f) reduce the percentage in principal amount of Outstanding
Debt Securities of any series, the consent of whose Holders is required for
modification or amendment of the Indenture or for waiver of compliance with
certain provisions of the Indenture or for waiver of certain defaults, or (g)
modify any of the provisions set forth in this paragraph except to increase any
such percentage or to provide that certain other provisions of the Indenture may
not be modified or waived without the consent of the Holder of each Outstanding
Debt Security affected thereby. (Section 902)
The Holders of at least a majority in principal amount of the Outstanding
Debt Securities of each series may, on behalf of the Holders of all the Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(Section 1010) The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of each series may, on behalf of all Holders of
Debt Securities of that series and any coupons appertaining thereto, waive any
past default under the Indenture with respect to Debt Securities of that series,
except a default (a) in the payment of principal of or any premium or interest
on any Debt Security of such series or (b) in respect of a covenant or provision
of the Indenture which cannot be modified or amended without the consent of the
Holder of each Outstanding Debt Security of such series affected. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver thereunder
or whether a quorum is present at a meeting of Holders of Debt Securities (i)
the principal amount of an Original Issue Discount Security that shall be deemed
to be Outstanding shall 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 Debt Security denominated in
other than U.S. dollars shall be the U.S. dollar equivalent, determined on the
date of original issuance of such Debt Security, of the principal amount of such
Debt Security (or, in the case of an Original Issue Discount Security, the U.S.
dollar equivalent on the date of original issuance of such Debt Security of the
amount determined as provided in (i) above of such Debt Security) and (iii) Debt
Securities owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any Person which
is a corporation, partnership or trust organized and validly existing under the
laws of any domestic jurisdiction, provided that any successor Person expressly
assumes the Company's obligations on the Debt Securities and under the Indenture
and that, after giving effect to the transaction, no Event of Default, and no
event which, after notice or lapse of time, would become an Event of Default,
shall have occurred and be continuing, and that certain other conditions are
met. (Section 801)
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of Debt
Securities will be given by mail to the addresses of such Holders as they appear
in the Debt Security Register. (Section 106)
TITLE
Prior to due presentment of a Debt Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Debt Security is registered as the owner of such
Debt Security for the purpose of receiving payment of principal of and any
premium and any interest (other than Defaulted Interest or as otherwise provided
in the applicable Prospectus Supplement) on such Debt Security and for all other
purposes whatsoever, whether or not such Debt Security be overdue, and neither
the Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary. (Section 308)
11
<PAGE> 40
REPLACEMENT OF DEBT SECURITIES
Any mutilated Debt Security will be replaced by the Company at the expense
of the Holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, stolen or lost will be replaced by the Company
at the expense of the Holder upon delivery to the Trustee of the Debt Security
or evidence of the destruction, loss or theft thereof satisfactory to the
Company and the Trustee. In the case of a destroyed, lost or stolen Debt
Security, an indemnity satisfactory to the Trustee and the Company may be
required at the expense of the Holder of such Debt Security before a replacement
Debt Security will be issued. (Section 306)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. (Section 613) The Trustee
will be permitted to engage in certain other transactions; however, if it
acquires any conflicting interest and there is a default under the Debt
Securities of any series for which the Trustee serves as trustee, the Trustee
must eliminate such conflict or resign. (Section 608)
The Trustee currently provides certain banking and financial services to
the Company in the ordinary course of business and may provide other such
services in the future.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 1,000,000 shares of
Preferred Stock, none of which has been issued, and 100,000,000 shares of Common
Stock, 80,724,000 of which were issued and outstanding as of February 28, 1994.
At the Company's stockholders' meeting to be held on March 3, 1994, the
stockholders of the Company will vote on a proposal, which has been approved by
the Company's Board of Directors, to increase the number of shares of Common
Stock authorized for issuance to 200,000,000.
PREFERRED STOCK
Under the Company's Certificate of Incorporation, the Board of Directors is
authorized to issue shares of Preferred Stock from time to time in one or more
series and to determine the designation and number of shares of each series and
the relative rights, preferences and limitations with respect to dividends,
redemptions (including sinking fund provisions), liquidation, dissolution or
winding up, voting rights and conversion, all in accordance with the laws of the
State of Delaware. When shares of Preferred Stock are issued, certain rights of
the holders thereof may materially affect the rights of the holders of the
Common Stock, including voting rights and preferences in respect of dividends
and liquidation.
COMMON STOCK
All issued and outstanding shares of Common Stock of the Company, including
the shares offered hereby, are fully paid and nonassessable. Holders of Common
Stock have no preemptive, subscription or conversion rights and are not liable
for further calls or assessments. There are no redemption or sinking fund
provisions in effect with respect to the Common Stock. Subject to the rights of
any then outstanding Preferred Stock, holders of Common Stock are entitled to
receive such dividends as may be declared by the Board of Directors out of funds
legally available therefor and to share ratably in the assets available for
distribution upon liquidation. Except as described below, each share of Common
Stock is entitled to one vote at all
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<PAGE> 41
meetings of stockholders. The holders of Common Stock are not entitled to
cumulative voting rights in the election of directions.
The Company has paid no cash dividends on its Common Stock since its
incorporation and anticipates that for the foreseeable future it will continue
to retain any earnings for use in its business. The Common Stock of the Company
is traded on the Nasdaq National Market under the symbol AMAT. The transfer
agent and registrar for the Common Stock is Harris Trust Company of California.
The Certificate of Incorporation and the By-Laws of the Company contain
provisions that could have certain anti-takeover effects. The Board of Directors
has no current plans to formulate or effect additional measures that could have
anti-takeover effects.
Fair Price Provisions. The Certificate of Incorporation contains a fair
price provision pursuant to which, unless certain minimum price criteria and
procedural requirements are satisfied, Business Combinations (as defined in the
Certificate of Incorporation) with any person who is the beneficial owner of 15%
or more of the Voting Stock (as defined) or with certain other persons must be
approved by either the holders of two-thirds of the Company's outstanding voting
stock or a majority of the Continuing Directors (as defined) of the Company.
These provisions may have the effect of discouraging or deterring a third party
from making an offer to the Company's stockholders to acquire a substantial
amount or all of the Company's Common Stock.
No Stockholder Action by Written Consent; Special Meetings. The Certificate
of Incorporation prohibits stockholder action by written consent in lieu of a
meeting. The provision of the Certificate of Incorporation prohibiting
stockholder action by written consent may have the effect of delaying
consideration of a stockholder proposal until the next annual meeting unless a
special meeting is called by the Board of Directors, the Chairman of the Board
of Directors, or the President of the Company. This provision would also prevent
the holders of a majority of the outstanding shares of Common Stock from using
the written consent procedure to take stockholder action and from taking action
by consent without giving all the stockholders of the Company entitled to vote
on a proposed action the opportunity to participate in determining such proposed
action.
Advance Notice Requirements for Stockholders' Proposals and Director
Nominations. The By-Laws establish an advance notice procedure with regard to
the nomination, other than by or at the direction of the Board of Directors or a
committee thereof, of candidates for election as directors (the "Nomination
Procedure") and with regard to certain matters to be brought before a meeting of
stockholders of the Company (the "Business Procedure").
The Nomination Procedure provides that the notice of proposed stockholder
nominations for the election of directors must be timely given in writing to the
Secretary of the Company prior to the meeting at which directors are to be
elected. The Business Procedure provides that only such business may be
conducted at a stockholders' meeting as has been brought before the meeting by,
or at the direction of, the Board of Directors or by a stockholder who has given
timely prior written notice to the Secretary of the Company of such
stockholder's intention to bring such business before the meeting. In the case
of both the Nomination Procedure and the Business Procedure, to be timely,
notice must be received not less than 60 days prior to the date of the
stockholders' meeting or 10 days after the date on which notice of the meeting
is first given.
Although the By-Laws do not give the Board of Directors any power to
approve or disapprove stockholder nominations for the election of directors or
any other business desired by stockholders to be conducted at a stockholders'
meeting, the By-Laws may have the effect of precluding a nomination for the
election of directors or precluding the conducting of business at a particular
meeting if the proper procedures are not followed, and may discourage or deter a
third party from conducting a solicitation of proxies to elect its own slate of
directors or otherwise attempting to obtain control of the Company, even if the
conduct of such solicitation or such attempt might otherwise be desired by the
Company's stockholders.
Amendment of Certain Provisions of the Certificate of Incorporation. The
Certificate of Incorporation requires the affirmative vote of the holders of at
least two-thirds of the total voting power of all the outstanding shares of
stock entitled to vote generally in the election of directors for any amendment
of the fair price
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<PAGE> 42
provision of the Certificate of Incorporation described above. This provision
will make it more difficult for stockholders to make changes in the Certificate
of Incorporation. In addition, the requirement for approval by at least a
two-thirds stockholder vote will enable the holders of a minority of the voting
stock of the Company to prevent the holders of a majority or more of the stock
from amending such provisions of the Certificate of Incorporation.
Preferred Stock. The Certificate of Incorporation authorizes the Board of
Directors to fix, with respect to any series of Preferred Stock, the powers,
preferences and rights of the shares of such series. Although the Company has no
intention at the present time of doing so, it could issue Preferred Stock that
could, depending on its terms, either impede or facilitate the completion of a
merger, tender offer or other takeover attempt. Although the Board of Directors
is required to make any determination to issue such stock based on its judgment
as to the best interest of the stockholders of the Company, the Board of
Directors could act in a manner that would discourage an acquisition attempt or
other transaction that some, or a majority, of the stockholders might believe to
be in their best interests or in which stockholders might receive a premium for
their stock over the then market price of such stock.
RIGHTS PLAN
In June 1989, the Board of Directors of Applied Materials declared a
dividend distribution of one right (a "Right" or, collectively, the "Rights")
for each outstanding share of Common Stock of the Company to stockholders of
record at the close of business on June 26, 1989 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company a unit consisting of
one-fourth of a share (a "Unit") of Common Stock, at a price of $11.25 per Unit
(the "Exercise Price"), subject to adjustment (giving effect to two subsequent
two-for-one stock splits). The description and terms of the Rights are set forth
in a Rights Agreement dated as of June 14, 1989 (the "Rights Agreement").
Initially, the Rights are evidenced by the Common Stock certificates
representing shares outstanding and no separate Rights certificates will be
distributed. The Rights will be exercisable, and transferable apart from the
shares of Common Stock, on the earlier to occur of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) 10 business days following
the commencement of (or a public announcement of an intention to commence) a
tender offer or exchange offer if, upon consummation thereof, the person who
commenced the offer would be an Acquiring Person (the earlier of such dates
being called the "Distribution Date"). The foregoing time periods are subject to
extension as set forth in the Rights Agreement. After the occurrence of the
event set forth in clause (ii) above, the Rights would become exercisable for a
Unit of Common Stock at the Exercise Price. After the occurrence of the event
set forth in clause (i) above, the Rights would become exercisable as set forth
below.
In the event that a person becomes the beneficial owner of 20% or more of
the then outstanding shares of Common Stock (other than as a result of a tender
or exchange offer for all shares of the Common Stock at a price and on terms
determined by a majority of the directors who are not representatives, nominees,
affiliates or associates of an Acquiring Person, after receiving advice from one
or more nationally recognized investment banking firms selected by such
directors, to be fair and adequate to the stockholders, and otherwise in the
best interests of the Company and its stockholders (a "Permitted Offer")), the
Rights Agreement provides that proper provision shall be made so that each
holder of a Right will thereafter have the right to receive, for a 90-day period
(the "Exercise Period"), upon exercise, Common Stock (or, under certain
circumstances, cash, a reduction in the Exercise Price, other securities of the
Company or any combination thereof) having a market value equal to two times the
exercise price paid (i.e., at a 50% discount). Following the occurrence of this
event, any Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person shall
immediately become null and void. However, Rights generally are not exercisable
following the occurrence of such an event until such time as the Rights are no
longer redeemable by the Company as set forth below. Further, Rights generally
are exercisable only after the effectiveness of a registration statement for the
Common Stock issuable upon exercise of the Rights under the Securities Act of
1933.
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<PAGE> 43
In the event that, at any time following the Distribution Date, (i) the
Company engages in a merger or other business combination transaction in which
the Company is not the surviving corporation (other than following a Permitted
Offer), (ii) the Company engages in a merger or other business combination
transaction with another person in which the Company is the surviving
corporation, but in which its Common Stock is changed or exchanged (other than
following a Permitted Offer), or (iii) 50% or more of the Company's assets or
earning power (on a consolidated basis) is sold or transferred, the Rights
Agreement provides that proper provision shall be made so that each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, common stock of the acquiring company
having a market value equal to two times the exercise price paid (i.e., at a 50%
discount). The events described in clauses (i), (ii) and (iii) of this paragraph
are defined as "Triggering Events."
The Exercise Price payable, and the number of shares of Common Stock 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 Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for preferred stock that is substantially the same as
Common Stock or convertible securities at less than the current market price of
the Common Stock, or (iii) upon the distribution to holders of the Common Stock
of evidences of indebtedness, cash (excluding regular quarterly cash dividends),
assets (other than dividends payable in Common Stock) or of subscription rights
or warrants (other than those referred to above).
At any time after the date of the Rights Agreement until 10 business days
(or such later date as the Board of Directors of the Company may determine)
following the Stock Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.0025 per Right, as adjusted for stock
splits, stock dividends or similar transactions (the "Redemption Price"),
payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors. Thereafter, the Company's right of redemption may be
reinstated if the Exercise Period has expired, no Triggering Event has occurred
and an Acquiring Person reduces his beneficial ownership to 5% or less of the
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company and there are no other Acquiring Persons. Immediately
upon the action of the Board of Directors of the Company ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the 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. While the distribution of the Rights will not
be taxable to the stockholders or the Company, the stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Stock (or other consideration) of the Company or
for common stock of the acquiring company as set forth above.
The foregoing description of the Company's Common Stock and the Rights do
not purport to be a complete description of the terms of the Company's Common
Stock and the Rights and is qualified in its entirety by reference to the terms
of such Common Stock and Rights, which are incorporated herein by reference and
are set forth in full in the Company's Certificate of Incorporation and the
Rights Agreement, respectively.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. This statute generally prohibits, under certain
circumstances, a Delaware corporation whose stock is publicly traded, from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless (i) the corporation has elected in its
certificate of incorporation or bylaws not to be governed by this Delaware law
(the Company has not made such an election), (ii) prior to the time the
stockholder became an interested stockholder, the board of directors approved
either the business combination or the transaction which resulted in the person
becoming an interested stockholder, (iii) the stockholder owned at least 85% of
the outstanding voting stock of the corporation (excluding shares held by
directors who were also officers or held in certain
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<PAGE> 44
employee stock plans) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder or (iv) the business combination
was approved by the board of directors and by two-thirds of the outstanding
voting stock of the corporation (excluding shares held by the interested
stockholder). An "interested stockholder" is a person who, together with
affiliates and associates, owns (or any time within the prior three years did
own) 15% or more of the corporation's outstanding voting stock. The term
"business combination" is defined generally to include mergers, consolidations,
stock sales, asset based transactions, and other transactions resulting in a
financial benefit to the interested stockholder.
PLAN OF DISTRIBUTION
The Company may sell the Securities separately or together, (i) to one or
more underwriters or dealers for public offering and sale by them and (ii) to
investors directly or through agents. The distribution of the Securities may be
effected from time to time in one or more transactions at a fixed price or
prices (which may be changed from time to time), at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. Each Prospectus Supplement will describe the method of
distribution of the Securities offered thereby.
In connection with the sale of the Securities, underwriters, dealers or
agents may receive compensation from the Company or from purchasers of the
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. The underwriters, dealers or agents which
participate in the distribution of the Securities may be deemed to be
underwriters under the Securities Act of 1933 and any discounts or commissions
received by them and any profit on the resale of the Securities received by them
may be deemed to be underwriting discounts and commissions thereunder. Any such
underwriter, dealer or agent will be identified and any such compensation
received from the Company will be described in the Prospectus Supplement. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Under agreements that may be entered into with the Company, underwriters,
dealers and agents may be entitled to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act of
1933, or to contribution with respect to payments which the underwriters,
dealers or agents may be required to make in respect thereof.
The Company may grant underwriters who participate in the distribution of
Securities an option to purchase additional Securities to cover over-allotments,
if any.
All Debt Securities will be new issues of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the Company
for public offering and sale may make a market in such securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any such securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with or perform services for the Company in the
ordinary course of business.
LEGAL OPINIONS
The validity of the Securities is being passed upon for the Company by
Orrick, Herrington & Sutcliffe, San Francisco, California. Certain matters will
be passed upon for any underwriters or agents by Wilson, Sonsini, Goodrich &
Rosati, Professional Corporation, Palo Alto, California.
EXPERTS
The audited consolidated financial statements incorporated in this
Prospectus, and the financial statement schedules incorporated in the
Registration Statement, by reference to the Annual Report on Form 10-K of
Applied Materials, Inc. for the year ended October 31, 1993 have been so
incorporated in reliance on the reports of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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<PAGE> 45
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth expenses in connection with the issuance and
distribution of the securities being registered, other than the underwriting
discount and commissions.
<TABLE>
<S> <C>
Registration fee.................................................. $ 86,207
Trustee's fees and expenses....................................... 20,000*
Accountants' fees and expenses.................................... 115,000*
Printing and engraving expenses................................... 100,000*
Blue sky and legal investment fees and expenses................... 15,000*
Rating agencies' fees............................................. 60,000*
Legal fees and expenses........................................... 150,000*
Miscellaneous..................................................... 8,793*
--------
Total................................................... $555,000
--------
--------
</TABLE>
- ---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "Delaware Law")
authorizes a court to award, or a corporation's board of directors to grant,
indemnity to directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). The Registrant's Certificate of Incorporation
and Bylaws provide for indemnification of the Registrant's directors, officers,
employees and other agents to the maximum extent permitted by the Delaware Law.
In addition, the Registrant has entered into indemnification agreements with its
officers and directors.
Reference is made to Section 6 of the Underwriting Agreement included
herein as an exhibit to the Registration Statement for provisions regarding
indemnification of the Company, officers, directors and controlling persons
against certain liabilities.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ -----------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement
4.1 Form of Indenture dated as of March , 1994 between the
Registrant and Harris Trust Company of California, as Trustee
4.2 Form of Debt Security (included in Exhibit 4.1)
5.1 Opinion of Orrick, Herrington & Sutcliffe as to the validity of
the Debt Securities and Common Stock
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Price Waterhouse
23.2 The consent of Orrick, Herrington & Sutcliffe is contained in its
opinion filed as Exhibit 5.1 to this Registration Statement
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of Harris Trust Company of California
(bound separately)
</TABLE>
II-1
<PAGE> 46
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Applied Materials, Inc., a corporation organized and existing under the laws of
Delaware, certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City and County of Santa Clara, State of California, on the
1st day of March, 1994.
APPLIED MATERIALS, INC.
By /s/ JAMES C. MORGAN
James C. Morgan
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ----------------------------------------------- --------------------------- ----------------
<C> <S> <C>
(1) Principal Executive Officer and Director:
/s/ JAMES C. MORGAN Chairman of the Board, March 1, 1994
(James C. Morgan) Chief Executive Officer
and Director
(2) Principal Financial and Accounting Officer:
/s/ GERALD F. TAYLOR Senior Vice President and March 1, 1994
(Gerald F. Taylor) Chief Financial Officer
(3) Directors:
/s/ JAMES W. BAGLEY* Director March 1, 1994
(James W. Bagley)
/s/ HERBERT M. DWIGHT, JR.* Director March 1, 1994
(Herbert M. Dwight, Jr.)
/s/ GEORGE B. FARNSWORTH* Director March 1, 1994
(George B. Farnsworth)
/s/ PHILIP V. GERDINE* Director March 1, 1994
(Philip V. Gerdine)
</TABLE>
II-3
<PAGE> 47
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- ----------------------------------------------- --------------------------- ----------------
<C> <S> <C>
/s/ PAUL R. LOW* Director March 1, 1994
(Paul R. Low)
/s/ DAN MAYDAN* Director March 1, 1994
(Dan Maydan)
Director March 1, 1994
(Alfred J. Stein)
Director March 1, 1994
(Hiroo Toyoda)
*By: /s/ JAMES C. MORGAN
(James C. Morgan)
Attorney-in-Fact
A majority of the members of the Board of Directors
</TABLE>
II-4
<PAGE> 48
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
- --------- --------------------------------------------------- -------------
<S> <C> <C>
1.1 Form of Underwriting Agreement.....................
4.1 Form of Indenture dated as of March , 1994
between the Registrant and Harris Trust Company of
California, as Trustee.............................
4.2 Form of Debt Security (included in Exhibit 4.1)....
5.1 Opinion of Orrick, Herrington & Sutcliffe as to the
validity of the Debt Securities and Common Stock...
12.1 Computation of Ratio of Earnings to Fixed
Charges............................................
23.1 Consent of Price Waterhouse........................
23.2 The consent of Orrick, Herrington & Sutcliffe is
contained in its opinion filed as Exhibit 5.1 to
this Registration Statement........................
24.1 Powers of Attorney.................................
25.1 Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of Harris
Trust Company of California (bound separately).....
</TABLE>
<PAGE> 1
EXHIBIT 1.1
<PAGE> 2
APPLIED MATERIALS, INC.
UNDERWRITING AGREEMENT
[For Debt Securities -
STANDARD PROVISIONS
(Debt Securities)]
March , 1994
[For Debt Securities Use - From time to time, Applied Materials, Inc., a
Delaware corporation (the "Company"), may enter into one or more underwriting
agreements that provide for the sale of designated securities to the several
underwriters named therein. The standard provisions set forth herein may be
incorporated by reference in any such underwriting agreement (an "Underwriting
Agreement"). The Underwriting Agreement, including the provisions incorporated
therein by reference, is herein sometimes referred to as this Agreement. Unless
otherwise defined herein, terms defined in the Underwriting Agreement are used
herein as therein defined.]
[For Common Stock Use -
As Manager for the several
Underwriters named in Schedule I hereto,
c/o
Ladies and Gentlemen:
Applied Materials, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"Underwriters"), for whom and
are acting as manager (the "Manager") an
aggregate of shares (the "Firm Securities") of Common Stock, $0.01 par
value (the "Common Stock"), of the Company. In addition, for the sole purpose of
covering over-allotments in connection with the sale of the Firm Securities, the
Company proposes to grant to the Underwriters an option to purchase up to an
additional shares (the "Additional Securities") of Common Stock. The
Firm Securities and any Additional Securities purchased pursuant to this
Underwriting Agreement are herein called the "Offered Securities." This is to
confirm the agreement concerning the purchase of the Offered Securities from the
Company by the Underwriters.]
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement, including a prospectus, relating to the
Offered Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "Prospectus Supplement") specifically relating to the
Offered Securities pursuant to Rule 424 or Rule 430A under the Securities Act of
1933, as amended (the "Securities Act"). The term "Registration Statement" means
the registration statement, including the exhibits thereto, as amended to the
date of this Agreement. The term "Basic Prospectus" means the prospectus
included in the Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Offered Securities, together with the Basic Prospectus. As used herein, the
terms "Registration Statement," "Basic Prospectus," "Prospectus" and
"preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated by
reference in the Prospectus that are filed subsequent to the date of the Basic
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
<PAGE> 3
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act. The Registration Statement has become effective; no
stop order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement, when such part became effective,
did not contain, and each such part, as amended or supplemented, if
applicable, when such part is filed, will not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (iii)
the Registration Statement and the Prospectus comply, and, as amended or
supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and (iv) the Prospectus as of its issue date does not contain
and, as amended or supplemented, if applicable, as of the date of any such
amendment and at the Closing Date, will not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set
forth in this Section 1(b) do not apply (A) to statements or omissions in
the Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Manager expressly for use therein [For Debt
Securities add - or (B) to that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the
Trustee.]
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(d) Each subsidiary of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to
own its property and to conduct its business as described in the Prospectus
and as currently being conducted and is duly qualified to transact business
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
[For Debt Securities - (f) The Indenture pursuant to which the Offered
Securities are to be issued has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally or the effect of general principles of equity, including
the possible unavailability of specific performance or injunctive relief,
whether considered in a proceeding in equity or at law.]
[For Debt Securities - (g) The Offered Securities have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company enforceable in accordance with their
(2)
<PAGE> 4
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws relating to or affecting creditors' rights
generally or the effect of general principles of equity, including the
possible unavailability of specific performance or injunctive relief,
whether considered in a proceeding in equity or at law.]
[For Common Stock - (h) The Offered Securities have been duly
authorized and, when issued in accordance with the terms of this Agreement,
and duly countersigned by the Company's Transfer Agent and Registrar, will
be validly issued, fully paid and nonassessable and will not be subject to
any preemptive rights or similar rights to subscribe for or to purchase
securities of the Company pursuant to the Company's Certificate of
Incorporation or bylaws or any agreement to which the Company or any of its
subsidiaries is a party or by which it may be bound.]
(i) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(j) The shares of Common Stock of the Company outstanding prior to the
issuance of the Offered Securities have been duly authorized and are
validly issued, fully paid and nonassessable.
(k) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, [For Debt
Securities add -- the Indenture and the Offered Securities] will not
contravene, or give rise to any additional rights or remedies under, any
provision of applicable law or the certificate of incorporation or bylaws
of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, [For
Debt Securities add -- the Indenture or the Offered Securities], except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Offered Securities.
(l) There has not occurred any material adverse change, or any
development which could be reasonably expected to result in a prospective
material adverse change, in the condition, financial or otherwise, or in
the business or operations of the Company and its subsidiaries, taken as a
whole, from that described in the Prospectus.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described in all material respects (other
than proceedings that would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, or on the power or ability
of the Company to perform its obligations under this Agreement, [For Debt
Securities add -- the Indenture or the Offered Securities] or to consummate
the transactions contemplated by the Prospectus), or any statutes,
regulations, contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that
are not described, filed or incorporated as required.
(n) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(o) To the best knowledge of the Company after due inquiry, the
Company and its subsidiaries (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws which are necessary to
conduct their respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive required
permits, licenses or other approvals or failure to comply with the terms
and conditions of such
(3)
<PAGE> 5
permits, licenses or approvals would not reasonably be expected to, singly
or in the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(p) The Company has a process of conducting periodic internal reviews
relating to compliance by the Company and its subsidiaries with
Environmental Laws. On the basis of such reviews, except as set forth in
the Prospectus, nothing has come to the attention of the Company which
would lead it to believe that costs associated with compliance with
Environmental Laws or liabilities arising due to noncompliance with
Environmental Laws (including, without limitation, any capital or operating
expenses required for cleanup, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties) would have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(q) Each of the Company and its subsidiaries owns or possesses
adequate and sufficient licenses or other rights to use all patents,
copyrights, trademarks, service marks, trade names, technology and know-how
necessary (in any material respect) to conduct its business in the manner
described in the Prospectus, except such as are not material to the
business of the Company and its subsidiaries taken as a whole and except as
disclosed in the Prospectus. Except as disclosed in the Prospectus, neither
the Company nor any of its subsidiaries has received any notice of
infringement or conflict with (and knows of no infringement or conflict
with) asserted rights of others with respect to any patents, copyrights,
trademarks, service marks, trade names or know-how which would reasonably
be expected to result in any material adverse effect upon the Company and
its subsidiaries taken as a whole.
(r) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
[For Debt Securities Use - 2. Public Offering. The Company is
advised by the Manager that the Underwriters propose to make a public
offering of their respective portions of the Offered Securities as soon
after this Agreement has been entered into as in the Manager's judgment is
advisable. The terms of the public offering of the Offered Securities are
set forth in the Prospectus.]
[For Debt Securities Use - 3. Purchase and Delivery. Payment for the
Offered Securities shall be made by certified or official bank check or
checks payable to the order of the Company in funds as are set forth in,
and at the time and place set forth in, the Underwriting Agreement, upon
delivery to the Manager for the respective accounts of the several
Underwriters of the Offered Securities, registered in such names and in
such denominations as the Manager shall request in writing not less than
two full business days prior to the date of delivery, with any transfer
taxes payable in connection with the transfer of the Offered Securities to
the Underwriters duly paid.]
[For Common Stock Use - 2. Purchase and Delivery.
(a) Subject to the terms and conditions hereof and upon the basis of the
representations and warranties herein set forth, the Company agrees to sell to
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase at a price of $ per share, the aggregate number
of Firm Securities set forth opposite such Underwriter's name in Schedule I
hereto. The Underwriters agree to offer the Firm Securities to the public on the
terms as set forth in the Prospectus.
(b) The Company hereby grants to the Underwriters an option to purchase
from the Company, solely for the purpose of covering over-allotments in the sale
of Firm Securities, all or any portion of the Additional Securities for a period
of thirty (30) days from the date hereof at the purchase price per share set
forth above. Additional Securities shall be purchased from the Company,
severally and not jointly, for the accounts of the several Underwriters in
proportion to the number of Firm Securities set forth opposite such
Underwriter's name in Schedule I hereto, except that the respective purchase
obligations of each Underwriter shall be adjusted by the Manager so that no
Underwriter shall be obligated to purchase Additional Securities other than in
100-share quantities.
(c) Delivery of certificates for the Firm Securities, and certificates for
the Additional Securities, if the option to purchase the same is exercised on or
before the third Business Day (as defined in Section 16 hereof)
(4)
<PAGE> 6
prior to the First Closing Date, shall be made at the offices of Lehman Brothers
Inc., 388 Greenwich Street, New York, New York 10013 (Cashier's Window) (or such
other place as mutually may be agreed upon), at 10:00 A.M., New York City time,
on the fifth full Business Day following the date of this Agreement or on such
later date as shall be determined by you and the Company (the "Firm Closing
Date"). Payment of the purchase price for the Firm Securities and, if the option
to purchase the Additional Securities is exercised on or before the third
Business Day prior to the Firm Closing Date, the Additional Securities, shall be
made by the Underwriters to the Company at the offices of Wilson, Sonsini,
Goodrich & Rosati, P.C., Two Palo Alto Square, Palo Alto, California 94306 (or
such other place as mutually agreed upon), at 10:00 A.M., New York City time, on
the Firm Closing Date.
(d) The option to purchase Additional Securities granted in Section 3(b)
hereof may be exercised during the term thereof by written notice to the Company
from the Manager. Such notice shall set forth the aggregate number of Additional
Securities as to which the option is being exercised and the time and date, not
earlier than either the Firm Closing Date or the second Business Day after the
date on which the option shall have been exercised nor later than the fifth
Business Day after the date of such exercise, as determined by the Manager, when
the Additional Securities are to be delivered (the "Option Closing Date").
Delivery and payment for such Additional Securities shall be made at the offices
set forth above for delivery and payment of the Firm Securities. (The Firm
Closing Date and the Option Closing Date are herein individually referred to as
the "Closing Date" and collectively referred to as the "Closing Dates.")
(e) Delivery of certificates for the Offered Securities shall be made by or
on behalf of the Company to you, for the respective accounts of the
Underwriters, against payment of the respective purchase prices therefor by
certified or official bank check payable in New York Clearing House funds to the
order of the Company. The certificates for the Offered Securities shall be
registered in such names and denominations as you shall have requested at least
two full Business Days prior to the applicable Closing Date, and shall be made
available for checking and packaging in New York, New York or such other
location as may be designated by you at least one full Business Day prior to
such Closing Date. Time shall be of the essence, and delivery of certificates
for the Offered Securities at the time and place specified in this Agreement is
a further condition to the obligations of each Underwriter.]
4. Conditions to Closing. The several obligations of the Underwriters
hereunder are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date,
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading, in the
rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus
that, in the judgment of the Manager, is material and adverse and that
makes it, in the judgment of the Manager, impracticable to market the
Offered Securities on the terms and in the manner contemplated in the
Prospectus.
(b) The Manager shall have received on the Closing Date a certificate,
dated the Closing Date and signed by the chief executive officer and chief
financial officer of the Company, to the effect set forth in clause (a)(i)
above and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the Closing
Date and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or satisfied on
or before the Closing Date.
The officers signing and delivering such certificate may rely upon the
best of their knowledge as to proceedings threatened.
(5)
<PAGE> 7
(c) The Manager shall have received on the Closing Date an opinion of
Orrick, Herrington & Sutcliffe, counsel for the Company, dated the Closing
Date, substantially to the effect set forth in Exhibit A. The opinion of
Orrick, Herrington & Sutcliffe shall be rendered to the Manager at the
request of the Company and shall so state therein.
(d) The Manager shall have received on the Closing Date an opinion of
James J. DeLong, Director of Legal Affairs of the Company, dated the
Closing Date, substantially to the effect set forth in Exhibit B.
(e) The Manager shall have received on the Closing Date an opinion of
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, special
counsel for the Underwriters, dated the Closing Date, covering the matters
referred to in subparagraphs (ii), (iii), (iv), (vi), (x) (but only as to
the statements in the Prospectus under "Description of Debt Securities" and
"Plan of Distribution"), (xii) and (xiv) of Exhibit A hereto.
(f) The Manager shall have received on each of the date hereof and the
Closing Date a letter, dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Manager, from Price
Waterhouse, the Company's independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in or incorporated by reference
into the Prospectus.
5. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants as follows:
(a) To furnish the Manager, without charge, a signed copy of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and, during the period mentioned in paragraph
(c) below, as many copies of the Prospectus, any documents incorporated by
reference therein and any supplements and amendments thereto or to the
Registration Statement as the Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the Offered Securities, to furnish to the
Manager a copy of each such proposed amendment or supplement and not to
file any such proposed amendment or supplement to which the Manager
reasonably objects.
(c) If, during such period after the first date of the public offering
of the Offered Securities as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with law, forthwith to prepare, file
with the Commission and furnish, at its own expense, to the Underwriters,
and to the dealers (whose names and addresses the Manager will furnish to
the Company) to which Offered Securities may have been sold by the Manager
on behalf of the Underwriters and to any other dealers upon request, either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Offered Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as
the Manager shall reasonably request.
(e) To make generally available to its security holders and to the
Manager as soon as practicable an earnings statement covering a twelve
month period beginning on the first day of the first full fiscal quarter
after the date of this Agreement, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder. If such fiscal quarter is
(6)
<PAGE> 8
the last fiscal quarter of the Company's fiscal year, such earnings
statement shall be made available not later than 90 days after the close of
the period covered thereby and in all other cases shall be made available
not later than 45 days after the close of the period covered thereby.
(f) During the period beginning on the date of this Underwriting
Agreement and continuing for a period [For Debt Securities add -- through
the Closing Date] [For Common Stock add -- of 90 days after the first date
of the public offering of the Offered Securities], not to offer, sell,
contract to sell or otherwise dispose of any [For Debt Securities
add -- debt securities which are substantially similar to the Offered
Securities] [For Common Stock add -- shares of its common stock or any
securities convertible into or exercisable or exchangeable for its common
stock,] other than [For Debt Securities add -- the Offered Securities] [For
Common Stock add -- (i) the Offered Securities, (ii) options to purchase
common stock, stock purchase rights or shares of common stock issued upon
exercise of such options or rights, granted under the Company's existing
stock option and benefit plans, (iii) shares of common stock pursuant to
Rights (as defined in the Prospectus) and (iv) shares of common stock
issued upon exercise of warrants and options outstanding as of the date
hereof, without the prior written consent of the Manager.]
(g) Whether or not any sale of Offered Securities is consummated, to
pay all expenses incident to the performance of its obligations under this
Agreement, including: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto,
(ii) the preparation, issuance and delivery of the Offered Securities,
(iii) the fees and disbursements of the Company's counsel and accountants
[For Debt Securities add - and of the Trustee and its counsel,] (iv) the
qualification of the Offered Securities under securities or Blue Sky laws
in accordance with the provisions of Section 5(d), including filing fees
and the fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
[For Debt Securities add - or Legal Investment] Memoranda, (v) the printing
and delivery to the Underwriters in quantities as hereinabove stated of
copies of the Registration Statement and all amendments thereto and of the
Prospectus and any amendments or supplements thereto, (vi) [For Debt
Securities add -- any fees charged by rating agencies for the rating of the
Offered Securities], and (vii) the fees and expenses, if any, incurred with
respect to any filing with the National Association of Securities Dealers,
Inc.
6. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by any Underwriter
or any such controlling person in connection with investigating or defending any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Manager
expressly for use therein, [For Debt Securities add - or the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the
Trustees;] provided, however, that the indemnity agreement contained in this
paragraph (a) with respect to any preliminary prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability purchased
the Offered Securities, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Offered Securities to such person, and the
Prospectus (as so amended or supplemented) would have corrected the defect
giving rise to such loss, claim, damage or liability.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company
(7)
<PAGE> 9
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Manager expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto. The
information set forth on the cover page of, and under the caption "Underwriters"
or "Plan of Distribution" in the Prospectus, insofar as it relates to the
distribution by the Underwriters of the Offered Securities, constitutes the only
written information furnished by the Underwriters to the Company for use in the
Prospectus.
(c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to either paragraph (a) or (b) above, such person (the "indemnified
party") shall promptly notify the person against whom such indemnity may be
sought (the "indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Manager, in the case of parties indemnified
pursuant to paragraph (a) above, and by the Company, in the case of parties
indemnified pursuant to paragraph (b) above. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there shall be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into in good faith more than 45 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in paragraph (a) or (b)
of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Offered Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Offered Securities shall be
(8)
<PAGE> 10
deemed to be in the same respective proportions as the net proceeds from the
offering of such Offered Securities (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus Supplement, bear to the aggregate public offering price of the
Offered Securities. The relative fault of the Company on the one hand and of the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 6 are several in proportion to the respective [For Debt
Securities - principal amounts] [For Common Stock -- number of shares] of
Offered Securities they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 6 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
7. Termination. This Agreement shall be subject to termination, by notice
given by the Manager to the Company, if (a) after the execution and delivery of
the Underwriting Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., or any other over-the-counter market,
(ii) trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Manager, is material and adverse
and (b) in the case of any of the events specified in clauses (a)(i) through
(iv), such event, singly or together with other such event, makes it, in the
judgement of the Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
8. Defaulting Underwriters. If, on the Closing Date, any one or more of the
Underwriters shall fail or refuse to purchase the Offered Securities that it has
or they have agreed to purchase hereunder on such date, and the aggregate amount
of Offered Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
amount of the Offered Securities to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the amount of
Offered Securities set forth opposite their respective names in the Underwriting
Agreement bears to the aggregate amount of Offered Securities set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as the Manager may specify, to purchase the Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the amount of Offered Securities
that any Underwriter has agreed to purchase pursuant to this Agreement be
increased pursuant to this Section 8 by an amount in excess of one-ninth of such
amount of Offered Securities without the written consent of such Underwriter.
If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Offered Securities and the aggregate amount of Offered Securities with
respect to which such default occurs is more than one-tenth of the aggregate
(9)
<PAGE> 11
amount of Offered Securities to be purchased on such date, and arrangements
satisfactory to the Manager and the Company for the purchase of such Offered
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either the Manager or the Company shall have the right
to postpone the Closing Date but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. Any
action taken under this paragraph shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of the Offered Securities.
9. Representations and Indemnities to Survive. The respective indemnity and
contribution agreements and the representations, warranties and other statements
of the Company, its officers and the Underwriters set forth in this Agreement
will remain in full force and effect, regardless of any termination of this
Agreement, any investigation made by or on behalf of any Underwriter or the
Company or any of the officers, directors or controlling persons referred to in
Section 6 and delivery of and payment for the Offered Securities.
[For Common Stock Add - 10. Definition of "Business Day." For purposes of
this Agreement, "Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading.]
10. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers,
directors and controlling persons referred to in Section 6, and no other person
will have any right or obligation hereunder.
11. Counterparts. The Underwriting Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
13. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
(10)
<PAGE> 12
[FOR COMMON STOCK ONLY ADD: ]
Please confirm, by signing and returning to us two counterparts of this
Agreement, that you are acting on behalf of yourselves and the several
Underwriters and that the foregoing correctly sets forth the Agreement between
the Company and the several Underwriters.
Very truly yours,
APPLIED MATERIALS, INC.
By:
Authorized Signatory
Confirmed and accepted as of
the date first above mentioned
[MANAGERS]
For themselves and as Manager for the
several
Underwriters named in Schedule I
hereto
By: [LEAD]
By:
Authorized Representative
(11)
<PAGE> 13
[FOR COMMON STOCK ONLY ]
SCHEDULE I
UNDERWRITING AGREEMENT DATED , 1994
<TABLE>
<CAPTION>
NUMBER OF FIRM
UNDERWRITER SECURITIES TO BE PURCHASED
--------------------------------------- --------------------------
<S> <C>
</TABLE>
(12)
<PAGE> 14
[FOR DEBT SECURITIES ONLY ]
UNDERWRITING AGREEMENT
, 1994
APPLIED MATERIALS, INC.
3050 Bowers Avenue
Santa Clara, California 95054
Ladies and Gentlemen:
We (the "Manager") are acting on behalf of the underwriter or underwriters
(including ourselves) named below (such underwriter or underwriters being herein
called the "Underwriters"), and we understand that Applied Materials, Inc., a
Delaware corporation (the "Company"), proposes to issue and sell [Currency and
Principal Amount] aggregate initial offering price of [Full title of Debt
Securities] (the "Debt Securities"). The Debt Securities are also referred to
herein as the "Offered Securities". The Debt Securities will be issued pursuant
to the provisions of an Indenture dated as of , 1994 (the "Indenture")
between the Company and , as Trustee (the "Trustee").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the respective principal amounts of Debt
Securities set forth below opposite their names at a purchase price of % of
the principal amount of Debt Securities, plus accrued interest, if any, from
[Date of Offered Securities] to the date of payment and delivery:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
OF
NAME DEBT SECURITIES
--------------------------------------------------- ----------------
<S> <C>
Total..............................................
----------------
----------------
</TABLE>
The Underwriters will pay for the Offered Securities upon delivery thereof
at the offices of Wilson, Sonsini, Goodrich & Rosati, Two Palo Alto Square, Palo
Alto, California at 10:00 a.m. New York time on , 1994, or
at such other time, not later than 5:00 p.m. (New York time) on
, 1994, as shall be designated by the Manager. The time and
date of such payment and delivery are hereinafter referred to as the Closing
Date. Payment for the Offered Securities shall be made in funds.
The Offered Securities shall have the terms set forth in the Prospectus
dated , 1994, and the Prospectus Supplement dated
, 1994, including the following:
TERMS OF DEBT SECURITIES
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: , 19 and ,
19 commencing , 19 (Interest
accrues from , 19 )
Form and Denomination:
[Other Terms:]
<PAGE> 15
All provisions contained in the document entitled Applied Materials, Inc.
Underwriting Agreement Standard Provisions (Debt Securities) dated
, 1994, a copy of which is attached hereto, are herein
incorporated by reference in their entirety and shall be deemed to be a part of
this Agreement to the same extent as if such provisions had been set forth in
full herein, except that (i) if any term defined in such document is otherwise
defined herein, the definition set forth herein shall control, (ii) all
references in such document to a type of security that is not an Offered
Security shall not be deemed to be a part of this Agreement, and (iii) all
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be deemed
to be a part of this Agreement.
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
Acting severally on behalf of
themselves and the several
Underwriters named herein
By: [ ]
By:
Name:
Title:
Accepted, , 1994
APPLIED MATERIALS, INC.
By:
Name:
Title:
(2)
<PAGE> 16
EXHIBIT A
Pursuant to Section 4(c) of the Underwriting Agreement, the Company's legal
counsel, Orrick, Herrington & Sutcliffe shall furnish their opinion to the
Underwriters, dated the Closing Date, to the effect that:
(i) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the full
corporate power and corporate authority to own, lease and operate its
properties and conduct its business as described in the Prospectus.
(ii) The Underwriting Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been duly
executed and delivered by the Company.
(iii) [For Offered Debt Securities insert - The Offered Securities
have been duly authorized by all necessary corporate action on the part of
the Company and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for in accordance
with the terms of the Underwriting Agreement will be (x) entitled to the
benefits of the Indenture and (y) valid and binding agreements of the
Company enforceable against the Company in accordance with their terms
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or other laws affecting creditors' rights generally and (b) the
enforceability thereof may be limited by general principles of equity and
the unavailability of specific performance or injunctive relief.]
(iv) [Common Stock insert - The Offered Securities are duly authorized
and will be, when duly countersigned by the Company's Transfer Agent and
Registrar and upon issuance and delivery against payment therefor in
accordance with the terms of the Underwriting Agreement, validly issued,
fully paid and nonassessable.]
(v) There are no preemptive or, to our knowledge, other rights to
subscribe for or to purchase any securities of the Company pursuant to the
Company's Certificate of Incorporation, Bylaws, Credit Agreement, dated as
of August 1, 1991, among Applied Materials, Inc., the bank's signatory
thereto and The Chase Manhattan Bank, N.A., as agent (the "Bank
Agreement"), or any agreement set forth as an exhibit to any of the
documents incorporated by reference in the Prospectus.
(vi) [For Offered Debt Securities insert - The Indenture has been duly
authorized by all necessary corporate action on the part of the Company and
has been executed and delivered by the Company. The Indenture is a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or other laws affecting creditors' rights
generally and (b) the enforceability thereof may be limited by general
principles of equity and the unavailability of specific performance or
injunctive relief. The Indenture is qualified under the Trust Indenture
Act.]
(vii) The execution, delivery and performance by the Company of the
Underwriting Agreement, [For Offered Debt Securities insert - The Indenture
and the Offered Securities] (1) do not conflict with or violate the
Company's Certificate of Incorporation or Bylaws, (2) to our knowledge, do
not conflict with or violate or constitute a breach of, or constitute a
default under, the Bank Agreement or any agreement set forth as an exhibit
to any of the documents incorporated by reference in the Prospectus, (3) to
our knowledge, do not result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company in
any manner that would have a material adverse effect on the condition
(financial or other), results of operations, business or business prospects
of the Company and its subsidiaries taken as a whole, and (4) do not
violate applicable law.
(viii) No permit, authorization, consent, approval of or qualification
with any U.S. federal or state governmental authority is required for the
execution, delivery or performance by the Company of the Underwriting
Agreement, [For Offered Debt Securities insert - the Indenture or the
Offered Securities], except such as have been obtained under the Securities
Act [and the Trust Indenture Act] and such as may be required under state
or other blue sky laws (on which we express no opinion) in connection with
the purchase and distribution of the Offered Securities.
A-1
<PAGE> 17
(ix) To our knowledge, except as set forth in the Prospectus, there is
no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending or overtly
threatened in writing against or affecting the Company which would require
disclosure in the Registration Statement or the Prospectus.
(x) The terms and provisions of the Offered Securities conform in all
material respects to the description thereof contained in the Prospectus.
The statements in the Prospectus under the caption "Description of Debt
Securities", "Description of Capital Stock", and "Plan of Distribution,"
and in the Registration Statement under Item 15, insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with respect
to such legal matters, documents and proceedings and fairly summarize the
matters referred to therein.
(xi) The Registration Statement is effective under the Securities Act
and, to the best of our knowledge, no proceedings for a stop order have
been instituted or are pending or threatened under the Securities Act and
any required filings pursuant to Rule 424(b) have been made in accordance
therewith.
(xii) The Registration Statement, the Prospectus and each amendment
thereof or supplement thereto (except the financial statements, schedules
and other financial and statistical information contained or incorporated
by reference therein and the Form T-1, as to which we express no opinion),
as of their respective effective or issue dates, complied as to form in all
material respects with the requirements of the Securities Act [and the
Trust Indenture Act] and the rules and regulations of the Commission
thereunder.
(xiii) Each document filed pursuant to the Securities Exchange Act of
1934 and incorporated by reference in the Prospectus (it being understood
that we have not been requested to and do not give any opinion or make any
comment with respect to the financial statements, schedules and other
financial and statistical information contained or incorporated by
reference therein) complied when it was filed as to form in all material
respects with the requirements of the Securities Exchange Act of 1934 and
the rules and regulations of the Commission thereunder.
(xiv) Nothing has come to such counsel's attention to cause it to
believe that (1) (except for financial statements, schedules and other
financial and statistical information contained therein as to which such
counsel need not express any belief and except for that part of the
Registration Statement that constitutes the Form T-1) the Registration
Statement, at the time it became effective contained any untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and (2) (except for financial statements, schedules and other financial and
statistical information contained therein as to which such counsel need not
express any belief) the Prospectus as of its issue date and as of the date
such opinion is delivered contained or contains, respectively, any untrue
statement of a material fact or omitted or omits, respectively, to state a
material fact required to be stated therein or necessary in order to make
the statements therein not misleading.
(xv) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
With respect to subparagraph (xiv) above such counsel may state that their
belief is based upon their participation in the preparation of the Registration
Statement and Prospectus and any amendments or supplements thereto and documents
incorporated therein by reference and review and discussion of the contents
thereof, but are without independent check or verification, except as specified.
A-2
<PAGE> 18
EXHIBIT B
Pursuant to Section 4(d) of the Underwriting Agreement, the Company's
Director of Legal Affairs shall furnish an opinion to the Underwriters, dated
the Closing Date, to the effect that:
(i) Each of the Company's Significant Subsidiaries (as such term is
defined in Rule 405 under the Securities Act) and each other subsidiary
listed on Exhibit 21 to the Company's Annual Report on Form 10-K for the
year ended October 31, 1993 (each, a "Subsidiary" and collectively, the
"Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with full power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and as
presently being conducted, and the Company and each Subsidiary is duly
qualified to do business and is in good standing in each jurisdiction in
which the character of the business conducted by it or the location of the
properties owned or leased by it makes such qualification necessary, except
where the failure to be so qualified would not have a material adverse
effect on the condition (financial or other), results of operations,
business or business prospects of the Company and its subsidiaries taken as
a whole.
(ii) To such counsel's knowledge, there are no rights to subscribe for
or to purchase any securities of the Company pursuant to any agreement to
which the Company or any of the Subsidiaries is a party or by which it or
any of its properties is bound. To such counsel's knowledge, no holders of
shares of Common Stock of the Company have registration rights with respect
to such securities.
(iii) The execution and delivery by the Company of the Underwriting
Agreement, [For Debt Securities, insert - the Indenture or the Offered
Securities] and the consummation by the Company of the transactions
contemplated thereby (i) do not conflict with or violate the charter
documents of any Subsidiary, (ii) to such counsel's knowledge, do not
result in the material breach or violation of any of the terms or
provisions of, or constitute a material default under, any agreement to
which the Company or any of the Subsidiaries is a party or by which it is
or any of its properties is bound, and (iii) do not violate any applicable
law or any judgment, order or decree of any court or any governmental
agency or body having jurisdiction over the Company or any of the
Subsidiaries, in each case in any manner that would have a material adverse
effect on the condition (financial or other), results of operations,
business or business prospects of the Company and its subsidiaries taken as
a whole or that would affect the power or ability of the Company in any
manner to perform its obligations under the Underwriting Agreement, [For
Offered Debt Securities, insert - the Indenture or the Offered Securities]
or to consummate the transactions contemplated by the Prospectus.
(iv) There is no action, suit or proceeding at law or in equity or by
or before any governmental instrumentality or other agency now pending or,
to such counsel's knowledge, threatened against or affecting the Company or
any Subsidiary or any of their respective properties, other than (i)
proceedings fairly summarized in all material respects in the Prospectus,
and (ii) proceedings which are not likely to have a material adverse effect
on the Company and its subsidiaries, taken as a whole, or on the power or
ability of the Company to perform its obligations under the Underwriting
Agreement, [For Offered Debt Securities, insert - the Indenture or the
Offered Securities] or to consummate the transactions contemplated thereby.
(v) The statements in Item 3 - Legal Proceedings of the Company's most
recent Annual Report on Form 10-K and in Part II, Item 1 - Legal
Proceedings of the Company's Quarterly Report for the quarter ended January
30, 1994, insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents or
proceedings and fairly summarize in all material respects the matters
referred to therein.
(vi) To such counsel's knowledge, the Company and its subsidiaries are
in compliance with all applicable Environmental Laws, have received all
permits, licenses or other approvals required of them under all applicable
Environmental Laws to conduct their respective businesses and are in
compliance
B-1
<PAGE> 19
with all terms and conditions of such permits, licenses or approvals, in
each case (i) except as described in or contemplated by the Prospectus and
(ii) except where such noncompliance with such Environmental Laws, failure
to receive such required permits, licenses or approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not reasonably be expected to, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(vii) To such counsel's knowledge and except as described in or
contemplated by the Prospectus (i) each of the Company and its subsidiaries
owns or possesses adequate and sufficient licenses or other rights to use,
all patents, copyrights, trademarks, service marks, trade names, technology
and know-how necessary in any material respect to conduct its business as
described in the Prospectus and (ii) neither the Company nor any of its
subsidiaries has received any notice of infringement or conflict with (and
knows of no infringement or conflict with) asserted rights of others with
respect to any patents, copyrights trademarks, service marks, trade names
or know-how which would reasonably be expected to result in any material
adverse effect upon the Company and its subsidiaries, taken as a whole.
(viii) Such counsel does not know of any statutes, regulations,
contracts, indentures, mortgages, loan agreements, leases or other
documents of a character required to be described in the Registration
Statement or the Prospectus, or to be filed or incorporated by reference as
exhibits to the Registration Statement that are not described, filed or
incorporated by reference as required by the Securities Act and the rules
and regulations of the Commission thereunder.
B-2
<PAGE> 1
EXHIBIT 4.1
<PAGE> 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
APPLIED MATERIALS, INC.
TO
HARRIS TRUST COMPANY OF CALIFORNIA
TRUSTEE
---------
INDENTURE
DATED AS OF MARCH , 1994
---------
DEBT SECURITIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 3
APPLIED MATERIALS, INC.
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE,
OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST
INDENTURE
ACT INDENTURE
SECTION SECTION
- ---------- ---------------
<C> <S> <C> <C>
sec. (1) ........................................... 609
310(a)
(a) (2) ........................................... 609
(a) (3) ........................................... Not Applicable
(a) (4) ........................................... Not Applicable
(b) ........................................... 608
610
sec. ........................................... 613
311(a)
(b) ........................................... 613
sec. ........................................... 701
312(a)
702(a)
(b) ........................................... 702(b)
(c) ........................................... 702(c)
sec. ........................................... 703(a)
313(a)
(b) ........................................... 703(a)
(c) ........................................... 703(a)
(d) ........................................... 703(b)
sec. ........................................... 704
314(a)
(a) (4) ........................................... 101
1004
(b) ........................................... Not Applicable
(c) (1) ........................................... 102
(c) (2) ........................................... 102
(c) (3) ........................................... Not Applicable
(d) ........................................... Not Applicable
(e) ........................................... 102
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
TRUST
INDENTURE
ACT INDENTURE
SECTION SECTION
- ---------- ---------------
<C> <S> <C> <C>
sec. ........................................... 601
315(a)
(b) ........................................... 602
(c) ........................................... 601
(d) ........................................... 601
(e) ........................................... 514
sec. ........................................... 101
316(a)
(a) (1)(A) ........................................... 502
512
(a) (1)(B) ........................................... 513
(a) (2) ........................................... Not Applicable
(b) ........................................... 508
(c) ........................................... 104(c)
sec. (1) ........................................... 503
317(a)
(a) (2) ........................................... 504
(b) ........................................... 1003
sec.318(a) ........................................... 107
</TABLE>
- ---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
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TABLE OF CONTENTS
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ARTICLE ONE -- DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION..................................... 1
Section 101. Definitions.................................. 1
Section 102. Compliance Certificates and Opinions......... 10
Section 103. Form of Documents Delivered to Trustee....... 11
Section 104. Acts of Holders; Record Dates................ 12
Section 105. Notices, Etc., to Trustee and Company........ 13
Section 106. Notice to Holders; Waiver.................... 13
Section 107. Conflict with Trust Indenture Act............ 15
Section 108. Effect of Headings and Table of Contents..... 15
Section 109. Successors and Assigns....................... 15
Section 110. Separability Clause.......................... 15
Section 111. Benefits of Indenture........................ 15
Section 112. Governing Law................................ 15
Section 113. Legal Holidays............................... 15
ARTICLE TWO -- SECURITY FORMS.................................. 16
Section 201. Forms Generally.............................. 16
Section 202. Form of Face of Security..................... 16
Section 203. Form of Reverse of Security.................. 19
Section 204. Form of Legend for Global Securities......... 24
Section 205. Form of Trustee's Certificate of
Authentication............................... 25
ARTICLE THREE -- THE SECURITIES................................ 25
Section 301. Amount Unlimited; Issuable in Series......... 25
Section 302. Denominations................................ 28
Section 303. Execution, Authentication, Delivery and
Dating....................................... 28
Section 304. Temporary Securities......................... 30
Section 305. Registration, Registration of Transfer and
Exchange..................................... 31
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities................................... 33
Section 307. Payment of Interest; Interest Rights
Preserved.................................... 34
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Section 308. Persons Deemed Owners........................ 36
Section 309. Cancellation................................. 36
Section 310. Computation of Interest...................... 37
ARTICLE FOUR -- SATISFACTION AND DISCHARGE..................... 37
Section 401. Satisfaction and Discharge of Indenture...... 37
Section 402. Application of Trust Money................... 39
ARTICLE FIVE -- REMEDIES....................................... 39
Section 501. Events of Default............................ 39
Section 502. Acceleration of Maturity; Rescission and
Annulment.................................... 42
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee....................... 43
Section 504. Trustee May File Proofs of Claim............. 44
Section 505. Trustee May Enforce Claims Without Possession
of Securities................................ 44
Section 506. Application of Money Collected............... 45
Section 507. Limitation on Suits.......................... 46
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest.............. 47
Section 509. Restoration of Rights and Remedies........... 47
Section 510. Rights and Remedies Cumulative............... 48
Section 511. Delay or Omission Not Waiver................. 48
Section 512. Control by Holders........................... 48
Section 513. Waiver of Past Defaults...................... 49
Section 514. Undertaking for Costs........................ 49
Section 515. Waiver of Stay or Extension Laws............. 49
ARTICLE SIX -- THE TRUSTEE..................................... 50
Section 601. Certain Duties and Responsibilities.......... 50
Section 602. Notice of Defaults........................... 50
Section 603. Certain Rights of Trustee.................... 50
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Section 604. Not Responsible for Recitals or Issuance of
Securities................................... 51
Section 605. May Hold Securities.......................... 52
Section 606. Money Held in Trust.......................... 52
Section 607. Compensation and Reimbursement............... 52
Section 608. Disqualification; Conflicting Interests...... 53
Section 609. Corporate Trustee Required; Eligibility...... 53
Section 610. Resignation and Removal; Appointment of
Successor.................................... 54
Section 611. Acceptance of Appointment by Successor....... 55
Section 612. Merger, Conversion, Consolidation or
Succession to Business....................... 57
Section 613. Preferential Collection of Claims Against
Company...................................... 57
Section 614. Appointment of Authenticating Agent.......... 58
ARTICLE SEVEN -- HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY....................................... 60
Section 701. Company to Furnish Trustee Names and
Addresses of Holders......................... 60
Section 702. Preservation of Information; Communications
to Holders................................... 60
Section 703. Reports by Trustee........................... 61
Section 704. Reports by Company........................... 61
ARTICLE EIGHT -- CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR
LEASE......................................... 61
Section 801. Company May Consolidate, Etc., Only on
Certain Terms................................ 61
Section 802. Successor Substituted........................ 62
ARTICLE NINE -- SUPPLEMENTAL INDENTURES........................ 63
Section 901. Supplemental Indentures Without Consent of
Holders...................................... 63
Section 902. Supplemental Indentures with Consent of
Holders...................................... 64
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Section 903. Execution of Supplemental Indentures......... 65
Section 904. Effect of Supplemental Indentures............ 65
Section 905. Conformity with Trust Indenture Act.......... 66
Section 906. Reference in Securities to Supplemental
Indentures................................... 66
ARTICLE TEN -- COVENANTS....................................... 66
Section 1001. Payment of Principal, Premium and Interest... 66
Section 1002. Maintenance of Office or Agency.............. 66
Section 1003. Money for Securities Payments to Be Held in
Trust........................................ 67
Section 1004. Statement by Officers as to Default.......... 68
Section 1005. Existence.................................... 68
Section 1006. Maintenance of Properties.................... 69
Section 1007. Payment of Taxes and Other Claims............ 69
Section 1008. Limitations on Liens......................... 69
Section 1009. Limitations on Sale and Lease-Back
Transactions................................. 72
Section 1010. Waiver of Certain Covenants.................. 73
ARTICLE ELEVEN -- REDEMPTION OF SECURITIES..................... 74
Section 1101. Applicability of Article..................... 74
Section 1102. Election to Redeem; Notice to Trustee........ 74
Section 1103. Selection by Trustee of Securities to Be
Redeemed..................................... 75
Section 1104. Notice of Redemption......................... 75
Section 1105. Deposit of Redemption Price.................. 76
Section 1106. Securities Payable on Redemption Date........ 76
Section 1107. Securities Redeemed in Part.................. 77
ARTICLE TWELVE -- SINKING FUNDS................................ 77
Section 1201. Applicability of Article..................... 77
Section 1202. Satisfaction of Sinking Fund Payments with
Securities................................... 78
Section 1203. Redemption of Securities for Sinking Fund.... 78
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ARTICLE THIRTEEN -- DEFEASANCE AND COVENANT DEFEASANCE.........
79
Section 1301. Company's Option to Effect Defeasance or
Covenant Defeasance.......................... 79
Section 1302. Defeasance and Discharge..................... 79
Section 1303. Covenant Defeasance.......................... 79
Section 1304. Conditions to Defeasance or Covenant
Defeasance................................... 80
Section 1305. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions..................... 82
Section 1306. Reinstatement................................ 83
ARTICLE FOURTEEN -- REPAYMENT AT OPTION OF SECURITY HOLDERS....
83
Section 1401. Applicability of Article..................... 83
Section 1402. Repayment of Securities...................... 83
Section 1403. Exercise of Option; Notice................... 83
Section 1404. Securities Payable on the Repayment Date..... 84
TESTIMONIUM.................................................... 85
SIGNATURES AND SEALS........................................... 85
ACKNOWLEDGEMENTS............................................... 85
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<PAGE> 10
INDENTURE, dated as of March , 1994, between APPLIED MATERIALS, INC.,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 3050
Bowers Avenue, Santa Clara, California 95054-3299, and HARRIS TRUST COMPANY OF
CALIFORNIA, a national banking association, duly organized and existing under
the laws of California, as Trustee hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), unlimited as to principal amount, to bear such rates of interest,
to mature at such time or times, to be issued in one or more series and to have
such other provisions as shall be fixed as hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
<PAGE> 11
2
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted at the date of such
computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Attributable Debt" has the meaning specified in Section 1009.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act for it in respect thereof.
"Board Resolution" means a copy of one or more resolutions certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
<PAGE> 12
3
on which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close, except as may otherwise be
provided in the form of Securities of any particular series pursuant to the
provisions of this Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Net Tangible Assets" means, as of any particular time, the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom: (a) all current liabilities except
for (1) notes and loans payable, (2) current maturities of long-term debt and
(3) current maturities of obligations under capital leases; and (b) to the
extent included in said aggregate amount of assets, all goodwill, trade names,
trademarks, patents, organization expenses, unamortized debt discount and
expenses (other than capitalized unamortized product development costs, such as,
without limitation, capitalized hardware and software development costs), to the
extent included in said aggregate amount of assets, all as set forth on the most
recent consolidated balance sheet of the Company and computed in accordance with
generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be conducted, which
office, at the date of execution of this Indenture, is located at 707 Wilshire
Boulevard, Suite 4840, Los Angeles, California 90017.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
<PAGE> 13
4
"Covenant Defeasance" has the meaning specified in Section 1303.
"Debt" has the meaning specified in Section 1008.
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exempted Secured Debt" has the meaning specified in Section 1008.
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of the particular series of Securities
established as contemplated by Section 301; provided, however, that if at any
time more than one person is acting as Trustee under this Indenture due to the
appointment of one or more separate Trustees for any one or more separate series
of Securities, "Indenture" shall mean, with respect to such series of Securities
for which any such Person is Trustee, this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities for which such
person is Trustee established as contemplated by Section 301, exclusive,
however, of any provisions or terms
<PAGE> 14
5
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such person had become such
Trustee, but to which such person, as such Trustee, was not a party; provided
further that in the event that this indenture is supplemented or amended by one
or more indentures supplemental hereto which are only applicable to certain
series of Securities, the term "Indenture" for a particular series of Securities
shall only include the supplemental indentures applicable thereto.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, exercise of option for
repayment or otherwise.
"Mortgage" and "mortgages" have the respective meanings specified in
Section 1008.
"Notice of Default" means a written notice of the kind specified in
Sections 501(4), 501(5) and (501)(6).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company (and who may be an employee of the Company), or other counsel
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
<PAGE> 15
6
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, (a) the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding shall 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 pursuant to
Section 502, (b) the principal amount of a Security denominated in one or more
foreign currencies or currency units shall be the U.S. dollar equivalent,
determined in the manner provided as contemplated by Section 301 on the date of
original issuance of such Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the amount determined as provided in (a)
above) of such Security, and (c) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be
<PAGE> 16
7
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver or upon any such determination as to the presence of a quorum,
only Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means the land, land improvements, buildings and
fixtures (to the extent they constitute real property interests) (including any
leasehold interest therein) constituting the principal corporate office, any
manufacturing plant or any manufacturing facility, whether owned at the date of
this Indenture or thereafter acquired, and any equipment located thereon, which
(a) is owned by the Company or any Subsidiary, (b) is located within any of the
present 50 states of the United States of America (or the District of Columbia),
(c) has not been determined in good faith by the Board of Directors not to be of
material importance to the business conducted by the Company and its
Subsidiaries taken as a whole, and (d) has a book value on the date as of which
the determination is being made of in excess of 0.75% of Consolidated Net
Tangible Assets of the Company as most recently deter-
<PAGE> 17
8
mined on or prior to such date (including for purposes of such calculation the
land, land improvements, buildings and such fixtures comprising such office,
plant or facility, as the case may be).
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Repayment Date", when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holders, means the date fixed for such
repayment by or pursuant to this Indenture.
"Repayment Price", when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holder, means the price at which it is
to be repaid pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary which owns any Principal
Property; provided, however, that the term "Restricted Subsidiary" shall not
include any Subsidiary which is principally engaged in financing receivables, or
which is principally engaged in financing the Company's operations outside the
United States of America; provided, further, that the term "Restricted
Subsidiary" shall not include any Subsidiary less than 80% of the voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other
<PAGE> 18
9
Subsidiaries, or by the Company and one or more other Subsidiaries if the common
stock of such Subsidiary is traded on any national securities exchange or quoted
on the NASDAQ National Market System or over the counter. For purposes of this
definition, "voting stock" has the meaning specified in the definition of
"Subsidiary," below.
"Sale and Lease-Back" has the meaning specified in Section 1009.
"Security" or "Securities" has the meaning stated in the first recital of
this Indenture and more particularly means any Security or Securities
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means any corporation more than 66 2/3% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in Section
905; provided, however, that in the event the Trust Indenture Act of 1939 is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939, as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the
<PAGE> 19
10
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"U.S. Government Obligations" means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case under clauses (a) or (b) are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
"Vice President", when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
<PAGE> 20
11
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than those provided for in
Section 1004) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
related thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
<PAGE> 21
12
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgements of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
<PAGE> 22
13
(e) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Securities of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by any Person in
respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 701) prior to such first solicitation or vote, as the case
may be. With regard to any record date for action to be taken by the Holders of
one or more series of Securities, only the Holders of Securities of such series
on such date (or their duly designated proxies) shall be entitled to give or
take, or vote on, the relevant action. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to give or take the relevant action, whether or
not such Holders remain Holders after such record date. With regard to any
action that may be given or taken hereunder only by Holders of a requisite
principal amount of Outstanding Securities of any series (or their duly
appointed agents) and for which a record date is set pursuant to this paragraph,
the Company may, at its option, set an expiration date after which no such
action purported to be given or taken by any Holder shall be effective hereunder
unless given or taken on or prior to such expiration date by Holders of the
requisite principal amount of Outstanding Securities of such series on such
record date (or their duly appointed agents). On or prior to any expiration date
set pursuant to this paragraph, the Company may, on one or more occasions at its
option, extend such date to any later date. Nothing in this paragraph shall
prevent any Holder (or any duly appointed agent thereof) from giving or taking,
after any expiration date, any action identical to, or, at any time, contrary to
or different from, any action given or taken, or purported to have been given or
taken, hereunder by a Holder on or prior to such date, in which event the
Company may set a record date in respect thereof pursuant to this paragraph.
(f) Without limiting the foregoing, a Holder entitled hereunder to give or
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
<PAGE> 23
14
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company; provided, however, that
such notice shall not be deemed to be given until received by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
<PAGE> 24
15
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any Authenticating Agent, Paying Agent, Security Registrar and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Repayment
Date or Stated Maturity of any Security shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of this
<PAGE> 25
16
Indenture or the Securities (other than a provision of the Securities of any
series which specifically states that such provision shall apply in lieu of this
Section)) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repayment Date or at
the Stated Maturity, provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date, Repayment Date or Stated
Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
SECTION 202. Form of Face of Security.
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]
<PAGE> 26
17
------------------------------------------------------------
- --------------------------------------------------------------------------------
No. $
APPLIED MATERIALS, INC., a corporation duly organized and existing under
the laws of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or registered
assigns, the principal sum of Dollars on
[IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY,
INSERT --, and to pay interest thereon from or from the
most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on and in
each year, commencing , at the rate of % per annum,
until the principal hereof is paid or made available for payment [IF APPLICABLE,
INSERT --, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of % per annum on any overdue principal and
premium and on any overdue installment of interest]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the
or (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the Holder on such Regular Record Date and may either be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided is said Indenture.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption, upon
repayment or at Stated Maturity and in such case the overdue principal of this
Security
<PAGE> 27
18
shall bear interest at the rate of % per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of % per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such demand for payment to the date payment of
such interest has been made or duly provided for, and such interest shall also
be payable on demand.]
Payment of principal of (and premium, if any) and [IF APPLICABLE,
INSERT -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in , in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. In the event the Global
Security representing the Securities becomes exchangeable for definitive
Securities pursuant to the terms of the Indenture, at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
[IF APPLICABLE, INSERT -- So long as all of the Securities of this series
are represented by Global Securities, the principal of, premium, if any, and
interest, if any, on this Global Security shall be paid in same day funds to the
Depositary, or to such name or entity as is requested by an authorized
representative of the Depositary. If at any time the Securities of this series
are no longer represented by the Global Securities and are issued in definitive
form ("Certificated Securities"), then the principal of, premium, if any, and
interest, if any, on each Certificated Security at Maturity shall be paid in
same day funds to the Holder upon surrender of such Certificated Security at the
Corporate Trust Office of the Trustee, or at such other place or places as may
be designated in or pursuant to the Indenture, provided that such Certificated
Security is surrendered to the Trustee, acting as Paying Agent, in time for the
Paying Agent to make such payments in such funds in accordance with its normal
procedures. Payments of interest with respect to Certificated Securities other
than at Maturity may, at the option of the Company, be made by check mailed to
the address of the Person entitled thereto as it appears on the Security
Register on the relevant Regular or Special Record Date or by wire transfer in
same day funds to such account as may have been appropriately
<PAGE> 28
19
designated to the Paying Agent by such Person in writing not later than such
relevant Regular or Special Record Date.]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereof has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
APPLIED MATERIALS, INC.
By
Attest:
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of March , 1994 (herein called the
"Indenture"), between the Company and Harris Trust Company of California, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [, limited in aggregate amount to $ ].
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE, INSERT --
(1) on in any year commencing with the year and
ending with the year through operation of the sinking fund for
<PAGE> 29
20
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after , 19 ], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed [on or before
, %, and if redeemed] during the 12 month period
beginning of the years indicated,
<TABLE>
<CAPTION>
REDEMPTION REDEMPTION
YEAR PRICE YEAR PRICE
- ---- ---------- ---- ----------
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to % of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on
in any year commencing with the year and ending
with the year through operation of the sinking fund for this series
at the Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [on or after ], as a whole or in part,
at the election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below: If redeemed
<PAGE> 30
21
during the 12-month period beginning of the years
indicated,
<TABLE>
<CAPTION>
REDEMPTION PRICE REDEMPTION PRICE FOR
FOR REDEMPTION REDEMPTION OTHERWISE
THROUGH OPERATION THAN THROUGH OPERATION
YEAR OF THE SINKING OF THE SINKING FUND
- ---- ----------------- ----------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption price equal to % of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
, redeem any Securities of this series as contemplated by
[Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any
refunding operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in accordance with
generally accepted financial practice) of less than % per annum.]
[The sinking fund for this series provides for the redemption on
in each year beginning with the year and ending
with the year of [not less than $ ("mandatory sinking
fund") and not more than] $ aggregate principal amount of Securities
of this series. Securities of this series acquired or redeemed by the Company
otherwise than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the inverse order in which they become due].]
[IF THE SECURITY IS TO BE SUBJECT TO REPAYMENT AT THE OPTION OF THE HOLDER,
INSERT -- To be repaid at the option of the Holder, the Company must receive
this Security, with the form of "Option to Elect Repayment" hereon duly
<PAGE> 31
22
completed, at an office or agency of the Company maintained for that purpose in
(or at such other place of which the Company shall from
time to time notify the Holder of this Security) not less than nor
more than days prior to the Repayment Date. The exercise of the
repayment option by the Holder shall be irrevocable.]
[IF THE SECURITY IS SUBJECT TO REDEMPTION, INSERT -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration
<PAGE> 32
23
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
[IF APPLICABLE, INSERT -- Each of the defeasance and covenant defeasance
provisions of Article Thirteen of the Indenture shall apply to this Security.]
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar, duly executed by the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Security shall for all purposes be governed by and construed in
accordance with the laws of the State of New York.
The terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
<PAGE> 33
24
[FORM OF OPTION TO ELECT REPAYMENT.]
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company to
repay the within Security (or portion thereof specified below) pursuant to its
terms at a price equal to the principal amount thereof, together with interest
to the Repayment Date, to the undersigned, at
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print or Typewrite Name and Address of the Undersigned)
For this Security to be repaid, the Company must receive this Security,
with this "Option to Elect Repayment" form duly completed, at an office or
agency of the Company maintained for that purpose in , or at
such other place of which the Company shall from time to time notify the Holder,
no less than days nor more than days prior to [ , . . .
or ] [the or (commencing on
)].
If less than the entire principal amount of the within Security is to be
repaid, specify the portion thereof (which shall be $ , or an
integral multiple of $ ) which the Holder elects to have repaid:
$ .
Dated: ----------------------------------------
Note: The signature must correspond with
the name as written upon the face of the
Security in every particular without
alteration or enlargement
SECTION 204. Form of Legend for Global Securities.
Any Global Security authenticated and delivered hereunder may bear any
legend required to comply with the requirements of any Depositary.
<PAGE> 34
25
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
HARRIS TRUST COMPANY OF CALIFORNIA
As Trustee
By
Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth, or determined in a manner provided, in an Officer's
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1404 and except for
any Securities which, pursuant to Section 303, are deemed never to have
been authenticated and delivered hereunder);
<PAGE> 35
26
(3) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method by which such rate or rates are determined,
the date or dates from which such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable on any Securities
and the Regular Record Date for any interest payable on any Interest
Payment Date, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(6) the place or places where the principal of and any premium and
interest on Securities of the series shall be payable and where the
Securities of any series may be surrendered for registration of transfer;
(7) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may be
redeemed or repaid, as the case may be, in whole or in part, at the option
of the Holders;
(8) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in
whole or in part, pursuant to such obligation, and any provisions for the
remarketing of such Securities;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) the currency, currencies or currency units in which payment of
the principal of and any premium and interest on any Securities of the
series shall be payable if other than the currency of the United States of
America and the manner of determining the equivalent thereof in the
currency of the United States of America for purposes of the definition of
"Outstanding" in Section 101;
<PAGE> 36
27
(11) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined with reference
to an index, formula or other method, the manner in which such amounts
shall be determined;
(12) if the principal of or any premium or interest on any Securities
of the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
(14) if applicable, that the Securities of such series shall be
defeasible as provided in Article Thirteen;
(15) if and as applicable, that the Securities of such series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the Depositary or Depositaries for such Global Security
or Global Securities and any circumstances other than those set forth in
Section 305 in which any such Global Security may be transferred to, and
registered and exchanged for Securities registered in the name of, a Person
other than the Depositary for such Global Security or a nominee thereof and
in which such transfer may be registered;
(16) the Person who shall be the Security Registrar, if other than the
Trustee, and the Person who will be the Paying Agent;
(17) if applicable, any Events of Default with respect to Securities
of such series, to the extent that such Events of Default are in addition
to the Events of Default herein contained;
(18) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
<PAGE> 37
28
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to 303) set forth, or determined
in the manner provided, in the Officer's Certificate referred to above or in any
such indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be reopened
for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officer's Certificate setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of any
series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President, one of its Vice
Presidents or its Treasurer, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order (which may provide that Securities that are the subject
thereof will be authenticated and delivered by the Trustee from
<PAGE> 38
29
time to time upon the telephonic or written order of Persons designated in said
Company Order and that such Persons are authorized to determine such terms and
conditions of said Securities as are specified in the Company Order) shall
authenticate and deliver such Securities. If the form or terms of the Securities
of the series have been established in or pursuant to one or more Board
Resolutions as permitted by Sections 201 and 301, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form such Securities has been established by or pursuant to
a Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or
pursuant to a Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture;
and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles
and to such other matters as counsel may specify.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of
<PAGE> 39
30
such series to be issued and contemplate issuance of all Securities of such
series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. -- Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 in a Place
of Payment for that series for the purpose of exchanges of Securities of such
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and of
a like aggregate principal amount and tenor. Until so exchanged the temporary
<PAGE> 40
31
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
SECTION 305. -- Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be maintained
by the Company in accordance with Section 1002 a register (being the combined
register of the Security Registrar and all transfer agents designated pursuant
to Section 1002 for the purpose of registration of transfer of Securities and
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency maintained pursuant to Section 1002 for such purpose in
a Place of Payment for that series, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing.
<PAGE> 41
32
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1404 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (b) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except in the case of any Security to be redeemed in part, the portion
thereof not to be redeemed.
Notwithstanding any other provision in this Indenture, any Global Security
shall be exchangeable pursuant to this Section 305 for Securities registered in
the names of Persons other than the Depositary for such Global Security or its
nominee only when (a) such Depositary notifies the Company and the Trustee in
writing that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act, and a successor Depositary is not appointed
by the Company within 90 days, (b) the Company in its sole discretion determines
that Securities shall no longer be represented by a Global Security and executes
and delivers to the Trustee a Company Order that such Global Security shall be
so exchangeable, (c) there shall have occurred and be continuing an Event of
Default or an event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default with respect to the Securities represented
by such Global Security or (d) there shall exist such other circumstances, if
any, as shall be specified for this purpose as contemplated by Section 301. Any
Global Security that is exchangeable pursuant to clause (a), (b), (c) or (d)
above, shall be surrendered by the Depositary, or such other depositary as shall
be specified in the Company Order with respect thereto, to the Trustee, as the
agent for such purpose, to be exchanged, in whole or in part, for definitive
Securities without charge, and the Trustee shall authenticate and deliver, in
exchange for each portion of such permanent Global Security, an equal aggregate
principal amount of definitive Securities, executed by the Company, of the same
series of authorized denominations and
<PAGE> 42
33
of like tenor as the portion of such Global Security to be exchanged, which
shall be in the form of registered Securities as provided in the Company Order.
Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Security other than pursuant to
clauses (a), (b), (c) or (d) in the preceding paragraph, whether pursuant to
this Section, Sections 304, 306, 906, 1107 or 1404 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security.
SECTION 306. -- Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a) evidence to
their satisfaction of the destruction, loss or theft of any Security and (b)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
<PAGE> 43
34
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
In the case of Securities represented by a Global Security registered in
the name of or held by a Depositary or its nominee, unless otherwise specified
by Section 301, payment of principal, premium, if any, and interest, if any,
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or Holder of such Global Security. None of the Company, the
Trustee, any Paying Agent, any Authenticating Agent nor the Security Registrar
for such Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interest in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements
<PAGE> 44
35
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at his address as it appears in
the Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice is given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed practicable
by the Trustee.
At the option of the Company, interest on Securities of any series that
bear interest may be paid by mailing a check to the address of the Person
entitled thereto as such address shall appear in the Security Register, except
as otherwise provided pursuant to Section 301.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
<PAGE> 45
36
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and (except
as otherwise specified as contemplated by Section 301(3) and subject to Section
307) any interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
In the case of a Global Security, so long as the Depositary for such Global
Security, or its nominee, is the registered owner of such Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or Holder of the Securities represented by such Global Security for all
purposes under this Indenture. Except as provided in Section 305, owners of
beneficial interests in a Global Security will not be entitled to have
Securities that are represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or Holders
thereof under this Indenture.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall (a) prevent the Company, the Trustee, or any agent of the Company
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or (b) impair, as between a Depositary
and holders of beneficial interests in any Global Security, the operation of
customary practices governing the exercise of the rights of the Depositary as
Holder of such Global Security.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security issued in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
<PAGE> 46
37
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with its customary practices and the Trustee shall from time to time, or upon
request by the Company, deliver to the Company certificates of destruction with
respect thereto.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
<PAGE> 47
38
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year and are not repayable at the option of the Holder
prior thereto, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company and are not repayable at the option of the Holder
prior thereto,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose, lawful money of the United States or U.S.
Government Obligations which through the payment of interest and
principal in respect thereof in accordance with their terms will
provide lawful money not later than the due dates of principal (and
premium, if any) or interest, or any combination thereof, in an amount
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal and any premium and interest to the date of such deposit
(in the case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to the
Securities of all series to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instruments from all Trustees hereunder.
<PAGE> 48
39
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
401 shall be held in trust and applied by it (without liability, in the case of
monies, for the payment of interest thereon or the investment thereof, except as
otherwise agreed to by the Company and the Trustee for the exclusive benefit of
the Company), in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
except to the extent such event is specifically deleted or modified as
contemplated by Section 301 for the Securities of that series:
(1) default in the payment of any interest upon any Security of that
series when it become due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
<PAGE> 49
40
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is specifically dealt with
elsewhere in this Section or which has expressly been included in this
Indenture solely for the benefit of a series of Securities other than that
series or which has been included in this Indenture but not made applicable
to the Securities of such series), and continuance of such default or
breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the
Trustee by the Holders of at least 15% in principal amount of the
Outstanding Securities of that series a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(5) failure by the Company to make any payment at maturity, including
any applicable grace period, in respect of indebtedness, which term as used
herein means obligations (other than the Securities of such series or
non-recourse obligations) of the Company for borrowed money or evidenced by
bonds, debentures, notes or other similar instruments ("Indebtedness") in
an amount in excess of $10,000,000 or the equivalent thereof in any other
currency or composite currency and such failure shall have continued for
thirty (30) days after written notice thereof shall have been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 15% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(6) a default with respect to any Indebtedness, which default results
in the acceleration of Indebtedness in an amount in excess of $10,000,000
or the equivalent thereof in any other currency or composite currency
without such Indebtedness having been discharged or such acceleration
having been cured, waived, rescinded or annulled for a period of thirty
(30) days after written notice thereof shall have been given to the Company
by the Trustee or to the Company and the Trustee by the Holders of at least
15% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
<PAGE> 50
41
(7) the entry by a court having jurisdiction in the premises of (a) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (b) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its properties, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(8) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by the Company to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company, or the filing by the Company of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law,
or the consent by the Company to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or
of any substantial part of its properties, or the making by the Company of
an assignment for the benefit of creditors, or the admission by the Company
in writing its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or
(9) any other Event of Default established as contemplated by Section
301 with respect to Securities of that series.
provided that if any such failure, default or acceleration referred to in
clauses (5) or (6) above shall cease or be cured, waived, rescinded or annulled,
then the Event of Default hereunder by reason thereof shall be deemed likewise
to have been thereupon cured.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if any of the Securities of
that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities, to the extent that payment of
such interest is lawful,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
<PAGE> 52
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which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series, and any such default continues for any period of
grace provided with respect to the Securities of such series.
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holder of any such Security (or the Holders of any such series in the case of
clause (3) above), the whole amount then due and payable on any such Security
(or on the Securities of any such series in the case of clause (3) above) for
principal and any premium and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate or rates prescribed therefor by
the terms of any such Security (or of Securities of any such series in the case
of clause (3) above); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and all other amounts owing the Trustee under Section
607.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceedings to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner
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provided by law out of the property of the Company or any other obligor upon
such Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly to
the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
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Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium and interest,
respectively; and
THIRD: The balance, if any, to the Company or any other Person or
Persons entitled thereto.
In any case where Securities are outstanding which are denominated in more
than one currency, or in a composite currency and at least one other currency,
and the Trustee is directed to make ratable payments under this Section to
Holders of Securities, the Trustee shall calculate the amount of such payments
as follows: (i) as of the day the Trustee collects an amount under this Article,
the Trustee shall, as to each Holder of a Security to whom an amount is due and
payable under this Section which is denominated in a foreign currency or a
composite currency, determine that amount of U.S. Dollars that would be obtained
for the amount owing such Holder, using the rate of exchange at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York U.S. Dollars with such amount owing, (ii) calculate the sum of all
U.S. Dollar amounts determined under (i) and add thereto any amounts due and
payable in U.S. Dollars; and
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(iii) using the individual amounts determined in (i) or any individual amounts
due and payable in U.S. Dollars, as the case may be, as a numerator and the sum
calculated in (ii) as a denominator, calculate as to each Holder of a Security
to whom an amount is owed under this Section the fraction of the amount
collected under this Article payable to such Holder. Any expenses incurred by
the Trustee in actually converting amounts owing Holders of Securities
denominated in a currency or composite currency other than that in which any
amount is collected under this Article shall be likewise (in accordance with
this paragraph) borne ratably by all Holders of Securities to whom amounts are
payable under this Section.
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against the Company in any court it is necessary to convert
the sum due in respect of the principal of, or any premium or interest on the
Securities of any series (the "Required Currency") into a currency in which
judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the New York Business Day preceding that on which final
judgment is given. The Company shall not be liable for any shortfall nor shall
it benefit from any windfall in payments to Holders of Securities under this
Section caused by a change in exchange rates between the time the amount of a
judgment against it is calculated as above and the time the Trustee converts the
Judgment Currency into the Required Currency to make payments under this Section
to Holders of Securities, but payment of such judgment shall discharge all
amounts owed by the Company on the claim or claims underlying such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (except as specified as
contemplated by Section 301(3) and subject to Section 307) any interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee shall not determine (it being understood that the
Trustee shall have no obligation to make such determination) that the
action so directed would be unjustly prejudicial to Holders of Securities
of that series, or any other series, not taking part in such direction, and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on
any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing (but subject to Section 107),
no provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default known to the Trustee as and to the extent provided by the Trust
Indenture Act and in the manner provided in Section 106; provided, however, that
in the case of any default of the character specified in Sections 501(4), 501(5)
and 501(6) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and
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any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture (including, without
limitation, under Section 512), unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
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and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for investment of or interest on any money received by it hereunder
except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its negligence or
bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder or the
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or perform-
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ance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or
bad faith.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for payment of principal of (and premium, if any) or interest, if any,
on particular Securities.
"Trustee", for purposes of this Section 607, includes any predecessor
Trustee, provided that the negligence or bad faith of any Trustee shall not
affect the rights under this Section 607 of any other Trustee.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture, and the Company
shall take prompt action to have a successor Trustee appointed in the manner
provided herein. For purposes of Section 301(b)(1) of the Trust Indenture Act,
no Trustee hereunder will be deemed to have a conflicting interest solely by
reason of being Trustee in respect of more than one series of Securities.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder with respect to the
Securities of each series, which shall be a Person that is eligible pursuant to
the Trust Indenture Act to act as such and has a combined capital and surplus of
at least $5,000,000, be subject to supervision or examination by Federal or
State authority. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then, for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
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SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(A) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(B) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(C) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
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(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the
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request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (ii)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(iii) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and
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confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In the
event any Securities shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such
Securities, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
SECTION 613. Preferential Collection of Claims Against Company.
Reference is made to Section 311 of the Trust Indenture Act. For purposes
of Sections 311(b)(4) and 311(b)(6) of the Trust Indenture Act, the following
terms shall have the following meanings:
"cash transaction" means any transaction in which full payment for goods or
securities sold is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon banks or bankers
acceptances and payable upon demand.
"self-liquidating paper" means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacture, shipment, storage or
sale of goods, wares or merchandise and which is secured by
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documents evidencing title to, possession of or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $5,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
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Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
HARRIS TRUST COMPANY OF CALIFORNIA,
AS TRUSTEE
By: ,
As Authenticating Agent
By: ,
Authorized Officer
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) semiannually, not later than 15 days after the Regular Record Date
for each series of Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities
as of such Regular Record Date (unless the Trustee has such information),
or if there is no Regular Record Date for interest for such series of
Securities, semi-annually, upon such dates as are set forth in the Board
Resolution or indenture supplemental hereto authorizing such series, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 701 and (ii) received by the Trustee for each series in the capacity as
Security Registrar if the Trustee is acting in such capacity. The Trustee may
destroy any list furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
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disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders of Securities, as their names and
addresses appear in the Security Register, such reports, if any, concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
Any such reports required pursuant to Section 313(a) of the Trust Indenture Act
shall be transmitted on or about July 15, 1994 and on or about each July 15
thereafter and shall be dated not more than 60 days before such July 15.
(b) A copy of such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, if any, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
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(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately 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; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power herein conferred upon the
Company; or
(3) to add any additional Events of Default; or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the
issuance of Securities in uncertificated form; or
(5) to add, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, provided that any
such addition, change or elimination (i) shall not apply to any Security of
any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision or (ii) shall become
effective only when there is no such Security Outstanding; or
(6) to secure the Securities pursuant to the requirements of Section
1008 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
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more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action pursuant
to this clause (9) shall not adversely affect the interests of the Holders
of Securities of any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
502, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or interest thereon is payable, or
impair the right to institute suit for the enforcement of any payment on or
after the Stated Maturity thereof (or, in the case of redemption or
repayment, on or after the Redemption Date or Repayment Date, as the case
may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
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for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1010, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby, provided, however, that this clause shall not be deemed to require
the consent of any Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section and Section 1010, or the
deletion of this proviso, in accordance with the requirements of Sections
611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
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of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
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Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (a) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (b) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
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The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company, or (if then held by the Company) shall be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive, financial or accounting officer of the
Company as to his or her knowledge of the Company's compliance (without regard
to any period of grace or requirement of notice provided hereunder) with all
conditions and covenants hereof.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
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SECTION 1006. Maintenance of Properties.
The Company will cause all material properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as (and to the extent)
in the judgment of the Company may be necessary or appropriate in connection
with its business; provided, however, that nothing in this Section shall prevent
the Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, within
30 days after the Company shall have received notice that the same has become
delinquent (1) all material taxes, assessments and governmental charges levied
or imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a material lien
upon the property of the Company or any Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings;
provided, further, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim unless
the failure to pay or discharge such tax, assessment, charge or claim would,
individually or in the aggregate with all such failures, have a material adverse
effect on the Company and its Subsidiaries taken as a whole.
SECTION 1008. Limitations on Liens.
(a) So long as any Securities of such series remain Outstanding, the
Company will not, nor will it permit any Restricted Subsidiary to, issue, incur,
create, assume or guarantee any debt for borrowed money (hereinafter in this
Article 10 referred to as "Debt"), secured by a mortgage, security interest,
pledge, lien, charge or other encumbrance (mortgages, security interests,
pledges, liens, charges and other encumbrances being hereinafter in this Article
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10, referred to as "mortgage" or "mortgages") upon any Principal Property of the
Company or any Restricted Subsidiary or upon any shares of stock or indebtedness
of any Restricted Subsidiary (whether such Principal Property, shares of stock
or indebtedness are now existing or owed or hereafter created or acquired)
without in any such case effectively providing concurrently with the issuance,
incurrence, creation, assumption or guaranty of any such Debt that the
Securities of such series Outstanding (together with, if the Company shall so
determine, any other indebtedness of or guarantee by the Company or such
Restricted Subsidiary ranking equally with the Securities of such series
Outstanding and then existing or thereafter created) shall be secured equally
and ratably with (or, at the Company's option, prior to) such Debt; provided,
however, that the foregoing restrictions shall not apply to Debt secured by:
(1) mortgages on property, shares of stock or indebtedness or other
assets of any corporation existing at the time such corporation becomes a
Restricted Subsidiary; provided that such mortgages are not incurred in
anticipation of such corporation becoming a Restricted Subsidiary;
(2) (A) mortgages on property, capital stock, indebtedness or other
assets existing at the time of acquisition thereof by the Company or a
Restricted Subsidiary (which may include property previously leased by the
Company and leasehold interests thereon, provided that the lease terminates
prior to the acquisition) or mortgages thereon to secure the payment of all
or any part of the purchase price thereof, (B) or mortgages on property,
capital stock, indebtedness or other assets to secure any Debt incurred
prior to, at the time of, or within 270 days after, the latest of the
acquisition thereof, or, in the case of property, the completion of
construction, the completion of improvements or the commencement of
substantial commercial operation of such property for the purpose of
financing all or any part of the purchase price thereof, such construction
or the making of such improvements;
(3) mortgages securing Debt owing to the Company or to a Restricted
Subsidiary;
(4) mortgages existing on the date of initial issuance of the
Securities of such series;
(5) mortgages on property or other assets of a corporation existing at
the time such corporation is merged into or consolidated with the Company
or a Restricted Subsidiary or at the time of a sale, lease or other
disposition of the properties of a corporation as an entirety or
substantially
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as an entirety to the Company or a Restricted Subsidiary; provided that
such mortgage was not incurred in anticipation of such merger or
consolidation or sale, lease or other disposition;
(6) mortgages on or other conveyances of property or other assets
owned by the Company or a Restricted Subsidiary in favor of the United
States of America or any State, territory or possession thereof (or the
District of Columbia), or any department, agency, instrumentality or
political subdivision of the United States of America or any State,
territory or possession thereof (or the District of Columbia), to secure
partial, progress, advance or other payments pursuant to any contract or
statute or to secure any Debt incurred for the purpose of financing all or
any part of the purchase price or the cost of construction or improvement
of the property subject to such mortgages;
(7) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any mortgage referred to
in the foregoing clauses (1) to (6), inclusive, without increase of the
principal of the Debt secured thereby; provided, however, that such
extension, renewal or replacement shall be limited to all or a part of the
property which secured the mortgage so extended, renewed or replaced (plus
improvements on such property); and provided, further, that any mortgage
permitted by any of the foregoing clauses (1), (2), (3), (4), (5), and (6)
of this Section 1008 shall not extend to or cover any property of the
Company or such Restricted Subsidiary, as the case may be, other than the
property specified in such clauses and improvements thereto.
(b) Notwithstanding the foregoing provisions of this Section 1008, the
Company and any one or more Restricted Subsidiaries may issue, incur, create,
assume or guarantee Debt secured by mortgages which would otherwise be subject
to the foregoing restrictions ("Exempted Secured Debt") in an aggregate amount
which, together with all other outstanding Debt of the Company and its
Restricted Subsidiaries which (if originally issued, incurred, created, assumed
or guaranteed at such time) would otherwise be subject to the foregoing
restrictions (including Attributable Debt in respect of Sale and Lease-Backs as
provided in Section 1009, but not including Debt permitted to be secured under
any of clauses (1) through (7) above or Attributable Debt with respect to a Sale
and Lease-Back if Debt at least equal in amount to the Attributable Debt in
respect of such Sale and Lease-Back could have been issued, incurred, created,
assumed or guaranteed by the Company or one or more Restricted Subsidiaries
under any of clauses (1) through (7) above),
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does not at the time exceed 5% of Consolidated Net Tangible Assets of the
Company.
SECTION 1009. Limitations on Sale and Lease-Back Transactions.
(a) So long as any Securities of such series remain Outstanding, the
Company will not, nor will it permit any Restricted Subsidiary to, enter into
any direct or indirect arrangement with any person that provides for the leasing
to the Company or any Restricted Subsidiary of any Principal Property (except
for leases for a term of not more than three years and except for leases between
the Company and a Restricted Subsidiary or between Restricted Subsidiaries),
which Principal Property has been or is to be sold or transferred by the Company
or such Restricted Subsidiary to such person (such arrangement herein in this
Section 1009 referred to as a "Sale and Lease-Back"), unless:
(1) the Company or such Restricted Subsidiary would be entitled,
pursuant to the provisions of Section 1008, to issue, incur, create, assume
or guarantee Debt secured by a mortgage upon such property at least equal
in amount to the Attributable Debt in respect of such Sale and Lease-Back
without equally and ratably securing the Securities of such series
Outstanding; provided, however, that from and after the date on which such
Sale and Lease-Back becomes effective the Attributable Debt in respect of
such Sale and Lease-Back shall be deemed for all purposes under Section
1008 and this Section 1009 to be Debt subject to the provisions of Section
1008 (including, to the extent relying on the provisions of Section
1008(b), for purposes of calculating Exempted Secured Debt as provided in
Section 1008(b)); or
(2) within 180 days of the effective date of such Sale and Lease-Back,
the Company shall apply an amount in cash equal to the greater of the net
proceeds of the sale involved in such Sale and Lease-Back or the
Attributable Debt in respect of such Sale and Lease-Back either (or a
combination of) (i) to the retirement (other than any mandatory retirement,
mandatory prepayment or sinking fund payment or by way of payment at
maturity), of Debt of the Company or any Restricted Subsidiary (other than
Debt owed by the Company or any Restricted Subsidiary to the Company or any
Restricted Subsidiary or Debt which is subordinate to Securities of such
series Outstanding) which by its terms matures at or is extendible or
renewable at the option of the obligor to a date more than twelve months
after the date of the creation of such Debt, or (ii) to the purchase,
construction or development (or any combination thereof) of other
comparable property.
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(b) For the purposes of this Section 1009, the term "Attributable Debt"
with respect to a Sale and Lease-Back means, at the time of determination, the
lesser of:
(1) the fair market value of the property which is the subject of such
Sale and Lease-Back (as determined in good faith by the Board of Directors)
or;
(2) the then present value of the total net amount of rent required to
be paid under the lease in respect of such Sale and Lease-Back during the
remaining term thereof (including any renewal term or period for which such
lease has been extended) computed by discounting from the respective due
dates to such date such total net amount of rent at the actual interest
factor included in such rent or implicit in the terms of the applicable
Sale and Lease-Back, or, if not practicable to determine such rate, the
rate per annum equal to the weighted average interest rate per annum borne
by the Securities of each series outstanding pursuant to this Indenture
compounded semi-annually, in either case as determined in good faith by the
principal financial or accounting officer of the Company, which computation
shall be binding for purposes of this Indenture absent manifest error;
provided, however, that the net amount of rent required to be paid for any
such period shall be the aggregate amount of the rent payable by the lessee
with respect to such period after excluding amounts required to be paid on
account of or contingent upon maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges. In the case of any lease
which is terminable by the lessee upon the payment of a penalty, such net
amount shall be the lesser of (i) the net amount determined assuming
termination upon the first date such lease may be terminated (in which case
the net amount shall also include the amount of the penalty, but no rent
shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated) or (ii) the net amount
determined assuming no such termination.
SECTION 1010. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1008 and 1009 with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
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but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series of the same tenor, the Company shall,
at least 60 days (45 days in the case of redemption of all Securities of any
series or of any series with the same (i) Stated Maturity, (ii) period or
periods within which, price or prices at which and terms and conditions upon
which such Securities may or shall be redeemed or purchased, in whole or in
part, at the option of the Company or pursuant to any sinking fund or analogous
provision or repayable at the option of the Holder and (iii) rate or rates at
which the Securities bear interest, if any, or formula pursuant to which such
rate or rates accrue (collectively, the "Equivalent Principal Terms")) prior to
the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
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SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities with Equivalent Principal Terms of any
series are to be redeemed (unless all of the Securities of such series and of a
specified tenor are to be redeemed), the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series with Equivalent
Principal Terms or any integral multiple thereof) of the principal amount of
Securities of such series with Equivalent Principal Terms of a denomination
larger than the minimum authorized denomination for Securities of that series.
Unless otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified in the Securities to be redeemed, to each
Holder of Securities to be redeemed, at his address appearing in the Security
Register.
Any notice that is mailed to the Holder of any Securities in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not such Holder receives the notice.
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All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to be
redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the Holder of such Security will
receive, without charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(6) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
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Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking
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fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". The cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1202. Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (a) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (b) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such Series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering the crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
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ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
Section 1302 and/or Section 1303 shall apply to the Outstanding Securities
of any series to the extent specified as contemplated by Section 301 for
Securities of such series.
SECTION 1302. Defeasance and Discharge.
The Company shall be deemed to have been discharged from its obligations
with respect to the Outstanding Securities of such series as provided in this
Section on and after the date the conditions set forth in Section 1304 are
satisfied (hereinafter called "Defeasance"). For this purpose, such Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the Outstanding Securities of such series and to
have satisfied all of its other obligations under the Securities of such series
and this Indenture insofar as the Securities of such series are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), subject to the following which shall survive until
otherwise terminated or discharged hereunder: (a) the rights of Holders of
Securities of such series to receive, solely from the trust fund described in
Section 1304 and as more fully set forth in such Section, payments in respect of
the principal of and any premium and interest on such Securities of such series
when payments are due, (b) the Company's obligations with respect to the
Securities of such series under Sections 304, 305, 306, 1002 and 1003, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and (d)
this Article Thirteen. Subject to compliance with this Article Thirteen, the
Company may defease the Outstanding Securities of any series pursuant to this
Section 1302 notwithstanding the prior Defeasance of the Outstanding Securities
of such series pursuant to Section 1303.
SECTION 1303. Covenant Defeasance.
The Company shall be released from its obligations under Sections 1005
through 1009, inclusive, and the occurrence of any event specified in Sections
501(4) (with respect to any of Sections 1005 through 1009 inclusive) and 501(9)
shall be deemed not to be or result in an Event of Default, in each case with
respect to Outstanding Securities of any series as provided in this Section on
and after the date the conditions set forth in Section 1304 are satisfied
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(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section (to the extent so specified in the case of Section 501(4)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Securities of such series shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to Defeasance pursuant to Section
1302 or Covenant Defeasance pursuant to Section 1303 of the Outstanding
Securities of any series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the
requirements contemplated by Section 609 and agrees to comply with the
provisions of this Article Thirteen applicable to it) as trust funds in
trust for the purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of Outstanding Securities of such series, (A) money in an amount,
or (B) U.S. Government Obligations that through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than the due date of any payment, money in an
amount, or (C) a combination thereof, in each case sufficient, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge each installment of principal (including mandatory
sinking fund payments and amounts that may be payable at the option of the
Holder on any Repayment Date) of, and premium (not relating to optional
redemption), if any, and interest on, the Outstanding Securities of such
series on the dates such installments of principal of, and premium (not
relating to optional redemption), if any, or interest are due.
(2) In the case of Defeasance under Section 1302, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date first set forth hereinabove,
there has been a change in the applicable Federal income tax law, in either
case (A) or (B) to the effect that, and based thereon such
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opinion shall confirm that, the Holders of the Outstanding Securities of
such series will not recognize gain or loss for Federal income tax purposes
as a result of the deposit, Defeasance and discharge to be effected with
respect to the Securities of such series and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as
would be the case if such deposit, Defeasance and discharge were not to
occur.
(3) In the case of Covenant Defeasance under Section 1303, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities of such series will not
recognize income, gain or loss for Federal income tax purposes as a result
of the deposit and Covenant Defeasance to be effected with respect to the
Securities of such series and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would be the case
if such deposit and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that the Securities of such series, if then
listed on any securities exchange, will not be delisted as a result of such
deposit.
(5) No Event of Default or event that (after notice or lapse of time
or both) would become an Event of Default shall have occurred and be
continuing at the time of such deposit or, with regard to any Event of
Default or any such event specified in Sections 501(7) and (8), at any time
on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after
such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of the such
Act).
(7) Such Defeasance or Covenant Defeasance (including the deposit
pursuant to such Defeasance or Covenant Defeasance) shall not result in a
breach or violation of, or constitute a default under, the Indenture or any
other agreement or instrument to which the Company is a party or by which
it is bound.
(8) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
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precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
(9) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within
the meaning of the Investment Company Act of 1940, as amended, unless such
trust shall be qualified under such Act or exempt from regulation
thereunder.
SECTION 1305. Deposited Money and U.S. Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of the
Securities of any series shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Securities of such series and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge that by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 with respect to Securities of any series that, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Defeasance or Covenant Defeasance with respect to the Securities of
such series.
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SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Thirteen with respect to the Securities of any
series by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Thirteen with respect to Securities of such series until such time
as the Trustee or Paying Agent is permitted to apply all money held in trust
pursuant to Section 1305 with respect to Securities of such series in accordance
with this Article Thirteen; provided, however, that if the Company makes any
payment of principal of or any premium or interest on any Security of such
series following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of Securities of such series to receive
such payment from the money so held in trust.
ARTICLE FOURTEEN
REPAYMENT AT OPTION OF SECURITY HOLDERS
SECTION 1401. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with their
terms and (except as otherwise contemplated by Section 301 for Securities of
such series) in accordance with this Article.
SECTION 1402. Repayment of Securities.
Each Security which is subject to repayment in whole or in part at the
option of the Holder thereof on a Repayment Date shall be repaid at the
applicable Repayment Price together with interest accrued to such Repayment Date
as specified pursuant to Section 301.
SECTION 1403. Exercise of Option; Notice.
Each Holder desiring to exercise his option for repayment shall, as
conditions to such repayment, surrender the Security to be repaid together with
all coupons, if any, appertaining thereto maturing after the Repayment Date and
with written notice of the exercise of such option at any office or agency of
the Company in a Place of Payment, not less than 15 nor more than 30 days
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prior to the Repayment Date. Such notice, which shall be irrevocable, shall
identify the Security to be repaid and shall specify the principal amount of
such Security to be repaid, which shall be not less than the minimum authorized
denomination for such Security or an integral multiple thereof and, in the case
of a partial repayment of the Security, the denomination or denominations of the
Security or Securities with Equivalent Principal Terms to be issued to the
Holder for the portion of the principal of the Security surrendered which is not
to be repaid.
Any Security which is to be repaid only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities with Equivalent Principal Terms, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the repayment of Securities shall relate, in the case
of any Security repaid or to be repaid only in part, to the portion of the
principal of such Security which has been or is to be repaid.
SECTION 1404. Securities Payable on the Repayment Date.
Notice of exercise of the option of repayment having been given and the
Securities so to be repaid having been surrendered as aforesaid, such Securities
shall, on the Repayment Date, become due and payable at the Repayment Price
therein specified and from and after such date (unless the Company shall default
in the payment of Repayment Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for repayment in
accordance with Section 1403, such Security shall be paid by the Company at the
Repayment Price, together with accrued interest to the Repayment Date; provided,
however, that, installments of interest on Securities whose Stated Maturity is
on or prior to the Repayment Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
<PAGE> 94
85
If any Security duly surrendered for repayment shall not be so paid, the
principal and any premium shall, until paid, bear interest from the Repayment
Date at the rate prescribed therefor in the Security.
---------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
APPLIED MATERIALS, INC.
By:
Name:
[SEAL] Title:
Attest:
- ------------------------------------------------
HARRIS TRUST COMPANY OF CALIFORNIA
By:
Name:
Title:
[SEAL]
Attest:
- ------------------------------------------------
<PAGE> 1
EXHIBIT 5.1
<PAGE> 2
EXHIBIT 5.1
March 1, 1994
Applied Materials, Inc.
3050 Bowers Avenue
Santa Clara, California 95054
Re: Applied Materials, Inc.
Registration Statement on Form S-3
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form S-3
(the "Registration Statement"), in the form to be filed by Applied Materials,
Inc. (the "Company") with the Securities and Exchange Commission in connection
with the registration under the Securities Act of 1933, as amended (the "Act"),
of the Company's senior debt securities (the "Senior Debt Securities") and the
Company's Common Stock (the "Common Stock"), with an aggregate offering price of
up to $250,000,000 or the equivalent thereof in one or more foreign currencies
or composite currencies. The Senior Debt Securities are to be issued under an
Indenture, a form of which has been filed as an exhibit to the Registration
Statement (the "Indenture") between the Company and Harris Trust Company of
California, as Trustee (the "Trustee"). The Common Stock and the Senior Debt
Securities are to be issued pursuant to an Underwriting Agreement (the
"Underwriting Agreement"), in the form filed as an exhibit to the Registration
Statement. The Senior Debt Securities are to be issued in the form filed as an
exhibit to the Registration Statement. The Senior Debt Securities and the Common
Stock are to be sold from time to time as set forth in the Registration
Statement, the Prospectus contained therein (the "Prospectus") and the
supplements to the Prospectus (the "Prospectus Supplements").
We have examined instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the following: (a) the authenticity of
original documents and the genuineness of all signatures; (b) the conformity to
the originals of all documents submitted to us as copies; and (c) the truth,
accuracy, and completeness of the information, representations and warranties
contained in the records, documents, instruments and certificates we have
reviewed.
Based on such examination, we are of the opinion that:
1. When the issuance of Senior Debt Securities has been duly
authorized by appropriate corporate action and the Senior Debt Securities,
in the form filed as an exhibit to the Registration Statement, have been
duly completed, executed, authenticated and delivered in accordance with
the Indenture and sold pursuant to the Underwriting Agreement and as
described in the Registration Statement, any amendment thereto, the
Prospectus and any Prospectus Supplement relating thereto, the Senior Debt
Securities will be legal, valid and binding obligations of the Company,
entitled to the benefits of such Indenture.
2. When the issuance of the Common Stock has been duly authorized by
appropriate corporate action and the Common Stock has been duly issued,
sold and delivered in accordance with the Underwriting Agreement and as
described in the Registration Statement, any amendment thereto, the
Prospectus and the Prospectus Supplement relating thereto, the Common Stock
will be legally issued, fully paid, and nonassessable.
Our opinion that any document is legal, valid and binding is qualified as
to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium or other laws relating to or
affecting the rights of creditors generally; and
(b) general principles of equity, including without limitation
concepts of materiality, reasonableness, good faith and fair dealing, and
the possible unavailability of specific performance or injunctive relief,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
<PAGE> 3
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement and to the use of our name wherever it
appears in the Registration Statement, the Prospectus, the Prospectus
Supplement, and in any amendment or supplement thereto. In giving such consent,
we do not believe that we are "experts" within the meaning of such term as used
in the Act or the rules and regulations of the Securities and Exchange
Commission issued thereunder with respect to any part of the Registration
Statement, including this opinion as an exhibit or otherwise.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE
<PAGE> 1
EXHIBIT 12.1
<PAGE> 2
EXHIBIT 12.1
APPLIED MATERIALS, INC.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------- FISCAL YEAR ENDED(1)
JANUARY 30, JANUARY 31, ------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
----------- ----------- -------- ------- ------- ------- -------
(IN THOUSANDS, EXCEPT RATIOS)
<S> <C> <C> <C> <C> <C> <C> <C>
Income from consolidated companies
before provision for income taxes and
cumulative effect of accounting
change............................... $60,680 $21,919 $153,558 $58,925 $40,355 $54,084 $84,402
----------- ----------- -------- ------- ------- ------- -------
Fixed charges:
Interest expense..................... 3,648 3,598 14,206 15,207 13,969 6,717 2,768
Interest component of rent
expense(1)........................ 2,607 2,124 9,021 7,197 5,968 4,344 3,085
----------- ----------- -------- ------- ------- ------- -------
Total fixed charges.......... 6,255 5,722 23,227 22,404 19,937 11,061 5,853
----------- ----------- -------- ------- ------- ------- -------
Income from consolidated companies
before income taxes and cumulative
effect of accounting change plus
fixed charges........................ $66,935 $27,641 $176,785 $81,329 $60,292 $65,145 $90,255
----------- ----------- -------- ------- ------- ------- -------
Ratio of earnings to fixed charges..... 10.70x 4.83x 7.61x 3.63x 3.02x 5.89x 15.42x
</TABLE>
- ---------------
(1) For leases where the interest factor can be specificially identified, the
actual interest factor was used. For all other leases, the interest factor
is estimated at one-third of total rent expense for the applicable period,
which management believes represents a reasonable approximation of the
interest factor. Amounts exclude the Company's proportional share of the
earnings and fixed charges of the joint venture, which are insignificant.
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to incorporation by reference in the Prospectus constituting
part of this Registration Statement on Form S-3 of our report dated November 24,
1993, which appears on page 35 of the Annual Report to Stockholders of Applied
Materials, Inc. for the year ended October 31, 1993, which is incorporated by
reference in Applied Materials Inc.'s Annual Report on Form 10-K for the year
ended October 31, 1993. We also consent to the incorporation by reference of our
report on the Financial Statement Schedules which appears on page 19 of such
Annual Report on Form 10-K. We also consent to the references to us under the
headings "Experts" and "Selected Consolidated Financial Data" in such
Prospectus. However, it should be noted that Price Waterhouse has not prepared
or certified such "Selected Consolidated Financial Data."
PRICE WATERHOUSE
February 28, 1994
San Jose, California
<PAGE> 1
EXHIBIT 24.1
<PAGE> 2
EXHIBIT 24.1
POWER OF ATTORNEY
The undersigned directors and officers of Applied Materials, Inc., a
Delaware corporation (the "Company") constitute and appoint James C. Morgan and
Gerald F. Taylor, and each one of them with full power to act without the other,
such person's true and lawful attorneys-in-fact, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to execute in the name and on behalf of the undersigned as such
director or officer a Registration Statement on Form S-3 or other appropriate
form, under the Securities Act of 1933, as amended, with respect to shares of
Common Stock and Debt Securities of the Company, and any and all amendments
(including post-effective amendments) to such Registration Statement, and to
file such Registration Statement and any and all amendments thereto, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing necessary or desirable to be done in and about the premises, as fully to
all intents and purposes, as he might or could do in person, thereby ratifying
and confirming all that said attorneys-in-fact, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of March,
1994.
<TABLE>
<S> <C>
GERALD F. TAYLOR
JAMES C. MORGAN Gerald F. Taylor,
James C. Morgan, Senior Vice President,
Chairman, Chief Executive Chief Financial Officer and
Officer and Director Principal Accounting Officer
JAMES W. BAGLEY
DAN MAYDAN James W. Bagley,
Dan Maydan, Director
Director
HERBERT M. DWIGHT, JR.
PAUL L. LOW Herbert M. Dwight, Jr.,
Paul R. Low, Director
Director
GEORGE B. FARNSWORTH
George B. Farnsworth, Alfred J. Stein,
Director Director
PHILIP GERDINE Dr. Hiroo Toyoda,
Philip V. Gerdine, Director
Director
</TABLE>
<PAGE> 1
EXHIBIT 25.1
<PAGE> 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
------------------------
HARRIS TRUST COMPANY
OF CALIFORNIA
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
CALIFORNIA 94-0304530
(STATE OF INCORPORATION (I.R.S. EMPLOYER
IF NOT A NATIONAL BANK) IDENTIFICATION NO.)
</TABLE>
601 SOUTH FIGUEROA STREET, 49TH FLOOR
LOS ANGELES, CALIFORNIA 90017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
ESTHER CERVANTES, HARRIS TRUST COMPANY OF CALIFORNIA
601 SOUTH FIGUEROA STREET, 49TH FLOOR
LOS ANGELES, CALIFORNIA 90017
(213) 239-0675
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------
APPLIED MATERIALS, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 94-1655526
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION IDENTIFICATION NO.)
</TABLE>
3050 BOWERS AVENUE
SANTA CLARA, CALIFORNIA 95054
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
------------------------
SENIOR DEBT SECURITIES
(TITLE OF THE INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 3
GENERAL
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervisory authority to which it
is subject.
State Banking Department
111 Pine Street
Suite 1100
San Francisco, California 94104
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR
If the obligor is an affiliate of the Trustee, describe each affiliation.
None.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE
Furnish the following information as to each class of voting securities of
the Trustee:
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COL. A COL. B
- ------------------------------------------------------------
TITLE OF STOCK AMOUNT OUTSTANDING
- -------------- ------------------
<C> <S> <C>
Common Stock .............................................. 2,500 Shares
</TABLE>
ITEM 4. TRUSTEESHIP UNDER OTHER INDENTURES
If the Trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each such other indenture.
None
(b) A brief statement of the facts relied upon as a basis for the claim
that no conflicting interest within the meaning of Section 310(b)(1) of
the Act arises as a result of the trusteeship under any such other
indenture, including a statement as to how the indenture securities
will rank as compared with the securities issued under such other
indenture.
Not applicable
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS
If the Trustee or any of the directors or executive officers of the Trustee
is a director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
None
1
<PAGE> 4
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS
Furnish the following information as to the voting securities of the
Trustee owned beneficially by the obligor and each director, partner, and
executive officer of the obligor.
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COLUMN D
-----------------
PERCENTAGE OF
COLUMN C VOTING SECURITIES
COLUMN A COLUMN B ------------ REPRESENTED BY
- ------------- -------------- AMOUNT OWNED AMOUNT GIVEN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY IN COLUMN C
- ------------- -------------- ------------ -----------------
<S> <C> <C> <C>
None
</TABLE>
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS
Furnish the following information as to the voting securities of the
Trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COLUMN D
-----------------
PERCENTAGE OF
COLUMN C VOTING SECURITIES
COLUMN A COLUMN B ------------ REPRESENTED BY
- ------------- -------------- AMOUNT OWNED AMOUNT GIVEN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY IN COLUMN C
- ------------- -------------- ------------ -----------------
<S> <C> <C> <C>
None
</TABLE>
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
Trustee.
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COLUMN B
------------- COLUMN C COLUMN D
WHETHER THE ------------------------- -------------------
SECURITIES AMOUNT OWNED BENEFICIALLY PERCENTAGE OF CLASS
COLUMN A ARE VOTING OR HELD AS COLLATERAL REPRESENTED BY
- -------------- OR NON-VOTING SECURITY FOR OBLIGATIONS AMOUNT GIVEN
TITLE OF CLASS SECURITIES IN DEFAULT IN COLUMN C
- -------------- ------------- ------------------------- -------------------
<S> <C> <C> <C>
None
</TABLE>
2
<PAGE> 5
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE
If the Trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor, furnish
the following information as to each class of securities of such underwriter of
which are so owned or held by the Trustee.
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COLUMN B
------------- COLUMN C COLUMN D
WHETHER THE ------------------------- -------------------
SECURITIES AMOUNT OWNED BENEFICIALLY PERCENTAGE OF CLASS
COLUMN A ARE VOTING OR HELD AS COLLATERAL REPRESENTED BY
- -------------- OR NON-VOTING SECURITY FOR OBLIGATIONS AMOUNT GIVEN
TITLE OF CLASS SECURITIES IN DEFAULT IN COLUMN C
- -------------- ------------- ------------------------- -------------------
<S> <C> <C> <C>
None
</TABLE>
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR
If the Trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge of
the Trustee (1) owns 10 percent or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish the
following information as to the voting securities of such person.
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COLUMN C
------------------------- COLUMN D
COLUMN A COLUMN B AMOUNT OWNED BENEFICIALLY ---------------------
- ------------------ ----------- OR HELD AS COLLATERAL PERCENTAGE OF CLASS
NAME OF ISSUER AMOUNT SECURITY FOR OBLIGATIONS REPRESENTED BY AMOUNT
AND TITLE OF CLASS OUTSTANDING IN DEFAULT BY TRUSTEE GIVEN IN COLUMN C
- ------------------ ----------- ------------------------- ---------------------
<C> <S> <C> <C>
None
</TABLE>
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
If the Trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of the
Trustee, owns 50 percent or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such person
any of which are so owned or held by the Trustee.
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COLUMN C
------------------------- COLUMN D
COLUMN A COLUMN B AMOUNT OWNED BENEFICIALLY ---------------------
- ------------------ ----------- OR HELD AS COLLATERAL PERCENTAGE OF CLASS
NAME OF ISSUER AMOUNT SECURITY FOR OBLIGATIONS REPRESENTED BY AMOUNT
AND TITLE OF CLASS OUTSTANDING IN DEFAULT BY TRUSTEE GIVEN IN COLUMN C
- ------------------ ----------- ------------------------- ---------------------
<C> <S> <C> <C>
None
</TABLE>
3
<PAGE> 6
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
If the obligor is indebted to the trustee, furnish the following
information:
AS OF FEBRUARY 25, 1994
<TABLE>
<CAPTION>
COLUMN A COLUMN B
- ---------------------- ------------------ COLUMN C
NATURE OF AMOUNT --------
INDEBTEDNESS OUTSTANDING DATE DUE
- ---------------------- ------------------ --------
<C> <S> <C>
None
</TABLE>
ITEM 13. DEFAULT BY THE OBLIGOR
(a) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such default.
None
(b) If the trustee is a trustee under another indenture under which any
other securities or certificates of interest or participation in any other
securities, of the obligor are outstanding, or if the trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
None
ITEM 14. AFFILIATION WITH THE UNDERWRITERS
If any underwriter is an affiliate of the Trustee, describe such
affiliation.
None.
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be qualified
under the Act.
Not applicable.
4
<PAGE> 7
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<S> <C>
Exhibit A copy of the articles of association of Trustee as presently in effect:
T-1A. Restated Articles of Incorporation and Amendment of February 9, 1994.
Exhibit A copy of the certificate of authority of the Trustee to commence
T-1B. business, if not contained in the articles of association: Certificate of
authority to commence business.
Exhibits T-1B is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1B.
Exhibit A copy of the authorization of the Trustee to exercise corporate trust
T-1C. powers, if such authorization is not contained in the documents specified
in paragraph (1) and (2) above.
Exhibits T-1C is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1C.
Exhibit Copy of the existing bylaws of the Trustee or instruments corresponding
T-1D. thereto: By-Laws of Harris Trust Company of California as of March 30,
1988, as presently in effect.
Exhibits T-1D is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1D.
Exhibit A copy of each indenture referred to in Item 4, if obligor is in default.
T-1E.
Not Applicable.
Exhibit The consents of United States institutional trustees required by Section
T-1F. 321 of the Act.
Exhibits T-1F is incorporated herein by reference to S.E.C. File No.
33-69382 of the Registration Statement of Pacific Gulf Properties, Inc.
Exhibit T-1F.
Exhibit A copy of the latest report of condition of the Trustee published
T-1G. pursuant to law or the requirement of its supervising or examining
authority: Consolidated Report of Condition of Harris Trust Company of
California Form 500P as of close of business on 31st day of December
1993.
Exhibit A copy of any order pursuant to which the foreign trustee is authorized
T-1H. to act as sole trustee under the indentures qualified or to be qualified
under the Act.
Not Applicable.
Exhibit Foreign trustees are required to file a consent to service of process on
T-1I. Forms F-X.
Not Applicable.
</TABLE>
5
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Trust Indenture Act of 1939 the
Trustee, Harris Trust Company of California, a corporation organized and
existing under the laws of California, has duly caused this Statement of
Eligibility and Qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of Los Angeles, State of California,
on February 25, 1994.
HARRIS TRUST COMPANY OF CALIFORNIA
By FREDERICK A. SCHAAL
Frederick A. Schaal
Vice President
6
<PAGE> 9
March 1, 1994
(415) 773-5520
VIA EDGAR
Securities and Exchange Commission
Filing Desk
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Applied Materials, Inc.
Ladies and Gentlemen:
On behalf of Applied Materials, Inc. (the "Company"), for the purpose of
registering up to $250,000,000 of debt securities and common stock, par value
$.01 per share, under the Securities Act of 1933, as amended (the "Act"), we
transmit for filing one signed copy of the Registration Statement on Form S-3,
together with exhibits thereto. The Company has previously fed-wired $86,207 in
payment of the requisite filing fee to the Commission's account at Mellon Bank.
Please be advised that the Company is filing the registration statement as
a shelf registration statement but is also including two Prospectus Supplements,
one relating to $100 million of debt securities and the other relating to
2,000,000 shares of Common Stock (together with an underwriters' over-allotment
option). The Prospectus Supplements are intended to meet the requirements of
Rule 430A because, depending on market conditions existing at the time of
effectiveness, the Company may desire to commence the sale of either or both of
the Common Stock and the debt securities, immediately upon effectiveness
pursuant to the Commission's Rule 430A and 424 Interpretive Memorandum No. 2
dated July 27 - August 21, 1987. The Company will, in its acceleration request,
indicate what portion of the offering it intends at that time to make on a
delayed or continuous basis.
Please direct notice of the availability of effectiveness, or any comments
or questions regarding this filing, to me at the number indicated above or to
Duke Slichter of this office at (415) 773-5402.
Very truly yours,
Dana M. Ketcham
Enclosures
cc: Nancy H. Handel
John A. Fore
Donald A. Slichter
<PAGE> 10
A442404 EXHIBIT T-1A
State of California
OFFICE OF THE SECRETARY OF STATE
CORPORATION DIVISION
I, MARCH FONG EU, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the corporate
record on file in this office, of which it purports to be a copy, and that
same is full, true and correct.
IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of
the State of California this
FEB - 9 1994
MARCH FONG EU
Secretary of State
<PAGE> 11
A442404
<TABLE>
<S> <C>
ENDORSED ENDORSED
APPROVED FILED
DEC 29 1993 In the office of the
JAMES E. GILLERAN Secretary of State
Superintendent of Banks of the State of California
State of California FEB - 9 1994
By DIANA H. NISHIURA MARCH FONG EU,
Diana H. Nishiura Secretary of State
Counsel
</TABLE>
CERTIFICATE OF AMENDMENT AND RESTATEMENT
RESTATED ARTICLES OF INCORPORATION OF
HARRIS TRUST COMPANY OF CALIFORNIA
Steven R. Rothbloom and Blanche O. Hurt certify:
1. That they are the President and Secretary, respectively, of Harris
Trust Company of California, a California corporation.
2. That at a special meeting of the board of directors of the corporation
duly held by conference telephone on October 28, 1993, the board duly
approved and adopted amendments to the Articles of Incorporation. The
Articles of Incorporation of this corporation are amended and restated
in full to read as follows:
<TABLE>
<S> <C>
FIRST: The name of this corporation is: Harris Trust Company of California
SECOND: The purpose of this corporation is to engage in trust business and any other
lawful activities which are not, by applicable laws or regulations, prohibited
to a trust company.
THIRD: This corporation is authorized to issue only one class of shares of stock which
shall be designated "common" stock. The total number of shares which the
corporation is authorized to issue is 25,000.
The common shares of this corporation shall be subject to assessment by the
Board of Directors upon order of the Superintendent of Banks of the State of
California for the purpose of restoring an impairment or reduction of capital in
the manner and to the extent provided by the Financial Code of the State of
California.
FOURTH: This corporation elects to be governed by
(a) all of the provisions of the General Corporation Law of California not
otherwise applicable to it under Chapter 23 thereof, and
(b) all of the provisions of the Revised Banking Law effective January 1, 1979
not otherwise applicable to it under Chapter 1.5 thereof, to the extent
applicable to trust companies.
</TABLE>
3. The foregoing amendment and restatement of the Articles of
Incorporation have been duly adopted and approved by written consent of
the sole shareholder.
In witness whereof, the undersigned have executed this Certificate of
Amendment on October 28, 1993.
STEVEN R. ROTHBLOOM
Steven R. Rothbloom, President
BLANCH O. HURT
Blanch O. Hurt, Secretary
<PAGE> 12
AFFIDAVIT
I, Steven R. Rothbloom, being duly sworn, do hereby swear under penalty of
perjury and affirm that the information set forth in the certificate above is
true and accurate of my own personal knowledge.
FURTHER AFFIANT SAYETH NOT.
STEVEN R. ROTHBLOOM
SUBSCRIBED AND SWORN TO before me
this 4th day of February, 1994 at
Chicago, Illinois
KIMBERELY LANGE
AFFIDAVIT
I, Blanche O. Hurt, being duly sworn, do hereby swear under penalty of
perjury and affirm that the information set forth in the certificate above is
true and accurate of my own personal knowledge.
FURTHER AFFIANT SAYETH NOT.
BLANCHE O. HURT
SUBSCRIBED AND SWORN TO before me
this 4th day of February, 1994 at
Chicago, Illinois
KIMBERELY LANGE
<PAGE> 13
EXHIBIT T-1G
Consolidated Report on Condition of Harris Trust Company of California of
Los Angeles, at the close of business on December 31, 1993.
State Bank No. 642
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
IN THOUSANDS
<S> <C>
ASSETS
1. Cash and due from banks........................................................ $ 76
2. Investment securities (Market value $6,123).................................... 6,129
5. Federal funds sold and securities purchased under agreements to resell in
domestic offices............................................................... 500
7. Bank premises, F.F. & E. etc. (including $.00 capital lease)................... 34
11. Other assets (including $683 intangibles)...................................... 1,195
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12. TOTAL ASSETS (sum of items 1 thru 11).......................................... $7,934
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LIABILITIES
18. Other liabilities.............................................................. $ 387
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19. TOTAL LIABILITIES (excluding subordinated notes and debentures)................ $ 387
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SHAREHOLDERS EQUITY
21. Preferred stock a. No shares outstanding -- amount............................. --
22. Common stock a. No shares authorized -- amount-2,500........................... $2,500
23. Surplus........................................................................ 2,500
24. TOTAL CONTRIBUTED CAPITAL (sum of items 21, 22 & 23)........................... 5,000
25. Retained earnings.............................................................. 2,547
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27. TOTAL SHAREHOLDERS EQUITY (sum of items 24, 25 & 26)........................... $7,547
28. TOTAL SHAREHOLDERS EQUITY (sum of items 19, 20 & 27)........................... $7,934
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</TABLE>
The undersigned, M. Valoise Douglas, VP, GM and Steven Rothbloom, Pres,
Chrm of the above-named bank, each declared for himself alone and not for the
other: I have personally knowledge of the matters contained in this report and I
believe that each statement in said report is true. Each of the undersigned, for
himself alone and not for the other, certifies under penalty of perjury that the
foregoing is true and correct.
Executed on January 28, 1994, at Los Angeles, California.
