<PAGE>
As filed with the Securities and Exchange Commission on March 6,1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________
APPLIED POWER INC.
(Exact name of Registrant as specified in its charter)
________________
WISCONSIN 39-0168610
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
(414) 781-6600
(Address, including ZIP Code, and telephone number,
including area code, of Registrant's principal executive offices)
ROBERT C. ARZBAECHER
Vice President and Chief Financial Officer
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
(414) 781-6600
(Name, address, including ZIP Code, and telephone number,
including area code, of agent for service)
________________
Copies to:
BRUCE C. DAVIDSON GARY W. WOLF
Quarles & Brady Cahill Gordon & Reindel
411 East Wisconsin Avenue 80 Pine Street
Milwaukee, Wisconsin 53202 New York, New York 10005
(414) 277-5000 (212) 701-3600
________________
Approximate date of commencement of proposed sale of the securities to
the public: At such time or from time to time after the effective date of this
Registration Statement as the Registrant shall determine in light of market
conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] _______________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] _______________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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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 per unit price fee
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<S> <C> <C> <C> <C>
Debt Securities (1) (3) (3) $300,000,000 (4) $88,500 (5)
Class A Common Stock,
par value $.20 per share (2)
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</TABLE>
(1) Subject to note (4) below, there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from time
to time, by the Registrant. If any Debt Securities are issued at an
original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price not
to exceed U.S. $300,000,000, less the dollar amount of any securities
previously issued hereunder.
(2) Subject to note (4) below, there are being registered hereunder an
indeterminate number of shares of Class A Common Stock as may be sold, from
time to time, by the Registrant.
(3) Not applicable pursuant to the Note following the Calculation of
Registration Fee Table and General Instruction II.D. to Form S-3, which
provide that only the maximum aggregate offering price for all classes of
securities to be registered need be specified.
(4) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
U.S. $300,000,000. Any securities registered hereunder may be sold
separately or as units with other securities registered hereunder.
(5) Calculated pursuant to Rule 457(o) at the statutory rate of .000295 of the
maximum aggregate offering price.
________________
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 the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
SUBJECT TO COMPLETION, DATED MARCH 6, 1998
$300,000,000
APPLIED POWER INC.
DEBT SECURITIES
CLASS A COMMON STOCK
Applied Power Inc. (the "Company") may offer from time to time (i)
unsecured debt securities ("Debt Securities") consisting of debentures, notes
and/or other evidences of unsecured indebtedness in one or more series or (ii)
Class A Common Stock, par value $.20 per share ("Common Stock") (the Debt
Securities and Common Stock are collectively referred to as "Securities"), or
any combination of the foregoing, at an aggregate initial offering price not to
exceed U.S. $300,000,000, at prices and on terms to be determined at or prior to
the time of sale in light of market conditions at the time of sale.
Specific terms of the particular Securities in respect of which this
Prospectus is being delivered will be set forth in one or more accompanying
Prospectus Supplements (each a "Prospectus Supplement"), together with the terms
of the offering of the Securities and the initial price and the net proceeds to
the Company from the sale thereof. The Prospectus Supplement will set forth with
regard to the particular Securities, without limitation, the following: (i) in
the case of Debt Securities, the specific designation, aggregate principal
amount, ranking as senior debt or subordinated debt, authorized denomination,
maturity, rate or method of calculation of interest and dates for payment
thereof, any exchangeability, conversion, redemption, prepayment or sinking fund
provisions, any covenants which may apply, and any other specific terms thereof,
and (ii) in the case of Common Stock, the number of shares of Common Stock and
the terms of the offering and sale thereof.
The Company may sell Securities offered hereby to or through underwriters
or dealers, and also may sell Securities directly to other purchasers or through
agents. The Prospectus Supplement will also set forth the names of the
underwriters, dealers and agents involved in the sale of the Securities offered
hereby, the principal amounts, if any, to be purchased by the underwriters or
agents and the compensation, if any, of such underwriters or agents and any
applicable commissions or discounts. The net proceeds to the Company from the
sale of the Securities offered hereby will also be set forth in the Prospectus
Supplement.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is , 1998.
<PAGE>
No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Company or any underwriter, dealer or agent. Neither the delivery of this
Prospectus or the accompanying Prospectus Supplement nor any sale made hereunder
or thereunder shall, under any circumstances, create an implication that the
information contained herein or in the accompanying Prospectus Supplement is
correct as of any date subsequent to the date hereof or thereof or that there
has been no change in the affairs of the Company since the date hereof or
thereof. Neither this Prospectus nor the accompanying Prospectus Supplement
constitutes an offer to sell or a solicitation of an offer to buy Securities 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 any person to whom it is unlawful to make such offer or solicitation.
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 or information statements and other information
with the Securities and Exchange Commission (the "Commission"), all of which may
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549, and at the following Regional Offices of the Commission: Chicago
Regional Office, Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material can be
obtained at the prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
The Commission maintains a site on the World Wide Web, and the reports,
statements and other information filed by the Company with the Commission may be
accessed electronically on the Web at http://www.sec.gov. Such material can
also be inspected at the offices of the New York Stock Exchange (the "NYSE"), 20
Broad Street, New York, New York 10005, where the Common Stock is listed (symbol
"APW").
This Prospectus constitutes part of a Registration Statement on Form S-3
filed by the Company with the Commission under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus omits certain of the information
contained in the Registration Statement in accordance with the rules and
regulations of the Commission. Reference is hereby made to the Registration
Statement and related exhibits for further information with respect to the
Company and the Securities. Statements contained herein concerning the
provisions of any document are not necessarily complete and, in each instance,
where a copy of such document has been filed as an exhibit to the Registration
Statement or otherwise has been filed with the Commission, reference is made to
the copy of the applicable document so filed. Each such statement is qualified
in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (Commission File
No. 1-11288) with the Commission pursuant to the Exchange Act are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended November 30, 1997;
(c) The Company's Current Report on Form 8-K dated October 3, 1997 and the
Company's Amendment to Current Report on Form 8-K/A filed December 17,
1997; and
(d) The Company's Current Report on Form 8-K dated November 4, 1997.
In lieu of incorporating by reference the description of the Common Stock
contained in the Company's Current Report on Form 8-K dated January 28, 1991,
filed for the purpose of updating the description of the Common Stock contained
in the Company's registration statement filed with respect thereto under the
Exchange Act, such description is included in this Prospectus. See "Description
of Capital Stock."
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All documents filed by the Company with the Commission 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 made hereby shall
be deemed to be incorporated by reference into this Prospectus from the date of
filing of such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, including any beneficial owner of Securities,
upon the written or oral request of any such person, a copy of any and all of
the documents that have been or may be incorporated by reference herein, other
than exhibits to such documents (unless such exhibits are specifically
incorporated by reference into such documents). Such requests should be
directed to Investor Relations, Applied Power Inc., 13000 West Silver Spring
Drive, Butler, Wisconsin 53007 (telephone: (414) 781-6600).
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS
This Prospectus and any Prospectus Supplement (including the documents
incorporated herein or therein by reference) may contain statements that
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to differ
materially from the future results, performance or achievements expressed or
implied in such forward-looking statements. The words "anticipate," "believe,"
"estimate," "expect," "project," "objective" and similar expressions are
intended to identify forward-looking statements. In addition to the assumptions
and other factors referred to specifically in connection with such statements,
factors that could cause the Company's actual results to differ materially from
those contemplated in the forward-looking statements include factors described
under the caption "Risk Factors That May Affect Future Results" or similar
cautionary captions in the documents incorporated herein by reference.
THE COMPANY
Applied Power Inc. (the "Company"), a Wisconsin corporation incorporated in
1910, is a diversified global company engaged in the business of providing
tools, equipment, systems, and supply items to a variety of end-users and
original equipment manufacturers ("OEMs") in the manufacturing, computer,
semiconductor, telecommunication, datacom, construction, electrical,
transportation, recreational vehicle, natural resources, aerospace, defense, and
other industries.
The Company's operations are divided into three segments: (i) Tools &
Supplies -- Industrial and electrical tools and supplies sold primarily through
distribution; (ii) Engineered Solutions -- Motion and vibration control products
and systems customized and primarily sold to OEM customers; and (iii) Technical
Environments and Enclosures ("TEE") -- Technical environment solutions for
computer rooms, offices, laboratories and manufacturing, and enclosures for
electronic equipment.
Tools & Supplies
Tools & Supplies is engaged in the design, manufacture, and distribution of
tools and supplies to the construction, electrical wholesale, retail Do-It-
Yourself, datacom, retail automotive, industrial, and production automation
markets. These products are sold under a variety of brand names of which the two
most well known are Enerpac and GB Electrical.
Tools & Supplies furnishes over 10,000 products. The majority of products
are manufactured or assembled, while select low volume products are sourced.
Enerpac is a specialist in hydraulic high force tools for the construction and
industrial markets, and also supplies quick mold change systems for the plastic
injection molding industry, quick die change systems for the metal stamping
industry, industrial products for the professional automotive repair market,
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and workholding products for the machining industry. GB Electrical is a large
volume manufacturer of wire connectors, conduit benders, plastic cable ties, and
fish tapes for the electrical wiring industry.
Engineered Solutions
Engineered Solutions focuses on developing and marketing value-added,
customized solutions for OEMs in the automotive, truck, off-highway equipment,
medical, aerospace, recreational vehicle, semiconductor, defense, and industrial
markets. Engineered Solutions markets under a variety of well known brand names
such as APITECH/Power-Packer, Power Gear, MoxMed, and Barry Controls. Engineered
Solutions' expertise is primarily in the areas of motion and vibration control.
The business is particularly skilled in using electronics to create smart or
active systems to control motion.
Primary applications in the automotive industry include convertible top
actuation systems and electric hydraulic valves used to control hydraulic
systems on cars. In the truck industry, the business supplies cab-over-engine
hydraulic tilt systems, cab suspension systems, engine mount systems, and other
vibration isolation components. Medical applications include self-contained
hydraulic actuators that are primarily used in conjunction with hospital beds as
well as vibration isolation products for medical instrumentation. In aerospace,
the segment is a leading supplier of engine vibration isolation systems to
aircraft manufacturers as well as directly to airlines to support maintenance
operations. In recreational vehicles, the Company supplies leveling and slide-
out systems. In addition to these major markets, the segment's products are used
in a wide variety of applications in other industries.
Technical Environments and Enclosures
TEE designs, manufactures, and sells furnishings and enclosures utilized in
technology intensive business environments. The business is comprised of two
product lines which are Wright Line (Technical Environments) and APW Enclosures.
Wright Line applications include local area networks, multimedia production,
electrical engineering and testing, electronic manufacturing, telecommunication
centers, and R&D laboratories. In addition, Wright Line provides modular
workstations used in the computerized office. APW Enclosures designs,
manufactures, and sells metal and plastic enclosures to a wide variety of
electronic OEMs in the computer, semiconductor, telecommunication, medical, and
electronic industries.
* * * * *
The Company has had an active acquisition program and regularly reviews
acquisition opportunities in the ordinary course of its business, some of which
may be potentially material. Such opportunities may be under investigation,
discussion, or negotiation at any particular time or from time to time.
The Company's principal executive offices are located at 13000 West Silver
Spring Drive, Butler, Wisconsin 53007, and its telephone number is (414) 781-
6600.
RECENT DEVELOPMENTS
Increase in Authorized Class A Common Stock. At the Annual Meeting of
Shareholders held on January 9, 1998, the shareholders of the Company approved
an increase in the number of authorized shares of Class A Common Stock from
40,000,000 to 80,000,000.
1998 Stock Split. On January 9, 1998, the Company's Board of Directors
approved a two-for-one stock split in the form of a 100% share dividend,
resulting in the issuance on February 3, 1998 of one additional share of Class A
Common Stock for each share held by shareholders of record on January 22, 1998.
USE OF PROCEEDS
Except as otherwise described in the applicable Prospectus Supplement,
the Company intends to use the net proceeds from the sale of the Securities to
refinance, in part, existing indebtedness, to finance, in part, the cost of
acquisitions, and/or for general corporate purposes. Funds not required
immediately for such purposes may be invested temporarily in short-term
marketable securities.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the three months ended November 30, 1997, and the years ended
August 31, 1997, 1996, 1995, 1994 and 1993.
<TABLE>
<CAPTION>
Years Ended August 31,
----------------------
Three Months Ended
November 30, 1997 (1) 1997 1996 1995 1994 1993(2)
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to
Fixed Charges (3) 4.6 4.9 5.1 3.6 2.7 1.6
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</TABLE>
(1) The Company has historically had a seasonality effect where the second half
of the fiscal year is generally better than the first half. Therefore, the
results for the first quarter ended November 30, 1997, are not necessarily
indicative of full year results.
(2) Net earnings from continuing operations in 1993 include a non-recurring
restructuring charge of $7,721,000. Excluding this charge, the ratio of
earnings to fixed charges would have been 2.0.
(3) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income before income taxes, cumulative effect of change in
accounting methods, discontinued operations, extraordinary items, and fixed
charges. Fixed charges consist of interest on indebtedness, amortization of
debt expenses and one-third of rent expense which is deemed representative
of an interest factor.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued in one or more series under an Indenture
(the "Indenture") between the Company and The First National Bank of Chicago, as
Trustee, the form of which is filed as an exhibit to the Registration Statement.
The Indenture will be subject to, and governed by, the Trust Indenture Act of
1939, as amended. The following summary of certain provisions of the Indenture
does not purport to be complete and is qualified in its entirety by express
reference to the Indenture and the Securities Resolution or the indenture
supplemental thereto authorizing a series (copies of which have been or will be
filed with the Commission). Capitalized terms used in this section without
definition have the meanings given such terms in the Indenture.
The particular terms of the Debt Securities offered by a Prospectus
Supplement will be described in such Prospectus Supplement, along with any
applicable modifications of or additions to the general terms of the Debt
Securities as described herein and in the Indenture. Accordingly, for a
description of the terms of any series of Debt Securities, reference must be
made to both the Prospectus Supplement relating thereto and the description of
the Debt Securities set forth in this Prospectus.
General
The Indenture does not limit the amount of Debt Securities that can be
issued thereunder and provides that the Debt Securities may be issued from time
to time in one or more series pursuant to the terms of one or more Securities
Resolutions or supplemental indentures creating such series. As of the date of
this Prospectus, there were no Debt Securities outstanding under the Indenture.
The ranking of a series of Debt Securities with respect to all indebtedness of
the Company will be established by the Securities Resolution or supplemental
indenture creating such series. Although the Indenture provides for the possible
issuance of Debt Securities in other forms or currencies, the only Debt
Securities covered by this Prospectus will be Debt Securities denominated in
U.S. dollars in registered form without coupons.
Terms
Reference is made to the Prospectus Supplement for the following terms, if
applicable, of the Debt Securities offered thereby: (1) the designation,
aggregate principal amount, currency or composite currency and denominations;
(2) the price at which such Debt Securities will be issued and, if an index
formula or other method is used, the method for determining amounts of principal
or interest; (3) the maturity date and other dates, if any, on which principal
will be payable; (4) the interest rate or rates, if any, or method of
calculating the interest rate or rates; (5) the date or dates from which
interest will accrue and on which interest will be payable, and the record dates
for the payment of interest; (6) the manner of paying principal and interest;
(7) the place or places where principal and interest will be payable; (8) the
terms of any mandatory or optional redemption by the Company including any
sinking fund; (9) the terms of any conversion or exchange right; (10) the terms
of any redemption at the option of Holders; (11) any tax indemnity provisions;
(12) if the Debt Securities provide that payments of principal or interest may
be made in a currency other than that in which Debt Securities are denominated,
the manner for determining such payments; (13) the portion of principal payable
upon acceleration of a Discounted Debt Security (as defined below); (14) whether
and upon what terms Debt Securities may be defeased; (15) whether any events of
default or covenants in addition to or in lieu of those set forth in the
Indenture apply; (16) provisions for electronic issuance of Debt Securities or
for Debt Securities in uncertificated form; (17) the ranking of the Debt
Securities; and (18) any other terms not inconsistent with the provisions of the
Indenture, including any covenants or other terms that may be required or
advisable under United States or other applicable laws or regulations, or
advisable in connection with the marketing of the Debt Securities. (Section
2.01)
Debt Securities of any series may be issued as registered Debt Securities,
bearer Debt Securities or uncertificated Debt Securities, and in such
denominations as specified in the terms of the series. (Section 2.01)
In connection with its original issuance, no bearer Debt Security will be
offered, sold or delivered to any location in the United States, and a bearer
Debt Security in definitive form may be delivered in connection with its
original issuance only upon presentation of a certificate in a form prescribed
by the Company to comply with United States laws and regulations. (Section 2.04)
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Registration of transfer of registered Debt Securities may be requested
upon surrender thereof at any agency of the Company maintained for that purpose
and upon fulfillment of all other requirements of the agent. (Sections 2.03 and
2.07)
Securities may be issued under the Indenture as Discounted Debt Securities
to be offered and sold at a substantial discount from the principal amount
thereof. Special United States federal income tax and other considerations
applicable thereto will be described in the Prospectus Supplement relating to
such Discounted Debt Securities. "Discounted Debt Security" means a Security
where the amount of principal due upon acceleration is less than the stated
principal amount. (Sections 1.01 and 2.10)
Certain Covenants
Any restrictive covenants which may apply to a particular series of Debt
Securities will be described in the Prospectus Supplement relating thereto.
Ranking of Debt Securities
Unless stated otherwise in a Prospectus Supplement, the Debt Securities
will be unsecured and will rank equally and ratably with other unsecured and
unsubordinated debt of the Company. The Debt Securities will not be secured by
any properties or assets and will represent unsecured debt of the Company. The
Indenture does not limit the ability of any of the Company's subsidiaries to
issue debt, and the Debt Securities will be effectively subordinated to all
existing and future indebtedness and other liabilities and commitments of the
Company's subsidiaries.
Successor Obligor
The Indenture provides that, unless otherwise specified in the Securities
Resolution establishing a series of Debt Securities, the Company shall not
consolidate with or merge into, or transfer all or substantially all of its
assets to, any person in any transaction in which the Company is not the
survivor, unless: (1) the person is organized under the laws of the United
States or a State thereof or is organized under the laws of a foreign
jurisdiction and consents to the jurisdiction of the courts of the United States
or a State thereof; (2) the person assumes by supplemental indenture all the
obligations of the Company under the Indenture, the Debt Securities and any
coupons; (3) all required approvals of any regulatory body having jurisdiction
over the transaction shall have been obtained; and (4) immediately after the
transaction no Default (as defined below) exists. The successor shall be
substituted for the Company, and thereafter all obligations of the Company under
the Indenture, the Debt Securities and any coupons shall terminate. (Section
5.01)
Exchange of Debt Securities
Registered Debt Securities may be exchanged for an equal aggregate
principal amount of registered Debt Securities of the same series and date of
maturity in such authorized denominations as may be requested upon surrender of
the registered Debt Securities at an agency of the Company maintained for such
purpose and upon fulfillment of all other requirements of such agent. (Section
2.07)
Default and Remedies
Unless the Securities Resolution establishing the series otherwise provides
(in which event the Prospectus Supplement will so state), an "Event of Default"
with respect to a series of Debt Securities will occur if:
(1) the Company defaults in any payment of interest on any Debt Securities
of such series when the same becomes due and payable and the Default continues
for a period of 30 days;
(2) the Company defaults in the payment of the principal and premium, if
any, of any Debt Securities of the series when the same becomes due and payable
at maturity or upon redemption, acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any sinking
fund obligation with respect to any Debt Securities of a series as required by
the Securities Resolution establishing such series;
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(4) the Company defaults in the performance of any of its other agreements
applicable to the series and the Default continues for 60 days after
the notice specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian for it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
(6) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 60 days; or
(7) there occurs any other Event of Default provided for in such series.
(Section 6.01)
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or a similar official under any Bankruptcy Law.
(Section 6.01)
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default. A Default under subparagraph (4) above is not an
Event of Default until the Trustee or the Holders of at least 25% in principal
amount of the series notify the Company of the Default and the Company does not
cure the Default within the time specified after receipt of the notice. (Section
6.01) If an Event of Default occurs and is continuing on a series, the Trustee
by notice to the Company, or the Holders of at least 25% in principal amount of
the series by notice to the Company and the Trustee, may declare the principal
of and accrued interest on all the Debt Securities of the series to be due and
payable immediately. Discounted Debt Securities may provide that the amount of
principal due upon acceleration is less than the stated principal amount. The
Holders of a majority in principal amount of the series, by notice to the
Trustee, may rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all existing Events of
Default on the series have been cured or waived except nonpayment of principal
or interest that has become due solely because of the acceleration. (Section
6.02) If an Event of Default occurs and is continuing on a series, the Trustee
may pursue any available remedy to collect principal or interest then due on the
series, to enforce the performance of any provision applicable to the series, or
otherwise to protect the rights of the Trustee and Holders of the series.
(Section 6.03)
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Debt Securities of the series. (Section 7.01) Subject to
certain limitations, Holders of a majority in principal amount of the Debt
Securities of the series may direct the Trustee in its exercise of any trust or
power with respect to such series. (Section 6.05) Except in the case of Default
in payment on a series, the Trustee may withhold from Holders of such series
notice of any continuing Default if it determines that withholding the notice is
in the interest of Holders of the series. (Section 7.04) The Company is required
to furnish the Trustee annually a brief certificate as to the Company's
compliance with all conditions and covenants under the Indenture. (Section 4.04)
The Indenture does not have a cross-default provision. Thus, a default by
the Company on any other debt, including any other series of Debt Securities,
would not constitute an Event of Default. A Securities Resolution may provide
for a cross-default provision, in which case the Prospectus Supplement will
describe the terms thereof.
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Amendments and Waivers
The Indenture and the Debt Securities or any coupons of the series may be
amended, and any default may be waived as follows: Unless the Securities
Resolution otherwise provides (in which event the Prospectus Supplement will so
state), the Company and the Trustee may amend the Debt Securities, the Indenture
and any coupons with the written consent of the Holders of a majority in
principal amount of the Debt Securities of all series affected voting as one
class. (Section 10.02) Unless the Securities Resolution otherwise provides (in
which event the Prospectus Supplement will so state), a Default on a particular
series may be waived with the consent of the Holders of a majority in principal
amount of the Debt Securities of the series. (Section 6.04) However, without the
consent of each Debt Securityholder affected, no amendment or waiver may (1)
reduce the amount of Debt Securities whose Holders must consent to an amendment
or waiver, (2) reduce the interest on or change the time for payment of interest
on any Debt Security, (3) change the fixed maturity of any Debt Security, (4)
reduce the principal of any non-Discounted Debt Security or reduce the amount of
the principal of any Discounted Debt Security that would be due on acceleration
thereof, (5) change the currency in which the principal or interest on a Debt
Security is payable, (6) make any change that materially adversely affects the
right to convert or exchange any Debt Security, or (7) waive any Default in
payment of interest on or principal of a Debt Security. (Sections 6.04 and
10.02) Without the consent of any Debt Securityholder, the Company and the
Trustee may amend the Indenture, the Debt Securities or any coupons to cure any
ambiguity, omission, defect, or inconsistency; to provide for assumption of
Company obligations to Debt Securityholders in the event of a merger or
consolidation requiring such assumption; to provide that specific provisions of
the Indenture shall not apply to a series of Debt Securities not previously
issued; to create a series and establish its terms; to provide for a separate
Trustee for one or more series; or to make any change that does not materially
adversely affect the rights of any Debt Securityholder. (Section 10.01)
Legal Defeasance and Covenant Defeasance
Debt Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution establishing the terms of the series
otherwise provides, as set forth in the Indenture and described briefly below.
The Company at any time may terminate as to a series all of its obligations
(except for certain obligations, including obligations with respect to the
defeasance trust and obligations to register the transfer or exchange of a
Security, to replace destroyed, lost or stolen Debt Securities and coupons, and
to maintain paying agencies in respect of the Debt Securities) with respect to
the Debt Securities of the series and any related coupons and the Indenture
("legal defeasance"). The Company at any time may terminate as to a series its
obligations, if any, with respect to the Debt Securities and coupons of the
series under any restrictive covenants which may be applicable to a particular
series ("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option, a series may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, a series may
not be accelerated by reference to any restrictive covenants which may be
applicable to a particular series. (Section 8.01)
To exercise either defeasance option as to a series, the Company must (i)
irrevocably deposit in trust (the "defeasance trust") with the Trustee or
another trustee money or U.S. Government Obligations, (ii) deliver a certificate
from a nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due on the deposited
U.S. Government Obligations, without reinvestment, plus any deposited money
without investment will provide cash at such times and in such amounts as will
be sufficient to pay the principal and interest when due on all Debt Securities
of such series to maturity or redemption, as the case may be, and (iii) comply
with certain other conditions. In particular, the Company must obtain an opinion
of tax counsel that the defeasance will not result in recognition of any gain or
loss to Holders for federal income tax purposes. "U.S. Government Obligations"
means direct obligations of the United States or an agency or instrumentality of
the United States, the payment of which is unconditionally guaranteed by the
United States, which, in either case, have the full faith and credit of the
United States of America pledged for payment and which are not callable at the
issuer's option, or certificates representing an ownership interest in such
obligations. (Section 8.02)
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Regarding the Trustee
The First National Bank of Chicago will act as Trustee and Registrar for
Debt Securities issued under the Indenture and, unless otherwise indicated in a
Prospectus Supplement, the Trustee will also act as Transfer Agent and Paying
Agent with respect to the Debt Securities. (Section 2.03) The Company may remove
the Trustee with or without cause if the Company so notifies the Trustee three
months in advance and if no Default occurs during the three-month period.
(Section 7.07) The Trustee, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
affiliates, and may otherwise deal with the Company or its affiliates, as if it
were not Trustee.
DESCRIPTION OF CAPITAL STOCK
(The following summary does not purport to be a complete description of the
applicable provisions of the Company's Restated Articles of Incorporation (the
"Articles") and By-Laws, as amended, copies of which have been or will be filed
with the Commission, or of applicable statutory or other law, and is qualified
in its entirety by reference thereto.)
The authorized capital stock of the Company as of February 27, 1998
consisted of 80,000,000 shares of Class A Common Stock, $.20 par value ("Class A
Common"), of which 27,836,656 shares were issued and outstanding; 7,500,000
shares of Class B Common Stock, $.20 par value ("Class B Common"), none of which
were issued and outstanding; and 800,000 shares of Cumulative Preferred Stock,
$1.00 par value ("Preferred Stock"), none of which have been issued. Class A
Common and Class B Common are collectively referred to herein as "Common Stock."
Preferred Stock
The Preferred Stock may be issued in one or more series providing for such
dividend rates, voting, liquidation, redemption, and conversion rights, and such
other terms and conditions as the Board of Directors may determine, without
further approval by holders of Common Stock. If any shares of Class B Common
were outstanding, any voting rights conferred on holders of Preferred Stock
would be limited, with respect to the election of directors, to the power to
vote together with holders of Class A Common in electing a "maximum minority" of
the Board of Directors, as described under "Common Stock" below.
If the Company issues any shares of Preferred Stock, the Company would be
permitted to pay dividends or make other distributions upon the Common Stock
(except for distributions payable in shares of Common Stock) only after paying
or setting apart funds for payment of current dividends and any accrued but
unpaid dividends upon the outstanding Preferred Stock, at the rate or rates
designated for each series of outstanding Preferred Stock, and making provision
for any mandatory sinking fund payments. In the event of voluntary or
involuntary liquidation of the Company, the holders of any outstanding Preferred
Stock would be entitled to receive all accrued dividends on the Preferred Stock
and the liquidation amount specified for each series of Preferred Stock before
any amount may be distributed to holders of the Common Stock.
Common Stock
The rights and preferences of shares of Class A and Class B Common are
identical, except as to voting power with respect to the election of directors
and conversion rights.
On all matters other than the election of directors, the holders of Class A
and Class B Common possess equal voting power of one vote per share, voting as a
single class of stock (unless otherwise required by the Wisconsin Business
Corporation Law--the "WBCL"). In the election of the Board of Directors, the
holders of Class A Common, voting together as a single class with the holders of
any Preferred Stock which has voting power, are entitled to elect a "maximum
minority" of the number of directors to be elected. As a result of the "maximum
minority" provision, the holders of the Class B Common, voting as a separate
class, are entitled to elect the balance of the directors, constituting a
"minimum majority" of the number of directors to be elected. If an even number
of directors is to be elected, the holders of Class B Common will be entitled to
elect two more directors than the holders of Class A Common and any Preferred
Stock having voting power; if the number of directors to be elected is an odd
number, the holders of Class B Common will be entitled to elect one more
director than the holders of Class A Common and any Preferred Stock
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having voting power. In the event there are no shares of Class B Common
outstanding, holders of Class A Common, together with holders of any Preferred
Stock having voting power, shall elect all of the directors to be elected. A
director, once elected and duly qualified, may be removed only by the requisite
affirmative vote of the holders of that class of stock by which such director
was elected.
Holders of both classes of Common Stock are equally entitled to such
dividends as the Company's Board of Directors may declare out of funds legally
available therefor. If the Company were to issue any of its authorized Preferred
Stock, no dividends could be paid or set apart for payment on shares of Common
Stock, unless paid in Common Stock, until dividends on all of the issued and
outstanding shares of Preferred Stock had been paid or set apart for payment and
provision had been made for any mandatory sinking fund payments. Certain
covenants contained in the Company's debt agreements, or in the provisions of
the Articles for the benefit of any Preferred Stock that may be hereafter
issued, from time to time could have the direct or indirect effect of limiting
the payment of dividends or other distributions on (including redemptions and
purchases of) the Company's capital stock. Stock dividends on Class A Common may
be paid only in shares of Class A Common and stock dividends on Class B Common
may be paid only in shares of Class B Common.
The Articles contain provisions which provided for the conversion of Class
B Common into shares of Class A Common on a share-for-share basis at the option
of the holder, and for the automatic conversion of all outstanding shares of
Class B Common to Class A Common on a share-for-share basis when the number of
outstanding shares of Class B Common was reduced below a certain threshold. All
of the shares of Class B Common that had been outstanding were converted into
Class A Common pursuant to these conversion provisions. Holders of Class A
Common do not have any conversion rights.
In the event of dissolution or liquidation of the Company, the holders of
both classes of Common Stock are entitled to share ratably all assets of the
Company remaining after payment of the Company's liabilities and satisfaction of
the rights of any series of Preferred Stock which may be outstanding. There are
no redemption or sinking fund provisions with respect to the Common Stock.
When the Company has received the consideration for which the Board of
Directors authorized the issuance of shares, the shares issued for that
consideration are fully paid and nonassessable. Shareholders are subject to
personal liability under Section 180.0622(2)(b) of the WBCL, as judicially
interpreted, for debts owing to employees of the Company for services performed
for the Company, but not exceeding six months' service in any one case.
The Class A Common is listed on the NYSE. Firstar Trust Company, Milwaukee,
Wisconsin, acts as the transfer agent for the Class A Common.
General
The Articles provide that the affirmative vote of two-thirds of all shares
entitled to vote thereon is required in order to constitute shareholder approval
of a merger, consolidation, or liquidation of the Company, sale or other
disposition of all or substantially all of its assets, amendment of the Articles
or the By-Laws, or removal of a director.
Directors of the Company are currently elected to serve one-year terms. The
Articles provide that the By-Laws (which may be amended by the Board of
Directors or by the shareholders) may provide for the division of the Board of
Directors into two or three classes, serving staggered two or three-year terms.
Holders of capital stock of the Company do not have preemptive or other
subscription rights to purchase or subscribe for unissued stock or other
securities of the Company.
Certain Statutory Provisions
Under Section 180.1150(2) of the WBCL, the voting power of shares of a
"resident domestic corporation," such as the Company (as long as it continues to
meet the statutory definition), which are held by any person (including two or
more persons acting in concert) in excess of 20% of the voting power in the
election of directors shall be limited (in voting on any matter) to 10% of the
full voting power of such excess shares, unless full voting rights have been
restored at a special meeting of the shareholders called for that purpose.
Shares held or acquired under certain circumstances
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are excluded from the application of Section 180.1150(2), including (among
others) shares acquired directly from the Company, shares acquired before
April 22, 1986, and shares acquired in a merger or share exchange to which the
Company is a party.
Sections 180.1130 to 180.1134 of the WBCL provide generally that, in
addition to the vote otherwise required by law or the articles of incorporation
of a "resident domestic corporation," such as the Company (as long as it
continues to meet the statutory definition), certain business combinations not
meeting certain fair price standards specified in the statute must be approved
by the affirmative vote of at least (a) 80% of the votes entitled to be cast by
the outstanding voting shares of the corporation and (b) two-thirds of the votes
entitled to be cast by the holders of voting shares other than voting shares
beneficially owned by a "significant shareholder" or an affiliate or associate
thereof who is a party to the transaction. The term "business combination" is
defined to include, subject to certain exceptions, a merger or share exchange of
the resident domestic corporation (or any subsidiary thereof) with, or the sale
or other disposition of all or substantially all of the property and assets of
the resident domestic corporation to, any significant shareholder or affiliate
thereof. "Significant shareholder" is defined generally to mean a person that is
the beneficial owner of 10% or more of the voting power of the outstanding
voting shares of the resident domestic corporation. The statute also restricts
the repurchase of shares and the sale of corporate assets by a resident domestic
corporation in response to a take-over offer.
Sections 180.1140 to 180.1144 of the WBCL prohibit certain "business
combinations" between a "resident domestic corporation," such as the Company (as
long as it continues to meet the statutory definition), and a person
beneficially owning 10% or more of the voting power of the outstanding voting
stock of such corporation (an "interested stockholder") within three years after
the date such person became a 10% beneficial owner, unless the business
combination or the acquisition of such stock has been approved before the stock
acquisition date by the corporation's board of directors. Business combinations
after the three-year period following the stock acquisition date are permitted
only if (i) the board of directors approved the acquisition of the stock prior
to the acquisition date, (ii) the business combination is approved by a majority
of the outstanding voting stock not beneficially owned by the interested
stockholder, or (iii) the consideration to be received by shareholders meets
certain fair price requirements of the statute with respect to form and amount.
Under the WBCL, as amended in 1997, a "resident domestic corporation" is
defined to mean a Wisconsin corporation that has a class of voting stock that is
registered or traded on a national securities exchange or that is registered
under Section 12(g) of the Exchange Act and that, as of the relevant date,
satisfies any of the following: (i) its principal offices are located in
Wisconsin; (ii) it has significant business operations located in Wisconsin;
(iii) more than 10% of the holders of record of its shares are residents of
Wisconsin; or (iv) more than 10% of its shares are held of record by residents
of Wisconsin. The Company is a "resident domestic corporation" for purposes of
the above described provisions. A Wisconsin corporation that is otherwise
subject to certain of such statutes may preclude their applicability by an
election to that effect in its articles of incorporation. The Company's Articles
do not contain any such election.
These provisions of the WBCL, the ability to issue additional shares of
Common Stock and Preferred Stock without further shareholder approval (except as
required under NYSE corporate governance standards), and certain other
provisions of the Company's Articles (discussed above) could have the effect,
among others, of discouraging take-over proposals for the Company, delaying or
preventing a change in control of the Company, or impeding a business
combination between the Company and a major shareholder of the Company.
BOOK-ENTRY
The Depository Trust Company ("DTC") may act as securities depository for
the Securities, in which case the applicable Prospectus Supplement will so
provide. The Securities will be issued only as fully registered securities
registered in the name of Cede & Co. (DTC's partnership nominee). One or more
fully registered global certificates will be issued for the Securities
representing the aggregate principal amount of the Debt Securities or the number
of shares of Common Stock offered by the applicable Prospectus Supplement and
will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered
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pursuant to the provisions of Section 17A of the 1934 Act, as amended. DTC holds
securities that its participants (the "Direct Participants") deposit with DTC.
DTC also facilitates the settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Direct 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. DTC is owned
by a number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant, either directly or
indirectly (the "Indirect Participants," and together with the Direct
Participants, the "Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of the Securities within the DTC system must be made by or
through Direct Participants which will receive a credit for the Securities on
DTC's records. The ownership interest of each actual purchaser of each Security
(a "Beneficial Owner") will in turn be recorded on the Direct and Indirect
Participants' respective records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interest in the Securities will be effected by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interest in
Securities except in the event that use of the book-entry system for the
Securities is discontinued.
The deposit of the Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Securities; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Securities 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 direct communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Securities of an issue are being redeemed, DTC's practice will determine by lot
the amount of the interest of each Direct Participant in such series to be
redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to the
Securities. Under its usual procedures, DTC mails an omnibus proxy (an "Omnibus
Proxy") to the Participants as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Securities are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest on the Debt Securities and
dividends on Common Stock, if applicable, will be paid to DTC. DTC's practice is
to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC has
reason to believe that it will not receive payment on such 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 DTC, the underwriters,
or the Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal, premium, if any, and interest on
the Debt Securities and dividends on Common Stock, if applicable, to DTC is the
responsibility of the Company or the Trustee. Disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depository with
respect to the Securities at any time by giving reasonable notice to the
Company. Under such circumstances and in the event that a successor securities
depository is not obtained, certificates for the Securities are required to be
printed and delivered. In addition, the
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Company may decide to discontinue use of the system of book-entry transfers
through DTC (or any successor securities depository). In that event,
certificates for the Securities will be printed and delivered.
The Company will not have any responsibility or obligation to Participants
or to the persons for whom they act as nominees with respect to the accuracy of
the records of DTC, its nominees or any Direct or Indirect Participant with
respect to any ownership interest in the Securities, or with respect to payments
or providing of notice to the Direct Participants, the Indirect Participants or
the Beneficial Owners.
So long as Cede & Co. is the registered owner of the Securities, as nominee
of DTC, references herein to holders of the Securities shall mean Cede & Co. or
DTC and shall not mean the Beneficial Owners of the Securities.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from DTC. None of the Company, the Trustees or the
underwriters take any responsibility for the accuracy or completeness thereof.
PLAN OF DISTRIBUTION
The Company may sell Securities to or through underwriters or dealers, and
also may sell Securities directly to other purchasers or through agents. Each
Prospectus Supplement will describe the method of distribution of the offered
Securities.
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, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company or from purchasers of Securities for whom they may
act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Securities may be deemed to be underwriters, and any discounts
or commissions received by them from the Company and any profit on the resale of
Securities by them may be deemed to be underwriting discounts and commissions,
under the Securities Act. Any such underwriter or agent will be identified, and
any such compensation received from the Company will be described, in the
Prospectus Supplement.
Underwriters and agents who participate in the distribution of Securities
may be entitled under agreements which may be entered into by the Company to
indemnification by the Company against, or contribution with respect to, certain
liabilities, including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase offered Securities from the
Company pursuant to contracts providing for payment and delivery on a future
date. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions, and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will be subject to the condition that the purchase of
the offered Securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject. The underwriters
and such other agents will not have any responsibility in respect of the
validity of performance of such contracts.
If so indicated in the applicable Prospectus Supplement, the Company will
grant the underwriters an option to purchase additional shares of Common Stock
solely to cover over-allotments, if any, in connection with a firm commitment
underwriting of Common Stock. The option may be exercised in whole or in part at
any time within 30 days after the date of such Prospectus Supplement. To the
extent such option is exercised, the underwriters will be severally committed,
subject to certain conditions, to purchase the additional shares of Common Stock
in proportion to their respective commitments for the initial shares of Common
Stock.
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In connection with the offering of the Securities, underwriters may engage
in transactions that stabilize, maintain or otherwise affect the price of the
Securities. Specifically, the underwriters may over-allot in connection with the
offerings of the Securities, creating a syndicate short position. In addition,
underwriters may bid for, and purchase, Securities in the open market to cover
syndicate shorts or to stabilize the price of the Securities, as the case may
be. Finally, the underwriting syndicate may reclaim selling concessions allowed
for distributing the Securities in the offering of the Securities, as the case
may be, if the syndicate repurchases previously distributed Securities, as the
case may be, in syndicate covering transactions, syndicate transactions, or
otherwise. Any of these activities may stabilize or maintain the market prices
of the Securities above independent market levels. The underwriters are not
required to engage in any of these activities, and may end any of them at any
time.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Debt Securities are not proposed to be listed on a securities exchange, and any
underwriters will not be obligated to make a market in the Debt Securities. The
Company cannot predict the activity or liquidity of any trading in the Debt
Securities or give any assurance that a market for the Debt Securities will
develop. The Common Stock offered hereby will be listed on the NYSE.
CERTAIN LEGAL MATTERS
The validity of the Securities to be sold pursuant to this Prospectus will
be passed upon for the Company by Quarles & Brady, counsel to the Company.
Anthony W. Asmuth, III, the Corporate Secretary of the Company, is a partner in
Quarles & Brady. As of the date of this Prospectus, Mr. Asmuth owned 38,420
shares of the Company's Common Stock and served as trustee or co-trustee with
sole or shared voting and dispositive powers over trusts that held an aggregate
of 279,252 shares of Common Stock. Certain legal matters in connection with the
Securities will be passed upon for the underwriters by Cahill Gordon & Reindel
(a partnership including a professional corporation), New York, New York.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this Prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended August 31, 1997 and the consolidated
financial statements of Versa Technologies, Inc. incorporated by reference from
the Company's report on Form 8-K dated October 3, 1997 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
Future audited financial statements incorporated in this Prospectus by
reference to future filings under the Exchange Act, as provided under
"Incorporation Of Certain Documents By Reference" above, will be so incorporated
in reliance on the related report or reports of the firm of independent
accountants auditing such financial statements, given on such authority of such
firm, if and to the extent such filings include the consent of such firm to the
incorporation of such report or reports herein. Coopers & Lybrand L.L.P. has
been engaged as the Company's independent public accountants for the fiscal year
ending August 31, 1998.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution of
the Securities covered by this Registration Statement are as follows:
SEC registration fee (actual)..................................... $ 88,500
Trustee's fee and expenses........................................ 15,000
Printing and engraving expenses................................... 90,000
Legal fees and expenses........................................... 125,000
Accounting fees and expenses...................................... 50,000
Rating agency fees................................................ 100,000
Miscellaneous..................................................... 10,000
--------
Total.......................................................... $478,500
========
Item 15. Indemnification of Directors and Officers.
The Registrant is incorporated under the Wisconsin Business Corporation Law
("WBCL"). Under Section 180.0851(1) of the WBCL, the Registrant is required to
indemnify a director or officer, to the extent such person is successful on the
merits or otherwise in the defense of a proceeding, for all reasonable expenses
incurred in the proceeding if such person was a party because he or she was a
director or officer of the Registrant. In all other cases, the Registrant is
required by Section 180.0851(2) of the WBCL to indemnify a director or officer
against liability incurred in a proceeding to which such person was a party
because he or she was an officer or director of the Registrant, unless it is
determined that he or she breached or failed to perform a duty owed to the
Registrant and the breach or failure to perform constitutes: (i) a willful
failure to deal fairly with the Registrant or its shareholders in connection
with a matter in which the director or officer has a material conflict of
interest; (ii) a violation of criminal law, unless the director or officer had
reasonable cause to believe his or her conduct was lawful or no reasonable cause
to believe his or her conduct was unlawful; (iii) a transaction from which the
director or officer derived an improper personal profit; or (iv) willful
misconduct. Section 180.0858(1) of the WBCL provides that, subject to certain
limitations, the mandatory indemnification provisions do not preclude any
additional right to indemnification or allowance of expenses that a director or
officer may have under the Registrant's articles of incorporation, bylaws, a
written agreement or a resolution of the Board of Directors or shareholders.
Section 180.0859 of the WBCL provides that it is the public policy of the
State of Wisconsin to require or permit indemnification, allowance of expenses
and insurance to the extent required or permitted under Sections 180.0850 to
180.0858 of the WBCL for any liability incurred in connection with a proceeding
involving a federal or state statute, rule or regulation regulating the offer,
sale or purchase of securities.
Section 180.0828 of the WBCL provides that, with certain exceptions, a
director is not liable to a corporation, its shareholders, or any person
asserting rights on behalf of the corporation or its shareholders, for damages,
settlements, fees, fines, penalties or other monetary liabilities arising from a
breach of, or failure to perform, any duty resulting solely from his or her
status as a director, unless the person asserting liability proves that the
breach or failure to perform constitutes any of the four exceptions to mandatory
indemnification under Section 180.0851(2) referred to above.
II-1
<PAGE>
Under Section 180.0833 of the WBCL, directors of the Registrant against
whom claims are asserted with respect to the declaration of an improper dividend
or other distribution to shareholders to which they assented are entitled to
contribution from other directors who assented to such distribution and from
shareholders who knowingly accepted the improper distribution, as provided
therein.
Article VIII of the Registrant's Bylaws contains provisions that generally
parallel the indemnification provisions of the WBCL and cover certain procedural
matters not dealt with in the WBCL. Directors and officers of the Registrant are
also covered by directors' and officers' liability insurance under which they
are insured (subject to certain exceptions and limitations specified in the
policy) against expenses and liabilities arising out of proceedings to which
they are parties by reason of being or having been directors or officers.
Item 16. Exhibits.
See Exhibit Index following the Signatures page in this Registration
Statement, which Exhibit Index is incorporated herein by reference.
Item 17. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the Registration Statement is on Form S-3 or Form S-8,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant with
the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Reference is made to the indemnification provisions described in Item
15 of this Registration Statement.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(i) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Butler, State of Wisconsin, on March 6, 1998.
APPLIED POWER INC.
(Registrant)
By: /s/ ROBERT C. ARZBAECHER
------------------------
Robert C. Arzbaecher
Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard G. Sim and Robert C. Arzbaecher, and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, and any other regulatory authority, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.*
Signature Title
/s/ RICHARD G. SIM Chairman of the Board, President and
- ------------------------ Chief Executive Officer; Director
Richard G. Sim
/s/ ROBERT C. ARZBAECHER Vice President and Chief Financial Officer
- ------------------------ (Principal Financial Officer)
Robert C. Arzbaecher
/s/ RICHARD D. CARROLL Treasurer, Controller and
- ------------------------ Principal Accounting Officer
Richard D. Carroll
/s/ H. RICHARD CROWTHER Director
- ------------------------
H. Richard Crowther
/s/ JACK L. HECKEL Director
- ------------------------
Jack L. Heckel
/s/ RICHARD A. KASHNOW Director
- ------------------------
Richard A. Kashnow
/s/ L. DENNIS KOZLOWSKI Director
- ------------------------
L. Dennis Kozlowski
/s/ JOHN J. McDONOUGH Director
- ------------------------
John J. McDonough
*Each of the above signatures is affixed as of March 6, 1998.
<PAGE>
APPLIED POWER INC
(the "Registrant")
(Commission File No. 1-11288)
EXHIBIT INDEX
TO
FORM S-3 REGISTRATION STATEMENT
The following exhibits are filed with or incorporated by reference in this
Registration Statement:
<TABLE>
<CAPTION>
Exhibit Description Incorporated Herein Filed
By Reference To Herewith
<C> <S> <C> <C>
1.1 Form of proposed Purchase Agreement for
Debt Securities*
1.2 Form of proposed Purchase Agreement for
Shares of Common Stock*
3.1 Restated Articles of Incorporation Exhibit 4.1 to the
Registrant's Registration
Statement on Form S-8
(File No. 333-46469)
3.2 Amended and Restated By-Laws (effective Exhibit 3.2 to the
as of January 8, 1997) Registrant's Form 10-K
for fiscal year ended
August 31, 1997 ("1997
10-K")
4.1 Restated Articles of Incorporation See Exhibit 3.1 above
4.2 Agreement for Purchase and Sale, dated Exhibit 19.2(a)-(g) to the
August 29, 1990, between Minnesota Registrant's Form 10-Q
Mining and Manufacturing Company and for quarter ended
Applied Power Inc., and seven related May 31, 1991
Leases, each dated April 29, 1991, between
Bernard Garland and Sheldon Garland,
d/b/a Garland Enterprises, as Landlord, and
Applied Power Inc., as Tenant
4.3 Credit Agreement, dated as of October 3, Exhibit (b)(2) filed with
1997 among Applied Power Inc., Bank of Amendment No. 3 to the
America National Trust and Savings Registrant's Tender Offer
Association, as agent, and the other Statement on Schedule
financial institutions party hereto 14D-1 dated October 6,
1997 (File No. 5-13342)
4.4 Multi-currency Credit Agreement, dated as Exhibit 4.6 to 1997 10-K
of October 22, 1997 between Applied
Power Inc. and Applied Power Finance,
S.A., as borrowers, various financial
institutions, as lenders, Bank of America
National Trust and Savings Association, as
agent, and BA Robertson Stephens, as
arranger
</TABLE>
EI-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description Incorporated Herein Filed
By Reference To Herewith
- ------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
4.5 Receivables Purchase Agreement dated as Exhibit 4.1 to the
of November 20, 1997 among Applied Registrant's Quarterly
Power Credit Corporation as Seller, Report on Form 10-Q for
Applied Power Inc. individually and as quarter ended
Servicer and Barton Capital Corporation as November 30, 1997
Purchaser and Societe Generale as Agent
4.6 Form of Indenture for Debt Securities X
5 Opinion of Quarles & Brady X
12 Statement of Computation of Ratio of X
Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP X
23.2 Consent of Quarles & Brady Contained in Exhibit 5
24 Power of Attorney On Signatures page
25 Statement of Eligibility of Trustee on Form X
T-1
</TABLE>
- -------------
*To be filed by amendment or under cover of Form 8-K and incorporated
herein by reference.
EI-2
<PAGE>
EXHIBIT 4.6
================================================================================
APPLIED POWER INC.
DEBT SECURITIES
-------------------
INDENTURE
Dated as of , 1998
-------------------
The First National Bank of Chicago, Trustee
================================================================================
<PAGE>
PARTIAL CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Indenture Section TIA Section
<S> <C>
2.05.......................................... 317(b)
2.06.......................................... 312(a), 313(c)
2.11.......................................... 316(a) (last sentence)
4.04.......................................... 314(a)(4)
4.05.......................................... 314(a)(1)
6.03.......................................... 317(a)(1)
6.04.......................................... 316(a)(1)(B)
6.05.......................................... 316(a)(1)(A)
6.07.......................................... 317(a)(1)
7.01.......................................... 315(a), 315(d)
7.04.......................................... 315(b)
7.05.......................................... 313(a), 313(d)
7.07.......................................... 310(a), 310(b)
7.09.......................................... 310(a)(2)
8.02.......................................... 310(a), 310(b)
10.04......................................... 316(c)
11.01......................................... 318(a)
11.02......................................... 313(c)
11.03......................................... 314(c)(1), 314(c)(2)
11.04......................................... 314(e)
</TABLE>
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 -- DEFINITIONS
SECTION 1.01. Definitions.............................................................. 1
SECTION 1.02. Other Definitions........................................................ 3
SECTION 1.03. Rules of Construction.................................................... 3
ARTICLE 2 -- THE SECURITIES
SECTION 2.01. Issuable in Series....................................................... 4
SECTION 2.02. Execution and Authentication............................................. 6
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and Other Agents.... 6
SECTION 2.04. Bearer Securities........................................................ 6
SECTION 2.05. Paying Agent to Hold Money in Trust...................................... 7
SECTION 2.06. Securityholder Lists..................................................... 7
SECTION 2.07. Transfer and Exchange.................................................... 8
SECTION 2.08. Replacement Securities................................................... 8
SECTION 2.09. Outstanding Securities................................................... 9
SECTION 2.10. Discounted Debt Securities............................................... 9
SECTION 2.11. Treasury Securities...................................................... 9
SECTION 2.12. Global Securities........................................................ 9
SECTION 2.13. Temporary Securities..................................................... 10
SECTION 2.14. Cancellation............................................................. 10
SECTION 2.15. Defaulted Interest....................................................... 10
ARTICLE 3 -- REDEMPTION
SECTION 3.01. Notices to Trustee....................................................... 10
SECTION 3.02. Selection of Securities to Be Redeemed................................... 11
SECTION 3.03. Notice of Redemption..................................................... 11
SECTION 3.04. Effect of Notice of Redemption........................................... 12
SECTION 3.05. Payment of Redemption Price.............................................. 12
SECTION 3.06. Securities Redeemed in Part.............................................. 12
ARTICLE 4 -- COVENANTS
SECTION 4.01. Payment of Securities.................................................... 13
SECTION 4.02. Overdue Interest......................................................... 13
SECTION 4.03. No Lien Created, etc..................................................... 13
SECTION 4.04. Compliance Certificate................................................... 13
SECTION 4.05. SEC Reports.............................................................. 13
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 5 -- SUCCESSORS
SECTION 5.01. When Company May Merge, etc.............................................. 14
ARTICLE 6 -- DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default........................................................ 14
SECTION 6.02. Acceleration............................................................. 15
SECTION 6.03. Other Remedies........................................................... 16
SECTION 6.04. Waiver of Past Defaults.................................................. 16
SECTION 6.05. Control by Majority...................................................... 16
SECTION 6.06. Limitation on Suits...................................................... 16
SECTION 6.07. Collection Suit by Trustee............................................... 17
SECTION 6.08. Priorities............................................................... 17
ARTICLE 7 -- TRUSTEE
SECTION 7.01. Rights of Trustee........................................................ 17
SECTION 7.02. Individual Rights of Trustee............................................. 18
SECTION 7.03. Trustee's Disclaimer..................................................... 18
SECTION 7.04. Notice of Defaults....................................................... 18
SECTION 7.05. Reports by Trustee to Holders............................................ 19
SECTION 7.06. Compensation and Indemnity............................................... 19
SECTION 7.07. Replacement of Trustee................................................... 19
SECTION 7.08. Successor Trustee by Merger, etc......................................... 20
SECTION 7.09. Trustee's Capital and Surplus............................................ 20
ARTICLE 8 -- DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance............................................................... 21
SECTION 8.02. Conditions to Defeasance................................................. 21
SECTION 8.03. Application of Trust Money............................................... 22
SECTION 8.04. Repayment to Company..................................................... 22
ARTICLE 9 -- CONVERSION
SECTION 9.01. Conversion Privilege..................................................... 22
SECTION 9.02. Conversion Procedure..................................................... 23
SECTION 9.03. Taxes on Conversion...................................................... 24
SECTION 9.04. Company Determination Final.............................................. 24
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.............................. 24
SECTION 9.06. Company to Provide Conversion Securities................................. 24
SECTION 9.07. Cash Settlement Option................................................... 24
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock................ 25
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below Market Price. 26
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 9.10. Adjustment for Other Distributions....................................... 27
SECTION 9.11. Voluntary Adjustment..................................................... 28
SECTION 9.12. When Adjustment May Be Deferred.......................................... 28
SECTION 9.13. When No Adjustment Required.............................................. 29
SECTION 9.14. Notice of Adjustment..................................................... 29
SECTION 9.15. Notice of Certain Transactions........................................... 29
SECTION 9.16. Reorganization of the Company............................................ 30
ARTICLE 10 -- AMENDMENTS
SECTION 10.01. Without Consent of Holders............................................... 30
SECTION 10.02. With Consent of Holders.................................................. 30
SECTION 10.03. Compliance with Trust Indenture Act...................................... 31
SECTION 10.04. Effect of Consents....................................................... 31
SECTION 10.05. Notation on or Exchange of Securities.................................... 31
SECTION 10.06. Trustee Protected........................................................ 32
ARTICLE 11 -- MISCELLANEOUS
SECTION 11.01. Trust Indenture Act...................................................... 32
SECTION 11.02. Notices.................................................................. 32
SECTION 11.03. Certificate and Opinion as to Conditions Precedent...................... 33
SECTION 11.04. Statements Required in Certificate or Opinion........................... 33
SECTION 11.05. Rules by Company and Agents.............................................. 34
SECTION 11.06. Legal Holidays........................................................... 34
SECTION 11.07. No Recourse Against Others............................................... 34
SECTION 11.08. Duplicate Originals...................................................... 34
SECTION 11.09. Governing Law............................................................ 34
SIGNATURES................................................................................ S-1
EXHIBIT A: A Form of Registered Security.................................................. A-1
EXHIBIT B: A Form of Bearer Security...................................................... B-1
Notes to Exhibits A and B
EXHIBIT C: Assignment Form................................................................ C-1
EXHIBIT D: Conversion Notice.............................................................. D-1
</TABLE>
-iii-
<PAGE>
INDENTURE dated as of , 1998 between APPLIED POWER INC., a
corporation organized and existing under the laws of the State of Wisconsin
(hereinafter called the "Company"), and THE FIRST NATIONAL BANK OF CHICAGO
("Trustee").
Each party agrees as follows for the benefit of the Holders of the
Company's debt securities issued under this Indenture:
ARTICLE 1 -- DEFINITIONS
SECTION 1.01. Definitions.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"Agent" means any Registrar, Transfer Agent, Paying Agent, Conversion
Agent or other Agent appointed by the Company.
"Authorized Newspaper" means a newspaper that is:
(1) printed in the English language or in an official language of the
country of publication;
(2) customarily published on each business day in the place of
publication; and
(3) of general circulation in the relevant place or in the financial
community of such place.
Whenever successive publications in an Authorized Newspaper are
required, they may be made on the same or different business days and in the
same or different Authorized Newspapers.
"Bearer Security" means a Security payable to bearer.
"Board" means the Board of Directors of the Company or any authorized
committee of the Board.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of any person and all
warrants or options to acquire such capital stock.
"Common Stock" means the Class A Common Stock, par value $.20 per
share, of the Company.
"Company" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Conversion Rate" means such number or amount of shares of Common
Stock or other equity or debt securities for which $1,000 aggregate principal
amount of Securities of any series is convertible,
<PAGE>
-2-
initially as stated in the Securities Resolution authorizing the series and as
adjusted pursuant to the terms of this Indenture and the Securities Resolution.
"coupon" means an interest coupon for a Bearer Security.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default (as defined below).
"Discounted Debt Security" means a Security where the amount of
principal due upon acceleration is less than the stated principal amount.
"Holder" or "Securityholder" means the person in whose name a
Registered Security is registered and the bearer of a Bearer Security or coupon.
"Indenture" means this Indenture and any Securities Resolution as
amended from time to time.
"Lien" means any mortgage, pledge, security interest or other lien.
"Officer" means the Chairman, any Vice-Chairman, the President, any
Executive or Senior Vice President, any Vice-President, the Treasurer or any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee, and delivered to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"principal" of a debt security means the principal of the security
plus the premium, if and when applicable, on the security.
"Registered Security" means a Security registered as to principal and
interest by the Registrar.
"SEC" means the Securities and Exchange Commission.
"Securities" means the debt securities issued under this Indenture.
"Securities Resolution" means a resolution adopted by the Board or by
a committee of Officers or an Officer pursuant to Board delegation authorizing a
series or a supplemental indenture authorizing a series executed by an
authorized Officer.
"series" means a series of Securities or the Securities of the series.
"Subsidiary" means a corporation a majority of whose Voting Stock is
owned by the Company or a Subsidiary.
<PAGE>
-3-
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S) 77aaa-
77bbbb), as amended.
"Trading Day" means each day on which the securities exchange or
quotation system which is used to determine the Market Price is open for trading
or quotation.
"Trustee" means the party named as such above until a successor
replaces it and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"United States" means the United States of America, its territories
and possessions and other areas subject to its jurisdiction.
"Voting Stock" means capital stock having voting power under ordinary
circumstances to elect directors.
"Yield to Maturity" means the yield to maturity on a Security at the
time of its issuance or at the most recent determination of interest on the
Security.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
Term Defined in Section
<S> <C> <C>
"actual knowledge" 7.01
"Bankruptcy Law" 6.01
"Conditional Redemption" 3.04
"Conversion Agent" 2.03
"Conversion Date" 9.02
"Conversion Notice" 9.02
"Conversion Right" 9.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 11.06
"Market Price" 9.07
"Paying Agent" 2.03
"Price Per Share" 9.09
"Registrar" 2.03
"Transfer Agent" 2.03
"Treasury Regulations" 2.04
"U.S. Government Obligations" 8.02
</TABLE>
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
<PAGE>
-4-
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in the United States;
(3) generally accepted accounting principles are those applicable
from time to time;
(4) all terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings assigned to them by such
definitions;
(5) "or" is not exclusive; and
(6) words in the singular include the plural, and in the plural
include the singular.
ARTICLE 2 -- THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities that may be issued under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more series. Each series shall be created by a Securities Resolution
that establishes the terms of the series, which may include the following:
(1) the title of the series;
(2) the aggregate principal amount of the series;
(3) the interest rate or rates, if any, or method of calculating
the interest rate or rates;
(4) the date from which interest will accrue;
(5) the record dates for interest payable on Registered Securities;
(6) the dates when principal and interest are payable;
(7) the manner of paying principal and interest;
(8) the places where principal and interest are payable;
(9) the Registrar, Transfer Agent and Paying Agent;
(10) the terms of any mandatory or optional redemption by the
Company including any sinking fund;
(11) the terms of any redemption at the option of Holders;
(12) the denominations in which Securities are issuable;
<PAGE>
-5-
(13) whether Securities will be issuable as Registered Securities,
Bearer Securities or uncertificated Securities;
(14) whether and upon what terms Registered Securities, Bearer
Securities and uncertificated Securities may be exchanged;
(15) whether any Securities will be represented by a Security in
global form;
(16) the terms of any global Security;
(17) the terms of any tax indemnity;
(18) the currencies (including any composite currency) in which
principal or interest may be paid;
(19) if payments of principal or interest may be made in a currency
other than that in which Securities are denominated, the manner
for determining such payments;
(20) if amounts of principal or interest may be determined by
reference to an index, formula or other method, the manner for
determining such amounts;
(21) provisions for electronic issuance of Securities or for
Securities in uncertificated form;
(22) the portion of principal payable upon acceleration of a
Discounted Debt Security;
(23) whether any Events of Default or covenants in addition to or in
lieu of those set forth in this Indenture apply;
(24) whether and upon what terms Securities may be defeased;
(25) the forms of the Securities or any coupon, which may be in the
form of Exhibit A or B;
(26) any terms that may be required by or advisable under U.S. or
other applicable laws or regulations;
(27) whether and upon what terms the Securities will be convertible
into or exchangeable for Common Stock of the Company or other
equity or debt securities, which may include the terms provided
in Article 9;
(28) the ranking of the Securities; and
(29) any other terms not inconsistent with this Indenture.
All Securities of 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.
<PAGE>
-6-
The creation and issuance of a series and the authentication and
delivery thereof are not subject to any conditions precedent.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities by manual or facsimile
signature. The Company's seal shall be reproduced on the Securities. An Officer
shall sign any coupons by facsimile signature.
If an Officer whose signature is on a Security or its coupons no
longer holds that office at the time the Security is authenticated or delivered,
the Security and coupons shall nevertheless be valid.
A Security and its coupons shall not be valid until the Security is
authenticated by the manual or facsimile signature of the Registrar. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
Each Registered Security shall be dated the date of its
authentication. Each Bearer Security shall be dated the date of its original
issuance or as provided in the Securities Resolution.
Securities may have notations, legends or endorsements required by
law, stock exchange rule, agreement or usage.
In the event Securities are issued in electronic or other
uncertificated form, such Securities may be validly issued without the
signatures or seal contemplated by this Section 2.02.
SECTION 2.03. Registrar and Transfer, Paying and Conversion Agents and Other
Agents.
The Company shall maintain an office or agency where Securities may be
authenticated ("Registrar"), where Securities may be presented for registration
of transfer or for exchange ("Transfer Agent"), where Securities may be
presented for payment ("Paying Agent") and where Securities may be presented for
conversion ("Conversion Agent"). Whenever the Company must issue or deliver
Securities pursuant to this Indenture, the Registrar shall authenticate the
Securities at the Company's request. The Transfer Agent shall keep a register of
the Securities and of their transfer and exchange.
The Trustee shall be, and is hereby appointed as, Registrar. The
Company may appoint more than one Transfer Agent, Paying Agent or Conversion
Agent or other Agent for a series. The Company shall notify the Trustee of the
name and address of any Agent not a party to this Indenture. If the Company does
not appoint or maintain a Transfer Agent, Paying Agent or Conversion Agent for a
series, the Trustee shall act as such.
SECTION 2.04. Bearer Securities.
U.S. laws and Treasury Regulations restrict sales or exchanges of and
payments on Bearer Securities. Therefore, except as provided below:
(1) Bearer Securities will be offered, sold or delivered only outside
the United States and will be delivered in connection with their
original issuance only upon presentation of a certificate in a
form prescribed by the Company to comply with U.S. laws and
regulations.
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(2) Bearer Securities will not be issued in exchange for Registered
Securities.
(3) All payments of principal and interest (including original issue
discount) on Bearer Securities will be made outside the United
States by a Paying Agent located outside the United States unless
the Company determines that:
(A) such payments may not be made by such Paying Agent because
the payments are illegal or prevented by exchange controls
as described in Treasury Regulation (S) 1.163-5(c)(2)(v);
and
(B) making the payments in the United States would not have an
adverse tax effect on the Company.
If there is a change in the relevant provisions of U.S. laws or
Treasury Regulations or the judicial or administrative interpretation thereof, a
restriction set forth in paragraph (1), (2) or (3) above will not apply to a
series if the Company determines that the relevant provisions no longer apply to
the series or that failure to comply with the relevant provisions would not have
an adverse tax effect on the Company or on Securityholders or cause the series
to be treated as "registration-required" obligations under U.S. law.
The Company shall notify the Trustee of any determinations by the
Company under this Section.
"Treasury Regulations" means regulations of the U.S. Treasury
Department under the Internal Revenue Code of 1986, as amended.
SECTION 2.05. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent for a series other than
the Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of the persons entitled thereto all money held by the Paying Agent for
the payment of principal of or interest on the series, and will notify the
Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying
Agent to pay all money so held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent shall have no further liability for the
money.
If the Company or an Affiliate acts as Paying Agent for a series, it
shall segregate and hold as a separate trust fund all money held by it as Paying
Agent for the series.
The Company may elect not to exchange or register the transfer of any
Security for a period of 15 days before a selection of Securities to be
redeemed.
SECTION 2.06. Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Transfer Agent, the Company shall
furnish to the Trustee semiannually and at such other times as the Trustee may
request a list in such
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form and as of such date as the Trustee may reasonably require of the names and
addresses of Holders of Registered Securities and Holders of Bearer Securities
whose names are on the list referred to below.
The Transfer Agent shall keep a list of the names and addresses of
Holders of Bearer Securities who file a request to be included on such list. A
request will remain in effect for two years but successive requests may be made.
Whenever the Company or the Trustee is required to mail a notice to
all Holders of Registered Securities of a series, it also shall mail the notice
to Holders of Bearer Securities of the series whose names are on the list.
Whenever the Company is required to publish a notice to all Holders of
Bearer Securities of a series, it also shall mail the notice to such of them
whose names are on the list.
SECTION 2.07. Transfer and Exchange.
Where Registered Securities of a series are presented to the Transfer
Agent with a request to register a transfer or to exchange them for an equal
principal amount of Registered Securities of other denominations of the same
series, the Transfer Agent shall register the transfer or make the exchange if
its requirements for such transactions are met. Where Bearer Securities of a
series are presented to the Transfer Agent with a request to exchange them for
an equal principal amount of Bearer Securities of other denominations of the
same series, the Transfer Agent shall make the exchange if its requirements for
such transactions are met.
The Transfer Agent may require a Holder to pay a sum sufficient to
cover any taxes imposed on a transfer or exchange.
If a series provides for Registered and Bearer Securities and for
their exchange, Bearer Securities may be exchanged for Registered Securities and
Registered Securities may be exchanged for Bearer Securities as provided in the
Securities or the Securities Resolution if the requirements of the Transfer
Agent for such transactions are met and in the case of the exchange of
registered securities for bearer securities if Section 2.04 permits the
exchange.
SECTION 2.08. Replacement Securities.
If the Holder of a Security or coupon claims that it has been lost,
destroyed or wrongfully taken, then, in the absence of notice to the Company or
the Trustee that the Security or coupon has been acquired by a bona fide
purchaser, the Company shall issue a replacement Security or coupon if the
Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and any taxes
for replacing the Security or coupon.
A replacement Security shall have coupons attached corresponding to those, if
any, on the replaced Security.
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Every replacement Security or coupon is an additional obligation of
the Company.
SECTION 2.09. Outstanding Securities.
The Securities outstanding at any time are all the Securities
authenticated by the Registrar except for those cancelled by it, those delivered
to it for cancellation, and those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01, they cease to be
outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
SECTION 2.10. Discounted Debt Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, the principal
amount of a Discounted Debt Security shall be the amount of principal that would
be due as of the date of such determination if payment of the Security were
accelerated on that date.
SECTION 2.11. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or an Affiliate shall be disregarded, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which the Trustee knows are
so owned shall be so disregarded.
SECTION 2.12. Global Securities.
If the Securities Resolution so provides, the Company may issue some
or all of the Securities of a series in temporary or permanent global form. A
global Security may be in registered form, in bearer form with or without
coupons or in uncertificated form. A global Security shall represent that amount
of Securities of a series as specified in the global Security or as endorsed
thereon from time to time. At the Company's request, the Registrar shall endorse
a global Security to reflect the amount of any increase or decrease in the
Securities represented thereby.
The Company may issue a global Security only to a depository
designated by the Company. A depository may transfer a global Security only as a
whole to its nominee or to a successor depository.
The Securities Resolution may establish, among other things, the
manner of paying principal and interest on a global Security and whether and
upon what terms a beneficial owner of an interest in a global Security may
exchange such interest for definitive Securities.
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The Company, an Affiliate, the Trustee and any Agent shall not be
responsible for any acts or omissions of a depository, for any depository
records of beneficial ownership interests or for any transactions between the
depository and beneficial owners.
SECTION 2.13. Temporary Securities.
Until definitive Securities of a series are ready for delivery, the
Company may use temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company considers appropriate for temporary Securities. Temporary Securities
may be in global form. Temporary Bearer Securities may have one or more coupons
or no coupons. Without unreasonable delay, the Company shall deliver definitive
Securities in exchange for temporary Securities.
SECTION 2.14. Cancellation.
The Company at any time may deliver Securities to the Registrar for
cancellation. The Transfer Agent and the Paying Agent shall forward to the
Registrar any Securities and coupons surrendered to them for payment, exchange
or registration of transfer. The Registrar shall cancel all Securities or
coupons surrendered for payment, registration of transfer, exchange or
cancellation. The Registrar also will cancel all Bearer Securities and unmatured
coupons unless the Company requests the Registrar to hold the same for
redelivery. Any Bearer Securities so held shall be considered delivered for
cancellation under Section 2.09. The Registrar shall destroy cancelled
Securities and coupons unless the Company otherwise directs.
Unless the Securities Resolution otherwise provides, the Company may
not issue new Securities to replace Securities that the Company has paid or that
the Company has delivered to the Registrar for cancellation.
SECTION 2.15. Defaulted Interest.
If the Company defaults in a payment of interest on Registered
Securities, it need not pay the defaulted interest to Holders on the regular
record date. The Company may fix a special record date for determining Holders
entitled to receive defaulted interest, or the Company may pay defaulted
interest in any other lawful manner.
ARTICLE 3 -- REDEMPTION
SECTION 3.01. Notices to Trustee.
Securities of a series that are redeemable before maturity shall be
redeemable in accordance with their terms and, unless the Securities Resolution
otherwise provides, in accordance with this Article.
In the case of a redemption by the Company, the Company shall notify
the Trustee of the redemption date and the principal amount of Securities to be
redeemed. The Company shall notify the Trustee at least 45 days before the
redemption date unless a shorter notice is satisfactory to the Trustee.
If the Company is required to redeem Securities, it may reduce the
principal amount of Securities required to be redeemed to the extent that it is
permitted a credit against such redemption requirement by
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the terms of the Securities Resolution and notifies the Trustee of the amount of
such credit and the basis for it. If the reduction is based on a credit for
acquired or redeemed Securities that the Company has not previously delivered to
the Registrar for cancellation, the Company shall deliver the Securities at the
same time as the notice.
SECTION 3.02. Selection of Securities to Be Redeemed.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select the Securities to be redeemed by a method the Trustee
considers fair and appropriate. The Trustee shall make the selection from
Securities of the series outstanding not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities having
denominations larger than the minimum denomination for the series. Securities
and portions thereof selected for redemption shall be in amounts equal to the
minimum denomination for the series or an integral multiple thereof. Provisions
of this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption.
SECTION 3.03. Notice of Redemption.
At least 30 but not more than 60 days before a redemption date, the
Company shall mail a notice of redemption by first-class mail to each Holder of
Registered Securities whose Securities are to be redeemed.
If Bearer Securities are to be redeemed, the Company shall publish a
notice of redemption in an Authorized Newspaper as provided in the Securities.
A notice shall identify the Securities of the series to be redeemed
and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption, together with all
coupons, if any, maturing after the redemption date, must be
surrendered to the Paying Agent to collect the redemption
price;
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date;
(6) whether the redemption by the Company is mandatory or
optional; and
(7) whether the redemption is conditional as provided in Section
3.04, and if so, the terms of the conditions, and that, if the
conditions are not satisfied or are not waived by the Company,
the Securities will not be redeemed and such a failure to
redeem will not constitute an Event of Default.
A redemption notice given by publication need not identify Registered
Securities to be redeemed.
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At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Except as provided below, once notice of redemption is given,
Securities called for redemption become due and payable on the redemption date
at the redemption price stated in the notice.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as described
in such notice ("Conditional Redemption"), and such notice of Conditional
Redemption shall be of no effect unless all such conditions to the redemption
have occurred on or before such date or have been waived by the Company in its
sole discretion.
SECTION 3.05. Payment of Redemption Price.
On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date.
When the Holder of a Security surrenders it for redemption in
accordance with the redemption notice, the Company shall pay to the Holder on
the redemption date the redemption price and accrued interest to such date,
except that:
(1) the Company will pay any such interest (except defaulted
interest) to Holders on the record date of Registered
Securities if the redemption date occurs on an interest payment
date; and
(2) the Company will pay any such interest to Holders of coupons
that mature on or before the redemption date upon surrender of
such coupons to the Paying Agent.
Coupons maturing after the redemption date on a called Security are
void absent a payment default on that date. Nevertheless, if a Holder surrenders
for redemption a Bearer Security missing any such coupons, the Company may
deduct the face amount of such coupons from the redemption price. If thereafter
the Holder surrenders to the Paying Agent the missing coupons, the Company will
return the amount so deducted. The Company may waive surrender of the missing
coupons if it receives an indemnity bond satisfactory to the Company.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company
shall deliver to the Holder a new Security of the same series equal in principal
amount to the unredeemed portion of the Security surrendered.
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ARTICLE 4 -- COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on a series in
accordance with the terms of the Securities for the series, any related coupons,
and this Indenture. Principal and interest on a series shall be considered paid
on the date due if the Paying Agent for the series holds on that date money
sufficient to pay all principal and interest then due on the series.
SECTION 4.02. Overdue Interest.
Unless the Securities Resolution otherwise provides, the Company shall
pay interest on overdue principal of a Security of a series at the rate (or
Yield to Maturity in the case of a Discounted Debt Security) borne by the
series; the Company shall pay interest on overdue installments of interest at
the same rate or Yield to Maturity to the extent lawful.
SECTION 4.03. No Lien Created, etc.
This Indenture and the Securities do not create a Lien, charge or
encumbrance on any property of the Company or any Subsidiary.
SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, a brief certificate signed by the
principal executive officer, principal financial officer or principal accounting
officer of the Company, as to the signer's knowledge of the Company's compliance
with all conditions and covenants under this Indenture (determined without
regard to any period of grace or requirement of notice provided herein).
Any other obligor on the Securities shall also deliver to the Trustee
such a certificate as to its compliance with this Indenture within 120 days
after the end of each of its fiscal years.
The certificates need not comply with Section 11.04.
SECTION 4.05. SEC Reports.
The Company shall file with the Trustee, within 15 days after the
Company is required to file the same with the SEC, copies of the annual reports
and of the information, documents, and other reports (or such portions of the
foregoing as the SEC may prescribe) which the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Any other obligor on the Securities shall do likewise as to the above
items which it is required to file with the SEC pursuant to those sections.
<PAGE>
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ARTICLE 5 -- SUCCESSORS
SECTION 5.01. When Company May Merge, etc.
Unless the Securities Resolution establishing a Series otherwise
provides, the Company shall not consolidate with or merge into, or transfer all
or substantially all of its assets to, any person in any transaction in which
the Company is not the survivor unless:
(1) the person is organized under the laws of the United States or
a State thereof or is organized under the laws of a foreign
jurisdiction and consents to the jurisdiction of the courts of
the United States or a State thereof;
(2) the person assumes by supplemental indenture all the
obligations of the Company under this Indenture, the Securities
and any coupons;
(3) all required approvals of any regulatory body having
jurisdiction over the transaction shall have been obtained;
(4) immediately after the transaction no Default exists; and
(5) the Company provides an Officers' Certificate and an Opinion of
Counsel to the effect that all the provisions in this Section
5.01 have been complied with.
The successor shall be substituted for the Company, and thereafter all
obligations of the Company under this Indenture, the Securities and any coupons
shall terminate.
ARTICLE 6 -- DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
Unless the Securities Resolution otherwise provides, an "Event of
Default" on a series occurs if:
(1) the Company defaults in any payment of interest on any
Securities of the series when the same becomes due and payable
and the Default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal and
premium, if any, of any Securities of the series when the same
becomes due and payable at maturity or upon redemption,
acceleration or otherwise;
(3) the Company defaults in the payment or satisfaction of any
sinking fund obligation with respect to any Securities of the
series as required by the Securities Resolution establishing
such series;
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(4) the Company defaults in the performance of any of its other
agreements applicable to the series and the Default continues
for 60 days after the notice specified below;
(5) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian for it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors;
(6) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian for the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company;
and the order or decree remains unstayed and in effect for 60
days; or
(7) there occurs any other Event of Default provided for in the
series.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or a similar official under any
Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the
Trustee or the Holders of at least 25% in principal amount of the series notify
the Company of the Default and the Company does not cure the Default within the
time specified after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default." If Holders notify the Company of a Default, they shall notify the
Trustee at the same time.
The failure to redeem any Security subject to a Conditional Redemption
is not an Event of Default if any event on which such redemption is so
conditioned does not occur and is not waived before the scheduled redemption
date.
SECTION 6.02. Acceleration.
If an Event of Default occurs and is continuing on a series, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the series by notice to the Company and the Trustee, may declare the
principal of and accrued interest on all the Securities of the series to be due
and payable imme-
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diately. Discounted Debt Securities may provide that the amount of principal due
upon acceleration is less than the stated principal amount.
The Holders of a majority in principal amount of the series by notice
to the Trustee may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default on the series have been cured or waived except nonpayment of
principal or interest that has become due solely because of the acceleration.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing on a series, the
Trustee may pursue any available remedy to collect principal or interest then
due on the series, to enforce the performance of any provision applicable to the
series, or otherwise to protect the rights of the Trustee and Holders of the
series.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or coupons or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults.
Unless the Securities Resolution otherwise provides, the Holders of a
majority in principal amount of a series by notice to the Trustee may waive an
existing Default on the series and its consequences except:
(1) a Default in the payment of the principal of or interest on the
series, or
(2) a Default in respect of a provision that under Section 10.02
cannot be amended without the consent of each Securityholder
affected.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of a series may direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or of exercising any trust or power conferred on the Trustee,
with respect to the series. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or if the Trustee in good
faith shall determine that the action or direction might involve the Trustee in
personal liability.
SECTION 6.06. Limitation on Suits.
A Securityholder of a series may pursue a remedy with respect to the
series only if:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default on the series;
(2) the Holders of at least 25% in principal amount of the series
make a request to the Trustee to pursue the remedy;
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(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or
expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in principal
amount of the series do not give the Trustee a direction
inconsistent with such request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Collection Suit by Trustee.
If an Event of Default in payment of interest, principal or sinking
fund specified in Section 6.01(1), (2) or (3) occurs and is continuing on a
series, the Trustee may recover judgment in its own name and as trustee of an
express trust against the Company for the whole amount of principal and interest
remaining unpaid on the series.
SECTION 6.08. Priorities.
If the Trustee collects any money for a series pursuant to this
Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.06;
Second: to Securityholders of the series for amounts due and unpaid
for principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable for principal and interest,
respectively; and
Third: to the Company.
The Trustee may fix a payment date for any payment to Securityholders.
ARTICLE 7 -- TRUSTEE
SECTION 7.01. Rights of Trustee.
(1) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the
document.
(2) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in
good faith in reliance on the Certificate or Opinion.
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(3) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due
care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith in accordance with a direction received by
it pursuant to Section 6.05.
(5) The Trustee may refuse to perform any duty or exercise any right
or power which it reasonably believes may expose it to any loss,
liability or expense unless it receives indemnity satisfactory to
it against such loss, liability or expense.
(6) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company.
Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(7) The Trustee shall have no duty with respect to a Default unless a
Trust Officer has actual knowledge of the Default. As used
herein, the term "actual knowledge" means the actual fact or
statement of knowing, without any duty to make any investigation
with regard thereto.
(8) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized and
within its powers.
(9) Any Agent shall have the same rights and be protected to the same
extent as if it were Trustee.
(10) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
SECTION 7.02. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities or coupons and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
SECTION 7.03. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities or any coupons; it shall not be accountable for
the Company's use of the proceeds from the Securities; it shall not be
responsible for any statement in the Securities or any coupons; it shall not be
responsible for any overissue; it shall not be responsible for determining
whether the form and terms of any Securities or coupons were established in
conformity with this Indenture; it shall not be responsible for determining
whether any Securities were issued in accordance with this Indenture; and it
shall not be responsible for the acts or omissions of any other Trustees
appointed hereunder.
SECTION 7.04. Notice of Defaults.
If a Default occurs and is continuing on a series and if the Trustee
has actual knowledge of such Default, the Trustee shall mail a notice of the
Default within 90 days after it occurs to Holders of Regis-
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tered Securities of the series. Except in the case of a Default in payment on a
series, the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interest of Holders of the series. The Trustee shall withhold notice of a
Default described in Section 6.01(4) until at least 60 days after it occurs.
SECTION 7.05. Reports by Trustee to Holders.
Any report required by TIA (S) 313(a) to be mailed to Securityholders
shall be mailed by the Trustee on or before May 15th of each year.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which any Securities are
listed. The Company shall notify the Trustee when any Securities are listed on a
stock exchange.
SECTION 7.06. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or willful
misconduct.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities and any coupons on all money
or property held or collected by the Trustee, except that held in trust to pay
principal or interest on particular securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(5) or (6) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive any termination or
discharge of this Indenture (including without limitation any termination under
any Bankruptcy Law) and the resignation or removal of the Trustee.
SECTION 7.07. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
<PAGE>
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The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and may appoint a successor Trustee with the Company's
consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b) or
with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a Custodian or other public officer takes charge of the Trustee
or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(5) or (6) occurs
with respect to the Trustee.
The Company also may remove the Trustee with or without cause if the
Company so notifies the Trustee three months in advance and if no Default occurs
during the three-month period.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b) or
with Section 7.09, any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Registered Securities. The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.06.
SECTION 7.08. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.09. Trustee's Capital and Surplus.
The Trustee at all times shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published report of
financial condition.
<PAGE>
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ARTICLE 8 -- DISCHARGE OF INDENTURE
SECTION 8.01. Defeasance.
Securities of a series may be defeased in accordance with their terms
and, unless the Securities Resolution otherwise provides, in accordance with
this Article.
The Company at any time may terminate as to a series all of its
obligations under this Indenture, the Securities of the series and any related
coupons ("legal defeasance option"). The Company at any time may terminate as to
a series its obligations, if any, under any restrictive covenants which may be
applicable to a particular series ("covenant defeasance option"). However, in
the case of the legal defeasance option, the Company's obligations in Sections
2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.06, 7.07 and 8.04 shall survive until the
Securities of the series are no longer outstanding; thereafter the Company's
obligations in Section 7.06 shall survive.
The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option. If the Company exercises
its legal defeasance option, a series may not be accelerated because of an Event
of Default. If the Company exercises its covenant defeasance option, a series
may not be accelerated by reference to any restrictive covenants as to which the
covenant defeasance option applicable to such series has been so exercised.
The Trustee upon request shall acknowledge in writing the discharge of
those obligations or restrictions that the Company terminates by defeasance.
SECTION 8.02. Conditions to Defeasance.
The Company may exercise as to a series its legal defeasance option or
its covenant defeasance option if:
(1) the Company irrevocably deposits in trust with the Trustee or
another trustee money or U.S. Government Obligations;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing
their opinion that the payments of principal and interest when
due on the deposited U.S. Government Obligations without
reinvestment plus any deposited money without investment will
provide cash at such times and in such amounts as will be
sufficient to pay principal and interest when due on all the
Securities of the series to maturity or redemption, as the case
may be;
(3) immediately after the deposit no Default exists;
(4) the deposit does not constitute a default under any other
agreement binding on the Company;
(5) the deposit does not cause the Trustee to have a conflicting
interest under TIA (S) 310(a) or (S) 310(b) as to another series;
<PAGE>
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(6) the Company delivers to the Trustee an Opinion of Counsel to the
effect that Holders of the series will not recognize income, gain
or loss for Federal income tax purposes as a result of the
defeasance;
(7) 91 days pass after the deposit is made and during the 91-day
period no Default specified in Section 6.01(5) or (6) occurs that
is continuing at the end of the period; and
(8) the Company provides an Officers' Certificate and an Opinion of
Counsel to the effect that all conditions precedent pursuant to
this Section 8.02 have been satisfied.
Before or after a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
"U.S. Government Obligations" means direct obligations of (i) the
United States or (ii) an agency or instrumentality of the United States, the
payment of which is unconditionally guaranteed by the United States, which, in
either case, have the full faith and credit of the United States pledged for
payment and which are not callable at the issuer's option, or certificates
representing an ownership interest in such obligations.
SECTION 8.03. Application of Trust Money.
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.02. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal and interest on
Securities of the defeased series.
SECTION 8.04. Repayment to Company.
The Trustee and the Paying Agent shall promptly turn over to the
Company upon request any excess money or securities held by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to the Company, Securityholders entitled
to the money must look to the Company for payment as unsecured general creditors
unless an abandoned property law designates another person.
ARTICLE 9 -- CONVERSION
SECTION 9.01. Conversion Privilege.
If the Securities Resolution establishing the terms of a series of
securities so provides, Securities of any series may be convertible at the
option of the holders into or for Common Stock or other equity or debt
securities (a "Conversion Right"). The Securities Resolution may establish,
among other things, the Conversion Rate, provisions for adjustments to the
Conversion Rate and limitations upon exercise of the Conversion Right.
<PAGE>
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Unless the Securities Resolution otherwise provides, a Holder may
convert a portion of a Security if the portion is $1,000 or an integral
multiples thereof. Provisions of this Indenture that apply to the conversion of
the aggregate principal amount of a Security also apply to conversion of a
portion of it.
The Securities Resolution providing for Securities with a Conversion
Right may establish any terms in addition to, or other than (including terms
inconsistent with), those set forth in this Article 9 with respect to the
conversion of the Securities established thereby (other than those of Section
9.16).
SECTION 9.02. Conversion Procedure.
To convert a Security a Holder must satisfy all requirements in the
Securities or the Securities Resolution and (i) complete and manually sign the
conversion notice (the "Conversion Notice") provided for in the Securities
Resolution or the Security (or complete and manually sign a facsimile thereof)
and deliver such notice to the Conversion Agent or any other office or agency
maintained for such purpose, (ii) surrender the Security to the Conversion Agent
or at such other office or agency by physical delivery, (iii) if required,
furnish appropriate endorsements and transfer documents, and (iv) if required,
pay all transfer or similar taxes. The date on which such notice shall have been
received by and the Security shall have been so surrendered to the Conversion
Agent is the "Conversion Date." Such Conversion Notice shall be irrevocable and
may not be withdrawn by a Holder for any reason.
The Company will complete settlement of any conversion of Securities
not later than the fifth business day following the Conversion Date in respect
of the cash portion elected to be delivered in lieu of the securities into which
the Security is convertible and not later than the seventh business day
following the Conversion Date in respect of the portion to be settled in such
securities.
If any Security is converted between the record date for the payment
of interest and the next succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such succeeding interest
payment date on the principal amount so converted (unless such Security shall
have been called for redemption during such period, in which case no such
payment shall be required). A Security converted on an interest payment date
need not be accompanied by any payment, and the interest on the principal amount
of the Security being converted will be paid on such interest payment date to
the registered holder of such Security on the immediately preceding record date.
Subject to the aforesaid right of the registered holder to receive interest, no
payment or adjustment will be made on conversion for interest accrued on the
converted Security or for interest, dividends or other distributions payable on
any security issued on conversion.
If a Holder converts more than one Security at the same time, the
securities into which the Security is convertible issuable or cash payable upon
the conversion shall be based on the total principal amount of the Securities
converted.
Upon surrender of a Security that is converted in part the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unconverted portion of the Security surrendered; except that if a global
Security is so surrendered the Trustee shall authenticate and, if applicable,
deliver to the depository a new global Security in a denomination equal to and
in exchange for the unconverted portion of the principal of the global Security
so surrendered.
If the last day on which a Security may be converted is a Legal
Holiday in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that is not a
Legal Holiday.
<PAGE>
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SECTION 9.03. Taxes on Conversion.
If a Holder of a Security exercises a Conversion Right, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on the
issue of the securities into which the Security is convertible upon the
conversion. However, the Holder shall pay any such tax which is due because
securities or other property are issued in a name other than the Holder's name.
Nothing herein shall preclude any income tax or other withholding required by
law or regulations.
SECTION 9.04. Company Determination Final.
Any determination that the Board of Directors makes pursuant to this
Article 9 or consistent with terms provided for in any Securities Resolution is
conclusive, absent manifest error.
SECTION 9.05. Trustee's and Conversion Agent's Disclaimer.
The Trustee (and each Conversion Agent other than the Company) has no
duty to determine when or if an adjustment under this Article 9 or any
Securities Resolution should be made, how it should be made or calculated or
what it should be. The Trustee (and each Conversion Agent other than the
Company) makes no representation as to the validity or value of any securities
issued upon conversion of Securities. The Trustee (and each Conversion Agent
other than the Company) shall not be responsible for the Company's failure to
comply with this Article 9 or any provision of a Securities Resolution relating
to a Conversion Right.
SECTION 9.06. Company to Provide Conversion Securities.
The Company shall reserve out of its authorized but unissued Common
Stock or its Common Stock held in treasury sufficient shares to permit the
conversion of all of the Securities convertible into Common Stock. The Company
shall arrange and make available for issuance upon conversion the full amount of
any other securities into which the Securities are convertible to permit such
conversion of the Securities.
All shares of Common Stock or other equity securities of any person
which may be issued upon conversion of the Securities shall be validly issued,
fully paid and non-assessable, subject to the personal liability which may be
imposed on shareholders by Section 180.0622(2)(b) of the Wisconsin Business
Corporation Law (or any successor provision), as judicially interpreted, for
debts owing to employees for services performed.
The Company will comply with all securities laws regulating the offer
and delivery of securities upon conversion of Securities.
SECTION 9.07. Cash Settlement Option.
If the Securities Resolution so provides, the Company may elect to
satisfy, in whole or in part, a Conversion Right of Securities convertible into
Common Stock or other securities of any person by the delivery of cash. The
amount of cash to be delivered shall be equal to the Market Price on the last
Trading Day preceding the applicable Conversion Date of a share of Common Stock
or other securities of any person into which the Securities are convertible
multiplied by the number of shares of Common Stock or the number of shares or
principal amount of other securities into which the Securities are convertible,
respectively, in respect of which the Company elects to deliver cash. If the
Company elects to satisfy, in whole or in part, a Conversion Right by the
delivery of shares of Common Stock or other securities, no fractional shares or
portion of other securities
<PAGE>
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will be delivered. Instead, the Company will pay cash based on the Market Price
for such fractional share of Common Stock or portion of other securities.
The "Market Price" of the Common Stock into which Securities or other
equity securities into which the Securities are convertible may be converted
pursuant to a Securities Resolution or this Article 9 on any Trading Day means
the weighted average per share sale price for all sales of the Common Stock or
other equity securities on such Trading Day (or, if the information necessary to
calculate such weighted average per share sale price is not reported, the
average of the high and low sale prices, or if no sales are reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and average ask prices), as reported in the composite
transactions for the New York Stock Exchange, or if the Common Stock or other
equity securities into which the Securities are convertible are not listed or
admitted to trading on such exchange, as reported in the composite transactions
for the principal national or regional United States securities exchange on
which the Common Stock or other equity securities into which the Securities are
convertible are listed or admitted to trading or, if the Common Stock or other
equity securities into which the Securities are convertible are not listed or
admitted to trading on a United States national or regional securities exchange,
as reported by NASDAQ or by the National Quotation Bureau Incorporated, or if
not so reported, as determined in the manner set forth in the appropriate
Securities Resolution. In the absence of such quotations, the Company shall be
entitled to determine the Market Price on the basis of such quotations as it
considers appropriate.
The "Market Price" of any debt security into which Securities are
convertible shall be determined as set forth in the applicable Securities
Resolution.
SECTION 9.08. Adjustment in Conversion Rate for Change in Capital Stock.
If the Securities are convertible into Common Stock and the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock other than Common Stock; or
(5) issues by reclassification of its Common Stock any shares of its
Capital Stock,
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares of Capital Stock of the
Company (or, at the Company's option, an equivalent amount in cash) which he
would have owned immediately following such action if he had converted the
Security immediately prior to such action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If the security into which the Securities are convertible is other
than Common Stock of the Company, the conversion rate shall be subject to
adjustment as set forth in the applicable Securities Resolution.
<PAGE>
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If after an adjustment a Holder of a Security may, upon conversion,
receive shares of two or more classes of Capital Stock of the Company or other
securities, the Board of Directors of the Company shall determine the allocation
of the adjusted Conversion Rate between or among the classes of Capital Stock or
other securities. After such allocation, the conversion privilege and the
Conversion Rate of each class of Capital Stock or other securities shall
thereafter be subject to adjustment on terms comparable to those applicable to
Common Stock in this Article or in such Securities Resolution.
SECTION 9.09. Adjustment in Conversion Rate for Common Stock Issued Below Market
Price.
If the Securities are convertible into Common Stock, and the Company
issues to all holders of Common Stock rights, options or warrants to subscribe
for or purchase shares of Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock, or rights, options or warrants to
subscribe for or purchase such convertible or exchangeable securities at a Price
Per Share (as defined and determined according to the formula given below) lower
than the current Market Price on the date of such issuance, the Conversion Rate
shall be adjusted in accordance with the following formula:
AC = CC . (O + N)
-------
O . R
-
M
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding immediately prior to such
issuance (which number shall include shares owned or held by or for the
account of the Company).
N = the "Number of Shares," which (i) in the case of rights, options or
warrants to subscribe for or purchase shares of Common Stock or of
securities convertible into or exchangeable for shares of Common Stock, is
the maximum number of shares of Common Stock initially issuable upon
exercise, conversion or exchange thereof; and (ii) in the case of rights,
options or warrants to subscribe for or purchase convertible or
exchangeable securities, is the maximum number of shares of Common Stock
initially issuable upon the conversion or exchange of the convertible or
exchangeable securities issuable upon the exercise of such rights, options
or warrants.
R = the proceeds received or receivable by the Company, which (i) in the case
of rights, options or warrants to subscribe for or purchase shares of
Common Stock or of securities convertible into or exchangeable for shares
of Common Stock, is the aggregate amount received or receivable by the
Company in consideration for the sale and issuance of such rights, options,
warrants or convertible or exchangeable securities, plus the minimum
aggregate amount of additional consideration, other than the convertible or
exchangeable securities, payable to the Company upon exercise, conversion
or exchange thereof; and (ii) in the case of rights, options or warrants to
subscribe for or purchase convertible or exchangeable securities, is the
aggregate amount received or receivable by the Company in consideration for
the sale and issuance of such rights, options or warrants, plus the minimum
aggregate consideration payable to the Company upon the exercise thereof,
plus the minimum aggregate amount of additional consideration, other than
the convertible or exchangeable securities, payable upon the conversion or
exchange of the convertible or exchangeable securities; provided, that in
each case the proceeds received or receiv-
<PAGE>
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able by the Company shall be deemed to be the amount of gross cash proceeds
without deducting therefrom any compensation paid or discount allowed in
the sale, underwriting or purchase thereof by underwriters or dealers or
others performing similar services or any expenses incurred in connection
therewith.
M = the current Market Price per share of Common Stock on the date of issue of
the rights, options or warrants to subscribe for or purchase shares of
Common Stock or the securities convertible into or exchangeable for shares
of Common Stock or the rights, options or warrants to subscribe for or
purchase convertible or exchangeable securities.
"Price Per Share" shall be defined and determined according to the
following formula:
P = R
-
N
where:
P = Price Per Share
and R and N have the meanings assigned above.
If the Company shall issue rights, options, warrants or convertible or
exchangeable securities with respect to its Common Stock for a consideration
consisting, in whole or in part, of property other than cash the amount of such
consideration shall be determined in good faith by the Board of Directors whose
determination shall be conclusive and evidenced by a resolution of the Board of
Directors filed with the Trustee.
The adjustment shall be made successively whenever any such additional
rights, options, warrants or convertible or exchangeable securities with respect
to its Common Stock are issued, and shall become effective immediately after the
date of issue of such shares, rights, options, warrants or convertible or
exchangeable securities.
To the extent that such rights, options or warrants to acquire Common
Stock expire unexercised or to the extent any convertible or exchangeable
securities with respect to its Common Stock are redeemed by the Company or
otherwise cease to be convertible or exchangeable into shares of Common Stock,
the Conversion Rate shall be readjusted to the Conversion Rate which would then
be in effect had the adjustment made upon the date of issuance of such rights,
options, warrants or convertible or exchangeable securities been made upon the
basis of the issuance of rights, options or warrants to subscribe for or
purchase only the number of shares of Common Stock as to which such rights,
options or warrants were actually exercised and the number of shares of Common
Stock that were actually issued upon the conversion or exchange of the
convertible or exchangeable securities.
If the Securities are convertible into securities other than the
Common Stock, any adjustment in the Conversion Rate required for the issuance or
sale of the securities into which the Securities are convertible shall be made
as set forth in the Securities Resolution.
SECTION 9.10. Adjustment for Other Distributions.
If the Securities are initially convertible into Common Stock and the
Company distributes to all holders of its Common Stock any of its assets or debt
securities or any rights or warrants to purchase assets or
<PAGE>
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debt securities of the Company, the Conversion Rate shall be adjusted in
accordance with the following formula:
AC = CC . (O . M)
-------------
((O . M) - F)
where:
AC = the adjusted Conversion Rate.
CC = the then current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date
mentioned below (which number shall include shares owned or held by or for
the account of the Company).
M = the current Market Price per share of Common Stock on the record date
mentioned below.
F = the fair market value on the record date of the assets, securities, rights
or warrants distributed. The Board of Directors of the Company shall
determine the fair market value.
The adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
If the securities into which the Securities are convertible are other
than Common Stock, any adjustments for such other distribution shall be made as
set forth in the Securities Resolution.
This Section does not apply to cash dividends or distributions or to
reclassifications or distributions referred to in Section 9.08. Also, this
Section does not apply to shares issued below Market Price referred to in
Section 9.09.
SECTION 9.11. Voluntary Adjustment.
The Company at any time may increase the Conversion Rate, temporarily
or otherwise, by any amount but in no event shall such Conversion Rate result in
the issuance of Capital Stock at a price less than the par value of such Capital
Stock at the time such increase is made.
SECTION 9.12. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the
adjustment would require a change of at least 1% in the Conversion Rate. Any
adjustments that are not made due to the immediately preceding sentence shall be
carried forward and taken into account in any subsequent adjustment; provided,
that any adjustment carried forward shall be deferred not in excess of three
years, whereupon any adjustment to the Conversion Rate will be effected.
All calculations under this Article 9 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
<PAGE>
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SECTION 9.13. When No Adjustment Required.
Except as set forth in Section 9.09, no adjustment in the Conversion
Rate shall be made because the Company issues, in exchange for cash, property or
services, shares of Common Stock, or any securities convertible into shares of
Common Stock, or securities carrying the right to purchase shares of Common
Stock or such convertible securities.
No adjustment in the Conversion Rate need be made for rights to
purchase or the sale of Common Stock pursuant to a Company plan providing for
reinvestment of dividends or interest.
No adjustment in the Conversion Rate need be made for a change in the
par value of the Common Stock or other securities having a par value.
No adjustment need be made for a transaction referred to in Section
9.08, 9.09 or 9.10 if Securityholders are to participate in the transaction on a
basis and with notice that the Board determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock or other
securities into which the Securities are convertible participate in the
transaction.
SECTION 9.14. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall promptly
mail to Holders of Securities affected a notice of the adjustment. The Company
shall file with the Trustee an Officers' Certificate or a certificate from the
Company's independent public accountants stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct, absent manifest error.
SECTION 9.15. Notice of Certain Transactions.
If:
(1) the Company proposes to take any action that would require
an adjustment in the Conversion Rate,
(2) the Company proposes to take any action that would require a
supplemental indenture pursuant to Section 9.16, or
(3) there is a proposed liquidation or dissolution of the
Company or of the issuer of any other security into which
the Securities are convertible,
the Company shall mail to registered Holders of Securities of any affected
series a notice stating the proposed record date for a dividend or distribution
or the proposed effective date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall mail the notice at least 15 days before such date. Failure to mail the
notice or any defect in it shall not affect the validity of the transaction.
<PAGE>
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SECTION 9.16. Reorganization of the Company.
If the Company is a party to a transaction subject to Section 5.01,
the successor corporation (if other than the Company) shall enter into a
supplemental indenture which shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which he
would have owned immediately after the consolidation, merger or transfer if he
had converted the Security immediately before the effective date of the
transaction. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article. The successor company shall mail to Holders of Securities
of any affected series a notice briefly describing the supplemental indenture.
If this Section applies, Sections 9.08, 9.09 and 9.10 do not apply.
ARTICLE 10 -- AMENDMENTS
SECTION 10.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture, the Securities
or any coupons without the consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5 or Section 9.16;
(3) to provide that specific provisions of this Indenture shall
not apply to a series not previously issued;
(4) to create a series and establish its terms;
(5) to provide for a separate Trustee for one or more series; or
(6) to make any change that does not materially adversely affect
the rights of any Securityholder.
SECTION 10.02. With Consent of Holders.
Unless the Securities Resolution otherwise provides, the Company and
the Trustee may amend this Indenture, the Securities and any coupons with the
written consent of the Holders of a majority in principal amount of the
Securities of all series affected by the amendment voting as one class. However,
without the consent of each Securityholder affected, an amendment under this
Section may not:
(1) reduce the amount of Securities whose Holders must consent
to an amendment;
(2) reduce the interest on or change the time for payment of
interest on any Security;
(3) change the fixed maturity of any Security;
<PAGE>
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(4) reduce the principal of any non-Discounted Debt Security or
reduce the amount of principal of any Discounted Debt
Security that would be due upon an acceleration thereof;
(5) change the currency in which principal or interest on a
Security is payable;
(6) make any change that materially adversely affects the right
to convert or exchange any Security; or
(7) make any change in Section 6.04 or 10.02, except to increase
the amount of Securities whose Holders must consent to an
amendment or waiver or to provide that other provisions of
this Indenture cannot be amended or waived without the
consent of each Securityholder affected thereby.
An amendment of a provision included solely for the benefit of one or
more series does not affect Securityholders of any other series.
Securityholders need not consent to the exact text of a proposed
amendment or waiver; it is sufficient if they consent to the substance thereof.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment pursuant to Section 10.01 or 10.02 shall be set forth
in a supplemental indenture (except any amendment pursuant to Section 10.01(4),
which may be set forth in a Securities Resolution) that complies with the TIA.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect.
SECTION 10.04. Effect of Consents.
An amendment or waiver becomes effective in accordance with its terms
and thereafter binds every Securityholder entitled to consent to it.
A consent to an amendment or waiver by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security that
evidences the same debt as the consenting Holder's Security. Any Holder or
subsequent Holder may revoke the consent as to his Security if the Trustee
receives notice of the revocation before the amendment or waiver becomes
effective.
The Company may fix a record date for the determination of Holders of
Registered Securities entitled to give a consent. The record date shall not be
less than 10 nor more than 60 days prior to the first written solicitation of
Securityholders.
SECTION 10.05. Notation on or Exchange of Securities.
The Company or the Trustee may place an appropriate notation about an
amendment or waiver on any Security thereafter authenticated. The Company may
issue in exchange for affected Securities new Securities that reflect the
amendment or waiver.
<PAGE>
-32-
SECTION 10.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that adversely
affects its rights. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment or supplement or waiver
authorized pursuant to this Article is authorized or permitted by this
Indenture, and that such amendment or supplement or waiver constitutes the
legal, valid and binding obligation of the Company.
ARTICLE 11 -- MISCELLANEOUS
SECTION 11.01. Trust Indenture Act.
The provisions of TIA (S)(S) 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not expressly set forth herein.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control. If any provision of this Indenture
modifies or excludes any provision of the TIA that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 11.02. Notices.
Any notice by one party to another is duly given if in writing and
delivered in person, sent by facsimile transmission confirmed by mail or mailed
by first-class mail to the other's address shown below:
Company:
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007
Fax: (414) 783-9790
Attention: Chief Financial Officer
Trustee:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670-0126
Fax: (312) 407-1708
Attention: Corporate Trust Division
A party by notice to the other parties may designate additional or
different addresses for subsequent notices.
<PAGE>
-33-
Any notice mailed to a Securityholder shall be mailed to his address
shown on the register kept by the Transfer Agent or on the list referred to in
Section 2.06. Failure to mail a notice to a Securityholder or any defect in a
notice mailed to a Securityholder shall not affect the sufficiency of the notice
mailed to other Securityholders or the sufficiency of any published notice.
If a notice is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice to Securityholders, it shall mail a copy
to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice
required to be mailed or to publish a notice required to be published, the
Company may give such substitute notice as the Trustee approves. Failure to
publish a notice as required or any defect in it shall not affect the
sufficiency of any mailed notice.
All notices shall be in the English language, except that any
published notice may be in an official language of the country of publication.
A "notice" includes any communication required by this Indenture.
SECTION 11.03. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall if so requested furnish to
the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been
complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied
with.
SECTION 11.04. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or
opinion has read such covenant or condition;
(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 such person, 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
<PAGE>
-34-
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 11.05. Rules by Company and Agents.
The Company may make reasonable rules for action by or a meeting of
Securityholders. An Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 11.06. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open. If a payment date is a Legal Holiday
at a place of payment, unless the Securities Resolution establishing a series
otherwise provides with respect to Securities of the series, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 11.07. No Recourse Against Others.
All liability described in the Securities of any director, officer,
employee or stockholder, as such, of the Company is waived and released.
SECTION 11.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 11.09. Governing Law.
The laws of the State of Wisconsin shall govern this Indenture, the
Securities and any coupons, unless federal law governs.
<PAGE>
S-1
SIGNATURES
Dated: , APPLIED POWER INC.
By
-----------------------------------------
Name:
Title:
Dated: , THE FIRST NATIONAL BANK OF CHICAGO
By
-----------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
A Form of Registered Security
No. $
APPLIED POWER INC.
[Title of Security]
APPLIED POWER INC.
promises to pay to
or registered assigns
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By:
--------------------------------------
[Title of Authorized Officer]
By:
--------------------------------------
[Assistant] Secretary
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:
---------------------------------
Authorized Signature
A-1
<PAGE>
APPLIED POWER INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. Interest./1/
Applied Power Inc. ("Company"), a corporation organized and existing
under the laws of the State of Wisconsin, promises to pay interest on
the principal amount of this Security at the rate per annum shown
above. The Company will pay interest on and
of each year commencing , . Interest on the Securities
will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from , . Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment./2/
The Company will pay interest on the Securities to the persons who are
registered holders of Securities at the close of business on the
record date for the next interest payment date, except as otherwise
provided in the Indenture. Holders must surrender Securities to a
Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money. It may mail an interest check to a holder's registered
address.
3. Securities Agents./2A/
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Paying Agent, Transfer Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
4. Indenture.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of , 1998 ("Indenture") between the
Company and The First National Bank of Chicago ("Trustee"). The terms
of the Securities include those stated in the Indenture and in the
Securities Resolution creating the Securities and those made part of
the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb). Securityholders are referred to the Indenture, the
Securities Resolution and the Act for a statement of such terms.
5. Optional Redemption./3/
On or after , the Company may redeem all the Securities
at any time or some of them from time to time at the following
redemption prices (expressed in percentages of principal amount), plus
accrued interest to the redemption date.
If redeemed during the 12-month period beginning,
A-2
<PAGE>
Year Percentage Year Percentage
and thereafter at 100%.
6. Mandatory Redemption./4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued interest to
the redemption date./5/ The Company may reduce the principal amount
of Securities to be redeemed pursuant to this paragraph by subtracting
100% of the principal amount (excluding premium) of any Securities (i)
that the Company has acquired or that the Company has redeemed other
than pursuant to this paragraph and (ii) that the Company has
delivered to the Registrar for cancellation. The Company may so
subtract the same Security only once.
7. Additional Optional Redemption./6/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $ principal amount of
Securities on and on each thereafter through
at a redemption price of 100% of principal amount, plus accrued
interest to the redemption date.
8. Notice of Redemption./7/
Notice of redemption will be mailed at least 30 but not more than 60
days before the redemption date to each holder of Securities to be
redeemed at his registered address.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
9. Conversion./8/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any
time before the close of business on ___________, or, if the Security
is called for redemption, the Holder may convert it at any time before
the close of business on the redemption date. The initial Conversion
Rate is ____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as provided
in Article 9 of the Indenture./9/ The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment
for interest accrued on the Securities will be made nor for dividends
on the Common Stock issued on conversion. If any Security is
converted between the record date for the payment of interest and the
next succeeding interest payment date, such Security must be
accompanied by funds equal to the interest payable on such succeeding
interest payment date on the principal amount so converted (unless
such Security shall have been called for redemption, in which case no
such payment shall be required). A Security converted on an interest
payment date
A-3
<PAGE>
need not be accompanied by any payment, and the interest on the
principal amount of the Security being converted will be paid on such
interest payment date to the registered holder of such Security on the
immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by the Registrar or Conversion
Agent and (4) pay any transfer or similar tax if required. A Holder
may convert a portion of a Security if the portion is $1,000 or an
integral multiple of $1,000.
10. Denominations, Transfer, Exchange.
The Securities are in registered form without coupons in denominations
of $1,000/10/ and whole multiples of $1,000. The transfer of
Securities may be registered and Securities may be exchanged as
provided in the Indenture. The Transfer Agent may require a holder,
among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or the
Indenture. The Transfer Agent need not exchange or register the
transfer of any Security or portion of a Security selected for
redemption. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to
be redeemed.
11. Persons Deemed Owners.
The registered holder of a Security may be treated as its owner for
all purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./11/
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder.
13. Restrictive Covenants./12/
The Securities are unsecured general obligations of the Company
limited to $ principal amount. The Indenture does not limit
other unsecured debt.
14. Successors.
When a successor assumes all the obligations of the Company under the
Securities and the Indenture, the Company will be released from those
obligations.
A-4
<PAGE>
15. Defeasance Prior to Redemption or Maturity./13/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the
Securities to redemption or maturity. U.S. Government Obligations are
securities backed by the full faith and credit of the United States of
America or certificates representing an ownership interest in such
Obligations.
16. Defaults and Remedies.
An Event of Default/14/ includes: default for 30 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare the
principal/15/ of all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of principal
or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate
to the Trustee.
17. Trustee Dealings with Company.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for
the issue of the Securities.
19. Authentication.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
A-5
<PAGE>
20. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
A-6
<PAGE>
EXHIBIT B
A Form of Bearer Security
No. $
APPLIED POWER INC.
[Title of Security]
APPLIED POWER INC.
promises to pay to bearer
the principal sum of Dollars on ,
Interest Payment Dates:
Record Dates:
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By: :
--------------------------
[Title of Authorized Officer]
By: :
--------------------------
[Assistant] Secretary
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:
-------------------------------
Authorized Signature
B-1
<PAGE>
APPLIED POWER INC.
[Title of Security]
[Explanatory Notes follow Exhibit B]
1. Interest./1/
APPLIED POWER INC. ("Company"), a corporation organized and existing
under the laws of the State of Wisconsin, promises to pay to bearer
interest on the principal amount of this Security at the rate per
annum shown above. The Company will pay interest on and
of each year commencing , . Interest on the Securities
will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from , . Interest
will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment./2/
Holders must surrender Securities and any coupons to a Paying Agent to
collect principal and interest payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money.
3. Securities Agents./2A/
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Transfer Agent, Paying Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
4. Indenture.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of , 1998 ("Indenture") between the Company
and The First National Bank of Chicago ("Trustee"). The terms of the
Securities include those stated in the Indenture and the Securities
Resolution and those made part of the Indenture by the Trust Indenture
Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb). Securityholders are
referred to the Indenture, the Securities Resolution and the Act for a
statement of such terms.
5. Optional Redemption./3/
On or after , the Company may redeem all the Securities at any
time or some of them from time to time at the following redemption
prices (expressed in percentages of principal amount), plus accrued
interest to the redemption date.
If redeemed during the 12-month period beginning,
Year Percentage Year Percentage
B-2
<PAGE>
and thereafter 100%.
6. Mandatory Redemption./4/
The Company will redeem $ principal amount of Securities on
and on each thereafter through at a
redemption price of 100% of principal amount, plus accrued interest to
the redemption date./5/ The Company may reduce the principal amount of
Securities to be redeemed pursuant to this paragraph by subtracting
100% of the principal amount (excluding premium) of any Securities (i)
that the Company has acquired or that the Company has redeemed other
than pursuant to this paragraph and (ii) that the Company has
delivered to the Registrar for cancellation. The Company may so
subtract the same Security only once.
7. Additional Optional Redemption./6/
In addition to redemptions pursuant to the above paragraph(s), the
Company may redeem not more than $ principal amount of
Securities on and on each thereafter through
at a redemption price of 100% of principal amount, plus accrued
interest to the redemption date.
8. Notice of Redemption./7/
Notice of redemption will be published once in an Authorized Newspaper
in the City of New York and if the Securities are listed on any stock
exchange located outside the United States and such stock exchange so
requires, in any other required city outside the United States at
least 30 but not more than 60 days before the redemption date. Notice
of redemption also will be mailed to holders who have filed their
names and addresses with the Transfer Agent within the two preceding
years. A holder of Securities may miss important notices if he fails
to maintain his name and address with the Transfer Agent.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
9. Conversion./8/
A Holder of a Security may convert it into Common Stock of the Company
or cash, or a combination thereof, at the Company's option, at any
time before the close of business on ___________, or, if the Security
is called for redemption, the Holder may convert it at any time before
the close of business on the redemption date. The initial Conversion
Rate is ____________ (or an equivalent amount in cash) per $1,000
principal amount of the Securities, subject to adjustment as provided
in Article 9 of the Indenture./9/ The Company will deliver a check in
lieu of any fractional share. On conversion no payment or adjustment
for interest accrued on the Securities will be made nor for dividends
on the Common Stock issued on conversion. If any Security is
converted between the record date for the payment of interest and the
next succeeding interest payment date, such Security must be
accompanied by
B-3
<PAGE>
funds equal to the interest payable on such succeeding interest
payment date on the principal amount so converted (unless such
Security shall have been called for redemption, in which case no such
payment shall be required). A Security converted on an interest
payment date need not be accompanied by any payment, and the interest
on the principal amount of the Security being converted will be paid
on such interest payment date to the registered holder of such
Security on the immediately preceding record date.
To convert a Security a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements
and transfer documents if required by the Registrar or Conversion
Agent and (4) pay any transfer or similar tax if required. A Holder
may convert a portion of a Security if the portion is $1,000 or an
integral multiple of $1,000.
10. Denominations, Transfer, Exchange.
The Securities are in bearer form with coupons in denominations of
$5,000/10/ and whole multiples of $5,000. The Securities may be
transferred by delivery and exchanged as provided in the Indenture.
Upon an exchange, the Transfer Agent may require a holder, among other
things, to furnish appropriate documents and to pay any taxes and fees
required by law or the Indenture. The Transfer Agent need not
exchange any Security or portion of a Security selected for
redemption. Also, it need not exchange any Securities for a period of
15 days before a selection of Securities to be redeemed.
11. Persons Deemed Owners.
The holder of a Security or coupon may be treated as its owner for all
purposes.
12. Amendments and Waivers.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment./11/
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder.
13. Restrictive Covenants./12/
The Securities are unsecured general obligations of the Company
limited to $ principal amount. The Indenture does not limit
other unsecured debt.
B-4
<PAGE>
14. Successors.
When a successor assumes all the obligations of the Company under the
Securities, any coupons and the Indenture, the Company will be
released from those obligations.
15. Defeasance Prior to Redemption or Maturity./13/
Subject to certain conditions, the Company at any time may terminate
some or all of its obligations under the Securities, any coupons and
the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on
the Securities to redemption or maturity. U.S. Government Obligations
are securities backed by the full faith and credit of the United
States of America or certificates representing an ownership interest
in such Obligations.
16. Defaults and Remedies.
An Event of Default/14/ includes: default for 30 days in payment of
interest on the Securities; default in payment of principal on the
Securities; default in payment or satisfaction of any sinking fund
obligation; default by the Company for a specified period after notice
to it in the performance of any of its other agreements applicable to
the Securities; certain events of bankruptcy or insolvency; and any
other Event of Default provided for in the series. If an Event of
Default occurs and is continuing, the Trustee or the holders of at
least 25% in principal amount of the Securities may declare the
principal/15/ of all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal
amount of the Securities may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice
of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their
interests. The Company must furnish annual compliance certificates
to the Trustee.
17. Trustee Dealings with Company.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
18. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for
the issue of the Securities.
B-5
<PAGE>
19. Authentication.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
20. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
B-6
<PAGE>
...............
[$]............
Due............
APPLIED POWER INC.
[Title of Security]
Unless the Security attached to this coupon has been called for
redemption, Applied Power Inc. ("Company") will pay to bearer, upon surrender,
the amount shown hereon when due. This coupon may be surrendered for payment to
any Paying Agent listed on the back of this coupon unless the Company has
replaced such Agent. Payment may be made by check. This coupon represents
months' interest.
APPLIED POWER INC.
By
--------------------------------
[REVERSE OF COUPON]
PAYING AGENTS
B-7
<PAGE>
NOTES TO EXHIBITS A AND B
1 If the Security is not to bear interest at a fixed rate per annum, insert a
description of the manner in which the rate of interest is to be
determined. If the Security is not to bear interest prior to maturity, so
state.
2 If the method or currency of payment is different, insert a statement
thereof.
2A As is done in Section 2.03 of the Indenture, the Trustee must be appointed
Registrar under Section 182.23, Wis. Stats., in order for Officers'
signatures on Securities and the corporate seal to be facsimiles.
3 If applicable. If the Security is to be subject to a nonrefunding
restriction, insert a brief summary thereof. If the redemption is to be
subject to a condition, insert a brief summary thereof.
4 Such provisions as are applicable, if any.
5 If the Security is a Discounted Debt Security, insert amount to be redeemed
or method of calculating such amount.
6 If applicable. Also insert, if applicable, provisions for repayment of
Securities at the option of the Securityholder.
7 If applicable.
8 If applicable. If convertible into securities other than Common Stock,
insert appropriate summary.
9 If additional or different adjustment provisions apply so specify.
10 If applicable. Insert additional or different denominations and terms as
appropriate.
11 If different terms apply, insert a brief summary thereof.
12 If applicable. If additional or different covenants apply, insert a brief
summary thereof.
13 If applicable. If different defeasance terms apply, insert a brief summary
thereof.
14 If additional or different Events of Default apply, insert a brief summary
thereof.
15 If the Security is a Discounted Debt Security, set forth the amount due and
payable upon an Event of Default.
Note: U.S. tax law may require certain legends on Discounted Debt and Bearer
Securities.
<PAGE>
EXHIBIT C
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_________________________________________
:_______________________________________:
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
Date: _______________ Your Signature: __________________________
--------------------------
(Sign exactly as your name(s) appear(s) on the other side of this Security)
Signature(s) guaranteed by: _________________________________________
(All signatures must be
guaranteed by an "eligible
guarantor institution " as defined
by Rule 17Ad-15 of the Securities
Exchange Act of 1934, as amended)
C-1
<PAGE>
EXHIBIT D
CONVERSION NOTICE
To convert this Security, check the box:
[ ]
----------
To convert only part of this Security, state the amount
(must be in integral multiples of $1,000);
$_____________________________
If you want the securities delivered upon conversion made out in
another person's name, fill in the form below:
(Insert other person's Social Security or Tax I.D. Number)
______________________________
______________________________
______________________________
______________________________
(Print or type other person's name, address and zip code
Date: ____________ Signature(s): ____________________________
__________________________________
(Sign exactly as your name(s)
appear(s) on the other side of this Security)
Signature(s) guaranteed by: ________________________________
(All signatures must be
guaranteed by an "eligible
guarantor institution" as defined
by Rule 17Ad-15 of the Securities
Exchange Act of 1934, as amended)
D-1
<PAGE>
EXHIBIT 5
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, WI 53202-4497
March 6, 1998
Applied Power Inc.
13000 West Silver Spring Drive
Butler, WI 53007-1093
Ladies and Gentlemen:
We are providing this opinion in connection with the Registration Statement
of Applied Power Inc. (the "Company") on Form S-3 (the "Registration Statement")
to be filed with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Act"), with respect to the proposed
offering on a delayed basis pursuant to Rule 415 under the Act, of (i) one or
more series of the Company's unsecured debt securities (the "Debt Securities")
and/or (ii) shares of the Company's Class A Common Stock, par value $.20 per
share (the "Shares" and, together with the Debt Securities, the "Securities"),
for an aggregate initial offering price not to exceed $300,000,000.
We have examined (i) the Registration Statement; (ii) the Company's
Restated Articles of Incorporation and Amended and Restated Bylaws, as amended
to date; (iii) the proposed form of Indenture for Debt Securities (including, as
exhibits, proposed forms of Registered Security and Bearer Security thereunder)
from the Company to The First National Bank of Chicago, as Trustee (the
"Indenture"), providing for the issuance of the Debt Securities from time to
time in one or more series pursuant to the terms of one or more Securities
Resolutions (as defined in the Indenture) or supplemental indentures creating
such series; (iv) corporate proceedings of the Company relating to the
Registration Statement, the Indenture and the transactions contemplated thereby;
and (v) such other documents, and such matters of law, as we have deemed
necessary in order to render this opinion.
In connection with this opinion, we have assumed that (i) the Registration
Statement, and any amendments thereto (including post-effective amendments),
will have become effective under the Act; (ii) a Prospectus Supplement will have
been prepared and filed with the Commission describing the terms of each
particular issue of Securities offered and the terms of the offering thereof;
(iii) all Securities will be issued and sold in compliance with applicable
federal and state securities laws and
<PAGE>
Applied Power Inc.
Page 2
March 6, 1998
in the manner stated in the Registration Statement and the applicable Prospectus
Supplement; (iv) the Indenture will have been duly qualified under the Trust
Indenture Act of 1939, as amended, and will have been duly authorized, executed
and delivered by the Company and the Trustee; and (v) a definitive purchase,
underwriting or similar agreement with respect to any Securities offered will
have been duly authorized and validly executed and delivered by the Company and
the other parties thereto.
On the basis of and subject to the foregoing, we advise you that, in our
opinion:
1. The Company is a corporation duly incorporated and validly existing
under the laws of the State of Wisconsin.
2. With respect to each series of Debt Securities to be issued under the
Indenture, when (a) the Board of Directors of the Company or any duly
authorized committee thereof (the "Board") has taken all necessary
further action to approve the issuance and terms of such Debt
Securities, the terms of the offering thereof and related matters; (b)
the Securities Resolution or supplemental indenture setting forth the
terms of such series shall have been duly adopted, or duly executed
and delivered by the Company and the Trustee, as the case may be; and
(c) such Debt Securities have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the
Indenture, the applicable Securities Resolution or supplemental
indenture, and the applicable definitive purchase, underwriting or
similar agreement approved by the Board upon payment of the
consideration therefor provided for therein, such Debt Securities will
be valid and binding obligations of the Company, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at
law), and will be entitled to the benefits of the Indenture relating
to such series.
3. With respect to each offering of the Shares, when (a) the Board has
taken all necessary further action to approve the issuance of such
Shares, the terms of the offering thereof and related matters; and (b)
such Shares have been duly issued in accordance with such
authorization and the provisions of the applicable definitive
purchase, underwriting or similar agreement approved by the Board upon
payment of the consideration therefor provided for therein, such
Shares will be validly issued, fully paid and nonassessable by the
Company, subject to the personal liability which
<PAGE>
Applied Power Inc.
Page 3
March 6, 1998
may be imposed on shareholders by Section 180.0622(2)(b) of the
Wisconsin Business Corporation Law, as judicially interpreted, for
debts owing to employees for services performed, but not exceeding six
months service in any one case. Although Section 180.0622(2)(b)
provides that such personal liability of shareholders shall be "to an
amount equal to the par value of shares owned by them respectively,
and to the consideration for which their shares without par value was
issued," the Wisconsin Supreme Court, by a split decision without a
written opinion, has affirmed a judgment holding shareholders of a
corporation liable under the substantially identical predecessor
statute in effect prior to January 1, 1991 (Section 180.40(6)) for
unpaid employee wages to an amount equal to the consideration for
which their par value shares were issued rather than the shares' lower
stated par value. Local 257 of Hotel and Restaurant Employees and
Bartenders International Union v. Wilson Street East Dinner Playhouse,
Inc., 126 Wis. 2d 284, 375 N.W.2d 664 (1985) (affirming the 1983
decision of the Circuit Court for Dane County, Wisconsin, in Case No.
82-CV-0023).
Anthony W. Asmuth III, a partner in our firm, is Corporate Secretary of the
Company.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Certain Legal
Matters" in the Prospectus constituting a part thereof. In giving our consent,
we do not admit that we are "experts" within the meaning of Section 11 of the
Act, or that we come within the category of persons whose consent is required by
Section 7 of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Quarles & Brady
QUARLES & BRADY
<PAGE>
EXHIBIT 12
APPLIED POWER INC.
Computation of Ratio of
Earnings to Fixed Charges
<TABLE>
<CAPTION>
Earnings to Fixed Charges
(in thousands, except Ratio Data)
------------------------------------------------------------------------
Three
months
ended
11/30/97 (1) 1997 1996 1995 1994 1993(2)
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Earnings from continuing
operations $12,186 $42,038 $33,729 $25,005 $16,896 $ 7,086
Add Income Tax Expense 6,562 20,705 15,438 11,868 8,402 2,504
Add Interest Expense (3) 4,147 12,003 8,456 10,291 11,362 12,469
Portion of Rent deemed interest factor
(4) 1,054 4,057 3,544 3,655 3,755 4,043
------------------------------------------------------------------------
Total Earnings Available
for Fixed Charges $23,949 $78,803 $61,167 $50,819 $40,415 $26,102
========================================================================
Fixed Charges:
Interest Expense (3) $ 4,147 $12,003 $ 8,456 $10,291 $11,362 $12,469
Portion of Rent deemed interest factor
(4) 1,054 4,057 3,544 3,655 3,755 4,043
------------------------------------------------------------------------
Total Fixed Charges $ 5,201 $16,060 $12,000 $13,946 $15,117 $16,512
========================================================================
Ratio of Earnings to Fixed Charges 4.6 4.9 5.1 3.6 2.7 1.6
========================================================================
</TABLE>
_______________
(1) The Company has historically had a seasonality effect where the second half
of the fiscal year is generally better than the first half. Therefore, the
results for the first quarter ended November 30, 1997, are not necessarily
indicative of full year results.
(2) Net Earnings from continuing operations in 1993 include a non-recurring
restructuring charge of $7,721. Excluding this charge, the ratio of
earnings to fixed charges would have been 2.0.
(3) Interest Expense consists of interest on indebtedness and amortization of
debt expense.
(4) 33% of rental expense is deemed representative of the interest factor.
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Applied Power Inc. on Form S-3 of our report dated September 25, 1997,
appearing in the Annual Report on Form 10-K of Applied Power Inc. for the year
ended August 31, 1997. We also consent to the incorporation by reference in this
Registration Statement of our report dated May 9, 1997 relating to Versa
Technologies, Inc. appearing in the Current Report on Form 8-K of Applied Power
Inc. dated October 3, 1997.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 2, 1998
<PAGE>
EXHIBIT 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
-----------------------------------
APPLIED POWER INC.
(Exact name of obligor as specified in its charter)
Wisconsin 39-0168610
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 3rd day of March, 1998.
The First National Bank of Chicago,
Trustee
By /S/ STEVEN M. WAGNER
--------------------------------
Steven M. Wagner
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25.1 to the Registration Statement on Form S-3 of
SunAmerica Inc. filed with the Securities and Exchange Commission on October 25,
1996 (Registration No. 333-14201).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of an indenture between Applied Power Inc.
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By /S/ STEVEN M. WAGNER
------------------------------
Steven M. Wagner
Vice President
4
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION> C400
Dollar Amounts in ------------
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
ASSETS
<C> <S> <C> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 4,499,157 1.a.
b. Interest-bearing balances(2)..................................... 0071 6,967,103 1.b.
2. Securities
a. Held-to-maturity securities (from Schedule RC-B, column A)....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 5,251,713 2.b.
3. Federal funds sold and securities purchased under agreements to
resell.............................................................. 1350 5,561,976 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)............................................................... RCFD 2122 24,171,565 4.a.
b. LESS: Allowance for loan and lease losses........................ RCFD 3123 419,216 4.b.
c. LESS: Allocated transfer risk reserve............................ RCFD 3128 0 4.c.
d. Loans and leases, net of unearned
income, allowance, and reserve (item 4.a minus 4.b and 4.c)...... 2125 23,752,349 4.d.
5. Trading assets (from Schedule RD-D)................................. 3545 6,238,805 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 717,303 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 7,187 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 77,115 8.
9. Customers' liability to this bank on acceptances outstanding........ 2155 614,921 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 277,105 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,147,141 11.
12. Total assets (sum of items 1 through 11)............................ 2170 56,108,875 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 09/30/97
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0303 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
<TABLE>
<CAPTION>
Schedule RC-Continued
Dollar Amounts in
Thousands Bil Mil Thou
----------------- ------------
LIABILITIES
<S> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)............................................. RCON 2200 21,496,468
(1) Noninterest-bearing(1).............................................. RCON 6631 8,918,843
(2) Interest-bearing.................................................... RCON 6636 12,577,625
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)...................................... RCFN 2200 14,164,129
(1) Noninterest bearing................................................. RCFN 6631 352,399
(2) Interest-bearing.................................................... RCFN 6636 13,811,730
14. Federal funds purchased and securities sold under agreements
to repurchase:............................................................. RCFD 2800 3,894,469
15. a. Demand notes issued to the U.S. Treasury................................ RCON 2840 68,268
b. Trading Liabilities (from Schedule RC-D)................................ RCFD 3548 5,247,232
16. Other borrowed money:
a. With a remaining maturity of one year or less........................... RCFD 2332 2,608,057
b. With a remaining maturity of than one year through three years.......... A547 379,893
c. With a remaining maturity of more than three years..................... A548 323,042
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... RCFD 2920 614,921
19. Subordinated notes and debentures (2)...................................... RCFD 3200 1,700,000
20. Other liabilities (from Schedule RC-G)..................................... RCFD 2930 1,222,121
21. Total liabilities (sum of items 13 through 20)............................. RCFD 2948 51,718,600
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. RCFD 3838 0
24. Common stock............................................................... RCFD 3230 200,858
25. Surplus (exclude all surplus related to preferred stock)................... RCFD 3839 2,989,408
26. a. Undivided profits and capital reserves.................................. RCFD 3632 1,175,518
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. RCFD 8434 26,750
27. Cumulative foreign currency translation adjustments........................ RCFD 3284 (2,259)
28. Total equity capital (sum of items 23 through 27).......................... RCFD 3210 4,390,275
29. Total liabilities and equity capital (sum of items 21 and 28).............. RCFD 3300 56,108,875
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)............................................. 13.a
(1) Noninterest-bearing(1).............................................. 13.a.1
(2) Interest-bearing.................................................... 13.a.2
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)...................................... 13.b.
(1) Noninterest bearing................................................. 13.b.1
(2) Interest-bearing.................................................... 13.b.2
14. Federal funds purchased and securities sold under agreements
to repurchase:............................................................. 14
15. a. Demand notes issued to the U.S. Treasury................................ 15.a
b. Trading Liabilities (from Schedule RC-D)................................ 15.b
16. Other borrowed money:
a. With a remaining maturity of one year or less........................... 16.a
b. With a remaining maturity of than one year through three years.......... 16.b
c. With a remaining maturity of more than three years..................... 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding.................... 18
19. Subordinated notes and debentures (2)...................................... 19
20. Other liabilities (from Schedule RC-G)..................................... 20
21. Total liabilities (sum of items 13 through 20)............................. 21
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.............................. 23
24. Common stock............................................................... 24
25. Surplus (exclude all surplus related to preferred stock)................... 25
26. a. Undivided profits and capital reserves.................................. 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities.............................................................. 26.b.
27. Cumulative foreign currency translation adjustments........................ 27
28. Total equity capital (sum of items 23 through 27).......................... 28
29. Total liabilities and equity capital (sum of items 21 and 28).............. 29
</TABLE>
<TABLE>
<CAPTION>
Memorandum
<S> <C> <C> <C> <C>
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external Number
auditors as of any date during 1996...........................................RCFD 6724.............N/A M.1
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
6
