<PAGE>
FILED PURSUANT TO RULE 424(b)(2)
FILE NO. 33-50879
PROSPECTUS SUPPLEMENT
[LOGO]
(To Prospectus Dated November 5, 1993)
$350,000,000
ARCHER-DANIELS-MIDLAND COMPANY
7 1/2% DEBENTURES DUE MARCH 15, 2027
Interest on the Debentures is payable semiannually on March 15 and September 15,
commencing September 15, 1997. The Debentures are not redeemable prior to
maturity and will not be entitled to any sinking fund.
The Debentures will be represented by Global Securities registered in the name
of the nominee of The Depository Trust Company, which will act as the
Depository. Beneficial interests in the Global Securities will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depository (with respect to participants' interests) and its participants.
Except as described herein, Debentures in definitive form will not be issued.
See "Certain Terms of the Debentures -- Book-Entry, Delivery and Form."
Settlement for the Debentures will be made in immediately available funds. The
Debentures will trade in the Depository's Same-Day Funds Settlement System until
maturity, and secondary market trading activity for the Debentures will
therefore settle in immediately available funds. All payments of principal and
interest will be made by the Company in immediately available funds. See
"Certain Terms of the Debentures -- Same-Day Settlement and Payment."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PROCEEDS TO
PRICE TO UNDERWRITING THE
PUBLIC(1) DISCOUNT COMPANY(1)(2)
Per Debenture............................ 99.387% .875% 98.512%
Total.................................... $347,854,500 $3,062,500 $344,792,000
<CAPTION>
- --------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from March 18, 1997 to the date of delivery.
(2) Before deduction of expenses payable by the Company estimated at $300,000.
The Debentures are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any order
in whole or in part and to withdraw, cancel or modify the offer without notice.
It is expected that delivery of the Global Securities will be made to The
Depository Trust Company on or about March 18, 1997.
SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
STEPHENS INC.
The date of this Prospectus Supplement is March 13, 1997.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES, INCLUDING
PURCHASES OF THE DEBENTURES TO STABILIZE THEIR MARKET PRICE AND PURCHASES OF THE
DEBENTURES TO COVER ANY SHORT POSITION IN THE DEBENTURES MAINTAINED BY THE
UNDERWRITERS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
LEGAL PROCEEDINGS
As described in the Notes to Financial Statements and Management's
Discussion of Operations and Financial Condition set forth in the Company's
Quarterly Reports on Form 10-Q for the quarters ended September 30 and December
31, 1996 incorporated herein by reference, the Company has made provisions to
cover assessed fines, litigation settlements and related costs and expenses
described therein. However, because of the early stage of other putative class
actions described therein, including those related to high fructose corn syrup,
the ultimate outcome and materiality of these matters cannot presently be
determined. Accordingly, no provision for any liability that may result
therefrom has been made in the Company's consolidated financial statements.
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the consolidated ratio of earnings to fixed charges for
each of the years in the
five-year period ended June 30, 1996 and for the six months ended December 31,
1995 and 1996.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED JUNE 30 DECEMBER 31
------------------------------------- -------------
1992 1993 1994 1995 1996 1995 1996
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges...... 5.42x 4.48x 4.04x 5.81x 4.92x 5.40x 3.49x
</TABLE>
For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before income taxes and fixed charges (excluding capitalized
interest). Fixed charges consist of interest on all indebtedness, amortization
and debt discount and expense, and one third of rental expense (which is deemed
representative of the interest factor).
CERTAIN TERMS OF THE DEBENTURES
The following description of the terms of the Debentures offered hereby
supplements and should be read in conjunction with the statements under
"Description of Debt Securities" in the accompanying Prospectus.
The Debentures will be unsecured obligations of the Company, will be limited
to $350,000,000 aggregate principal amount and will mature on March 15, 2027.
The Debentures will bear interest at the rate of 7 1/2% per annum from March
18, 1997. Interest on the Debentures will be payable semi-annually on March 15
and September 15 in each year, commencing on September 15, 1997, to the persons
in whose names the Debentures are registered at the close of business on the
preceding March 1 and September 1, respectively.
The Debentures are not redeemable by the Company prior to maturity and will
not be entitled to the benefit of a sinking fund.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be issued in the form of fully registered Global
Securities. The Global Securities will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York (the "Depository") and registered
in the name of the Depository's nominee.
Except as set forth below, the Global Securities may be transferred, in
whole and not in part, only to another nominee of the Depository or to a
successor of the Depository or its nominee.
S-2
<PAGE>
The Depository has advised the Company and the Underwriters as follows: It
is a limited-purpose trust company which was created to hold securities for its
participating organizations (the "Participants") and to facilitate the clearance
and settlement of transactions in such securities between Participants through
electronic book-entry changes in accounts of its Participants. Participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations. Access
to the Depository's book-entry system is also available to others, such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("indirect participants"). Persons who are not Participants may beneficially own
securities held by the Depository only through Participants or indirect
participants.
The Depository has also advised that pursuant to procedures established by
it (i) upon the issuance by the Company of the Debentures, the Depository will
credit the accounts of Participants designated by the Underwriters with the
principal amount of the Debentures purchased by the Underwriters, and (ii)
ownership of beneficial interests in the Global Securities will be shown on, and
the transfer of that ownership will be effected only through, records maintained
by the Depository (with respect to Participants' interests), the Participants
and the indirect participants. The laws of some states require that certain
persons take physical delivery in definitive form of securities which they own.
Consequently, the ability to transfer beneficial interests in the Global
Securities is limited to such extent.
So long as a nominee of the Depository is the registered owner of the Global
Securities, such nominee will be considered the sole owner or holder of the
Debentures for all purposes under the Indenture. Except as provided below,
owners of beneficial interests in the Global Securities will not be entitled to
have Debentures registered in their names, will not receive or be entitled to
receive physical delivery of Debentures in definitive form and will not be
considered the owners or holders thereof under the Indenture.
Neither the Company, the Trustee (The Chase Manhattan Bank, formerly known
as Chemical Bank), any Paying Agent nor the Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Securities, or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Principal and interest payments on the Global Securities registered in the
name of the Depository's nominee will be made by the Company through the Paying
Agent to the Depository's nominee as the registered owner of the Global
Securities. Under the terms of the Indenture, the Company and the Trustee will
treat the persons in whose names the Debentures are registered as the owners of
such Debentures for the purpose of receiving payments of principal and interest
on such Debentures and for all other purposes whatsoever. Therefore, neither the
Company, the Trustee nor any Paying Agent has any direct responsibility or
liability for the payment of principal or interest on the Debentures to owners
of beneficial interests in the Global Securities. The Depository has advised the
Company and the Trustee that its present practice is, upon receipt of any
payment of principal or interest, to credit immediately the accounts of the
Participants with payment in amounts proportionate to their respective holdings
in principal amount of beneficial interests in the Global Securities as shown on
the records of the Depository. Payments by Participants and indirect
participants to owners of beneficial interests in the Global Securities will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name" and will be the responsibility of such Participants or indirect
participants.
If the Depository is at any time unwilling or unable to continue as
depository and a successor depository is not appointed by the Company within 90
days, the Company will issue Debentures in definitive form in exchange for the
Global Securities. In addition, the Company may at any time determine not to
have the Debentures represented by Global Securities and, in such event, will
issue Debentures in definitive form in exchange for the Global Securities. In
either instance, an owner of a beneficial interest in the Global Securities will
be entitled to have Debentures equal in principal amount
S-3
<PAGE>
to such beneficial interest registered in its name and will be entitled to
physical delivery of such Debentures in definitive form. Debentures so issued in
definitive form will be issued in denominations of $1,000 and integral multiples
thereof and will be issued in registered form only, without coupons.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures will be made by the Underwriters in
immediately available funds. All payments of principal and interest will be made
by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearing-house or next-day funds. In contrast, the
Debentures will trade in the Depository's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Debentures will therefore
be required by the Depository to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in immediately
available funds on trading activity in the Debentures.
S-4
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated as of March 13, 1997, the Company has agreed to sell to each of the
Underwriters named below, and each of the Underwriters has severally agreed to
purchase, the principal amount of Debentures set forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF DEBENTURES
- ---------------------------------------------------------------------------- ----------------
<S> <C>
Salomon Brothers Inc........................................................ $ 58,333,335
Goldman, Sachs & Co......................................................... 58,333,333
Lehman Brothers Inc......................................................... 58,333,333
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...................................................... 58,333,333
Smith Barney Inc............................................................ 58,333,333
Stephens Inc................................................................ 58,333,333
----------------
Total....................................................................... $ 350,000,000
----------------
----------------
</TABLE>
The Company has been advised by the Underwriters that they propose initially
to offer the Debentures to the public at the public offering price set forth on
the cover page of this Prospectus Supplement, and to certain dealers at such
price less a concession not in excess of .50% of the principal amount of the
Debentures. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of .25% of the principal amount of the Debentures to
certain other dealers. After the initial public offering, the public offering
price and such concessions may be changed.
In connection with this Offering, certain Underwriters and their affiliates
may engage in transactions that stabilize, maintain or otherwise affect the
market price of the Debentures. Such transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M, pursuant to
which such persons may bid for or purchase Debentures for the purpose of
stabilizing their market price. The Underwriters also may create a short
position for the account of the Underwriters by selling more Debentures in
connection with the Offering than they are committed to purchase from the
Company, and in such case may purchase Debentures in the open market following
completion of the Offering to cover such short position. Any of the transactions
described in this paragraph may result in the maintenance of the price of the
Debentures at a level above that which might otherwise prevail in the open
market. None of the transactions described in this paragraph is required, and,
if they are undertaken, they may be discontinued at any time.
The Company does not presently intend to list the Debentures on any
exchange. The Company has been advised by the Underwriters that they intend to
make a market in the Debentures but that they are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Debentures.
The Underwriting Agreement provides that the Company will indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act of 1933, as amended, or contribute to payments the
Underwriters may be required to make in respect thereof.
Dwayne O. Andreas, Chairman of the Board and Chief Executive Officer of the
Company, is also a director of Salomon Inc, the parent of Salomon Brothers Inc.
LEGAL OPINIONS
The validity of the Debentures will be passed upon for the Company by Faegre
& Benson LLP, 90 South Seventh Street, Minneapolis, Minnesota 55402, and for the
Underwriters by Mayer, Brown & Platt, 190 South LaSalle Street, Chicago,
Illinois 60603. Mayer, Brown & Platt from time to time acts as counsel in
certain matters for the Company.
S-5
<PAGE>
AVAILABLE INFORMATION
The following information hereby supplements and, to the extent inconsistent
therewith, supersedes the statements under "Additional Information" in the
accompanying Prospectus.
The current address of the public reference facility maintained by the
Commission at the New York regional office is 7 World Trade Center, Suite 1300,
New York New York 10048. The Commission maintains a Web site that contains
reports, proxy statements and other information filed by the Company at
(http://www.sec.gov).
S-6
<PAGE>
ARCHER-DANIELS-MIDLAND COMPANY
DEBT SECURITIES AND WARRANTS
TO PURCHASE DEBT SECURITIES [LOGO]
Archer-Daniels-Midland Company (the "Company") may from time to time offer
unsecured debt securities of the Company consisting of debentures, notes and/or
other unsecured evidences of indebtedness (the "Debt Securities") and/or
warrants to purchase Debt Securities ("Warrants") in an aggregate amount
sufficient to result in net proceeds to the Company of up to U.S. $500,000,000
(or the equivalent in foreign denominated currencies or European Currency Units
or other composite currencies). The Debt Securities and/or Warrants may be
offered as separate series in amounts, at prices and on terms to be set forth in
one or more supplements to this Prospectus. Debt Securities may be offered alone
or with Warrants (which may or may not be detachable from the Debt Securities),
and Warrants may be offered alone, all as set forth in an accompanying
Prospectus Supplement and any related Pricing Supplement (the "Prospectus
Supplement"). If any Warrants are issued, Debt Securities will be issuable upon
exercise of such Warrants. The Company may sell Debt Securities and/or Warrants
to or through underwriters to be designated from time to time, and also may sell
Debt Securities and/or Warrants directly to other purchasers or through agents
or broker-dealers. See "Plan of Distribution".
Debt Securities of a series may be issuable in registered form without coupons
attached ("Registered Securities"), in bearer form with or without coupons
attached ("Bearer Securities") or in the form of one or more global securities
(each a "Global Security"). Bearer Securities will be offered only to non-United
States persons and to branches located outside the United States of certain
United States financial institutions. See "Description of Debt
Securities--Limitations on Issuance of Bearer Securities".
The designation, principal amount, currency or currencies of denomination and
payment, offering price, maturity, interest rate, redemption provisions, if any,
and other terms of the Debt Securities, the duration, offering price, exercise
price, detachability and other terms of any Warrants, and the name and basis of
compensation of the underwriters, agents or broker-dealers, if any, in
connection with the sale of the Debt Securities and/or Warrants in respect of
which this Prospectus is being delivered are set forth in the applicable
Prospectus Supplement. The Debt Securities and Warrants are herein sometimes
referred to as the "Securities."
This Prospectus may not be used to consummate sales of Securities unless
accompanied by the Prospectus Supplement applicable to the Securities being
sold.
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 November 5, 1993.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document filed by the Company with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") is incorporated in and made a part of this Prospectus by
reference: the Company's Annual Report on Form 10-K for the year ended June 30,
1993 (which incorporates by reference certain portions of the Company's 1993
Annual Report to Shareholders, including financial statements and notes thereto,
and certain portions of the Company's definitive Notice and Proxy Statement for
the Company's Annual Meeting of Shareholders held on October 21, 1993).
All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Securities offered hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference 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 that also is or is deemed to be
incorporated herein by reference 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, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
or oral request of any such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits not specifically
incorporated in such document). Requests for such copies should be directed to
the Secretary, Archer-Daniels-Midland Company, 4666 Faries Parkway, Decatur,
Illinois 62526 (telephone number 217/424-5200).
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the Exchange Act
and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities of
the Commission, Room 1024, at 450 Fifth Street N.W., Washington, D.C. 20549, and
at the following regional offices of the Commission: Public Reference Room, Room
1400, 75 Park Place, New York, New York 10007, and Northwestern National Center,
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661; and copies of such
materials can be obtained from the public reference facilities of the Commission
at 450 Fifth Street N.W., Washington, D.C. 20549, at prescribed rates.
The Company's Common Stock is listed on the New York Stock Exchange and the
Chicago Stock Exchange and reports, proxy statements and other information
regarding the Company can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005 and at the offices of the
Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60603.
Additional information regarding the Company and the Securities offered
hereby is contained in the Registration Statement, and exhibits thereto, in
respect of the Securities offered hereby, filed with the Commission under the
Securities Act of 1933 (the "Securities Act"). For further information regarding
the Company and the Securities offered hereby, reference is made to the
Registration Statement, and exhibits thereto, which may be inspected without
charge at the office of the Commission at 450 Fifth Street N.W., Washington,
D.C. 20549, and copies thereof may be obtained from the Commission at prescribed
rates.
------------------------
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$", "dollars" or
"U.S. dollars").
2
<PAGE>
THE COMPANY
Archer-Daniels-Midland Company is a major processor of agricultural products
for the food and feed industries. It is one of the world's largest oilseed and
vegetable oil processors, corn refiners, fuel alcohol producers and wheat
millers.
The Company was incorporated in Delaware in 1923 as the successor to a
business formed in 1902. The Company's executive offices are located at 4666
Faries Parkway, Decatur, Illinois 62525 (telephone number 217/424-5200).
References herein to the Company relate to Archer-Daniels-Midland Company, its
subsidiaries and their predecessors unless otherwise noted or indicated by the
context.
USE OF PROCEEDS
Except as otherwise specified in the applicable Prospectus Supplement, net
proceeds from the sale of the Securities will be added to the general funds of
the Company. Initially, all or a portion of the proceeds may be invested in
short-term or long-term marketable securities or used to repay short-term
borrowings. The proceeds will be used, as required, for general corporate
purposes, including working capital, capital expenditures and possible
acquisitions of, or investments in, businesses and assets, and the repayment of
indebtedness originally incurred for general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the consolidated ratio of earnings to fixed charges for
each of the years in the five-year period ended June 30, 1993.
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30
----------------------------------------------------------
1989 1990 1991 1992 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges................................... 5.42x 5.91x 5.34x 5.42x 4.48x
</TABLE>
For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income before income taxes and fixed charges (excluding capitalized
interest). Fixed charges consist of interest on all indebtedness, amortization
of debt discount and expense, and one third of rental expense (which is deemed
representative of the interest factor).
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which a
Prospectus Supplement may relate. The particular terms and provisions of the
Debt Securities offered by a Prospectus Supplement (the "Offered Debt
Securities") and the extent, if any, to which such general terms and provisions
may not apply to the Debt Securities so offered will be described in the
Prospectus Supplement relating to such Offered Debt Securities.
The Debt Securities are to be issued under an Indenture dated as of June 1,
1986 as amended and supplemented by a Supplemental Indenture dated as of August
1, 1989 and as amended by the Trust Indenture Reform Act of 1990 (the
"Indenture"), between the Company and Chemical Bank, as Trustee (the "Trustee"),
a copy of which is filed as an exhibit to the Registration Statement. The
following summaries of certain provisions of the Debt Securities and the
Indenture do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all the provisions of the Indenture, including
the definition therein of certain capitalized terms used herein and not defined.
Section numbers below refer to sections of the Indenture.
3
<PAGE>
GENERAL
The Debt Securities will be unsecured and unsubordinated obligations of the
Company ranking PARI PASSU with all other unsecured and unsubordinated
indebtedness of the Company.
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series. (SECTION 301).
Reference is made to the Prospectus Supplement relating to the particular
Offered Debt Securities offered thereby for the following terms of the Offered
Debt Securities: (i) the title of the Offered Debt Securities or the particular
series thereof; (ii) any limit on the aggregate principal amount of the Offered
Debt Securities; (iii) whether the Offered Debt Securities are to be issuable as
Registered Securities or Bearer Securities or both, whether any of the Offered
Debt Securities are to be issuable initially in temporary global form and
whether any of the Offered Debt Securities are to be issuable in permanent
global form; (iv) the price or prices (generally expressed as a percentage of
the aggregate principal amount thereof) at which the Offered Debt Securities
will be issued; (v) the date or dates on which the Offered Debt Securities will
mature; (vi) the rate or rates per annum, or the formula by which such rate or
rates shall be determined, at which the Offered Debt Securities will bear
interest, if any, and the dates from which any such interest will accrue; (vii)
the Interest Payment Dates on which any such interest on the Offered Debt
Securities will be payable, the Regular Record Date for any interest payable on
any Offered Debt Securities that are Registered Securities on any Interest
Payment Date, and the extent to which, or the manner in which, any interest
payable on a Global Security on an Interest Payment Date will be paid if other
than in the manner described below under "Global Securities"; (viii) any
mandatory or optional sinking fund or analogous provisions; (ix) each office or
agency where, subject to the terms of the Indenture as described below under
"Payments and Paying Agents," the principal of and any premium and interest on
the Offered Debt Securities will be payable and each office or agency where,
subject to the terms of the Indenture as described below under "Denominations,
Registration and Transfer," the Offered Debt Securities may be presented for
registration of transfer or exchange; (x) the date, if any, after which and the
price or prices at which the Offered Debt Securities may, pursuant to any
optional or mandatory redemption provisions, be redeemed, in whole or in part,
and the other detailed terms and provisions of any such optional or mandatory
redemption provisions; (xi) the denominations in which any Offered Debt
Securities which are Registered Securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof, and the denomination
in which any Offered Debt Securities which are Bearer Securities will be
issuable, if other than denominations of $5,000; (xii) the currency or
currencies of payment of principal of and any premium and interest on the
Offered Debt Securities; (xiii) any index used to determine the amount of
payments of principal of and any premium and interest on the Offered Debt
Securities; (xiv) any additional covenants applicable to the Offered Debt
Securities; and (xv) any other terms and provisions of the Offered Debt
Securities not inconsistent with the terms and provisions of the Indenture. Any
such Prospectus Supplement will also describe any special provisions for the
payment of additional amounts with respect to the Offered Debt Securities.
(SECTION 301).
If the purchase price of any of the Debt Securities is denominated in a
foreign or composite currency or currencies or if the principal of and any
premium and interest on any series of Debt Securities is payable in a foreign or
composite currency or currencies, the restrictions, elections, general tax
considerations, specific terms and other information with respect to such issue
of Debt Securities and such foreign or composite currency or currencies will be
set forth in the applicable Prospectus Supplement.
Some of the Debt Securities may be issued as original issue discount
securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below their
stated principal amount. Federal income tax considerations and other special
considerations applicable to any original issue discount securities will be set
forth in the applicable Prospectus Supplement.
4
<PAGE>
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities will be issuable as Registered Securities, Bearer
Securities or both. Debt Securities may be issuable in the form of one or more
Global Securities, as described below under "Global Securities." Unless
otherwise provided in the applicable Prospectus Supplement, Registered
Securities denominated in U.S. dollars will be issued only in denominations of
$1,000 or any integral multiple thereof and Bearer Securities denominated in
U.S. dollars will be issued only in denominations of $5,000 with coupons
attached. A Global Security will be issued in a denomination equal to the
aggregate principal amount of outstanding Debt Securities represented by such
Global Security. The Prospectus Supplement relating to Debt Securities
denominated in a foreign or composite currency will specify the denominations
thereof. (SECTIONS 201, 203, 301 AND 302).
During the "restricted period" as defined in Treasury Regulation Section
1.163-5(c) (2) (i) (D) (7), no Bearer Security shall be mailed or otherwise
delivered to any location in the United States (as defined below under
"Limitations on Issuance of Bearer Securities") and a Bearer Security may be
delivered during such restricted period only if the person entitled to receive
such Bearer Security furnishes written certification, in the form required by
the Indenture, to the effect that such Bearer Security is owned by (i) a person
that is not a United States person (as defined below under "Limitations on
Issuance of Bearer Securities") or (ii) a Qualifying Foreign Branch of a U.S.
Financial Institution (as defined below under "Limitations on Issuance of Bearer
Securities") or (iii) a United States person who acquired the obligation through
the Qualifying Foreign Branch of a U.S. Financial Institution and holds the
obligation through such Qualifying Foreign Branch of a U.S. Financial
Institution on the date of certification or (iv) a financial institution for
purposes of resale during the restricted period but not for resale directly or
indirectly to a United States person or to a person within the United States or
its possessions. See "Global Securities" and "Limitations on Issuance of Bearer
Securities" below.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, if Debt
Securities of any series are issuable as both Registered Securities and as
Bearer Securities, at the option of the holder upon request confirmed in
writing, and subject to the terms of the Indenture, Bearer Securities (with all
unmatured coupons, except as provided below, and all matured coupons in default
attached) of such series will be exchangeable for Registered Securities of the
same series of any authorized denominations and of a like aggregate principal
amount and tenor. Unless otherwise indicated in an applicable Prospectus
Supplement, any Bearer Security surrendered in exchange for a Registered
Security between a Regular Record Date or a Special Record Date and the relevant
date for payment of interest shall be surrendered without the coupon relating to
such date for payment of interest attached and interest will not be payable in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the holder of such coupon when due in accordance
with the terms of the Indenture. Except as provided in an applicable Prospectus
Supplement, Bearer Securities will not be issued in exchange for Registered
Securities. (SECTION 305).
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer duly executed), at the
office of the Security Registrar designated by the Company or at the office of
any transfer agent designated by the Company for such purpose with respect to
any series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon the Security Registrar or such transfer agent, as the case
may be, being satisfied with the documents of title and identity of the person
making the request. The Company has initially appointed the Trustee as the
Security Registrar under the Indenture. (SECTION 305). If a Prospectus
Supplement refers to any transfer agent (in addition to the Security Registrar)
initially designated by the Company with respect to any series of Debt
Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
only as Registered Securities, the Company will be required to maintain a
transfer agent in each Place of Payment for such series and, if
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Debt Securities of a series are issuable as Bearer Securities, the Company will
be required to maintain (in addition to the Security Registrar) a transfer agent
in a Place of Payment for such series located outside the United States. The
Company may at any time designate additional transfer agents with respect to any
series of Debt Securities. (SECTION 1002).
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Debt Securities of that series selected
to be redeemed and ending at the close of business on (a) if Debt Securities of
the series are issuable only as Registered Securities, the day of mailing of the
relevant notice of redemption, and (b) if Debt Securities of the series are
issuable as Bearer Securities, the day of the first publication of the relevant
notice of redemption or, if Debt Securities of that series are also issuable as
Registered Securities and there is no publication, the mailing of the relevant
notice of redemption; (ii) register the transfer of or exchange any Registered
Security, or portion thereof, called for redemption, except the unredeemed
portion of any Registered Security being redeemed in part; or (iii) exchange any
Bearer Security called for redemption, except to exchange such Bearer Security
for a Registered Security of that series and like tenor which is immediately
surrendered for redemption. (SECTION 305).
PAYMENTS AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities (other
than a Global Security) will be made at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that, at
the option of the Company, payment of any interest may be made (i) by check
mailed to the address of the payee entitled thereto as such address shall appear
in the Security Register or (ii) by wire transfer to an account maintained by
such payee as specified in the Security Register. (SECTIONS 305, 307 AND 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
any installment of interest on Registered Securities will be made to the person
in whose name such Registered Security is registered at the close of business on
the Regular Record Date for such interest payment. (SECTION 307).
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Bearer Securities will be
payable (subject to applicable laws and regulations) at the offices of such
Paying Agent or Paying Agents outside the United States as the Company may
designate from time to time, except that, at the option of the Company, payment
of any interest may be made by check or by wire transfer to an account
maintained by the payee outside the United States. (SECTIONS 307 AND 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on Bearer Securities on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date. (SECTION
1001). No payment with respect to any Bearer Security will be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by transfer to an account maintained in the United
States. Payments will not be made in respect of Bearer Securities or coupons
appertaining thereto pursuant to presentation to the Company or its Paying
Agents within the United States or any other demand for payment to the Company
or its Paying Agents within the United States. Notwithstanding the foregoing,
payment of principal of and any premium and interest on Bearer Securities
denominated and payable in U.S. dollars will be made at the office of the
Company's Paying Agent in the United States if, and only if, payment of the full
amount thereof in U.S. dollars at all offices or agencies outside the United
States is illegal or effectively precluded by exchange controls or other similar
restrictions and the Company has delivered to the Trustee an opinion of counsel
to that effect. (SECTION 1002).
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in The City of New York will be designated as
the Company's sole Paying Agent for payments with respect to Debt Securities
which are issuable solely as Registered Securities. Any Paying Agent outside the
United States and any other Paying Agent in the United States initially
designated by the Company for the Debt Securities will be named in the
applicable Prospectus Supplement. The Company
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may at any time designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that, if Debt Securities of a series are issuable only as
Registered Securities, the Company will be required to maintain a Paying Agent
in each Place of Payment for such series and, if Debt Securities of a series are
issuable as Bearer Securities, the Company will be required to maintain (i) a
Paying Agent in each Place of Payment for such series in the United States for
payments with respect to any Registered Securities of such series (and for
payments with respect to Bearer Securities of such series in the circumstances
described above, but not otherwise), (ii) a Paying Agent in each Place of
Payment located outside the United States where Debt Securities of such series
and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Debt Securities of such series are listed on The
International Stock Exchange, London or the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock exchange
shall so require, the Company will maintain a Paying Agent in London or
Luxembourg City or any other required city located outside the United States, as
the case may be, for Debt Securities of such series, and (iii) a Paying Agent in
each Place of Payment located outside the United States where (subject to
applicable laws and regulations) Registered Securities of such series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company may be served. (SECTION 1002).
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium and interest on any Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and thereafter
the holder of such Debt Security or any coupon appertaining thereto will look
only to the Company for payment thereof. (SECTION 1003).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a Depositary identified in the applicable Prospectus Supplement. Global
Securities may be issued in either registered or bearer form and in either
temporary or permanent form. (SECTION 305). Unless and until it is exchanged for
Debt Securities in definitive form, a temporary Global Security in registered
form may not be transferred except as a whole by the Depositary for such Global
Security to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor of such Depositary or a nominee of such
successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities or any part thereof will be described in the applicable
Prospectus Supplement.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered, sold, resold or delivered during the "restricted
period" as defined in Treasury Regulation Section 1.163-5 (c) (2) (i) (D) (7) in
the United States or its possessions or to United States persons (each as
defined below) other than to a Qualifying Foreign Branch of a United States
Financial Institution (as defined below), and any underwriters, agents and
dealers participating in the offering of Debt Securities must agree that they
will not offer any Bearer Securities for sale or resale in the United States,
its possessions or to United States persons (other than a Qualifying Foreign
Branch of a United States Financial Institution) nor deliver Bearer Securities
within the United States. The term "Qualifying Foreign Branch of a United States
Financial Institution" means a branch located outside the United States of a
United States securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
or business and that provides a certificate within a reasonable time (or a
blanket certificate in the year the Debt Security is issued or either of the
preceding two calendar years) stating that it agrees to comply with the
requirements of Section 165 (j) (3) (A), (B) or (C) of the Internal Revenue Code
of 1986, as amended (the "Code") and the regulations thereunder.
Bearer Securities and any coupons appertaining thereto will bear a legend
substantially to the following effect: "Any United States person who holds this
obligation will be subject to limitations under
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the United States income tax laws, including the limitations provided in Section
165(j) and 1287(a) of the Internal Revenue Code". Under Sections 165(j) and
1287(a) of the Code, holders that are United States persons, with certain
exceptions, will not be entitled to deduct any loss on Bearer Securities and
must treat as ordinary income any gain realized on the sale or other disposition
(including the receipt of principal) of Bearer Securities.
The term "United States person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or of any political subdivision thereof, and
an estate or trust the income of which is subject to United States federal
income taxation regardless of its source, and the term "United States" means the
United States of America (including the states and the District of Columbia);
the term "possessions" includes Puerto Rico, the U.S. Virgin Islands, Guam,
American Samoa, Wake Island, and the Northern Mariana Islands.
TAX REDEMPTION; SPECIAL TAX REDEMPTION
To the extent specified in an applicable Prospectus Supplement, Debt
Securities of a series will be subject to redemption at any time, as a whole but
not in part, at a redemption price equal to the principal amount thereof
together with accrued and unpaid interest to the date fixed for redemption, upon
publication of a notice as described below, if (i) the Company determines that
(a) as a result of any change in or amendment to the laws (or any regulations or
rulings promulgated thereunder) of the United States or of any political
subdivision or taxing authority thereof or therein affecting taxation, or any
change in official position regarding application or interpretation of such
laws, regulations or rulings (including a holding by a court of competent
jurisdiction), which change or amendment is announced or becomes effective on or
after a date specified in the applicable Prospectus Supplement, the Company has
or will become obligated to pay additional amounts with respect to any Debt
Security of such series as described below under "Payment of Additional Amounts"
or (b) on or after a date specified in the applicable Prospectus Supplement, any
action has been taken by any taxing authority of, or any decision has been
rendered in a court of competent jurisdiction in, the United States or any
political subdivision or taxing authority thereof or therein, including any of
those actions specified in (a) above, whether or not such action was taken or
decision was rendered with respect to the Company, or any change, amendment,
application or interpretation shall be officially proposed, which, in any such
case, in the written opinion to the Company of independent legal counsel of
recognized standing, will result in a material probability that the Company will
become obligated to pay additional amounts with respect to any Debt Security of
such series as described below under "Payment of Additional Amounts," and (ii)
in any such case the Company in its business judgment determines that such
obligation cannot be avoided by the use of reasonable measures available to the
Company.
If the Company shall determine that any payment made outside the United
States by the Company or any Paying Agent of principal or interest due in
respect of any Bearer Security (an "Affected Security") or any coupon
appertaining thereto would, under any present or future laws or regulations of
the United States, be subject to any certification, information or other
reporting requirement of any kind, the effect of which requirement is the
disclosure to the Company, any Paying Agent or any governmental authority of the
nationality, residence or identity (as distinguished from, for example, status
as a United States Alien) of a beneficial owner of such Affected Security or
coupon who is a United States Alien (other than such a requirement which (i)
would not be applicable to a payment made (a) directly to the beneficial owner
or (b) to a custodian, nominee or other agent of the beneficial owner, (ii) can
be satisfied by such custodian, nominee or other agent certifying to the effect
that such beneficial owner is a United States Alien, provided that in each case
referred to in items (i) (b) and (ii), payment by such custodian, nominee or
other agent to such beneficial owner is not otherwise subject to any such
requirement (other than a requirement which is imposed on a custodian, nominee
or other agent described in (iv) of this sentence), (iii) would not be
applicable to a payment made by at least one other Paying Agent of the Company
or (iv) is applicable to a payment to a custodian, nominee or other agent of the
beneficial owner who is a United States person, a controlled foreign corporation
for United States tax purposes, a foreign person 50% or more of whose gross
income for the three-year period ending with the close of its taxable year
preceding the year of payment is effectively connected with a United States
trade or business, or is
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otherwise related to the United States), the Company at its election shall
either (x) redeem the Affected Securities, as a whole, but not in part, at a
redemption price equal to the principal amount thereof, together with interest
accrued to the date fixed for redemption, or (y) if the conditions of the next
succeeding paragraph are satisfied, pay the additional amounts specified in such
paragraph. The Company shall make such determination and election as soon as
practicable and give prompt notice thereof (the "Determination Notice") in the
manner described under "Notices" below, stating the effective date of such
certification, information or reporting requirements, whether the Company has
elected to redeem the Affected Securities, or to pay the additional amounts
specified in the next succeeding paragraph, and (if applicable) the last date by
which the redemption of the Affected Securities must take place, as provided in
the next succeeding sentence. If the Company elects to redeem the Affected
Securities, such redemption shall take place on such date, not later than one
year after the publication of the Determination Notice, as the Company shall
elect by notice to the Trustee given not less than 45 nor more than 75 days
prior to the date fixed for redemption. Notice of such redemption of the
Affected Securities will be given to the holders thereof not less than 30 nor
more than 60 days prior to the date fixed for redemption. Notwithstanding the
foregoing, the Company shall not so redeem the Affected Securities if the
Company shall subsequently determine, not less than 30 days prior to the date
fixed for redemption, that subsequent payments would not be subject to any such
requirement in which case the Company shall give prompt notice of such
determination in the manner described under "Notices" below and any earlier
redemption notice shall be revoked and of no further effect. The right of the
holders of Affected Securities called for redemption to exchange such Affected
Securities for Registered Securities (which Registered Securities will remain
outstanding following such redemption) will terminate on the 16th day prior to
the date fixed for redemption, and no further exchanges of Affected Securities
for Registered Securities shall be permitted unless the Company shall have made
the subsequent determination and given the notice referred to in the preceding
sentence.
If and so long as the certification, information or other reporting
requirements referred to in the preceding paragraph would be fully satisfied by
payment of a withholding tax, backup withholding tax or similar charge, the
Company may elect to pay such additional amounts as may be necessary so that
every net payment made outside the United States following the effective date of
such requirements by the Company or any Paying Agent of principal, premium, if
any, or interest, if any, due in respect of any Affected Security or any coupon
to a holder who certifies that the beneficial owner is a United States Alien
(but without any requirement that the nationality, residence or identity of such
beneficial owner be disclosed to the Company, any Paying Agent or any
governmental authority), after deduction or withholding for or on account of
such withholding tax, backup withholding tax or similar charge (other than a
withholding tax, backup withholding tax or similar charge which (i) is the
result of a certification, information or other reporting requirement described
in the second parenthetical clause of the first sentence of the preceding
paragraph or (ii) is imposed as a result of presentation of such Affected
Security or coupon for payment more than 10 days after the date on which such
payment becomes due and payable or on which payment thereof is duly provided
for, whichever occurs later), will not be less than the amount provided for in
such Affected Security or coupon to be then due and payable. In the event the
Company elects to pay such additional amounts, the Company will have the right,
at its sole option, at any time, to redeem the Affected Securities, as a whole,
but not in part, at a redemption price equal to the principal amount thereof,
together with accrued and unpaid interest to the date fixed for redemption. If
the Company has made the determination described in the preceding paragraph with
respect to certification, information or other reporting requirements applicable
only to interest and subsequently makes a determination in the manner and of the
nature referred to in the preceding paragraph with respect to such requirements
applicable to principal, the Company will redeem the Affected Securities in the
manner and on the terms described in the preceding paragraph unless the Company
elects to have the provisions of this paragraph apply rather than the provisions
of the preceding paragraph. If in such circumstances the Affected Securities are
to be redeemed, the Company shall have no obligation to pay additional amounts
pursuant to this paragraph with respect to principal of, premium, if any, or
interest, if any, on such Affected Securities accrued and unpaid after the date
of the notice of such determination indicating such redemption, but will be
obligated to pay such
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additional amounts with respect to interest accrued and unpaid to the date of
such determination. If the Company elects to pay additional amounts pursuant to
this paragraph and the condition specified in the first sentence of this
paragraph should no longer be satisfied, then the Company shall promptly redeem
such Affected Securities in whole but not in part. (SECTION 1004).
In the event that the Company elects or is required to redeem Affected
Securities of a series pursuant to the provisions set forth in the preceding
three paragraphs, the Company shall deliver to the Trustee a certificate, signed
by an authorized officer, stating that the Company is entitled to redeem the
Affected Securities of such series pursuant to their terms. (SECTION 1102).
Notice of intention to redeem Affected Securities and all other notices in
accordance with the provisions of the preceding paragraphs will be given in
accordance with "Notices" below. In the case of a redemption, notice will be
given once not more than 60 nor less than 30 days prior to the date fixed for
redemption and will specify the date fixed for redemption. (SECTION 1104).
PAYMENT OF ADDITIONAL AMOUNTS
If and to the extent specified in an applicable Prospectus Supplement, the
Company will, subject to the exceptions and limitations set forth below, pay to
the holder of any Debt Security or coupon who is a United States Alien such
additional amounts as may be necessary in order that every net payment on such
Debt Security or coupon, after withholding by the Company or any of its Paying
Agents for or on account of any present or future tax, assessment or other
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein)
will not be less than the amount provided for in such Debt Security or in such
coupon to be then due and payable. However, the Company will not be required to
make any payment of additional amounts for or on account of:
(i) any tax, assessment or other governmental charge that would not
have been so imposed but for (a) the existence of any present or former
connection between such holder (or between a fiduciary, settlor or
beneficiary of, or a person holding a power over, such holder, if such
holder is an estate or trust, or a member or shareholder of such holder, if
such holder is a partnership or corporation) and the United States,
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, person holding a power, member or shareholder) being or having
been a citizen, resident or treated as a resident thereof or being or having
been engaged in a trade or business or present therein or having or having
had a permanent establishment therein, or (b) such holder's present or
former status as a personal holding company, foreign personal holding
company, controlled foreign corporation or passive foreign investment
company with respect to the United States or as a corporation that
accumulates earnings to avoid United States federal income tax;
(ii) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the holder of such Debt
Security or coupon for payment on a date more than 10 days after the date on
which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
(iii) any estate, inheritance, gift, sales, transfer, personal property
tax or any similar tax, assessment or other governmental charge;
(iv) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from a payment on a Debt Security or coupon;
(v) any tax, assessment or other governmental charge imposed on a holder
of a Debt Security or coupon that actually or constructively owns 10% or
more of the total combined voting power of all classes of stock of the
Company entitled to vote within the meaning of Section 871(h)(3) of the Code
or that is a controlled foreign corporation related to the Company through
stock ownership;
(vi) any tax, assessment or other governmental charge imposed as a
result of the failure to comply with applicable certification, information,
documentation or other reporting requirements concerning the nationality,
residence, identity or connection with the United States of the holder or
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beneficial owner of a Debt Security or coupon, if such compliance is
required by statute, or by regulation of the United States, as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(vii) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment on a Debt Security or coupon
if such payment can be made without such withholding by at least one other
Paying Agent;
(viii) any tax, assessment or other governmental charge imposed with
respect to payments on any Registered Security by reason of the failure of
the holder to fulfill the statement requirement of Sections 871(h) or 881(c)
of the Code; or
(ix) any combination of items (i), (ii), (iii), (iv), (v), (vi), (vii)
and (viii);
nor will additional amounts be paid with respect to any payment on a Debt
Security or coupon to a holder who is a fiduciary or partnership or other than
the sole beneficial owner of such payment to the extent such payment would be
required by the laws of the United States (or any political subdivision or
taxing authority thereof or therein) to be included in the income for federal
income tax purposes of a beneficiary or settlor with respect to such fiduciary
or a member of such partnership or a beneficial owner who would not have been
entitled to payment of the additional amounts had such beneficiary, settlor,
member or beneficial owner been the holder of such Debt Security or coupon.
(SECTION 1004).
SUBSIDIARIES
The term "Subsidiary" is defined as a corporation more than 50 percent of
the outstanding voting stock of which is owned, directly or indirectly, by the
Company and/or one or more Subsidiaries. The term "Restricted Subsidiary" is
defined as a Subsidiary other than a Subsidiary (i) which neither transacts any
substantial portion of its business nor regularly maintains any substantial
portion of its fixed assets within the United States, or (ii) which is engaged
primarily in financing the operations of the Company or its Subsidiaries, or
both, outside the United States. (SECTION 101).
RESTRICTIONS ON SECURED DEBT
If the Company or any Restricted Subsidiary shall incur, assume or guarantee
any Debt secured by a Mortgage on any Principal Domestic Manufacturing Property
(each as defined below) or on any shares of stock or Debt of any Restricted
Subsidiary, the Company will secure, or cause such Restricted Subsidiary to
secure, the Debt Securities equally and ratably with (or prior to) such Debt,
unless after giving effect thereto the aggregate amount of all such Debt so
secured together with all Attributable Debt (as defined below) in respect of
sale and leaseback transactions involving Principal Domestic Manufacturing
Properties would not exceed 5 percent of Consolidated Net Tangible Assets (as
defined below). This restriction will not apply to, and there shall be excluded
in computing secured Debt for the purpose of such restriction, Debt secured by
(i) Mortgages on property of, or on any shares of stock or Debt of, any
corporation existing at the time such corporation becomes a Restricted
Subsidiary, (ii) Mortgages in favor of the Company or a Restricted Subsidiary,
(iii) Mortgages in favor of United States governmental bodies to secure progress
or advance payments, (iv) Mortgages on property, shares of stock or Debt
existing at or incurred within 120 days of the time of acquisition thereof
(including acquisition through merger or consolidation), purchase money
Mortgages and construction Mortgages, and (v) certain extensions, renewals or
replacements of Debt secured by any Mortgage referred to in the forgoing clauses
(i) through (iv), inclusive. (SECTION 1009).
"Principal Domestic Manufacturing Property" is defined as any building,
structure or other facility (which for purposes of this definition shall not
include barges, railroad cars or other transportation equipment, vehicle or
vessels), together with the land on which it is erected and fixtures comprising
a part thereof, used primarily for manufacturing, processing or warehousing,
located in the United States, owned or leased by the Company or a Subsidiary and
having a gross book value (without deduction of any depreciation reserves) which
on the date as of which the determination is being made is in excess of 1
percent of Consolidated Net Tangible Assets, other than any such building,
structure or other facility or portion thereof or any such land or fixture (i)
which is financed by certain governmental obligations the
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interest on which is excludable from gross income of the holder thereof pursuant
to the provisions of Section 103(a)(1) of the Code or (ii) which, in the opinion
of the Board of Directors of the Company, is not of material importance to the
total business conducted by the Company and its Subsidiaries as an entirety.
"Consolidated Net Tangible Assets" is defined as the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities (excluding any thereof constituting Funded
Debt (defined below) by reason of being renewable or extendible) and (b) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles to the extent not deducted as reserves and
deductible items as set forth above, all as set forth on the most recent
consolidated balance sheet of the Company and its consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles. "Mortgage"
is defined as any mortgage, pledge, lien, security interest, conditional sale or
other title retention agreement or similar encumbrance. "Attributable Debt" is
defined as the net amount of rent (discounted to the date of determination at a
rate per annum of 15 percent, compounded semi-annually) required to be paid
during the remaining term of any lease. (SECTION 101).
The Indenture does not restrict the incurring of unsecured Debt by the
Company or its Subsidiaries.
RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS
Neither the Company nor any Restricted Subsidiary may enter into any sale
and leaseback transaction involving any Principal Domestic Manufacturing
Property which has been or is to be sold or transferred more than 120 days after
the acquisition thereof or the completion of construction and commencement of
full operation thereof, unless (i) the Company or such Restricted Subsidiary
could create Debt secured by a Mortgage on such property pursuant to Section
1009 of the Indenture (see "Restrictions on Secured Debt" above) in an amount
equal to the Attributable Debt with respect to the sale and leaseback
transaction without equally and ratably securing the Debt Securities or (ii) the
Company, within 120 days after the sale or transfer, applies to the retirement
of its Funded Debt an amount equal to the greater of (a) the net proceeds of the
sale of the Principal Domestic Manufacturing Property leased pursuant to such
arrangement or (b) the fair market value of the Principal Domestic Manufacturing
Property so leased (subject to credits for certain voluntary retirements of
Funded Debt and cancellation or retirement of the Debt Securities). (SECTION
1010). "Funded Debt" is defined as indebtedness for money borrowed having a
maturity at or being renewable or extendable by the borrower to a date more than
12 months from the date of determination in the amount set forth on the most
recent consolidated balance sheet of the Company and its consolidated
Subsidiaries and computed in accordance with generally accepted accounting
principles. Funded Debt does not include any amount in respect of obligations
under leases (or guarantees thereof), whether or not such obligations would be
included as liabilities on a consolidated balance sheet, and does not include
any principal amount of indebtedness required to be redeemed within 12 months
from the date of determination pursuant to any sinking fund provisions or
otherwise. (SECTION 101). This restriction does not apply to any sale and
leaseback transaction (i) between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries, or (ii) involving the taking back of a lease
for a period of three years or less. (SECTION 1010).
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
The Company may not consolidate with or merge into any other corporation, or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company unless (i) the corporation formed by
such consolidation or into which the Company is merged or the Person to which
the properties and assets of the Company are transferred substantially as an
entirety shall be a corporation organized and existing under the laws of the
United States, any State thereof or the District of Columbia and shall expressly
assume the payment of the principal of, premium, if any, and interest, if any,
on the Debt Securities and the performance of the other covenants of the Company
under the Indenture, (ii) after
12
<PAGE>
giving effect to such transaction, no Event of Default (as defined below), or
event which after notice or lapse of time or both would become an Event of
Default, shall have occurred and be continuing, (iii) if, as a result of such
transaction, properties or assets of the Company or any Restricted Subsidiary
would become subject to a Mortgage not permitted by Section 1009 of the
Indenture without equally and ratably securing the Debt Securities as provided
therein (see "Restrictions on Secured Debt" above), steps shall have been taken
to secure the Debt Securities equally and ratably with (or prior to) all
indebtedness secured thereby pursuant to Section 1009 of the Indenture; and (iv)
the Company has delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that such transaction and, if a supplemental indenture
is required in connection with such transaction, such supplemental indenture
comply with Indenture and that all conditions precedent to such transaction
contained in the Indenture have been complied with. (SECTION 801).
Notwithstanding the provisions summarized in this paragraph, the Company may,
without complying with such provisions, transfer all of its property and assets
to another corporation if, immediately after giving effect to such transfer,
such corporation is a Wholly-Owned Restricted Subsidiary of the Company and the
Company would be permitted to become liable for an additional amount of secured
Debt. (SECTION 803).
MODIFICATION AND WAIVER
Certain modifications and amendments of the Indenture, including the rights
of Holders of a series of Outstanding Debt Securities, may be made by the
Company and the Trustee only with the consent of the Holders (as defined in the
Indenture) of 66 2/3% in aggregate principal amount of the Outstanding Debt
Securities of each series affected by the modification or amendment, provided
that no such modification or amendment may, without the consent of the Holder of
each Outstanding Debt Security affected thereby: (i) change the stated maturity
date of the principal of, or any installment of principal of or interest on, any
such Debt Security; (ii) reduce the principal amount of, premium, if any, or
interest, if any, on any such Debt Security (including in the case of an
Original Issue Discount Security the amount payable upon acceleration of the
Maturity thereof); (iii) change the Place of Payment where, or the coin or
currency in which, any principal of, premium, if any, or interest, if any, on
any such Debt Security is payable; (iv) impair the right to institute suit for
the enforcement of any payment on or with respect to any such Debt Security; (v)
reduce the above-stated percentage of Outstanding Debt Securities of any series
the consent of the Holders of which is necessary to modify or amend the
Indenture; or (vi) modify the foregoing requirements or reduce the percentage of
aggregate principal amount of Outstanding Debt Securities of any series
necessary for waiver of compliance with certain provisions of the Indenture or
for waiver of certain defaults. (SECTION 902).
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may, on behalf of the Holders of all Debt
Securities of such series, waive, insofar as such series is concerned,
compliance by the Company with certain restrictive provisions of the Indenture.
(SECTION 1012). The Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of such series waive any past default under the Indenture with
respect to such series, except a default in the payment of the principal of,
premium, if any, or interest, if any, on any Debt Security of such series or in
respect of a provision under which the Indenture cannot be modified or amended
without consent of the Holder of each Outstanding Debt Security of such series
affected. (SECTION 513).
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events: (i) default for 30 days in
any payment of interest on such series; (ii) default in any payment of principal
of, and premium, if any, on such series when due; (iii) default in the payment
of any sinking fund installment with respect to such series when due; (iv)
default for 60 days after appropriate notice by the Holders of at least 10% in
aggregate principal amount of the Outstanding Debt Securities in performance of
any other covenant or warranty in the Indenture (other than a covenant or
warranty included in the Indenture solely for the benefit of series of Debt
Securities other than such series); (v) default under any evidence of
indebtedness for money borrowed (including a default with respect to Debt
Securities other than such series) or under any Mortgage, indenture or
instrument under
13
<PAGE>
which any such indebtedness is issued or secured (including the Indenture),
which results in acceleration of the maturity of such indebtedness, if such
acceleration is not annulled, or in the case of indebtedness not exceeding U.S.
$1,000,000 such indebtedness is not paid, in each case within 10 days after
written notice as provided in the Indenture; (vi) certain events in bankruptcy,
insolvency or reorganization; or (vii) any other Event of Default provided with
respect to Debt Securities of such series. In case an Event of Default shall
occur and be continuing with respect to any series of Debt Securities, the
Trustee or the Holders of not less than 25 percent in aggregate principal amount
of the Outstanding Debt Securities of such series may declare the principal of
such series (or, if the Debt Securities of such series are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms of such series) to be due and payable. Any Event of Default with respect
to a particular series of Debt Securities may be waived by the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
such series, except in each case a failure to pay the principal of, premium, if
any, or interest, if any, on such Debt Security. (SECTIONS 501, 502 AND 513).
Reference is made to the Prospectus Supplement relating to each series of
Offered Debt Securities which are Original Issue Discount Securities for the
particular provisions relating to acceleration of the Maturity of a portion of
the principal amount of such Original Issue Discount Securities upon the
occurrence of an Event of Default and the continuation thereof.
The Indenture requires the Company to file annually with the Trustee an
Officers' Certificate as to the absence of certain defaults under the terms of
the Indenture. (SECTION 1011). The Indenture provides that the Trustee may
withhold notice to the Holders of the Debt Securities of any default (except in
payment of principal of, premium, if any, or interest, if any, or any sinking
fund installment) if it considers it in the interest of the Holders of the Debt
Securities to do so. (SECTION 602).
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Indenture
provides that the Trustee shall be under no obligation to exercise any of its
rights or powers under the Indenture at the request, order or direction of the
Holders of the Debt Securities unless such Holders shall have offered to the
Trustee reasonable indemnity. (SECTIONS 601, 603). Subject to such provisions
for indemnification and certain other rights of the Trustee, the Indenture
provides that the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series affected shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee with respect to the Debt Securities of such series. (SECTIONS 512 AND
603).
No Holder of any Debt Security of any series will have any right to
institute any proceeding with respect to the Indenture or for any remedy
thereunder, unless (i) such Holder shall have previously given to the Trustee
written notice of a continuing Event of Default with respect to Debt Securities
of such series, (ii) the Holders of at least 25 percent in aggregate principal
amount of the Outstanding Debt Securities of such series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and (iii) the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Securities of such series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (SECTION 507). However,
the Holder of any Debt Security will have an absolute right to receive payment
of the principal of, premium, if any, and interest, if any, on such Debt
Security on or after the due dates expressed in such Debt Security and to
institute suit for the enforcement of any such payment. (SECTION 508).
DEFEASANCE
DEFEASANCE AND DISCHARGE. If the terms of a series of Debt Securities so
provide and the Company deposits or causes to be deposited with the Trustee as
trust funds in trust for that purpose money and/or U.S. Government Obligations
(as hereinafter defined) which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay and discharge (i) the principal of, and premium, if any, and
each instalment of principal and premium, if
14
<PAGE>
any, and interest, if any, on the Outstanding Debt Securities of such series on
the Stated Maturity of such principal or instalment of principal or interest (or
on the Redemption Date of the Outstanding Debt Securities of such series if the
Company has elected to redeem such Outstanding Debt Securities in accordance
with Section 1102 of the Indenture), and (ii) any mandatory (or, if applicable,
optional) sinking fund payments applicable to the Outstanding Debt Securities of
such series on the day on which such payments are due and payable, then the
Indenture will cease to be of further effect with respect to such series (except
for certain obligations to compensate, reimburse and indemnify the Trustee, to
register the transfer or exchange of Debt Securities, to replace stolen, lost or
mutilated Debt Securities, to maintain paying agencies and to hold monies for
payment in trust and to pay any tax indemnity), and the Company will be deemed
to have satisfied and discharged the Indenture with respect to such series.
(SECTION 403). In the event of any such defeasance, holders of Debt Securities
of such series would be able to look only to such trust fund for payment of
principal of, premium, if any, and interest, if any, on their Debt Securities.
The term "U.S. Government Obligations" means securities of the government which
issued the currency in which the Debt Securities of such series are denominated
and/or in which interest is payable or of government agencies backed by the full
faith and credit of such government.
Under current federal income tax law, such defeasance will be treated as a
taxable exchange of the related Debt Securities for an interest in the trust. As
consequence, each holder of such Debt Securities will recognize gain or loss
equal to the difference between the holder's cost or other tax basis for the
Debt Securities and the value of the holder's interest in the trust, and
thereafter will be required to include in income a share of the income, gain and
loss of the trust, including gain or loss recognized in connection with any
substitution of collateral, as described below. Prospective investors are urged
to consult their own tax advisors as to the specific consequences of such a
defeasance.
DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS OF DEFAULT. If the terms
of the Debt Securities of any series so provide, the Company may omit to comply
with certain restrictive covenants in Sections 801 and 803 (Consolidation,
Merger, Conveyance, Transfer or Lease), and Sections 1004 (Additional Amounts),
1005 (Corporate Existence), 1006 (Purchase of Securities by Company or
Subsidiary), 1007 (Maintenance of Properties), 1008 (Payment of Taxes and Other
Claims), 1009 (Restriction on Secured Debt) and 1010 (Restrictions on Sale and
Leaseback Transactions), and Sections 501(4), 501(5), 501(6), 501(7) and 501(8)
of the Indenture (if Section 501(8) is specified in the Prospectus Supplement),
as described in clauses (iv) through (vii) under "Events of Default" above,
shall not be deemed to be Events of Default under the Indenture with respect to
such series, upon the deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay and discharge (i) the principal of (and premium, if any) and
each instalment of principal, and premium, if any, and interest on the
Outstanding Debt Securities of such series on the Stated Maturity of such
principal or instalment of principal or interest (or on the Redemption Date of
the Outstanding Debt Securities of such series if the Company has elected to
redeem such Outstanding Debt Securities in accordance with Section 1102 of the
Indenture) and (ii) any mandatory (or, if applicable, optional) sinking fund
payments applicable to the Outstanding Debt Securities of such series on the day
on which such payments are due and payable. The obligations of the Company under
the Indenture and the Debt Securities other than with respect to the covenants
referred to above and the events of Default other than the Events of Default
referred to above shall remain in full force and effect. (SECTION 1013).
In the event the Company exercises its option to omit compliance with
certain covenants of the Indenture with respect to the Debt Securities of any
series as described above and the Debt Securities of such series are declared
due and payable because of the occurrence of any Event of Default other than
Events of Default described in clauses (iv) through (vii) under "Events of
Default" above, the amount of money and/or U.S. Government Obligations on
deposit with the Trustee will be sufficient to pay amounts due on the Debt
Securities of such series on their Stated Maturity or Redemption Date, but may
not be sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Company shall
remain liable for such payments. (SECTION 1013).
15
<PAGE>
LIMITATION ON DEFEASANCE. To exercise either option referred to above under
DEFEASANCE AND DISCHARGE and DEFEASANCE OF CERTAIN COVENANTS AND CERTAIN EVENTS
OF DEFAULT, the Company is required to deliver to the Trustee an opinion of
outside counsel of nationally recognized standing (which opinion, in the case of
the option referred to under DEFEASANCE AND DISCHARGE above, is based on there
having been, since the date of the Indenture, a change in the applicable United
States Federal income tax law (including a change in official interpretation
thereof)), or a ruling from or published by the IRS, to the effect that the
exercise of such option will not cause holders of Debt Securities to recognize
income, gain or loss for Federal income tax purposes, and that such holders of
Debt Securities will be subject to Federal income tax on the same amount and in
the same manner and at the same time as would have been the case if such option
had not been exercised.
SUBSTITUTION OF COLLATERAL. If the terms of a series of Debt Securities so
provide, the Company will be permitted at any time to withdraw any money or U.S.
Government Obligations deposited pursuant to the foregoing defeasance
provisions, provided that the Company in substitution therefor simultaneously
deposits money and/or U.S. Government Obligations which would then be sufficient
to satisfy the Company's payment obligations in respect of the Debt Securities
in the manner contemplated by such defeasance provisions.
NOTICES
Except as may otherwise be set forth in an applicable Prospectus Supplement,
notices to holders of Bearer Securities will be given by publication in a daily
newspaper in the English language of general circulation in The City of New York
and in London, and so long as such Bearer Securities are listed on the
Luxembourg Stock Exchange and the Luxembourg Stock Exchange shall so require, in
a daily newspaper of general circulation in Luxembourg City or, if not
practical, elsewhere in Western Europe. Such publication is expected to be made
in THE WALL STREET JOURNAL, the FINANCIAL TIMES and the LUXEMBURGER WORT.
Notices to holders of Registered Securities will be given by mail to the
addresses of such holders as they appear in the Security Register. (SECTIONS 101
AND 106).
TITLE
Title to any temporary global Debt Security, any permanent global Debt
Security, any Bearer Securities and any coupons appertaining thereto will pass
by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security, the bearer of any coupon
and the registered owner of any Registered Security as the absolute owner
thereof (whether or not such Debt Security or coupon shall be overdue and
notwithstanding any notice to the contrary) for the purpose of making payment
and for all other purposes. (SECTION 308).
REPLACEMENT OF SECURITIES AND COUPONS
Any mutilated Security or a Security with a mutilated coupon appertaining
thereto will be replaced by the Company at the expense of the Holder upon
surrender of such Security to the Trustee. Securities or coupons that become
destroyed, stolen or lost will be replaced by the Company at the expense of the
Holder upon delivery to the Trustee of the Security and coupons or evidence of
the destruction, loss or theft thereof satisfactory to the Company and the
Trustee; in the case of any coupon which becomes destroyed, stolen or lost, such
coupon will be replaced by issuance of a new Security in exchange for the
Security to which such coupon appertains. In the case of a destroyed, lost or
stolen Security or coupon, an indemnity satisfactory to the Trustee and the
Company may be required at the expense of the Holder of such Security or coupon
before a replacement Security will be issued. (SECTION 306).
GOVERNING LAW
The Indenture and the Debt Securities are governed by and construed in
accordance with the laws of the State of New York.
16
<PAGE>
INFORMATION CONCERNING THE TRUSTEE
The Company from time to time borrows from Chemical Bank, the Trustee under
the Indenture, and maintains deposit accounts and conducts other banking
transactions with it in the ordinary course of business. Chemical Bank also
serves as trustee for certain other senior unsecured debt obligations of the
Company.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities of the
Company issued under one or more indentures. Warrants may be issued
independently or together with any Debt Securities offered by any Prospectus
Supplement and may be attached to or separate from such Debt Securities. The
Warrants are to be issued under one or more Warrant Agreements (each a "Warrant
Agreement") to be entered into between the Company and a bank or trust company,
as Warrant Agent (the "Warrant Agent"), all as set forth in the Prospectus
Supplement relating to the particular issue of Warrants. The Warrant Agent will
act solely as an agent of the Company in connection with the Warrant
Certificates and will not assume any obligation or relationship of agency or
trust for or with any holder of Warrant Certificates or beneficial owners of
Warrants. A copy of the form of Warrant Agreement, including the form of Warrant
Certificate representing the Warrants, is filed as an exhibit to the
Registration Statement. The following summaries of certain provisions of the
form of Warrant Agreement and Warrant Certificate do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Warrant Agreement and the Warrant Certificate, including the
definition therein of certain terms.
GENERAL
If Warrants are offered, the applicable Prospectus Supplement will identify
the Warrant Agent and describe the terms of the Warrants, including the
following: (i) the offering price; (ii) the currency for which Warrants may be
purchased; (iii) the designation, aggregate principal amount, currency of
denomination and payment and terms of the Debt Securities purchasable upon
exercise of the Warrants; (iv) if applicable, the designation and terms of the
Debt Securities with which the Warrants are issued and the number of Warrants
issued with each such Debt Security; (v) if applicable, the date on and after
which the Warrants and the related Debt Securities will be separately
transferable; (vi) the principal amount of Debt Securities purchasable upon
exercise of one Warrant and the price at and the currency in which such
principal amount of Debt Securities may be purchased upon such exercise; (vii)
the date on which the right to exercise the Warrants shall commence and the date
(the "Expiration Date") on which such right shall expire; (viii) United States
federal income tax considerations; (ix) whether the Warrants will be issued in
registered or bearer form; and (x) any other terms of the Warrants.
Warrant Certificates may be exchanged for new Warrant Certificates of
different denominations, may (if in registered form) be presented for
registration of transfer, and may be exercised at the corporate trust office of
the Warrant Agent or any other office indicated in the applicable Prospectus
Supplement. Prior to the exercise of their Warrants, holders of Warrants will
not have any of the rights of holders of the Debt Securities purchasable upon
such exercise, including the right to receive payments of principal of, premium,
if any, or interest, if any, on the Debt Securities purchasable upon such
exercise or to enforce covenants in the applicable indenture.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Debt Securities at such exercise price as shall in each case be set forth in, or
calculable from, the applicable Prospectus Supplement. Warrants may be exercised
at any time up to 5:00 p.m., New York City time, on the Expiration Date set
forth in the applicable Prospectus Supplement. After the close of business on
the Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Warrants will become void.
Warrants may be exercised by delivery to the Warrant Agent of payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the Debt Securities purchasable
17
<PAGE>
upon such exercise together with certain information set forth on the reverse
side of the Warrant Certificate. Warrants will be deemed to have been exercised
upon receipt of the exercise price, subject to the receipt within five business
days of the Warrant Certificate evidencing such Warrants. Upon receipt of such
payment and the Warrant Certificate properly completed and duly executed at the
corporate trust office of the Warrant Agent or any other office indicated in the
applicable Prospectus Supplement, the Company will, as soon as practicable,
issue and deliver the Debt Securities purchasable upon such exercise. If fewer
than all of the Warrants represented by such Warrant Certificate are exercised,
a new Warrant Certificate will be issued for the remaining amount of Warrants.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Securities to or through underwriters, to be designated
from time to time, and also may sell Securities directly to other purchasers or
through agents or broker-dealers, including broker-dealers as principals. Debt
Securities may be offered alone or with Warrants (which may or may not be
detachable from Debt Securities), and Warrants may be offered alone, all as set
forth in the applicable Prospectus Supplement. If any Warrants are issued, Debt
Securities will be issuable upon exercise of such Warrants.
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, dealers and agents
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, dealers and agents that participate in the
distribution of Securities may be deemed to be underwriters, and any discounts
or commissions received by them and any profit on the resale of Securities by
them may be deemed to be underwriting discounts and commissions, under the
Securities Act. Any such underwriter or agent is set forth, and any such
compensation is set forth, in the applicable Prospectus Supplement.
Under agreements that may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act, or to contribution with respect
to payments that the underwriters, dealers or agents may be required to make in
respect thereof. Such underwriters, dealers or agents may engage in transactions
with or perform services for the Company in the ordinary course of business.
Each underwriter, dealer and agent participating in the distribution of any
Debt Securities that are issuable as Bearer Securities will agree that it will
not offer, sell or deliver, directly or indirectly, Bearer Securities in the
United States or to United States persons (other than a Qualifying Foreign
Branch of a United States Financial Institution) in connection with the original
issuance of such Debt Securities.
DELAYED DELIVERY ARRANGEMENTS.
If so indicated in the applicable Prospectus Supplement, the Company will
authorize dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase Securities from the Company pursuant
to contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Company. The obligations of any purchaser under any such
contract will not be subject to any conditions except that the purchase of the
Offered Debt Securities and/or Warrants shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which such purchaser is
subject. The dealers and such other persons will not have any responsibility in
respect of the validity or performance of such contracts.
18
<PAGE>
EXPERTS
The consolidated financial statements and schedules of
Archer-Daniels-Midland Company, appearing or incorporated by reference in the
Company's Annual Report (Form 10-K) for the year ended June 30, 1993, have been
audited by Ernst & Young, independent auditors, as set forth in their report
thereon included or incorporated by reference therein and incorporated herein by
reference. Such consolidated financial statements and schedules are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
19
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS,
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED HEREIN,
AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS GIVEN IN THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO
ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
Legal Proceedings................................. S-2
Ratio of Earnings to Fixed Charges................ S-2
Certain Terms of the Debentures................... S-2
Underwriting...................................... S-5
Legal Opinions.................................... S-5
Available Information............................. S-6
PROSPECTUS
Incorporation of Certain Documents by Reference... 2
Additional Information............................ 2
The Company....................................... 3
Use of Proceeds................................... 3
Ratio of Earnings to Fixed Charges................ 3
Description of Debt Securities.................... 3
Description of Warrants........................... 17
Plan of Distribution.............................. 18
Experts........................................... 19
</TABLE>
$350,000,000
ARCHER-DANIELS-MIDLAND
COMPANY
7 1/2% DEBENTURES
DUE MARCH 15, 2027
[LOGO]
SALOMON BROTHERS INC
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
STEPHENS INC.
PROSPECTUS SUPPLEMENT
DATED MARCH 13, 1997
