<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 1998
REGISTRATION NO. 333-57333
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------
LAFARGE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
MARYLAND 58-1290226
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
11130 SUNRISE VALLEY DRIVE, SUITE 300
RESTON, VIRGINIA 20191
(703) 264-3600
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
LARRY J. WAISANEN
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
11130 SUNRISE VALLEY DRIVE, SUITE 300
RESTON, VIRGINIA 20191
(703) 264-3600
(Name, address, including zip code, and telephone number, including area code,
of Registrant's agent for service)
---------------------
Copies of Communication to:
<TABLE>
<S> <C>
PETER A. LODWICK, ESQ. ROBERT B. WILLIAMS, ESQ.
THOMPSON & KNIGHT, P.C. MILBANK, TWEED, HADLEY & MCCLOY
1700 PACIFIC, SUITE 3300 ONE CHASE MANHATTAN PLAZA
DALLAS, TEXAS 75201 NEW YORK, NEW YORK 10005
(214) 969-1700 (212) 530-5000
</TABLE>
---------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 29, 1998
PROSPECTUS
, 1998
$650,000,000
[LAFARGE LOGO]
% SENIOR NOTES DUE
The Senior Notes (the "Notes") are being offered by Lafarge Corporation, a
Maryland corporation. Interest on the Notes is payable semi-annually on June 15
and December 15 of each year commencing on December 15, 1998. The Notes
constitute senior and unsecured obligations of the Company, ranking pari passu
in right of payment with all other senior and unsecured obligations of the
Company. See "Description of Notes -- General."
The Notes may be redeemed as a whole or in part at the option of the Company
at any time, at a redemption price equal to the greater of (i) 100% of the
principal amount thereof or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to such
redemption date on a semiannual basis at the Treasury Rate (as defined herein)
plus basis points, plus in either case accrued and unpaid interest
on the principal amount being redeemed to the date of redemption. See
"Description of Notes -- Redemption Provisions." The Notes are not subject to
any sinking fund.
The Notes will be represented by a Book-Entry Note registered in the name of
the nominee of The Depository Trust Company, which will act as securities
depositary. Beneficial interests in a Book-Entry Note will be shown on, and
transfers thereof will be effected only through, records maintained by The
Depository Trust Company and its direct and indirect participants. Except as
described herein, the Notes will not be issued in definitive form. See
"Description of Notes -- Book-Entry Notes."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC(1) COMMISSIONS(2) COMPANY(3)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note..................................... % % %
Total........................................ $ $ $
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from the date of issuance.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $ .
The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if delivered to and accepted by them, subject to certain
conditions, including their rights to withdraw, cancel or reject orders in whole
or in part. It is expected that delivery of the Notes will be made in New York,
New York, on or about , 1998, in book-entry form through the
facilities of The Depository Trust Company against payment therefor in
immediately available funds.
Joint Lead Managers
DONALDSON, LUFKIN & JENRETTE WARBURG DILLON READ LLC
--------------------------------------------
CITICORP SECURITIES, INC.
<PAGE> 3
[Map of the Company's cement plants and construction materials operations]
THE UNDERWRITERS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICES OF THE NOTES IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
2
<PAGE> 4
AVAILABLE INFORMATION
Lafarge Corporation, a Maryland corporation (the "Company" or "Lafarge"),
is subject to the information requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company with the Commission can be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the Commission: Chicago Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and
New York Regional Office, Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy statements and other information
concerning the Company can be inspected at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, The Toronto Stock Exchange, Exchange Tower, 2
First Canadian Place, Toronto, Ontario, Canada M5X 1J2 and the Montreal
Exchange, Stock Exchange Tower, 800 Victoria Square, Montreal, Quebec, Canada
H4Z 1A9.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act of
1933, as amended (the "Securities Act"). This Prospectus omits certain of the
information contained in the Registration Statement in accordance with the rules
and regulations of the Commission. Reference is hereby made to the Registration
Statement and exhibits thereto for further information with respect to the
Company and the securities offered hereby. Any statements contained herein
concerning the provisions of any document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission under the
Exchange Act (File No. 0-11936) are incorporated by reference in this
Prospectus:
(a) the Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
(b) the Company's Quarterly Report on Form 10-Q for the three months
ended March 31, 1998;
(c) Proxy Statement dated March 23, 1998, relating to the 1998 annual
meeting of stockholders of the Company; and
(d) the Company's Current Report on Form 8-K dated June 3, 1998.
All documents filed by the Company pursuant to Section 13(a), 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 Notes pursuant hereto shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
of such document. Any statement contained herein or in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents that are incorporated by reference in this
Prospectus (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to Mr. David C. Jones, Vice President -- Legal Affairs and Corporate
Secretary, Lafarge Corporation, 11130 Sunrise Valley Drive, Suite 300, Reston,
Virginia 20191, telephone number (703) 264-3600.
3
<PAGE> 5
THE COMPANY
The Company, one of the largest producers of cement and construction
materials in North America, produces and sells cement, aggregates, ready-mixed
concrete and other concrete products, gypsum wallboard and other construction
materials in the United States and Canada. Canadian operations are conducted by
Lafarge Canada Inc. ("Lafarge Canada"), the Company's Canadian subsidiary. In
the United States, the Company is the third largest producer of cement by
clinker production capacity and, including the recently acquired Redland
Operations (as defined below), the fourth largest producer of aggregates. In
Canada, the Company is the largest producer of cement by clinker production
capacity and one of the largest producers of aggregates, ready-mixed concrete
and other concrete products. The rated annual clinker production capacity of the
Company's 14 cement manufacturing plants is approximately 11.7 million tons,
with approximately 6.5 million tons of capacity in the United States and
approximately 5.2 million tons of capacity in Canada. In 1997, the Company
shipped 13 million tons of cement and, on a pro forma basis giving effect to the
acquisition of the Redland Operations, shipped 75 million tons of aggregates and
10 million cubic yards of ready-mixed concrete. In September 1996, the Company
entered the gypsum wallboard business by acquiring manufacturing facilities
located in Buchanan, New York and Wilmington, Delaware, with a combined rated
annual capacity of 700 million square feet of wallboard. The Company supplies a
full line of gypsum wallboard products used in residential and commercial
construction as well as remodeling and repair. The Company is also engaged in
road building and other construction using many of its own products. On a pro
forma basis, after giving effect to the acquisition of the Redland Operations,
the Company had revenues of approximately $2.4 billion for the twelve months
ended March 31, 1998.
Since the early 1990's, the Company has implemented an operating strategy
with the objective of increasing the profitability of existing operations while
pursuing opportunities to increase both revenue and cash flow. Actions taken by
management include: (i) repositioning the Company's asset portfolio to optimize
its competitive position in strategic markets, including the disposition of
non-strategic assets, (ii) entering new business areas such as gypsum wallboard
manufacturing and (iii) lowering production, transportation and overhead costs
and increasing productivity.
Currently, the Company seeks to:
- Achieve and maintain leading positions in targeted markets;
- Improve operational efficiencies and increase customer focus to become
the low cost supplier of choice for its customers;
- Invest in existing operations and acquire strategic assets that meet the
Company's investment criteria; and
- Maintain a flexible financial structure in order to capitalize on
attractive strategic opportunities.
Approximately 52% of the Company's outstanding voting securities are owned
by Lafarge S.A., a French corporation, and certain of its affiliates ("Lafarge
S.A."). Lafarge S.A., with 1997 sales of approximately $7.2 billion, is a world
leader in building materials active in 60 countries around the world.
The Company was incorporated under the laws of the State of Maryland in
1977. Its principal executive offices are located at 11130 Sunrise Valley Drive,
Suite 300, Reston, Virginia 20191 and its telephone number at these offices is
(703) 264-3600. Unless otherwise indicated or the context requires otherwise,
the "Company" and "Lafarge" refer to Lafarge Corporation and its subsidiaries
and predecessors, and information regarding the Company's business and
operations included in this Prospectus gives effect to the acquisition of the
Redland Operations. See "Business -- Redland Acquisition."
4
<PAGE> 6
RECENT DEVELOPMENTS
On June 3, 1998, the Company acquired from Lafarge S.A. certain
construction materials operations in North America (collectively, the "Redland
Operations") formerly owned by Redland Aggregates North America ("Redland") and
operated by Denver-based Western Mobile Inc., Redland Genstar Inc. of Towson,
Maryland and Redland Quarries Inc. of Hamilton, Ontario. Lafarge S.A. acquired
the Redland Operations in December 1997 as part of its acquisition of the
British construction materials firm Redland PLC. The purchase price paid by the
Company for the Redland Operations, free of debt, was $690 million, subject to
working capital adjustments. The U.S. operations were acquired pursuant to a
stock purchase agreement among the Company, Lafarge S.A. and Redland
International Limited, providing for the acquisition of the stock of Redland,
Inc. The Canadian operations were acquired pursuant to an asset acquisition
agreement among Lafarge Canada, Lafarge S.A. and Redland Quarries Inc. The
Company intends to use the proceeds of the offering of the Notes (the
"Offering") to finance the acquisition of the Redland Operations located in the
United States. The purchase price for the Canadian portion of the Redland
Operations, approximately $40 million, was paid by Lafarge Canada from available
cash.
The Redland Operations, which include 64 aggregates operations, 34
ready-mixed concrete plants and 29 asphalt plants, had revenues of approximately
$517.1 million for the year ended December 31, 1997. In 1997, the Redland
Operations shipped approximately 32 million tons of aggregates, approximately
two million cubic yards of ready-mixed concrete and approximately six million
tons of asphalt. Unless otherwise indicated, all information set forth below
relating to the operations and business of the Company includes the Redland
Operations.
USE OF PROCEEDS
The proceeds to the Company from the sale of the Notes in the Offering,
after deducting underwriting discounts and commissions and estimated offering
expenses, are estimated to be $644.8 million.
The net proceeds of the Offering, together with cash flow from operations,
are expected to be used to repay $650 million of outstanding indebtedness under
a short-term note between the Company and Lafarge S.A. (the "Bridge Note")
funded June 3, 1998, which was entered into by the Company to finance, on an
interim basis, the acquisition of the Redland Operations located in the United
States. See "Recent Developments." The Bridge Note accrues interest at the
London Interbank Offered Rate ("LIBOR") plus 30 basis points, has a maturity
date of December 31, 1998 and may be prepaid at any time without penalty.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges prior to the acquisition of the Redland Operations for the
periods shown:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
ENDED MARCH 31,
YEARS ENDED DECEMBER 31, MARCH 31,(2) LTM(3)
-------------------------------- ------------- ---------
1993 1994 1995 1996 1997 1997 1998 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges(1)................. 1.56 3.63 5.96 8.29 12.55 -- -- 13.48
</TABLE>
- ------------------------------
(1) The Company's consolidated ratio of earnings to fixed charges was computed
by dividing earnings by fixed charges. For this purpose, earnings are the
sum of income (loss) from continuing operations before income taxes and
fixed charges, excluding capitalized interest. Fixed charges are interest,
whether expensed or capitalized, amortization of debt expense and discount
or premium relating to indebtedness, whether expensed or capitalized, and
such portion of rental expense that can be demonstrated to be representative
of the interest factor in the particular case.
(2) Due to seasonality, the deficiency of earnings to fixed charges for the
three months ended March 31, 1997 and 1998 was $42.2 million and $35.4
million, respectively.
(3) Last twelve months.
5
<PAGE> 7
ACCOUNTING EFFECTS OF THE ACQUISITION
Lafarge S.A., the majority shareholder of the Company, is the owner of
Redland PLC. As a result, generally accepted accounting principles require that
the acquisition of the Redland Operations by the Company be accounted for in a
manner similar to a pooling of interests. Following the release of second
quarter results, the Company will report the net assets of the Redland
Operations at the historical cost of Lafarge S.A. retroactive to December 31,
1997. Lafarge S.A. acquired Redland PLC in December 1997 and accounted for the
transaction using the purchase method. As such, Lafarge S.A.'s historical cost
basis of the net assets acquired by the Company reflects the allocation of the
purchase price to the net assets and goodwill. Similarly, results of operations
of the Redland Operations will be combined with the Company's results, for
reporting purposes, beginning January 1, 1998. As the post-combination results
of the Redland Operations have not yet been reported, supplemental financial
information has been incorporated by reference herein from the Company's Current
Report on Form 8-K dated June 3, 1998 to show the impact of combining the
Redland Operations with the Company for the year ended December 31, 1997 and for
the quarter ended March 31, 1998.
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Prospectus, including the documents incorporated by reference herein,
includes "forward-looking" statements based upon current expectations that
involve a number of business risks and uncertainties. The Company desires to
take advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this statement for the express
purpose of availing itself of the protections of the safe harbor with respect to
all forward-looking statements. Several important factors, in addition to the
specific factors discussed in connection with such forward-looking statements
individually, could affect the future results of the Company and could cause
those results to differ materially from those expressed in the forward-looking
statements contained herein.
Such additional factors include, among other things, national and regional
economic conditions, levels of construction spending in major markets,
supply/demand structure of the industry, unfavorable weather conditions during
peak construction periods and changes in environmental regulations, all of which
are difficult or impossible to predict accurately and many of which are beyond
the control of the Company. Therefore, the Company cautions each reader of this
Prospectus to consider carefully these factors as well as the specific factors
discussed with each forward-looking statement in this Prospectus and as
disclosed in the Company's periodic reports filed with the Commission as such
factors, in some cases, have affected, and in the future (together with other
factors) could affect, the ability of the Company to implement its business
strategy and may cause actual results to differ materially from those
contemplated by the statements expressed herein and therein.
6
<PAGE> 8
CAPITALIZATION
The following table sets forth the unaudited capitalization of the Company
as of March 31, 1998, on a historical basis and as adjusted to give effect to
the sale of the Notes in the Offering and the application of the net proceeds
therefrom as described in "Use of Proceeds." This information should be read in
conjunction with the audited consolidated financial statements of the Company
and the related notes included in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1998 and the Company's Current Report on Form
8-K dated June 3, 1998, incorporated by reference herein.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1998
------------------------
AS
ACTUAL ADJUSTED(1)
---------- -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Cash, cash equivalents and short-term investments........... $ 285,424 $ 241,123
========== ==========
Short-term debt:
Short-term borrowings and current portion of long-term
debt.................................................. $ 71,643 $ 71,643
Long-term debt:
Long-term debt......................................... 121,327 124,233
Senior Notes........................................... -- 650,000
---------- ----------
Total long-term debt.............................. 121,327 774,233
Shareholder's equity:
Common Stock, $1.00 par value, 110,100,000 shares
authorized, 66,300,000 shares issued and
outstanding........................................... 66,276 66,276
Exchangeable shares, no par value, 24,300,000 shares
authorized, 5,500,000 shares issued and outstanding... 39,494 39,494
Additional paid-in capital............................. 656,994 666,975
Retained earnings...................................... 556,629 545,042
Foreign currency translation adjustments............... (91,414) (90,912)
---------- ----------
Total shareholders' equity........................ 1,227,979 1,226,875
---------- ----------
Total capitalization........................................ $1,420,949 $2,072,751
========== ==========
</TABLE>
- ------------------------------
(1) Gives effect to the acquisition of the Redland Operations on a pro forma
basis, including the payment of the purchase price for the Canadian assets
of Redland, and to the sale of the Notes in the Offering with the
application of the net proceeds therefrom to repay the Bridge Note. See "Use
of Proceeds."
7
<PAGE> 9
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial data for the
Company for each of the five years ended December 31, 1997 and for the
three-month periods ended March 31, 1997 and 1998. The selected financial data
as of and for the five years ended December 31, 1997 have been derived from the
Company's Consolidated Financial Statements, which were audited by Arthur
Andersen LLP, the Company's independent public accountants. Data for the
three-month periods are unaudited but, in the opinion of management, include all
adjustments, consisting only of normal recurring accruals, necessary for a fair
presentation. This table is qualified by and should be read in conjunction with
the Company's Consolidated Financial Statements incorporated by reference
herein. The historical financial data set forth below does not reflect the
impact of the acquisition of the Redland Operations, which were acquired on June
3, 1998. For additional information regarding the acquisition of the Redland
Operations, see "Unaudited Pro Forma Condensed Consolidated Financial Data"
below.
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
---------------------------------------------------- -------------------
1993 1994 1995 1996 1997 1997 1998
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA AND PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales................................ $1,494.5 $1,563.3 $1,472.2 $1,649.3 $1,806.4 $ 244.0 $ 267.3
Earnings before interest and taxes....... 70.2 141.9 185.4 236.4 300.9 (52.6) (45.6)
Interest expense, net.................... (42.7) (28.8) (15.2) (14.1) (6.6) (2.6) (0.2)
Income tax benefit (expense)............. (21.6) (32.5) (40.6) (81.4) (112.3) 21.2 17.7
Net income (loss)........................ 5.9 80.6 129.6 140.9 182.0 (34.1) (28.2)
Net income per share -- basic............ $ 0.10 $ 1.19 $ 1.89 $ 2.02 $ 2.56 $ (0.48) $ (0.39)
Net income per share -- diluted.......... 0.10 1.18 1.82 1.95 2.54 (0.48) (0.39)
Dividends per share...................... 0.30 0.30 0.375 0.40 0.42 0.10 0.12
BALANCE SHEET DATA:
Cash, cash equivalents and short-term
investments............................ $ 109.3 $ 243.6 $ 221.0 $ 209.3 $ 318.4 $ 203.0 $ 285.4
Working capital.......................... 315.4 402.3 448.6 394.9 520.2 328.7 439.1
Total assets............................. 1,687.7 1,651.4 1,713.9 1,813.0 1,889.1 1,750.3 1,871.0
Long-term debt........................... 373.2 290.7 268.6 161.9 132.3 149.3 121.3
Shareholders' equity..................... 791.7 841.4 981.0 1,110.5 1,255.7 1,069.3 1,228.0
SELECTED STATISTICAL AND OPERATING DATA:
Gross profit as a percent of net sales... 16.9% 19.7% 21.9% 24.1% 26.1% (4.6)% 0.8%
Selling and administrative as a percent
of sales............................... 10.8% 10.4% 9.6% 9.2% 8.9% 15.3% 15.8%
EBITDA(1)................................ $ 185.2 $ 245.5 $ 279.7 $ 336.9 $ 407.2 $ (25.6) $ (18.3)
Depreciation, depletion and
amortization........................... 115.0 103.6 94.3 100.5 106.3 27.1 27.3
Capital expenditures..................... 58.4 95.4 121.9 124.8 124.0 40.6 40.3
Acquisitions............................. 15.2 4.7 29.3 83.5 8.8 0.0 22.1
Return on average shareholders' equity... 0.8% 9.9% 14.2% 13.5% 15.4% (3.1)% (2.3)%
Long-term debt as a percentage of total
capitalization(2)...................... 26.3% 21.6% 18.6% 11.0% 8.3% 10.5% 7.7%
</TABLE>
- ------------------------------
(1) EBITDA represents earnings before interest, taxes, depreciation and
amortization. The Company has included EBITDA data (which are not a measure
of financial performance under generally accepted accounting principles)
because such data are used by certain investors.
(2) Total capitalization represents long-term debt, other long-term liabilities
and shareholders' equity.
8
<PAGE> 10
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
Lafarge S.A., the majority shareholder of the Company, acquired Redland PLC
in December 1997. The Company acquired the Redland Operations from Lafarge S.A.
on June 3, 1998. See "Recent Developments." Since the Company acquired the
Redland Operations from the holder of a majority of its voting securities, the
acquisition will be accounted for similar to a pooling of interests.
Accordingly, Redland assets and liabilities acquired by the Company from Lafarge
S.A. are transferred to the Company at Lafarge S.A.'s historical cost, which
approximates the purchase price paid by the Company. The unaudited pro forma
condensed consolidated financial data reflect the impact of Lafarge S.A.'s
preliminary purchase price adjustments on Redland, the impact of the Company's
acquisition of the Redland Operations from Lafarge S.A. and the impact of debt
financing of the Company's acquisition of the Redland Operations from Lafarge
S.A.
The following Unaudited Pro Forma Condensed Consolidated Income Statements
for the year ended December 31, 1997, the Last Twelve Months ("LTM") ended March
31, 1998 and the three months ended March 31, 1998 give effect to the
acquisition of the Redland Operations, the Offering of the Notes hereby, and the
application of the net proceeds therefrom, assuming these transactions occurred
at January 1, 1997. The Unaudited Pro Forma Balance Sheet as of March 31, 1998
gives effect to the acquisition of the Redland Operations and the Offering, and
the application of the net proceeds therefrom, assuming the Offering occurred on
March 31, 1998.
The Unaudited Pro Forma Condensed Consolidated Financial Data, which are
based on the historical financial information of the Company and the Redland
Operations for the year ended December 31, 1997 and the three months ended March
31, 1998, are presented for informational purposes only and are not necessarily
indicative of the combined earnings and results of operations had the Company
completed the acquisition of the Redland Operations at the beginning of the
periods presented, nor is such information intended necessarily to be indicative
of the future results of operations. The Unaudited Pro Forma Condensed
Consolidated Financial Data should be read in conjunction with the financial
statements and other financial data of the Company and the Redland Operations
incorporated by reference or included herein.
9
<PAGE> 11
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
<TABLE>
<CAPTION>
LTM(3)
ENDED
MARCH 31,
YEAR ENDED DECEMBER 31, 1997 1998
--------------------------------------------------------------------------------- ----------
REDLAND
-----------------------------------------
SUB-TOTAL
PUSH-DOWN OF REDLAND
HISTORICAL OF AND
BASIS OF LAFARGE S.A. LAFARGE S.A.
LAFARGE REDLAND PURCHASE PURCH. PRO PRO
CORPORATION OPERATIONS ACCOUNTING(a) ACCOUNTING FINANCING FORMA FORMA
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales........................ $1,806,351 $517,056 $ -- $517,056 $ -- $2,323,407 $2,357,139
Cost of goods sold........... 1,335,206 406,310 2,905(c) 409,215 -- 1,744,421 1,761,997
---------- -------- ------- -------- -------- ---------- ----------
Gross profit..................... 471,145 110,746 (2,905) 107,841 -- 578,986 595,142
Selling and administrative... 160,963 51,632 -- 51,632 -- 212,595 217,890
Goodwill amortization........ 3,748 7,177 3,139(d) 10,316 14,064 14,593
Other (income) expense,
net........................ 5,536 (5,200) -- (5,200) -- 336 2,155
---------- -------- ------- -------- -------- ---------- ----------
Operating income (loss).......... 300,898 57,137 (6,044) 51,093 -- 351,991 360,504
Interest (income) expense,
net........................ 6,664 16,936 -- 16,936 43,550(f) 50,514 48,083
(16,636)(f) --
---------- -------- ------- -------- -------- ---------- ----------
Income (loss) before taxes....... 294,234 40,201 (6,044) 34,157 (26,914) 301,477 312,421
Income taxes expense (benefit)... 112,258 16,473 (1,191)(e) 15,282 (10,496)(e) 117,044 121,211
---------- -------- ------- -------- -------- ---------- ----------
Net income (loss)................ $ 181,976 $ 23,728 $(4,853) $ 18,875 $(16,418) $ 184,433 $ 191,210
========== ======== ======= ======== ======== ========== ==========
Net income per
share -- basic............. $ 2.56 $ 2.59 $ 2.68
Net income per
share -- diluted........... 2.54 2.57 2.65
Dividends per share.............. 0.42 0.42 0.44
SELECTED STATISTICAL AND
OPERATING DATA:
Gross profit as a percent of net
sales.......................... 26.1% 24.9% 25.2%
Selling and administrative as a
percent of sales............... 8.9% 9.2% 9.2%
EBITDA(1)........................ $ 407.2 $ 500.8 $ 511.8
Depreciation, depletion and
amortization................... 106.3 148.8 151.3
Capital expenditures............. 124.0 152.7 151.2
Return on average shareholders'
equity......................... 15.4% 15.6% 16.7%
Long-term debt as a percentage of
total capitalization........... 8.3% 8.0% 33.5%
Ratio of earnings to fixed
charges(2)..................... 12.55 5.24 5.48
</TABLE>
- ------------------------------
(1) EBITDA represents earnings before interest, taxes, depreciation and
amortization. The Company has included EBITDA data (which are not a measure
of financial performance under generally accepted accounting principles)
because such data are used by certain investors.
(2) The Company's consolidated ratio of earnings to fixed charges was computed
by dividing earnings by fixed charges. For this purpose, earnings are the
sum of income (loss) from continuing operations before income taxes and
fixed charges, excluding capitalized interest. Fixed charges are interest,
whether expensed or capitalized, amortization of debt expense and discount
or premium relating to indebtedness, whether expensed or capitalized, and
such portion of rental expense that can be demonstrated to be representative
of the interest factor in the particular case.
(3) Last twelve months.
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated financial statements.
10
<PAGE> 12
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE QUARTER ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
<TABLE>
<CAPTION>
REDLAND OPERATIONS
------------------------------------------
SUB-TOTAL
OF REDLAND
HISTORICAL PUSH-DOWN OF AND LAFARGE
BASIS OF LAFARGE S.A. S.A.
LAFARGE REDLAND PURCHASE PURCH.
CORPORATION OPERATIONS ACCOUNTING(a) ACCOUNTING(b) FINANCING PRO FORMA
<S> <C> <C> <C> <C> <C> <C>
Net sales.................................... $267,292 $ 67,484 $ -- $ 67,484 $ -- $334,776
Cost of goods sold....................... 265,196 67,398 813(c) 68,211 -- 333,407
-------- -------- ------- -------- ------- --------
Gross profit................................. 2,096 86 (813) (727) -- 1,369
Selling and administrative............... 42,251 11,431 -- 11,431 -- 53,682
Goodwill amortization.................... 1,167 1,739 842(d) 2,581 -- 3,748
Other (income) expense, net.............. 4,288 730 -- 730 -- 5,018
-------- -------- ------- -------- ------- --------
Operating income (loss)...................... (45,610) (13,814) (1,655) (15,469) -- (61,079)
Interest (income) expense, net........... 211 3,585 -- 3,585 10,888(f) 11,174
(3,510)(f)
-------- -------- ------- -------- ------- --------
Income (loss) before taxes................... (45,821) (17,399) (1,655) (19,054) (7,378) (72,253)
Income taxes expense (benefit)............... (17,654) (7,134) (333) (e) (7,467) (2,877)(e) (27,998)
-------- -------- ------- -------- ------- --------
Net income (loss)............................ $(28,167) $(10,265) $(1,322) $(11,587) $(4,501) $(44,255)
======== ======== ======= ======== ======= ========
Net income per share -- basic................ $ (0.39) $ (0.62)
Net income per share -- diluted.............. (0.39) (0.62)
Dividends per share.......................... 0.12 0.12
SELECTED STATISTICAL AND OPERATING DATA:
Gross profit as a percent of net sales....... 0.8% 0.4%
Selling and administrative as a percent of
sales...................................... 15.8% 16.0%
EBITDA(1).................................... $ (18.3) $ (23.6)
Depreciation, depletion and amortization..... 27.3 37.5
Capital expenditures......................... 40.3 42.3
Return on average shareholders' equity....... (2.3)% (3.6)%
Long-term debt as a percentage of total
capitalization............................. 7.7% 33.5%
</TABLE>
- ------------------------------
(1) EBITDA represents earnings before interest, taxes, depreciation and
amortization. The Company has included EBITDA data (which are not a measure
of financial performance under generally accepted accounting principles)
because such data are used by certain investors.
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated financial statements.
11
<PAGE> 13
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT MARCH 31, 1998
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
REDLAND OPERATIONS
--------------------------------------------
SUBTOTAL OF
PUSH DOWN OF REDLAND AND LAFARGE
HISTORICAL LAFARGE S.A. LAFARGE S.A. CORP.
LAFARGE REDLAND PURCHASE PURCHASE PURCHASE
CORPORATION OPERATIONS ACCOUNTING(g) ACCOUNTING(h) ACCOUNTING(l) FINANCING(n)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash......................... $ 121,001 $ 899 $ -- $ 899 $ -- $ (40,000)(o)
(5,200)(p)
Short-term investments....... 164,423 -- -- -- -- --
Accounts receivable, net..... 194,118 58,578 173(i) 58,751 -- --
Inventory.................... 227,093 31,096 150(i) 31,246 -- --
Other current assets......... 34,227 32,361 34(i) 32,395 -- --
---------- -------- -------- -------- --------- ---------
Total current assets......... 740,862 122,934 357 123,291 -- (45,200)
---------- -------- -------- -------- --------- ---------
Property, plant and
equipment, net............. 899,249 415,026 (2,426)(i) 411,787 -- --
---------- -------- -------- --------- ---------
(813)(m)
--------
Other Assets
Excess of cost over net
tangible assets of
business acquired,
net.................... 40,284 73,919 231,364(j) 305,283(j) -- --
Other.................... 190,650 14,254 7,512(i) 21,766 -- 5,200(q)
---------- -------- -------- -------- --------- ---------
Total assets......... $1,871,045 $626,133 $235,994 $862,127 $ -- $ (40,000)
========== ======== ======== ======== ========= =========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Total current liabilities.... $ 301,751 $218,325 $ (2,467)(i) $219,430 $ 550,577(l) $(690,000)(r)
3,572(k)
Long-term debt............... 121,327 83,141 -- 83,141 (80,235)(l) 650,000(s)
Other long-term
liabilities................ 219,988 95,503 (5,185)(i) 90,318 -- --
---------- -------- -------- -------- --------- ---------
Total liabilities........ 643,066 396,969 (4,080) 392,889 470,342 (40,000)
---------- -------- -------- -------- --------- ---------
Common shares................ 66,276 5 (5)(i) -- -- --
Exchangeable shares.......... 39,494 -- -- -- -- --
Additional paid-in capital... 656,994 170,239 310,084(i) 480,323 (470,342)(l) --
Retained earnings............ 556,629 67,844 (79,431)(i)(t) (11,587) -- --
Cumulative foreign currency
translation adjustment..... (91,414) (8,924) 9,426(i)(t) 502 -- --
---------- -------- -------- -------- --------- ---------
Total shareholders'
equity................. 1,227,979 229,164 240,074 469,238 (470,342) --
---------- -------- -------- -------- --------- ---------
Total liabilities &
shareholders'
equity............. $1,871,045 $626,133 $235,994 $862,127 $ -- $ (40,000)
========== ======== ======== ======== ========= =========
<CAPTION>
PRO FORMA
<S> <C>
ASSETS
Cash......................... $ 76,700
Short-term investments....... 164,423
Accounts receivable, net..... 252,869
Inventory.................... 258,339
Other current assets......... 66,622
----------
Total current assets......... 818,953
----------
Property, plant and
equipment, net............. 1,311,036
----------
Other Assets
Excess of cost over net
tangible assets of
business acquired,
net.................... 345,567
Other.................... 217,616
----------
Total assets......... $2,693,172
==========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Total current liabilities.... $ 381,758
Long-term debt............... 774,233
Other long-term
liabilities................ 310,306
----------
Total liabilities........ 1,466,297
----------
Common shares................ 66,276
Exchangeable shares.......... 39,494
Additional paid-in capital... 666,975
Retained earnings............ 545,042
Cumulative foreign currency
translation adjustment..... (90,912)
----------
Total shareholders'
equity................. 1,226,875
----------
Total liabilities &
shareholders'
equity............. $2,693,172
==========
</TABLE>
The accompanying notes are an integral part of the unaudited pro forma
condensed consolidated financial statements.
12
<PAGE> 14
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AND STATISTICAL AND OPERATING DATA)
(a) Lafarge S.A. acquired Redland PLC in December 1997 and accounted for the
transaction using the purchase method. This column reflects the pro forma
purchase accounting adjustments assuming Lafarge S.A. purchased Redland PLC
on January 1, 1997.
(b) This column represents the pro forma total of the Redland Operations
historical results of operations and associated purchase accounting
adjustments assuming Lafarge S.A. purchased Redland PLC on January 1, 1997.
(c) The purchase accounting described in note (a) resulted in a change in the
carrying amounts of fixed assets and mineral reserves of the Redland
Operations to new estimated fair values. As a result, the associated
depreciation and depletion of these assets will increase by approximately
$2,905 on a pro forma basis for 1997 and $813 for the three months ended
March 31, 1998.
(d) The purchase accounting described in note (a) resulted in additional
goodwill that will be amortized over an average of 30 years. As a result,
the associated amortization will increase by approximately $3,139 on a pro
forma basis for 1997 and $842 for the three months ended March 31, 1998.
(e) Reflects the impact of the pro forma adjustments on income taxes at the
appropriate effective rate of Redland or the Company.
(f) Adjustment reflects increased interest expense of $43,550 for 1997 and
$10,888 for the three months ended March 31, 1998 related to an additional
$650,000 in borrowings with an assumed fixed blended interest rate of
approximately 6.7%. This is offset by a reduction in interest expense of
approximately $16,636 for 1997 and $3,510 for the three months ended March
31, 1998, for debt associated with the Redland Operations that will not be
assumed by the Company.
(g) Lafarge S.A. acquired Redland PLC in December 1997 and accounted for the
transaction using the purchase method. The adjustments in this column
reflect the preliminary purchase accounting adjustments for the Redland
Operations recorded by Lafarge S.A.
(h) This column represents the total of the Redland Operations historical
balance sheet and associated preliminary purchase accounting adjustments of
Lafarge S.A. Since the Company acquired the Redland Operations from its
parent, the balance sheet in this column is combined with the Company's
historical balance sheet similar to a pooling of interests.
(i) Reflects Lafarge S.A.'s adjustments to record the assets and liabilities
acquired at preliminary estimated fair market values.
(j) The preliminary calculations of the excess cost over fair value of the net
assets acquired (goodwill) by Lafarge S.A. is as follows:
<TABLE>
<S> <C>
Purchase price of the Redland Operations.................... $690,000
Value of net assets acquired:
Historical net book value at December 31, 1997,
excluding related party debt of $209,677 not assumed
by the Company........................................ 448,604
Less historical goodwill.................................... (75,422)
Liabilities associated with employee termination benefits
and restructuring costs directly related to the
acquisition............................................... (3,572)
Add estimated increase in fair values of mineral reserves
and other net assets acquired............................. 12,762
--------
Estimated fair value of net assets acquired................. 382,372
--------
Excess purchase price over fair value of net assets acquired
(goodwill) at December 31, 1997........................... 307,628
--------
First quarter 1998 activity................................. (2,345)
--------
Balance, March 31, 1998..................................... $305,283
========
</TABLE>
13
<PAGE> 15
NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AND STATISTICAL AND OPERATING DATA)
(k) Preliminary purchase accounting adjustment to current liabilities reflects
a $3,572 adjustment to record termination benefits and restructuring costs
directly related to the acquisition. Management began to assess these plans
at the consummation of the acquisition of the Redland Operations and is
currently taking steps to implement them.
(l) This column reflects purchase accounting adjustments recorded by the
Company in connection with its acquisition of the Redland Operations from
Lafarge S.A. for $690,000, subject to certain working capital adjustments.
The adjustments eliminate Redland Operations related party debt which was
not assumed by the Company, eliminate Redland Operations paid-in capital
and record the payable to Lafarge S.A. for the $690,000 purchase price.
(m) Reflects the depreciation and depletion of property, plant and equipment
related to purchase accounting adjustments for the three months ended March
31, 1998.
(n) This column reflects the pro forma adjustments for the financing of the
$690,000 acquisition of the Redland Operations by the Company.
(o) Pro forma adjustment to reduce cash by $40,000 represents $690,000 in cash
paid by the Company to purchase the Redland Operations from Lafarge S.A.,
net of $650,000 in proceeds received to finance the acquisition.
(p) Pro forma adjustment to reduce cash by $5,200 represents the cash expected
to be paid by the Company for financing and other fees associated with the
issuance of $650,000 in Notes.
(q) Reflects the $5,200 deferred financing fees associated with the issuance of
the Notes that will be amortized as interest expense over the life of the
debt.
(r) Reflects the refinancing of the $690,000 payable to Lafarge S.A. for the
acquisition of the Redland Operations.
(s) Reflects the issuance of $650,000 in the Notes offered hereby with the
proceeds used to purchase the U.S. portion of the Redland Operations from
Lafarge S.A.
(t) Included in adjustments to retained earnings and cumulative foreign
currency translation adjustment are the Redland Operations net loss and
foreign currency translation adjustment for the three months ended March
31, 1998.
14
<PAGE> 16
BUSINESS
The following discussion is qualified in its entirety by the more detailed
information included or incorporated by reference in this Prospectus, including
the Company's Annual Report on Form 10-K for the year ended December 31, 1997;
the Company's Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1998; the Company's Proxy Statement dated March 23, 1998; and the Company's
Current Report on Form 8-K dated June 3, 1998.
GENERAL
The Company, one of the largest producers of cement and construction
materials in North America, produces and sells cement, aggregates, ready-mixed
concrete and other concrete products, gypsum wallboard and other construction
materials in the United States and Canada. Canadian operations are conducted by
Lafarge Canada. In the United States, the Company is the third largest producer
of cement by clinker production capacity and, including the recently acquired
Redland Operations, the fourth largest producer of aggregates. In Canada, the
Company is the largest producer of cement by clinker production capacity and one
of the largest producers of aggregates, ready-mixed concrete and other concrete
products. The rated annual clinker production capacity of the Company's 14
cement manufacturing plants is approximately 11.7 million tons, with
approximately 6.5 million tons of capacity in the United States and
approximately 5.2 million tons of capacity in Canada. In 1997, the Company
shipped 13 million tons of cement and, on a pro forma basis giving effect to the
acquisition of the Redland Operations, shipped 75 million tons of aggregates and
10 million cubic yards of ready-mixed concrete. In September 1996, the Company
entered the gypsum wallboard business by acquiring manufacturing facilities
located in Buchanan, New York and Wilmington, Delaware, with a combined rated
annual capacity of 700 million square feet of wallboard. The Company supplies a
full line of gypsum wallboard products that are used in residential and
commercial construction as well as remodeling and repair. The Company is also
engaged in road building and other construction using many of its own products.
REDLAND ACQUISITION
On June 3, 1998, the Company acquired the Redland Operations, free of debt,
for $690 million, subject to working capital adjustments. The Redland
Operations, which include 64 aggregates operations, 34 ready-mixed concrete
plants and 29 asphalt plants, had revenues of approximately $517.1 million for
the year ended December 31, 1997. In 1997, the Redland Operations shipped
approximately 32 million tons of aggregates, approximately two million cubic
yards of ready-mixed concrete and approximately six million tons of asphalt.
Unless otherwise indicated, all information set forth below relating to the
operations and business of the Company includes the Redland Operations.
CEMENT OPERATIONS
INDUSTRY OVERVIEW
Cement is the essential binding material used in making concrete, which is
widely used in residential, non-residential, commercial and industrial
construction. The competitive marketing radius of a typical cement plant for
common types of cement is approximately 250 miles except for waterborne
shipments which can be economically transported considerably greater distances.
Consequently, even cement producers with global operations compete on a regional
basis in each market in which that company manufactures and distributes product.
No single cement company in the U.S. has a production and distribution system
extensive enough to serve all U.S. markets. A company's competitive position in
a given market depends largely on the location and operating costs of its plants
and associated distribution terminals and price in that market.
Current demand for cement is dependent on levels of construction activity
specific to a region or market. For example, current demand for cement in the
Company's U.S. markets is in excess of current domestic cement capacity. The
Company believes that a continuation of the current low interest rate
environment and increased government spending on infrastructure improvement and
paving work could have a favorable impact on future demand in its markets.
Further, in Canada, the recent economic recovery has had a favorable impact on
demand for cement due to increases in residential and commercial construction
and increased spending in the oil and gas and farming sectors.
15
<PAGE> 17
GENERAL
The cement manufacturing process involves an intermediate product called
clinker. Clinker is made from limestone, clay or shale and sand crushed, ground
and blended into a mixture which is burned in a rotary kiln at extremely high
temperatures. The mixing and grinding process may be done by either a dry
process, which is more cost efficient, or a wet process. A majority of the
Company's plants use the dry process. The clinker is then cooled and ground with
a small amount of gypsum to produce a fine powder which is cement. A plant's
cement production capacity generally is approximately 10% greater than its
clinker production capacity.
The Company manufactures and sells various types of portland cement used to
make concrete and concrete products, as well as numerous special purpose cements
including masonry and oilwell cement. The Company sells cement to several
thousand unaffiliated customers including ready-mixed concrete businesses,
manufacturers of concrete products such as blocks, pipes and prefabricated
building components, and construction contractors. No single unaffiliated
customer accounted for more than 10% of the Company's sales in 1997. Sales of
cement are made on the basis of competitive prices in each market area,
generally pursuant to telephone orders from customers who purchase quantities
sufficient for their immediate requirements. Therefore, with the exception of
isolated major construction projects, the Company's cement sales do not
typically involve long-term contractual commitments. Because of freight costs,
most cement is sold within a radius of 250 miles from the producing plant,
except for waterborne shipments which can be shipped considerably greater
distances. The Company utilizes trucks, waterborne vessels and rail cars to
transport cement from its plants directly to customers or to its approximately
84 distribution terminals strategically located to serve regional markets.
For the year ended December 31, 1997, the Company's cement operations had
revenues before elimination of intercompany sales of approximately $1,050
million and operating profit (before corporate and unallocated expenses) of
approximately $259 million, constituting, on a pro forma basis giving effect to
the acquisition of the Redland Operations, approximately 43% of total revenues
and approximately 64% of total operating profit (before corporate and
unallocated expenses), respectively.
FACILITIES
The following table indicates the location, types of process and rated
annual clinker production capacity (based on management's estimates) of each of
the Company's operating cement manufacturing plants at December 31, 1997.
RATED ANNUAL CLINKER PRODUCTION CAPACITY
OF CEMENT MANUFACTURING PLANTS
(IN SHORT TONS)*
<TABLE>
<CAPTION>
UNITED STATES PLANTS CANADIAN PLANTS
- ----------------------------------------------- -----------------------------------------------
CLINKER CLINKER
LOCATION PROCESS CAPACITY LOCATION PROCESS CAPACITY
<S> <C> <C> <C> <C> <C>
Brookfield, Nova
Paulding, Ohio.......... Wet 471,200 Scotia.................. Dry 517,700
Fredonia, Kansas........ Wet 376,200 St. Constant, Quebec.... Dry 1,046,200
Whitehall,
Pennsylvania.......... Dry 718,600 Bath, Ontario........... Dry 1,121,700
Alpena, Michigan........ Dry 2,275,500 Woodstock, Ontario...... Wet 561,400
Davenport, Iowa......... Dry 943,500 Exshaw, Alberta......... Dry 1,185,500
Kamloops, British
Sugar Creek, Missouri... Dry 517,500 Columbia................ Dry 211,700
Richmond, British
Joppa, Illinois......... Dry 1,172,900 Columbia................ Wet 558,100
--------- ---------
Total Capacity.......... 6,475,400 Total Capacity.......... 5,202,300
========= =========
Total 1997 Clinker Total 1997 Clinker
Production............ 6,106,400 Production.............. 4,293,000
1997 Production as a 1997 Production as a
Percentage of Total Percentage of Total
Capacity.............. 94% Capacity................ 82%
</TABLE>
- ---------------
* One short ton equals 2,000 pounds.
16
<PAGE> 18
According to the "U.S. and Canadian Portland Cement Industry Plant
Information Summary Report", as of December 31, 1996, Lafarge Canada had the
highest capacity of Canadian cement companies with approximately 35% of total
active industry clinker production capacity in Canada. According to that report,
as of December 31, 1996, the Company's operating cement manufacturing plants in
the United States accounted for an estimated 8% of total U.S. active industry
clinker production capacity. Approximately 11%, or 1.4 million tons, of the
Company's cement shipments in 1997 were made to the Company's construction
materials operations.
The Company's U.S. plants are primarily concentrated in the central and
midwestern states, extending from the northern Great Lakes southward along the
Mississippi River system. The Company is the only cement producer serving all
regions of Canada. Distribution and storage facilities are maintained at all
cement plants and at approximately 84 other sites in the U.S. and Canada,
including four deep water ocean terminals. The Company purchases imported cement
to supplement production in some of its domestic markets.
CONSTRUCTION MATERIALS OPERATIONS
INDUSTRY OVERVIEW
The aggregates business consists of the mining, extraction, production and
sale of stone, sand, gravel and lightweight aggregates such as expanded shale
and clay. Aggregates are employed in virtually all types of construction,
including highway construction and maintenance. The concrete business involves
the mixing of cement with sand, gravel, crushed stone or other aggregates and
water to form concrete which is subsequently marketed and distributed to
numerous construction contractors.
Demand for aggregates and concrete products largely depends on regional
levels of construction activity, and therefore tends to follow cycles similar to
those of cement. Both the aggregates and concrete industries are highly
fragmented, with numerous participants operating in localized markets. The cost
of transportation of both aggregates and concrete products is high relative to
their value, and consequently, producers are typically limited to a market area
within 100 miles of their production facilities. Similar to the market for
cement, the Company believes that the current favorable conditions, including
low interest rates, strong regional economies in its U.S. markets and in Ontario
and the western provinces of Canada, as well as an increase in federal highway
and transportation funding resulting from passage of the Transportation Equity
Act for the 21st Century, could lead to increased residential, non-residential
and public works construction activity, fueling the demand for aggregates and
concrete.
GENERAL
The Company's construction materials operations encompass the production
and sale of ready-mixed concrete, aggregates, asphalt, concrete blocks and
pipes, precast and prestressed concrete components and other related products.
The Company is also engaged in highway and municipal paving and road building
work.
Lafarge Canada is the only producer of ready-mixed concrete and
construction aggregates in Canada that has operations extending from coast to
coast. In the United States, the Company owns or has a majority interest in
construction materials facilities with operations concentrated in Kansas,
Louisiana, Missouri, Ohio, Pennsylvania, Washington, West Virginia and
Wisconsin. Ready-mixed concrete plants mix controlled portions of cement, water
and aggregates to make concrete which is sold primarily to building contractors
and delivered to construction sites by mixer trucks. Aggregates are sold
primarily to road building contractors and ready-mixed concrete producers.
Management believes that Lafarge Canada is one of the largest manufacturers of
precast concrete products and concrete pipe in Canada. Precast concrete products
and concrete pipe are sold primarily to contractors engaged in all types of
construction activity. No single unaffiliated customer accounted for more than
10% of the Company's sales in 1997.
Sales of ready-mixed concrete and aggregates are made on the basis of
competitive prices in each market area, generally pursuant to telephone orders
from customers who purchase quantities sufficient for their immediate
requirements. Therefore, with the exception of isolated major construction
projects, the Company's sales of these products do not typically involve
long-term contractual commitments.
17
<PAGE> 19
For the year ended December 31, 1997, on a pro forma basis giving effect to
the acquisition of the Redland Operations, the Company's construction materials
operations had revenues, before elimination of intercompany sales, of
approximately $1.3 billion, or approximately 53% of the Company's total
revenues. For the same period, on a pro forma basis giving effect to the
acquisition of the Redland Operations, the construction materials operations had
operating profit (before corporate and unallocated expenses) of approximately
$131 million, or approximately 33% of the Company's total operating profit
(before corporate and unallocated expenses).
FACILITIES
On June 3, 1998, the Company owned or had a majority interest in the
following construction materials facilities in the U.S. and Canada: 242
ready-mixed concrete plants, 197 aggregates facilities, 57 asphalt plants, and
54 precast and prestressed concrete, concrete block and concrete pipe plants and
other construction materials operations. In 1997, the Company (excluding the
Redland Operations) sold approximately five million cubic yards of ready-mixed
concrete and approximately 31 million tons of aggregates in Canada and
approximately two million cubic yards of ready-mixed concrete and approximately
12 million tons of aggregates in the U.S. In 1997, the Redland Operations
shipped approximately 32 million tons of aggregates, two million cubic yards of
ready-mixed concrete and six million tons of asphalt.
GYPSUM WALLBOARD OPERATIONS
In September 1996, the Company entered the gypsum wallboard business by
acquiring manufacturing facilities located in Buchanan, New York and Wilmington,
Delaware, with a combined rated annual production capacity of approximately 700
million square feet (approximately 3% of total manufacturing capacity in the
United States). The Company's strategy in the gypsum wallboard business, as in
its other product lines, is to build strong, regional positions in core markets
with sound economic and demographic fundamentals and good earnings potential.
The Company's two existing plants, which are geographically well located to
serve the Mid-Atlantic and northeastern markets, supply a full line of gypsum
wallboard products used in residential and commercial construction as well as
the repair and remodeling segment. The Company will seek to expand its gypsum
wallboard operations as attractive investment opportunities are found.
The Company's gypsum wallboard products are sold to a variety of
residential and commercial building materials dealers, individual and
regional/national gypsum wallboard distributors, original equipment
manufacturers, building materials distribution companies, lumber yards and
"do-it-yourself" home centers. Sales are made on the basis of competitive prices
in each market area, generally pursuant to telephone orders from customers.
Customer orders are taken at each plant site. The amount of backlog orders, as
measured by written contracts, is normally not significant.
For the year ended December 31, 1997, the Company's gypsum wallboard
operations had revenues of approximately $92 million and operating profit
(before corporate and unallocated expenses) of $13 million, constituting, on a
pro forma basis giving effect to the acquisition of the Redland Operations,
approximately 4% of total revenues and approximately 3% of total operating
profit (before corporate and unallocated expenses), respectively.
OTHER OPERATIONS
The Company's other operations include processing supplemental fuels and
the management and marketing of coal combustion by-products and other
cementitious materials. Systech Environmental Corporation, a wholly-owned
subsidiary of the Company, processes fuel-quality waste and alternative raw
materials for use in cement kilns. The Systech facilities and the Company's
cement plants that utilize hazardous waste derived fuel are highly regulated by
federal, state and local environmental statutes and regulations.
The Company's wholly owned subsidiary, Mineral Solutions Inc., is engaged
in the management and marketing of coal combustion by-products which are the
residues produced by coal burning, electricity generating plants and industrial
boilers. Fly ash is the predominant product and is used as an enhancement in
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ready-mixed concrete (replacing a portion of the portland cement) and also in
engineered fills, flowable fill, soil/sludge drying and stabilization.
ENVIRONMENTAL MATTERS
As more fully discussed in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997, the Company's operations, like those of other
companies engaged in similar businesses, involve the use, release, discharge,
disposal, and cleanup of substances regulated under increasingly stringent
federal, state, provincial, and/or local environmental protection laws. The
Company has been and is presently involved in certain environmental enforcement
matters in both the U.S. and Canada. Because of differences between requirements
in the U.S. and Canada and the complexity and uncertainty of existing and future
environmental requirements, permit conditions, costs of new and existing
technology, potential remedial costs and insurance coverages, and/or
enforcement-related activities and costs, it is difficult for management to
estimate the ultimate level of Company expenditures related to environmental
matters. While amounts accrued and paid in the past have not been material, the
Company's capital expenditures and operational expenses for environmental
matters have increased and are likely to increase in the future. The Company
cannot determine at this time whether capital expenditures and other remedial
action that the Company may be required to undertake to comply with the changing
environmental protection laws will materially affect its capital expenditures or
earnings. However, with respect to known environmental contingencies, the
Company has recorded provisions for estimated probable liabilities and does not
believe that the ultimate resolution of such matters will have a material
adverse effect on the Consolidated Financial Statements.
LEGAL MATTERS
The Company is involved in certain actions and claims, including but not
limited to those items described in the Company's Annual Report on Form 10-K for
the year ended December 31, 1997. In the opinion of management, such litigation
and claims should be resolved without a material adverse effect on the Company's
financial position.
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DESCRIPTION OF NOTES
The Notes are to be issued under an indenture dated as of October 1, 1989
between the Company and Citibank, N.A., as Trustee (the "Trustee"), and a
supplemental indenture thereto dated as of , 1998 (collectively, the
"Indenture"), copies of which are filed as exhibits to the Registration
Statement of which this Prospectus is a part. The Notes will be limited to
$650,000,000 aggregate principal amount and mature on , 20 .
The following summaries of certain provisions of the Indenture do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indenture. Copies of the Indenture
are available for inspection during normal business hours at the principal
office of the Company and at the office of the Trustee in the City of New York.
The holders of the Notes are entitled to the benefits of, are bound by, and are
deemed to have notice of, all the provisions of the Indenture. Wherever
particular sections or defined terms of the Indenture are referred to, such
sections or defined terms are incorporated herein by reference. Certain
capitalized terms used herein are defined in the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of debt
Securities which may be issued thereunder and provides that debt Securities may
be issued thereunder in one or more series up to the aggregate principal amount
which may be authorized from time to time by the Company. All debt Securities,
including the Notes, which may from time to time be issued and outstanding under
the Indenture are herein sometimes referred to as the "Debt Securities". The
Company may, from time to time, without the consent of the Holders of the Notes,
provide for the issuance of Debt Securities under the Indenture in addition to
the $650,000,000 principal amount of Debt Securities authorized, issued and
outstanding as of the date of this Prospectus. As used herein, "Holder" includes
the Depositary (as defined below) with respect to the Notes issued in book-entry
form.
The Notes will be issued in fully registered book-entry form in
denominations of $1,000 and any integral multiple thereof and will be issued as
a Book-Entry Note (as defined below). Principal is to be payable, and the Notes
will be transferable and exchangeable, at the office or agency of the Security
Registrar, initially the Trustee, provided that the Book-Entry Notes will be
exchangeable only in the manner and to the extent set forth under "--Book-Entry
Notes."
The Notes will bear interest at the rate per annum shown on the cover page
of this Prospectus from the date of issuance or from the most recent interest
payment date to which interest has been paid or duly provided for. Interest on
the Notes will be payable semi-annually on June 15 and December 15 of each year
(each, an "Interest Payment Date"), and at maturity or upon redemption,
commencing on December 15, 1998, to the person in whose name a Note is
registered at the close of business on the preceding June 1 or December 1 (each
a "Record Date"), as the case may be. Interest on the Notes will be computed on
the basis of a 360-day year of twelve 30-day months. If the original issue date
of a Note is between a Record Date and an Interest Payment Date, the initial
interest payment will be made on the Interest Payment Date following the next
succeeding Record Date to the registered Holder on such next succeeding Record
Date. Holders must surrender the Notes to the paying agent for the Notes to
collect principal payments. Except as described in "-- Book-Entry Notes," the
Company will pay principal and interest at the office or agency of the Company
maintained for that purpose in New York, New York.
All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be unsecured and will rank pari passu with all other unsecured
and unsubordinated indebtedness of the Company from time to time outstanding.
The Company conducts a substantial part of its operations through its
subsidiaries. The Notes will effectively rank junior to any secured indebtedness
of the Company to the extent of the assets securing such indebtedness and to any
indebtedness of the Company's subsidiaries to the extent of the assets of such
subsidiaries. At March 31, 1998, the Company and its subsidiaries had aggregate
debt obligations in the amount of approximately $193.0 million, including
approximately $38.8 million of secured indebtedness, and the Company's
subsidiaries had aggregate indebtedness of approximately $12.9 million
outstanding to third parties, including approximately $7.7 million of secured
indebtedness. At the same date, the Company
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had outstanding $154.2 million of indebtedness which will rank pari passu with
the Notes, including $300,000 of guarantees with respect to indebtedness of its
subsidiaries. The Indenture contains no restrictions on the amount of additional
indebtedness which may be incurred by the Company or its subsidiaries; however,
as set forth under "-- Certain Covenants of the Company -- Restrictions on
Liens" below, the Indenture contains certain restrictions on the ability of the
Company and its subsidiaries to incur secured indebtedness. The ability of the
Company to pay principal and interest on the Notes is dependent in part upon the
payment to it of distributions, dividends, interest or other amounts by its
subsidiaries. The Company's principal subsidiaries, Lafarge Canada and Redland,
Inc., are currently not a party to any agreements that contain material
restrictions on their ability to pay dividends to the Company. At December 31,
1997, Lafarge Canada had $796.8 million of cumulative undistributed earnings
which the Company considers to be permanently invested in Canada. While there
are currently no material contractual restrictions on Lafarge Canada's ability
to pay dividends to the Company, the Company's practice has been to retain
earnings at Lafarge Canada.
REDEMPTION PROVISIONS
The Notes will be redeemable, in whole or in part, at the option of the
Company, on any date (a "Redemption Date") at a redemption price equal to the
greater of (a) 100% of the principal amount of the Notes to be redeemed and (b)
the sum of the present values of the remaining scheduled payments of principal
and interest thereon (exclusive of interest accrued to such Redemption Date)
discounted to such Redemption Date on a semiannual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Treasury Rate plus basis
points, plus accrued and unpaid interest on the principal amount being redeemed
to such Redemption Date; provided, however, that installments of interest on
Notes that are due and payable on an Interest Payment Date falling on or prior
to the relevant Redemption Date shall be payable to the holders of such Notes,
registered as such at the close of business on the relevant Record Date
according to their terms and provisions of the Indenture.
"Treasury Rate" means, with respect to any Redemption Date for the Notes,
(a) the yield, under the heading that represents the average for the immediately
preceding week, appearing in the most recently published statistical release
designated "H.15(519)" or any successor publication that is published weekly by
the Board of Governors of the Federal Reserve System and that establishes yields
on actively traded United States Treasury securities adjusted to constant
maturity under the caption "Treasury Constant Maturities" for the maturity
corresponding to the Comparable Treasury Issue (if no maturity is within three
months before or after the Maturity Date, yields for the two published
maturities most closely corresponding to the Comparable Treasury Issue shall be
determined and the Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding to the nearest month) or (b) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity of the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes.
"Independent Investment Banker" means Donaldson, Lufkin & Jenrette
Securities Corporation, Warburg Dillon Read LLC or Citicorp Securities, Inc. and
their respective successors or, if such firms are unwilling or unable to select
the Comparable Treasury Issue, an independent investment banking institution of
national standing appointed by the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date, (a)
the average of four Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest such Reference Treasury Dealer
Quotations, or (b) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations.
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"Reference Treasury Dealer" means each of Donaldson, Lufkin & Jenrette
Securities Corporation, Warburg Dillon Read LLC and Citicorp Securities, Inc.
and their respective successors; provided however, that if any of the foregoing
shall cease to be a primary U.S. Government securities dealer in New York City
(a "Primary Treasury Dealer"), the Company will substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to the Reference
Treasury Dealer and any Redemption Date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.
Notice of any redemption by the Company will be mailed at least 30 days but
not more than 60 days before any Redemption Date to each holder of Notes to be
redeemed. If less than all the Notes are to be redeemed at the option of the
Company, the Trustee shall select, in such manner as it shall deem fair and
appropriate, the Notes to be redeemed in whole or in part.
Unless the Company defaults in payment of the redemption price, on and
after any Redemption Date interest will cease to accrue on the Notes or portions
thereof redeemed.
BOOK-ENTRY NOTES
The Notes will be issued in whole or in part in the form of one or more
fully registered Notes (each, a "Book-Entry Note") which will be deposited with,
or on behalf of, The Depository Trust Company in the City of New York (the
"Depositary") and registered in the name of the Depositary or the Depositary's
nominee. Except as set forth below, a Book-Entry Note may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any nominee to a successor of the Depositary or a
nominee of such successor.
The Depositary has advised the Company as follows: the Depositary is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. The Depositary
was created to hold securities for its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
such securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. The Depositary's participants include securities brokers and
dealers (including the Underwriters), banks, trust companies, clearing
corporations and certain other organizations, some of which (and/or their
representatives) own the Depositary (the "Participants"). Access to the
Depositary'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. Persons who are
not Participants may beneficially own securities held by the Depositary only
through Participants.
The Notes will be represented by a Book-Entry Note registered in the name
of the Depositary or its nominee. Upon the issuance of a Book-Entry Note in
registered form, the Depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of the Notes represented by
such Book-Entry Note to the accounts of Participants. The accounts to be
credited shall be designated by the Underwriters.
Ownership of beneficial interests in a Book-Entry Note will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests by Participants in the Book-Entry Note will be shown on,
and the transfer of that ownership interest will be affected only through,
records maintained by the Depositary or its nominee. Ownership of beneficial
interests in the Book-Entry Note by persons that hold through Participants will
be shown on, and the transfer of that ownership interest within such Participant
will be effected only through, records maintained by such Participant. Owners of
beneficial interests in the Book-Entry Note will not receive written
confirmation from the Depositary of their purchases, but they are
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expected to receive written confirmation providing details of the transactions,
as well as periodic statements of their holdings, from the Participants through
which they purchased beneficial interests in the Book-Entry Note. The laws of
some jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in the Book-Entry Note.
So long as the Depositary, or its nominee, is the registered owner of the
Book-Entry Note, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the Notes represented by the Book-Entry
Note for all purposes under the Indenture. Except as set forth below, owners of
beneficial interests in the Book-Entry Note will not be entitled to have Notes
registered in their names, will not receive or be entitled to receive physical
delivery of the Notes in definitive form and will not be considered the owner or
holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on the Notes
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Book-Entry Note representing the Notes.
None of the Company, the Trustee, any paying agent or the registrar for the
Notes 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
Book-Entry Note or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company has been advised by the Depositary that, upon receipt of any
payment of principal, premium or interest in respect of the Book-Entry Note, the
Depositary will credit immediately Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the Book-Entry Note as shown on the records of the Depositary. The
Company also expects that payments by Participants to owners of beneficial
interests in the Book-Entry Note held through such Participants will be governed
by standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participants.
The Book-Entry Note may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor of the Depositary or a nominee of such successor. If
the Depositary is at any time unwilling or unable to continue as Depositary and
a successor Depositary is not appointed by the Company within 90 days, the
Company will execute and the Trustee will authenticate and deliver Notes in
definitive registered form in exchange for each Book-Entry Note representing the
Notes. In addition, the Company may at any time and in its sole discretion
determine not to have any Notes in registered form represented by one or more
Book-Entry Notes and, in such event, will issue certificated notes in definitive
form in exchange for the Book-Entry Note representing the Notes. In any such
instance, an owner of a beneficial interest in the Book-Entry Note will be
entitled to physical delivery in definitive form of certificated Notes
represented by the Company equal in principal amount to such beneficial interest
and to have such certificated notes registered in its name.
CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE
Nothing contained in the Indenture prevents the Company from consolidating
with or merging into another corporation or conveying, transferring or leasing
its properties and assets substantially as an entirety to any Person, provided
that (a) the corporation formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an entirety is
a corporation (as defined in the Indenture); the corporation assumes, by an
indenture supplemental thereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
(and premium, if any) and interest, if any, on all the Debt Securities and the
performance of every covenant of the Indenture on the part of the Company to be
performed or observed and (b) immediately after giving effect to such
transaction no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened and be
continuing.
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CERTAIN COVENANTS OF THE COMPANY
Restrictions on Liens. (a) The Indenture provides that the Company will
not, and will not permit any Principal Subsidiary (as defined below) to, issue,
assume or guarantee any debt for money borrowed (herein referred to as "Debt")
if such Debt is secured by any mortgage, security interest, pledge, lien or
other encumbrance (herein referred to as a "mortgage") upon any Principal
Property (as defined below) of the Company or any Principal Subsidiary or any
shares of stock or indebtedness of any Principal Subsidiary, whether owned at
the date of the Indenture or thereafter acquired, without in any such case
effectively securing concurrently with the issuance, assumption or guaranty of
any such Debt, the Debt Securities (together with, if the Company shall so
determine, any other indebtedness of or guaranteed by the Company or such
Principal Subsidiary ranking equally with the Debt Securities and then existing
or thereafter created) equally and ratably with such Debt. The foregoing
restrictions do not apply to (i) mortgages on any property acquired, constructed
or improved after October 1, 1989, which are created or assumed
contemporaneously with, or within 180 days after such acquisition, or completion
of such construction or improvement (or within six months thereafter pursuant to
a firm commitment for financing arrangements entered into within such 180-day
period) to secure or provide for the payment of all or a portion of the purchase
price or cost thereof incurred after October 1, 1989 (or prior to October 1,
1989 in the case of any construction or improvement which is at least 40%
completed at the date of the Indenture), or, in addition to mortgages
contemplated by clauses (ii) and (iii) below, mortgages existing on property at
the time of its acquisition (including acquisition through merger or
consolidation), provided that such mortgage does not apply to any property
theretofore owned by the Company or a Principal Subsidiary other than, in the
case of any such construction or improvement, any theretofore unimproved real
property on which the property so constructed, or the improvement, is located;
(ii) mortgages on any property, shares of stock or indebtedness at the time of
acquisition thereof from a corporation which is merged with or into the Company
or a Principal Subsidiary; (iii) mortgages on any property, share of stock or
indebtedness of any corporation existing at the time such corporation becomes a
Principal Subsidiary; (iv) mortgages to secure Debt of a Principal Subsidiary to
the Company or to another Principal Subsidiary; (v) mortgages in favor of
governmental bodies to secure partial progress, advance or other payments
pursuant to any contract or statute or to secure any indebtedness incurred for
the purpose of financing all or any part of the purchase price or cost of
constructing or improving the property subject to such mortgages; (vi) mortgages
to secure tax-exempt private activity bonds under the Internal Revenue Code of
1986, as amended; or (vii) mortgages for the sole purpose of extending, renewing
or replacing, in whole or in part, Debt secured by any mortgage referred to in
the foregoing clauses (i) to (vi), inclusive, or in this clause (vii), or any
mortgage existing on the date of the Indenture, provided, however, that the
principal amount of Debt secured thereby does not exceed the principal amount of
Debt so secured at the time of such extension, renewal or replacement, and that
such extension, renewal or replacement is limited to all or a part of the
property which secured the mortgage so extended, renewed or replaced (plus
improvements on such property).
(b) The foregoing restriction does not apply to the issuance, assumption or
guarantee by the Company or any Principal Subsidiary of Debt secured by a
mortgage which would otherwise be subject to the foregoing restrictions up to an
aggregate amount which, together with all other Debt of the Company and its
Principal Subsidiaries secured by mortgages which would otherwise be subject to
the foregoing restrictions (other than mortgages permitted under the foregoing
exceptions) and the Value (as defined below) of all Sale and Lease-back
Transactions existing at such time (other than any Sale and Lease-back
Transaction the proceeds of which have been applied to the retirement of the
Debt Securities or of certain long-term indebtedness or to the purchase of other
Principal Property, and other than Sale and Lease-back Transactions in which the
property involved would have been permitted to be mortgaged under clause (i)
above), does not exceed 10% of Consolidated Net Tangible Assets (as defined
below).
Restrictions on Sale and Lease-back Transactions. Sale and Lease-back
Transactions by the Company or any Principal Subsidiary of any Principal
Property are prohibited (except for temporary leases for a term, including
renewals, of not more than three years and except for leases between the Company
and a Principal Subsidiary or between Principal Subsidiaries) unless the net
proceeds of such Sale and Lease-back Transactions are at least equal to the fair
value (as determined by the Board of Directors, the Chairman of the
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Board, the President or the principal financial officer of the Company) of the
Principal Property to be leased and either (a) the Company or such Principal
Subsidiary would be entitled pursuant to the provisions of (i) of paragraph (a)
of "-- Restrictions on Liens" or paragraph (b) of "-- Restrictions on Liens," to
incur Debt secured by a mortgage on the Principal Property to be leased without
equally and ratably securing any Debt Security or (b) the Value thereof would be
an amount permitted under paragraph (b) under "Restrictions on Liens" or (c) the
Company shall, and in any case the Company covenants that it will, within 180
days of the effective date of any such arrangement (or in the case of (iii) of
this paragraph, within six months thereafter pursuant to a firm purchase
commitment entered into within such 180-day period) apply an amount equal to the
fair market value (as so determined) of such Principal Property (i) to the
redemption, if applicable, or repurchase, if permitted, of the Debt Securities,
(ii) to the payment or other retirement of Funded Debt (as defined) incurred or
assumed by the Company which ranks senior to or pari passu with the Debt
Securities or of Funded Debt incurred or assumed by any Principal Subsidiary
(other than, in either case, Funded Debt owned by the Company or any Principal
Subsidiary) or (iii) to the purchase of Principal Property (other than the
Principal Property involved in such sale). The restrictions on Sale and
Lease-back Transactions shall not apply to sale and lease-back arrangements
existing on the date of the Indenture.
Definitions. The term "Consolidated Net Tangible Assets" is defined to mean
the total of all the assets appearing on the consolidated balance sheet of the
Company and its Subsidiaries less the following: (1) current liabilities; (2)
reserves for depreciation and other asset valuation reserves; (3) intangible
assets including, without limitation, items such as goodwill, trademarks, trade
names, patents, and unamortized debt discount and expense; and (4) appropriate
adjustments on account of minority interests of other persons holding stock in
any Subsidiary of the Company. The Indenture provides that Consolidated Net
Tangible Assets must be determined as of a date not more than 60 days prior to
the happening of the event for which such determination is being made.
The term "Funded Debt" means any Debt which by its terms matures at or is
extendable or renewable at the sole option of the obligor without requiring the
consent of the obligee to a date more than twelve months after the date of the
creation of such Debt.
The term "Principal Property" is defined to mean any manufacturing or
processing plant, office facility, distribution facility or sand and gravel or
quarry site, including, in each case, the fixtures appurtenant thereto, located
within the continental United States of America or Canada and owned and operated
now or hereafter by the Company or any Subsidiary and having a book value on the
date as of which the determination is being made of more than 2% of Consolidated
Net Tangible Assets.
The term "Principal Subsidiary" is defined to mean any Subsidiary which
owns a Principal Property.
The term "Value" is defined to mean, with respect to a Sale and Lease-back
Transaction, as of any particular time, the amount equal to the greater of (1)
the net proceeds from the sale or transfer of the property leased pursuant to
such Sale and Lease-back Transaction or (2) the fair value in the opinion of the
Board of Directors, the Chairman of the Board, the President or the principal
financial officer of the Company of such property at the time of entering into
such Sale and Lease-back Transaction, in either case multiplied by a fraction,
the numerator of which is equal to the number of full years of the term of the
lease remaining at the time of determination and the denominator of which is
equal to the number of full years of such term, without regard to any renewal or
extension options contained in the lease.
EVENTS OF DEFAULT
If an Event of Default with respect to any Debt Securities of any series
shall occur and be continuing, the Trustee or the Holders of at least 25% in
principal amount of the Debt Securities of that series outstanding may declare
the principal of all the Debt Securities of that series outstanding (or such
lesser amount as may be provided for in the Debt Securities of that series) and
the interest accrued thereon and Additional Amounts payable in respect thereof,
if any, to be due and payable immediately and upon any such declaration such
principal or such lesser amount shall become immediately due and payable;
provided, that if all such Events of Default with respect to Debt Securities of
that series shall have been cured, or waived as described under the heading
"Modification and Waiver" below, and all amounts due otherwise than on account
of such declaration
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shall have been paid or deposited with the Trustee, the Holders of a majority in
aggregate principal amount of the Debt Securities of that series then
outstanding may rescind and annul such declaration and its consequences.
An Event of Default with respect to any series of Debt Securities is
defined in the Indenture as being: (a) default in the payment of any interest
upon or any Additional Amounts in respect of any Debt Security of such series or
any coupon appertaining thereto when such interest or Additional Amounts become
due and payable, and continuance of such default for a period of 30 days; (b)
default in the payment of the principal of and any premium on any Debt Security
of such series when it becomes due and payable either at maturity, by
declaration of acceleration, upon redemption, by request for repayment or
otherwise; (c) default in the making of any sinking fund payment on any Debt
Security of such series; (d) default in the performance or breach of any
covenant or warranty of the Company contained in the Indenture for the benefit
of such series or in the Debt Securities of such series, continued for 60 days
after written notice as provided in the Indenture; (e) acceleration of the
maturity of any indebtedness for money borrowed in excess of $5,000,000 of the
Company or any of its Principal Subsidiaries if such acceleration is not
rescinded or annulled, or such indebtedness is not discharged, within 10 days
after written notice as provided in the Indenture; (f) certain events of
bankruptcy, insolvency or reorganization; and (g) any other Event of Default
provided with respect to Debt Securities of such series.
The Trustee is required, within 90 days after the occurrence of a default
with respect to the Debt Securities of any series that is continuing, to give to
all Holders of the Debt Securities of such series notice of such default by
mail; provided that, except in the case of default in the payment of the
principal of or any premium or interest on or any Additional Amounts with
respect to any Debt Securities of such series or in the payment of any sinking
fund installment with respect to Debt Securities of such series, the Trustee
shall be protected in withholding such notice if it in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Debt Securities of such series.
The Trustee, subject to its duties during default to act with the required
standard of care, may require indemnification by the Holders of Debt Securities
of any series with respect to which a default has occurred before proceeding to
exercise any right or power under the Indenture at the request of the Holders of
Debt Securities of such series. Subject to such right of indemnification, the
Holders of a majority in principal amount of the outstanding Debt Securities of
any series may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee with respect to the Debt Securities of such series.
The Company is required to furnish to the Trustee annually statements as to
the fulfillment by the Company of all of its obligations and as to the absence
of any defaults under the Indenture.
MODIFICATION AND WAIVER
The Company may amend the indenture with the written consent of the Holders
of a majority in principal amount of each series of Debt Securities affected by
the proposed amendment. However, without the consent of each Holder of Debt
Securities of any such series, an amendment may not: (i) change the maturity
date of the principal of, or any installment of principal of or interest on, the
affected Debt Securities, (ii) reduce the principal amount of, or any premium or
the rate of interest on, or any Additional Amounts payable in respect of the
affected Debt Securities, (iii) change any obligation of the Company to pay any
Additional Amounts in respect of the affected Debt Securities, (iv) reduce the
amount of the principal of any Original Issue Discount Securities that would be
due and payable upon acceleration thereof, (v) adversely affect any right of
repayment at the option of Holders of the affected Debt Securities, (vi) change
the place or currency of payment of principal of, or any premium or interest on,
the affected Debt Securities, (vii) impair the right to institute suit for the
enforcement of any payment on or with respect to the affected Debt Securities,
or (viii) reduce the percentage in principal amount of affected Debt Securities,
the consent of whose Holders is required for modification or amendment of the
Indenture or for waiver of compliance with certain provisions of the Indenture
or for waiver of certain defaults or (ix) to modify any of the provisions of
this paragraph, the provisions relating to the waiver of past defaults under the
Indenture and the provisions relating to the waiver
26
<PAGE> 28
of certain covenants under the Indenture, except to increase any such percentage
or to provide that certain other provisions of the Indenture cannot be modified
or waived without the consent of the Holders of the affected Debt Securities.
The Holders of not less than a majority in principal amount of the Debt
Securities of any series may on behalf of all Holders of such series waive
compliance by the Company with certain restrictive provisions of the Indenture.
The Holders of a majority in principal amount of the Debt Securities of any
series may on behalf of all Holders of Debt Securities of such series waive any
past default under the Indenture with respect to the Debt Securities of such
series and any Event of Default arising therefrom, except a default in the
payment of the principal of, or any premium or interest on, or any Additional
Amounts payable in respect of the affected Debt Securities or in respect of any
covenant or provision which under the Indenture cannot be modified or amended
without the consent of the Holder of each outstanding Debt Security of such
series.
DEFEASANCE PROVISIONS
The Indenture provides that the Company will be discharged from any and all
obligations in respect of the Debt Securities of a series (except for certain
obligations to register the transfer or exchange of Debt Securities, to replace
stolen, lost or mutilated Debt Securities, to maintain paying agencies and to
hold moneys for payment in trust) upon the deposit with the Trustee, in trust,
of money and/or U.S. Government Obligations, which through the payment of
interest and principal thereof in accordance with their terms will provide money
in an amount sufficient to pay any installment of principal of (and premium, if
any) and interest on and any mandatory sinking fund payments in respect of any
of the Debt Securities of such series on the stated maturity of such payments,
or on any redemption date established for such Debt Securities, in accordance
with the terms of the Indenture and such Debt Securities. Such discharge may
only occur if (i) no Event of Default has occurred and is continuing, or will
occur upon the giving of notice or the lapse of time during the period such
defeasance and discharge is being effected, (ii) the Company has delivered to
the Trustee an opinion of counsel based on a change in law occurring after the
issue dates of the Notes or a United States Internal Revenue Service ruling to
the effect that such a discharge will not cause the Holders of such Debt
Securities to recognize income, gain or loss for Federal income tax purposes and
will be subject to Federal income tax in the same amount and in the same manner
and at the same times, as would have been the case if such discharge had not
occurred, and (iii) in the event that the Debt Securities of such series are
then listed on the New York Stock Exchange, the Company has delivered to the
Trustee an opinion of counsel satisfactory to the Trustee to the effect that the
discharge would not cause such Debt Securities to be de-listed as a result
thereof. No defeasance and discharge may be effected with respect to any series
of Debt Securities the terms of which provide for the payment of any Additional
Amounts.
The Company may omit to comply with the covenants described under the
heading "Certain Covenants of the Company" above under the circumstances
described herein with respect to the Debt Securities of each series. The
Company, in order to exercise such option, will be required to deposit with the
Trustee, in trust, money and/or U.S. Government Obligations which through the
payment of interest and principal thereof in accordance with their terms will
provide money in an amount sufficient to pay any installment of principal of
(and premium, if any) and interest on and any mandatory sinking fund payments
and any Additional Amounts in respect of any of the Debt Securities of such
series on the stated maturity of such payments in accordance with the terms of
the Indenture and such Debt Securities. Such covenant defeasance may only occur
if (i) such deposit does not cause the Trustee with respect to such series of
Debt Securities to have any conflicting interest, as defined in the Indenture,
with respect to Debt Securities of any series, (ii) such deposit will not result
in a breach or a violation of, or default under, the Indenture or any other
agreement or instrument to which the Company is a party or by which it is bound,
(iii) no Event of Default or event which with notice or lapse of time or both
would become an Event of Default with respect to Debt Securities of such series
has occurred and is continuing on the date of such deposit, (iv) the Company has
delivered to the Trustee an opinion of counsel satisfactory to the Trustee to
the effect that the covenant defeasance and related deposit will not cause the
Holders of such series to recognize income, gain or loss for Federal income tax
purposes and that the Holders will be subject to Federal income tax in the same
amount and in the same manner and at the same times, as would have been the case
if such covenant defeasance and related deposit
27
<PAGE> 29
had not occurred, and (v) the Company has delivered to the Trustee an Officers'
Certificate and an opinion of counsel, each stating that all conditions
precedent to such covenant defeasance have been complied with. If any Additional
Amounts should become payable with respect to a series of Debt Securities after
any such deposit and related covenant defeasance with respect to such series of
Debt Securities shall have occurred, the Company will be required to make
additional deposits with the Trustee with respect thereto or such covenant
defeasance will terminate.
CONCERNING THE TRUSTEE
Citibank, N.A. will serve as the Trustee under the Indenture. The Trustee
and its affiliates may perform banking services for, or transact other banking
business with, the Company in the ordinary course of business. Citicorp
Securities, Inc., an affiliate of the Trustee, will act as an Underwriter with
respect to the Notes.
28
<PAGE> 30
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement, dated
, 1998 (the "Underwriting Agreement"), the underwriters named below
(the "Underwriters") have severally, and not jointly, agreed to purchase from
the Company the respective principal amount of Notes set forth opposite their
names below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
NOTES
UNDERWRITERS ------------
<S> <C>
Donaldson Lufkin & Jenrette Securities Corporation..........
Warburg Dillon Read LLC.....................................
Citicorp Securities, Inc....................................
------------
Total............................................. $650,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the Notes offered hereby are
subject to approval by their counsel of certain legal matters and to certain
other conditions. The Underwriters are obligated to purchase and accept delivery
of all the Notes offered hereby if any are purchased.
The Underwriters initially propose to offer the Notes in part directly to
the public at the initial public offering price set forth on the cover page of
this Prospectus and in part to certain dealers at such price less a concession
not in excess of % of the principal amount of the Notes. The Underwriters
may allow, and such dealers may re-allow, to certain other dealers a concession
not in excess of % of the principal amount of the Notes. After the initial
offering of the Notes, the public offering price and other selling terms of the
Notes may be changed by the Underwriters at any time without notice.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments that the Underwriters may be required to make in respect thereof.
The Notes are a new issue of securities with no established trading market.
The Company does not intend to apply for listing of the Notes on any securities
exchange and there can be no assurance that there will be a secondary market for
the Notes. The Company has been advised by the Underwriters that one or more of
the Underwriters may make a market in the Notes; however, they are not obligated
to do so, and they may discontinue any such market making at any time without
notice. Therefore, no assurance can be given as to the liquidity of the trading
market for the Notes.
Other than in the United States, no action has been taken by the Company or
the Underwriters that would permit a public offering of the Notes in any
jurisdiction where action for that purpose is required. The Notes offered hereby
may not be offered or sold, directly or indirectly, nor may this Prospectus or
any other offering material or advertisements in connection with the offer and
sale of the Notes be distributed or published in any jurisdiction, except under
circumstances that will result in compliance with the applicable rules and
regulations of such jurisdiction. Persons into whose possession this Prospectus
comes are advised to inform themselves about and to observe any restrictions
relating to the Offering of the Notes and the distribution of this Prospectus.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the Notes offered hereby in any jurisdiction in which such
an offer or a solicitation is unlawful.
In connection with the Offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriters may overallot the Offering, creating a
syndicate short position. The Underwriters may bid for and purchase Notes in the
open market to cover such syndicate short position or to stabilize the price of
the Notes. These activities may stabilize or maintain the market price of the
Notes above independent market levels. The Underwriters are not required to
engage in these activities, and may end either of these activities at any time.
Certain of the Underwriters and their respective affiliates have, from time
to time, performed and may in the future perform various investment banking and
commercial banking services for the Company, for which
29
<PAGE> 31
they have received or will receive usual and customary fees. In connection with
the acquisition of the Redland Operations from Lafarge S.A., Warburg Dillon Read
LLC provided financial advisory services and delivered an opinion to the
Company's Board of Directors with respect to certain matters relating to the
acquisition for which it has received customary fees and expenses from the
Company. In addition to services in connection with the acquisition of the
Redland Operations, certain of the Underwriters have provided from time to time,
and expect to provide in the future, financial advisory and investment banking
services to the Company and its affiliates, for which such Underwriters have
received and will receive customary fees and expenses.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the
Company by Thompson & Knight, P.C., Dallas, Texas. Milbank, Tweed, Hadley &
McCloy, New York, New York, will pass upon certain legal matters for the
Underwriters. In rendering their opinions, Thompson & Knight, P.C. and Milbank,
Tweed, Hadley & McCloy will rely as to matters of Maryland law upon the opinion
of Piper & Marbury, Baltimore, Maryland.
EXPERTS
The financial statements incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, to the extent and for the periods
indicated in their reports, have been audited by Arthur Andersen LLP,
independent public accountants, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
30
<PAGE> 32
======================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE SECURITIES OFFERED
HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 3
Incorporation of Certain Documents by
Reference........................... 3
The Company........................... 4
Recent Developments................... 5
Use of Proceeds....................... 5
Ratio of Earnings to Fixed Charges.... 5
Accounting Effects of the
Acquisition......................... 6
Cautionary Statement for Purposes
of the Safe Harbor Provisions of
the Private Securities Litigation
Reform Act of 1995.................. 6
Capitalization........................ 7
Selected Consolidated Financial
Data................................ 8
Unaudited Pro Forma Condensed
Consolidated Financial Data......... 9
Business.............................. 15
Description of Notes.................. 20
Underwriting.......................... 29
Legal Matters......................... 30
Experts............................... 30
</TABLE>
======================================================
======================================================
$650,000,000
[LAFARGE LOGO]
% SENIOR NOTES DUE
-------------------------
PROSPECTUS
-------------------------
Joint Lead Managers
DONALDSON, LUFKIN & JENRETTE
WARBURG DILLON READ LLC
--------------------------------------
CITICORP SECURITIES, INC.
, 1998
======================================================
<PAGE> 33
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Company will pay all expenses incident to the offering and sale to the
public of the Notes being registered other than any commissions and discounts of
underwriters, dealers or agents and any transfer taxes. Such expenses are set
forth in the following table. All of the amounts shown are estimates except the
Securities and Exchange Commission ("SEC") registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $191,750
Legal fees and expenses..................................... 100,000
Rating Agencies' fees....................................... 235,000
Accounting fees and expenses................................ 200,000
Printing fees and expenses.................................. 75,000
--------
Total............................................. $801,750
========
</TABLE>
- ---------------
* To be provided by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 2-418 of the Maryland General Corporation Law ("MGCL") provides for
the indemnification of directors and officers of a corporation incorporated
under Maryland law under certain circumstances. A person who was or is a
director or officer of the corporation may be indemnified by the corporation for
judgments, penalties, fines, settlements and reasonable expenses (including
attorneys' fees) actually incurred by the director or officer in connection with
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, to which such director or officer was
or is made a party by reason of service in that capacity unless it is
established that (1) the act or omission of the director or officer was material
to the matter giving rise to the proceeding and (i) was committed in bad faith
or (ii) was the result of active and deliberate dishonesty; (2) the director
actually received an improper personal benefit in money, property or services;
or (3) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. If a
proceeding is brought by or on behalf of the corporation, no indemnification
will be made in connection with such proceeding if the director or officer was
adjudged to be liable to the corporation. In addition, the MGCL permits a
corporation to advance reasonable expenses to a director or officer upon the
corporation's receipt of (a) a written affirmation by the director or officer of
his good faith belief that he has met the standard of conduct necessary for
indemnification by the corporation and (b) a written undertaking by or on his
behalf to repay the amount paid or reimbursed by the corporation if it shall
ultimately be determined that the standard of conduct was not met. The
termination of any proceeding by conviction, or upon a plea of nolo contendere
or its equivalent, or an entry of any order of probation prior to the judgment,
creates a rebuttable presumption that the director or officer did not meet the
requisite standard of conduct required for indemnification to be permitted. It
is the position of the Commission that indemnification of directors and officers
for liabilities arising under the Securities Act is against public policy and is
unenforceable pursuant to Section 14 of the Securities Act.
Article Ninth of the Articles of Incorporation of the Registrant provides
that the Registrant shall indemnify its directors and officers to the full
extent permitted by Maryland law now or hereafter in force, including the
advance of related expenses, upon a determination by the Board of Directors or
independent legal counsel made in accordance with applicable statutory
standards, and that the Registrant, upon authorization by the Board of
Directors, may indemnify other employees or agents to the same extent. Article
Ninth also contains a provision that eliminates the liability of officers and
directors of the Registrant for money damages to the Registrant or its
stockholders for any act or omission, including conduct of such officers and
directors on behalf of the Registrant constituting gross negligence, unless (1)
the director or officer received
II-1
<PAGE> 34
an improper benefit in money, property or services or (2) the action, or failure
to act, by the director or officer was the result of active and deliberate
dishonesty which was material to a cause of action adjudicated in a proceeding
against such director or officer.
Article VIII of the By-Laws of the Registrant provides for the
indemnification of the Registrant's directors and officers to the extent
permitted under Section 2-418 of the MGCL. The Registrant has insurance policies
indemnifying its officers and directors against claims and liabilities (with
stated exceptions) to which they may become subject by reason of their positions
as directors and officers.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
----------- -------------------------
<C> <S>
1.1 -- Form of Underwriting Agreement with respect to the Notes.
3.1 -- Articles of Amendment and Restatement of the Company,
filed May 29, 1992 (incorporated by reference to Exhibit
3.1 to the Annual Report on Form 10-K filed by the
Company for the fiscal year ended December 31, 1992).
3.2 -- By-Laws of the Company, (as most recently amended on July
29, 1994) (incorporated by reference to Exhibit 3.2 to
the Annual Report on Form 10-K filed by the Company for
the fiscal year ended December 31, 1994).
4.1 -- Indenture between the Company and Citibank, N.A., as
Trustee, dated October 1, 1989, relating to senior debt
securities of the Company (incorporated by reference to
Exhibit 4.1 to the Registration Statement on Form S-3
(Registration No. 33-31333) of the Company, filed with
the Securities and Exchange Commission on October 3,
1989).
4.2 -- Form of Supplemental Indenture between the Company and
Citibank, N.A., as Trustee, relating to $650 million of
senior debt securities of the Company.
4.3 -- Form of Note (included in Exhibit 4.2).
5.1 -- Opinion of Thompson & Knight, P.C.
12 -- Statement of Computation of Ratios of Earnings to Fixed
Charges.
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants.
23.2 -- Consent of Thompson & Knight, P.C. (included in Exhibit
5.1).
24 -- Power of Attorney (included on the signature page of this
Registration Statement).
25 -- Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939 on Form T-1.
</TABLE>
ITEM 17. UNDERTAKINGS.
A. Undertaking Regarding Filings Incorporating Subsequent Exchange Act
Documents By Reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
B. Undertaking in Respect of Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
II-2
<PAGE> 35
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
C. Undertaking Pursuant to Rule 430A.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of the prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 36
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Reston, State of Virginia, on this 6th day of
July, 1998.
LAFARGE CORPORATION
By: /s/ LARRY J. WAISANEN
----------------------------------
Larry J. Waisanen
Executive Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1993, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JOHN M. PIECUCH* President, Chief Executive July 6, 1998
- ----------------------------------------------------- Officer and Director (Principal
John M. Piecuch Executive Officer)
/s/ LARRY J. WAISANEN Executive Vice President and July 6, 1998
- ----------------------------------------------------- Chief Financial Officer
Larry J. Waisanen (Principal Financial Officer)
/s/ JOHN C. PORTER* Vice President and Controller July 6, 1998
- ----------------------------------------------------- (Principal Accounting Officer)
John C. Porter
/s/ BERTRAND P. COLLOMB* Chairman of the Board July 6, 1998
- -----------------------------------------------------
Bertrand P. Collomb
Director
- -----------------------------------------------------
Thomas A. Buell
/s/ MARSHALL A. COHEN* Director July 6, 1998
- -----------------------------------------------------
Marshall A. Cohen
/s/ PHILIPPE P. DAUMAN* Director July 6, 1998
- -----------------------------------------------------
Philippe P. Dauman
/s/ BERNARD L. KASRIEL* Director July 6, 1998
- -----------------------------------------------------
Bernard L. Kasriel
/s/ JACQUES LEFEVRE* Director July 6, 1998
- -----------------------------------------------------
Jacques Lefevre
/s/ PAUL W. MACAVOY* Director July 6, 1998
- -----------------------------------------------------
Paul W. MacAvoy
/s/ CLAUDINE B. MALONE* Director July 6, 1998
- -----------------------------------------------------
Claudine B. Malone
/s/ ALONZO L. MCDONALD* Director July 6, 1998
- -----------------------------------------------------
Alonzo L. McDonald
/s/ ROBERT W. MURDOCH* Director July 6, 1998
- -----------------------------------------------------
Robert W. Murdoch
</TABLE>
II-4
<PAGE> 37
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ BERTIN F. NADEAU* Director July 6, 1998
- -----------------------------------------------------
Bertin F. Nadeau
/s/ JOHN D. REDFERN* Director July 6, 1998
- -----------------------------------------------------
John D. Redfern
/s/ JOE M. RODGERS* Director July 6, 1998
- -----------------------------------------------------
Joe M. Rodgers
</TABLE>
*By: /s/ LARRY J. WAISANEN
-------------------------------
Larry J. Waisanen
Attorney-in-fact
II-5
<PAGE> 38
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
1.1 -- Form of Underwriting Agreement with respect to the Notes.
3.1 -- Articles of Amendment and Restatement of the Company,
filed May 29, 1992 (incorporated by reference to Exhibit
3.1 to the Annual Report on Form 10-K filed by the
Company for the fiscal year ended December 31, 1992).
3.2 -- By-Laws of the Company, (as most recently amended on July
29, 1994) (incorporated by reference to Exhibit 3.2 to
the Annual Report on Form 10-K filed by the Company for
the fiscal year ended December 31, 1994).
4.1 -- Indenture between the Company and Citibank, N.A., as
Trustee, dated October 1, 1989, relating to senior debt
securities of the Company (incorporated by reference to
Exhibit 4.1 to the Registration Statement on Form S-3
(Registration No. 33-31333) of the Company, filed with
the Securities and Exchange Commission on October 3,
1989).
4.2 -- Form of Supplemental Indenture between the Company and
Citibank, N.A., as Trustee, relating to $650 million of
senior debt securities of the Company.
4.3 -- Form of Note (included in Exhibit 4.2).
5.1 -- Opinion of Thompson & Knight, P.C.
12 -- Statement of Computation of Ratios of Earnings to Fixed
Charges.
23.1 -- Consent of Arthur Andersen LLP, independent public
accountants.
23.2 -- Consent of Thompson & Knight, P.C. (included in Exhibit
5.1).
24 -- Power of Attorney (included on the signature page of this
Registration Statement).
25 -- Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939 on Form T-1.
</TABLE>
<PAGE> 1
EXHIBIT 1.1
$650,000,000
LAFARGE CORPORATION
___% Senior Notes due _______
UNDERWRITING AGREEMENT
July ___, 1998
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
WARBURG DILLON READ LLC
CITICORP SECURITIES, INC.
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Dear Sirs:
Lafarge Corporation, a Maryland corporation (the "Company"), proposes
to issue and sell $650,000,000 principal amount of its __% Senior Notes due ____
(the "Securities") to Donaldson, Lufkin & Jenrette Securities Corporation,
Warburg Dillon Read LLC and Citicorp Securities, Inc. (the "Underwriters") in
the amounts specified in Schedule I hereto. The Securities are to be issued
pursuant to the provisions of an Indenture dated as of October 1, 1989, as
supplemented by a Supplemental Indenture thereto, to be dated as of _____ ___,
1998 (collectively, the "Indenture") between the Company and Citibank, N.A., as
Trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Indenture.
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Act"), a registration statement on Form S-3 (No. 333-57333),
including a prospectus, relating to the Securities. The registration statement,
as amended at the time it became effective, including the information (if any)
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deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Act, is hereinafter referred to as the
"Registration Statement"; and the prospectus in the form first used to confirm
sales of Securities is hereinafter referred to as the "Prospectus". Reference
made herein to any preliminary prospectus or to the Prospectus shall include all
documents incorporated by reference therein as of the date of such preliminary
prospectus or Prospectus, as the case may be, and any reference to any amendment
or supplement to any preliminary prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and incorporated by
reference in such amendment or supplement. If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional Securities (a "Rule 462(b)
Registration Statement"), then, unless otherwise specified, any reference herein
to the term "Registration Statement" shall be deemed to include such Rule 462(b)
Registration Statement.
SECTION 2. Agreements to Sell and Purchase. On the basis of the
representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Company agrees to issue and sell, and each Underwriter
agrees, severally and not jointly, to purchase from the Company the principal
amount of the Securities set forth opposite the name of such Underwriter in
Schedule I hereto at ____% of the principal amount thereof (the "Purchase
Price").
SECTION 3. Terms of Public Offering. The Company is advised by you that
the Underwriters propose (i) to make a public offering of their respective
portions of the Securities as soon after the execution and delivery of this
Agreement as in your judgment is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. The Securities shall be represented by
definitive certificates and shall be issued in such authorized denominations and
registered in such names as Donaldson, Lufkin & Jenrette Securities Corporation
shall request no later than two business days prior to the Closing Date (as
defined below). The Company shall deliver the Securities, with any transfer
taxes thereon duly paid by the Company, to Donaldson, Lufkin & Jenrette
Securities Corporation through the facilities of The Depository Trust Company
("DTC"), for the respective accounts of the several Underwriters, against
payment to the Company of the Purchase Price therefore by wire transfer of
Federal or other funds immediately available in New York City. The certificates
representing the Securities shall be made available for inspection not later
than 9:30 A.M., New York City time, on the business day prior to the Closing
Date (as defined below), at the office of DTC or its designated custodian (the
"Designated Office"). The time and date of delivery and payment for the
Securities shall be 9:00 A.M., New York City time, on _____ ___, 1998 or such
other time on the same or such other date as Donaldson, Lufkin & Jenrette
Securities Corporation and the Company
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shall agree in writing. The time and date of such delivery and payment are
hereinafter referred to as the "Closing Date".
The documents to be delivered on the Closing Date on behalf of the
parties hereto pursuant to Section 8 of this Agreement shall be delivered at the
offices of Milbank, Tweed, Hadley & McCloy, Washington, D.C. and the Securities
shall be delivered at the Designated Office, all on the Closing Date.
SECTION 5. Agreements of the Company. The Company agrees with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for such purposes, (iii) when any amendment to
the Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective, (v)
of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading and (vi) of receipt by the Company or any representative
or attorney for the Company of any other communication from the Commission
relating to the Company, the Registration Statement or any Prospectus. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will use its reasonable best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish (i) to you four signed copies of the Registration
Statement as first filed with the Commission and of each amendment to it,
including all exhibits, and (ii) to you and each Underwriter designated by you
such number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits, as you may reasonably request.
(c) To prepare the Prospectus, the form and substance of which shall
be reasonably satisfactory to you, and to file the Prospectus in such form with
the Commission within the applicable period specified in Rule 424(b) under the
Act; during the period specified in Section 5(d) below, not to file any further
amendment to the Registration Statement and not to make any amendment or
supplement to the Prospectus of which you shall not previously have been advised
or to which you shall reasonably object after being so advised; and, during such
period, to prepare and file with the Commission, promptly upon your reasonable
request, any amendment to the Registration Statement or amendment or supplement
to the Prospectus which may be necessary or advisable in connection
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with the distribution of the Securities by you, and to use its reasonable best
efforts to cause any such amendment to the Registration Statement to become
promptly effective.
(d) Prior to 12:00 P.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading in any
material respect, or so that the Prospectus will comply with applicable law, and
to furnish to each Underwriter and to any dealer such number of copies thereof
as such Underwriter or dealer may reasonably request.
(f) Prior to any public offering of the Securities, to cooperate with
you and counsel for the Underwriters in connection with the registration or
qualification of the Securities for offer and sale by the several Underwriters
and by dealers under the state securities or Blue Sky laws of such jurisdictions
as you may request, to continue such registration or qualification in effect so
long as required for distribution of the Securities and to file such consents to
service of process or other documents as may be necessary in order to effect
such registration or qualification; provided, however, that the Company shall
not be required in connection therewith to (i) qualify as a foreign corporation
in any jurisdiction in which it is not now so qualified, (ii) take any action
that would subject it to taxation in any jurisdiction or (iii) take any action
that would subject it to general consent to service of process other than as to
matters and transactions relating to the Prospectus, the Registration Statement,
any preliminary prospectus or the offering or sale of the Securities, in any
jurisdiction in which it is not now so subject.
(g) To make generally available to its security holders as soon as
reasonably practicable an earnings statement, which need not be audited,
covering a period of at least twelve-months after the effective date of the
Registration Statement that shall satisfy the provisions of Section 11(a) of the
Act, and to advise you in writing when such statement has been so made
available.
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(h) The Company, during the period when the Prospectus is required to
be delivered under the Act, will file promptly all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act.
(i) So long as the Securities are outstanding, to furnish to you as
soon as available copies of all reports or other communications furnished to its
security holders or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is listed
and such other publicly available information concerning the Company and its
subsidiaries as you may reasonably request.
(j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
out-of-pocket expenses reasonably incurred and incident to the performance of
its obligations under this Agreement, including: (i) the reasonable fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the Securities
under the Act and all other reasonable fees and expenses in connection with the
preparation, printing, filing and distribution of the Registration Statement
(including financial statements and exhibits), any preliminary prospectus, the
Prospectus and all amendments and supplements to any of the foregoing, including
the mailing and delivering of copies thereof to the Underwriters and dealers in
the quantities specified herein, (ii) all reasonable costs and expenses related
to the transfer and delivery of the Securities to the Underwriters, including
any transfer or other taxes payable thereon, (iii) all costs of printing or
producing this Agreement and any other agreements or documents in connection
with the offering, purchase, sale or delivery of the Securities, (iv) all
expenses in connection with the registration or qualification of the Securities
for offer and sale under the securities or Blue Sky laws of the several states
and all costs of printing or producing any Preliminary and Supplemental Blue Sky
Memoranda in connection therewith (including the filing fees and fees and
disbursements of counsel for the Underwriters in connection with such
registration or qualification and memoranda relating thereto), (v) any filing
fees and disbursements of counsel for the Underwriters in connection with the
review and clearance of the offering of the Securities by the National
Association of Securities Dealers, Inc., if any, (vi) the cost of printing
certificates representing the Securities, (vii) the costs and charges of any
transfer agent, registrar and/or depositary (including the Depository Trust
Company), (viii) any fees charged by rating agencies for the rating of the
Securities, (ix) the fees and expenses of the Trustee and the Trustee's counsel
in connection with the Indenture and the Securities and (x) all other reasonable
costs and expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section.
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(k) During the period beginning on the date hereof and continuing to
and including the Closing Date, not to offer, sell, contract to sell or
otherwise transfer or dispose of any debt securities of the Company or any
warrants, rights or options to purchase or otherwise acquire debt securities of
the Company substantially similar to the Securities (other than (i) the
Securities and (ii) commercial paper issued in the ordinary course of business),
without the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation.
(l) To use its reasonable best efforts to do and perform all things
required or necessary to be done and performed under this Agreement by the
Company prior to the Closing Date and to satisfy all conditions precedent to the
delivery of the Securities.
(m) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Securities, to file a Rule 462(b)
Registration Statement with the Commission registering the Securities not so
covered in compliance with Rule 462(b) by the earlier of 10:00 A.M., New York
City time, on the date after this Agreement and the time confirmations are first
sent or given for the Securities, and to pay to the Commission the filing fee
for such Rule 462(b) Registration Statement at the time of the filing thereof or
to give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
SECTION 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
the earlier of 10:00 A.M., New York City time, on the date of this Agreement and
the time confirmations are first sent or given for the Securities, and no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments
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thereto, when they become effective (A) will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and (B) will comply
in all material respects with the Act and (iv) the Prospectus does not contain
and, as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in this paragraph do not apply to statements or omissions in the Registration
Statement or the Prospectus or any amendment or supplement thereto based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein. In addition, the
documents incorporated by reference into the Prospectus, at the time they were
or hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the Exchange Act and the rules and
regulations promulgated thereunder, and, when read together and with the other
information in the Prospectus, did not and will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were or are made, not misleading.
(c) Except for those matters amended or included in the Prospectus,
the preliminary prospectus filed as part of the registration statement as
originally filed or as part of any amendment thereto, or filed pursuant to Rule
424 under the Act, complied when so filed in all material respects with the Act,
and did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in any preliminary prospectus
based upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein.
(d) The Company and each subsidiary of the Company listed on Exhibit A
(collectively, the "Subsidiaries"), each of which is a significant subsidiary as
defined in Rule 405 of Regulation C of the rules and regulations of the
Commission under the Act (collectively, the "Subsidiaries") has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation and has the corporate power and
authority to conduct its business as described in the Prospectus and to own,
lease and operate its properties, and each is duly qualified and is in good
standing as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of property
requires such qualification, except where the failure to be so qualified or to
be in good standing would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries considered as one enterprise, and all of the
issued and outstanding capital stock of each Subsidiary has been duly authorized
and validly issued and is fully paid and non-assessable and, except for
directors' qualifying shares and
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the Exchangeable Preference Shares, no par value, of Lafarge Canada, Inc., is
owned by the Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or equity (each, a
"Lien").
(e) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent which might
be expected to materially adversely affect the conduct of the business
operations, financial condition or income of the Company and its subsidiaries
considered as one enterprise.
(f) The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), and has been duly
authorized, executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting creditors' rights generally and (B) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability.
(g) The Securities have been duly authorized and, on the Closing Date,
will have been validly executed and delivered by the Company. When the
Securities have been executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, the Securities will be entitled to
the benefits of the Indenture and will be valid and binding obligations of the
Company, enforceable in accordance with their terms except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(h) The Securities conform as to legal matters in all material
respects to the description thereof contained in the Prospectus.
(i) Neither the Company nor any of its Subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
material obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound or to which any of the property or assets
of the Company or any of its subsidiaries is subject, except for any such
violation or default that would not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
(j) The Company and its Subsidiaries own, possess, license or can
acquire on reasonable terms, the material patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other unpatented
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and/or unpatentable proprietary or confidential information, systems or
procedures), service marks and trade names presently employed by them in
connection with the business now operated by them, and neither the Company nor
any of its Subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing, except for
any such unfavorable decisions, rulings or findings which, singly or in the
aggregate, would not result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise.
(k) The execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Company, the compliance by the Company with
all the provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) require any consent, approval,
authorization or other order of, or qualification with, any court or
governmental body or agency (except such as may be required under (a) the Act,
(b) the Exchange Act or (c) the securities or Blue Sky laws of the various
states of the United States), (ii) conflict with or constitute a breach of any
of the terms or provisions of, or a default under, the charter or by-laws of the
Company or any of its Subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and its
Subsidiaries, taken as a whole, to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its subsidiaries or their
respective property is bound, (iii) violate or conflict with any applicable law
or any rule, regulation, judgment, order or decree of any court or any
governmental body or agency having jurisdiction over the Company, any of its
Subsidiaries (other than the [Redland Subsidiaries]), and to the best of the
Company's knowledge, the [Redland Subsidiaries] or their respective property or
(iv) result in the imposition or creation of (or the obligation to create or
impose) a Lien under any agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its subsidiaries
or their respective property is bound that is material to the Company and its
Subsidiaries, taken as a whole.
(l) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened against or affecting, the Company or any of
its subsidiaries, which is required to be disclosed in the Prospectus (other
than as disclosed therein), or which might result in any material adverse change
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company and its subsidiaries considered as one
enterprise, or which might materially and adversely affect the properties or
assets thereof or which might materially and adversely affect the consummation
of this Agreement; all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
properties or assets is the subject which are not described in the Prospectus,
including ordinary routine
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litigation incidental to the business, are, considered in the aggregate, not
material; nor are there any statutes, regulations, contracts or other documents
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement that are not
so described or filed as required.
(m) Except as described in the Prospectus, neither the Company nor any
of its Subsidiaries has violated any existing foreign, federal, state or local
law or regulation relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), any provisions of the Employee Retirement
Income Security Act of 1974, as amended, or any provisions of the Foreign
Corrupt Practices Act or the rules and regulations promulgated thereunder,
except for such violations which, singly or in the aggregate, would not result
in any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
(n) Except as described in the Prospectus, each of the Company and its
Subsidiaries has such permits, licenses, consents, exemptions, franchises,
authorizations and other approvals (each, an "Authorization") of, and has made
all filings with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, including,
without limitation, under any applicable Environmental Laws, as are necessary to
own, lease, license and operate its respective properties and to conduct its
business, except where the failure to have any such Authorization or to make any
such filing or notice would not, singly or in the aggregate, have a material
adverse effect on the Company and its Subsidiaries considered as one enterprise.
Except as described in the Prospectus, each of the Company and its Subsidiaries
is in compliance in all material respects with all the terms and conditions
thereof and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has occurred
(including, without limitation, the receipt of any notice from any authority or
governing body) which allows or, after notice or lapse of time or both, would
allow, revocation, suspension or termination of any such Authorization or
results or, after notice or lapse of time or both, would result in any other
impairment of the rights of the holder of any such Authorization, except those
that would not have a material adverse effect on the Company and its
subsidiaries taken as a whole; and, except as described in the Prospectus, such
Authorizations contain no restrictions that are materially burdensome to the
Company or any of its subsidiaries; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such event
or the presence of any such restriction would not, singly or in the aggregate,
result in any material adverse change in the condition, financial or otherwise,
or the earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise.
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(o) Except as described in the Prospectus, there are no costs or
liabilities associated with Environmental Laws (including, without limitation,
any capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any Authorization, any
related constraints on operating activities and any potential liabilities to
third parties) which would, singly or in the aggregate, result in any material
adverse change in the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(p) This Agreement has been duly authorized, executed and delivered
by the Company.
(q) Arthur Andersen are independent public accountants with respect
to the Company and its subsidiaries as required by the Act and the rules and
regulations thereunder.
(r) The consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus (and any amendment or
supplement thereto), together with related schedules and notes, present fairly
in all material respects the consolidated financial position, results of
operations and changes in financial position of the Company and its subsidiaries
on the basis stated therein at the respective dates or for the respective
periods to which they apply; such statements and related schedules and notes
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; the supporting schedules, if any, included in the Registration
Statement present fairly in all material respects in accordance with generally
accepted accounting principles the information required to be stated therein;
and the other financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) are, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of the
Company.
(s) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(t) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with the
Securities registered pursuant to the Registration Statement.
(u) No "nationally recognized statistical rating organization" as
such term is defined for purposes of Rule 436(g)(2) under the Act has indicated
to the Company that it is considering (i) the downgrading, suspension or
withdrawal of,
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or any review for a possible change that does not indicate the direction of the
possible change in, any rating assigned to the Company or any securities of the
Company or (ii) any change in the outlook for any rating of the Company or any
securities of the Company.
(v) Since the respective dates as of which information is given in
the Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not occurred any material adverse change in the condition, financial
or otherwise, or the earnings or business affairs of the Company and its
subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business, (ii) there has not been any material adverse change
in the capital stock or in the long-term debt of the Company or any of its
subsidiaries and (iii) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its subsidiaries
considered as one enterprise.
SECTION 7. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter, its directors, its officers and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages, liabilities and judgments (including, without limitation, any
reasonable legal or other expenses incurred in connection with investigating or
defending any matter, including any action, that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Underwriter furnished in writing
to the Company by or on behalf of such Underwriter through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
who failed to deliver a Prospectus, as then amended or supplemented, (so long as
the Prospectus and any amendment or supplemented thereto was provided by the
Company to the several Underwriters in the requisite quantity and on a timely
basis to permit proper delivery on or prior to the Closing Date) to the person
asserting any losses, claims, damages, liabilities or judgements caused by any
untrue statement or alleged untrue statement of a material fact contained in the
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured in the Prospectus, as so
amended or supplemented, and such Prospectus was
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required by law to be delivered at or prior to the written confirmation of sale
to such person.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the
same extent as the foregoing indemnity from the Company to such Underwriter but
only with reference to information relating to such Underwriter furnished in
writing to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto), the Prospectus (or any
amendment or supplement thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 7(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party within a reasonably prompt
period of time following the receipt of notification in writing from the
indemnified party, or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) for all indemnified parties and all such reasonable fees and expenses
shall be reimbursed as they are incurred. Such firm shall be designated in
writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case of
parties indemnified pursuant to Section 7(a), and by the Company, in the case of
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<PAGE> 14
parties indemnified pursuant to Section 7(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action (i) effected with its written consent or (ii) effected without its
written consent if the settlement is entered into more than twenty business days
after the indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case where
such fees and expenses are at the expense of the indemnifying party) and, prior
to the date of such settlement, the indemnifying party shall have failed to
comply with such reimbursement request. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement or
compromise of, or consent to the entry of judgment with respect to, any pending
or threatened action in respect of which the indemnified party is or could have
been a party and indemnity or contribution may be or could have been sought
hereunder by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of such
action and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party. No
indemnifying party will be liable for the costs and expenses of any settlement
of any pending or threatened action effected by the indemnified party without
the consent of the indemnifying party.
(d) To the extent the indemnification provided for in this Section 7
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause 7(d)(i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (after deducting
underwriting discounts and commissions but before deducting expenses) received
by the Company, and the total underwriting discounts and commissions received by
the Underwriters, bear to the total price to the public of the Securities, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent,
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<PAGE> 15
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action, that could have given rise to such losses, claims, damages, liabilities
or judgments. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7(d) are several in proportion to the respective
principal amount of Securities purchased by each of the Underwriters hereunder
and not joint.
(e) The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 8. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Securities under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by the earlier of 10:00 A.M.,
New York City time, on the date after the date of this Agreement and the time
confirmations are first sent or given for the Securities; and no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been commenced or shall be
pending before or contemplated by the Commission.
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<PAGE> 16
(c) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have been given
of any potential or intended downgrading, suspension or withdrawal of, or of any
review (or of any potential or intended review) for a possible change that does
not indicate the direction of the possible change in, any rating of the Company
or any securities of the Company (including, without limitation, the placing of
any of the foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any "nationally
recognized statistical rating organization" as such term is defined for purposes
of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change,
nor shall any notice have been given of any potential or intended change, in the
outlook for any rating of the Company or any securities of the Company by any
such rating organization and (iii) no such rating organization shall have given
notice that it has assigned (or is considering assigning) a lower rating to the
Securities than that on which the Securities were marketed.
(d) You shall have received on the Closing Date a certificate dated
the Closing Date, signed by the Chief Executive Officer and the Chief Financial
Officer of the Company, confirming the matters set forth in Sections 6(w), 8(a),
8(b) and 8(c) and that the Company has complied with all of the agreements and
satisfied all of the conditions herein contained and required to be complied
with or satisfied by the Company on or prior to the Closing Date.
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall not have occurred any change or any development involving a
prospective change in the condition, financial or otherwise, or the earnings,
business, management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development involving
a prospective change in the capital stock or in the long-term debt of the
Company or any of its subsidiaries and (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 8(e)(i),
8(e)(ii) or 8(e)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Securities on the terms and in
the manner contemplated in the Prospectus.
(f) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Thompson & Knight, P.C., counsel for the Company, to the effect that:
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<PAGE> 17
(i) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (A)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability; in rendering the
foregoing opinion that the Securities will be valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms, such counsel may assume that
the law of New York is identical to the law of Texas in all respects
material to such opinion.
(iii) the Indenture as supplemented by the Supplemental
Indenture has been duly qualified under the Trust Indenture Act and has
been duly authorized, executed and delivered by the Company and is a
valid and binding agreement of the Company, enforceable in accordance
with its terms except as (A) the enforceability thereof may be limited
by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability; in rendering the foregoing opinion that the Indenture as
supplemented by the Supplemental Indenture constitutes a valid and
binding agreement of the Company enforceable in accordance with its
terms, such counsel may assume that the law of New York is identical to
the law of Texas in all respects material to such opinion;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) the Registration Statement has become effective under the
Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's
knowledge, pending before or contemplated by the Commission;
(vi) the statements under the caption "Description of Notes" in
the Prospectus and Item 15 of Part II of the Registration Statement,
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings;
(vii) the execution, delivery and performance of this Agreement,
the Indenture and the Securities by the Company, the compliance by the
Company with all the provisions hereof and thereof and the consummation
of the transactions contemplated hereby and thereby will not (A)
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency of the
United States of America or except for any such consent, approval or
authorization, or order, which, if not obtained, would not prevent or
adversely effect in any
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<PAGE> 18
material respect the performance of this Agreement or have a material
adverse effect on the Company and its subsidiaries, taken as a whole
(except such as may be required under the Act, the Exchange Act and the
securities or Blue Sky laws of the various states of the United States)
or violate or conflict with any federal securities law or any other law
or rule, regulation, judgment, order or decree known to such counsel to
be applicable to the Company or any of its subsidiaries of any court or
any governmental body or agency having jurisdiction over the Company,
any of its subsidiaries or their respective property (provided,
however, that such counsel need express no opinion with respect to
compliance with any state securities law except as otherwise
specifically stated in such counsel's opinion); and
(viii) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements
and other financial data (including the notes thereto and the auditor's
report thereon) included therein as to which no opinion need be
expressed) comply as to form in all material respects with the Act and
the Trust Indenture Act and the regulations under each of those Acts.
The opinion of Thompson & Knight, P.C. described in Section 8(f) above
shall be rendered to you at the request of the Company and shall so state
therein.
(g) Thompson & Knight, P.C., in rendering the opinions referred to in
subsection (f) of this Section, may rely as to all matters relating to the laws
of the State of Maryland upon an opinion of Piper & Marbury, dated the date
thereof, in form and substance satisfactory to counsel for the Underwriters, a
copy of which shall have been furnished to the Underwriters. Milbank, Tweed,
Hadley & McCloy, in rendering the opinion referred to in subsection (i) of this
Section, may rely as to all matters relating to the laws of the State of
Maryland upon such opinion of Piper & Marbury. In giving their opinions required
by subsection (f) and (i) of this Section, Thompson & Knight, P.C., and Milbank,
Tweed, Hadley & McCloy, shall each additionally state that nothing has come to
their attention that would lead them to believe that the Registration Statement,
at the time it became
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<PAGE> 19
effective, and if an amendment to the Registration Statement or a filing of a
report on Form 10-K, 10-Q or 8-K has been filed by the Company with the
Commission under the Act or the Exchange Act, respectively, subsequent to the
effectiveness of the Registration Statement, then at the time such amendment
became effective or at the time of the most recent such filing, and at the date
hereof, contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as amended or supplemented at the
date hereof, contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of David C. Jones, Vice President Legal Affairs of the Company, to the effect
that:
(i) each of the Company and its Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as described in
the Prospectus and to own, lease and operate its properties;
(ii) to the best of such counsel's knowledge, each of the
Company and its Subsidiaries is duly qualified and is in good standing
as a foreign corporation authorized to do business in each jurisdiction
in which the nature of its business or its ownership or leasing of
property requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the business,
prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole;
(iii) all of the outstanding shares of capital stock of each of
(x) the Company's Subsidiaries (other than Lafarge Canada Inc. and the
Redland Subsidiaries) and (y) to the best of such counsels knowledge,
the [Redland Subsidiaries], have been duly authorized and validly
issued and are fully paid and non-assessable, and are owned by the
Company, directly or indirectly through one or more subsidiaries, free
and clear of any Lien;
(iv) the Securities have been duly authorized and executed;
(v) the Indenture has been duly authorized, executed and
delivered by the Company;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) neither the Company nor any of its Subsidiaries, or to
the best of such counsel's knowledge, the Redland Subsidiaries, is in
violation
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of its respective charter or by-laws and, to the best of such counsel's
knowledge, neither the Company nor any of its Subsidiaries is in
default in the performance of any obligation, agreement, covenant or
condition contained in any indenture, loan agreement, mortgage, lease
or other agreement or instrument that is material to the Company and
its subsidiaries, taken as a whole, to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries or their respective property is bound;
(viii) the execution, delivery and performance of this
Agreement, the Indenture and the Securities by the Company, the
compliance by the Company with all the provisions hereof and thereof
and the consummation of the transactions contemplated hereby and
thereby will not (A) require any consent, approval, authorization or
other order of, or qualification with, any court or governmental body
or agency of the United States of America or the State of Maryland or
except for any such consent, approval or authorization, or order,
which, if not obtained, would not prevent or adversely effect in any
material respect the performance of this Agreement or have a material
adverse effect on the Company and its subsidiaries, taken as a whole
(except such as may be required under the Act, the Exchange Act and the
securities or Blue Sky laws of the various states of the United
States), (B) conflict with or constitute a breach of any of the terms
or provisions of, or a default under, the charter or by-laws of the
Company or any of its Subsidiaries or to such counsel's knowledge, any
indenture, loan agreement, mortgage, lease or other agreement or
instrument that is material to the Company and its subsidiaries, taken
as a whole, to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or their respective
property is bound, (C) violate or conflict with any federal securities
law or any other law or rule, regulation, judgment, order or decree
known to such counsel to be applicable to the Company or any of its
subsidiaries of any court or any governmental body or agency having
jurisdiction over the Company, any of its subsidiaries or their
respective property (provided, however, that such counsel need express
no opinion with respect to compliance with any federal or state
securities law or antitrust law, rule or regulation except as otherwise
specifically stated in such counsel's opinion, (D) result in the
imposition or creation of (or the obligation to create or impose) a
Lien under any material agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries other than the [Redland Subsidiaries], or to the best
of such counsel's knowledge, the Redland Subsidiaries or their
respective property is bound or (E) to the knowledge of such counsel,
result in the suspension, termination or revocation of any
Authorization of the Company or any of its subsidiaries or any other
impairment of the rights of the holder of any such Authorization;
(ix) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is or could be a party or to which any of their respective
20
<PAGE> 21
property is or could be subject that are required to be described in
the Registration Statement or the Prospectus and are not so described;
(x) the information in the 10-K Report under the caption
"Legal Proceedings", as amended or supplemented in any report filed by
the Company with the Commission under the Exchange Act, to the extent
that it constitutes matters of United States law or legal conclusions,
has been reviewed by such counsel and is correct in all material
aspects;
(xi) to the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other
than those described or referred to therein or filed or incorporated by
reference as exhibits thereto; the descriptions thereof or references
thereto are correct in all material respects, and no default exists in
the due performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture,
mortgage, loan agreement, note, lease or other instrument so described,
referred to, filed or incorporated by reference; and
(xii) to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with respect
to any securities of the Company or to require the Company to include
such securities with the Securities registered pursuant to the
Registration Statement.
(i) The favorable opinion of, Alain Fredette, Manager, Legal Services
and Secretary of Lafarge Canada Inc. to the effect that Lafarge Canada Inc. has
been duly incorporated and is validly existing as a corporation under the laws
of Canada and has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement
and, to the best of his knowledge and information, is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which it owns or leases substantial properties or in which the
conduct of its business requires such qualification, except where the failure to
so qualify or be in good standing would not have a material adverse effect on
the condition, financial or otherwise, or the earnings, business affairs or
business prospects of Lafarge
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Canada Inc.; and all of the issued and outstanding shares of capital stock of
Lafarge Canada Inc. have been duly and validly issued and are fully paid and
non-assessable.
(j) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Piper & Marbury, counsel for the Company, to the effect that:
(i) the Company and each of its Subsidiaries incorporated
under the laws of the State of Maryland has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of Maryland;
(ii) the Company has corporate power and authority to carry
on its business as described in the Prospectus and to own, lease and
operate its properties;
(iii) the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of this Agreement, will be entitled to the
benefits of the Indenture and will be valid and binding obligations
of the Company, enforceable in accordance with their terms except as
(A) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and
(B) rights of acceleration and the availability of equitable remedies
may be limited by equitable principles of general applicability; in
rendering the foregoing opinion that the Securities will be valid and
binding obligations of the Company enforceable against the Company in
accordance with their respective terms, such counsel may assume that
the law of New York is identical to the law of Maryland in all
respects material to such opinion;
(iv) the Indenture has been duly and validly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company, enforceable in accordance with its terms
except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability; in rendering the foregoing opinion that the Indenture
is a valid and binding agreement of the Company, enforceable in
accordance with its terms, such counsel may assume that the law of
New York is identical to the law of Maryland in all respects material
to such opinion; and
(v) this Agreement has been duly authorized, executed and
delivered by the Company.
(k) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters,
as to the matters referred to in Sections 8(f)(i), 8(f)(ii), 8(f)(iii),
8(f)(v) (but only with respect to the statements under the caption "Description
of Notes") and 8(f)(vii)].
(l) You shall have received, on each of the date hereof and the
Closing Date, a letter dated the date hereof or the Closing Date, as the case
may be, in form and substance satisfactory to you, from Arthur Andersen,
independent public accountants, containing the information and statements of the
type ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(m) The Securities shall have been rated "A-" by Standard & Poor's
Corporation and "Baa1" by Moody's Investors Service, Inc.
(n) The Underwriters shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the Company and
the Trustee.
(o) The Company shall not have failed on or prior to the Closing Date
to perform or comply with any of the agreements herein contained and required to
be performed or complied with by the Company on or prior to the Closing Date.
SECTION 9. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time on or prior to the Closing
Date by you by written notice to the Company if any of the following has
occurred: (i) any outbreak or escalation of hostilities or other national or
international calamity or crisis or change in economic conditions or in the
financial markets of the United States or elsewhere that, in your judgment, is
material and adverse and, in your judgment, makes it impracticable to market the
Securities on the terms and in the manner contemplated in the Prospectus, (ii)
the suspension or material limitation of trading in securities or other
instruments on the New York Stock Exchange, the American Stock Exchange, the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago
Board of Trade or the Nasdaq National Market or limitation on prices for
securities or other instruments on any such exchange or the Nasdaq National
Market, (iii) the suspension of trading of any securities of the Company on any
exchange or in the over-the-counter market, (iv) the enactment, publication,
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<PAGE> 23
decree or other promulgation of any federal or state statute, regulation, rule
or order of any court or other governmental authority which in your opinion
materially and adversely affects, or will materially and adversely affect, the
business, prospects, financial condition or results of operations of the Company
and its subsidiaries, taken as a whole, (v) the declaration of a banking
moratorium by either federal or New York State authorities or (vi) the taking of
any action by any federal, state or local government or agency in respect of its
monetary or fiscal affairs which in your opinion has a material adverse effect
on the financial markets in the United States.
If on the Closing Date any one or more of the Underwriters shall fail
or refuse to purchase the Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date by all Underwriters, each non-defaulting
Underwriter shall be obligated severally, in the proportion which the principal
amount of Securities set forth opposite its name in Schedule I bears to the
aggregate principal amount of Securities which all the non-defaulting
Underwriters have agreed to purchase, or in such other proportion as you may
specify, to purchase the Securities which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the aggregate principal amount of Securities which any
Underwriter has agreed to purchase pursuant to Section 2 hereof be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such principal
amount of Securities without the written consent of such Underwriter. If on the
Closing Date any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased by all Underwriters and arrangements
satisfactory to you and the Company for purchase of such Securities are not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter and the Company. In any
such case which does not result in termination of this Agreement, either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any default of any such
Underwriter under this Agreement.
SECTION 10. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to Lafarge
Corporation, 11130 Sunrise Valley Drive, Suite 300, Reston, Virginia 22091,
Attention: Sharon Collins Casey and (ii) if to any Underwriter or to you, to you
c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New
23
<PAGE> 24
York, New York 10172, Attention: Syndicate Department, or in any case to such
other address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the several Underwriters set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, and will survive delivery of and payment for the Securities,
regardless of (i) any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the officers or directors of any
Underwriter, any person controlling any Underwriter, the Company, the officers
or directors of the Company or any person controlling the Company, (ii)
acceptance of the Securities and payment for them hereunder and (iii)
termination of this Agreement.
If for any reason the Securities are not delivered by or on behalf of
the Company as provided herein (other than as a result of any termination of
this Agreement pursuant to Section 9), the Company agrees to reimburse the
several Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) incurred by them. Notwithstanding any termination of
this Agreement, the Company shall be liable for all expenses which it has agreed
to pay pursuant to Section 5(j) hereof. The Company also agrees to reimburse the
several Underwriters, their directors and officers and any persons controlling
any of the Underwriters for any and all fees and expenses (including, without
limitation, the fees disbursements of counsel) incurred by them in connection
with enforcing their rights hereunder (including, without limitation, pursuant
to Section 7 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Underwriters, the Underwriters' directors and officers, any controlling persons
referred to herein, the Company's directors and the Company's officers who sign
the Registration Statement and their respective successors and assigns, all as
and to the extent provided in this Agreement, and no other person shall acquire
or have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any of the
several Underwriters merely because of such purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
24
<PAGE> 25
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.
Very truly yours,
LAFARGE CORPORATION
By:
-----------------------------
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
WARBURG DILLON READ LLC
CITICORP SECURITIES, INC.
By DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By
---------------------------------
25
<PAGE> 26
SCHEDULE I
Principal Amount
Underwriters of Senior Notes
------------ ----------------
Donaldson, Lufkin & Jenrette Securities Corporation
Warburg Dillon Read LLC
Citicorp Securities, Inc.
-----------
Total
<PAGE> 1
EXHIBIT 4.1
================================================================================
LAFARGE CORPORATION
and
CITIBANK, N.A.,
as Trustee
---------------------
Supplemental Indenture
relating to
$650,000,000
____% Senior Notes Due ____
Dated as of ______ __, 1998
---------------------
================================================================================
<PAGE> 2
SUPPLEMENTAL INDENTURE, dated as of ____ __, 1998 relating to
the Senior Notes referred to below (herein called the "Supplemental Indenture"),
between LAFARGE CORPORATION, a corporation duly organized and existing under the
laws of the State of Maryland (hereinafter called the "Company"), and CITIBANK,
N.A., a national banking association incorporated and existing under the laws of
the United States, as Trustee under the Original Indenture referred to below
(hereinafter called the "Trustee").
WITNESSETH:
WHEREAS, the Company has heretofore executed and delivered to
the Trustee an indenture dated as of October 1, 1989 (hereinafter called the
"Original Indenture"), to provide for the issuance from time to time of its
unsecured and unsubordinated debt securities (hereinafter called the
"Securities"), the form and terms of which are to be established as set forth in
Sections 201 and 301 of the Original Indenture; and
WHEREAS, Section 901 of the Original Indenture provides, among
other things, that the Company and the Trustee may enter into indentures
supplemental to the Original Indenture for, among other things, the purpose of
establishing the form and terms of the Securities of any series as permitted in
Sections 201 and 301 of the Original Indenture and otherwise amending the
Original Indenture in a manner not prejudicial to the interests of the Holders
of the Securities of any series; and
WHEREAS, the Company desires to create a series of the
Securities in an aggregate principal amount of $650,000,000 of ____% Senior
Notes due ____ (the "Senior Notes"), and all action on the part of the Company
necessary to authorize the issuance of the Senior Notes under the Original
Indenture and this Supplemental Indenture has been duly taken; and
WHEREAS, all acts and things necessary to make the Senior
Notes when executed by the Company and authenticated and delivered by the
Trustee as in the Original Indenture provided, the valid and binding obligations
of the Company and to constitute these presents a valid and binding supplemental
indenture and agreement according to its terms, have been done and performed;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
That in consideration of the premises and of the acceptance
and purchase of the Senior Notes by the holders thereof, and of the acceptance
of this trust by the Trustee, the Company covenants and agrees with the Trustee,
for the equal benefit of holders of the Senior Notes, as follows:
ARTICLE ONE
DEFINITIONS
The use of the terms and expressions herein is in accordance
with the definitions, uses and constructions contained in the Original Indenture
and the form of Senior Note attached hereto as Exhibit A.
ARTICLE TWO
TERMS AND ISSUANCE OF THE SENIOR NOTES
Section 201 Issue of Senior Notes. A series of Securities which shall be
designated as the "___% Senior Notes due ____" shall be executed, authenticated
and delivered in accordance with the provisions of, and shall in all respects be
subject to, the terms, conditions and covenants of the Original Indenture and
this Supplemental Indenture (including the form of Senior Note set forth in
Exhibit A hereto). The aggregate principal amount of Senior Notes created hereby
which may be authenticated and delivered under this Supplemental Indenture shall
not, except as permitted by the provisions of the Original Indenture, exceed
$650,000,000.
<PAGE> 3
Section 202. Form of the Senior Notes; Incorporation of Terms. The form of
the Senior Notes shall be substantially in the form of Exhibit A attached
hereto, the terms of which are herein incorporated by reference and which are
part of this Supplemental Indenture.
Section 203. Place of Payment. The Place of Payment will be initially the
Corporate Trust Office of the Trustee in New York City which, as of the date
hereof, is located at 111 Wall Street, New York, New York 10043.
ARTICLE THREE
AMENDMENT OF ORIGINAL INDENTURE
Section 301. Amendment to Reconciliation and tie between Trust Indenture
Act of 1939 and Original Indenture. The Reconciliation and tie between the Trust
Indenture Act of 1939 (hereinafter referred to as the "TIA") and the Original
Indenture is hereby amended as set forth in Exhibit B hereto.
Section 302. Amendment to Section 401(3). Section 401(3) of the Original
Indenture is hereby amended in relation to the Senior Notes by adding the
following to the last sentence thereof, immediately following "have been
complied with" but before the end of the sentence: "and if Section 401(1)(B)(ii)
or Section 401(1)(B)(iii) applies, an Opinion of Counsel meeting the
requirements of Section 403(4)(A) relating to the discharge"
Section 303. Amendment to Section 403(4)(A). Section 403(4)(A) is hereby
deleted in its entirety in relation to the Senior Notes and shall be replaced by
the following provision:
"(A) an opinion of counsel based on a change in law occurring
after the issue dates of the Senior Notes or a private letter ruling
from the United States Internal Revenue Service addressed to the
Company to the effect that the Holders of the Securities will not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and discharge and will be subject to Federal
income tax in the same amount and in the same manner and at the same
times as would have been the case if such deposit and discharge had not
occurred; and"
Section 304. Amendment to Section 608. Section 608 of the Original
Indenture is hereby deleted in its entirety in relation to the Senior Notes and
shall be replaced by the following provision:
"The Trustee for the Debt Securities of any series issued
hereunder shall be subject to the provisions of Section 310(b) of the
Trust Indenture Act during the period of time provided for therein. If
the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate
such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this
Indenture. Nothing herein shall prevent the Trustee from filing with
the Commission the application referred to in the second to last
paragraph of Section 310(b) of the Trust Indenture Act."
Section 305. Amendment to Section 613. Section 613 of the Original
Indenture is hereby amended in relation to the Senior Notes by deleting all
references to the "four" month period prior to or subsequent to a default and
shortening such time period to "three" months every place it appears in Section
613 but only in Section 613.
Section 306. Amendment to Section 703(a). Section 703(a) of the Original
Indenture is hereby deleted in its entirety in relation to the Senior Notes and
replaced with the following provision:
"Within 60 days after the first May 15 which occurs not less than 60
days following the first date of issuance of Securities of any series
under this Indenture and within 60 days after May 15 in every year
thereafter, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Security Register, dated as of such
May 15, such reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto."
2
<PAGE> 4
Section 307. Amendment to Section 704(4). Section 704(4) of the Original
Indenture is hereby deleted in its entirety in relation to the Senior Notes and
replaced with the following provision:
"(4) deliver to the Trustee within 120 days after the end of each
fiscal year of the Company a brief certificate from the principal
executive, financial or accounting officer of the Company as to his or
her knowledge, after due inquiry, of the Company's compliance with all
conditions and covenants under the Indenture (such compliance to be
determined without regard to any period of grace or requirement of
notice provided under the Indenture)."
ARTICLE FOUR
MISCELLANEOUS
Section 401. Execution as Supplemental Indenture. This Supplemental
Indenture is executed and shall be construed as an indenture supplemental to the
Original Indenture and, as provided in the Original Indenture, this Supplemental
Indenture forms a part thereof in respect of the Senior Notes.
Section 402. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Supplemental Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
Section 403. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
Section 404. Successors and Assigns. All covenants and agreements by the
Company in this Supplemental Indenture shall bind its successors and assigns,
whether so expressed or not.
Section 405. Separability Clause. In case any provision in this
Supplemental Indenture or in the Senior Notes shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 406. Benefits of Supplemental Indenture. Nothing in this
Supplemental Indenture or in the Senior Notes, express or implied, shall give to
any person, other than the parties hereto and their successors hereunder and the
Holders of Senior Notes, any benefit or any legal or equitable right, remedy or
claim under this Supplemental Indenture.
Section 407. Governing Law. This Supplemental Indenture and each Senior
Note shall be governed by and construed in accordance with the laws of the State
of New York.
Section 408. Execution and Counterparts. This Supplemental Indenture may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
3
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the day and year first
above written.
LAFARGE CORPORATION
[Seal] By
------------------------------------
Name:
Title:
Attest:
- --------------------------------
Name:
Title:
CITIBANK, N.A., as Trustee
By
------------------------------------
Name:
Title:
<PAGE> 6
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the [____] day of [____________], 1998, before me
personally came [___________], to me known, who, being by me duly sworn, did
depose and say that [he/she] is a [__________] of Lafarge Corporation, one of
the corporations described in and which executed the foregoing instrument; and
that [he/she] signed [his/her] name thereto by like authority.
-------------------------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the [____] day of [____________], 1998, before me
personally came [___________], to me known, who, being by me duly sworn, did
depose and say that [he/she] is a [__________] of Citibank, N.A., one of the
corporations described in and which executed the foregoing instrument; and that
[he/she] signed [his/her] name thereto by like authority.
<PAGE> 7
EXHIBIT A
[Form of Face of Security]
This Security is a Book-Entry Security within the meaning of
the Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Security is exchangeable for
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and no
transfer of this Security (other than a transfer of this Security as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary) may be registered except
in limited circumstances.
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the issuer or
its agent for registration of transfer, exchange or payment, and any definitive
Note is issued in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made to Cede & Co. or
to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an
interest herein.
LAFARGE CORPORATION
___% Senior Note due ____
No. __________ $__________
Lafarge Corporation, a corporation duly organized and existing
under the laws of the State of Maryland (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
___________________________________, or registered assigns, the principal sum of
________________________ Dollars on _________________________________, and to
pay interest thereon from ________, or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
____________ and ___________ in each year, commencing ________, at the rate per
annum provided in the title hereof, until the principal hereof is paid or made
available for payment. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest, which shall be the _______ or ________ (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
As used herein, "Business Day" and "Special Record Date" with respect to any
Interest Payment Date shall be as defined in the Indenture.
Payment of the principal of (and premium, if any) and interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in The City of New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for the payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
<PAGE> 8
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
LAFARGE CORPORATION
[Seal] By
-------------------------------------
Name:
Title:
Attest:
- --------------------------------
Name:
Title:
<PAGE> 9
[Form of Reverse of Security]
LAFARGE CORPORATION
___% Senior Note due ____
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be issued in one
or more series under an Indenture, dated as of October 1, 1989 as supplemented
by the Supplemental Indenture dated as of ________, 1998 (herein called the
"Indenture"), between the Company and Citibank, N.A., as Trustee (herein called
the "Trustee", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $________.
These Securities will be redeemable, in whole or in part, at
the option of the Company, on any date (a "Redemption Date") at a redemption
price equal to the greater of (a) 100% of their principal amount of the
Securities to be redeemed and (b) the sum of the present values of the remaining
scheduled payments of principal and interest thereon (exclusive of interest
accrued to such Redemption Date) discounted to such Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate plus [__] basis points, plus accrued and unpaid interest on
the principal amount being redeemed to such Redemption Date; provided, however,
that installments of interest on Securities that are due and payable on an
Interest Payment Date falling on or prior to the relevant Redemption Date shall
be payable to the holders of such Securities, registered as such at the close of
business on the relevant Record Date according to their terms and provisions of
the Indenture.
"Treasury Rate" means, with respect to any Redemption Date for
the Securities, (a) the yield, under the heading that represents the average for
the immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication that is
published weekly by the Board of Governors of the Federal Reserve System and
that establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities"
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the Maturity Date, yields for the two
published maturities most closely corresponding to the Comparable Treasury Issue
shall be determined and the Treasury Rate shall be interpolated or extrapolated
from such yields on a straight-line basis, rounding to the nearest month) or (b)
if such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such Redemption Date. The Treasury Rate shall be calculated
on the third Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means, the United States Treasury
security selected by the Independent Investment Banker as having a maturity
comparable to the remaining term of the Securities to be redeemed that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of the Securities.
"Independent Investment Banker" means Donaldson, Lufkin &
Jenrette Securities Corporation, Warburg Dillon Read LLC or Citicorp Securities,
Inc. or, if such firms are unwilling or unable to select the Comparable Treasury
Issue, an independent investment banking institution of national standing
appointed by the Company.
"Comparable Treasury Price" means, with respect to any
Redemption Date, (a) the average of four Reference Treasury Dealer Quotations
for such Redemption Date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than four such
Reference Treasury Dealer Quotations, the average of all such Quotations.
<PAGE> 10
"Reference Treasury Dealer" means each of Donaldson, Lufkin &
Jenrette Securities Corporation, Warburg Dillon Read LLC or Citicorp Securities,
Inc. and their respective successors; provided however, that if any of the
foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company will substitute therefor
another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to
the Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
Notice of any redemption by the Company will be mailed at
least 30 days but not more than 60 days before any Redemption Date to each
holder of Securities to be redeemed. If less than all the Securities are to be
redeemed at the option of the Company, the Trustee shall select, in such manner
as it shall deem fair and appropriate, the Securities to be redeemed in whole or
in part.
Unless the Company defaults in payment of the redemption
price, on and after any Redemption Date interest will cease to accrue on the
Securities or portions thereof called for redemption.
Interest payments for this Security shall be computed and paid
on the basis of a 360-day year of twelve 30-day months.
The Indenture contains provisions for defeasance of (a) the
entire indebtedness of this Security and (b) certain restrictive covenants, upon
compliance by the Company with certain conditions set forth therein.
If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding of all series to be affected (voting as a
class). The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest, if any, on this Security at the times, place and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium, if any) and interest, if any, on this Security are payable,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
<PAGE> 11
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
This Security shall be governed by and construed in accordance
with the laws of the State of New York.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
<PAGE> 12
[Form of Trustee's Certificate of Authentication]
This is one of the Securities of the series designated herein
and referred to in the within-mentioned Indenture.
CITIBANK, N.A.
By
------------------------------------------
Name:
Title:
Date:
<PAGE> 13
EXHIBIT B
LAFARGE CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939 and
Indenture, dated as of October 1, 1989
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
- ---------------- -----------------
<S> <C> <C>
ss.310 (a)(1) ...................................................................... 609
(a)(2) ...................................................................... 609
(a)(3) ...................................................................... Not Applicable
(a)(4) ...................................................................... Not Applicable
(b) ...................................................................... 608
610
ss.311 (a) ...................................................................... 613(a)
(b) ...................................................................... 613(b)
(b)(2) ...................................................................... 703(a)(2)
703(b)
ss.312 (a) ...................................................................... 701
702(a)
(b) ...................................................................... 702(b)
(c) ...................................................................... 702(c)
ss.313 (a) ...................................................................... 703(a)
(b)(1) ...................................................................... Not Applicable
(b)(2) ...................................................................... 703(b)
(c) ...................................................................... 703(a), 703(b)
(d) ...................................................................... 703(c)
ss.314 (a) ...................................................................... 704
(b) ...................................................................... Not Applicable
(c)(1) ...................................................................... 102
(c)(2) ...................................................................... 102
(c)(3) ...................................................................... Not Applicable
(d) ...................................................................... Not Applicable
(e) ...................................................................... 102
ss.315 (a) ...................................................................... 601(a)
(b) ...................................................................... 602
703(a)(6)
(c) ...................................................................... 601(b)
(d) ...................................................................... 601(c)
(d)(1) ...................................................................... 601(a)(1)
(d)(2) ...................................................................... 601(c)(2)
(d)(3) ...................................................................... 601(c)(3)
(e) ...................................................................... 514
ss.316 (a)(1)(A) ...................................................................... 502
512
(a)(1)(B) ...................................................................... 513
(a)(2) ...................................................................... Not Applicable
(b) ...................................................................... 508
(c) ...................................................................... Not Applicable
ss.317 (a)(1) ...................................................................... 503
(a)(2) ...................................................................... 504
(b) ...................................................................... 1003
ss.318 (a) ...................................................................... 108
</TABLE>
- -------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
<PAGE> 1
EXHIBIT 5.1
July 6, 1998
Lafarge Corporation
11130 Sunrise Valley Drive
Suite 300
Reston, Virginia 20191
Ladies and Gentlemen:
We have acted as counsel for Lafarge Corporation, a Maryland
corporation (the "Company"), in connection with the preparation of the Company's
Registration Statement on Form S-3 (No. 333-57333), as amended (the
"Registration Statement"), filed with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the proposed offering by the Company of $650,000,000
aggregate principal amount of the Company's __% Senior Notes due ____ (the
"Senior Notes"). The Senior Notes are to be issued under an indenture, as
supplemented (the "Indenture"), between the Company and Citibank, N.A., as
Trustee, in the form previously filed with the Commission. The Senior Notes are
proposed to be sold by the Company to Donaldson, Lufkin & Jenrette Securities
Corporation, SBC Warburg Dillion Read Inc. and Citicorp Securities, Inc. (the
"Underwriters") pursuant to and subject to the terms and conditions of an
Underwriting Agreement among the Company and the Underwriters (the "Underwriting
Agreement"), the form of which is filed as Exhibit 1.1 to the Registration
Statement.
In connection with the foregoing, we have examined the originals or
copies, certified or otherwise authenticated to our satisfaction, of the
Registration Statement, the form of the Underwriting Agreement, the Indenture,
the form of Supplemental Indenture included as Exhibit 4.2 to the Registration
Statement and pursuant to which the Senior Notes will be issued (the
"Supplemental Indenture"), and such corporate records of the Company,
certificates of public officials and of officers of the Company, and other
agreements, instruments and documents as we have deemed necessary to require as
a basis for the opinions hereinafter expressed. Where facts material to the
opinions hereinafter expressed were not independently established by us, we have
relied upon the statements of officers of the Company, where we deemed such
reliance appropriate under the circumstances.
Based upon the foregoing and in reliance thereon, and subject to the
assumptions and qualifications herein specified, it is our opinion that:
1. The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of Maryland.
2. The Senior Notes have been duly authorized for issuance by the
Company and, upon the effectiveness of the Registration Statement under the
Securities Act, the due execution and delivery of the Supplemental Indenture and
the Underwriting Agreement by the respective parties thereto in substantially
the forms filed as exhibits to the Registration Statement, the issuance,
execution and authentication of the Senior Notes in accordance with the
provisions of the Indenture, and the delivery to and payment for the Senior
Notes by the Underwriters in accordance with the Underwriting Agreement, and
subject to any applicable state securities or Blue Sky laws, will be valid and
binding obligations of the Company and will be entitled to the benefits of the
Indenture.
<PAGE> 2
Lafarge Corporation
July 6, 1998
Page 2
3. The Indenture has been duly authorized by the Company and, when
qualified under the Trust Indenture Act of 1939, as amended, and executed and
delivered by the Company, will be the valid and binding agreement of the
Company.
The opinions expressed above are limited by and subject to the
following qualifications:
(a) We express no opinion other than as to the federal securities laws
of the United States of America, the laws of the State of New York and the
corporate laws of the State of Maryland; provided, however, (i) we have assumed,
without investigation, that the laws of the State of New York are identical in
all respects to the laws of the State of Texas and (ii) insofar as the opinions
expressed herein relate to matters governed by Maryland law, we have relied with
their permission upon an opinion of even date herewith of Piper & Marbury,
L.L.P.
(b) In rendering the opinions expressed herein, we have assumed that no
action heretofore taken by the Board of Directors of the Company in connection
with the matters described or referred to herein will be modified, rescinded or
withdrawn after the date hereof.
(c) The opinions expressed in Paragraphs 2 and 3 above are subject to
the qualification that the validity and binding effect of the Senior Notes and
the Indenture may be limited or affected by (i) bankruptcy, insolvency,
reorganization, fraudulent transfer or conveyance, receivership, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general principles of equity, regardless of whether applied in a proceeding in
equity or at law and (iii) an implied covenant of good faith and fair dealing.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement and to the reference to us under the
caption "Experts" in the prospectus forming a part of the Registration
Statement. In giving this consent, we do not thereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission thereunder.
Respectfully submitted,
THOMPSON & KNIGHT,
A Professional Corporation
By: /s/ Peter A. Lodwick
-----------------------------------
Peter A. Lodwick, Attorney
<PAGE> 1
EXHIBIT 12
LAFARGE CORPORATION
RATIO OF FIXED CHARGES TO EARNINGS
LAFARGE CORPORATION HISTORICAL
<TABLE>
<CAPTION>
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Fixed Charges
Total Interest Expense 42,732,000 38,132,000 27,086,000 24,118,000 19,949,000
Interest Capitalized 0 700,000 2,100,000 1,200,000 1,400,000
Interest Element of Rentals 6,667,000 3,933,000 4,700,000 5,033,000 4,000,000
------------ ------------- ------------- ------------- -------------
Total Fixed Charges 49,399,000 42,765,000 33,886,000 30,351,000 25,349,000
============ ============= ============= ============= =============
Earnings
Consolidated Pre-Tax Income 27,471,000 113,087,000 170,167,000 222,328,000 294,234,000
Add: Fixed Charges less Capitalized Interest 49,399,000 42,065,000 31,786,000 29,151,000 23,949,000
------------ ------------- ------------- ------------- -------------
Net Earnings 76,870,000 155,152,000 201,953,000 251,479,000 318,183,000
============ ============= ============= ============= =============
Ratio of Earnings to Fixed Charges
Net Earnings/Fixed Charges 1.56 3.63 5.96 8.29 12.55
============ ============= ============= ============= =============
<CAPTION>
Three Months Ended LTM
3/31/97 3/31/98 3/31/98
------------- ------------- -------------
<S> <C> <C> <C>
Fixed Charges
Total Interest Expense 5,559,000 4,042,000 18,432,000
Interest Capitalized -- 363,000 1,763,000
Interest Element of Rentals 1,000,000 1,000,000 4,000,000
------------- ------------- -------------
Total Fixed Charges 6,559,000 5,405,000 24,195,000
============= ============= =============
Earnings
Consolidated Pre-Tax Income (55,279,000) (45,821,000) 303,692,000
Add: Fixed Charges less Capitalized Interest 6,559,000 5,042,000 22,432,000
------------- ------------- -------------
Net Earnings (48,720,000) (40,779,000) 326,124,000
============= ============= =============
Ratio of Earnings to Fixed Charges
Net Earnings/Fixed Charges -- -- 13.48
============ ============= =============
</TABLE>
LAFARGE CORPORATION PRO FORMA
<TABLE>
<CAPTION>
LTM
12/31/97 3/31/98
------------ ------------
<S> <C> <C>
Fixed Charges
Total Interest Expense 63,799,000 61,982,000
Interest Capitalized 1,400,000 1,763,000
Interest Element of Rentals 5,525,000 5,525,000
------------ ------------
Total Fixed Charges 70,724,000 69,270,000
Earnings
Consolidated Pre-Tax Income 301,477,000 312,421,000
Add: Fixed Charges less Capitalized Interest 69,324,000 67,507,000
------------ ------------
Net Earnings 370,801,000 379,928,000
Ratio of Earnings to Fixed Charges
Net Earnings/Fixed Charges 5.24 5.48
============ ============
</TABLE>
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of (a) our report dated
January 22, 1998 (except with respect to the matters discussed in the Note
entitled "Subsequent Events" as to which the date is March 18, 1998) relating
to the December 31, 1997 consolidated financial statements of Lafarge
Corporation included in Lafarge Corporation's Form 10-K for the year then
ended, (b) our report dated April 15, 1998 (except with respect to the matters
discussed in the Note entitled "Subsequent Event" as to which the date is June
3, 1998) relating to the December 31, 1997 combined financial statements of the
Redland Businesses to be Acquired included in Lafarge Corporation's Form 8-K
filed June 18, 1998, (c) our report dated June 3, 1998 relating to the December
31, 1997 consolidated supplemental financial statements of Lafarge Corporation
included in Lafarge Corporation's Form 8-K filed June 18, 1998, and to all
references to our Firm included in this Form S-3 Registration Statement for
Lafarge Corporation to register $650,000,000 of Senior Notes.
ARTHUR ANDERSEN LLP
Washington, D.C.
June 26, 1998
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an application to determine eligibility of a Trustee
pursuant to Section 305(b)(2) ____
------------------------
CITIBANK, N.A.
(Exact name of trustee as specified in its charter)
13-5266470
(I.R.S. employer
identification no.)
399 Park Avenue, New York, New York 10043
(Address of principal executive office) (Zip Code)
-----------------------
Lafarge Corporation
(Exact name of obligor as specified in its charter)
Maryland 58-1290226
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
11130 Sunrise Valley Drive
Suite 300
Reston, Virginia 20191
(Address of principal executive offices) (Zip Code)
-------------------------
Debt Securities
(Title of the indenture securities)
<PAGE> 2
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Name Address
---- -------
Comptroller of the Currency Washington, D.C.
Federal Reserve Bank of New York New York, NY
33 Liberty Street
New York, NY
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as exhibits
hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee, as
now in effect. (Exhibit 1 to T-1 to Registration Statement No.
2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement
No. 2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to Registration
Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4
to T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
<PAGE> 3
Exhibit 6 - The consent of the Trustee required by Section
321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1
to Registration Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of
Citibank, N.A. (as of March 31, 1998 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
-----------------
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Citibank, N.A., a national banking association organized and existing
under the laws of the United States of America, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in The City of New York and State of New York, on the 16th day
of June, 1998.
CITIBANK, N.A.
By /s/ Arthur W. Aslanian
----------------------
Vice President
<PAGE> 4
EXHIBIT INDEX
Item 16. List of Exhibits.
List below all exhibits filed as a part of this Statement of
Eligibility.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as exhibits
hereto.
Exhibit 1 - Copy of Articles of Association of the Trustee, as
now in effect. (Exhibit 1 to T-1 to Registration Statement No.
2-79983)
Exhibit 2 - Copy of certificate of authority of the Trustee to
commence business. (Exhibit 2 to T-1 to Registration Statement
No. 2-29577).
Exhibit 3 - Copy of authorization of the Trustee to exercise
corporate trust powers. (Exhibit 3 to T-1 to Registration
Statement No. 2-55519)
Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit
4 to T-1 to Registration Statement No. 33-34988)
Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the Trustee required by Section
321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1
to Registration Statement No. 33-19227.)
Exhibit 7 - Copy of the latest Report of Condition of
Citibank, N.A. (as of March 31, 1998 - attached)
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
<PAGE> 5
EXHIBIT 7
Charter No. 1461
Comptroller of the Currency
Northeastern District
REPORT OF CONDITION
CONSOLIDATING
DOMESTIC AND FOREIGN
SUBSIDIARIES OF
CITIBANK, N.A.
OF NEW YORK IN THE STATE OF NEW YORK AT THE CLOSE OF BUSINESS ON MARCH
31, 1998, PUBLISHED IN RESPONSE TO CALL MADE BY COMPTROLLER OF THE
CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161, CHARTER
NUMBER 1461 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT.
<TABLE>
<CAPTION>
ASSETS
THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin............... $ 6,890,000
Interest-bearing balances.......................................... 14,848,000
Held-to-maturity securities........................................ 0
Available-for-sale securities...................................... 31,464,000
Federal funds sold and securities purchased under
agreements to resell......................................... 19,345,000
Loans and lease financing receivables:
Loans and Leases, net of unearned income......... $159,106,000
LESS: Allowance for loan and lease losses........ 4,259,000
Loans and leases, net of unearned income, allowance, and reserve... 154,847,000
Trading assets..................................................... 36,633,000
Premises and fixed assets (including capitalized leases)........... 3,376,000
Other real estate owned............................................ 485,000
Investments in unconsolidated subsidiaries and associated
companies....................................................... 1,386,000
Customers' liability to this bank on acceptances outstanding....... 1,824,000
Intangible assets.................................................. 160,000
Other assets....................................................... 9,670,000
------------
TOTAL ASSETS....................................................... $280,928,000
============
LIABILITIES
Deposits:
In domestic offices............................................. $ 37,884,000
Noninterest-bearing............................. $ 12,822,000
Interest-bearing................................ 25,062,000
In foreign offices, Edge and Agreement subsidiaries, and
IBFs............................................................ 155,776,000
Noninterest-bearing............................. 9,878,000
Interest-bearing................................ 145,898,000
Federal funds purchased and securities sold under agreements to
repurchase...................................................... 7,429,000
Trading liabilities................................................ 29,266,000
Other borrowed money (includes mortgage indebtedness and
obligations under capitalized leases):
With a remaining maturity of one year or less................... 9,518,000
With a remaining maturity of more than one year through
three years..................................................... 2,340,000
With a remaining maturity of more than three years.............. 898,000
Bank's liability on acceptances executed and outstanding........... 1,992,000
Subordinated notes and debentures.................................. 5,600,000
Other liabilities.................................................. 12,507,000
------------
TOTAL LIABILITIES.................................................. $263,210,000
============
EQUITY CAPITAL
Perpetual preferred stock and related surplus...................... 0
Common stock....................................................... $ 751,000
Surplus............................................................ 7,604,000
Undivided profits and capital reserves............................. 9,617,000
Net unrealized holding gains (losses) on available-for-sale
securities...................................................... 443,000
Cumulative foreign currency translation adjustments................ (697,000)
------------
TOTAL EQUITY CAPITAL............................................... $ 17,718,000
------------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY
CAPITAL......................................................... $280,928,000
============
</TABLE>
I, Roger W. Trupin, Controller of the above-named bank do hereby declare that
this Report of Condition is true and correct to the best of my knowledge and
belief.
ROGER W. TRUPIN
CONTROLLER
We, the undersigned directors, attest to the correctness of this Report of
Condition. We declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions and
is true and correct.
PAUL J. COLLINS
JOHN S. REED
WILLIAM R. RHODES
DIRECTORS
