<PAGE>1
As filed with the Securities and Exchange Commission on May 8, 1998
Registration No. 333- _______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TEMPLE-INLAND INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1903917
State or other jurisdiction of (I.R.S. Employer
of incorporation or organization) Identification No.)
303 SOUTH TEMPLE DRIVE
DIBOLL, TEXAS 75941
(409) 829-5511
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
M. RICHARD WARNER, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
TEMPLE-INLAND INC.
303 SOUTH TEMPLE DRIVE
DIBOLL, TEXAS 75941
(409) 829-5511
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
STEPHEN HAMILTON, ESQ. JOHN W. WHITE, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP CRAVATH, SWAINE & MOORE
1440 NEW YORK AVENUE, N.W. 825 EIGHTH AVENUE
WASHINGTON, D.C. 20005 NEW YORK, NEW YORK 10019
(202) 371-7000 (212) 474-1000
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If any of the securities being registered on this Form are 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 a dividend or interest reinvestment plan, check the
following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, 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 registrations 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. [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
=========================================================================================================
Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate offering Amount of
to be registered registered <F1> per unit <F2> price (2) registration fee
- ---------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
Debt securities $500,000,000 100% $500,000,000 $147,500.00
=========================================================================================================
<FN>
<F1> Or, if any Debt Securities are issued at original
issue discount, such greater amount as may result in
the initial offering prices for Debt Securities
aggregating $500,000,000.
<F2> Estimated pursuant to Rule 457 solely for purposes of
calculating the registration fee.
</FN>
</TABLE>
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 THAT SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>2
PROSPECTUS
$500,000,000
[TEMPLE-INLAND INC. LOGO]
DEBT SECURITIES
Temple-Inland Inc. (the "Company") intends to sell from time to time
its senior debt securities, consisting of notes, debentures, or other
evidences of indebtedness (the "Debt Securities"). The Debt
Securities offered by the Company hereby will have an aggregate
initial public offering price not to exceed $500,000,000, including
the equivalent thereof in one or more foreign currencies, foreign
currency units, or composite currencies, including European Currency
Units. The Debt Securities may be offered as separate series in
amounts, at prices, and on terms to be determined at the time of sale
and to be set forth in supplements to this Prospectus (each, a
"Prospectus Supplement"). The Company may sell Debt Securities to or
through underwriters or dealers, directly to other purchasers, or
through agents. See "Plan of Distribution."
The Debt Securities will be unsecured and will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. The
specific terms of the Debt Securities will be set forth in one or more
Prospectus Supplements, together with the terms of the offering and
sale of the Debt Securities, the initial offering price and the net
proceeds to the Company from the sale thereof. Each Prospectus
Supplement will include, among other things, the specific designation,
aggregate principal amount, denominations, currency, location of the
offering, maturity, interest rate or method for its calculation, if
any, interest payment dates, whether such Debt Securities will be
issued in registered form, bearer form, or both or in the form of
global securities, any terms for redemption at the option of the
Company or the holder, any terms for sinking fund payments, and the
currency or currency unit in which principal, premium, or interest is
payable. Each Prospectus Supplement will also contain information,
when applicable, about material United States federal income tax
considerations relating to, and any listings on a securities exchange
of, the Debt Securities covered by such Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
________________________
The Company may sell the Debt Securities directly to purchasers,
through agents designated from time to time, or through underwriters
or dealers on terms determined by market conditions at the time of
sale. If any agents, underwriters or dealers are involved in the sale
of the Debt Securities, the names of such agents, underwriters, or
dealers and any applicable commissions or discounts and the net
proceeds to the Company from such sale will be set forth in the
applicable Prospectus Supplement.
________________________
SALOMON SMITH BARNEY SBC WARBURG DILLON READ INC.
The date of this Prospectus is May__, 1998.
<PAGE>3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements, and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements, and other information
concerning the Company can be inspected and copied at the public
reference facilities maintained by the Commission at its office at
Room 1024, Judiciary Plaza, 450 5th Street, N.W., Washington, D.C.
20549, as well as at the Regional Offices of the Commission at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661, and Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies of such material can be obtained from the
Public Reference Section of the Commission at Judiciary Plaza, 450 5th
Street, N.W., Washington, D.C. 20549 at prescribed rates. In
addition, the Company's Common Stock is listed on the New York Stock
Exchange and the Pacific Exchange and such reports and other
information concerning the Company also may be inspected at their
offices at 20 Broad Street, New York, New York 10005 and 301 Pine
Street, San Francisco, California 94104, respectively. The Commission
maintains a web site at http://www.sec.gov that contains reports,
proxy and information statements, and other information that
registrants, including the Company, have filed electronically with the
Commission.
The Company has filed with the Commission a Registration
Statement on Form S-3 under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Debt Securities. This
Prospectus does not contain all of the information set forth in the
Registration Statement. For further information with respect to the
Company and such securities, reference is made to the Registration
Statement and to the exhibits and schedules filed therewith. The
Registration Statement and such exhibits and any schedules attached to
the Registration Statement can be inspected at the office of the
Commission, Judiciary Plaza, 450 5th Street, N.W., Washington, D.C.
20549.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year
ended January 3, 1998, filed with the Commission pursuant to Section
13 or 15(d) of the Exchange Act, is incorporated herein by reference.
All other documents filed by the Company pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the
Debt Securities hereunder shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of the filing
of such reports and documents. The Company will provide a copy of any
documents incorporated by reference herein (exclusive of exhibits
unless such exhibits are specifically incorporated by reference
therein), without charge, to each person to whom this Prospectus is
delivered, upon written or oral request to M. Richard Warner, Esq.,
Vice President, General Counsel, and Secretary, Temple-Inland Inc.,
303 South Temple Drive, Diboll, Texas 75941 (Telephone (409) 829-
5511).
Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document
that also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
2
<PAGE>4
THE COMPANY
The Company is a holding company that conducts all of its
operations through its subsidiaries. The Company holds interests in
corrugated packaging, bleached paperboard, building products, timber
and timberlands, and financial services. The business of the Company
is divided among three groups: (1) the Paper Group, which consists of
the corrugated packaging and bleached paperboard operations, (2) the
Building Products Group, and (3) the Financial Services Group.
The Company's Paper Group consists of the corrugated packaging
and bleached paperboard operations. The corrugated packaging operation
is vertically integrated and consists of four linerboard mills, three
corrugating medium mills, 39 box plants, and nine specialty converting
plants. In February 1998, the Company announced its intention to
close, during the second quarter of 1998, one of its corrugating
medium mills and one of its box plants, both located in Newark,
California. The bleached paperboard operation consists of one large
mill located in Evadale, Texas.
The Company's Building Products Group manufactures a wide range
of building products including lumber, plywood, particleboard, gypsum
wallboard, and fiberboard. Forest resources include approximately 2.2
million acres of timberland in Texas, Louisiana, Georgia, and Alabama.
The Company's Financial Services Group consists of savings bank
activities, mortgage banking, real estate development, and insurance
brokerage.
The Company is a Delaware corporation that was organized in 1983.
Its principal subsidiaries include Inland Paperboard and Packaging, Inc.
("Inland"), Temple-Inland Forest Products Corporation ("Temple-Inland
FPC"), Temple-Inland Financial Services Inc. ("Financial Services"),
Guaranty Federal Bank, F.S.B. ("Guaranty"), and Temple-Inland Mortgage
Corporation ("Temple-Inland Mortgage"). The Company's principal executive
offices are located at 303 South Temple Drive, Diboll, Texas 75941. Its
telephone number is (409) 829-5511.
3
<PAGE>5
RATIO OF EARNINGS TO FIXED CHARGES
The table below sets forth the ratio of earnings to fixed charges
of the Company, computed on both a consolidated basis and a parent
company basis, for the periods indicated. For purposes of computing
the consolidated ratios, earnings consists of earnings before income
taxes and fixed charges, and fixed charges consists of all interest
charges and ten percent of rent expense, which approximates the
interest component of such expense. The consolidated ratios are also
presented excluding interest on deposits from fixed charges. For
purposes of computing the parent company ratios, earnings consists of
the earnings of the parent company before income taxes (excluding
unremitted earnings from the Financial Services Group), dividends from
the Financial Services Group, and fixed charges, and fixed charges
consists of all parent company interest charges and ten percent of
rent expense, which approximates the interest component of such
expense.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
Consolidated 1.37x 1.65x 2.45x 1.82x 1.45x
Consolidated, excluding interest
on deposits 1.17x 1.29x 1.68x 1.37x 1.20x
Parent company <F1> 3.07x 2.24x 3.30x 2.16x 1.66x
________________
<FN>
<F1> In 1997, the parent company received dividends from the
Financial Services Group in the amount of $200 million that
were the result of nonrecurring transactions rather than
earnings. Excluding these nonrecurring transactions, the
parent company ratio of earnings to fixed charges for 1997
would have been 1.38x.
</FN>
</TABLE>
Although earnings from the Financial Services Group is included
for purposes of computing the consolidated ratios set forth above, the
ability of the Company to receive dividends from the Financial
Services Group may be affected from time to time as a result of
regulatory limitations.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be
used for general corporate purposes, which may include capital
expenditures, working capital requirements, and reduction of
commercial paper and other short-term indebtedness. At April 4, 1998,
the Company had outstanding $262.5 million of commercial paper and
other short-term borrowings with a weighted average interest rate of
5.725 percent. The precise amount and timing of the application of
such proceeds will depend upon the funding requirements of the Company
and the availability and cost of other funds. Pending such
application, the net proceeds from the sale of Debt Securities may be
temporarily invested.
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<PAGE>6
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be issued under an Indenture dated as of
September 1, 1986, as amended by the First Supplemental Indenture,
dated as of April 15, 1988, the Second Supplemental Indenture, dated
as of December 27, 1990, and the Third Supplemental Indenture dated as
of May 9, 1991 (the "Indenture"), between the Company and The Chase
Manhattan Bank, formerly known as Chemical Bank, 450 West 33rd Street,
New York, New York 10001, as Trustee (the "Trustee"). A copy of the
Indenture has been filed with the Commission as an exhibit to the
Registration Statement of which this Prospectus forms a part. There is
no other material relationship between the Company and the Trustee.
GENERAL
The following description of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The Debt Securities may be
issued from time to time in one or more series. The Debt Securities
offered by this Prospectus will be limited to $500,000,000 aggregate
principal amount, plus an additional amount of Original Issue Discount
Debt Securities (as hereinafter defined) such that the aggregate
public offering price of all Debt Securities will not exceed
$500,000,000 (for such purposes the initial public offering price of
any Debt Securities denominated in any foreign currency or currency
unit being the U.S. dollar equivalent thereof). The term "Original
Issue Discount Debt Security" as used herein means a Debt Security
that provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the maturity
thereof.
The particular terms of the Debt Securities offered by any
Prospectus Supplement (the "Offered Debt Securities") and the extent,
if any, to which such general provisions do not apply to the Offered
Debt Securities will be described in the Prospectus Supplement
relating to such Offered Debt Securities. Reference is made to the
Prospectus Supplement relating to the particular series of Offered
Debt Securities for the following terms of such Debt Securities: (a)
the title of such Debt Securities; (b) any limit upon the aggregate
principal amount of such Debt Securities; (c) the currency or currency
unit of payment; (d) the date or dates on which the principal of such
Debt Securities is payable; (e) the rate or rates at which such Debt
Securities will bear interest or the method for calculating such rate,
if any, the date or dates from which such interest will accrue, the
dates on which such interest will be payable and the record date for
the interest payable on any interest payment date; (f) whether such
Debt Securities will be issued in registered form or bearer form or
both; (g) the place where the principal of and interest on such Debt
Securities will be payable; (h) the period or periods, if any, within
which, the price or prices at which and the terms and conditions upon
which such Debt Securities may be redeemed by the Company; (i) the
obligation, if any, of the Company to redeem or purchase such Debt
Securities pursuant to any sinking fund or at the option of a Holder
thereof, and the terms and conditions upon which such Debt Securities
shall be redeemed or purchased pursuant to such obligation; (j) any
provisions for the remarketing of the Debt Securities by and on behalf
of the Company; (k) if other than denominations of $1,000 and integral
multiples thereof, the denominations in which such Debt Securities
shall be issuable; (l) if other than the principal amount thereof, the
portion of the principal amount of such Debt Securities that shall be
payable upon declaration of acceleration of the maturity thereof; and
(m) any other terms not inconsistent with the Indenture. If any Debt
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<PAGE>7
Securities of a particular series are issuable in bearer form, the
related Prospectus Supplement will set forth any limitations or other
provisions relating thereto.
Because the Company is a holding company, any claims that it or
its creditors, including holders of the Debt Securities (the
"Holders"), may have against the assets of any subsidiary of the
Company will be subject to the prior claims of the subsidiary's
creditors, except to the extent that the Company may itself be a
creditor with recognized claims against the subsidiary.
Unless otherwise indicated in the applicable Prospectus
Supplement, the Debt Securities will be issued only in fully
registered form with coupons and in denominations of $1,000 or any
integral multiple thereof. No service charge will be made for any
transfer or exchange of the Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
The United States federal income tax and other considerations
relating to the Debt Securities will be described in the applicable
Prospectus Supplement.
Debt Securities may be issued as Original Issue Discount
Securities to be sold at a substantial discount below their principal
amount. Special federal income tax and other considerations relating
thereto will be described in the applicable Prospectus Supplement.
The Company previously issued under the Indenture $70 million
aggregate principal amount of 8-3/8% Notes due 1996; $200 million
aggregate principal amount of Medium-Term Notes, Series B, maturing
from 1996 to 1998 at an interest rate averaging approximately 8-7/8%;
$200 million aggregate principal amount of 9% Notes Due May 1, 2001;
$100 million aggregate principal amount of Medium-Term Notes, Series
D, maturing 2006 at interest rates from 8-1/8% to 8-3/8%, and $100
million and $150 million aggregate principal amount of 7-1/4% Notes
and 8-1/4% Debentures maturing in 2002 and 2022, respectively. The
securities that may be offered under the Indenture are not limited in
amount. The following summaries of certain provisions of the Indenture
do not purport to be complete and are subject to and qualified in
their entirety by reference to the Indenture.
CERTAIN DEFINITIONS
Certain terms defined in Section 101 of the Indenture are
summarized below.
"Attributable Debt" means, at the time of determination, the
present value (discounted at the interest rate, compounded semi-
annually, equal to the weighted average Yield to Maturity (as
hereinafter defined) of the Securities then outstanding under the
Indenture, such average being weighted by the principal amount of the
Securities of each series or, in the case of Original Issue Discount
Securities, such amount to be determined as provided in the definition
of "Outstanding" in the Indenture) of the obligation of a lessee for
net rental payments during the remaining term of any lease (including
any period for which such lease has been extended) entered into in
connection with a Sale and Leaseback Transaction (as hereinafter
defined).
"Debt" means indebtedness for money borrowed.
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<PAGE>8
"Financial Services Subsidiary" means any Subsidiary (as defined
below) principally engaged in banking (including mortgage banking),
real estate development, insurance, or similar businesses.
"Funded Debt" means Debt that by its terms matures at, or is
extendible or renewable at the option of the obligor to, a date more
than twelve months after the date of the creation of such Debt.
"Mortgage" means any mortgage, pledge, lien, encumbrance, charge,
or security interest of any kind.
"Principal Manufacturing Facility" means any linerboard,
corrugating medium, paperboard, paper or pulp mill, or any paper
converting plant of the Company or any Subsidiary that is located
within the United States, other than any such mill or plant or portion
thereof (i) that is financed by obligations issued by a state, a
territory, or a possession of the United States, or any political
subdivision of any of the foregoing, or the District of Columbia, the
interest on which is excludable from gross income of the holders
thereof pursuant to the provisions of Section 103(a) of the Internal
Revenue Code (or any successor to such provision) as in effect at the
time of issuance of such obligations, or (ii) that, in the opinion of
the Board of Directors of the Company, is not of material importance
to the total business conducted by the Company and its Subsidiaries as
an entirety.
"Security" or "Securities" means any note or notes, bond or
bonds, debenture or debentures, or any other evidences of
indebtedness, as the case may be, of any series authenticated and
delivered from time to time under the Indenture, including but not
limited to the Debt Securities.
"Subsidiary" means any corporation of which a majority of the
outstanding voting stock is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or both.
"Timberlands" means, at any time, property in the United States
that contains standing timber that is, or upon completion of a growth
cycle then in process is expected to become, of a commercial quantity
and of merchantable quality.
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series or, if
applicable, at the most recent redetermination of interest on such
series and calculated in accordance with accepted financial practice.
CERTAIN COVENANTS
The Indenture contains certain covenants, including those
summarized below, which will be applicable (unless waived or amended)
so long as any of the Securities are outstanding.
Limitations on Liens. The Company will not, nor will it permit
any Subsidiary to, issue, assume, or guarantee any Debt if such Debt
is secured by a Mortgage upon any Timberlands or Principal
Manufacturing Facility, now owned or hereafter acquired, without in
any such case effectively providing that the Securities (together
with, if the Company shall so determine, any
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<PAGE>9
other indebtedness of the Company ranking equally with the Securities)
shall be secured equally and ratably with (or prior to) such Debt, except
that the foregoing restrictions shall not apply to (a) Mortgages on any
property acquired, constructed, or improved by the Company or any Subsidiary
after the date of the Indenture, which Mortgages are created or
assumed within 180 days after such acquisition (or in the case of
property constructed or improved, after the completion and
commencement of commercial operation of such property, whichever is
later) to secure or provide for the payment of the purchase price or
cost thereof, or existing Mortgages on property acquired, provided
that such Mortgages shall not apply to any property theretofore owned
by the Company or any Subsidiary other than theretofore unimproved
real property, (b) Mortgages on any property acquired from a
corporation that is merged with or into the Company or a Subsidiary or
Mortgages outstanding at the time any corporation becomes a
Subsidiary, (c) Mortgages in favor of the Company or any Subsidiary,
(d) Mortgages granted or incurred by any Financial Services
Subsidiary, or (e) any extension, renewal or replacement (or
successive extensions, renewals, or replacements) in whole or in part,
of any Mortgage referred to in the foregoing clauses (a), (b), (c), or
(d); provided that the amount of Debt secured thereby is not increased
and except that the following types of transactions, among others,
shall not be deemed to create Debt secured by a Mortgage: (x) the
Mortgage, sale, or other transfer of timber in connection with an
arrangement under which the Company or a Subsidiary is obligated to
cut such timber or a portion thereof in order to provide the mortgagee
or transferee with a specified amount of money, however determined,
and (y) Mortgages in favor of governmental bodies of the United States
or any state thereof to secure advance, progress, or other payments
pursuant to any contract or statute or to secure indebtedness incurred
to finance the purchase price or cost of constructing or improving the
property subject to such Mortgages.
Notwithstanding the foregoing, the Company or any Subsidiary may,
without securing the Securities, issue, assume, or guarantee secured
Debt (which would otherwise be subject to the foregoing restrictions)
in an aggregate amount that, together with all other such Debt and the
Attributable Debt in respect of Sale and Leaseback Transactions (as
defined below) of the Company and its Subsidiaries existing at such
time (other than Sale or Leaseback Transactions the proceeds of which
have been applied to the retirement of Securities or Funded Debt),
does not at the time exceed 10 percent of the net tangible assets of
the Company and its consolidated Subsidiaries as of the latest fiscal
year. "Net tangible assets" is defined as the aggregate amount of
assets (less applicable reserves and other properly deductible items)
after deducting therefrom (a) all current liabilities and (b) all
goodwill, trade names, trademarks, patents, unamortized debt discount
and expense (to the extent included in said aggregate amount of
assets) and other like intangibles, all as set forth on the most
recent consolidated balance sheet of the Company and its consolidated
Subsidiaries and computed in accordance with generally accepted
accounting principles.
Limitation on Sale and Leaseback Transactions. The Company will
not, nor will it permit any Subsidiary to, enter into any arrangement
with any person providing for the leasing to the Company or a
Subsidiary of any Timberlands or any Principal Manufacturing Facility
(except for temporary leases for a term of not more than three years),
which property has been owned and, in the case of any such Principal
Manufacturing Facility, has been placed in commercial operation for
more than 180 days by the Company or such Subsidiary and has been or
is to be sold or transferred by the Company or such Subsidiary to such
person (herein referred to as a "Sale and Leaseback Transaction"),
unless either (a) the Company or such Subsidiary would be entitled to
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<PAGE>10
incur Debt secured by a Mortgage on the property to be leased in an
amount equal to the Attributable Debt with respect to such Sale and
Leaseback Transaction without equally and ratably securing the
Securities or (b) the Company shall, and in such case the Company will
covenant that it will, apply an amount equal to the fair value (as
determined by its Board of Directors) of the property so leased to the
retirement, within 180 days of the effective date of any such Sale and
Leaseback Transaction, of Securities or of Funded Debt of the Company
that ranks on a parity with the Securities.
Limitation on Debt of Subsidiaries. The Company will not permit
any Subsidiary to issue, assume, or guarantee any Debt except for (a)
Debt secured by a Mortgage permitted as described under "Limitation on
Liens" above; (b) Debt of a corporation existing at the time such
corporation is merged into or consolidated with, or disposes of all or
substantially all of its properties (or those of a division thereof)
to, a Subsidiary; (c) Debt of a corporation existing at the time such
corporation first becomes a Subsidiary; (d) Debt to, or held by, the
Company or another Subsidiary; (e) Debt existing on the date of the
Indenture; (f) Debt created in connection with, or with a view to,
compliance by such Subsidiary with the requirements of any program
adopted by any federal, state, or local governmental authority and
applicable to such Subsidiary and providing financial or tax benefits
to such Subsidiary that are not available directly to the Company; (g)
Debt incurred to pay all or any part of the purchase price or cost or
construction of property (or additions, substantial repairs,
alterations, or substantial improvements thereto) or equipment,
provided such Debt is incurred within one year of the acquisition or
completion of construction (or alteration or repair) and full
operation of such property, provided, further, in respect of such
additions, substantial repairs, alterations, or substantial
improvements, that the amount of such Debt may not exceed the expense
incurred to construct such additions, repairs, alterations, or
improvements; (h) Debt to a public entity on which the interest
payments are exempt from federal income tax under Section 103 of the
Internal Revenue Code (or any successor to such provision); (i) Debt
of a Financial Services Subsidiary; and (j) any extension, renewal, or
replacement of any Debt referred to in the foregoing clauses (a)
through (i), provided that the amount of Debt issued is not increased.
Notwithstanding the foregoing, any Subsidiary may issue, assume, or
guarantee Debt that would otherwise be subject to the foregoing
restrictions in an aggregate principal amount that, together with all
other Debt of the Company's Subsidiaries that would otherwise be
subject to the foregoing restrictions, does not at any one time exceed
10 percent of the net tangible assets of the Company and its
consolidated Subsidiaries as of the latest fiscal year.
Limitation on Transfers of Timberlands or Principal Manufacturing
Facilities to Financial Services Subsidiaries. The Company will not,
nor will it permit any Subsidiary (other than a Financial Services
Subsidiary) to, sell, transfer, or otherwise dispose of any
Timberlands or any Principal Manufacturing Facility to any Financial
Services Subsidiary other than for cash or other consideration that,
in the opinion of the Company's Board of Directors, constitutes fair
value for such Timberlands or such Principal Manufacturing Facility.
CONSOLIDATION, MERGER, SALE, OR CONVEYANCE
The Indenture provides that the Company may not consolidate with
or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any person,
unless (i) the successor corporation shall be a corporation organized
and existing under
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the laws of the United States or any state thereof
or the District of Columbia, and shall expressly assume by a
supplemental indenture the due and punctual payment of the principal
of, and any interest on, all the Securities and the performance of
every covenant in the Indenture on the part of the Company to be
performed or observed; (ii) immediately after giving effect to such
transaction, no Event of Default (as hereinafter defined), and no
event that, after notice or lapse of time or both, would become an
Event of Default, shall have occurred and be continuing; and (iii) the
Company shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel (each as defined in the Indenture), each
stating that such consolidation, merger, conveyance, or transfer and
such supplemental indenture comply with the foregoing provisions
relating to such transaction. In case of any such consolidation,
merger, conveyance, or transfer, such successor corporation will
succeed to, and be substituted for, the Company under the Indenture,
with the same effect as if it had been named in the Indenture as the
Company.
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF
An Event of Default with respect to any series of Securities is
defined in the Indenture as any of the following events: (a) default
for 30 days in payment of any interest on any of the Securities of
that series; (b) default in payment of principal of or premium on any
of the Securities of that series at maturity; (c) acceleration of the
maturity of, or failure to pay at maturity, any Funded Debt of the
Company in excess of $10,000,000; (d) default in payment of any
sinking or purchase fund or analogous obligation due under the terms
of the Securities of such series; (e) default by the Company in the
performance of any other covenant or warranty contained in the
Indenture for the benefit of any of the Securities of that series,
which default shall not have been remedied for a period of 90 days
after notice given as specified in the Indenture; (f) certain events
of bankruptcy, insolvency, and reorganization of the Company; and (g)
any other Event of Default provided in the supplemental Indenture
under which such series of Securities is issued or in the form of
Security for such series.
A default under other indebtedness of the Company will not
necessarily be a default under the Indenture, and a default under one
series of Securities under the Indenture will not necessarily be a
default under any other series of Securities.
The Indenture provides that (i) if an Event of Default described
in clause (a), (b), (d), (e), or (g) above shall have occurred and be
continuing with respect to any series of Securities, either the
Trustee or the Holders of not less than 25 percent in aggregate
principal amount of the Securities of such series then outstanding may
declare the principal of all outstanding Securities of such series and
the interest accrued thereon, if any, to be due and payable
immediately and (ii) if an Event of Default described in clause (e) or
(g) (if the Event of Default is in respect of all series of
Securities), or (c) or (f) above shall have occurred and be
continuing, either the Trustee or the Holders of not less than 25
percent in aggregate principal amount of all series of Securities
(treated as one class) may declare the principal of all series of
Securities then outstanding and the interest accrued thereon, if any,
to be due and payable immediately, but upon certain conditions such
declarations with respect to the Securities of any series may be
annulled and past defaults (except for defaults not theretofore cured
in the payment of principal of, or any interest on, any series of
Securities and defaults in compliance with certain covenants) may be
waived by the Holders of a majority in aggregate principal amount of
the Securities of such series then outstanding.
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<PAGE>12
Under the Indenture the Trustee must give to the Holders of the
Securities of any series notice of all uncured defaults known to it
with respect to the Securities of such series within 90 days after
such a default occurs (the term default to include the events
specified as Events of Default above without notice or grace periods);
provided that, except in the case of default in the payment of
principal of, or any interest on, any of the Securities of any 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 Securities of such series; and
provided, further, that for an Event of Default described in clause
(e), no such notice shall be given to the holder of the Securities of
such series until at least 90 days after the occurrence thereof.
No holder of a Security of any series may institute any action
under the Indenture unless (a) such holder shall have given the
Trustee written notice of a continuing Event of Default; (b) the
Holders of not less than 25 percent in aggregate principal amount of
the Securities of such series then outstanding shall have requested
the Trustee to institute proceedings in respect of such Event of
Default; (c) such Holder or Holders shall have offered the Trustee
such reasonable indemnity as the Trustee may require; (d) the Trustee
shall have failed to institute an action for 60 days thereafter, and
(e) no inconsistent direction shall have been given to the Trustee
during such 60-day period by the Holders of a majority in aggregate
principal amount of the Securities of such series.
The Holders of a majority in aggregate principal amount of the
Securities of any series then outstanding will have the right, subject
to certain limitations, to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to
the Securities of such series. The Indenture provides that in case an
Event of Default shall occur and be continuing, the Trustee, in
exercising its rights and powers under the Indenture, will be required
to use the degree of care of a prudent person in the conduct of such
person's own affairs. The Indenture further provides that the Trustee
shall not be required to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
under the Indenture unless it has reasonable grounds for believing
that repayment of such funds, or adequate indemnity against such risk
or liability, is reasonably assured to it.
The Company must furnish to the Trustee within 120 days after the
end of each fiscal year a statement signed by certain officers of the
Company to the effect that a review of the activities of the Company
during such year and of its performance under the Indenture and the
terms of the Securities has been made and that, to the best of the
knowledge of the signatories based on such review, the Company is not
in default in the performance and observance of the terms of the
Indenture or, if the Company is in default, specifying such default.
LEVERAGED AND OTHER TRANSACTIONS
Other than the restrictions on Liens, Sale and Leaseback
Transactions, and Limitation on Debt of Subsidiaries described above,
the Indenture and the Debt Securities do not contain any covenants or
other provisions designed to afford Holders of the Debt Securities
protection in the event of a highly leveraged transaction involving
the Company or any Subsidiary.
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<PAGE>13
MODIFICATION OF THE INDENTURE
With certain exceptions, the Indenture or the rights of the
Holders of the Securities of any series may be modified by the Company
and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of each affected series then outstanding,
but no such modification may be made that would (i) change the
maturity of principal of, or any installment of interest on, any
Security, or reduce the principal amount thereof or the interest
thereon, or change the method of computing the amount of principal
thereof or interest thereon on any date or change any place of payment
where, or the coin or currency in which, any Security or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the maturity thereof; (ii)
reduce the percentage in principal amount of the outstanding
Securities of any series, the consent of whose holders is required for
any supplemental indenture, or the consent of whose holders is
required for any waiver of compliance with certain provisions of the
Indenture or certain defaults thereunder and their consequences,
provided for in the Indenture; or (iii) modify any of the provisions
of certain sections of the Indenture, including the provisions
summarized in this paragraph, 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 holder of each
outstanding Security affected thereby.
DEFEASANCE OF THE SECURITIES OF ANY SERIES
The Company will be deemed to have paid and discharged the entire
indebtedness on all the outstanding Securities of any series by (a)
depositing with the Trustee (i) as trust funds in trust an amount
sufficient to pay and discharge the entire indebtedness on all
Securities of such series for principal and interest or (ii) as
obligations in trust such amount of direct obligations of, or
obligations the principal of and interest on which are fully
guaranteed by, the government of the United States as will, together
with the income to accrue thereon without consideration of any
reinvestment thereof, be sufficient to pay and discharge the entire
indebtedness on all Securities of such series for principal and
interest and (b) satisfying certain other conditions precedent
specified in the Indenture. In the event of any such defeasance,
Holders of Securities of such series would be able to look only to
such trust fund for payment of principal of, and any interest on,
their Securities. To exercise such defeasance option, the Company, in
addition to satisfying certain other conditions precedent specified in
the Indenture, is required to deliver to the Trustee an Opinion of
Counsel to the effect that the deposit of funds or obligations
described above and related defeasance would not cause the Holders of
Securities of such series to recognize income, gain or loss for
Federal income tax purposes, such Opinion of Counsel to be accompanied
by a ruling to such effect received from or published by, the United
States Internal Revenue Service.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part
in the form of one or more Global Securities that will be deposited
with, or on behalf of The Depository Trust Company, New York, New York
(the "Depository"), and registered in the name of a nominee of the
Depository. Global Securities may be issued in temporary or permanent
form. If the Depository is at any time unwilling, unable, or
ineligible to continue as depository and a successor depository is not
appointed by the Company within 90 days, the Company will issue
Certificated Debt Securities in exchange for the Global Security or
Securities. In addition, the Company may
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<PAGE>14
at any time and in its sole discretion determine not to have any Book-Entry
Debt Securities represented by one or more Global Securities, and in such
event, will issue Certificated Debt Securities in exchange for the Global
Security or Securities representing such Book-Entry Debt Securities.
The Depository has advised the Company and the Underwriters as
follows: the Depository is a limited-purpose trust company organized
under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to
the provisions of Section 17A of the Exchange Act. The Depository
holds securities that its participants ("Participants") deposit with
the Depository. The Depository also facilitates the settlement among
Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-
entry changes in Participants' accounts, thereby eliminating the need
for physical movement of securities certificates. "Direct
Participants" include securities brokers and dealers (which may
include any underwriters or agents through which the Debt Securities
are sold), banks, trust companies, clearing corporations, and certain
other organizations. The Depository is owned by a number of its
Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the Depository's system is also
available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial
relationship with a Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to the Depository and
its Participants are on file with the Commission.
Except as set forth below, each Global Security may be
transferred, in whole and not in part, only to another nominee of the
Depository or to a successor of the Depository or its nominee. The
specific terms of any depository arrangement with respect to a series
of Debt Securities will be described in the applicable Prospectus
Supplement. The Company anticipates that the following provisions
will generally apply to any depository arrangements.
Purchases of Book-Entry Debt Securities under the Depository's
system must be made by or through Direct Participants, which will
receive a credit for the Book-Entry Debt Securities on the
Depository's records. The ownership interest of each beneficial owner
of each Book-Entry Debt Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. A
Beneficial Owner will not receive written confirmation from the
Depository of its purchase, but such Beneficial Owner is expected to
receive a written confirmation providing details of such transaction,
as well as periodic statements of its holdings, from the Direct or
Indirect Participant through which such Beneficial Owner entered into
such transaction. Transfers of ownership interests in the Book-Entry
Debt Securities are to be accomplished by entries made on the books of
Participants acting on behalf of the Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership
interests in Book-Entry Debt Securities, except in the event that use
of the book-entry system for one or more Book-Entry Debt Securities is
discontinued.
To facilitate subsequent transfers, all Global Securities
deposited by Participants with the Depository are registered in the
name of the Depository's partnership nominee, Cede & Co. The deposit
of Global Securities with the Depository and their registration in the
name of Cede & Co.
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<PAGE>15
effect no change in beneficial ownership. The
Depository has no knowledge of the actual Beneficial Owners of the
Book-Entry Debt Securities; the Depository's records reflect only the
identity of the Direct Participants to whose accounts such Book-Entry
Debt Securities are credited, which may or may not be the Beneficial
Owners. The Participants remain responsible for keeping account of
their holdings on behalf of their customers.
Delivery of notices and other communications by the Depository to
Direct Participants, by Direct Participants to Indirect Participants,
and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to
time.
Redemption notices shall be sent to Cede & Co. If less than all
of the Book-Entry Debt Securities within an issue are being redeemed,
the Depository's current practice is to determine by lot the amount of
the interest of each Direct Participant in such issue to be redeemed.
Neither the Depository nor Cede & Co. will consent or vote with
respect to Book-Entry Debt Securities. Under its usual procedures, the
Depository will mail an "Omnibus Proxy" to the issuer as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose
accounts the Book-Entry Debt Securities are credited on the record
date (identified in a listing attached to the Omnibus Proxy).
Principal and interest payments on the Book-Entry Debt Securities
will be made to the Depository. The Depository's practice is to credit
Direct Participants' accounts on the payable date in accordance with
their respective holdings shown on the Depository's records unless the
Depository has reason to believe that it will not receive payment on
the payable date. Payments by Participants to Beneficial Owners will
be governed by standing instructions and customary practices, as in
the case of securities held for the accounts of customers in bearer
form or registered in "street name," and will be the responsibility of
such Participants and not of the Depository, the Paying Agent, or the
Company, subject to any statutory or regulatory requirements as may be
in effect from time to time. Payment of principal and interest to the
Depository is the responsibility of the Company or the Paying Agent,
disbursement of such payments to Direct Participants is the
responsibility of the Depository, and disbursement of such payments to
the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
A Beneficial Owner shall give notice to elect to have its Book-
Entry Debt Securities purchased or tendered, through its Participant,
to the Paying Agent, and shall effect delivery of such Book-Entry Debt
Securities by causing the Direct Participant to transfer the
Participant's interest in the Book-Entry Debt Securities, on the
Depository's records, to the Paying Agent. The requirement for
physical delivery of Book-Entry Debt Securities in connection with a
demand for purchase or a mandatory purchase will be deemed satisfied
when the ownership rights in the Book-Entry Debt Securities are
transferred by Direct Participant on the Depository's records.
The information in this section concerning the Depository and the
Depository's book-entry system has been obtained from sources that the
Company believes to be reliable, but the Company takes no
responsibility for the accuracy thereof.
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None of the Company, any underwriter, agent, or dealer, the
Trustee, any paying agent, or the registrar for the Debt Securities
will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial
ownership interests in a Global Security or for maintaining,
supervising, or reviewing any records relating to such beneficial
ownership interests.
INTERNATIONAL OFFERING
If specified in the applicable Prospectus Supplement, the Company
may issue Debt Securities in an international offering. Such Debt
Securities may be issued in bearer form ("Bearer Securities") pursuant
to a supplement to the Indenture that will be described in an
applicable Prospectus Supplement.
In connection with any such international offering, the Company
will designate paying agents, registrars, or other agents with respect
to the Debt Securities, as specified in the applicable Prospectus
Supplement.
Debt Securities issued in an international offering may be
subject to certain selling restrictions that will be described in the
applicable Prospectus Supplement. Such Debt Securities may be listed
on one or more foreign stock exchanges as described in the applicable
Prospectus Supplement. Special United States tax and other
considerations, if any, applicable to an international offering will
be described in the applicable Prospectus Supplement.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in or outside the United
States through underwriters, through or to dealers, directly to one or
more purchasers, or through agents. Each Prospectus Supplement with
respect to the Debt Securities will set forth the terms of the
offering of applicable Debt Securities, including the name or names of
any underwriters, dealers, or agents, the purchase price of the Debt
Securities and the proceeds to the Company from such sale, any delayed
delivery arrangements, any underwriting discounts and other items
constituting underwriters' compensation, the initial public offering
price, any discounts or concessions allowed or reallowed or paid to
dealers, and any securities exchanges on which the Debt Securities may
be listed.
If underwriters are used in the sale, the Debt Securities will be
acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The Debt Securities may be offered to
the public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more firms acting
as underwriters. The underwriter or underwriters with respect to a
particular underwritten offering of Debt Securities will be named in
the Prospectus Supplement relating to such offering, and if an
underwriting syndicate is used, the managing underwriter or
underwriters will be set forth on the cover of such Prospectus
Supplement. Unless otherwise set forth in the Prospectus Supplement
relating thereto, the obligations of the underwriters or agents to
purchase the Debt Securities will be subject to conditions precedent
and the underwriters will be obligated to purchase all the Debt
Securities if any are purchased. The initial public offering price
and any
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<PAGE>17
discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.
If dealers are used in the sale of Debt Securities, the Company
will sell such Debt Securities to the dealers as principals. The
dealers may then resell such Debt Securities to the public at varying
prices to be determined by such dealers at the time of resale. The
names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Debt Securities may be sold directly by the Company or through
agents designated by the Company from time to time at fixed prices,
which may be changed, or at varying prices determined at the time of
sale. Any agent involved in the offer or sale of the Debt Securities
will be named in the Prospectus Supplement relating thereto and any
commissions payable by the Company to such agent will be set forth
therein. Unless otherwise indicated in the Prospectus Supplement, any
such agent will be acting on a best efforts basis for the period of
its appointment.
In connection with the sale of Debt Securities, underwriters or
agents acting on behalf of the Company may receive compensation from
the Company or from purchasers of Debt Securities for whom they may
act as agents, in the form of discounts, concessions, or commissions.
The underwriters, dealers, and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters under
the Securities Act and any discounts or commissions received by them
from the Company and any profit on the resale of Debt Securities by
them may be deemed to be underwriting discounts and commissions under
the Securities Act.
Under agreements that may be entered into by the Company,
underwriters, dealers, and agents that participate in the distribution
of Debt Securities may be entitled to indemnification by the Company
against certain liabilities, including liabilities under the
Securities Act, and to certain rights of contribution from the
Company.
If so indicated in the applicable Prospectus Supplement, the
Company will authorize underwriters or other persons acting as the
Company's agents to solicit offers by certain types of institutions to
purchase Debt Securities from the Company at the public offering price
set forth in such Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a future date. The
obligations of any purchaser under any such contract will not be
subject to any condition except that (1) the purchase of the Debt
Securities shall not at the time of delivery be prohibited under the
laws of the jurisdiction to which such purchaser is subject, and (2)
if the Debt Securities are also being sold to underwriters acting as
principals for their own account, the underwriters shall have
purchased such Debt Securities not sold for delayed delivery. The
underwriters and such other persons will not have any responsibility
in respect of the validity or performance of such contracts. A
commission described in the Prospectus Supplement will be paid to
underwriters or agents soliciting purchases of Debt Securities
pursuant to contracts accepted by the Company.
Certain of the underwriters, agents, or dealers may be customers
of, including borrowers from, engage in transactions with, and perform
services for, the Company or one or more of its affiliates in the
ordinary course of business.
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The Debt Securities may or may not be listed on a national
securities exchange. No assurances can be given that there will be a
market for the Debt Securities.
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule
104 permits stabilizing bids to purchase the underlying security so
long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve purchases of the Debt
Securities in the open market after the distribution has been
completed in order to cover syndicate short positions. Stabilizing
and syndicate covering transactions may cause the price of the Debt
Securities to be higher than it would otherwise be in the absence of
such transactions. These transactions, if commenced, may be
discontinued at any time.
LEGAL MATTERS
Certain legal matters in connection with this offering are being
passed upon for the Company by M. Richard Warner, Esq., its general
counsel, and Skadden, Arps, Slate, Meagher & Flom LLP, Washington,
D.C., and for the underwriters or agents, if any, by Cravath, Swaine &
Moore, New York, New York.
EXPERTS
The consolidated financial statements and schedule of the Company
incorporated by reference or included in the Company's Annual Report
(Form 10-K) for the year ended January 3, 1998, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports
thereon incorporated by reference or included therein and incorporated
herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting
and auditing.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses to be paid by the
Company in connection with the distribution of the securities being
registered, other than underwriting discounts and commissions:
Amount
Registration Fee--Securities and Exchange Commission $ 147,500
*Accounting Fees and Expenses 30,000
*Blue Sky Fees and Expenses 15,000
*Trustee Fees and Expenses 15,000
*Rating Agency Fees 150,000
*Printing and Engraving 75,000
*Legal Fees and Expenses 75,000
*Miscellaneous Expenses 7,500
---------
Total $ 515,000
=========
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102(b)(7) of the Delaware General Corporation Law permits
a corporation to limit the personal liability of its directors in
certain cases. Article Eleventh of the Company's Certificate of
Incorporation provides that no director of the Company shall be
personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of such director's duty of loyalty to the
Company or its stockholders, (ii) for any acts or omissions not in
good faith or that involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which such director
derived an improper personal benefit.
Section 145 of the Delaware General Corporation Law permits
indemnification in cases where a director or officer has been
successful in defending any claim or proceeding and permits
indemnification, even if a director or officer has not been
successful, in cases where the director or officer acted in good faith
and in a manner that he reasonably believed was in, or not opposed to,
the best interest of the corporation. To be indemnified with respect
to criminal proceedings, the director or officer must also have had no
reasonable cause to believe that his conduct was unlawful. In the case
of a claim by a third party (that is, a party other than the
corporation), the Delaware General Corporation Law permits
indemnification for judgments, fines, and amounts paid in settlement,
as well as expenses. In the case of a claim by or in the right of the
corporation (including stockholder derivative suits), indemnification
under the Delaware General Corporation Law is limited to expenses, but
does not cover judgments or amounts paid in settlement, and no
indemnification of expenses is permitted if the director or officer is
adjudged liable to the corporation, unless a court determines that,
despite such adjudication but in view of all the
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circumstances, such indemnification is nonetheless proper. The Delaware
General Corporation Law also permits the advancement of expenses to
directors and officers upon receipt by the corporation of an undertaking
to repay all amounts so advanced if it is ultimately determined that the
director or officer has not met the applicable standard of conduct and
is, therefore, not entitled to be indemnified.
Article VI of the Company's By-Laws generally provides that,
subject to certain limitations, each person who was or is made a party
or is threatened to be made a party to or is involved in any
threatened, pending, or completed legal action, suit, or proceeding
whether civil, criminal, administrative, or investigative by reason of
the fact that he is or was a director, officer, or employee of the
Company or a direct or indirect wholly owned subsidiary of the Company
(except Guaranty Federal Bank, F.S.B.), or is or was serving at the
request of the corporation as a director, officer, employee, or agent
of any such subsidiary or another company, savings and loan
association, partnership, joint venture, trust, employee benefit plan,
or other enterprise, shall be indemnified and held harmless by the
corporation, to the full extent authorized by the Delaware General
Corporation Law, against all expenses (including attorneys' fees),
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection therewith, provided
that such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the
Company (and with respect to a criminal action, had no reason to
believe his conduct was unlawful) except that with respect to actions
brought by or in the right of the Company, no indemnification shall be
made in respect of any claim, issue, or matter as to which such person
shall have been adjudicated to be liable to the Company, unless and
only to the extent that the applicable court determines, upon
application, that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses. Such
indemnification shall continue as to a person who has ceased to be
director, officer, employee, or agent and shall inure to the benefit
of his or her heirs, executors and administrators. Article VI provides
that the Company may pay the expenses incurred in defending any such
proceeding in advance of its final disposition upon delivery to the
Company of an undertaking, by or on behalf of such director, officer,
employee, or agent to repay such amounts so advanced if it shall
ultimately be determined that such person is not entitled to be
indemnified under Article VI.
Both the Delaware General Corporation Law and Article VI of the
Company's By-laws specifically state that their indemnification
provisions shall not be deemed exclusive of any other indemnity rights
a director may have. The Company has entered into indemnification
agreements with each of its directors that are intended to assure the
directors that they will be indemnified to the fullest extent
permitted by Delaware law.
Section 145 of the Delaware General Corporation Law permits a
corporation to purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee, or agent of the
corporation against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such. Under
an insurance policy maintained by the Company, the Company is insured
for certain amounts that it may be obligated to pay directors and
officers by way of indemnity, and each such director and officer is
insured against certain losses that he may incur by reason of his
being a director or officer and for which he is not indemnified by the
Company.
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Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, or persons
controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
The form of Selling Agency Agreement, which is filed as Exhibit
1.02 to this Registration Statement, and the form of Underwriting
Agreement, which is filed as Exhibit 1.01 to this Registration Statement,
provide for indemnification by the agents and the underwriters, as the
case may be, of directors and certain officers of the Company against
certain liabilities, including civil liabilities under the Securities Act.
ITEM 16. EXHIBITS
1.01 -- Form of Underwriting Agreement.*
1.02 -- Form of Selling Agency Agreement for Medium-Term
Notes.*
4.01 -- Indenture, dated as of September 1, 1986, between the
Company and The Chase Manhattan Bank, formerly known as
Chemical Bank, as Trustee, incorporated by reference to
Registration Statement on Form S-1, Registration No. 33-
8362, Exhibit 4.01.
4.02 -- Form of First Supplemental Indenture between the Company and
The Chase Manhattan Bank, formerly known as Chemical Bank,
as Trustee, incorporated by reference to Registration
Statement on Form S-3, Registration No. 33-20431, Exhibit
4.02.
4.03 -- Form of Second Supplemental Indenture between the Company
and The Chase Manhattan Bank, formerly known as Chemical
Bank, as Trustee, incorporated by reference to File No. 1-
8634, Form 8-K, dated December 27, 1990, Exhibit 4.03.
4.04 -- Form of Third Supplemental Indenture between the Company and
The Chase Manhattan Bank, formerly known as Chemical Bank,
as Trustee, incorporated by reference to File No. 1-8634,
Form 10-Q, Exhibit 4.
4.05 -- Form of Note issued pursuant to the Indenture.*
5.01 -- Opinion of M. Richard Warner, Esq., General Counsel of the
Registrant, as to the legality of the securities to be
registered.
12.01-- Statements re: Computation of Ratios of Earnings to Fixed
Charges.
23.01-- Consent of Ernst & Young LLP.
23.02-- Consent of M. Richard Warner, Esq. (contained in his
opinion).
24.01-- Power of Attorney (on signature page).
25.01-- Statement of Eligibility of Trustee on Form T-1.
__________________
* To be filed by amendment
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
II-3
<PAGE>22
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the Registration Statement is on Form S-3, and the
information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) 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 the Registration
Statement shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) 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 Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person
II-4
<PAGE>23
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.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act, the information omitted from the form of
prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared
effective.
(2) For the purpose of determining any liability under the
Securities Act, 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-5
<PAGE>24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3
and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Diboll, State of Texas, on May 8, 1998.
TEMPLE-INLAND INC.
(Registrant)
By: /s/ Clifford J. Grum
Clifford J. Grum
Chairman of the Board and
Chief Executive Officer
POWERS OF ATTORNEY
Each person whose signature appears below constitutes and
appoints M. Richard Warner and David H. Dolben and each of them, as
his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in his name,
place, and stead, in any and all capacities, to sign any or all
further amendments (including post-effective amendments) to this
Registration Statement or any Registration Statement for the same
offering that is to be effective upon filing pursuant to Rule 462(b)
under the Securities Act of 1933, as amended, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Capacity Date
/s/Clifford J. Grum Director, Chairman of the Board, May 8, 1998
Clifford J. Grum and Chief Executive Officer
/s/Kenneth M. Jastrow, II Director, President, Chief May 8, 1998
Kenneth M. Jastrow, II Operating Officer, and Chief
Financial Officer
/s/David H. Dolben Vice President and Chief May 8, 1998
David H. Dolben Accounting Officer
/s/Paul M. Anderson Director May 8, 1998
Paul M. Anderson
/s/Robert Cizik Director May 8, 1998
Robert Cizik
/s/Anthony M. Frank Director May 8, 1998
Anthony M. Frank
/s/William B. Howes Director May 8, 1998
William B. Howes
/s/Bobby R. Inman Director May 8, 1998
Bobby R. Inman
/s/Herbert A. Sklenar Director May 8, 1998
Herbert A. Sklenar
/s/Walter P. Stern Director May 8, 1998
Walter P. Stern
/s/Arthur Temple III Director May 8, 1998
Arthur Temple III
/s/Charlotte Temple Director May 8, 1998
Charlotte Temple
/s/Larry E. Temple Director May 8, 1998
Larry E. Temple
<PAGE>25
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT PAGE
5.01 -- Opinion of M. Richard Warner, Esq., General
Counsel of the Registrant, as to the legality
of the securities to be registered.
12.01-- Statements re: Computation of Ratios of
Earnings to Fixed Charges.
23.01-- Consent of Ernst & Young LLP
23.02-- Consent of M. Richard Warner, Esq.
(contained in his opinion).
24.01-- Power of Attorney (on signature page).
25.01-- Statement of Eligibility of Trustee on Form T-1.
TEMPLE-INLAND INC. M. RICHARD WARNER
Drawer N Vice President
Diboll, Texas 75941 General Counsel and Secretary
409-829-7729
May 8, 1998
Temple-Inland Inc.
303 South Temple Drive
Diboll, Texas 75941
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
I am General Counsel of Temple-Inland Inc., a Delaware
corporation (the "Company"). This opinion is being furnished to
you in connection with the preparation and filing with the
Securities and Exchange Commission of the Registration Statement
on Form S-3 (the "Registration Statement") relating to
$500,000,000 of Debt Securities (the "Securities") of the Company
as more fully described in the Registration Statement. Terms
appearing herein with capital letters and not otherwise defined
herein shall have the meanings given them in the Registration
Statement.
As counsel for the Company, I have examined corporate
proceedings taken by the Company, the Certificate of
Incorporation, and Bylaws of the Company and its subsidiaries,
and such other documents as I have deemed necessary and relevant
as a basis for this opinion, including the Underwriting Agreement
and the Indenture. I am admitted to practice law only in the
State of Texas, and I express on opinion as to the laws of any
other jurisdiction other than the General Corporation Law of the
State of Delaware and the laws of the United States of America.
Based upon the foregoing, I am of the opinion that the
issuance of the Securities has been duly authorized by the
Company and when issued and sold in accordance with the terms of
the Underwriting Agreement and the Indenture, will constitute
valid and binding obligations of the Company.
Temple-Inland Inc.
May 8, 1998
Page 2
I hereby consent to the filing of this Opinion with the
Commission as an exhibit to the Registration Statement and to the
use of my name in the Prospectus under the caption "Legal
Matters."
Very truly yours,
/s/ M. Richard Warner
M. Richard Warner
MRW:dgd
Exhibit 12.01
TEMPLE-INLAND INC.
RATIO OF EARNINGS TO FIXED CHARGES
WITHOUT TIFS DEPOSIT INTEREST
(dollars in millions)
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Fixed Charges:
Interest expense 112 113 111 95 82
TIFS interest on
borrowings 157 127 121 81 99
Interest capitalized
during period 2 3 39 28 13
Portion of rent expense
representative of
interest 5 4 3 3 3
---- ---- ---- ---- ----
Total fixed charges 276 247 274 207 197
==== ==== ==== ==== ====
Earnings:
Pretax income from
continuing operations 95 156 431 193 96
Add:
Fixed charges from above 276 247 274 207 197
Less interest capitalized
during period (2) (3) (39) (28) (13)
Current period
amortization of interest
capitalized in prior
periods 8 9 7 6 5
---- ---- ---- ---- ----
377 409 673 378 285
==== ==== ==== ==== ====
Ratio of Earnings to
Fixed Charges 1.37 1.65 2.45 1.82 1.45
==== ==== ==== ==== ====
Exhibit 12.01 (continued)
TEMPLE-INLAND INC.
RATIO OF EARNINGS TO FIXED CHARGES
WITH TIFS INTEREST EXPENSE
(dollars in millions)
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Fixed Charges:
Interest expense - Parent
Company 112 113 111 95 82
Interest expense -
Borrowed Funds (TIFS) 157 127 121 81 99
Interest on Deposits
(TIFS) 331 308 313 254 237
Interest capitalized
during period 2 3 39 28 13
Portion of rent expense
representative of
interest 5 4 3 3 3
---- ---- ---- ---- ----
Total fixed charges 607 555 587 461 434
==== ==== ==== ==== ====
Earnings:
Pretax income from
continuing operations 95 156 431 193 96
Add:
Fixed charges from above 607 555 587 461 434
Less interest capitalized
during period (2) (3) (39) (28) (13)
Current period
amortization of interest
capitalized in prior
periods 8 9 7 6 5
---- ---- ---- ---- ----
708 717 986 632 522
==== ==== ==== ==== ====
Ratio of Earnings to
Fixed Charges 1.17 1.29 1.68 1.37 1.20
==== ==== ==== ==== ====
Exhibit 12.01 (continued)
TEMPLE-INLAND INC.
RATIO OF EARNINGS TO FIXED CHARGES-PARENT COMPANY
(dollars in millions)
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
Fixed Charges:
Interest expense 112 113 111 95 82
Interest capitalized
during period 2 3 39 28 13
Portion of rent expense
representative of interest 4 3 2 2 2
---- ---- ---- ---- ----
Total fixed charges 118 119 152 125 97
==== ==== ==== ==== ====
Earnings:
Pretax income from
continuing operations 95 156 431 193 96
Less: TIFS income before
tax (132) (63) (98) (56) (68)
Add: Dividends from TIFS 275 50 50 30 42
---- ---- ---- ---- ----
Pretax income from
continuing operations
adjusted for equity method
investee (TIFS) 238 143 383 167 70
Add:
Fixed charges from above 118 119 152 125 97
Less interest capitalized
during period (2) (3) (39) (28) (12)
Current period
amortization of interest
capitalized in prior
periods 8 9 7 6 5
---- ---- ---- ---- ----
362 268 503 270 160
==== ==== ==== ==== ====
Ratio of Earnings to Fixed
Charges 3.07 2.24 3.30 2.16 1.64
==== ==== ==== ==== ====
Exhibit 23.01
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement (Form S-3) and related
Prospectus of Temple-Inland Inc. for the registration of $500
million Debt Securities, and to the incorporation by reference
therein of our reports dated January 30, 1998, with respect to
the consolidated financial statements of Temple-Inland Inc.
incorporated by reference in its Annual Report (Form 10-K) for
the year ended January 3, 1998 and the related financial
statement schedule included therein, filed with the Securities
and Exchange Commission.
/s/ Ernst & Young LLP
Houston, Texas
May 1, 1998
____________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
___________________________________________
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
________________________________________
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
New York 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 Park Avenue
New York, New York 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
____________________________________________
Temple-Inland, Inc.
(Exact name of obligor as specified in its charter)
Delaware 75-1903917
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
303 South Temple Drive
Diboll, Texas 75941
(Address of principal executive offices) (Zip Code)
------------------------------------------
Debt Securities
(Title of the indenture securities)
------------------------------------------
GENERAL
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.
New York State Banking Department, State House, Albany,
New York 12110.
Board of Governors of the Federal Reserve System,
Washington, D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33
Liberty Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C.,
20429.
(b)Whether it is authorized to exercise corporate trust
powers.
Yes.
Item 2.Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
- 2 -
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement
of Eligibility.
1. A copy of the Articles of Association of the Trustee
as now in effect, including the Organization Certificate and the
Certificates of Amendment dated February 17, 1969, August 31,
1977, December 31, 1980, September 9, 1982, February 28, 1985,
December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249,
which is incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee
to Commence Business (see Exhibit 2 to Form T-1 filed in
connection with Registration Statement No. 33-50010, which is
incorporated by reference. On July 14, 1996, in connection with
the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation,
was renamed The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers
being contained in the documents identified above as Exhibits 1
and 2.
4. A copy of the existing By-Laws of the Trustee (see
Exhibit 4 to Form T-1 filed in connection with Registration
Statement No. 333-06249, which is incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b)
of the Act (see Exhibit 6 to Form T-1 filed in connection with
Registration Statement No. 33-50010, which is incorporated by
reference. On July 14, 1996, in connection with the merger of
Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was
renamed The Chase Manhattan Bank).
7. A copy of the latest report of condition of the
Trustee, published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939 the Trustee, The Chase Manhattan Bank, a corporation
organized and existing under the laws of the State of New York,
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 4th day of May,
1998.
THE CHASE MANHATTAN BANK
By /s/ P. Kelly
---------------------
/s/ P. Kelly
Vice President
- 3 -
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1997, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Millions
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin................................... $ 12,428
Interest-bearing balances .......................... 3,428
Securities: ..........................................
Held to maturity securities................. 2,561
Available for sale securities...................... 43,058
Federal funds sold and securities purchased under
agreements to resell ............................... 29,633
Loans and lease financing receivables:
Loans and leases, net of unearned income $129,260
Less: Allowance for loan and lease losses 2,783
Less: Allocated transfer risk reserve 0
Loans and leases, net of unearned income,
allowance, and reserve ............................ 126,477
Trading Assets
...................................................... 62,575
Premises and fixed assets (including capitalized
leases)............................................. 2,943
Other real estate owned .............................. 295
Investments in unconsolidated subsidiaries and
associated companies................................ 231
Customers' liability to this bank on acceptances
outstanding ........................................ 1,698
Intangible assets
...................................................... 1,466
Other assets ......................................... 10,268
TOTAL ASSETS ......................................... $297,061
=========
- 4 -
LIABILITIES
Deposits
In domestic offices ................................ $94,524
Noninterest-bearing .................... $39,487
Interest-bearing ....................... 55,037
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ............................. 71,162
Noninterest-bearing ........................$ 3,205
Interest-bearing .......................... 67,957
Federal funds purchased and securities sold under agree-
ments to repurchase .................................. 43,181
Demand notes issued to the U.S. Treasury ............. 1,000
Trading liabilities
...................................................... 48,903
Other borrowed money (includes mortgage indebtedness
and obligations under capitalized leases):
With a remaining maturity of one year or less ...... 3,599
With a remaining maturity of more than one year .
through three years.......................... 253
With a remaining maturity of more than three years. 132
Bank's liability on acceptances executed and outstanding 1,698
Subordinated notes and debentures ...................... 5,715
Other liabilities ...................................... 9,896
TOTAL LIABILITIES .................................... 280,063
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common stock ...................................... 1,211
Surplus (exclude all surplus related to preferred stock) 10,291
Undivided profits and capital reserves ............... 5,502
Net unrealized holding gains (losses)
on available-for-sale securities ..................... (22)
Cumulative foreign currency translation adjustments ..... 16
TOTAL EQUITY CAPITAL ................................. 16,998
______
TOTAL LIABILITIES AND EQUITY CAPITAL ................. $297,061
==========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named
bank, do hereby declare that this Report of Condition has
been prepared in conformance with the instructions issued
by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness
of this Report of Condition and declare that it has been
examined by us, and to the best of our knowledge and
belief has been prepared in conformance with the in-
structions issued by the appropriate Federal regulatory
authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
