NO. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________
BOWATER INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE
62-0721803
(State or other jurisdiction of incorporation or organization)
(I.R.S. employer identification no.)
55 EAST CAMPERDOWN WAY
P.O. BOX 1028
GREENVILLE, SOUTH CAROLINA 29602
(Address of principal executive offices) (Zip Code)
THE DEFERRED COMPENSATION PLAN FOR OUTSIDE DIRECTORS OF
BOWATER INCORPORATED
(Full title of the plan)
Wendy C. Shiba, Esquire
Secretary and Assistant General Counsel
Bowater Incorporated
55 East Camperdown Way
P.O. Box 1028
Greenville, South Carolina 29602
(Name and address of agent for service)
(803) 271-7733
(Telephone number, including area code, of agent for service)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
_____________________________________________________________________________
Title of Proposed Proposed
Securities Maximum Maximum
to be Amount to be Offering Price Aggregate Amount of
Registered* Registered Per Share** Offering Price** Registration Fee
___________ ____________ ______________ ________________ ________________
<S> <C> <C> <C> <C>
Common Stock,
Par Value
$1.00
Per Share 60,000 shares $47.25 $2,835,000 $977.59
____________________________________________________________________________
<FN>
<FN*> This Registration Statement also pertains to Common Stock Rights
that are currently evidenced by certificates for Shares of Common Stock
and automatically trade with such Common Stock.
<FN**> Estimated for purposes of calculation of the registration fee
pursuant to Rule 457(c) and based upon an average of the high and low
prices that the Common Stock of Bowater Incorporated was sold for on the
New York Stock Exchange on July 19, 1995.
</FN>
</TABLE>
__________________________________________________________
This Registration Statement shall become effective in accordance
with the provisions of Section 8(a) of the Securities Act of 1933 and
Rule 462 promulgated thereunder.
<PAGE>
PART I.
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Items 1 and 2 of Form S-8 is not
required to be filed as part of this Registration Statement in connection
with the registration of the offering of the Registrant's Common Stock to
be allocated to the accounts of participants in the Deferred Compensation
Plan for Outside Directors of Bowater Incorporated (the "Plan") following
the date of the filing of this Registration Statement and such
information will be delivered to persons eligible to participate in the
Plan.
A Reoffer Prospectus prepared in accordance with General Instruction
C of Form S-8 in connection with the reoffer and resale of certain shares
of the Registrant's Common Stock acquired under the Plan prior to the
date of the filing of this Registration Statement is as follows:
PROSPECTUS
BOWATER INCORPORATED
55 East Camperdown Way
P. O. Box 1028
Greenville, South Carolina 29602
Telephone: (803) 271-7733
9,973 Shares of Common Stock
($1.00 par value)
This Prospectus relates to offers and sales of shares ("Plan
Shares") of the Common Stock, $1.00 par value, of Bowater Incorporated, a
Delaware corporation (the "Company") that were acquired on or prior to
July 21, 1995 by certain directors of the Company or their beneficiaries
(the "Selling Shareholders") pursuant to the Deferred Compensation Plan
for Outside Directors of Bowater Incorporated (the "Plan"). The Selling
Shareholders may offer the Plan Shares from time to time to purchasers
directly or through underwriters, dealers or agents. The Plan Shares may
be sold at market prices prevailing at the time of sale or at negotiated
prices. The Company will receive no portion of the proceeds of the sales
made hereunder. All expenses of registration incurred in connection with
this offering are being borne by the Company, but all selling and other
expenses incurred by the Selling Shareholders will be borne by such
Selling Shareholders.
The Company's Common Stock, including the Plan Shares, is listed on
the New York Stock Exchange (stock symbol BOW), the Pacific Stock
Exchange, the London Stock Exchange and the Swiss Stock Exchange. The
address of the principal executive offices of the Company is 55 East
Camperdown Way, P. O. Box 1028, Greenville, South Carolina 29602 and its
telephone number at that address is (803) 271-7733.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
___________________________
No person is authorized to give any information or make any
representation not contained in this Prospectus; and any information,
data or representation not contained herein must not be relied upon as
having been authorized by Bowater Incorporated. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, any
securities other than the Plan Shares offered by this Prospectus or an
offer to sell, or a solicitation of an offer to buy, any of the Plan
Shares in any jurisdiction where, or to any person to whom, it is
unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus nor any sales or distributions of securities made
hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company since the date
hereof or that the information herein is correct as of any time
subsequent to its date.
The date of this Prospectus is July 21, 1995.
<PAGE>
TABLE OF CONTENTS
Page
AVAILABLE INFORMATION...............................
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE AND ADDITIONAL INFORMATION...........
THE COMPANY.........................................
SELLING SHAREHOLDERS................................
PLAN OF DISTRIBUTION................................
USE OF PROCEEDS.....................................
EXPERTS.............................................
INDEMNIFICATION.....................................
<PAGE>
AVAILABLE INFORMATION
Bowater Incorporated (the "Company" or "Bowater") is subject to the
informational requirements of the Securities Exchange Act of 1934, as
amended, (the "1934 Act") and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the
Public Reference Room of the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices as
follows: Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661-2511 and Suite 1300, Seven World Trade
Center, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Company's
Common Stock is listed on the New York Stock Exchange, Inc. and the
Pacific Stock Exchange Incorporated and reports, proxy statements and
other information can be inspected at the respective offices of such
Exchanges at 20 Broad Street, New York, New York 10005 and 301 Pine
Street, San Francisco, California.
The Company has filed with the Commission a Registration Statement
on Form S-8 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), in connection with this offering. In accordance with the relevant
rules and regulations of the Commission, this Prospectus, which forms a
part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement. Statements
contained herein concerning provisions of certain documents are not
necessarily complete and, in each instance, reference is made to a copy
of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission. Each such statement is qualified in
its entirety by such reference. For further information, reference is
hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE AND ADDITIONAL INFORMATION
The following documents heretofore filed with the Commission
pursuant to the 1934 Act and the Securities Act, are incorporated herein
by reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
(2) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1995.
(3) The description of the Company's Common Stock contained in a
registration statement on Form S-3, Registration No. 33-51569, filed
under the Securities Act, including any amendment or report filed for the
purpose of updating such description.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Prospectus and prior to the filing of a post-effective amendment which
indicates that all securities offered hereby have been sold or which
deregisters all securities remaining unsold, 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 (such documents and the
documents enumerated above, being hereinafter referred to as
"Incorporated Documents", provided, however, that the documents
enumerated above or subsequently filed by the Company pursuant to
Section 13, 14 or 15(d) of the 1934 Act in each year during which the
offering made by this Prospectus is in effect prior to the filing with
the Commission of the Company's Annual Report on Form 10-K covering such
year shall not be Incorporated Documents or be incorporated by reference
in this Prospectus or be a part hereof from and after such filing of such
Annual Report on Form 10-K).
Any statement contained in an Incorporated Document shall be deemed
to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, on the
written or oral request of any such person, a copy of all of the
information that has been incorporated by reference in this Prospectus
(not including exhibits to the information incorporated by reference).
Requests for such copies should be directed to Investor Relations
Department, Bowater Incorporated, 55 East Camperdown Way, P. O. Box 1028,
Greenville, South Carolina 29602 (Telephone: (803) 271-7733). The
Company will also promptly furnish, without charge, on written request of
any person to whom this Prospectus is delivered, a copy of the Company's
annual report to shareholders for its last fiscal year.
THE COMPANY
The Company, together with its consolidated subsidiaries, is engaged
in the manufacture, sale and distribution of newsprint, directory paper,
uncoated groundwood specialties, coated groundwood paper, market pulp,
continuous stock computer forms and lumber. The Company operates
facilities in both the United States and Canada, and manages and controls
approximately 3.7 million acres of timberlands to support these
facilities. The Company markets and distributes various products in the
United States, Canada and overseas. The Company was incorporated in
Delaware in 1964. The Company's principal executive offices are located
at 55 East Camperdown Way, Greenville, South Carolina 29602, and its
telephone number at that address is (803) 271-7733.
SELLING SHAREHOLDERS
This Prospectus covers Plan Shares that have been acquired on or
prior to July 21, 1995 by the Selling Shareholders.
The following table sets forth the name of each of the Selling
Shareholders, his or her position, office or other material relationship
with the Company within the past three years and the amount of Common
Stock beneficially owned by such Selling Shareholder prior to the offer,
the amount of Common Stock to be offered for the Selling Shareholder's
account, the amount and (if 1% or more) the percentage of the Common
Stock to be owned by such Selling Shareholder after completion of the
offering.
<PAGE>
<TABLE>
<CAPTION>
Number of
Shares
Name and Position Beneficial Ownership Being Beneficial Ownership
with Company Prior to the Offering Offered after Offering
_________________ _____________________ _______ ____________________
Number Number
of of
Shares Percent Shares Percent
______ _______ ______ _______
<S> <C> <C> <C> <C> <C>
Richard Laster 7,709 * 7,709 0 0
served as a
Director of the
Company from
1984 until his
retirement on
May 24, 1995.
Mrs. Mary White 2,264 * 2,264 0 0
is the beneficiary
under the Plan of
James White, who
served as a
Director of the
Company from
February 1993
until his death
on June 24, 1994.
* Represents holdings of less than 1% of the outstanding shares of Common
Stock.
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders may sell shares of Common Stock in any of
the following ways: (i) through dealers; (ii) through agents; or (iii)
directly to one or more purchasers. The distribution of the shares of
Common Stock may be effected from time to time in one or more
transactions. Any such transaction may be effected at market prices
prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices or fixed prices. The Selling
Shareholders may effect such transactions by selling shares of Common
Stock to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions, or commissions from
Selling Shareholders and/or commissions from purchasers of shares of
Common Stock for whom they may act as agents. The Selling Shareholders
and any broker-dealers or agents that participate in the distribution of
shares of Common Stock by them might be deemed to be underwriters, and
any discounts, commissions or concessions received by any such broker-
dealers or agents might be deemed to be underwriting discounts and
commissions under the Securities Act.
USE OF PROCEEDS
Each Selling Shareholder will receive all of the net proceeds from
the sale of the Plan shares owned by such Selling Shareholder and offered
hereby. The Company will not receive any proceeds from the sale of such
Plan Shares.
EXPERTS
The consolidated financial statements and schedules of Bowater
Incorporated and subsidiaries as of December 31, 1994 and 1993 and for
each of the years in the three-year period ended December 31, 1994, have
been incorporated by reference herein in reliance upon the reports of
KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
The report of said firm covering the December 31, 1992 financial
statements refers to accounting changes regarding the Company's adoption
of the provisions of the Financial Accounting Standards Board's Statement
on Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," and Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," in 1992.
INDEMNIFICATION
The Company, pursuant to resolutions of the Board, now provides and,
pursuant to applicable statutes, may in the future in connection with
specific occasions provide, for the indemnification, subject to certain
conditions, of each director and officer of the Company against
liabilities and expenses incurred by him in connection with litigation in
which he may be involved as such director or officer, including any
action, suit or proceeding arising out of the preparation, filing or use
of registration statements or prospectuses relating to the issuance and
sale of securities, whether brought under the Securities Act or any other
applicable law. Under applicable statutes, such indemnification is
mandatory if the director or officer is successful in his defense.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors and officers pursuant to the foregoing,
or otherwise, the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable.
<PAGE>
BOWATER INCORPORATED
COMMON STOCK
($1.00 Par Value)
PROSPECTUS
Dated: July 21, 1995
A registration statement with respect to shares of Common Stock,
$1.00 par value, of Bowater Incorporated, has been filed with the
Securities and Exchange Commission, Washington, D.C. 20549. This
Prospectus is to be utilized as part of the Company's Registration
Statement No. ________. For further information with respect to the
securities offered hereby and the Company, reference is made to the
registration statement, including the exhibits, which may be examined at
the Securities and Exchange Commission's office in Washington, D.C.
PART II.
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Bowater Incorporated (the
"Company") with the Securities and Exchange Commission are incorporated
into this Registration Statement:
(1) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994 and the accountant's reports of KPMG
Peat Marwick LLP included or incorporated by reference
therein;
(2) all other reports filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (the "Exchange Act")
since December 31, 1994; and
(3) the description of the Company's Common Stock, $1.00 par
value per share, contained in a registration statement filed
under Section 12 of the Exchange Act, including any
amendment or report filed for the purpose of updating such
description.
In addition, all documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the
date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation), by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other
enterprise. Depending on the character of the proceeding, a corporation
may indemnify against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. In the case of an action by or
in the right of the corporation, no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or
suit was brought shall determine 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 which the Court of Chancery or such other court shall deem
proper. Section 145 further provides that to the extent a director,
officer, employee or agent of a corporation has been successful on the
merits or otherwise in the defense of any action, suit or proceeding
referred to above or in the defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in
connection therewith. The foregoing statement is subject to the detailed
provisions of Section 145 of the Delaware General Corporation Law.
The Restated Certificate of Incorporation of the Company provides,
in effect, that, to the extent and under the circumstances permitted by
Section 145 of the General Corporation Law of the State of Delaware, the
Company shall indemnify any person who was or is a party or is threatened
to be made a party to any action, suit or proceeding of the type
described above by reason of the fact that he or she is or was a
director, officer, employee or agent of the Company or is or was serving
at the request of the Company as a director, officer, employee or agent
of another enterprise.
There is a directors and officers liability insurance policy which
is presently outstanding insuring directors and officers of the Company
and its subsidiaries. Reimbursement by the Company of the officer and
director liability as allowed by the Restated Certificate of
Incorporation is recoverable under the insurance policy subject to a
deductible for each loss.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
The shares of the Company's Common Stock to be reoffered and resold
by the Selling Shareholders identified in the Prospectus filed as part of
this Registration Statement were obtained by the Selling Shareholders in
exempt transactions under Section 4(2) of the Securities Act of 1933, as
amended. The Selling Shareholders are a retired director of the Company
and the beneficiary of a deceased director who acquired such shares of
Common Stock in accordance with the terms of the Plan.
ITEM 8. EXHIBITS
4.1 Restated Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 4.2 to the Company's
Registration Statement No. 33-51569).
4.2 Certificate of Designations of the 7% PRIDES, Series B
Convertible Preferred Stock of the Company (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form
8-K dated February 1, 1994).
4.3 Certificate of Designations of the 8.40% Series C Cumulative
Preferred Stock of the Company (incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K dated
February 1, 1994).
4.4 Bylaws of the Company (incorporated by reference to Exhibit 3.3
to the Company's Registration Statement No. 33-11228).
4.5 Agreement pursuant to S-K Item 601(b)(4)(iii(A) to provide the
Commission upon request copies of certain other instruments with
respect to long-term debt not being registered where the amount
of securities authorized under each such instrument does not
exceed 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis (incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement No. 2-
93455).
4.6 Rights Agreement between the Company and Morgan Guaranty Trust
Company of New York is filed herewith.
4.6.1 Addendum to Rights Agreement substituting The Bank of New York as
successor Rights Agent is filed herewith.
4.7 Indenture, dated as of August 1, 1989, by and between the Company
and Manufacturers Hanover Trust Company, as Trustee, with respect
to the 9% Debentures Due 2009 is filed herewith.
4.8 Indenture, dated as of December 1, 1991, by and between the
Company and Marine Midland Bank, N.A., as Trustee, with respect
to the 9-3/8% Debentures Due 2021 (incorporated by reference to
Exhibit 4.8 to the Company's Annual Report on Form 10-K for
1991).
4.9 Indenture, dated as of December 1, 1991, by and between the
Company and Marine Midland Bank, N.A., as Trustee, with respect
to the 8-1/2% Notes Due 2001 (incorporated by reference to
Exhibit 4.9 to the Company's Annual Report on Form 10-K for
1991).
4.10 Indenture, dated as of October 15, 1992, by and between the
Company and The Chase Manhattan Bank (N.A.) as Trustee, with
respect to the 8-1/4% Notes Due 1999 (incorporated by reference
to Exhibit 4.10 to the Company's Annual Report on Form 10-K for
1992).
4.11 Indenture, dated as of October 15, 1992, between the Company and
The Chase Manhattan Bank (N.A.) as Trustee, with respect to the
9-1/2% Debentures Due 2012 (incorporated by reference to Exhibit
4.11 to the Company's Annual Report on Form 10-K for 1992).
4.12 Deposit Agreement, dated as of February 1,1994, by and among the
Company, Trust Company Bank, as Depositary, and the holders from
time to time of the Depositary Receipts relating to the Company's
7% PRIDES, Series B Convertible Preferred Stock, together with
form of Depositary Receipt (incorporated by reference to Exhibit
4.3 to the Company's Current Report on Form 8-K dated February 1,
1994).
4.13 Deposit Agreement, dated as of February 1, 1994, by and among the
Company, Trust Company Bank, as Depositary, and the holders from
time to time of the Depositary Receipts relating to the Company's
8.40% Series C Cumulative Preferred Stock, together with form of
Depositary Receipt (incorporated by reference to Exhibit 4.4 to
the Company's Current Report on Form 8-K dated February 1, 1994).
23 Consent of KPMG Peat Marwick LLP dated July 19, 1995.
24 Powers of Attorney authorizing the signing of the Registration
Statement and amendments hereto on behalf of the Company's
directors.
99 The Deferred Compensation Plan for Outside Directors of Bowater
Incorporated, effective March 1, 1989 is filed herewith.
ITEM 9. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933 (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) of the
Securities Act if, in the aggregate, the
changes in volume and price represent no more
than a 20% change in the maximum aggregate
offering price set forth in the "Calculation
of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii)
do not apply if the Registration Statement is on
Form S-3 or Form S-8 and the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the registrant pursuant to Section 13 or 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 a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
2. 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
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.
3. 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
Securities and Exchange 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 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.
<PAGE>
SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act
of 1933, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Greenville,
State of South Carolina, on the 21st day of July, 1995.
BOWATER INCORPORATED
(Registrant)
By /s/ Arnold M. Nemirow
_____________________
Arnold M. Nemirow
Its President and
Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
*
_____________________ Director and Chairman of July 21, 1995
Anthony P. Gammie the Board
/s/ Arnold M. Nemirow
______________________ Director, President and July 21, 1995
Arnold M. Nemirow Chief Executive Officer
/s/ Robert C. Lancaster
_______________________ Senior Vice President July 21, 1995
Robert C. Lancaster and Chief Financial Officer
/s/ Michael F. Nocito
_____________________ Vice President -- Controller July 21, 1995
Michael F. Nocito
*
______________________ Director July 21, 1995
Francis J. Aguilar
*
______________________ Director July 21, 1995
Hugh D. Aycock
*
_______________________ Director July 21, 1995
Richard Barth
*
________________________ Director July 21, 1995
Kenneth M. Curtis
*
________________________ Director July 21, 1995
H. Gordon MacNeil
*
________________________ Director July 21, 1995
Donald R. Melville
*
________________________ Director July 21, 1995
John A. Rolls
* Wendy C. Shiba, by signing his/her name hereto, does sign this document
on behalf of the persons indicated above pursuant to powers of attorney
duly executed by such persons.
By /s/ Wendy C. Shiba
__________________
Wendy C. Shiba
__________________
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
4.1 Restated Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 4.2 to the Company's
Registration Statement No. 33-51569).
4.2 Certificate of Designations of the 7% PRIDES, Series B
Convertible Preferred Stock of the Company (incorporated by
reference to Exhibit 4.1 to the Company's Current Report on Form
8-K dated February 1, 1994).
4.3 Certificate of Designations of the 8.40% Series C Cumulative
Preferred Stock of the Company (incorporated by reference to
Exhibit 4.2 to the Company's Current Report on Form 8-K dated
February 1, 1994).
4.4 Bylaws of the Company (incorporated by reference to Exhibit 3.3
to the Company's Registration Statement No. 33-11228).
4.5 Agreement pursuant to S-K Item 601(b)(4)(iii(A) to provide the
Commission upon request copies of certain other instruments with
respect to long-term debt not being registered where the amount
of securities authorized under each such instrument does not
exceed 10% of the total assets of the registrant and its
subsidiaries on a consolidated basis (incorporated by reference
to Exhibit 4.3 to the Company's Registration Statement No. 2-
93455).
4.6 Rights Agreement between the Company and Morgan Guaranty Trust
Company of New York is filed herewith.
4.6.1 Addendum to Rights Agreement substituting The Bank of New York as
successor Rights Agent is filed herewith.
4.7 Indenture, dated as of August 1, 1989, by and between the Company
and Manufacturers Hanover Trust Company, as Trustee, with respect
to the 9% Debentures Due 2009 is filed herewith.
4.8 Indenture, dated as of December 1, 1991, by and between the
Company and Marine Midland Bank, N.A., as Trustee, with respect
to the 9-3/8% Debentures Due 2021 (incorporated by reference to
Exhibit 4.8 to the Company's Annual Report on Form 10-K for
1991).
4.9 Indenture, dated as of December 1, 1991, by and between the
Company and Marine Midland Bank, N.A., as Trustee, with respect
to the 8-1/2% Notes Due 2001 (incorporated by reference to
Exhibit 4.9 to the Company's Annual Report on Form 10-K for
1991).
4.10 Indenture, dated as of October 15, 1992, by and between the
Company and The Chase Manhattan Bank (N.A.) as Trustee, with
respect to the 8-1/4% Notes Due 1999 (incorporated by reference
to Exhibit 4.10 to the Company's Annual Report on Form 10-K for
1992).
4.11 Indenture, dated as of October 15, 1992, between the Company and
The Chase Manhattan Bank (N.A.) as Trustee, with respect to the
9-1/2% Debentures Due 2012 (incorporated by reference to Exhibit
4.11 to the Company's Annual Report on Form 10-K for 1992).
4.12 Deposit Agreement, dated as of February 1,1994, by and among the
Company, Trust Company Bank, as Depositary, and the holders from
time to time of the Depositary Receipts relating to the Company's
7% PRIDES, Series B Convertible Preferred Stock, together with
form of Depositary Receipt (incorporated by reference to Exhibit
4.3 to the Company's Current Report on Form 8-K dated February 1,
1994).
4.13 Deposit Agreement, dated as of February 1, 1994, by and among the
Company, Trust Company Bank, as Depositary, and the holders from
time to time of the Depositary Receipts relating to the Company's
8.40% Series C Cumulative Preferred Stock, together with form of
Depositary Receipt (incorporated by reference to Exhibit 4.4 to
the Company's Current Report on Form 8-K dated February 1, 1994).
23 Consent of KPMG Peat Marwick LLP dated July 19, 1995.
24 Powers of Attorney authorizing the signing of the Registration
Statement and amendments hereto on behalf of the Company's
directors.
99 The Deferred Compensation Plan for Outside Directors of Bowater
Incorporated, effective March 1, 1989 is filed herewith.
[f:\fallon\bowater\s8bwtr.asc]
/rmc
EXHIBIT 4.6
BOWATER INCORPORATED
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
Rights Agent
Rights Agreement
Dated as of April 22, 1986
<PAGE>
TABLE OF CONTENTS
Section Page
1. Certain Definitions 1
2. Appointment of Rights Agent 4
3. Issue of Right Certificates 4
4. Form of Right Certificates 6
5. Countersignature and Registration 7
6. Transfer, Split Up, Combination
and Exchange of Right Certificates;
Mutilated, Destroyed, Lost
or Stolen Right Certificates 8
7. Exercise of Rights; Purchase
Price; Expiration Date of
Rights 9
8. Cancellation and Destruction
of Right Certificates 11
9. Reservation and Availability
of Shares of Preferred Stock 12
10. Preferred Stock Record Date 13
11. Adjustment of Purchase Price,
Number of Shares or Number of
Rights 13
12. Certification of Adjusted
Purchase Price or Number of Shares 23
13. Consolidation, Merger or
Sale or Transfer of Assets
or Earning Power 23
14. Fractional Rights and
Fractional Shares 25
15. Rights of Action 27
16. Agreement of Right Holders 27
17. Right Certificate Holder
Not Deemed a Stockholder 28
18. Concerning the Rights Agent 28
19. Merger or Consolidation or
Change of Name of Rights Agent 29
20. Duties of Rights Agent 30
21. Change of Rights Agent 32
22. Issuance of New Right Certificates 33
23. Redemption 33
24. Notice of Proposed Actions 34
25. Notices 35
Section Page
26. Supplements and Amendments 36
27. Successors 36
28. Determinations and Actions by
the Board of Directors, etc: 36
29. Severability 37
30. Benefits of this Agreement 37
31. Delaware Contract 37
32. Counterparts 37
33. Descriptive Headings 38
Exhibit A -- Form of Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series A
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Stockholder Rights Plan
<PAGE>
DEFINITION INDEX
Term Section Page
Acquiring Person 1(a) 1
Act 9(c) 12
Affiliate 1(b) 1
Associate 1(b) 1
Beneficially Own 1(c)(ii) 2
Beneficial Owner 1(c) 2
Beneficial Ownership 1(c)(ii) 2
Business Day 1(d) 3
Close of Business 1(e) 3
Common Shares 1(f) 3
Common Stock 1(f) 3
Company Preamble 1
Continuing Director 1(g) 3
Current per share market price 11(d)(i) 18
Dividend Preamble 1
Distribution Date 3(a) 5
Equivalent preferred stock 11(b) 17
Exchange Act 1(b) 2
Expiration Date 7(a) 9
Final Expiration Date 7(a) 9
NASDAQ 11(d)(i) 19
Original Rights l(c)(ii) 2
Person 1(h) 4
Preferred Stock Preamble 1
Principal Party 13 24
Purchase Price 4(a) 7, 9
Redemption Price 23(a) 33
Right Preamble 1
Rights Agent Preamble 1
Rights Agreement 3(c) 6
Stock Acquisition Date 1(i) 4
Subsidiary 1(j) 4
Substantial Block 1(k) 4
Summary of Rights 3(b) 5
Trading Day 11(d)(i) 19
Triggering Event 1(1) 4
<PAGE>
RIGHTS AGREEMENT
This Agreement, dated as of April 22, 1986, between Bowater
Incorporated, a Delaware corporation (the "Company"), and Morgan Guaranty
Trust Company of New York, a New York banking corporation (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend (the "Dividend") of one Right (a "Right") for each
share of Common Stock, par value $1.00 per share, of the Company
outstanding on the record date for the Dividend, each Right representing
the right to purchase one one-hundredth of a share of Junior
Participating Preferred Stock, Series A of the Company having the rights
and preferences set forth in the form of Certificate of Designation,
Rights and Preferences attached hereto as Exhibit A ("Preferred Stock")
upon the terms and subject to the conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, alone or together with all Affiliates
(as such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of securities of the Company
constituting a Substantial Block (as such term is hereinafter defined),
but shall not include the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company,
or any entity organized, appointed or established pursuant to the terms
of any such plan.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange
Act"), as in effect on April 22, 1986.
(c) A Person shall be deemed the "Beneficial Owner" of any
securities:
(i) which such Person or any such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (l) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange, (2) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (3) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect
to any Original Rights; or (B) the right to vote or dispose of or
"beneficial ownership" of (as determined pursuant to Rule l3d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under this
clause (B) if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Exchange Act and (2) is
not then reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (B) of subparagraph (ii) of this paragraph
(c)) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
p.m., New York time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., New York time, on the next
succeeding Business Day.
(f) "Common Stock" or "Common Shares" shall mean the Common
Stock, par value $1.00 per share, of the Company, except that "Common
Stock" or "Common Shares" when used with reference to any Person other
than the Company shall mean the common stock with the greatest voting
power of such Person, or the equity securities or other equity interest
having power to control or direct the management of such Person, or, if
such Person is a Subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person.
(g) "Continuing Director" shall mean any member of the Board
of Directors of the Company, while such person is a member of the Board,
who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative or nominee of an Acquiring Person
or of any such Affiliate or Associate, and was a member of the Board
prior to the Stock Acquisition Date, and any successor of a Continuing
Director, while such successor is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or
a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and is recommended or elected to succeed the
Continuing Director by a majority of the Continuing Directors.
(h) "Person" shall mean any individual, firm, corporation or
other entity.
(i) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person of its status
as an Acquiring Person.
(j) "Subsidiary" shall mean any corporation of which a
majority of any class of equity securities is owned directly or
indirectly, by another corporation.
(k) "Substantial Block" shall mean a number of shares of
Common Stock which equals or exceeds 20% of the number of shares of
Common Stock then outstanding.
(l) "Triggering Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) or the first sentence of Section 13.
Any determination required by the definitions contained in this
Section 1 shall be made by the Board of Directors of the Company in its
good faith judgment, which determination shall be binding on the Rights
Agent.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint one or more
additional Rights Agents as it may deem necessary or desirable to serve
concurrently with one or more previously appointed Rights Agents.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the Close of Business on the tenth day after the Stock Acquisition
Date or (ii) the Close of Business on the tenth day after the date of the
commencement of, or first public announcement of the intent to commence,
a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or
of any Subsidiary of the Company) for 30% or more of the outstanding
shares of Common Stock (including any such date which is after the date
of this Agreement and prior to the issuance of the Rights; the Close of
Business on the earlier of such dates being herein referred to as the
"Distribution Date") (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed to also be
Right Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in
connection with the transfer of Common Stock. As soon as practicable
after the Distribution Date, the Rights Agent will mail, by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Distribution Date, as shown by the
records of the Company, at the address of such holder shown on such
records, a Right Certificate, in the form of Exhibit B hereto, evidencing
one Right for each share of Common Stock so held.
(b) On May 2, 1986 or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by first-
class, postage prepaid mail, to each record holder of the Common Stock as
of the close of business on May 2, 1986, at the address of such holder
shown on the records of the Company. With respect to certificates for
the Common Stock outstanding as of May 2, 1986, until the Distribution
Date (or earlier redemption, expiration or termination of the Rights),
the Rights will be evidenced by such certificates for the Common Stock
and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the Distribution Date
(or earlier redemption, expiration or termination of the Rights), the
surrender for transfer of any of the certificates for the Common Stock
outstanding on May 2, 1986 shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
(c) Unless the Board of Directors by resolution adopted at or
before the time of issuance of any shares of Common Stock specifies to
the contrary, certificates for the Common Stock issued after May 2, 1986,
but prior to the earlier of (x) the Distribution Date and (y) the
redemption, expiration or termination of the Rights shall be deemed also
to be Certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Bowater
Incorporated and Morgan Guaranty Trust Company of New York, dated as of
April 22, 1986 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of Bowater Incorporated. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Bowater Incorporated will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person, including Affiliates or Associates thereof (as such
terms are defined in the Rights Agreement), whether currently held by or
on behalf of such Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any of such certificates shall
also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
Section 4. Form of Right Certificates. (a) The Right Certificates
(and the form of election to purchase shares and the form of assignment
to be printed on the reverse thereof) shall be substantially the same as
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto,or with any rule
or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of May 2, 1986 (or in the case of Rights
issued with respect to Common Stock issued by the Company after May 2,
1986, as of the date of issuance of such Common Stock), and on their face
shall entitle the holders thereof to purchase such number of shares of
Preferred Stock as shall be set forth therein at the price per share set
forth therein (the "Purchase Price"), but the number of such shares and
the Purchase Price shall be subject to adjustments as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person
or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Right
Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its President or any Vice President, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed
any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, issued and delivered with the same
force and effect as though the person who signed such Right Certificates
had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Rights Agreement any such person was
not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices in New York, New York, books for
registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates, the Certificate number and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the Expiration Date (as such
term is hereinafter defined), any Right Certificate or Certificates, may
be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to
purchase a like number of shares of Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such holder
to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined
or exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise,
except as such right of exercise may be suspended pursuant to Section
9(c) and 11(a)(iii) hereof, the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form
of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights
Agent in New York City, together with payment of the Purchase Price for
each one one-hundredth of a share of Preferred Stock as to which the
Rights are exercised, at or prior to the earlier of (i) the Close of
Business on May 2, 1996 (the "Final Expiration Date") and (ii) the time
at which the Rights are redeemed as provided in Section 23 (such earlier
date being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$90.00, shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price for the shares to be purchased
and an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20, thereupon promptly (i) requisition from any
transfer agent of the Preferred Stock of the Company certificates for the
number of shares of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) as provided in Section 14(b), at the election of the
Company, cause depositary receipts in lieu of fractional shares in
integral multiples of one-hundredth of a share to be issued, (iii) when
appropriate, requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 14
hereof and (iv) promptly after receipt of such certificates and/or
depositary receipts cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, and, when appropriate,
after receipt promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate. The payment of the Purchase
Price (as such amount may be reduced (including to zero) pursuant to
Section 11(a)(iii) hereof) may be made (x) in cash or by certified bank
check or money order payable to the order of the Company, or (y) by
delivery of a certificate or certificates (with appropriate stock powers
executed in blank attached thereto) evidencing a number of shares of
Common Stock equal to the then Purchase Price divided by the current per
share market price (as determined pursuant to Section 11(d) hereof) of
Common Stock on the date of such exercise. In the event that the Company
is obligated to issue securities, distribute property or pay cash
pursuant to Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are available
for issuance, distribution or payment by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder
of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
any Rights that are or were at any time on or after the earlier of the
Distribution Date and the Stock Acquisition Date (i) beneficially owned
by an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) transferred by an Acquiring Person (or any such Associate or
Affiliate) after the Acquiring Person becomes such, or (iii) transferred
by an Acquiring Person (or any such Associate or Affiliate) prior to or
concurrently with the Acquiring Person becoming such and if the
transferee receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any person with whom
the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which
the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall, from and after the first
occurrence of any Triggering Event, become null and void without any
further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section
4(b) hereof are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Shares of Preferred
Stock. (a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Common Stock and Preferred Stock or its authorized and issued shares of
Common Stock and Preferred Stock held in its treasury, the number of
shares of Common Stock and Preferred Stock that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the Common Stock and Preferred Stock issuable
upon the exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause all shares
reserved for such issuance to be listed on such exchange upon official
notice of issuance of such Stock upon the first exercise of a Right or
Rights.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act of 1933, as amended (the
"Act"), with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act) until the date of the expiration of the Rights. The Company will
also take such action as may be appropriate under the blue sky laws of
the various states. The Company may temporarily suspend, for a period of
time not to exceed ninety (90) days, the exercisability of the, Rights in
order to prepare and file such registration statement. Upon any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of
the Right Certificates or of any shares of Preferred Stock upon the
exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer involved
in the transfer, or delivery of Right Certificates or the issuance or
delivery of certificates for Preferred Stock in a name other than that of
the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates for
shares of Preferred Stock upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificate for shares of Preferred Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of shares covered by
each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital stock in
a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), the Purchase
Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, he would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to any adjustment required
pursuant to Section 11(a)(ii).
(ii) In the event (A) any Acquiring Person or any Associate
or Affiliate of any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) shall merge into the Company or
otherwise combine with the Company or any of its Subsidiaries, and the
Company or such Subsidiary shall be the continuing or surviving
corporation of such merger or consolidation, and the Common Stock of the
Company shall remain outstanding and unchanged, or (2) shall, in one or
more transactions, transfer any assets to the Company in exchange (in
whole or in part) for shares of Common Stock or Preferred Stock or for
securities exercisable for or convertible into shares of Common Stock or
Preferred Stock or otherwise obtain from the Company, with or without
consideration, any additional shares of Common Stock or Preferred Stock
or other securities exercisable for or convertible into shares of Common
Stock or Preferred Stock (other than as a part of a pro rata distribution
to all holders of such stock), or (3) shall sell, purchase, lease,
exchange, acquire, mortgage, pledge, transfer or otherwise dispose of (in
one transaction or a series of transactions), to, from or with the
Company or any of the Company's Subsidiaries, other than incidental to
the lines of business currently engaged in as of the date hereof between
the Company and its Subsidiaries taken as a whole and such Acquiring
Person or Associate or Affiliate, assets, or an interest therein, having
an aggregate fair market value of more than $3 million, or (4) shall
sell, purchase, lease, exchange, mortgage, acquire, pledge, transfer or
otherwise dispose of (in one transaction or a series of transactions),
to, from or with the Company or any of the Company's Subsidiaries, assets
or an interest therein on terms and conditions less favorable to the
Company than the Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party, or (5) shall receive any
compensation from the Company or any of the Company's Subsidiaries other
than compensation for full-time employment as a regular employee at rates
in accordance with the Company's (or its Subsidiaries') past practices,
or (6) shall receive the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries, or
(B) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions (whether or not with or into or
otherwise involving an Acquiring Person) which has the effect, directly
or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity or convertible securities
of the Company or any of its Subsidiaries which is directly or indirectly
owned by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, or
(C) any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity organized, appointed or
established pursuant to the terms of any such plan), alone or together
with its Affiliates and Associates, shall at any time after the date of
this Agreement be the Beneficial Owner of 30% or more of the shares of
Common Stock then outstanding,
then, and in each such case, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive (subject to Section 11(a)(iii)
hereof), upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of Preferred Stock,
such number of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then
number of one-hundredths of a share of Preferred Stock for which a Right
is then exercisable and dividing that product by (y) 50% of the current
per share market price of the Common Shares of the Company (determined
pursuant to Section 11(d)) on the date of the occurrence of any one of
the events listed above in this subparagraph (ii). In the event that
there shall not be sufficient authorized but unissued Common Shares to
permit the exercise in full of the Rights in accordance with the
foregoing sentence, the Company shall take all such action as may be
necessary to authorize for issuance upon exercise of the Rights
additional Common Shares.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if a majority of the
Continuing Directors then in office determines that such action is
necessary or appropriate and not contrary to the interests of holders of
Rights, elect to issue or pay, upon the exercise of the Rights, cash,
property, Common Shares, other securities or any combination thereof
having an aggregate value equal to the value of the Common Shares which
otherwise would have been issuable pursuant to Section 11(a)(ii), which
value, shall be determined by a nationally recognized investment banking
firm selected by a majority of Continuing Directors then in office. For
purposes of the preceding sentence, the value of Common Shares shall be
as determined pursuant to Section 11(d). Any such election by the
Continuing Directors must be made and publicly announced within 60 days
of the date on which the first of the Triggering Events described in
Section 11(a)(ii) occurs. Following the occurrence of one of the
Triggering Events described in Section 11(a)(ii), a majority of the
Continuing Directors then in office may suspend the exercisability of the
Rights for a period of up to 60 days following the occurrence of such
Triggering Event to the extent that the Continuing Directors have not
determined whether to exercise their rights of election under this
paragraph (a)(iii). In such event, the Company shall issue a public
announcement stating the exercisability of the Rights is temporarily
suspended.
(b) In case the Company shall fix a record date for the
issuance of rights or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Stock (or having the
same rights, privileges and preferences as the Preferred Stock (an
"equivalent preferred stock") or securities convertible into Preferred
Stock or equivalent preferred stock) at a price per share of Preferred
Stock or equivalent preferred stock (or having a conversion price per
share, if a security convertible into Preferred Stock or equivalent
preferred stock) less than the current market price per share of
Preferred Stock (as defined in Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date plus the number
of shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent preferred
stock to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of
additional shares of Preferred Stock or equivalent preferred stock to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent. Shares of Preferred Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last cash dividend theretofore paid or
a dividend payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price per
share of Preferred Stock (as defined in Section 11(d)) on such record
date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the assets
or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Preferred Stock and the
denominator of which shall be such current market price per share of
Preferred Stock. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date had not
been fixed.
(d)(i) For the purpose of any computation hereunder, the
"current per share market price" of the Common Shares on any date shall
be deemed to be the average of the daily closing prices per share of such
Common Shares for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however,
that in the event that the current per share market price of the Common
Shares is determined during a period following the announcement by the
issuer of such Common Shares of a dividend or distribution on such Common
Shares payable in such Common Shares or securities convertible into such
Common Shares, and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, then, and in each
case, the current market price shall be appropriately adjusted to reflect
the current market price per Common Share equivalent. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Common Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Common Shares are listed or admitted to
trading or, if the Common Shares are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system
then in use, or, if on any such date the Common Shares are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Shares selected by the Board of Directors of the Company. If the Common
Shares are not publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading is
open for the transaction of business or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Stock shall be
determined in the same manner as set forth above for Common Shares in
clause (i) of this Section 11(d). If the current per share market price
of the Preferred Stock cannot be determined in the manner provided above,
the "current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the
Common Shares, multiplied by one hundred.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-
thousandth of a share as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section
11 shall be made no later than the earlier of (i) three years from the
date of the transaction which mandates such adjustment and (ii) the
Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than shares
of Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the shares contained in Section 11(a)
through (c), (h) and (i), and the other provisions of Section 11 hereof
and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
shares of Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of shares
of Preferred Stock or other capital stock or securities purchasable from
time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as
a result of the calculations made in Section 11(b) and (c), each right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of shares (calculated to the nearest ten-thousandth)
obtained by (i) multiplying (x) the number of shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights in
substitution for any adjustment in the number of shares of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of shares of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount
of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i) the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record
date Right Certificates evidencing, subject to Section 14, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the name of the
holders of record of Right Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the
number of shares which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the Common Shares
or the shares of Preferred Stock issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Common Shares and shares of
such Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to issue to the holder of
any Right exercised after such record date (prior to the occurrence of
such event) only such shares of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment and to
defer until after the occurrence of such event the issuing of such
additional shares or other securities of the Company, if any, issuable
upon such exercise by giving effect to the adjustment required by such
specified event; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares or other securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that the Board of Directors in
its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Stock or Common Shares,
issuance wholly for cash of any Preferred Stock or Common Shares at less
than the current market price, issuance wholly for cash of Preferred
Stock or Common Shares or securities which by their terms are convertible
into or exchangeable for Preferred Stock or Common Shares, stock
dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to its
holders of Common Stock and/or Preferred Stock, shall not be taxable to
such holders.
(n) The Company covenants and agrees that it shall not (i)
combine with, (ii) merge with or into, or (iii) sell or transfer (or
permit any of its Subsidiaries to sell or transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person if at the time of or immediately after such
combination, merger or sale there are any rights, warrants or other
instruments outstanding which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time prior to
the Distribution Date (i) declare a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share
of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certification of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and
13, the Company shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, following the Distribution Date, directly
or indirectly, (a) the Company shall combine with, or merge with and
into, any other Person, (b) any Person shall merge into or otherwise
combine with the Company, and the Company shall be the continuing or
surviving corporation of such merger or combination and, in connection
with such merger or combination, all or part of the Common Stock shall be
changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets (computed separately according to
book value and fair market value) or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person, then, and in each
such case, proper provision shall be made so that (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have
the right to receive, upon the exercise thereof at the then-current
Purchase Price in accordance with the terms of this Agreement, such
number of validly issued, fully paid and nonassessable and freely
tradeable shares of Common Stock of the Principal Party (as defined
below), not subject to any rights of first refusal, as shall be equal to
the result obtained by (x) multiplying the then-current Purchase Price by
the number of one-hundredths of a share of Preferred Stock for which a
Right is then exercisable and dividing that product by (y) 50% of the
current market price per share of the Common Stock of such Principal
Party (determined pursuant to Section 11(d)) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of this Agreement (including,
without limitation, Section 11 hereof) shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of
its Common Stock and Preferred Stock in accordance with Section 9) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as they
reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights. "Principal
Party" shall mean (i) in the case of any transaction described in (a) or
(b) of the first sentence of this Section 13, the Person that is the
issuer of any securities into which shares of Common Stock of the Company
are converted or exchanged in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to the
merger or consolidation and (ii) in the case of any transaction described
in (c) of the first sentence of this Section 13, the Person that is the
other party to such transaction; provided, however, that in any such
case, (x) if the Common Stock of such Person is not at such time and has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another corporation the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other
corporation; and (y) in case such Person is a Subsidiary, directly or
indirectly, of more than one corporation, the Common Stocks of all of
which are and have been so registered, "Principal Party" shall refer to
whichever of such corporations is the issuer of the Common Stock having
the greatest market value of shares held by the public. The Company
shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in this Section 13, the
Principal Party will (i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, will use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the date of expiration
of the Rights; and (ii) will deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all respects
with the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that
one of the transactions described in this Section 13 shall occur at any
time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in this Section 13.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For the purpose of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted
to trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board
of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares (other than fractions which are integral multiples of one-
hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which
are integral multiples of one-hundredth of a share). Fractions of shares
of Preferred Stock in integral multiples of one-hundredth of a share may,
at the election of the Company be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it provided that such agreement shall provide that the
holders of such depositary receipts shall have all of the rights,
privileges and preferences to which they are entitled as beneficial
owners of the Preferred Stock. In lieu of fractional shares that are not
integral multiples of one-hundredth of a share there shall be issued to
the registered holders of Right Certificates at the time such Right
Certificates are exercised as herein provided certificates as described
above to the extent that such fractional shares include integral
multiples of one-hundredth of a share and the remaining balance shall be
paid to such registered holders in cash in an amount equal to the same
fraction of the current market value of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of a share of
Preferred Stock shall be the closing price of a share of Preferred Stock
(as determined pursuant to the second sentence of Section 11(d)) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares (other than fractions which are integral multiples of
one-hundredth of a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the
Right Certificates (and prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of or notice to the Rights Agent or of or to the
holder of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate
(or Common Stock) in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for any breach
of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock Certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated Common Stock Certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Preferred
Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without gross negligence, bad faith
or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Right Certificate or certificate for Preferred Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer business
of the Rights Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. In case at
the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name
of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed
by the Chairman of the Board, the President or any Vice President and by
the Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or
in the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or
in any Right Certificate; nor shall it be responsible for any adjustment
required under the provisions of Sections 11 or 13 or responsible for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock to be
issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Preferred Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President or any Vice
President or the Secretary or any Assistant Secretary or the Treasurer or
any Assistant Treasurer of the Company, and to apply to such officers for
advice or instruction in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, - provided
reasonable care was exercised in the selection and continued employment
thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and
to each transfer agent of the Common Stock and the Preferred Stock by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock and the Preferred Stock by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United
States or of the State of New York, in good standing, having its
principal office in the State of New York, which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which-has at the time of
its appointment as Rights Agent a combined capital and surplus of at
least $10,000,000. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and
mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the
number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with
the provisions of this Agreement. In addition, the Company may, if
deemed necessary or appropriate by the Continuing Directors, issue Right
Certificates in connection with the original issuance of shares of Common
Stock following the Distribution Date.
Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to 5:00 P.M., New York time, on the
earlier of (x) the 10th day following the Stock Acquisition Date and (y)
the Final Expiration Date, elect to redeem all but not less than all of
the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"); provided,
however, that for the purposes hereof the Board of Directors of the
Company shall be entitled to so redeem the Right only if it consists of a
majority of Continuing Directors. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Company's
right of redemption.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights, the Company shall make a
public announcement thereof, and from the date of such announcement,
without any further action and without any further notice, the right to
exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. Within 10
days after the action of the Board of Directors ordering the redemption
of the Rights, the Company shall give notice of such redemption to the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be
made.
Section 24. Notice of Proposed Actions. In case the Company shall
propose (a) to pay any dividend payable in stock of any class to the
holders of its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular periodic cash
dividend at a rate not in excess of 125% of the rate of the last cash
dividend theretofore paid), or (b) to offer to the holders of its
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or
any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (d) to effect any merger into or other combination with any other
Person, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person, or
(e) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a
Right, in accordance with Section 25, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution of rights or Rights, or the date on which such
reclassification, merger, combination, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of Common Stock and/or Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (a) or (b) above at least twenty days
prior to the record date for determining holders of the Preferred Stock
for purposes of such action, and in the case of any such other action, at
least twenty days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of Common Stock
and/or Preferred Stock, whichever shall be the earlier. The failure to
give notice required by this Section 24 or any defect therein shall not
affect the legality or validity of the action taken by the Company or the
vote upon any such action.
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon
as practicable thereafter give to each holder of a Right, in accordance
with Section 25 hereof, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Bowater Incorporated
One Parklands Drive
Darien, Connecticut 06820-4012
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of
any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
Morgan Guaranty Trust Company of New York
30 West Broadway
New York, New York 10007
Attention: Tenders and Exchanges
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 26. Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, or to
make any other provisions in regard to matters or questions arising
hereunder which the Company and the Rights Agent may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Right Certificates; provided, however, that this Agreement may
not be supplemented or amended in any way unless a majority of the
members of the Company's Board of Directors at the time of such amendment
or supplement are Continuing Directors. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Stock. The Rights Agent may, but
shall not be obligated to, enter into any such supplement or amendment
which affects the Rights Agent's own rights, duties or immunities under
this Agreement.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3(d)(l)(i) of
the General Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (and, where specifically provided for herein,
the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company (or, where specifically
provided for herein, the Continuing Directors), or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board (or, where specifically
provided for herein, by the Continuing Directors) in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent,
the holder of the Right Certificates and all other parties, and (y) not
subject the Board or the Continuing Directors to any liability to the
holders of the Rights.
Section 29. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors
of the Company determine in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in Section
23 hereof shall be reinstated and shall not expire until the close of
business on the tenth day following the date of such determination by the
Board of Directors.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights.
Section 31. Delaware Contract. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
Attest: BOWATER INCORPORATED
By: /s/ Leonard M. Saari By: /s/ D. J. D'ANTUONO
_______________________ ___________________________
Title: Assistant Secretary Title: Vice President
Attest: MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Celia E. Rodel By: /s/ John Gagnon
_______________________ ____________________________
Title: Assistant Secretary Title: Vice President
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF JUNIOR PARTICIPATING
PREFERRED STOCK, SERIES A
of
BOWATER INCORPORATED
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Bowater Incorporated, a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, HEREBY CERTIFIES:
That pursuant to the authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation of the said Corporation, the
said Board of Directors on April 22, 1986 adopted the following
resolution creating a series of 350,000 shares of Preferred Stock
designated as Junior Participating Preferred Stock, Series A:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Restated Certificate of Incorporation, a series of Preferred Stock of the
Corporation be and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are
as follows:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Junior Participating Preferred Stock, Series A" (the
"Series A Preferred Stock"), par value $1.00 per share, and the number of
shares constituting such series shall be 350,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable in cash on April 1, July 1, October 1 and January 2 in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a shade of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $12.50 and (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock, par value $1.00 per share, of the
Corporation (the "Common Stock") since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series A Preferred Stock. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in this paragraph (A) immediately
after it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a quarterly dividend
of $12.50 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the First Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred
Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no
more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If at the time of any meeting of shareholders called
for the election of directors any six or more quarterly dividends
(whether or not consecutive) payable on the Series A Preferred Stock or
on any other series of Preferred Stock, par value $1.00 per share
("Preferred Stock") of the Corporation (including the LIBOR Preferred
Stock, Series A) with similar voting rights (the Series A Preferred Stock
and such other series of Preferred Stock being collectively called the
"Voting Preferred Stock"), shall be in arrears or if a mandatory
redemption payment on any Voting Preferred Stock has been omitted, the
holders of outstanding Voting Preferred Stock (together, the "Preferred
Stockholders"), voting as a single class without regard to series, shall
thereafter automatically have the right to elect two directors. Such
voting rights shall remain vested until such time as all dividends in
arrears on the series of Voting Preferred Stock the dividend arrearage or
omissions of mandatory redemption payments on which gave rise to such
voting rights have, or such mandatory redemption payment has, been paid
or declared and a sum sufficient therefor set apart for payment, at which
time the right shall terminate (subject to revesting) and upon any
termination of the aforesaid voting right, subject to the requirements of
the General Corporation Law of the State of Delaware and the Company's
Restated Certificate of Incorporation, all directors elected by the
holders of Voting Preferred Stock voting separately as a class are to
resign. In exercising any such vote each share of Series A Preferred
Stock shall be entitled to 100 votes and each share of any other series
of Voting Preferred Stock will be entitled to one vote. So long as any
shares of Voting Preferred Stock remain outstanding, the number of
directors to be elected other than by the holders of Voting Preferred
Stock shall be at least two (2) less than the maximum number of directors
permitted under the Restated Certificate of Incorporation and the By-
laws.
(ii) A director elected by the holders of Voting Preferred
Stock (a "Preferred Director") may be removed only for cause, and only by
the affirmative vote of the holders of record of 75% of the Voting
Preferred Stock.
(D) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series
A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of preferred stock and may be reissued as part of a
new series of preferred stock to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
voluntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the
holders of shares of Series A Preferred Stock shall have received an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus an aggregate
amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount to be distributed per
share to holders of Common Stock, or (2) to the holders of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all other such parity stock
in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (l) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series A Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to
100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the event
the Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. Redemption. The outstanding shares of Series A
Preferred Stock may be redeemed at the option of the Board of Directors
as a whole, but not in part, at any time, or from time to time, at a cash
price per share equal to (i) the product of 100 (as appropriately
adjusted to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) times the Average
Market Value (as such term is hereinafter defined) of the Common Stock,
plus (ii) all dividends which on the redemption date have accrued on the
shares to be redeemed and have not been paid or declared and a sum
sufficient for the payment thereof set apart, without interest. The
"Average Market Value" is the average of the closing sale prices of the
Common Stock during the 30-day period immediately preceding the date
before the redemption date on the Composite Tape for New York Stock
Exchange Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on
such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended, on
which such stock is listed, or, if such stock is not listed on any such
exchange, the average of the closing bid quotations with respect to a
share of Common Stock during such 30-day period on the National
Association of Securities Dealers, Inc. Automated Quotations System or
any system then in use, or if no such quotations are available, the fair
market value of the Common Stock as determined by the Board of Directors
in good faith.
Section 9. Ranking. The Series A Preferred Stock shall rank junior
to all other series of the Corporation's preferred stock, whether or not
outstanding as of May 2, 1986 as to the payment of dividends and the
distribution of assets except to the extent otherwise provided in the
Corporation's Restated Certificate of Incorporation or the Certificate of
Designation, Preferences and Rights with respect to any such series.
Section 10. Amendment. The Restated Certificate of Incorporation
of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of
the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series A Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this
___ day of , 1986.
BOWATER INCORPORATED
By ______________________________
[CORPORATE SEAL]
ATTEST:
BY___________________________________
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. W- ________ Rights
NOT EXERCISABLE AFTER May 2, 1996 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
BY THIS CERTIFICATE WERE ISSUED TO OR HELD BY A PERSON WHO WAS AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON.
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT]1
BOWATER INCORPORATED
This certifies that __________________________ , or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of April 22,
1986 (the "Rights Agreement") between Bowater Incorporated, a Delaware
corporation (the "Company"), and Morgan Guaranty Trust Company of New
York, a New York Banking corporation (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined
_____________________
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
in the Rights Agreement) and prior to 5:00 P.M., New York time, on May 2,
1996 at the principal office of the Rights Agent, or its successors as
Rights Agent, in New York, New York, _____ fully paid nonassessable
shares of the Junior Participating Preferred Stock, Series A ("Preferred
Stock"), of the Company, at a purchase price of $90 per one one-hundredth
of a share (the "Purchase Price") upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase and related
Certificate duly executed. The Purchase Price shall be paid, at the
election of the holder, in cash or shares of Common Stock having an
equivalent value. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of May 2, 1986, based
on the shares of Preferred Stock of the Company as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Preferred Stock which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
Upon the occurrence of a Triggering Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person
who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after
the occurrence of such Triggering Event.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on file at
the principal office of the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.0l per Right at any time prior to the
earlier of the close of business on (i) the tenth day following the Stock
Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement), and (ii) the Final Expiration Date. As set forth in
the Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors.
No fractional shares of Preferred Stock (other than fractions which
are integral multiples of one-hundredth of a share) will be issued upon
the exercise of any Rights or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
As provided in the Rights Agreement, fractions of shares of Preferred
Stock in integral multiples of one-hundredth of a share may, at the
election of the Company, be evidenced by depositary receipts.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the
Rights or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of __________ 1986.
ATTEST: BOWATER INCORPORATED
________________________ By____________________________
Secretary Title:
Countersigned:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By________________________
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED _________________________________ hereby sells,
assigns and transfers unto _____________________________________________
________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _________________ , 19___
_____________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _____________ , 19___ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Bowater Incorporated:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to
purchase the shares of Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the
name of:
Please insert social security
or other identifying number
_______________________________________________________________________
(Please print name and address)
_______________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________
(Please print name and address)
_______________________________________________________________________
Dated: _____________ , 19___
__________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(l) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [
] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: _____________ , 19___ __________________________________
Signature
Signature Guaranteed:
EXHIBIT C
SUMMARY OF STOCKHOLDER RIGHTS PLAN
On April 22, 1986, the Board of Directors of Bowater Incorporated
(the "Company") declared a dividend distribution of one Right for each
outstanding share of common stock of the Company (the "Common Shares").
The distribution is payable on May 2, 1986. Except as set forth below,
each Right entitles the registered holder to purchase from the Company
one one-hundredth of a share of Junior Participating Preferred Stock,
Series A ("Preferred Stock") at an initial price of $90, subject to
adjustment (the "Purchase Price"). The Purchase Price shall be paid, at
the option of the holder, in cash or shares of Common Stock having a
value at the time of exercise equal to the Purchase Price. The
description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Company and Morgan Guaranty Trust
Company of New York as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following the date of a
public announcement that a person (an "Acquiring Person"), together with
persons affiliated or associated with it, has acquired beneficial
ownership of 20% or more of the outstanding Common Shares (the "Stock
Acquisition Date") or (ii) 10 days following the commencement or
announcement of an intention to make a tender offer or exchange offer by
a person other than the Company if, upon consummation of the offer, such
person, together with persons affiliated or associated with it, would be
the beneficial owner of 30% or more of the outstanding Common Shares (the
earlier of such days being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of May 2, 1986, by such Common Share certificates. Until
the Distribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with the Common
Shares. Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after May 2, 1986
upon transfer, replacement or new issuance of Common Shares will contain
a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for Common Shares will
also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business on
the Distribution Date. From and after the Distribution Date, such
separate Right Certificates alone will evidence the Rights. Except as
otherwise determined by the Continuing Directors, only Common Shares
issued prior to the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 2, 1996, unless earlier redeemed by the Company
as described below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders
of the Preferred Stock of certain rights or warrants to subscribe for
Preferred Stock or convertible securities at less than the current market
price of the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness, securities, cash or
assets (excluding regular periodic dividends out of earnings or retained
earnings) or of subscription rights or warrants (other than those
referred to above). With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in the Purchase Price. With certain
exceptions, no fractional shares will be issued on exercise of Rights,
and in lieu thereof an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading day prior to the
date of exercise.
In the event that, following the Distribution Date, the Company (i)
engages in a merger or other business combination transaction with an
Acquiring Person in which the Common Shares are changed or exchanged, or
(ii) sells or transfers 50% or more of its assets or earning power to an
Acquiring Person, proper provision shall be made so that each holder of a
Right (except as provided below) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price, common
stock of such other person (or in certain circumstances one of its
affiliates) having a value of two times such Purchase Price.
In the event that (i) a person, together with persons affiliated or
associated with it, becomes the beneficial owner of 30% or more of the
outstanding Common Shares (except pursuant to an offer for all
outstanding Common Shares at a price and on terms which the Continuing
Directors determine to be in the best interests of the Company and its
shareholders), or (ii) the Company is the surviving corporation in a
merger with an Acquiring Person, or an affiliate or associate of an
Acquiring Person, and its Common Shares are not changed or exchanged, or
(iii) an Acquiring Person engages in one of a number of self-dealing
transactions specified in the Rights Agreement, proper provision shall be
made so that each holder of a Right (except as provided below) shall
thereafter have the right to receive, upon exercise thereof at the then
current Purchase Price, (A) Common Shares of the Company having a value
of two times such Purchase Price or (B) in certain circumstances as
determined by the Continuing Directors, any combination of cash,
property, Common Shares or other securities which equate to the value of
the Common Shares which would otherwise be distributed upon exercise of
the Rights.
Any of the events described in the preceding two paragraphs is
defined as a "Triggering Event".
Any Rights that are or were beneficially owned at any time on or
after the earlier of the Distribution Date or the Stock Acquisition Date
by an Acquiring Person or an affiliate or associate of an Acquiring
Person shall become null and void upon the occurrence of a Triggering
Event and no holder of such Rights shall have any right with respect to
such Rights from and after the occurrence of a Triggering Event.
At any time on or prior to the 10th day following the Stock
Acquisition Date and prior to the expiration date of the Rights, the
Board of Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $.01 per Right. Immediately upon the action of
the Board of Directors of the Company electing to redeem the Rights, the
Company shall make announcement thereof, and upon such election, the
right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the Stock
Acquisition Date, and any successor of a Continuing Director who is
recommended or elected to succeed such Continuing Director by a majority
of the Continuing Directors, but shall not include an Acquiring Person,
or a representative or nominee of an Acquiring Person or of an affiliate
or associate of an Acquiring Person.
Until a Right is exercised, the holder thereof, in his capacity as a
holder, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
The terms of the Rights may be amended by the Board of Directors of
the Company; provided, however, that the amendment will not adversely
affect the interests of holders of Rights.
The Preferred Stock purchasable upon exercise of the Rights will be
redeemable and subordinate to other series of the Company's preferred
stock unless otherwise provided in such series. Each share of Preferred
Stock will be redeemable at 100 times the market value of a share of
Common Stock. Each share of Preferred Stock will have a minimum
preferential quarterly dividend rate of $12.50 per share, but will be
entitled to an aggregate dividend of 100 times the dividend declared on
the Common Stock. In the event of liquidation, the holders of the
Preferred Stock will receive a preferred liquidation payment equal to
accrued and unpaid distributions plus 100 times the payment made per
share of Common Stock. Each share of Preferred Stock will have 100
votes, voting together with the Common Stock and, in the case of a
failure to pay six or more quarterly dividends (whether or not
consecutive), each share of Preferred Stock will have one hundred votes
and will vote together with the LIBOR Preferred Stock. Finally, in the
event of any merger, consolidation or other transaction in which shares
of Common Stock are exchanged for or changed into other stock or
securities, cash or other property, each share of Preferred Stock will be
entitled to receive 100 times the amount received per share of Common
Stock. The foregoing rights of the Preferred Stock are protected against
dilution in the event additional shares of Common Stock are issued.
Fractional shares of Preferred Stock in integral multiples of 1/100 of a
share of Preferred Stock will be issuable; however, to facilitate trading
of such fractional interests depositary receipts will be made available.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the value of the interest in a share of Preferred Stock
purchasable with each Right should approximate the value of one hundred
shares of Common Stock.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-
A. A copy of the Rights Agreement will be available free of charge from
the Company. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
EXHIBIT 4.6.1
ADDENDUM TO THE RIGHTS AGREEMENT
WHEREAS, Bowater Incorporated (the "Company") seeks to appoint The
Bank of New York as successor rights agent (the "Rights Agent") under the
Rights Agreement dated as of April 22, 1986 (the "Agreement"); and
WHEREAS, The Bank of New York desires to become said Rights Agent
with the duties and obligations set forth in the Agreement and this
addendum (the "Addendum"); and
WHEREAS, the Company and the Rights Agent are authorized to execute
such an Addendum pursuant to Section 26 of the Agreement;
NOW, THEREFORE, in consideration of the premises, the parties hereto
agree as follows:
1. At every point in the Agreement where reference is made to
"Morgan Guaranty Trust Company of New York," "The Bank of New York" shall
be substituted. Further, references to a "New York Trust Company" shall
be changed to read "New York banking corporation." Every reference to
the Rights Agent shall be deemed to refer to The Bank of New York in its
capacity as Rights Agent.
2. Section 2 of the Agreement shall be changed to read, in
pertinent part: "The Company may from time to time appoint one or more
additional Rights Agents as it may deem necessary and desirable to serve
concurrently with one or more previously appointed Rights Agents and
shall give the Rights Agent ten (10) days written notice of any such
appointment.
3. The last line of Section 3(a) of the Agreement shall be changed
to read, in pertinent part: "As soon as practicable after the
Distribution Date (of which date the Company shall notify the Rights
Agent in writing) . . . ."
4. The legend in Section 3(c) shall be changed to read, in
pertinent part: "This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
Bowater Incorporated and The Bank of New York as successor rights agent
(the "Rights Agent") dated as of . . . ."
5. After the first sentence of Section 4(a) shall be inserted, "The
Rights Certificates shall be in machine printable form and shall be in a
format satisfactory to the Rights Agent." After the original second
sentence of that section shall be inserted, "The Rights Certificates
shall show the date of countersignature." A copy of the form of Right
Certificate is attached hereto as Exhibit A.
6. The second sentence of Section 5 shall be changed to read: "The
Right Certificates shall be manually countersigned by an authorized
signatory of the Rights Agent (which need not be the same signatory for
all of the Right Certificates) and shall not be valid for any purpose
unless so countersigned."
7. The last sentence of the first paragraph of Section 6 shall be
changed to read: "The Company may require payment from the Right
Certificates holders of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, exchange,
split up, or combination of Right Certificates."
The second paragraph of Section 6 shall be changed to read, in
pertinent part: "Upon receipt by the Rights Agent of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it . . . ."
8. Section 7(a) shall be changed to read: "The registered holder
of any Right Certificate may exercise, except as such right of exercise
may be suspended pursuant to Section 9(c) and 11(a)(iii) hereof, the
Rights evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, and such other and
further documentation as the Rights Agent may reasonably require, to the
Rights Agent at the designated office of the Rights Agent in New York
City . . . ."
9. Section 8(c) shall be changed to read, in pertinent part: "Upon
receipt of a Right Certificate representing exercisable rights, with the
form of election to purchase and the certificate duly executed, and such
other and further documentation as the Rights Agent may reasonably
require . . . ."
10. The last sentence of Section 9(c) shall be changed to read:
"Upon any such suspension, the Company shall issue a public announcement
stating and notify the Rights Agent in writing that the exercisability of
the Rights has been temporarily suspended."
11. A sentence shall be added to Section 10 stating: "Such
preferred stock certificates shall show the date of countersignature."
12. The fourth sentence of Section 11(i) shall be changed to read:
"The Company shall make a public announcement and notify the Rights Agent
in writing of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made."
13. A sentence shall be added to the first paragraph of Section 18
stating: "The Company further agrees to indemnify the Rights Agent for
any loss, expense, liability or other damages arising from the acts or
omissions of any predecessor rights agent."
14. The following language shall be added to Section 20(g): "An
application by the Rights Agent for instructions may set forth in writing
any action proposed to be taken or omitted by the Rights Agent with
respect to its duties and obligations under this agreement and the date
on and/or after which such action shall be taken and the Rights Agent
shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein (which date shall not be less than one Business Day after the
Company receives such application) without the Company's consent unless
prior to taking or omitting such action, the Rights Agent has received
written instructions in response to such application specifying the
actions to be taken or omitted."
15. A subsection (j) shall be added to Section 20 stating: "The
Rights Agent shall not be required to risk or expend its own funds in the
performance of its duties and obligations hereunder."
16. The second sentence of Section 23(b) shall be changed to read,
in pertinent part: "Within ten (10) days after the action of the Board
of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders and to the Rights Agent . .
. ."
17. The second paragraph of Section 24 shall be changed to read, in
pertinent part: "In case any of the events set forth in Section
11(a)(iii) of this Agreement shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to each holder and
to the Rights Agent . . . ."
18. The notice address of the Rights Agent in Section 25 shall be
changed to read:
The Bank of New York
Stock Transfer Administration
90 Washington Street, 27th Floor
New York, New York 10015
Attention: Leonard D. Small
19. Section 31 shall be changed to read: "New York Contract. This
Agreement and each Right Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of New York and for all
purposes shall be governed by and construed in accordance with the laws
of such state applicable to contracts to be made and performed entirely
within such state."
20. It is further agreed that the Rights Certificates shall be
changed in accordance with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to
be duly executed all as of April 10, 1987.
BOWATER INCORPORATED
By: /S/ John P. Fucigna
________________________
THE BANK OF NEW YORK,
as Rights Agent
By: /S/ L. D. Small
________________________
EXHIBIT A
FORM OF RIGHT CERTIFICATE
Certificate No. W- ________ Rights
NOT EXERCISABLE AFTER MAY 2, 1996 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
BY THIS CERTIFICATE WERE ISSUED TO OR HELD BY A PERSON WHO WAS AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON.
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT]1
BOWATER INCORPORATED
This certifies that ________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of April 22, 1986 (the
"Rights Agreement") between Bowater Incorporated, a Delaware corporation
(the "Company"), and The Bank of New York, a New York banking
corporation, as successor rights agent (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York time,
on May 2, 1996 at the designated office of the Rights Agent, or its
successors as Rights Agent, in New York, New York, ________ fully paid
nonassessable shares of the Junior Participating Preferred Stock, Series
A ("Preferred Stock"), of the Company, at a purchase price of $90 per one
one-hundredth of a share (the "Purchase Price") upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase
and related Certificate duly executed. The Purchase Price shall be paid,
at the election of the holder, in cash or shares of Common Stock having
an equivalent value. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set
________
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
forth above, are the number and Purchase Price as of May 2, 1986, based
on the shares of Preferred Stock of the Company as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Preferred Stock which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
Upon the occurrence of a Triggering Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined in the Rights Agreement), (ii) a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person
who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after
the occurrence of such Triggering Event.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on file at
the principal office of the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time prior to the
earlier of the close of business on (i) the tenth day following the Stock
Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement), and (ii) the Final Expiration Date. As set forth in
the Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors.
No fractional shares of Preferred Stock (other than fractions which
are integral multiples of one-hundredth of a share) will be issued upon
the exercise of any Rights or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
As provided in the Rights Agreement, fractions of shares of Preferred
Stock in integral multiples of one-hundredth of a share may, at the
election of the Company, be evidenced by depositary receipts.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the
Rights or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________, 198
ATTEST: BOWATER INCORPORATED
_______________________ By_________________________
Secretary Title:
Countersigned:
The Bank of New York,
as Rights Agent
By_____________________
Authorized Signature
Date:
EXHIBIT 4.7
[CONFORMED COPY]
BOWATER INCORPORATED
TO
MANUFACTURERS HANOVER
TRUST COMPANY,
Trustee
Indenture
Dated as of August 1, 1989
$300,000,000
9% Debentures Due 2009
<PAGE>
BOWATER INCORPORATED
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of August 1, 1989
Trust Indenture
Act Section Indenture Section
Section 310(a)(1).................................. 609
(a)(2).................................. 609
(a)(3).................................. Not Applicable
(a)(4).................................. Not Applicable
(b)..................................... 608
610
Section 311(a)..................................... 613(a)
(b)..................................... 613(b)
(b)(2).................................. 703(a)(2)
703(b)
Section 312(a)..................................... 701
702(a)
(b)..................................... 702(b)
(c)..................................... 702(c)
Section 313(a)..................................... 703(a)
(b)..................................... 703(b)
(c)..................................... 703(a), 703(b)
(d)..................................... 703(c)
Section 314(a)..................................... 704
(b)..................................... Not Applicable
(c)(1).................................. 102
(c)(2).................................. 102
(c)(3).................................. Not Applicable
(d)..................................... Not Applicable
(e)..................................... 102
Section 315(a)..................................... 601(a)
(b)..................................... 602
703(a)(6)
(c)..................................... 601(b)
(d)..................................... 601(c)
(d)(1).................................. 601(c)(1)
(d)(2).................................. 601(c)(2)
(d)(3).................................. 601(c)(3)
(e)..................................... 514
Section 316(a)..................................... 101
(a)(1)(A)............................... 502
512
(a)(1)(B)............................... 513
(a)(2).................................. Not Applicable
(b)..................................... 508
Section 317(a)(1).................................. 503
(a)(2).................................. 504
(b)..................................... 1003
Section 318(a)..................................... 107
__________
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
TABLE OF CONTENTS
PAGE
PARTIES................................................... 1
RECITALS OF THE COMPANY................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions................................. 1
Act...................................... 2
Affiliate................................ 2
Attributable Debt........................ 2
Board of Directors....................... 2
Board Resolution......................... 2
Business Day............................. 2
Calculation Date......................... 3
Commission............................... 3
Company.................................. 3
Company Request; Company Order........... 3
Consolidated Net Tangible Assets......... 3
Corporate Trust Office................... 3
Corporation.............................. 3
Debenture Register; Debenture Registrar.. 3
Defaulted Interest....................... 3
Designated Event......................... 4
Event of Default......................... 4
Full Rating Category..................... 4
Funded Debt.............................. 4
Holder................................... 4
Indenture................................ 4
Interest Payment Date.................... 4
Investment Grade......................... 4
Maturity................................. 4
Moody's.................................. 4
Officers' Certificate.................... 4
Opinion of Counsel....................... 4
Outstanding.............................. 5
Paying Agent............................. 5
Person................................... 5
Predecessor Debenture.................... 6
Principal Property....................... 6
Rating Agency............................ 6
Rating Date.............................. 6
Rating Decline........................... 6
Realty Subsidiary........................ 6
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
Redemption Date.......................... 6
Regular Record Date...................... 6
Repurchase Date.......................... 6
Responsible Officer...................... 6
Restricted Subsidiary.................... 7
S&P...................................... 7
Special Record Date...................... 7
Stated Maturity.......................... 7
Subsidiary............................... 7
Timberlands.............................. 7
Trustee.................................. 7
Trust Indenture Act...................... 8
Vice President........................... 8
Voting Stock............................. 8
U.S. Government Obligations.............. 8
1934 Act................................. 8
SECTION 102. Compliance Certificates and Opinions......... 8
SECTION 103. Form of Documents Delivered to Trustee....... 9
SECTION 104. Acts of Holders.............................. 10
SECTION 105. Notices, Etc., to Trustee and Company........ 10
SECTION 106. Notice to Holders; Waiver.................... 11
SECTION 107. Conflict with Trust Indenture Act............ 11
SECTION 108. Effect of Headings and Table of Contents..... 11
SECTION 109. Successors and Assigns....................... 12
SECTION 110. Separability Clause.......................... 12
SECTION 111. Benefits of Indenture........................ 12
SECTION 112. Governing Law................................ 12
SECTION 113. Legal Holidays............................... 12
ARTICLE TWO
DEBENTURE FORMS
SECTION 201. Forms Generally.............................. 12
SECTION 202. Form of Face of Debenture.................... 13
SECTION 203. Form of Reverse of Debenture................. 14
SECTION 204. Form of Trustee's Certificate of
Authentication............................. 17
ARTICLE THREE
THE DEBENTURES
SECTION 301. Title and Terms.............................. 17
SECTION 302. Denominations................................ 18
SECTION 303. Execution, Authentication, Delivery
and Dating................................. 18
SECTION 304. Temporary Debentures......................... 19
SECTION 305. Registration, Registration of Transfer
and Exchange............................... 19
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Debentures................................. 20
SECTION 307. Payment of Interest; Interest Rights
Preserved.................................. 21
SECTION 308. Persons Deemed Owners........................ 23
SECTION 309. Cancellation................................. 23
SECTION 310. Computation of Interest...................... 23
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of
Indenture................................. 23
SECTION 402. Application of Trust Money; Indemnification. 25
SECTION 403. Satisfaction, Discharge and Defeasance of
Debentures................................ 25
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default........................... 27
SECTION 502. Acceleration of Maturity; Recision and
Annulment................................. 28
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.................... 29
SECTION 504. Trustee May File Proofs of Claim............ 30
SECTION 505. Trustee May Enforce Claims Without
Possession of Debentures.................. 31
SECTION 506. Application of Money Collected.............. 31
SECTION 507. Limitation on Suits......................... 31
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest........... 32
SECTION 509. Restoration of Rights and Remedies.......... 32
SECTION 510. Rights and Remedies Cumulative.............. 33
SECTION 511. Delay or Omission Not Waiver................ 33
SECTION 512. Control by Holders.......................... 33
SECTION 513. Waiver of Past Defaults..................... 33
SECTION 514. Undertaking for Costs....................... 34
SECTION 515. Waiver of Stay or Extension Laws............ 34
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities......... 35
SECTION 602. Notice of Defaults.......................... 36
SECTION 603. Certain Rights of Trustee................... 36
SECTION 604. Not Responsible for Recitals or Issuance of
Debentures................................ 37
SECTION 605. May Hold Debentures......................... 38
SECTION 606. Money Held in Trust......................... 38
SECTION 607. Compensation and Reimbursement.............. 38
SECTION 608. Disqualification; Conflicting Interests..... 39
(a) Elimination of Conflicting Interest or
Resignation........................... 39
(b) Notice of Failure to Eliminate
Conflicting Interest or Resign........ 39
(c) "Conflicting Interest" Defined.......... 39
(d) Definitions of Certain Terms Used in This
Section............................... 42
(e) Calculation of Percentages of Securities 43
SECTION 609. Corporate Trustee Required; Eligibility..... 45
SECTION 610. Resignation and Removal; Appointment of
Successor................................. 45
SECTION 611. Acceptance of Appointment by Successor...... 46
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.................... 47
SECTION 613. Preferential Collection of Claims
Against Company........................... 47
(a) Segregation and Apportionment of
Certain Collections by Trustee,
Certain Exceptions.................... 47
(b) Certain Creditor Relationships Excluded
from Segregation and Apportionment.... 50
(c) Definitions of Certain Terms Used in
This Section.......................... 51
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders...................... 52
SECTION 702. Preservation of Information; Communications
to Holders................................ 52
SECTION 703. Reports by Trustee.......................... 54
SECTION 704. Reports by Company.......................... 55
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on
Certain Terms............................. 56
SECTION 802. Successor Corporation Substituted........... 57
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without
Consent of Holders........................ 58
SECTION 902. Supplemental Indentures with Consent
of Holders................................ 58
SECTION 903. Execution of Supplemental Indentures........ 59
SECTION 904. Effect of Supplemental Indentures........... 59
SECTION 905. Conformity with Trust Indenture Act......... 60
SECTION 906. Reference in Debentures to Supplemental
Indentures................................ 60
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and
Interest................................. 60
SECTION 1002. Maintenance of Office or Agency............ 60
SECTION 1003. Money for Debenture Payments to Be
Held in Trust............................ 61
SECTION 1004. Corporate Existence........................ 62
SECTION 1005. Maintenance of Properties.................. 63
SECTION 1006. Payment of Taxes and Other Claims.......... 63
SECTION 1007. Restrictions on Secured Debt............... 63
SECTION 1008. Restrictions on Sales and Leasebacks....... 65
SECTION 1009. Statement by Officers as to Default........ 67
SECTION 1010. Waiver of Certain Covenants................ 67
ARTICLE ELEVEN
REPURCHASE AT THE OPTION OF HOLDERS
SECTION 1101. Repurchase at the Option of Holders........ 68
SECTION 1102. Exercise of Repurchase Right............... 68
SECTION 1103. Optional Redemption upon Repurchase of 90%
of Debentures............................ 69
SECTION 1104. Certain Definitions........................ 71
TESTIMONIUM.............................................. 74
SIGNATURES AND SEALS..................................... 74
ACKNOWLEDGEMENTS......................................... 75
INDENTURE, dated as of August 1, 1989, between BOWATER INCORPORATED,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at
One Parklands Drive, P.O. Box 4012, Darien, Connecticut 06820-1412 and
Manufacturers Hanover Trust Company, a corporation duly organized and
existing under the laws of the State of New York, Trustee (herein called
the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
Debentures (herein called the "Debentures") of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.
All things necessary to make the Debentures, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture
a valid agreement of the Company, in accordance with their and its terms,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Debentures,
as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein have the meanings
assigned to them therein;
(3) all accounting terms otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act" when used with respect to any Holder has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Attributable Debt" means, as to any particular lease under which
any Person is at the time liable and at any date as of which the amount
thereof is to be determined, the total net amount of rent required to be
paid by such Person under such lease during the remaining primary term
thereof, discounted from the respective due dates thereof to such date at
the rate of 9% per annum. The net amount of rent required to be paid
under any such lease for any such period shall be the aggregate amount of
rent payable by the lessee with respect to such period after excluding
amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty,
but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on
the date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The
City of New York are authorized or obligated by law or executive order to
close.
"Calculation Date" has the meaning specified in Section 1104.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the
Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman of the Board, its
President or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items)
after deducting therefrom (i) all liabilities and equities, other than
deferred income taxes, minority interests, Funded Debt, preferred stock
and common shareholders' equity and (ii) all goodwill, trade names,
trademarks, patents, organization expenses and other like intangibles,
all as set forth on the most recent balance sheet of the Company and its
consolidated Subsidiaries and computed in accordance with generally
accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered, which office at the date hereof is located at 450 West 33rd
Street, New York, New York 10001.
"Corporation" includes corporations, associations, companies and
business trusts.
"Debenture Register" and "Debenture Registrar" have the respective
meanings specified in Section 305.
"Defaulted Interest" has the meaning specified in Section 307.
"Designated Event" has the meaning specified in Section 1104.
"Event of Default" has the meaning specified in Section 501.
"Full Rating Category" has the meaning specified in Section 1104.
"Funded Debt" means (i) all indebtedness for money borrowed having a
maturity of more than 12 months from the date as of which the
determination is made or having a maturity of 12 months or less but by
its terms being renewable or extendible beyond 12 months from such date
at the option of the borrower (excluding any amount thereof included in
current liabilities) and (ii) rental obligations payable more than 12
months from such date under leases which are capitalized in accordance
with generally accepted accounting principles (such rental obligations to
be included as Funded Debt at the amount so capitalized and to be
included for the purposes of the definition of Consolidated Net Tangible
Assets both as an asset and as Funded Debt at the amount so capitalized).
"Holder" means a Person in whose name a Debenture is registered in
the Debenture Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof.
"Interest Payment Date" means the Stated Maturity of an installment
of interest on the Debentures.
"Investment Grade" has the meaning specified in Section 1104.
"Maturity", when used with respect to any Debenture, means the date
on which the principal of such Debenture becomes due and payable as
therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Moody's" has the meaning specified in Section 1104.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the
Trustee.
"Outstanding", when used with respect to Debentures, means, as of
the date of determination, all Debentures theretofore authenticated and
delivered under this Indenture, except:
(i) Debentures theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debentures for whose payment or redemption money in the
necessary amount or U.S. Government Obligations in accordance with
Section 403 in the necessary amount, has been theretofore deposited with
the Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Debentures; and
(iii) Debentures in exchange for or in lieu of which other
Debentures have been authenticated and delivered pursuant to this
Indenture;
provided, however, that in determining whether the Holders of the
requisite principal amount of the Outstanding Debentures have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Debentures owned by the Company or any other obligor upon the
Debentures or any Affiliate of the Company or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Debentures which the Trustee knows to be so owned shall be
so disregarded. Debentures so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to
such Debentures and that the pledgee is not the Company or any other
obligor upon the Debentures or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debentures on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 306
in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Debenture shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Debenture.
"Principal Property" means (a) any mill, converting plant,
manufacturing plant or other facility owned on the date hereof or
hereafter acquired by the Company or any Restricted Subsidiary which is
located within the present 50 States Of the United States and the gross
book value (including related land and improvements thereon and all
machinery and equipment included therein without deduction of any
depreciation reserves) of which on the date as of which the determination
is being made exceeds 1% of Consolidated Net Tangible Assets, and (b)
Timberlands, in each case other than (i) any property which in the
opinion of the Board of Directors is not of material importance to the
total business conducted by the Company and its Restricted Subsidiaries
as an entirety or (ii) any portion of a particular property which is
similarly found not to be of material importance to the use or operation
of such property or (iii) any oil, gas or other minerals or mineral
rights.
"Rating Agency" has the meaning specified in Section 1104.
"Rating Date" has the meaning specified in Section 1104.
"Rating Decline" has the meaning specified in Section 1104.
"Redemption Date" has the meaning specified in Section 1103.
"Realty Subsidiary" means a Subsidiary of the Company engaged
primarily in the development and sale or financing of real property.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the January 15 or July 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 1101.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust
officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Subsidiary" means a Subsidiary of the Company (i)
substantially all the property of which is located, or substantially all
the business of which is carried on, within the present 50 States of the
United States and (ii) which owns a Principal Property, but does not
include a Realty Subsidiary.
"S&P" has the meaning specified in Section 1104.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Debenture or any
instalment of interest thereon, means the date specified in such
Debenture as the fixed date on which the principal of such Debenture or
such instalment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of
stock has such voting power by reason of any contingency.
"Timberlands" means any real property of the Company or any
Restricted Subsidiary of the Company located within the present 50 States
of the United States which contains standing timber which is (or upon
completion of a growth cycle then in process is expected to become) of a
commercial quantity and of merchantable quality, excluding however, any
such real property which at the time of determination is held primarily
for development or sale, and not primarily for the production of any
lumber or other timber products.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as
provided in Section 905.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
"Voting Stock" has the meaning specified in Section 1104.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with
respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by
such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of
interest on or principal of the U.S. Government Obligation evidenced by
such depository receipt.
"1934 Act" has the meaning specified in Section 704.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action
have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular application
or request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but
one such Person may certify or give an opinion with respect to some
matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with
respect to such factual matters is in the possession of the Company,
unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by agent duly appointed
in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject
to Section 601) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any reasonable manner which
the Trustee deems sufficient.
(c) The ownership of Debentures shall be proved by the
Debenture Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Debenture shall bind
every future Holder of the same Debenture and the Holder of every
Debenture issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Debenture.
SECTION 105. Notices, Etc., to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver, or Act of
Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trustee Administration Department, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified
in the first paragraph of this instrument, Attention: Secretary or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Debenture Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of the publication of all
newspapers referred to in Section 1003 or the suspension of regular mail
service, or by reason of any other cause it shall be impracticable to
give such notice by publication or mail, as the case may be, then such
notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose here under.
SECTION 107. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which
is required to be included in this Indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
SECTION 108. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 110. Separability Clause. In case any provision in this
Indenture or in the Debentures shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders of
Debentures, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law. This Indenture and the Debentures shall
be governed by and construed in accordance with the laws of the State of
New York.
SECTION 113. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Debenture shall not be a
Business Day, then (notwithstanding any other provision of this Indenture
or of the Debentures) payment of interest or principal (and premium, if
any) need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date or Redemption Date or at the Stated Maturity,
provided that no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case
may be.
ARTICLE TWO
DEBENTURE FORMS
SECTION 201. Forms Generally. The Debentures and the Trustee's
certificates of authentication shall be in substantially the forms set
forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Debentures, as evidenced by their execution of the Debentures.
The definitive Debentures shall be printed, lithographed or engraved
or produced by any combination of these methods on steel engraved borders
or may be produced in any other manner permitted by the rules of any
securities exchange on which the Debentures may be listed, all as
determined by the officers executing such Debentures, as evidenced by
their execution of such Debentures.
SECTION 202. Form of Face of Debenture.
BOWATER INCORPORATED
9% DEBENTURE DUE 2009
No. $
Bowater Incorporated, a corporation duly organized and existing
under the laws of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to
, or registered assigns, the principal
sum of Dollars on August 1, 2009,
and to pay interest thereon from August 1, 1989 or from the most recent
Interest Payment Date to which interest has been paid or duly provided
for, semi-annually in arrears on February 1 and August 1 in each year,
commencing February 1, 1990, at the rate of 9% per annum, until the
principal hereof is paid or duly provided for. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name
this Debenture (or one or more Predecessor Debentures) is registered at
the close of business on the Regular Record Date for such interest, which
shall be the January 15 or July 15 (whether or not a Business Day), as
the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease
to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Debenture (or one or more
Predecessor Debentures) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be
fixed by the Trustee, notice whereof shall be given to Holders of
Debentures not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be
listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture. Payment of the principal of (and
premium, if any) and interest on this Debenture will be made at the
office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, in such coin or currency of
the United States of America as at the time of payment is legal tender
for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear
in the Debenture Register; provided further, however, that at the option
of the Company payment of interest may be made by wire or other transfer
of immediately available funds to the Person entitled thereto if such
Person is the registered Holder of at least $300,000 in aggregate
principal amount of Debentures and has provided appropriate written
instructions for such transfer to the Company not later than the close of
business on the Regular Record Date with respect to such interest
payment.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Debenture shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
BOWATER INCORPORATED
By:______________________
Attest:
__________________________
SECTION 203. Form of Reverse of Debenture. This Debenture is one of
a duly authorized issue of Debentures of the Company designated as its 9%
Debentures Due 2009 (herein called the "Debentures"), limited in
aggregate principal amount to $300,000,000, issued and to be issued under
an Indenture, dated as of August 1, 1989 (herein called the "Indenture"),
between the Company and Manufacturers Hanover Trust Company, Trustee
(herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Company, the Trustee and the Holders of the Debentures and of the terms
upon which the Debentures are, and are to be, authenticated and
delivered.
If an Event of Default shall occur and be continuing, the principal
of all the Debentures may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations
of the Company and the rights of the Holders of the Debentures under the
Indenture at any time by the Company and the Trustee with the consent of
the Holders of a majority in aggregate principal amount of the Debentures
at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal
amount of the Debentures at the time Outstanding, on behalf of the
Holders of all the Debentures, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the
Holder of this Debenture shall be conclusive and binding upon such Holder
and upon all future Holders of this Debenture and of any Debenture issued
upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made
upon this Debenture.
In the event that there occurs at any time both (a) a Designated
Event with respect to the Company and (b) a Rating Decline, the holder
hereof shall have the right, at the Holder's option, to require the
Company to purchase all or any part of this Debenture on the date
("Repurchase Date") that is 100 days after the occurrence of the Rating
Decline, at 100% of the principal amount hereof, together with accrued
interest to the Repurchase Date. If on any Repurchase Date 90% or more of
the Debentures Outstanding on the day on which the Rating Decline
occurred are repurchased by the Company at the option of the Holders
thereof pursuant to the foregoing, the Company may, within 90 days after
such Repurchase Date, at its option, redeem, on not less than 30 nor more
than 60 days' written notice to the Holders thereof, the remaining
Debentures, as a whole but not in part, at 100% of the principal amount
thereof, together with accrued interest thereon to the date of such
redemption.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
(and premium, if any) and interest on this Debenture at the times, place
and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Debenture is registrable in the
Debenture Register, upon surrender of this Debenture for registration of
transfer at the office or agency of the Company (as provided for in
Section 1002 of the Indenture) in the Borough of Manhattan, The City of
New York, duly endorsed by, or accompanied by a written instrument Of
transfer in form satisfactory to the Company and the Debenture Registrar
duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Debentures, of authorized
denominations and for the same aggregate principal amount, will be issued
to the designated transferee or transferees.
The Debentures are issuable only in registered form without coupons
in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Debentures are exchangeable for a like aggregate principal amount
of Debentures of a different authorized denomination, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Debenture is registered
as the owner hereof for all purposes, whether or not this Debenture be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 204. Form of Trustee's Certificate of Authentication. This
is one of the Debentures referred to in the within-mentioned Indenture.
MANUFACTURERS HANOVER TRUST COMPANY,
As Trustee
By:________________________________
Authorized Officer
ARTICLE THREE
THE DEBENTURES
SECTION 301. Title and Terms. The aggregate principal amount of
Debentures which may be authenticated and delivered under this Indenture
is limited to $300,000,000, except for Debentures authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Debentures pursuant to Section 304, 305, 306, 906 or 1108.
The Debentures shall be known and designated as the "9% Debentures
Due 2009" of the Company. Their Stated Maturity shall be August 1, 2009,
and they shall bear interest at the rate of 9% per annum, from August 1,
1989 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, as the case may be, payable semi-annually
in arrears on February 1 and August 1 in each year, commencing February
1, 1990, until the principal thereof is paid or duly provided for.
The principal of (and premium, if any) and interest on the
Debentures shall be payable at the office or agency of the Company in the
Borough of Manhattan, The City of New York, maintained for such purpose
and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Debenture Register;
provided further, however, that at the option of the Company payment of
interest may be made by wire or other transfer of immediately available
funds to the Person entitled thereto if such Person is the registered
Holder of at least $300,000 in aggregate principal amount of Debentures
and has provided appropriate written instructions for such transfer to
the Company not later than the close of business on the Regular Record
Date with respect to such interest payment.
SECTION 302. Denominations. The Debentures shall be issuable only in
registered form without coupons and only in denominations of $1,000 and
any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The
Debentures shall be executed on behalf of the Company by its Chairman of
the Board, its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Debentures may be manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Debentures executed by the
Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Debentures; and the Trustee
in accordance with such Company Order and without further action by the
Company shall authenticate and deliver such Debentures as in this
Indenture provided and not otherwise.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such
Debenture a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature of an
authorized officer thereof, and such certificate upon any Debenture shall
be conclusive evidence, and the only evidence, that such Debenture has
been duly authenticated and delivered hereunder.
SECTION 304. Temporary Debentures. Pending the preparation of
definitive Debentures, the Company may execute, and upon Company Order
the Trustee shall authenticate and deliver, temporary Debentures which
are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of
the definitive Debentures in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as
the officers executing such Debentures may determine, as evidenced by
their execution of such Debentures.
If temporary Debentures are issued, the Company will cause
definitive Debentures to be prepared without unreasonable delay. After
the preparation of definitive Debentures, the temporary Debentures shall
be exchangeable for definitive Debentures upon surrender of the temporary
Debentures at any office or agency of the Company designated pursuant to
Section 1002, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Debentures the Company shall
execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Debentures of authorized
denominations. Until so exchanged the temporary Debentures shall in all
respects be entitled to the same benefits under this Indenture as
definitive Debentures.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at one of the offices or agencies of
the Company maintained pursuant to Section 1002 (the register maintained
in such office designated pursuant to Section 1002 being herein sometimes
referred to as the "Debenture Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for
the registration of Debentures and for the registration of the transfers
of Debentures. The Trustee is hereby initially appointed "Debenture
Registrar" for the purpose of registering Debentures and transfers of
Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture at an
office or agency of the Company designated pursuant to Section 1002 for
such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Debentures of any authorized denominations,
of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office
or agency. Whenever any Debentures are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver,
the Debentures which the Holder making the exchange is entitled to
receive.
All Debentures issued upon any registration of transfer or exchange
of Debentures shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as
the Debentures surrendered upon such registration of transfer or
exchange.
Every Debenture presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Debenture Registrar
duly executed, by the Holder thereof or his attorney duly authorized in
writing.
The Company shall not be required to issue or register the transfer
or exchange of any Debenture on or after the fifteenth day prior to the
mailing of a notice of redemption under Section 1103.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Debentures, other than exchanges pursuant to Sections 304, 906 and 1108
not involving any transfer.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debentures. If
any mutilated Debenture is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange
therefor a new Debenture of like tenor and principal amount and bearing a
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture and (ii) such security or indemnity as may be required by them
to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Trustee that such Debenture
has been acquired by a bona fide purchaser, the Company shall execute and
upon its request the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Debenture, a new Debenture of like
tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Debenture shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Debentures duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen
Debentures.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Debenture (or one or more Predecessor
Debentures) is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Debenture which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date
(herein called "Defaulted Interest") shall forthwith cease to be payable
to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company,
at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Debenture and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears
in the Debenture Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such
other Debenture.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
Debenture for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name
such Debenture is registered as the owner of such Debenture for the
purpose of receiving payment of principal of (and premium, if any) and
(subject to Section 307) interest on such Debenture and for all other
purposes whatsoever, whether or not such Debenture be overdue, and
neither the Company, the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation. All Debentures surrendered for payment or
registration of transfer or exchange shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Debentures previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever,
and all Debentures so delivered shall be promptly cancelled by the
Trustee. No Debentures shall be authenticated in lieu of or in exchange
for any Debentures cancelled as provided in this Section, except as
expressly permitted by this Indenture. Unless another manner of disposing
of cancelled Debentures is directed by a Company Order, all cancelled
Debentures held by the Trustee shall be destroyed by the Trustee in such
manner as the Trustee shall determine and a certificate evidencing such
destruction and signed by a Responsible Officer of the Trustee shall be
delivered to the Company.
SECTION 310. Computation of Interest. Interest on the Debentures
shall be computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Debentures herein expressly
provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Debentures theretofore authenticated and delivered
(other than (i) Debentures which have been destroyed, lost or stolen and
have been replaced or paid as provided in Section 306 and (ii) Debentures
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section 1003) have
been delivered to the Trustee for cancellation; or
(B) all such Debentures not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption pursuant to Section
1103 under arrangements satisfactory to the Trustee for the giving of
notice of such redemption as provided in such Section 1103,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
such purpose an amount sufficient to pay and discharge the entire
indebtedness on such Debentures not theretofore delivered to the Trustee
for cancellation (other than (i) Debentures which have been destroyed,
lost or stolen and which have been replaced or paid as provided in
Section 306 and (ii) Debentures for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the company or discharged from such trust, as
provided in Section 1003), for principal (and premium, if any) and
interest to the date of such deposit (in the case of Debentures which
have become due and payable) or to the Stated Maturity or the Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 shall
survive.
SECTION 402. Application of Trust Money; Indemnification. (a)
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401, all money and
U.S. Government Obligations deposited with the Trustee pursuant to
Section 403 and all money received by the Trustee in respect of U.S.
Government Obligations deposited with the Trustee pursuant to Section
403, shall be held in trust and applied by it, in accordance with the
provisions of the Debentures and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal (and premium, if any) and interest for whose
payment such money has been deposited with or received by the Trustee or
as contemplated by Section 403.
(b) The Company shall pay and shall indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against U.S.
Government Obligations deposited pursuant to Section 403 or the interest
and principal received in respect of such obligations other than any
payable by or on behalf of Holders.
(c) The Trustee shall deliver or pay to the Company from time
to time upon Company Request any U.S. Government Obligations or money
held by it as provided in Section 403 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee, are then in
excess of the amount thereof which then would have been required to be
deposited for the purpose for which such obligations or money were
deposited or received.
SECTION 403. Satisfaction, Discharge and Defeasance of Debentures.
Notwithstanding Section 401, the Company shall be deemed to have paid and
discharged the entire indebtedness on all the Outstanding Debentures, the
provisions of this Indenture (except as to the rights of Holders of the
Debentures to receive, from the money and U.S. Government Obligations
deposited with the Trustee pursuant to this Section 403 or the interest
and principal received by the Trustee in respect of such U.S. Government
Obligations, payment of the principal of (and premium, if any) or
interest on the Debentures on the Stated Maturities thereof or on the
Redemption Date, the Company's obligations with respect to the Debentures
under Sections 305, 306, 1002 and 1003 and the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the obligations of the
Company to the Trustee under Section 607) shall no longer be in effect,
and the Trustee, at the expense of the Company, shall, upon Company
Request, execute proper instruments acknowledging the same, if
(1) the Company has deposited or caused to be deposited with
the Trustee irrevocably (irrespective of whether the conditions in
clauses (2), (3) and (4) have been satisfied) as trust funds in trust for
the purpose, with reference to this Section 403, (A) money in an amount,
or (B) U.S. Government Obligations which through the payment of interest
and principal in respect thereof in accordance with their terms will
provide not later than one day before the due date of any payment
(referred to below) money in an amount, or (C) a combination thereof,
sufficient, in any case, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge the principal of
(and premium, if any) and interest on the Outstanding Debentures on the
Stated Maturity of such principal or interest or on the Redemption Date,
as the case may be;
(2) no Event of Default or event which with the giving of
notice or lapse of time or both would become an Event of Default shall
have occurred and be continuing on the date of such deposit and no Event
of Default under Section 501(4) or Section 501(5) or event which with the
giving of notice or lapse of time or both would become an Event of
Default under Section 501(4) or Section 501(5) shall have occurred and be
continuing on the 91st day after such date;
(3) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of the entire indebtedness on all Debentures have been complied with.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree Or
order of any court or any order, rule or regulation of any administrative
or governmental body):
(1) default in the payment of any interest upon any Debenture
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Debenture at its Maturity; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default or
breach for a period of 60 days after there has been given, by registered
or certified mail, to the company by the Trustee or to the Company and
the Trustee by the Holders of at least 10% in principal amount of the
Outstanding Debentures a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(4) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(5) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default occurs and is continuing, then and in every such case
the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Debentures may declare the principal of all the
Debentures to be due and payable immediately, by a notice in writing to
the Company (and to the Trustee if given by Holders), and upon any such
declaration such principal shall become immediately due and payable.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority in principal amount of the Outstanding Debentures,
by written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all
Debentures,
(B) the principal of (and premium, if any, on) any
Debentures which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne by the
Debentures, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the
principal of Debentures which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(1) default is made in the payment of any instalment of
interest on any Debenture when such interest becomes due and payable and
such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Debenture at the Maturity thereof, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debentures, the whole amount then due and payable on such
Debentures for principal (and premium, if any) and interest, with
interest upon the overdue principal (and premium, if any) and, to the
extent that payment of such interest shall be legally enforceable, upon
overdue installments of interest, at the rate borne by the Debentures;
and, in addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the
Debentures and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any
other obligor upon the Debentures, wherever situated.
If an event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the
Debentures or the property of the Company or of such other obligor or
their creditors, the Trustee (irrespective of whether the principal of
the Debentures shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Debentures and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting
the Debentures or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
Debentures. All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Trustee without the
possession of any of the Debentures or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the
Holders of the Debentures in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected. Any money collected
by the Trustee pursuant to this Article shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any)
or interest, upon presentation of the Debentures and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully
paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debentures in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Debentures for principal (and
premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Debenture shall
have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debentures shall have made a written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Debentures; it being
understood and intended that no one or more Holders shall have any right
in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all
the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any Debenture shall have the right, which is
absolute and unconditional, to receive payment of the principal of (and
premium, if any) and (subject to Section 307) interest on such Debenture
on the respective Stated Maturities expressed in such Debenture (or, in
the case of redemption, on the Redemption Date) and to institute suit for
the enforcement of any such payment and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the
Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Debenture to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders may be exercised from time to time,
and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 512. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Debentures shall have the right to
direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power
conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture and would not in the good faith judgment of
the Trustee expose the Trustee to personal liability, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Debentures may, on behalf
of the Holders of all the Debentures, waive any past default hereunder
and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debenture, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Debenture affected.
Upon any such waiver, such default shall cease to exist, aid any
Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Debenture by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require,
in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply
to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Debentures, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Debenture on or after the respective
Stated Maturities expressed in such Debenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been
enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Debentures relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to the Trustee shall be subject to
the provisions of this Section.
SECTION 602. Notice of Defaults. Within 90 days after the occurrence
of any default hereunder, the Trustee shall transmit by mail to all
Holders, as their names and addresses appear in the Debenture Register,
notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except
in the case of a default in the payment of the principal of (or premium,
if any) or interest on any Debenture, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of
such notice is in the interests of the Holders; and provided, further,
that in the case of any default of the character specified in Section
501(4), no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default.
SECTION 603. Certain Rights of Trustee. Except as otherwise provided
in Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or
parties;
(b) any request Or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by
a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protectiOn in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights Or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debentures. The Trustee shall not
be accountable for the use or application by the Company of Debentures or
the proceeds thereof.
SECTION 605. May Hold Debentures. The Trustee, any Paying Agent, any
Debenture Registrar or any other agent of the Company, in its individual
or any other capacity, may become the owner or pledgee of Debentures and,
subject to Sections 608 and 613, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Paying Agent,
Debenture Registrar or such other agent.
SECTION 606. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed with the
Company.
SECTION 607. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties
hereunder.
As security for the performance of the obligations of the Company
under this Section the Trustee shall have a lien prior to the Debentures
upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium,
if any) or interest on particular Debentures.
SECTION 608. Disqualification; Conflicting Interests. (a) If the
Trustee has or shall acquire any conflicting interest, as defined in this
Section, it shall, within 90 days after ascertaining that it has such
conflicting interest, either eliminate such conflicting interest or
resign in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section, the Trustee shall, within
10 days after the expiration of such 90-day period, transmit by mail to
all Holders, as their names and addresses appear in the Debenture
Register, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be
deemed to have a conflicting interest if
(1) the Trustee is trustee under another indenture under
which any other securities, or certificates of interest or participation
in any other securities, of the Company are outstanding, unless such
other indenture is a collateral trust indenture under which the only
collateral consists of Debentures issued under this Indenture, provided
that there shall be excluded from the operation of this paragraph any
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Company are
outstanding, if
(i) this Indenture and such other indenture or
indentures are wholly unsecured and such other indenture or indentures
are hereafter qualified under the Trust Indenture Act, unless the
Commission shall have found and declared by order pursuant to Section
305(b) or Section 307(c) of the Trust Indenture Act that differences
exist between the provisions of this Indenture and the provisions of such
other indenture or indentures which are so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting as
such under this Indenture and such other indenture or indentures, or
(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after opportunity for
hearing thereon, that trusteeship under this Indenture and such other
indenture or indentures is not so likely to involve a material conflict
Of interest as to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting as such
under one of such indentures;
(2) the Trustee or any of its directors or executive
officers is an obligor upon the Debentures or an underwriter for the
Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee or
representative of the Company, or of an underwriter (other than the
Trustee itself) for the Company who is currently engaged in the business
of underwriting, except that (i) one individual may be a director or an
executive officer, or both, of the Trustee and a director or an executive
officer, or both, of the Company but may not be at the same time an
executive officer of both the Trustee and the Company; (ii) if and so
long as the number of directors of the Trustee in office is more than
nine, one additional individual may be a director or an executive
officer, or both, of the Trustee and a director of the Company; and (iii)
the Trustee may be designated by the Company or by any underwriter for
the Company to act in the capacity of transfer agent, registrar,
custodian, paying agent, fiscal agent, escrow agent or depositary, or in
any other similar capacity, or, subject to the provisions of paragraph
(1) of this Subsection, to act as trustee, whether under an indenture or
otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner or
executive officer thereof, or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this Subsection defined), (i) 5% or more of the voting securities, or
10% or more of any other class of security, of the Company not including
the Debentures issued under this Indenture and securities issued under
any other indenture under which the Trustee is also trustee, or (ii) 10%
or more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this Subsection defined), 5% or more of the voting securities of any
person who, to the knowledge of the Trustee, owns 10% or more of the
voting securities of, or controls directly or indirectly or is under
direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as hereinafter
in this Subsection defined), 10% or more of any class of security of any
person who, to the knowledge of the Trustee, owns 50% or more of the
voting securities of the Company; or
(9) the Trustee owns, on May 15 in any calendar year, in
the capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or of any
class of security, of any person, the beneficial ownership of a specified
percentage of which would have constituted a conflicting interest under
paragraph (6), (7) or (8) of this Subsection. As to any such securities
of which the Trustee acquired ownership through becoming executor,
administrator or testamentary trustee of an estate which included them,
the provisions of the preceding sentence shall not apply, for a period of
two years from the date of such acquisition, to the extent that such
securities included in such estate do not exceed 25% of such voting
securities or 25% of any such class of security. Promptly after May 15 in
each calendar year, the Trustee shall make
a check of its holdings of such securities in any of the above mentioned
capacities as of such May 15. If the Company fails to make payment in
full of the principal of (or premium, if any) or interest on any of the
Debentures when and as the same becomes due and payable, and such failure
continues for 30 days thereafter, the Trustee shall make a prompt check
of its holdings of such securities in any of the above-mentioned
capacities as of the date of the expiration of such 30-day period, and
after such date, notwithstanding the foregoing provisions of this
paragraph, all such securities so held by the Trustee, with sole or joint
control over such securities vested I.n it, shall, but only so long as
such failure shall continue, be considered as though beneficially owned
by the Trustee for the purposes of paragraphs (6), (7) and (8) of this
Subsection.
The specification of percentages in paragraphs (5) to (9),
inclusive, of this Subsection shall not be construed as indicating that
the ownership of such percentages of the securities of a person is or is
not necessary or sufficient to constitute direct or indirect control for
the purposes of paragraph (3) or (7) of this Subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
Subsection only, (i) the terms "security" and "securities" shall include
only such securities as are generally known as corporate securities, but
shall not include any note or other evidence of indebtedness issued to
evidence an obligation to repay moneys lent to a person by one or more
banks, trust companies or banking firms, or any certificate of interest
or participation in any such note or evidence of indebtedness; (ii) an
obligation shall be deemed to be "in default" when a default in payment
of principal shall have continued for 30 days or more and shall not have
been cured; and (iii) the Trustee shall not be deemed to be the owner or
holder of (A) any security which it holds as collateral security, as
trustee or otherwise, for an obligation which is not in default as
defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (C) any security which it holds as agent for collection, or
as custodian, escrow agent or depositary, or in any similar
representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter", when used with reference to the
Company, means every person who, within three years prior to the time as
of which the determination is made, has purchased from the Company with a
view to, or has offered or sold for the Company in connection with, the
distribution of any security of the Company outstanding at such time, or
has participated or has had a direct or indirect participation in any
such undertaking, or has participated or has had a participation in the
direct or indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a commission
from an underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a corporation
or any individual performing similar functions with respect to any
organization, whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of the affairs
of a person.
(5) The term "Company" means any obligor upon the
Debentures.
(6) The term "executive officer" means the president, every
vice president, every trust officer, the cashier, the secretary and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization whether incorporated
or unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the
following provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means such
amount of the outstanding voting securities of such person as entitles
the holder or holders thereof to cast such specified percentage of the
aggregate votes which the holders of all the outstanding voting
securities of such person are entitled to cast in the direction or
management of the affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of the
class outstanding.
(3) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness, the
number of shares if relating to capital shares and the number of units if
relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or
for the account of the issuer. The following securities shall not be
deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as to
principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to principal
or interest or otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof; provided, however, that any voting securities of an
issuer shall be deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and privileges; provided, however,
that, in the case of secured evidences of indebtedness, all of which are
issued under a single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed sufficient
to constitute such series different classes and provided, further, that,
in the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient
to constitute them securities of different classes, whether or not they
are issued under a single indenture.
SECTION 609. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder which shall be a corporation organized
and doing business under the laws of the United States of America, any
State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of
at least $25,000,000, subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee wider
Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Debentures,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608(a)
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take charge
or control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee, or (ii) subject to Section 514, any Holder who has been a
bona fide Holder of a Debenture for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee
shall be appointed by Act of the Holders of a majority in principal
amount of the Outstanding Debentures delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and
accepted appointment in the manner hereinafter provided, any Holder who
has been a bona fide Holder of a Debenture for at least six months may,
on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the
Debenture Register. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder,
subject nevertheless to its lien, if any, provided for in Section 607.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation shall
be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Debentures shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Debentures so authenticated
with the same effect as if such successor Trustee had itself
authenticated such Debentures.
SECTION 613. Preferential Collection of Claims Against Company. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within four months prior to a default, as defined in
Subsection (c) of this Section, or subsequent to such a default, then,
unless and until such default shall be cured, the Trustee shall set apart
and hold in a special account for the benefit of the Trustee
individually, the Holders of the Debentures and the holders of other
indenture securities, as defined in Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due
and owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such four months' period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a petition
in bankruptcy had been filed by or against the Company upon the date of
such default; and
(2) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in satisfaction
or composition thereof, or otherwise, after the beginning of such four
months' period, or an amount equal to the proceeds of any such property,
if disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim by
the Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State
law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior to
the beginning of such four months' period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of such
four months' period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall
sustain the burden of proving that at the time such property was so
received the Trustee had no reasonable cause to believe that a default,
as defined in Subsection (c) of this Section, would occur within four
months; or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such four months' period for property
held as security at the time of such substitution shall, to the extent of
the fair value of the property released, have the same status as the
property released, and, to the extent that any claim referred to in any
of such paragraphs is created in renewal of or in substitution for or for
the purpose of repaying or refunding any pre-existing claim of the
Trustee as such creditor, such claim shall have the same status as such
pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be
apportioned among the Trustee, the Holders and the holders of other
indenture securities in such manner that the Trustee, the Holders and the
holders of other indenture securities realize, as a result of payments
from such special account and payments of dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State
law, the same percentage of their respective claims, figured before
crediting to the claim of the Trustee anything on account of the receipt
by it from the Company of the funds and property in such special account
and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims
filed against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act or applicable
State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held in
such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect
to such claim, in bankruptcy or receivership or proceedings for
reorganization pursuant to the Federal Bankruptcy Act or applicable State
law, whether such distribution is made in cash, securities or other
property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such
bankruptcy, receivership or proceedings for reorganization is pending
shall have jurisdiction (i) to apportion among the Trustee, the Holders
and the holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such special
account and proceeds thereof, or (ii) in lieu of such apportionment, in
whole or in part, to give to the provisions of this paragraph due
consideration in determining the fairness of the distributions to be made
to the Trustee and the Holders and the holders of other indenture
securities with respect to their respective claims, in which event it
shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such
claims, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning
of such four months' period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such four
months' period, it shall be subject to the provisions of this Subsection
if and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which would
have given rise to the obligation to account, if such Trustee had
continued as Trustee, occurred after the beginning of such four months'
period; and
(ii) such receipt of property or reduction of claim occurred
within four months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection
(a) of this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien of
this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the circumstances
surrounding the making thereof is given to the Holders at the time and in
the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business
in the capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a result of
goods or securities sold in a cash transaction, as defined in Subsection
(c) of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation
of any drafts, bills of exchange, acceptances or obligations which fall
within the classification of self-liquidating paper, as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in
full of the principal of or interest on any of the Debentures or upon the
other indenture securities when and as such principal or interest becomes
due and payable;
(2) the term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account;
(3) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within seven days
after delivery of the goods or securities in currency or in checks or
other orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill
of exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
(5) the term "Company" means any obligor upon the
Debentures; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy
Code of 1978, as amended, or Title 11 of the United States Code or any
successor statute.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the
Trustee:
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of such Regular Record Date,
and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished; provided, that no such list need be
furnished to the Trustee for so long as the Trustee is the Debenture
Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Debenture Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Debenture for a
period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with
other Holders with respect to their rights under this Indenture or under
the Debentures and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application,
at its election, either
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section 702(a),
or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appears in the
information preserved at the time by the Trustee in accordance with
Section 702(a), a copy of the form of proxy or other communication which
is specified in such request, with reasonable promptness after a tender
to the Trustee of the material to be mailed and of payment, or provision
for the payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and
file with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the
Holders or would be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any
of such objections or if, after the entry of an order sustaining one or
more of such objections, the Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been
met and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting
their application.
(c) Every Holder of Debentures, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Holders in accordance with Section 702(b), regardless of
the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 702(b).
SECTION 703. Reports by Trustee. (a) Within 60 days after May 15 of
each year commencing with the year 1990, the Trustee shall transmit by
mail to all Holders, as their names and addresses appear in the Debenture
Register, a brief report dated as of such May 15 with respect to:
(1) its eligibility under Section 609 and its
qualifications under Section 608, or in lieu thereof, if to the best of
its knowledge it has continued to be eligible and qualified under said
Sections, a written statement to such effect;
(2) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date of
such report, and for the reimbursement of which it claims or may claim a
lien or charge, prior to that of the Debentures, on any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal
amount of the Debentures Outstanding on the date of such report;
(3) the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Debentures) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 613(b)(2), (3),
(4) or (6);
(4) the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(5) any additional issue of Debentures which the Trustee
has not previously reported; and
(6) any action taken by the Trustee in the performance of
its duties hereunder which it has not previously reported and which in
its opinion materially affects the Debentures, except action in respect
of a default, notice of which has been or is to be withheld by the
Trustee in accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Debenture Register, a brief report with
respect to the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) since the date of the last report
transmitted pursuant to Subsection (a) of this Section (or if no such
report has yet been so transmitted, since the date of execution of this
instrument) for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Debentures, on property or funds held or
collected by it as Trustee and which it has not previously reported
pursuant to this Subsection, except that the Trustee shall not be
required (but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the principal
amount of the Debentures Outstanding at such time, such report to be
transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Debentures are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Debentures are
listed on any stock exchange.
SECTION 704. Reports by Company. The Company shall:
(1) file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act"); or, if the Company is not required to file information, documents
or reports pursuant to either of said Sections, then it shall file with
the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the 1934 Act in respect of a security listed
and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to all Holders, as their names and
addresses appear in the Debenture Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(1) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any State or
territory thereof or the District of Columbia and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all the
Debentures and the performance of every covenant of this Indenture on the
part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time or
both, would become an Event of Default, shall have happened and be
continuing;
(3) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by Section 1007, the
Company or such successor corporation or Person, as the case may be,
shall take such steps as shall be necessary effectively to secure the
Debentures equally and ratably with (or prior to) all indebtedness
secured thereby; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
SECTION 802. Successor Corporation Substituted. Upon any
consolidation or merger by the Company with or into any other corporation
or any conveyance, transfer or lease of the properties and assets of the
Company substantially as an entirety in accordance with Section 801, the
successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if
such successor corporation had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor corporation
shall be relieved of all obligations and covenants under this Indenture
and the Debentures.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the covenants of
the Company herein and in the Debentures; or
(2) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to secure the Debentures pursuant to the requirements
of Section 1007 or otherwise; or
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture; provided such action shall not
adversely affect the interests of the Holders in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders. With
the consent of the Holders of not less than a majority in principal
amount of the Outstanding Debentures, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders under
this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Debenture
affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Debenture, or reduce the principal amount
thereof (or the premium payable thereon, if any) or the rate of interest
thereon, or change the place of payment where, or the coin or currency in
which, any Debenture or any premium or the interest thereon is payable,
or impair the right of any Holder to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the
case of a redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Debentures the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) provided for in
this Indenture, or
(3) modify any of the provisions of this Section, Section
513 or Section 1010, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Debenture
affected thereby, or
(4) modify any of the provisions of Article Thirteen;
except any modification that would otherwise be permitted under Section
901(2) or (4).
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental In dentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may,
but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties, immunities or liabilities
under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes; and every Holder of
Debentures theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee
as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Debentures.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest. The
Company will duly and punctually pay the principal of (and premium, if
any) and interest on the Debentures in accordance with the terms of the
Debentures and this Indenture.
SECTION 1002. Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, The City of New York an office or
agency where Debentures may be presented or surrendered for payment,
where Debentures may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect
of the Debentures and this Indenture may be served. The Company initially
appoints the Corporate Trust Office of the Trustee as its agent for
purposes of presentation or surrender of the Debentures, for payment,
registration of transfer and exchange and for service of notices or
demands to or upon it in respect of the Debentures and this Indenture.
The Company will give prompt written notice to the Trustee of any change
in the location of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and the Company hereby appoints the Trustee
as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of
New York) where the Debentures may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or
agency in the Borough of Manhattan, The City of New York for such
purposes. The. Company will give prompt written notice to the Trustee of
any such designation or rescission and of any change in the location of
any such other office or agency.
SECTION 1003. Money for Debenture Payments to Be Held in Trust. If
the Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the principal of (and premium, if any) or
interest on any of the Debentures, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until such
sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so
to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of (and premium, if any) or
interest on any Debentures, deposit with a Paying Agent a sum sufficient
to pay the principal (and premium, if any) or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this
Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Debentures in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Debentures) in the making of any payment of
principal (and premium, if any) or interest; and
(3) at any time during the continuance of any such default,
upon written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums
were held by the Company or such Paying Agent; and, upon such payment by
any Paying Agent to the Trustee, such Paying Agent shall be released from
all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Debenture and remaining unclaimed for
two years after such principal (and premium, if any) or interest has
become due and payable shall be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from such trust; and
the Holder of such Debenture shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and
all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company
cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general
circulation in The City of New York, or mail to each Holder at its
address as shown in the Debenture Register, or both, notice that such
money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 1004. Corporate Existence. Subject to Article Eight, the
Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights (charter
and statutory) and franchises; provided, however, that the Company shall
not be required to preserve any such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business
of any Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to
be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however,
that nothing in this Section shall prevent the Company from discontinuing
the operation or maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims. The Company will
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent, (1) all taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (2) all lawful
claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1007. Restrictions on Secured Debt. After the date hereof,
the Company will not itself, and will not permit any Restricted
Subsidiary to, create, incur, issue, assume or guarantee any loans,
whether or not evidenced by negotiable instruments or securities, or any
notes, bonds, debentures or other similar evidences of indebtedness for
money borrowed (such loans, and such notes, bonds, debentures or other
similar evidences of indebtedness for money borrowed being hereinafter in
this Section 1007 called "Debt"), secured by pledge of, or mortgage or
lien on, any Principal Property of the Company or any Restricted
Subsidiary or any shares of capital stock of or Debt of any Restricted
Subsidiary (such mortgages, pledges and liens being hereinafter in this
Section 1007 called "Mortgage" or "Mortgages"), without effectively
providing that the Debentures (together with, if the Company shall so
determine, any other Debt of the Company or such Restricted Subsidiary
then existing or thereafter created which is not subordinate to the
Debentures) shall be secured equally and ratably with (or, at the option
of the Company, prior to) such secured Debt, so long as such secured Debt
shall be so secured, unless, after giving effect thereto, the aggregate
amount of all Debt secured by Mortgages plus all Attributable Debt of the
Company and its Restricted Subsidiaries with respect to sale and
leaseback transactions to which Section 1008 is applicable would not
exceed 10% of Consolidated Net Tangible Assets; provided, however, that
this Section 1007 shall not apply to, and there shall be excluded from
Debt secured by Mortgages in any computation under this Section 1007 or
Section 1008, Debt secured by:
(1) Mortgages on property of, or on any shares of capital stock
of or Debt of, any corporation existing at the time such corporation
becomes a Restricted Subsidiary;
(2) Mortgages in favor of the Company or any Restricted
Subsidiary;
(3) Mortgages in favor of any governmental body to secure
progress, advance or other payments pursuant to any contract or provision
of any statute;
(4) Mortgages on property, shares of capital stock or Debt
existing at the time of acquisition thereof, or to secure the payment of
all or any part of the purchase price thereof or construction thereon or
to secure any Debt incurred prior to, at the time of, or within 180 days
after the later of the acquisition of such property, shares of capital
stock or Debt or the completion of construction for the purpose of
financing all or any part of the purchase price thereof or construction
thereon; provided, however, that if such financing is in connection with
the acquisition of any Timberlands, and the Board of Directors has
determined, within 180 days of such acquisition, that the Company will
seek such financing (from a lender or investor not including the Company
or any Subsidiary), then the applicable Mortgage shall be deemed to be
included in this clause (4) if such Mortgage is created within a further
180 days after the end of such first 180-day period.
(5) Mortgages securing obligations issued by a State, territory
or possession of the United States, or any political subdivision of any
of the foregoing, or the District of Columbia, to finance the acquisition
or construction of property, and on which the interest is not, in the
opinion of tax counsel of recognized standing or in accordance with a
ruling issued by the Internal Revenue Service, includible in gross income
of the holder by reason of Section 103(a) of the Internal Revenue Code of
1986, as amended (or any successor to such provision) as in effect at the
time of the issuance of such obligations; or
(6) Any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any
Mortgage referred to in the foregoing clauses (1) through (5), inclusive;
provided, however, that such extension, renewal or replacement Mortgage
shall be limited to all or part of the same property, shares of capital
stock or Debt that secured the Mortgage extended, renewed or replaced
(plus improvements on such property).
For purposes of this Section 1007 and Section 1008, an "acquisition"
of property (including real, personal or intangible property or shares of
capital stock or Debt) shall include any transaction or series of
transactions by which the Company or a Restricted Subsidiary acquires,
directly or indirectly, an interest, or an additional interest (to the
extent thereof), in such property, including without limitation an
acquisition through merger or consolidation with, or an acquisition of an
interest in, a Person owning an interest in such property.
SECTION 1008. Restrictions on Sales and Leasebacks. After the date
hereof, the Company will not itself, and will not permit any Restricted
Subsidiary to, enter into any transaction with any bank, insurance
company or other lender or investor, or to which any such bank, company,
lender or investor is a party, providing for the leasing by the Company
or a Restricted Subsidiary of any Principal Property which has been or is
to be sold or transferred by the Company or any Restricted Subsidiary to
such bank, company, lender or investor, or to any person to whom funds
have been or are to be advanced by such bank, company, lender or investor
on the security of such Principal Property (herein referred to as a "sale
and leaseback transaction") unless, after giving effect thereto, the
aggregate amount of all Attributable Debt with respect to such sale and
leaseback transactions plus all Debt secured by Mortgages to which
Section 1007 is applicable would not exceed 10% of Consolidated Net
Tangible Assets, provided, however, that this Section 1008 shall not
apply to, and there shall be excluded from Attributable Debt in any
computation under this Section 1008 or Section 1007, Attributable Debt
with respect to any sale and leaseback transaction if:
(1) the lease in such sale and leaseback transaction is for a
period, including renewal rights, of not in excess of three years;
(2) the Company or a Restricted Subsidiary, within 180 days
after the sale or transfer shall have been made by the Company or by such
Restricted Subsidiary, applies an amount not less than the greater of the
net proceeds of the sale of the Principal Property leased pursuant to
such arrangement or the fair market value of the Principal Property so
leased at the time of entering into such arrangement (as determined in
any manner approved by the Board of Directors) to (a) the retirement of
Funded Debt of the Company or of a Restricted Subsidiary; provided,
however, that the amount to be applied to the retirement of such Funded
Debt of the Company or of a Restricted Subsidiary shall be reduced by an
amount equal to the sum of (i) the principal amount of any Debentures (or
other notes or debentures constituting such Funded Debt) delivered within
such 180-day period to the Trustee or other applicable trustee for
retirement and cancellation and (ii) the principal amount of such Funded
Debt, other than items referred to in the preceding clause (i),
voluntarily retired by the Company or a Restricted Subsidiary within 180
days after such sale; and provided, further, that, notwithstanding the
foregoing, no retirement referred to in this clause (a) may be effected
by payment at maturity or pursuant to any mandatory sinking fund payment
or any mandatory prepayment provision, or (b) the purchase of other
property which will constitute Principal Property having a fair market
value, in the opinion of the Board of Directors, at least equal to the
fair market value of the Principal Property leased in such sale and
leaseback transactions;
(3) such sale and leaseback transaction is entered into prior
to, at the time of, or within 180 days after the later of the acquisition
of the Principal Property or the completion of construction thereon;
provided, however, that if such transaction is in connection with the
acquisition of any Timberlands, and the Board of Directors of the Company
has determined, within 180 days of such acquisition, that the Company
will seek to enter into such transaction (with a lender or investor not
including the Company or any Subsidiary), then such transaction shall be
deemed to be included in this clause (3) if such transaction is entered
into within a further 180 days after the end of such first 180-day
period;
(4) the lease in such sale and leaseback transaction secures or
relates to obligations issued by a State, territory or possession of the
United States, or any political subdivision of any of the foregoing, or
the District of Columbia, to finance the acquisition or construction of
property, and on which the interest is not, in the opinion of tax counsel
of recognized standing or in accordance with a ruling issued by the
Internal Revenue Service, includable in gross income of the holder by
reason of Section 103(a) of the Internal Revenue Code of 1986, as amended
(or any successor to such provision) as in effect at the time of the
issuance of such obligations; or
(5) such sale and leaseback transaction is entered into between
the Company and a Subsidiary or between Subsidiaries.
SECTION 1009. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year
of the Company (which, as of the date hereof, is the calendar year)
ending after the date hereof, an Officers' Certificate, stating, as to
each officer of the Company signing the same, that:
(1) a review of the activities of the Company during such year
and of its performance under this Indenture has been made by such officer
or under his or her supervision; and
(2) to the best knowledge of such officer, based on such
review, the Company has fulfilled all of its obligations under this
Indenture during such year, or, if there has been a default in such
fulfillment, specifying each such default known to such officer and the
nature and status thereof.
SECTION 1010. Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any covenant or condition set
forth in Sections 1002 to 1008 inclusive, if the Holders of at least a
majority in principal amount of the Outstanding Debentures shall, by Act
of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such
waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee
in respect of any such covenant or condition shall remain in full force
and effect.
ARTICLE ELEVEN
REPURCHASE AT THE OPTION OF HOLDERS
SECTION 1101. Repurchase at the Option of Holders. In the event that
there occurs at any time both (a) a Designated Event with respect to the
Company and (b) a Rating Decline, each Holder of the Debentures shall
have the right, at such Holder's option, to require the Company to
purchase all or any part in the principal amount of $1,000 or any
integral multiple thereof of such Holder's Debentures on the date
("Repurchase Date") that is 100 days after the occurrence of the Rating
Decline, at 100% of the principal amount thereof, together with accrued
interest thereon to the Repurchase Date.
SECTION 1102. Exercise of Repurchase Right. On or before the twenty-
eighth day after the occurrence of the Rating Decline, the Company shall
notify the Trustee of the occurrence of the Designated Event and the
Rating Decline, and promptly thereafter mail, or cause to be mailed
first-class, postage prepaid, to Holders, at the address of record of
each such Holder, a notice regarding the Designated Event, the Rating
Decline and the repurchase right. At the Company's request, the Trustee
shall mail such notice to the Holders in the name and at the expense of
the Company. The notice shall state:
(1) that a Designated Event with respect to the Company and a
Rating Decline have both occurred;
(2) that each Holder has the option to require the Company to
repurchase such Holder's Debentures at 100% of the principal amount
thereof, together with accrued interest thereon to the Repurchase Date;
(3) the Repurchase Date;
(4) the date by which the repurchase right must be exercised;
(5) the procedure which the Holder must follow to exercise this
right;
(6) that any Debenture not repurchased by the Company will
continue to accrue interest as provided therein;
(7) that, unless the Company defaults in the payment of the
repurchase price, interest on the Debentures tendered and accepted for
repayment will cease to accrue on the Repurchase Date;
(8) that any Holder who elects to have its Debenture or
Debentures repurchased only in part will be issued one or more new
Debentures in the aggregate principal amount equal to the unpurchased
portion of the Debenture surrendered for repurchase; and
(9) that, if on the Repurchase Date 90% or more of the
Debentures Outstanding are repurchased by the Company, the Company shall
have the option to redeem the remaining Debentures then Outstanding at a
price equal to 100% of the principal amount thereof plus accrued interest
thereon to the date of redemption.
To exercise this right, the holder of such Debentures shall deliver, at
least ten days prior to the Repurchase Date, written notice to the
Company (or an agent designated by the Company for such purpose) of the
holder's exercise of such right, together with the Debentures with
respect to which the right is being exercised, duly endorsed for
transfer. Such written notice shall be irrevocable.
The Company shall accept for payment Debentures or portions thereof
properly submitted in exercise of the above-described repurchase option
and shall, on or before the Repurchase Date, deliver to the Trustee (i)
an Officers' Certificate stating the Debentures or portions thereof
accepted for payment by the Company and (ii) money in an amount
sufficient to pay 100% of the principal amount of the Debentures accepted
for payment, together with accrued interest thereon through and including
the Repurchase Date. The Trustee shall, promptly after receipt from the
Company, mail or deliver to Holders of Debentures so accepted payment in
an amount equal to 100% of the principal amount of the Debentures so
accepted, plus accrued interest to the Repurchase Date, and shall
authenticate and mail or deliver to each Holder who tendered a Debenture
repurchased only in part, one or more new Debentures equal in aggregate
principal amount to the unpurchased portion of any Debenture so
surrendered; provided that each such new Debenture shall be in a
principal amount authorized under Section 302.
SECTION 1103. Optional Redemption Upon Repurchase of 90% of
Debentures. If on any Repurchase Date 90% or more of the Debentures
Outstanding on the day on which the related Rating Decline occurred are
repurchased by the Company pursuant to the provisions of Section 1101,
the Company shall have the option, on not less than 30 nor more than 60
days' written notice to the Holders, to redeem at any time within 90 days
after the Repurchase Date (the date of such redemption being sometimes
referred to as the "Redemption Date"), in whole but not in part, the
Debentures then Outstanding, at a price equal to 100% of the principal
amount thereof, together with accrued interest thereon to the Redemption
Date.
The election of the Company to redeem any Debentures pursuant to
this Section 1103 shall be evidenced by a Company Order and the Company
shall, at least 45 days prior to the Redemption Date, notify the Trustee
of the Redemption Date.
Notice of a redemption pursuant to this Section 1103 shall be given
by the Company, or, at the request of the Company, by the Trustee in the
name and at the expense of the Company, by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date to each Holder of Debentures at its address appearing in
the Debenture Register and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) that on the Redemption Date the redemption price will
become due and payable upon each Debenture and that interest thereon will
cease to accrue on and after said date; and
(4) the place or places where such Debentures are to be
surrendered for payment of the redemption price.
Prior to the Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money sufficient to pay the redemption price of the Debentures.
Notice of redemption having been given as aforesaid, the Debentures
shall, on the Redemption Date, become due and payable at the redemption
price therein specified, and from and after such date (unless the Company
shall default in the payment of the redemption price) such Debentures
shall cease to bear interest. Upon surrender of any such Debenture for
redemption in accordance with said notice, such Debenture shall be paid
by the Company at the redemption price thereof.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption on the Redemption Date, the principal
(and premium, if any) shall, until paid, bear interest from the
redemption date at the rate borne by the Debenture.
SECTION 1104. Certain Definitions. As used in this Article Thirteen:
(1) a "Designated Event" shall be deemed to have occurred at
such a time as (i) a "person" or "group" (within the meaning of Sections
13(d)(3) or 14(d)(2) of the 1934 Act) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the 1934 Act) of more than 30% of the total
voting power of all classes of stock then outstanding of the Company
normally entitled to vote in elections of directors ("Voting Stock"); or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Company's Board of Directors
(together with any new director whose election by the Company's Board of
Directors or whose nomination for election by the Company's shareholders
was approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors then in
office; or (iii) the Company consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of
its assets to any person, or any corporation consolidates with or merges
into the Company, in either event pursuant to a transaction in which
Voting Stock of the Company is changed into or exchanged for cash,
securities or other property, provided that such transaction (a) between
the Company and its Subsidiaries or between Subsidiaries or (b) involving
the exchange of the Company's Voting Stock as consideration in the
acquisition of another business or businesses (without change or exchange
of the Company's outstanding Voting Stock into or for cash, securities or
other property) shall be excluded from the operation of this clause
(iii); or (iv) the Company or any Subsidiary of the Company purchases or
otherwise acquires, directly or indirectly, beneficial ownership of
Voting Stock of the Company if, after giving effect to such purchase or
acquisition, the Company (together with its Subsidiaries) acquires 30% or
more of the Company's Voting Stock within any 12-month period; or (v) on
any date (a "Calculation Date") the Company makes any distribution or
distributions of cash, property or securities (other than regular
dividends, and distributions of capital stock of the Company) to holders
of Voting Stock of the Company or purchases or otherwise acquires
beneficial ownership of Voting Stock of the Company and the sum of the
fair market value of such distribution or purchase, plus the fair market
value of all other such distributions and purchases which have occurred
during the preceding 12-month period, is at least 30% of the fair market
value of the outstanding Voting Stock of the Company. This percentage is
calculated on such Calculation Date by determining the percentage of the
fair market value of the Company's outstanding Voting Stock as of such
Calculation Date which is represented by the fair market value of the
distributions and purchases which have occurred on such date and adding
to that percentage all of the percentages which have been similarly
calculated on the Calculation Dates of all such distributions and
purchases during the preceding 12-month period;
(2) a "Rating Decline" shall be deemed to have occurred if on
any date within the 90-day period following public notice of the
occurrence of a Designated Event (which period shall be extended so long
as the rating of the Debentures is under publicly announced consideration
for possible downgrade by a Rating Agency) (i) in the event the
Debentures are rated by one or both Rating Agencies on the Rating Date as
Investment Grade, the rating of the Debentures by either Rating Agency
shall fall below Investment Grade, or (ii) in the event the Debentures
are rated by both Rating Agencies on the Rating Date below Investment
Grade, the rating of the Debentures by either Rating Agency shall be at
least one Full Rating Category below the rating of the Debentures by such
Rating Agency on the Rating Date;
(3) a "Rating Agency" shall mean Standard & Poor's Corporation
and its successors ("S&P"), and Moody's Investors Service, Inc. and its
successors ("Moody's"), or if S&P or Moody's or both shall not make a
rating on the Debentures publicly available, a nationally recognized
securities rating agency or agencies, as the case may be, selected by the
Company which shall be substituted for S&P or Moody's or both, as the
case may be;
(4) "Investment Grade" shall mean BBB- or higher by S&P or Baa3
or higher by Moody's or the equivalent of such ratings by S&P or Moody's
or by any other Rating Agency selected as provided above;
(5) a "Rating Date" shall mean the date which is 121 days prior
to public notice of the occurrence of a Designated Event; and
(6) a "Full Rating Category" shall mean (i) with respect to
S&P, any of the following categories: BB, B, CCC, CC and C, (ii) with
respect to Moody's, any of the following categories: Ba, B, Caa, Ca, and
C and (iii) with respect to any other Rating Agency, the equivalent of
any such category of S&P or Moody's used by such other Rating Agency. In
determining whether the rating of the Debentures has decreased by the
equivalent of one Full Rating Category, gradation within Full Rating
Categories (+ and - for S&P; 1, 2, and 3 for Moody's; or the equivalent
gradation for another Rating Agency) shall be taken into account (e.g.,
with respect to S&P, a decline in a rating from BB+ to BB-, or from BB to
B+, will constitute a decrease of less than one Full Rating Category).
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
BOWATER INCORPORATED
By: /s/ John P. Fucigna
______________________
Attest:
/s/ Leonard M. Saari
______________________
MANUFACTURERS HANOVER
TRUST COMPANY, Trustee
By: /s/ James M. Foley
____________________
Attest:
/s/ Michael A. Smith
____________________
STATE OF CONNECTICUT)
) SS.: 9th day of August 1989
COUNTY OF FAIRFIELD )
On the 9th day of August 1989, before me personally came John P.
Fucigna, to me known, who, being by me duly sworn, did depose and say
that he is Vice President of Bowater Incorporated one of the corporations
described in and which executed the foregoing instrument; that he knows
the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by
like, authority.
/s/ Mary H. Dombrowski
______________________
MARY H. DOMBROWSKI
NOTARY PUBLIC
MY COMMISSION EXPIRES MARCH 31, 1990
STATE OF NEW YORK )
) SS.: 9th day of August, 1989
COUNTY OF NEW YORK)
On the 9th day of August 1989, before me personally came James M. Foley,
to me known, who, being by me duly sworn, did depose and say that he is
Assistant Vice President of Manufacturers Hanover Trust Company, one of
the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
/s/ Zena M. Ruddock
___________________
ZENA M. RUDDOCK
NOTARY PUBLIC, STATE OF NEW YORK
NO. 41-4803-773
QUALIFIED IN QUEENS COUNTY
CERTIFICATE FILED IN NEW YORK COUNTY
COMMISSION EXPIRES SEPTEMBER 30, 1990
EXIBIT 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Bowater Incorporated
We consent to the use of our reports incorporated herein by reference and
to the reference to our firm under the heading "Experts" in the
prospectus.
Our report covering the December 31, 1992 financial statements refers to
accounting changes regarding the Company's adoption of the provisions of
the Financial Accounting Standards Board's Statement on Financial
Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," and Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," in 1992.
Greenville, South Carolina /s/ KPMG Peat Marwick LLP
July 19, 1995 __________________________
EXHIBIT 24
POWER OF ATTORNEY
We, the undersigned directors of Bowater Incorporated, hereby
severally constitute Ecton R. Manning, Robert C. Lancaster and Wendy C.
Shiba, and each of them singly, our true and lawful attorneys with full
power of substitution, to sign for us and in our names in the capacities
listed below, the Registration Statement on Form S-8 filed herewith and
any and all amendments to such Registration Statement, and generally to
do all such things in our names and on our behalf in our capacities as
directors to enable Bowater Incorporated to comply with the provisions of
the Securities Act of 1933, as amended, all requirements of the
Securities and Exchange Commission, and all requirements of any other
applicable law or regulation, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or either of
them, to such Registration Statement and any and all amendments thereto,
including post-effective amendments.
Signatures Title Date
/s/ Anthony P. Gammie Director and Chairman of May 24, 1995
_____________________ the Board
Anthony P. Gammie
/s/ Francis J. Aguilar Director May 24, 1995
______________________
Francis J. Aguilar
/s/ Hugh D. Aycock Director May 24, 1995
______________________
Hugh D. Aycock
/s/ Richard Barth Director May 24, 1995
______________________
Richard Barth
/s/ Kenneth M. Curtis Director May 24, 1995
_____________________
Kenneth M. Curtis
/s/ H. Gordon MacNeil Director May 24, 1995
_____________________
H. Gordon MacNeil
/s/ Donald R. Melville Director May 24, 1995
______________________
Donald R. Melville
/s/ John A. Rolls Director May 24, 1995
_____________________
John A. Rolls
EXHIBIT 99
DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS OF
BOWATER INCORPORATED
(Effective March 1, 1989)
<PAGE>
DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS OF
BOWATER INCORPORATED
PREAMBLE
ESTABLISHMENT OF PLAN
The Deferred Compensation Plan for Outside Directors of Bowater
Incorporated is established effective March 1, 1989 for the benefit of
Directors of Bowater Incorporated who are not employees of the Company.
OBJECTIVES OF THE PLAN
The Company recognizes that its long-term success and achievements
are enhanced and the interests of its shareholders are best preserved
when its outside Directors have a direct and personal stake in the
performance of the Company's stock. In view of this, the Company has
adopted this Plan.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I - DEFINITIONS
Section 1.01. "Accounts".............................. 5
Section 1.02. "Administrator"......................... 5
Section 1.03. "Anniversary Date"...................... 5
Section 1.04. "Beneficiary"........................... 5
Section 1.05. "Board of Directors".................... 5
Section 1.06. "Company"............................... 5
Section 1.07. "Compensation".......................... 6
Section 1.08. "Effective Date"........................ 6
Section 1.09. "Executive Committee"................... 6
Section 1.10. "Outside Director"...................... 6
Section 1.11. "Participant"........................... 6
Section 1.12. "Plan".................................. 6
Section 1.13. "Plan Year"............................. 6
Section 1.14. "Stock"................................. 6
ARTICLE II - PARTICIPATION
Section 2.01. Participation is Voluntary.............. 6
Section 2.02. Application to Participate.............. 6
Section 2.03. Designation of Beneficiary.............. 8
ARTICLE III - ACCRUAL OF BENEFITS
Section 3.01. Deferred Compensation................... 8
Section 3.02. Vesting................................. 11
ARTICLE IV - DISTRIBUTION OF BENEFITS
Section 4.01. Time of Distribution.................... 11
Section 4.02. Payment Upon Death...................... 12
Section 4.03. Methods of Payment...................... 12
ARTICLE V - THE ADMINISTRATOR
Section 5.01. Appointment............................. 12
Section 5.02. Rights and Duties....................... 13
Section 5.03. Annual Reports.......................... 13
Section 5.04. Information............................. 14
Section 5.05. Compensation, Indemnity
and Liability......................... 14
ARTICLE VI - AMENDMENT AND DISCONTINUANCE
Section 6.01. Amendments.............................. 15
Section 6.02. Discontinuance of Plan.................. 15
ARTICLE VII - MISCELLANEOUS
Section 7.01. No Interest in Assets................... 16
Section 7.02. Restriction Against Assignment.......... 16
Section 7.03. Receipt or Release...................... 17
Section 7.04. Payment on Behalf of Minor.............. 17
Section 7.05. Forfeiture.............................. 17
Section 7.06. Withholding............................. 18
Section 7.07. Connecticut Law Governs................. 18
Section 7.08. Headings Not Part of Agreement.......... 18
Section 7.09. Successors and Assigns.................. 18
<PAGE>
DEFERRED COMPENSATION PLAN
FOR OUTSIDE DIRECTORS OF
BOWATER INCORPORATED
ARTICLE I.
DEFINITIONS
This Plan shall be known as the "Deferred Compensation Plan for
Outside Directors of Bowater Incorporated, as now adopted or hereafter
amended.
Whenever the following terms are used herein, with the first letter
capitalized, they shall, unless the context clearly indicates otherwise,
have the meanings specified below. Whenever applicable, the masculine
pronoun shall include the feminine pronoun and the singular shall include
the plural.
1.01. "Account" shall mean the account maintained by the
Administrator for each Participant, to which there shall be credited, as
hereinafter set forth, the number of shares of stock equal in value to
the amount of the Participant's Compensation which is deferred pursuant
to this Plan, together with the earnings thereon as provided for herein.
1.02. "Administrator" shall mean the individual (who shall not be a
Participant) appointed by the Executive Committee to administer the Plan.
1.03. "Anniversary Date" shall mean the 31st day of December in
each year, the first Anniversary Date to be December 31, 1989.
1.04. "Beneficiary" or "Beneficiaries" shall mean the person or
persons (including, without limitation, any trustee) last designated by a
Participant to receive the benefits specified hereunder, in the event of
the Participant's death, or if there is no designated Beneficiary or
surviving Beneficiary, the Participant's estate.
1.05. "Board of Directors" means the Board of Directors of Bowater
Incorporated.
1.06. "Company" shall mean Bowater Incorporated.
1.07. "Compensation" shall mean for any Plan Year all retainer,
meeting and committee fees payable to an Outside Director for service on
the Board of Directors, before any reduction pursuant to this Plan.
1.08. "Effective Date" shall mean March 1, 1989.
1.09. "Executive Committee" shall mean the Executive Committee of
the Board of Directors exclusive of any member of such Committee who is
an Outside Director.
1.10. "Outside Director" shall mean a member of the Board of
Directors who is not an employee of the Company or its subsidiaries or
affiliates.
1.11. "Participant" shall mean any Outside Director who actually
participates in this Plan in any Plan Year and who is entitled to a
benefit hereunder.
1.12. "Plan" shall mean this Deferred Compensation Plan for Outside
Directors of Bowater Incorporated, as the same shall from time to time be
amended.
1.13. "Plan Year" shall mean each year beginning on the first day
of January and ending on the 31st day of December, commencing with the
year beginning on January 1, 1990. The first Plan Year shall be the
period from March 1, 1989 through December 31, 1989.
1.14. "Stock" shall mean Common Stock, $1.00 par value per share.
ARTICLE II.
PARTICIPATION
2.01 Participation is Voluntary
Participation in the Plan is voluntary.
2.02 Application to Participate
An Outside Director who wishes to participate in the Plan for any
Plan Year must deliver a written application to the Administrator no
later than the last day of the month immediately preceding such Plan
Year. The Administrator shall notify each Outside Director of his
prospective eligibility to participate in the Plan at least thirty (30)
days prior to the time he must deliver his application for participation.
Notwithstanding the foregoing, the Administrator may accept such an
application delivered after such last day of such month if it is an
application relating to the first Plan Year, or it is an application of
an Outside Director who was not an Outside Director as of such last day
of such month, in which case the application must be delivered within
thirty (30) days of the Effective Date or the date the individual becomes
an Outside Director, as applicable. The application for participation
shall constitute the Outside Director's acceptance of the benefits and
terms of the Plan, shall be implemented with respect to compensation
allocable to the period to which the election relates, and shall state
the portion of his Compensation that he elects to defer and the time
(within such limits as the Administrator may impose) when the Outside
Director desires a single lump sum distribution of his benefits under the
Plan in kind or cash, as hereinafter specified. An election to defer
Compensation shall remain in effect (and be irrevocable) with respect to
the Plan Year in which it first becomes effective and shall apply also to
each subsequent Plan Year unless the election expressly provides
otherwise or until it is revoked or changed. An election to defer
Compensation may be revoked or changed for future Plan Years if such
revocation or change is made prior to the beginning of the Plan Year to
which it relates.
2.03 Designation of Beneficiary
Each Participant shall designate on forms provided by the
Administrator, signed by the Participant and delivered to the
Administrator the Beneficiary or Beneficiaries to receive the amounts
distributable in the event of such Participant's death. A Participant
may from time to time change the designated Beneficiary or Beneficiaries,
without the consent of such Beneficiary or Beneficiaries, by delivering
to the Administrator a new written designation of Beneficiary signed by
the Participant. The spouse of a Participant shall be required to
consent in writing to any designation of a primary Beneficiary or
Beneficiaries other than such spouse. The Company and the Administrator
may rely upon the Beneficiary designation last delivered in accordance
with the terms of the Plan.
ARTICLE III.
ACCRUAL OF BENEFITS
3.01 Deferred Compensation
Each Outside Director who elects to participate in this Plan for any
Plan Year must irrevocably elect to defer the receipt of all or a
specified percentage of his Compensation for at least one Plan Year in
accordance with the terms of Section 2.02. The amount deferred shall be
credited to the electing Outside Director's account in the following
manner: On the date on which such Compensation would have been payable
to the Participant (but for his election to defer), the amount to be
deferred shall be converted to a number of shares of Stock by dividing
the amount of the Compensation to be deferred by that amount which is 95%
of the "Stock Price" on such date. The "Stock Price" shall be the
closing market price of one share of the Stock on the Composite Tape of
the New York Stock Exchange for that date. If the Composite Tape is not
operating on such date, or Stock is not traded there on such date, the
value shall be computed using the closing price on the next preceding
business day on which such Stock was traded thereon.
The Quotient, which shall be expressed in whole or fractional shares
of Stock to the nearest one/one hundredth shall be credited to the
Participant's account as of such date. The credits to a Participant's
account shall be paid in accordance with Article IV.
Whenever dividends are paid with respect to shares of Stock, each
Participant's Account shall be credited with an additional number of
shares of Stock (including fractions to the nearest one/one hundredth)
equal in value to the amount of the dividend paid on a single share of
Stock multiplied by the number of shares of Stock (including fractions)
credited to a Participant's Account as of the date of record for dividend
purposes. For purposes of crediting dividends, the value of Stock shall
be the Stock Price as of the day dividends are actually paid on Stock.
The number of shares of Stock in each Participant's Account shall be
appropriately adjusted and modified upon the occurrence of any stock
split, reverse stock split, stock dividend or stock consolidation. In
the event of a merger, consolidation or an acquisition of more than 50%
of the issued and outstanding shares of Stock of the Company, the
Executive Committee shall have the authority to amend the Plan to provide
for conversion of Stock credited to Participants' Accounts into stock of
the resulting or acquiring company (or a related company), as
appropriate, if such stock is publicly traded or, if not, into cash of
equal value on the date of merger, consolidation or acquisition (the
"Transaction Date"). If cash is credited to Participants' Accounts,
income shall be credited thereto from the Transaction Date to the date of
distribution at the base rate of Wachovia Bank and Trust Company, N.A.,
as is in effect from time to time during such period. If publicly traded
stock of the resulting or acquiring company (or a related company) is
credited to Participants' Accounts, dividends shall be credited thereto
in the same manner as dividends are credited on Stock credited to
Accounts. Notwithstanding Section 4.03, if cash or such publicly traded
stock is credited to Participants' Accounts, distribution shall be in the
medium credited to Participants' Accounts.
3.03 Vesting
The interest of each Participant in any benefit accrued hereunder
shall be fully vested and nonforfeitable at all times. Notwithstanding
the foregoing, the Company is not obligated to acquire, issue or hold any
Stock, cash or other asset by reason of the crediting to Accounts of
shares of Stock required by this Plan, and no Participant shall have any
right to compel the Company to acquire, issue or hold Stock in any amount
by reason of the provisions of this Plan.
ARTICLE IV.
DISTRIBUTION OF BENEFITS
4.01 Time of Distribution
A Participant may elect to have the balance of his Account
distributed to him (i) as soon as reasonably possible after the
Participant ceases to be an Outside Director, or (ii) on a stated date
occurring a stated number of years after the Participant ceases to be an
Outside Director (subject to such limitations as the Administrator may
reasonably impose). Such an election shall be made on the application
filed pursuant to Section 2.02 and shall be irrevocable once made.
4.02 Payment Upon Death
Notwithstanding any election under Section 4.01, if a Participant
dies prior to distribution of his Account, the balance credited to the
Participant's Account as of the date of death shall be paid, as soon as
reasonably possible thereafter, to the Participant's Beneficiary or
Beneficiaries.
4.03 Methods of Payment
All distributions under the Plan shall be in the form of a single
lump sum. Each such lump sum shall consist of shares of Stock equal to
the number of whole shares of Stock credited to the Participant's Account
on the date as of which the distribution occurs and a cash payment for
any fraction of a share determined by reference to the Stock Price on the
date as of which such distribution occurs. Each Participant or
Beneficiary agrees that prior to distribution of any benefit under the
Plan, he will make such representations and execute such documents as are
deemed by the Administrator necessary to comply with applicable
securities laws.
ARTICLE V.
THE ADMINISTRATOR
5.01 Appointment
An Administrator shall be appointed by the Executive Committee to
administer the Plan as provided herein.
5.02 Rights and Duties
The Administrator, on behalf of the Participants and their
Beneficiaries, shall enforce the Plan, in accordance with its terms,
shall be charged with the general administration of the Plan and shall
have all powers necessary to accomplish those purposes, including, but
not by way of limitation, the following:
(a) to compute and certify the amount and kind of benefits
payable to Participants and their Beneficiaries;
(b) to maintain or to designate any person or entity to maintain
all the necessary records for the administration of the
Plan;
(c) to make and publish such rules for the regulation of the
Plan as are not inconsistent with the terms hereof; and
(d) to provide for disclosure of such information and filing or
provision of such reports and statements to Participants or
Beneficiaries under this Plan as the Administrator deems
appropriate.
All action of the Administrator shall be conclusive on all persons
interested in the Plan except to the extent otherwise specifically
indicated herein. The Administrator may appoint a plan administrator and
agents, and delegate thereto such powers and duties in connection with
the administration of the Plan as the Administrator may from time to time
prescribe.
5.03 Annual Reports
The Administrator shall, within sixty (60) days after the end of
each Plan Year, furnish each Participant with a written annual report
indicating the number of shares of Stock credited to his Account as of
the end of the preceding Plan Year.
5.04 Information
To enable the Administrator to perform his functions, the Company
shall supply full and timely information to the Administrator on all
matters relating to the Compensation of all Participants, their status as
Outside Directors, their deferral elections and such other pertinent
facts as the Administrator may require.
5.05 Compensation, Indemnity and Liability
The Administrator shall serve without bond, except as otherwise
required by law, and without compensation for his services hereunder.
All expenses of the Administrator shall be paid by the Company and the
Company shall furnish the Administrator with such clerical and other
assistance as is necessary in the performance of his duties.
The Administrator shall not be liable for any act or omission on his
part, excepting only his own willful misconduct or gross negligence. The
Company shall indemnify and save harmless the Administrator against any
and all expenses and liabilities arising out of his administration of the
Plan, excepting only expenses and liabilities arising out of his own
willful misconduct or gross negligence.
ARTICLE VI.
AMENDMENT AND DISCONTINUANCE
6.01 Amendments
The Executive Committee shall have the right to amend the Plan from
time to time, and to amend or cancel any amendments, provided, however,
that no amendment shall reduce any amount already credited to a
Participant's Account as of the effective date of such amendment.
6.02 Discontinuance of Plan
It is the expectation of the Company that the Plan will be continued
indefinitely, but continuance of the Plan is not assumed as a contractual
obligation of the Company, and the right is reserved by the Company at
any time to reduce, suspend or discontinue the Plan, provided, however,
the Company shall in no event have the power to reduce the amount already
credited to a Participant's Account as of the effective date of any such
reduction, suspension or discontinuance nor to discontinue the crediting
of earnings on such amounts subsequent to said date. In the event of a
reduction, suspension or discontinuance of the Plan, the payment of
benefits accrued hereunder shall continue to be made in accordance with
the provisions of the Plan.
ARTICLE VII.
MISCELLANEOUS
7.01 No Interest in Assets
No Participant or any other person shall have any interest in any
shares of Stock credited to his Account or in any specific asset of the
Company by reason of any amount credited to him hereunder, nor any right
to receive any distribution under the Plan except as and to the extent
expressly provided in the Plan. There shall be no funding of any
benefits which may become payable hereunder. No trust shall be created
by the execution or adoption of this Plan or be required to be created in
connection herewith. Any benefits which become payable hereunder shall
be paid from the general assets of the Company. Nothing in the Plan
shall be deemed to give any Outside Director any right to participate in
the Plan, except in accordance with the provisions of the Plan.
7.02 Restriction Against Assignment
The Company shall pay all amounts payable hereunder only to the
person or persons designated by the Plan as Participant or Beneficiary,
as appropriate, and not to any other person or corporation. No part of a
Participant's Account shall be liable for the debts, contracts or
engagements of any Participant, his Beneficiaries or successors in
interest, nor shall it be subject to execution by levy, attachment or
garnishment or by any other legal or equitable proceeding, nor shall any
such person have any right to alienate, anticipate, commute, pledge,
encumber or assign any benefits or payments hereunder in any manner
whatsoever.
7.03 Receipt or Release
Any payment to any Participant or his Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be made in full
satisfaction of all claims against the Administrator and the Company, and
the Administrator may require such Participant or Beneficiary, as a
condition precedent to such payment, to execute a receipt, release and
indemnification to such effect.
7.04 Payment on Behalf of Minor
In the event any amount becomes payable under the Plan to a minor or
a person who, in the sole judgment of the Administrator, is considered by
reason of physical or mental condition to be unable to give a valid
receipt therefor, the Administrator may direct that such payment be made
to any person found by the Administrator, in his sole judgment, to have
assumed the care of such minor or other person. Any payment made
pursuant to such determination shall constitute a full release and
discharge of the Administrator and the Company.
7.05 Forfeiture
Any payment or distribution to a Participant under the Plan which is
not claimed by the Participant, Beneficiary or other person entitled
thereto within three (3) years after becoming payable shall be forfeited
and cancelled and shall remain with the Company and no other person shall
have any right thereto or interest therein. The Company shall not have
any duty to give notice that amounts are payable under the Plan to any
person other than the Participant and the designated Beneficiary or
Beneficiaries.
7.06 Withholding
The Company may deduct from the amount of all distributions under
the Plan any taxes required to be withheld by the Federal or any State or
local government.
7.07 Connecticut Law Governs
This Plan shall be construed, regulated and administered under the
laws of the State of Connecticut.
7.08 Headings Not Part of Agreement
Headings and subheadings in this Plan are inserted for convenience
of reference only and are not to be considered in the construction of the
provision hereto.
7.09 Successors and Assigns
This Plan shall inure to the benefit of, and be binding upon, the
parties hereto and their successors and assigns.
Executed at Darien, Connecticut on this 28th day of February, 1989.
BOWATER INCORPORATED
By /s/ R. E. Gustafson
_______________________
Its Vice President
