<PAGE>
RULE NO.424(b)(2)
REGISTRATION NO. 33-54097
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY 12, 1994)
$250,000,000
[LOGO OF CYPRUS AMAX MINERALS COMPANY APPEARS HERE]
7 3/8% NOTES DUE MAY 15, 2007
------------
Interest on the Notes is payable semi-annually on May 15 and November 15 of
each year, commencing November 15, 1995. The Notes are not redeemable by Cyprus
Amax Minerals Company ("Cyprus Amax" or the "Company") at any time prior to
maturity. See "Description of the Notes."
The Notes will be issued in fully registered form only in denominations of
$1,000 or integral multiples thereof. The Notes initially will be represented
by one or more global Notes registered in the name of The Depository Trust
Company (the "Depositary") or its nominee. Beneficial interests in the Notes
will be shown on, and transfers thereof will be effected only through, records
maintained by the Depositary and its participants. Owners of beneficial
interests in the Notes will be entitled to physical delivery of Notes in
certificated form equal in principal amount to their respective beneficial
interests only under the limited circumstances described herein. Settlement for
the Notes will be made in immediately available funds. The Notes will trade in
the Depositary's Same-Day Funds Settlement System until maturity, and secondary
market trading activity for the Notes therefore will settle in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC (1) DISCOUNT (2) COMPANY (1)(3)
- ---------------------------------------------------
<S> <C> <C> <C>
Per Note 99.372% .650% 98.722%
- ---------------------------------------------------
Total $248,430,000 $1,625,000 $246,805,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from May 17, 1995.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933,
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated to be $150,000.
------------
The Notes are offered by the Underwriters, subject to prior sale, when, as,
and if accepted by the Underwriters and subject to certain conditions. It is
expected that delivery of the Notes in book-entry form will be made through the
facilities of the Depositary on or about May 17, 1995.
------------
SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
May 10, 1995
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
THE COMPANY
Cyprus Amax is a diversified mining company engaged, directly or through its
subsidiaries, in the exploration for and extraction, processing, and marketing
of mineral resources. Cyprus Amax is among the world's largest producers of
copper, molybdenum, and lithium and is one of the nation's largest coal
producers. The Company reviews possible business transactions from time to time
and may engage in business acquisitions or dispositions in the future. Cyprus
Amax is incorporated in Delaware and operates primarily in the United States.
As of December 31, 1994, Cyprus Amax employed approximately 9,500 employees.
USE OF PROCEEDS
The net proceeds from the sale of the Notes offered hereby will be used for
the prepayment of coal production payment obligations and for general corporate
purposes. The aggregate principal amount outstanding under the coal production
payment obligations at April 30, 1995 was approximately $268 million, bearing
interest at a variable rate based on LIBOR and maturing on December 1, 1999.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS OF THE COMPANY
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
THREE MONTHS ENDED ------------------------
MARCH 31, 1995 1994 1993 1992 1991 1990
------------------ ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Consolidated Ratio of Earnings to
Fixed Charges..................... 4.7 2.7 3.3 (1) 2.5 5.5
Consolidated Ratio of Earnings to
Combined Fixed Charges and
Preferred Stock Dividends......... 4.0 2.3 3.1 (2) 1.6 3.4
</TABLE>
- --------
(1) Earnings for the year ended December 31, 1992 were inadequate to cover
fixed charges by $331 million.
(2) Earnings for the year ended December 31, 1992 were inadequate to cover
combined fixed charges and preferred stock dividend requirements by $346
million.
For purposes of the ratio of earnings to fixed charges, "earnings" includes
income before income taxes and the cumulative effect of accounting changes and
fixed charges. "Fixed charges" consist of interest on all indebtedness and that
portion of rental expense that management believes to be representative of
interest. For purposes of calculating the ratio of earnings to combined fixed
charges and preferred stock dividends, the preferred stock dividend
requirements were assumed to be equal to the pre-tax earnings which would be
required to cover such dividend requirements. The amount of such pre-tax
earnings required to cover preferred stock dividends was computed using tax
rates for the applicable year.
S-2
<PAGE>
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes offered hereby
supplements, and to the extent inconsistent therewith replaces, insofar as such
description relates to the Notes, the description of the general terms and
provisions of the Senior Securities, of which the Notes will be a series, set
forth in the Prospectus, to which description reference is hereby made.
GENERAL
The Notes offered hereby will be issued under an Indenture, dated as of May
17, 1995, between the Company and The First National Bank of Chicago, as
Trustee. The Notes will be unsecured, unsubordinated obligations of the
Company, will be limited in aggregate principal amount to $250 million and will
mature on May 15, 2007. The Notes will bear interest from May 17, 1995 at the
rate per annum shown on the front cover of this Prospectus Supplement payable
semi-annually on May 15 and November 15 of each year, commencing November 15,
1995 to the person in whose name the Note (or any predecessor) is registered at
the close of business on the May 1 or November 1, as the case may be, next
preceding such interest payment date.
SINKING FUND
The Notes are not entitled to any sinking fund payments.
REDEMPTION
The Notes may not be redeemed by the Company at any time prior to maturity.
CERTAIN COVENANTS; DEFEASANCE
All provisions described in the attached Prospectus under the captions
"Description of Debt Securities and Guarantees--Certain Covenants of the
Company," and "--Defeasance" will be applicable to the Notes.
BOOK-ENTRY DELIVERY AND FORM
Upon issuance, all Notes will be represented by one or more fully registered
global securities (the "Global Notes"). Each such Global Note will be deposited
with, or on behalf of, the Depositary, and registered in the name of the
Depositary or a nominee thereof. Unless and until it is exchanged in whole or
in part for Notes in definitive form, no Global Note may be transferred except
as a whole by or to the Depositary, a nominee of the Depositary or any
successor to either of them.
The Depositary had advised the Company as follows: The Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of
1934, as amended. The Depositary holds securities that its participants
("Direct Participants") deposit with the Depositary. The Depositary also
facilitates the settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in Direct Participants' accounts,
thereby eliminating the need for physical movement of securities. The
Depositary's Direct Participants include securities brokers and dealers, banks,
trust companies, clearing corporations, and certain other organizations,
including the Underwriters. The Depositary is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the Depositary's system is also available to others, such as securities
brokers and dealers, banks, and trust companies that clear through or maintain
a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants").
S-3
<PAGE>
Purchases of Notes under the Depositary's system must be made by or through
Direct Participants, which will receive a credit for the Notes on the records
of the Depositary. The ownership interest of each actual purchaser of each Note
(a "Beneficial Owner") is in turn to be recorded on the Direct Participants'
and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmation providing details of the transaction,
as well as periodic statements of their holdings, from the Direct Participant
or Indirect Participant through which each such Beneficial Owner entered into
the transaction. Ownership of beneficial interests in Global Notes will be
shown on, and the transfer of such ownership interests will be effected only
through, records maintained by the Depositary (with respect to interests of
persons held through Direct Participants). The laws of some states may require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to own,
transfer or pledge beneficial interests in Global Notes.
So long as the Depositary, or its nominee, is the registered owner of a
Global Note, the Depositary or its nominee, as the case may be, will be
considered the sole owner or Holder of the Notes represented by such Global
Note for all purposes under the Indenture. Except as provided below, Beneficial
Owners of a Global Note will not be entitled to have the Notes represented by
such Global Note registered in their names, will not receive or be entitled to
receive physical delivery of the Notes in definitive form, and will not be
considered the owners or Holders thereof under the Indenture. Accordingly, each
Person owning a beneficial interest in a Global Note must rely on the
procedures of the Depositary and, if such Person is not a Direct Participant,
on the procedures of the Direct Participant through which such Person owns its
interest, to exercise any rights of a Holder under the Indenture. The Company
understands that under existing industry practices, in the event that the
Company requests any action of Holders or that a Beneficial Owner desires to
give or take any action which a Holder is entitled to give or take under the
Indenture, the Depositary would authorize the Direct Participants holding the
relevant beneficial interests to give or take such action, and such Direct
Participants would authorize or otherwise would act upon the instructions of
Beneficial Owners. Conveyance of notices and other communications by the
Depositary to Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of the principal of, and interest on, Notes registered in the name of
the Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the holder of the Global Note or Notes representing such
Notes. None of the Company, the Trustee or any other agent of the Company or
agent of the Trustee will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests or for supervising or reviewing any records relating to such
beneficial ownership interests. The Company expects that the Depositary, upon
receipt of any payment of principal or interest in respect of a Global Note,
will credit the accounts of the Direct Participants with payments in amounts
proportionate to their respective holdings in principal amount of beneficial
interest in such Global Notes as shown on the record of the Depositary. The
Company also expects that payments by Direct Participants to Beneficial Owners
will be governed by standing customer instructions and customary practices, as
is now the case with securities held for the accounts of customers in bearer
form or registered in "street name", and will be the responsibility of such
Direct Participants.
If (x) the Depositary is at any time unwilling or unable to continue as
Depositary or at any time ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or (y) the Company executes and
delivers to the Trustee a Company Order to the effect that the Global Notes
shall be exchangeable, or (z) an Event of Default has occurred and is
continuing with respect to the Notes, the Global Note or Notes will be
exchangeable for Notes in definitive form of like tenor and of an equal
aggregate principal amount, in denominations of $1,000 and integral multiples
thereof. Such definitive Notes shall be registered in such name or names as the
Depositary shall instruct the Trustee. It is expected that such instructions
may be based upon directions received by the Depositary from Direct
Participants with respect to ownership of beneficial interests in Global Notes.
S-4
<PAGE>
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest on the Notes will be
made by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate issuers
generally is settled in clearing house or next-day funds. In contrast, the
Notes will trade in the Depositary's Same-Day Funds Settlement System until
maturity and secondary trading activity in the Notes therefore will be required
by the Depositary to settle in immediately available funds. No assurance can be
given as to the effect, if any, of settlement in immediately available funds on
trading activity in the Notes.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
dated May 10, 1995 (the "Underwriting Agreement"), among the Company and Smith
Barney Inc., Bear, Stearns & Co. Inc., PaineWebber Incorporated, Chemical
Securities Inc., and Citicorp Securities, Inc. (the "Underwriters"), the
Company has agreed to sell to the Underwriters, and the Underwriters severally
have agreed to purchase from the Company, the respective principal amounts of
Notes set forth opposite their names below. The Underwriting Agreement provides
that the obligations of the Underwriters are subject to certain conditions
precedent and that the Underwriters will be obligated to purchase all of the
Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Smith Barney Inc. ............................................. $ 80,000,000
Bear, Stearns & Co. Inc. ...................................... 80,000,000
PaineWebber Incorporated....................................... 80,000,000
Chemical Securities Inc. ...................................... 5,000,000
Citicorp Securities, Inc. ..................................... 5,000,000
------------
Total........................................................ $250,000,000
============
</TABLE>
The Underwriters have advised the Company that they initially propose to
offer the Notes to the public at the public offering price set forth on the
cover page of this Prospectus Supplement and to certain dealers at such price
less a concession not in excess of 0.400% of the principal amount of the Notes.
The Underwriters may allow, and such dealers may reallow, a discount not in
excess of 0.250% of the principal amount of the Notes to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.
Certain of the Underwriters and their affiliates engage in transactions with
and perform services for the Company and its subsidiaries in the ordinary
course of business. Chemical Bank, an affiliate of Chemical Securities Inc., is
agent bank and a lender under a credit facility with the Company. Citibank,
N.A., an affiliate of Citicorp Securities, Inc., is a lender under the same
credit facility.
All secondary trading in the Notes will settle in immediately available
funds. See "Description of the Notes--Same-Day Settlement and Payment."
The Notes are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that they intend to make a
market in the Notes, but are not obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given as to
whether a trading market for the Notes will develop.
The Underwriting Agreement provides that the Company will indemnify the
several Underwriters against certain civil liabilities, including liabilities
under the Securities Act of 1933, as amended, or contribute to payments the
Underwriters may be required to make in respect thereof.
S-5
<PAGE>
LEGAL MATTERS
The validity of the Notes being offered hereby will be passed upon for the
Company by Davis, Graham & Stubbs, L.L.C., Denver, Colorado and for the
Underwriters by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), New York, New York.
EXPERTS
The consolidated financial statements and the related financial statement
schedules as of December 31, 1994 and December 31, 1993 and for each of the
three years in the period ended December 31, 1994, incorporated by reference in
this Prospectus from the Company's Annual Report on Form 10-K for the year
ended December 31, 1994, have been audited by Price Waterhouse LLP, independent
accountants, as stated in their reports which are incorporated by reference
herein, and have been so included and incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
S-6
<PAGE>
PROSPECTUS
$500,000,000
LOGO
DEBT SECURITIES
GUARANTEES
PREFERRED STOCK
COMMON STOCK
WARRANTS
----------------
CYPRUS AMAX FINANCE CORPORATION
GUARANTEED DEBT SECURITIES
----------------
Cyprus Amax Minerals Company (the "Company") may offer from time to time (i)
Debt Securities ("Debt Securities"), which may be either senior debt
securities ("Senior Securities"), senior subordinated debt securities ("Senior
Subordinated Securities") or subordinated debt securities ("Subordinated
Securities"), consisting of debentures, notes, bonds and/or other unsecured
evidences of indebtedness in one or more series, (ii) unconditional and
irrevocable guarantees ("Guarantees") of Debt Securities issued by Cyprus Amax
Finance Corporation ("Finance"), a wholly-owned subsidiary of the Company,
(iii) shares of Preferred Stock ("Preferred Stock") in one or more series,
(iv) shares of Common Stock, without par value ("Common Stock"), or (v)
Warrants ("Warrants") to purchase Debt Securities, Preferred Stock or Common
Stock. Finance may offer from time to time guaranteed Debt Securities,
consisting of debentures, notes, bonds and/or other unsecured evidences of
indebtedness in one or more series, guaranteed by the Company. The foregoing
securities are collectively referred to as the "Securities." The Securities
will be offered at an aggregate initial offering price not to exceed
U.S.$500,000,000, at prices and on terms to be determined at the time of sale.
The accompanying Prospectus Supplement sets forth with regard to the
particular Securities in respect of which this Prospectus is being delivered
(i) in the case of Debt Securities, the title, aggregate principal amount,
denominations (which may be in United States dollars, in any other currency,
currencies or currency unit, including the European Currency Unit), maturity,
rate, if any (which may be fixed or variable) or method of calculation
thereof, and time of payment of any interest, any terms for redemption at the
option of the Company (or, in the case of Debt Securities issued by Finance,
Finance) or the holder, any terms for sinking fund payments, any conversion or
exchange rights, any listing on a securities exchange and the initial public
offering price and any other terms in connection with the offering and sale of
such Debt Securities, (ii) in the case of Preferred Stock, the designation,
aggregate principal amount, and stated value and liquidation preference per
share, initial public offering price, dividend rate (or method of
calculation), dates on which dividends shall be payable and dates from which
interest shall accrue, any redemption or sinking fund provisions, any
conversion or exchange rights, whether the Company has elected to offer the
Preferred Stock in the form of depositary shares, any listing of the Preferred
Stock on a securities exchange, and any other terms in connection with the
offering and sale of such Preferred Stock; (iii) in the case of Common Stock,
the number of shares of Common Stock and the terms of the offering thereof;
and (iv) in the case of Warrants, the number and terms thereof, the
designation and the number of Securities issuable upon their exercise, the
exercise price, any listing of the Warrants or the underlying Securities on a
securities exchange and any other terms in connection with the offering, sale
and exercise of the Warrants. The Prospectus Supplement will also contain
information, as applicable, about certain United States Federal income tax
considerations relating to the Securities in respect of which this Prospectus
is being delivered.
The Senior Securities will rank equally with all other unsubordinated and
unsecured indebtedness of the Company. The Senior Subordinated Securities will
be subordinated to all existing and future Senior Indebtedness (as defined) of
the Company, and senior to all existing and future Subordinated Indebtedness
(as defined) of the Company. The Subordinated Securities will be subordinated
to all existing and future Senior Indebtedness (as defined) of the Company.
All or a portion of any Debt Securities may be issued in permanent global
form.
The Company's Common Stock is listed on the New York Stock Exchange (Symbol:
"CYM"). Any Common Stock offered will be listed, subject to notice of
issuance, on such exchange. See "Price Range of Common Stock and Dividends."
The Company and Finance may sell Securities to or through one or more
underwriters, and also may sell Securities directly to other purchasers or
through agents. Such underwriters or agents may include Kidder, Peabody & Co.
Incorporated. The accompanying Prospectus Supplement sets forth the names of
any underwriters or agents involved in the sale of the Securities in respect
of which this Prospectus is being delivered, the principal amounts, if any, to
be purchased by underwriters and the compensation, if any, of such
underwriters or agents. See "Plan of Distribution" herein.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is July 12, 1994
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS
OR IN THE PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, FINANCE OR ANY UNDERWRITER, AGENT OR DEALER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES
OTHER THAN THE SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS IS DELIVERED OR
AN OFFER OF ANY SECURITIES IN ANY JURISDICTION TO ANY PERSON WHERE SUCH AN
OFFER WOULD BE UNLAWFUL.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 ("Exchange Act") and in accordance therewith files
reports, proxy statements and other information with the Securities and
Exchange Commission ("Commission"). Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at its Regional Offices located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and 7 World Trade Center, 13th Floor, New York, New York
10007. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission, 450 Fifth Street, N.W. Plaza,
Washington, D.C. 20549. In addition, such reports and proxy statements can be
inspected at the offices of The New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005.
Finance is a wholly-owned subsidiary of the Company. It currently is not
independently subject to the information requirements of the Exchange
Act. Finance expects to receive a conditional exemption pursuant to Section
12(h) of the Exchange Act from the informational requirements of such Act and
anticipates that no independent reports concerning Finance will be sent to
holders of Debt Securities issued by Finance.
The Company and Finance have filed with the Commission a Registration
Statement on Form S-3 (the "Registration Statement") under the Securities Act
of 1933 (the "Securities Act") with respect to the Securities offered hereby.
This Prospectus, which constitutes a part of the Registration Statement, does
not contain all the information set forth in the Registration Statement in
accordance with the rules and regulations of the Commission, and reference is
hereby made to the Registration Statement and the exhibits thereto for further
information with respect to the Company, Finance and the Securities. The
Registration Statement and the exhibits thereto can be obtained from or
inspected and copied at the public reference facilities maintained by the
Commission as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1993.
2. Quarterly Report on Form 10-Q for the quarterly period ended March 31,
1994.
3. Report on Form 8-K, dated March 31, 1994.
4. The information set forth at "Pro Forma Condensed Combined Financial
Information" and pages F-1 through F-39 in the Report on Form 8-K, dated
September 24, 1993, in order to meet the requirements of Rule 3-05 and
Article 11 of Regulation S-X.
5. Report on Form 10-Q for the quarterly period ended September 30, 1993
for the purpose of updating the Pro Forma information filed in the
Report on Form 8-K dated September 24, 1993.
6. Registration Statement on Form 8-A, dated March 3, 1989, as amended, for
the Company's Preferred Share Purchase Rights.
7. Registration Statement on Form 10, dated July 11, 1985 for the Company's
Common Stock.
8. All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequently to
the date of this Prospectus and prior to the termination of the offering
of the Securities shall be deemed to be incorporated herein by
reference.
2
<PAGE>
Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in the
Prospectus Supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the request of
such person, a copy of any of the documents incorporated by reference herein,
except for the exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Requests should
be directed to 9100 East Mineral Circle, Englewood, Colorado 80112 (telephone
(303) 643-5000), Attention: Investor Relations.
3
<PAGE>
THE COMPANY
On November 15, 1993, AMAX Inc. merged with and into Cyprus Minerals Company
to create one of the world's largest natural resource companies (the
"Cyprus/Amax Merger"). Cyprus Amax Minerals Company ("Cyprus Amax" or the
"Company") is a diversified mining company engaged, directly or through its
subsidiaries, in the exploration for and extraction, processing and marketing
of mineral resources. Cyprus Amax operates in three principal industry
segments: Copper, Coal, and Other (which includes lithium, gold, iron ore and
exploration). Cyprus Amax is among the world's largest producers of copper,
molybdenum, and lithium, and is one of the nation's largest coal producers.
The Company reviews possible business transactions from time to time and may
engage in business acquisitions or dispositions in the future. Cyprus Amax is
incorporated in Delaware and operates primarily in the United States. As of
December 31, 1993, Cyprus Amax employed approximately 10,750 employees.
The Company's principal executive office is located at 9100 East Mineral
Circle, Englewood, Colorado 80112, and its telephone number is (303) 643-5000.
Because the Company is primarily a holding company, conducting business
generally through its subsidiaries, the ability of the Company to meet its
obligations under the Debt Securities and its other indebtedness and to pay
dividends on its Preferred Stock and Common Stock will be dependent on the
earnings and cash flow of its subsidiaries and the ability of its subsidiaries
to pay dividends and to advance funds to the Company. In addition, the
Company's rights and the rights of its creditors and securities holders,
including the holders of the Securities, to participate in the assets of any
subsidiary upon such subsidiary's liquidation or recapitalization will be
subject to the prior claims of such subsidiary's creditors, except to the
extent that the Company may itself be a creditor with recognized claims
against any such subsidiary. A substantial amount of the Company's
consolidated debt represents claims of the creditors of the Company's
subsidiaries.
Finance is a wholly-owned subsidiary of the Company which was incorporated
under the laws of the state of Delaware on May 26, 1994. The primary purpose
of Finance is to issue guaranteed Debt Securities and to loan to or invest the
proceeds in the Company or subsidiaries. Finance will be prohibited from
issuing any capital stock to any person other than the Company and its
subsidiaries. Finance does not now, and in the near future does not expect to,
lease or own any material facilities or operating property. Finance's
principal executive office is located at 9100 East Mineral Circle, Englewood,
Colorado 80112, telephone (303) 643-5000.
USE OF PROCEEDS
Except as otherwise described in the accompanying Prospectus Supplement or
any Pricing Supplement, the net proceeds from the sale of Securities will be
used for general corporate purposes, which may include refinancings of
indebtedness, working capital, capital expenditures, acquisitions and
repurchases and redemptions of securities.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS
TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS OF THE COMPANY
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------ ---------------------------
1994 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to fixed
charges (unaudited).................... 1.7x 3.3x (a) 2.5x 5.5x 17.3x
Consolidated ratio of earnings to fixed
charges and preferred stock dividends
(unaudited)............................ 1.5x 3.1x (b) 1.6x 3.4x 8.5x
</TABLE>
- --------
(a) Earnings for the year ended December 31, 1992 were inadequate to cover
fixed charges by $331,798,000.
(b) Earnings for the year ended December 31, 1992 were inadequate to cover
combined fixed charges and preferred stock dividend requirements by
$346,577,000.
4
<PAGE>
For purposes of the ratio of earnings to fixed charges, "earnings" includes
income before income taxes, the cumulative effect of a change in accounting
principle and fixed charges. "Fixed charges" consist of interest on all
indebtedness and that portion of rental expense that management believes to be
representative of interest. For purposes of calculating the ratio of earnings
to combined fixed charges and preferred stock dividends, the preferred stock
dividend requirements were assumed to be equal to the pretax earnings which
would be required to cover such dividend requirements. The amount of such
pretax earnings required to cover preferred stock dividends was computed using
tax rates for the applicable year. The foregoing ratios have not been adjusted
to reflect the adoption by the Company of SFAS 106.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is listed on the New York Stock Exchange under the
symbol ("CYM"). The following table sets forth, for the periods shown, the
range of high and low sales prices of the Common Stock on the New York Stock
Exchange and the cash dividends declared on the Common Stock:
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------
DIVIDENDS
HIGH LOW DECLARED
------ ------ ---------
<S> <C> <C> <C>
1991
First quarter......................................... 23 7/8 17 1/2 .20
Second quarter........................................ 25 1/4 17 5/8 .20
Third quarter......................................... 22 7/8 18 1/4 .20
Fourth quarter........................................ 25 3/8 18 3/4 .20
1992
First quarter......................................... 23 3/4 18 1/2 .20
Second quarter........................................ 28 1/2 19 .20
Third quarter......................................... 32 26 5/8 .20
Fourth quarter........................................ 32 25 3/4 .25(1)
1993
First quarter......................................... 36 3/8 30 3/4 .20
Second quarter........................................ 33 1/8 22 7/8 .20
Third quarter......................................... 28 1/4 23 3/8 .20
Fourth quarter........................................ 26 5/8 21 1/4 .20
1994
First quarter......................................... 33 3/8 25 5/8 .20
Second quarter........................................ 31 7/8 25 3/4 .20
Third quarter (through July 8)........................ 31 1/8 29
</TABLE>
- --------
(1) Includes a special dividend of $.05 per share.
If shares of Common Stock or Securities convertible or exercisable for Common
Stock are being offered, a recent last sale price of the Common Stock will be
set forth on the cover page of the Prospectus Supplement.
Determinations by the Board of Directors of the Company of the amount and
timing of future dividends will be based upon the Company's earnings, cash
needs, capital requirements and other relevant factors. The Board of Directors
will continue to evaluate the Company's performance and the appropriateness of
dividends. It is currently anticipated that dividends will continue to be paid
during 1994.
There is no established trading market for the Company's Series A Convertible
Preferred Stock, which was issued in the Cyprus/Amax Merger.
5
<PAGE>
DESCRIPTION OF DEBT SECURITIES AND GUARANTEES
Debt Securities may be issued time to time in one or more series by the
Company or by Finance. In the event that any series of Debt Securities is
issued by Finance, such Debt Securities will be offered together with
unconditional and irrevocable guarantees issued by the Company. In the
following description, references to the Issuer refer to the Company, in the
case of a series of Debt Securities issued by the Company, and to the Company
and Finance, in the case of a series of Debt Securities issued by Finance.
The Debt Securities will constitute either indebtedness designated as Senior
Indebtedness ("Senior Securities"), indebtedness designated as Senior
Subordinated Indebtedness ("Senior Subordinated Securities") or indebtedness
designated as Subordinated Indebtedness ("Subordinated Securities"). The
particular terms of each series of Securities offered by a particular
Prospectus Supplement and, if such Debt Securities are offered by Finance, the
particular terms of the Guarantees offered in connection therewith, will be
described therein. Senior Securities, Senior Subordinated Securities and
Subordinated Securities will each be issued under a separate indenture
(individually an "Indenture" and collectively the "Indentures") to be entered
into prior to the issuance of such Debt Securities. The Indentures will be
substantially identical, except for provisions relating to subordination and
Guarantees. See "Subordination of Senior Subordinated Securities, Subordinated
Securities and Guarantees". There may be a separate Trustee (individually a
"Trustee" and collectively the "Trustees') under each Indenture. Information
regarding the Trustee under an Indenture will be included in any Prospectus
Supplement relating to the Debt Securities issued thereunder. The following
discussion includes a summary description of all material terms of the
Indentures, other than terms which are specific to a particular series of Debt
Securities and which will be described in the Prospectus Supplement relating to
such series. The following summaries do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, all of the
provisions of the Indentures, including the definitions therein of certain
terms capitalized in this Prospectus. Wherever particular Sections or Articles
or defined terms of the Indentures are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated herein or therein
by reference.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any
Prospectus Supplement or Prospectus Supplements will be described in such
Prospectus Supplement or Prospectus Supplements relating to such series.
Other than as set forth under "Certain Covenants of the Company," and only to
the extent applicable to the Debt Securities of a particular series, as
indicated in the applicable Prospectus Supplement, there are no provisions of
the Indentures which afford holders of the Debt Securities protection in the
event of a highly leveraged transaction involving the Company.
GENERAL
The Indentures do not limit the aggregate amount of Debt Securities which may
be issued thereunder, and Debt Securities may be issued thereunder from time to
time in separate series up to the aggregate amount from time to time authorized
by the Issuer for each series. Debt Securities of a series may be issuable in
registered form without coupons ("Registered Debt Securities"), in bearer form
with or without coupons attached ("Bearer Debt Securities") or in the form of
one or more Global Securities in registered or bearer form (each, a "Global
Security"). Bearer Debt Securities, if any, will be offered only to non-United
States persons and to offices located outside the United States of certain
United States financial institutions. The Senior Securities will be unsecured
and unsubordinated obligations of the Issuer and will rank equally and ratably
with other unsecured and unsubordinated indebtedness of the Issuer. The Senior
Subordinated Securities and the Subordinated Securities will be subordinated in
right of payment to the prior payment in full of the Senior Indebtedness (as
defined) of the Issuer, as described below under "Subordination of Subordinated
Securities" and in a Prospectus Supplement applicable to an offering of Senior
Subordinated Securities or Subordinated Securities.
6
<PAGE>
Any Debt Security issued by Finance will be unconditionally and irrevocably
guaranteed by the Company as to payment of principal, premium, if any, and
interest.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the series of Debt Securities in respect of which this
Prospectus is being delivered: (1) the Issuer (which may be the Company or
Finance) and title of such Debt Securities; (2) any limit on the aggregate
principal amount of such Debt Securities; (3) whether such Debt Securities will
be issued as Registered Debt Securities, Bearer Debt Securities or any
combination thereof, and any limitation on issuance of such Bearer Debt
Securities and any provisions regarding the transfer or exchange of such Bearer
Debt Securities, including exchange for Registered Debt Securities of the same
series; (4) whether any of such Debt Securities are to be issuable as a Global
Security, whether such Global Securities are to be issued in temporary global
form or permanent global form and, if so, the terms and conditions, if any,
upon which interests in such Securities in global form may be exchanged, in
whole or in part, for the individual Debt Securities represented thereby; (5)
the person to whom any interest on any Debt Security of the series shall be
payable if other than the person in whose name the Debt Security is registered
on the Regular Record Date; (6) the date or dates on which such Debt Securities
will mature; (7) the rate or rates of interest, if any, or the method of
calculation thereof, which such Debt Securities will bear; (8) the date or
dates from which any such interest will accrue, the Interest Payment Dates on
which any such interest on such Debt Securities will be payable and the Regular
Record Date for any interest payable on any Interest Payment Date; (9) the
place or places where the principal of, premium (if any) and interest on such
Debt Securities will be payable; (10) the period or periods within which, the
events upon the occurrence of which, and the price or prices at which, such
Debt Securities may, pursuant to any optional or mandatory provisions, be
redeemed or purchased, in whole or in part, by the Issuer and any terms and
conditions relevant thereto; (11) the obligation of the Issuer, if any, to
redeem or repurchase such Debt Securities at the option of the Holders; (12)
the denominations in which any such Debt Securities will be issuable, if other
than denominations of $1,000 and any integral multiple thereof; (13) the
currency, currencies or currency unit or units of payment of principal of and
any premium and interest on such Debt Securities if other than U.S. dollars;
(14) any index or formula used to determine the amount of payments of principal
of and any premium and interest on such Debt Securities; (15) if the principal
of or any premium or interest on such Debt Securities is to be payable, at the
election of the Issuer or a Holder thereof, in one or more currencies or
currency units other than that or those in which such Debt Securities are
stated to be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Debt Securities of
such series as to which such election is made shall be payable, and the periods
within which and the terms and conditions upon which such election is to be
made; (16) if other than the principal amount thereof, the portion of the
principal amount of such Debt Securities of the series which will be payable
upon declaration of the acceleration of the Maturity thereof; (17) the
applicability of any provisions described under "Certain Covenants of the
Company"; (18) the applicability of any provisions described under
"Defeasance"; (19) the terms and conditions, if any, pursuant to which such
Debt Securities are convertible or exchangeable into Common Stock or other
securities of the Company or another corporation and (20) any other terms of
such Debt Securities not inconsistent with the provisions of the respective
Indentures.
Debt Securities may be issued at a discount from their principal amount.
United States Federal income tax considerations and other special
considerations applicable to any such Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is denominated in a
foreign currency or currencies or a foreign currency unit or units or if the
principal of and any premium and interest on any series of Debt Securities is
payable in a foreign currency or currencies or a foreign currency unit or
units, the restrictions, elections, general tax considerations, specific terms
and other information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will be set
forth in the applicable Prospectus Supplement.
7
<PAGE>
GUARANTEES
The Company will unconditionally and irrevocably guarantee, on a senior,
senior subordinated or subordinated basis, the due and punctual payment of
principal of, premium, if any, and interest on any Debt Securities that are
issued by Finance, and the due and punctual payment of any sinking fund
payments thereon, when and as the same shall become due and payable, whether at
the maturity date, by declaration of acceleration, call for redemption or
otherwise. See "Subordination of Senior Subordinated Securities, Subordinated
Securities and Guarantees."
SENIOR SECURITIES
The Senior Securities will rank pari passu with all other unsecured and
unsubordinated debt of the Issuer and senior to the Senior Subordinated
Securities and Subordinated Securities.
SUBORDINATION OF SENIOR SUBORDINATED SECURITIES, SUBORDINATED SECURITIES AND
GUARANTEES
The indebtedness evidenced by the Senior Subordinated Securities and the
Subordinated Securities will be subordinated and junior in right of payment to
the extent set forth in the respective Indenture to the prior payment in full
of amounts then due on all Senior Indebtedness (as defined below). No payment
shall be made by the Issuer on account of principal of (or premium, if any) or
interest on the Senior Subordinated Securities or the Subordinated Securities
or on account of the purchase or other acquisition of Senior Subordinated
Securities or the Subordinated Securities, if the maturity of any of the Senior
Subordinated Securities or the Subordinated Securities shall have been
accelerated, until all amounts due have been paid on all outstanding Senior
Indebtedness, or if there shall have occurred and be continuing (i) a default
in the payment of principal (or premium, if any) or interest on any Senior
Indebtedness beyond any applicable grace period with respect thereto, or any
event of default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity of such Senior Indebtedness, unless and until such
default or event of default shall have been cured or waived or shall have
ceased to exist and such acceleration shall have been rescinded or annulled or
(ii) any such default in payment or event of default shall be the subject of a
judicial proceeding. By reason of these provisions in the event of default of
any Senior Indebtedness, whether now outstanding or hereafter issued, payments
of principal of (and premium, if any) and interest on the Senior Subordinated
Securities or the Subordinated Securities may not be permitted to be made until
such default is cured or such Senior Indebtedness is paid in full.
Upon any distribution of assets of the Issuer upon any receivership,
dissolution, winding-up, liquidation, reorganization or similar proceedings of
the Issuer, whether voluntary or involuntary, or in bankruptcy or insolvency,
all principal of (and premium, if any) and interest due upon all Senior
Indebtedness must be paid in full before the Holders of the Senior Subordinated
Securities and the Subordinated Securities or the Trustee is entitled to
receive or retain any assets so distributed in respect of the Senior
Subordinated Securities or the Subordinated Securities. By reason of this
provision, in the event of insolvency Holders of the Senior Subordinated
Securities and the Subordinated Securities may recover less, ratably, than
other creditors of the Issuer, including holders of Senior Indebtedness.
"Senior Indebtedness" means, when used with respect to any series of Senior
Subordinated Securities or Subordinated Securities, the principal of (and
premium, if any) and interest on (a) all indebtedness of the Issuer (including
indebtedness of others guaranteed by the Issuer) other than the Subordinated
Securities which is (i) for money borrowed or (ii) evidenced by a note or
similar instrument given in connection with the acquisition of any businesses,
properties or assets of any kind, (b) obligations of the Issuer as lessee under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles, and (c) amendments, renewals,
extensions, modifications and refunding of any such indebtedness or obligation,
in any such case whether outstanding on the date of the Senior Subordinated
Indenture or the Subordinated Indenture or thereafter created, incurred or
assumed, except that, with respect to the Senior Subordinated Securities, any
particular indebtedness, obligation, liability, guaranty, assumption, deferral,
renewal, extension or refunding shall not constitute "Senior Indebtedness" if
it is expressly stated in the
8
<PAGE>
governing terms, or in the assumption or guarantee, thereof that the
indebtedness involved is not senior in right of payment to the Senior
Subordinated Securities or that such indebtedness is pari passu with or junior
to the Senior Subordinated Securities and, with respect to Subordinated
Securities, any particular indebtedness, obligation, liability, guaranty,
assumption, deferral, renewal, extension or refunding shall not constitute
"Senior Indebtedness" if its expressly stated in the governing terms, or in the
assumption or guarantee, thereof that the indebtedness involved is not senior
in right of payment to the Subordinated Securities or that such indebtedness is
pari passu with or junior to the Subordinated Securities. As of March 31, 1994,
the amount of Senior Indebtedness of the Company was approximately $1.34
billion. Finance has no indebtedness at the date of this Prospectus. The Senior
Subordinated Indenture and Subordinated Indenture do not prohibit or limit the
incurrence of additional Senior Indebtedness.
If this Prospectus is being deliver in connection with a series of Senior
Subordinated Securities or Subordinated Securities, the accompanying Prospectus
Supplement or the information incorporated herein by reference will set forth
the approximate amount of Senior Indebtedness outstanding as of the end of the
Issuer's most recent fiscal quarter.
In the event that Senior Subordinated Securities or Subordinated Securities
are issued by Finance, the related Guarantees issued by the Company will be
subordinate and junior in right of payment to Senior Indebtedness of the
Company on substantially the same terms and conditions as the obligations of
Finance under the Senior Subordinated Securities or the Subordinated
Securities, as the case may be, will be subordinate and junior in right of
payment to Senior Indebtedness.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities are issuable in definitive form as Registered Debt
Securities, as Bearer Debt Securities or both. Unless otherwise indicated in an
applicable Prospectus Supplement, Bearer Debt Securities will have interest
coupons attached. Debt Securities are also issuable in temporary or permanent
global form.
Registered Debt Securities of any series will be exchangeable for other
Registered Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. In addition, with
respect to any series of Bearer Debt Securities, at the option of the holder,
subject to the terms of the Indenture, such Bearer Debt Securities (with all
unmatured coupons, except as provided below, and all matured coupons in
default) will be exchangeable into Registered Debt Securities of the same
series of any authorized denominations and of a like aggregate principal amount
and tenor. Bearer Debt Securities surrendered in exchange for Registered Debt
Securities between a Regular Record Date or a Special Record Date and the
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest, and interest accrued as of such
date will not be payable in respect of the Registered Debt Security issued in
exchange for such Bearer Debt Security, but will be payable only to the holder
of such coupon when due in accordance with the terms of the Indenture.
In connection with its sale during the restricted period (as defined below),
no Bearer Debt Security (including a Debt Security in permanent global form
that is either a Bearer Debt Security or exchangeable for Bearer Debt
Securities) shall be mailed or otherwise delivered to any location in the
United States (as defined under "--Limitations on Issuance of Bearer Debt
Securities") and a Bearer Debt Security may be delivered outside the United
States in definitive form in connection with its original issuance only if
prior to delivery the person entitled to receive such Bearer Debt Security
furnishes written certification, in the form required by the Indenture, to the
effect that such Bearer Debt Security is owned by: (a) a person (purchasing for
its own account) who is not a United States person (as defined under "--
Limitations on Issuance of Bearer Debt Securities"); (b) a United States person
who (i) is a foreign branch of a United States financial institution purchasing
for its own account or for resale or (ii) acquired such Bearer Debt Security
through the foreign
9
<PAGE>
branch of a United States financial institution and who for purposes of the
certification holds such Bearer Debt Security through such financial
institution on the date of certification and, in either case, such United
States financial institution certifies to the Issuer or the distributor selling
the Bearer Debt Security within a reasonable time stating that it agrees to
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the United
States Internal Revenue Code of 1986, as amended (the "Code"), and the
regulations thereunder, or (c) a United States or foreign financial institution
for purposes of resale within the "restricted period" as defined in United
States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7). A financial
institution described in clause (c) of the preceding sentence (whether or not
also described in clauses (a) and (b)) must certify that it has not acquired
the Bearer Debt Security for purpose of resale, directly or indirectly, to a
United States person or to a person within the United States or its
possessions. In the case of a Bearer Debt Security in permanent global form,
such certification must be given in connection with notation of a beneficial
owner's interest therein in connection with the original issuance of such Debt
Security or upon exchange of a portion of a temporary global Debt Security.
Debt Securities may be presented for exchange as provided above, and
Registered Debt Securities may be presented for registration of transfer (with
the form of transfer endorsed thereon duly executed), at the office or agency
of the Issuer maintained for such purposes and at any other office or agency
maintained for such purpose with respect to any series of Debt Securities and
referred to in the applicable Prospectus Supplement, without a service charge
and upon payment of any taxes and other governmental charges as described in
the Indenture. Such transfer or exchange will be effected upon the Issuer or
its agent, as the case may be, being satisfied with the documents of title and
identity of the person making the request.
In the event of any redemption in part, the Issuer shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on (A) if Debt Securities of the series are issued only as
Registered Debt Securities, the day of mailing of the relevant notice of
redemption and (B) if Debt Securities of the series are issued as Bearer Debt
Securities, the day of the first publication of the relevant notice of
redemption except that, if Securities of the series are also issued as
Registered Debt Securities and there is no publication, the day of mailing of
the relevant notice of redemption; (ii) register the transfer of or exchange
any Registered Debt Security, or portion thereof, called for redemption, except
the unredeemed portion of any Registered Debt Security being redeemed in part;
or (iii) exchange any Bearer Debt Security called for redemption, except to
exchange such Bearer Debt Security for a Registered Debt Security of that
series and like tenor which is simultaneously surrendered for redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and any premium) and interest on Bearer Debt Securities will
be payable, subject to any applicable laws and regulations, in the designated
currency or currency unit, at the offices of such Paying Agents ("Paying
Agents") outside the United States as the Issuer may designate from time to
time, at the option of the holder, by check or by transfer to an account
maintained by the payee with a bank located outside the United States;
provided, however, that the written certification described above under "--
Form, Exchange, Registration and Transfer" has been delivered prior to the
first actual payment of interest. Unless otherwise indicated in the applicable
Prospectus Supplement, payment of interest on Bearer Debt Securities on any
Interest Payment Date will be made only against surrender to the Paying Agent
of the coupon relating to such Interest Payment Date. No payment with respect
to any Bearer Debt Security will be made at any office or agency of the Issuer
in the United States or by check mailed to any address in the United States or
by transfer to any account maintained with a bank located in the United States,
nor shall any payments be made in respect of Bearer Debt Securities upon
presentation to the Issuer or its designated Paying Agents within the United
States. Notwithstanding the foregoing, payments of principal of (and any
premium) and interest on Bearer Debt Securities denominated and payable in U.S.
dollars will be made at the office of the Issuer's Paying Agent in the United
States, if (but only if) payment of the full amount thereof in U.S. dollars at
all offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions.
10
<PAGE>
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and any premium) and interest on Registered Debt Securities
will be made in the designated currency or currency unit at the office of such
Paying Agent or Paying Agents as the Issuer may designate from time to time,
except that at the option of the Issuer payment of any interest may be made by
check mailed to the address of the person entitled thereto as such address
shall appear in the Security Register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Debt Securities will be made to the person in whose name such
Registered Debt Security is registered at the close of business on the Regular
Record Date for such interest.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporate Trust Office of the Trustee will be designated as a Paying Agent for
the Trustee for payments with respect to Debt Securities which are issuable
solely as Registered Debt Securities, and the Issuer will maintain a Paying
Agent outside the United States for payments with respect to Debt Securities
(subject to limitations described above in the case of Bearer Debt Securities)
which are issued solely as Bearer Debt Securities, or as both Registered Debt
Securities and Bearer Debt Securities. Any Paying Agents outside the United
States and any other Paying Agents in the United States initially designated by
the Issuer for the Debt Securities will be named in an applicable Prospectus
Supplement. The Issuer may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that, if Debt Securities of a
series are issued solely as Registered Debt Securities, the Issuer will be
required to maintain a Paying Agent in each Place of Payment for such series
and, if Debt Securities of a series are issued as Bearer Securities, the Issuer
will be required to maintain (i) a Paying Agent in the United States for
principal payments with respect to any Registered Debt Securities of the series
(and for payments with respect to Bearer Debt Securities of the series in the
circumstances described above, but not otherwise), and (ii) a Paying Agent in a
Place of Payment located outside the United States where Securities of such
series and any coupons appertaining thereto may be presented and surrendered
for payment.
All moneys paid by the Issuer to a Paying Agent for the payment of principal
of and any premium or interest on any Debt Security which remain unclaimed at
the end of two years after such principal, premium or interest shall have
become due and payable will (subject to applicable escheat laws) be repaid to
the Issuer and the holder of such Debt Security or any coupon will thereafter
look only to the Issuer for payment thereof.
TEMPORARY GLOBAL SECURITIES
If so specified in the applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series which are issuable as Bearer Debt Securities
will initially be represented by one or more temporary global Debt Securities,
without interest coupons, to be deposited with a common depository in London
for the Euroclear System ("Euroclear") and CEDEL S.A. ("CEDEL") for credit to
the designated accounts. On and after the date determined as provided in any
such temporary global Debt Security and described in the applicable Prospectus
Supplement, each such temporary global Debt Security will be exchangeable for
definitive Bearer Debt Securities, definitive Registered Debt Securities or all
or a portion of a permanent global security, or any combination thereof, as
specified in the applicable Prospectus Supplement, but, unless otherwise
specified in the applicable Prospectus Supplement, only upon written
certification in the form and to the effect described under "--Form, Exchange,
Registration and Transfer." No Bearer Debt Security delivered in exchange for a
portion of a temporary global Debt Security will be mailed or otherwise
delivered to any location in the United States in connection with such
exchange.
Unless otherwise specified in the applicable Prospectus Supplement, interest
in respect of any portion of a temporary global Debt Security payable in
respect of an Interest Payment Date occurring prior to the issuance of
definitive Debt Securities or a permanent global Subordinated Debt Security
will be paid to each of Euroclear and CEDEL with respect to the portion of the
temporary global Debt Security held for its
11
<PAGE>
account. Each of Euroclear and CEDEL will undertake in such circumstances to
credit such interest received by it in respect of a temporary global Debt
Security to the respective accounts for which it holds such temporary global
Debt Security only upon receipt in each case of written certification in the
form and to the effect described above under "--Form, Exchange, Registration
and Transfer" as of the relevant Interest Payment Date regarding the portion of
such temporary global Debt Security on which interest is to be so credited.
PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent global form, the
applicable Prospectus Supplement will describe the circumstances, if any, under
which beneficial owners of interests in any such permanent global Debt
Securities may exchange such interests for Debt Securities of such series and
of like tenor and principal amount in any authorized form and denomination. No
Bearer Debt Security delivered in exchange for a portion of a permanent global
Debt Security shall be mailed or otherwise delivered to any location in the
United States in connection with such exchange.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the form
of one or more Global Securities that will be deposited with, or on behalf of,
a Depositary ("Depositary") or its nominee identified in the applicable
Prospectus Supplement. In such a case, one or more Global Securities will be
issued in a denomination or aggregate denominations equal to the portion of the
aggregate principal amount of Outstanding Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by
the Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any nominee to a successor Depositary or a
nominee of such successor Depositary and except in the circumstances described
in the applicable Prospectus Supplement. (Sections 2.4 and 3.5).
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. The Issuer expects that the
following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary or its nominee. Upon the issuance of
such Global Security, and the deposit of such Global Security with or on behalf
of the Depositary for such Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Issuer. Ownership of beneficial
interest in such Global Security will be limited to participants or Persons
that may hold interests through participants. Ownership of beneficial interests
by participants in such Global Security will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by
the Depositary or its nominee for such Global Security. Ownership of beneficial
interests in such Global Security by Persons that hold through participants
will be shown on, and the transfer of that ownership interest within such
participant will be effected only through, records maintained by such
participant. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated form. The
foregoing limitations and such laws may impair the ability to transfer
beneficial interests in such Global Securities.
12
<PAGE>
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Securities
represented by such Global Security for all purposes under the applicable
Indenture. Unless otherwise specified in the applicable Prospectus Supplement,
owners of beneficial interests in such Global Security will not be entitled to
have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certificated form and will not
be considered the Holders thereof for any purposes under the applicable
Indenture (Sections 2.4 and 3.5). Accordingly, each Person owning a beneficial
interest in such Global Security must rely on the procedures of the Depositary
and, if such Person is not a participant, on the procedures of the participant
through which such Person owns its interest, to exercise any rights of a
Holder under the applicable Indenture. The Issuer understands that under
existing industry practices, if the Issuer requests any action of Holders or
an owner of a beneficial interest in such Global Security desires to give any
notice or take any action a Holder is entitled to give or take under an
Indenture, the Depositary would authorize the participants to give such notice
or take such action, and participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Debt Securities (including securities in permanent global form that are either
Bearer Debt Securities or exchangeable for Bearer Debt Securities) will not be
offered or sold during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)) (generally, the first 40
days after the closing date, and, with respect to unsold allotments, until
sold) within the United States or to United States persons (each as defined
below) other than to an office located outside the United States of a United
States financial institution (as defined in Section 1.165-12(c)(1)(v) of the
United States Treasury Regulations), purchasing for its own account or for
resale or for the account of certain customers, that provides a certificate
stating that it agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Code and the United States Treasury
Regulations thereunder, or to certain other persons described in Section
1.163-5(c)(2)(i)(D)(1)(iii)(B) of the United States Treasury Regulations.
Moreover, such Bearer Debt Securities will not be delivered in connection with
their sale during the restricted period within the United States. Any
underwriters and dealers participating in the offering of Bearer Debt
Securities must covenant that they will not offer or sell during the
restricted period any Bearer Debt Securities within the United States or to
United States persons (other than the persons described above) or deliver in
connection with the sale of Bearer Debt Securities during the restricted
period any Bearer Debt Securities within the United States and that they have
in effect procedures reasonably designed to ensure that their employees and
agents who are directly engaged in selling the Bearer Debt Securities are
aware of the restrictions described above. No Bearer Debt Security (other than
a temporary global Bearer Debt Security) will be delivered in connection with
its original issuance nor will interest be paid on any Bearer Debt Security
until receipt by the Issuer of the written certification described above under
"--Form, Exchange, Registration and Transfer." Each Bearer Debt Security,
other than a temporary global Bearer Debt Security, will bear a legend to the
following effect: "Any United States person who holds this obligation will be
subject to limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue
Code."
As used herein, "United States person" means any citizen or resident of the
United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States and any estate or trust
the income of which is subject to United States federal income taxation
regardless of its source, and "United States" means the United States of
America (including the states and the District of Columbia) and its
possessions.
13
<PAGE>
CERTAIN COVENANTS OF THE COMPANY
If so indicated in the applicable Prospectus Supplement with respect to a
particular series of Debt Securities, the Company will be subject to either or
both of the following covenants.
Restrictions on Secured Debt.
If the Company or any Restricted Subsidiary shall incur, issue, assume, or
guarantee any loans, whether or not evidenced by any evidence of indebtedness,
for money borrowed ("Debt") secured by a mortgage, pledge, or lien ("Mortgage")
on any Principal Property of the Company or any Restricted Subsidiary, or on
any share of stock or Debt of any Restricted Subsidiary, the Company will
secure or cause such Restricted Subsidiary to secure any Debt Securities to
which this covenant is applicable equally and ratably with (or, at the
Company's option, prior to) such secured Debt, unless the aggregate amount of
all such secured Debt, together with all Attributable Debt of the Company and
its Restricted Subsidiaries with respect to sale and leaseback transactions
involving Principal Properties (with the exception of such transactions which
are excluded as described in "Restrictions on Sales and Leasebacks" below),
would not exceed 10 percent of Consolidated Net Tangible Assets.
The above restriction does not apply to, and there will be excluded from
secured Debt in any computation under such restriction, Debt secured by (i)
Mortgages on property of, or on any shares of stock of or Debt of, any
corporation existing at the dates of the respective Indentures or at the time
such corporation becomes a Restricted Subsidiary; (ii) Mortgages in favor of
the Company or a Restricted Subsidiary;(iii) Mortgages in favor of governmental
bodies to secure progress, advance or certain other payments;(iv) Mortgages on
property, assets, shares of stock or Debt existing at the time of acquisition
thereof (including acquisition through merger or consolidation), and purchase
money and construction Mortgages which are entered into within 180 days after
the acquisition or construction; (v) Mortgages securing industrial revenue or
pollution control bonds; (vi) Mortgages created in connection with a project
financed with, and created to secure, a Nonrecourse Obligation; and (vii) any
extension, renewal, or refunding of any Mortgage referred to in the foregoing
clauses (i) through (vi) inclusive (Section 10.8). In addition, the above
restriction does not apply to, and there will be excluded from secured Debt in
any corporation under such restriction, the sale or other transfer of the
following: (i) minerals in place for a period of time until, or in an amount
such that, the purchaser will realize therefrom a specified amount of money
(however determined) or a specified amount of such minerals, or (ii) any other
interest in property of the character commonly referred to as a "production
payment."
Restrictions on Sales and Leasebacks.
Neither the Company nor any Restricted Subsidiary may enter into any sale and
leaseback transaction involving any Principal Property, unless the aggregate
amount of all Attributable Debt of the Company and its Restricted Subsidiaries
with respect to all such transactions plus all secured Debt (with the exception
of secured Debt which is excluded as described in "Restrictions on Secured
Debt" above) would not exceed 10 percent of Consolidated Net Tangible Assets.
This restriction does not apply to, and there will be excluded from
Attributable Debt in any computation under such restriction, any sale and
leaseback transaction if (i) the lease is for a period, including renewal
rights, not in excess of three years; (ii) the sale or transfer of the
Principal Property is made within 180 days after its acquisition or
construction; (iii) the lease secures or relates to industrial revenue or
pollution control bonds; (iv) the transaction is between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries; (v) the lease payment
obligation is created in connection with a project financed with, and such
obligation constitutes, a Nonrecourse Obligation; or (vi) the Company or such
Restricted Subsidiary, within 180 days after the sale is completed, applies to
the retirement of Funded Debt of the Company or a Restricted Subsidiary, or to
the purchase of other property which will constitute Principal Property of a
value at least equal to the value of the Principal Property leased, an amount
not less than the greater of (a) the net proceeds of the sale of the Principal
Property leased or (b) the fair market value of the Principal Property leased.
The
14
<PAGE>
amount to be applied to the retirement of Funded Debt shall be reduced by (x)
the principal amount of any debentures or notes (including the Debt Securities)
of the Company or a Restricted Subsidiary surrendered within 180 days after
such sale to the applicable trustee for retirement and cancellation and (y) the
principal amount of Funded Debt, other than items referred to in the preceding
clause (x), voluntarily retired by the Company or a Restricted Subsidiary
within 180 days after such sale (Section 10.9).
Certain Definitions Applicable to Covenants.
"Attributable Debt" is defined to mean the total net amount of rent required
to be paid during the remaining primary term of any particular lease under
which any person is at the time liable, discounted at the rate of 10 1/8% per
annum (Section 1.1).
"Consolidated Net Tangible Assets" is defined to mean the aggregate amount of
assets (less applicable reserves and other properly deductible items) after
deducting (1) all liabilities, other than deferred income taxes and Funded
Debt, and (2) all goodwill, trade names, trademarks, patents, organization
expenses, and other like intangibles of the Company and its consolidated
subsidiaries (Section 1.1).
"Funded Debt" is defined as (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 extendable beyond 12 months from such date at the option of the borrower and
(ii) rental obligations payable more than 12 months from such date under leases
which are capitalized in accordance with generally accepted accounting
principles (Section 1.1).
"Nonrecourse Obligation" is defined to mean indebtedness or lease payment
obligations substantially related to (i) the acquisition of assets not owned as
of December 31, 1993 by the Company or any of its Restricted Subsidiaries or
(ii) the financing of a project involving the development of properties of the
Company or any of its Restricted Subsidiaries, as to which the obligee with
respect to such indebtedness or obligation has no recourse to the general
corporate funds or the assets, in general, of the Company or any of its
Restricted Subsidiaries (Section 10.8).
"Principal Property" is defined to mean any mine, mill, converting plant,
manufacturing plant, or other facility owned by the Company or any Restricted
Subsidiary of the Company which is located within the present 50 states of the
United States and the gross book value of which (without deduction of any
depreciation reserves) on the date as of which the determination is being made
exceeds 2.5 percent of Consolidated Net Tangible Assets, other than properties
or any portion of a particular property which in the opinion of the Board of
Directors is not of material importance to the Company's business (Section
1.1).
"Restricted Subsidiary" is defined to mean a Subsidiary of the Company
substantially all the property of which is located, or substantially all of the
business of which is carried on, within the present 50 states of the United
States and which owns a Principal Property, excluding however a Subsidiary of
the Company which is primarily engaged in the development and sale or financing
of real property (Section 1.1).
"Subsidiary" of the Company is defined to mean a corporation more than 50
percent of the voting stock of which is, directly or indirectly, owned by the
Company, one or more Subsidiaries of the Company, or the Company and one or
more Subsidiaries (Section 1.1).
EVENTS OF DEFAULT
The following are Events of Default under the Indentures with respect to Debt
Securities of any series: (a) failure to pay principal of or premium, if any,
on any Debt Security of that series when due; (b) failure to pay any interest
on any Debt Security of that series when due, continued for 30 days; (c)
failure to make any sinking fund payment, when due, in respect of any Debt
Security of that series; (d) failure to perform any other covenant of the
Company in the applicable Indenture (other than a covenant included in such
Indenture
15
<PAGE>
solely for the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the respective
Indentures; (e) failure to pay at the final maturity thereof the principal of,
or acceleration of, any indebtedness for money borrowed by the Issuer in
excess of $20 million, if such indebtedness is not discharged, or such
acceleration is not annulled, as provided in the respective Indentures; (f)
certain events of bankruptcy, insolvency or reorganization; and (g) any other
Event of Default provided with respect to Debt Securities of that series
(Section 5.1).
If an Event of Default with respect to Outstanding Debt Securities of any
series shall occur and be continuing, either the Trustee or the Holders of at
least 25% in principal amount of the Outstanding Debt Securities of that
series by notice as provided in the respective Indentures may declare the
principal amount (or, if the Debt Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of that series) of all Debt Securities of that series to be due
and payable immediately. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been made, but
before a judgment or decree based on such acceleration has been obtained, the
Holders of a majority in principal amount of the Outstanding Debt Securities
of that series may, under certain circumstances, rescind and annul such
acceleration (Section 5.2). For information as to waiver or defaults, see
"Modification and Waiver" below.
The Indentures provide that, subject to the duty of the respective Trustees
thereunder during an Event of Default to act with the required standard of
care, such Trustee will be under no obligation to exercise any of its rights
or powers under the respective Indentures at the request or direction of any
of the Holders, unless such Holders shall have offered to such Trustee
reasonable security or indemnity. (Sections 6.1 and 6.3) Subject to certain
provisions, including those requiring security or indemnification of the
Trustees, the Holders of a majority in principal amount of the Outstanding
Debt Securities of any series will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
applicable Trustee, or exercising any trust or power conferred on such
Trustee, with respect to the Debt Securities of that series (Section 5.12).
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the applicable Indenture or for any remedy
thereunder, unless such Holder shall have previously given to the applicable
Trustee written notice of a continuing Event of Default (as defined) and
unless also the Holders of at least 25 percent in aggregate principal amount
of the outstanding Debt Securities of the same series shall have made written
request, and offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the outstanding Debt
Securities of the same series a direction inconsistent with such request and
shall have failed to institute such proceeding within 60 days (Section 5.7).
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for enforcement of payment of the principal of and interest on
such Debt Security on or after the respective due dates expressed in such Debt
Security (Section 5.8).
The Issuer will be required to furnish to the Trustees annually a statement
as to the performance by the Issuer of its obligations under the respective
Indentures and as to any default in such performance(Section 10.4).
MODIFICATION AND WAIVER
Modifications and amendments of the respective Indentures may be made by the
Issuer and the Trustee with the consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Debt Securities of
each series affected thereby; provided, however, that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby: (a) change the Stated Maturity of the principal of,
or any installment of principal of, or interest on, any Debt Security; (b)
reduce the principal amount of, the rate of interest on, or the premium, if
any, payable upon the redemption of, any Debt Security; (c) reduce the amount
of principal of an Original Issue Discount Security payable upon acceleration
of the Maturity thereof; (d) change the place or currency of payment of
principal
16
<PAGE>
of, or premium, if any, or interest on any Debt Security; (e) impair the right
to institute suit for the enforcement of any payment on or with respect to any
Debt Security on or after the Stated Maturity or Redemption Date thereof; or
(f) reduce the percentage in principal amount of Outstanding Debt Securities of
any series, the consent of the Holders of which is required for modification or
amendment of the applicable Indenture or for waiver of compliance with certain
provisions of the applicable Indenture or for waiver of certain defaults
(Section 9.2).
The Holders of at least a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may on behalf of the Holders of all
Debt Securities of that series waive, insofar as that series is concerned,
compliance by the Company with certain covenants of the applicable Indenture
(Section 10.10). The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series may, on behalf of the Holders of
all Debt Securities of that series, waive any past default under the applicable
Indenture with respect to that series, except a default in the payment of the
principal of, or premium, if any, or interest on, any Debt Security of that
series or in respect of a provision which under the applicable Indenture cannot
be modified or amended without the consent of the Holder of each Outstanding
Debt Security of that series affected (Section 5.13).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Issuer, without the consent of any Holders of Outstanding Debt
Securities, may consolidate with or merge into, or transfer or lease its assets
substantially as an entirety to, any Person, and any other Person may
consolidate with or merge into, or transfer or lease its assets substantially
as an entirety to, the Issuer, provided (a) that the Person (if other than the
Issuer) formed by such consolidation or into which the Issuer is merged or
which acquires or leases the assets of the Company substantially as an entirety
is a Person organized and existing under the laws of any United States
jurisdiction and assumes the Issuer's obligations on the Debt Securities and
under the respective Indentures, (b) that 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, and (c) that certain other conditions are met (Article Eight).
DEFEASANCE
If so indicated in the applicable Prospectus Supplement with respect to the
Debt Securities of a series, the Issuer, at its option, (i) will be discharged
from any and all obligations in respect of the Debt Securities of such series
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace destroyed, stolen, lost or mutilated Debt
Securities of such series, and to maintain an office or agency in respect of
the Debt Securities and hold moneys for payment in trust) or (ii) will be
released from its obligations to comply with the covenants that are specified
under "Certain Covenants of the Company" above with respect to the Debt
Securities of such series and the occurrence of an event described in clause
(d) under "Events of Default" above with respect to any defeased covenant and
clauses (e) and (g) of the "Events of Default" above shall no longer be an
Event of Default if, in either case, the Issuer irrevocably deposits with the
Trustee, in trust, money or U.S. Government Obligations that through the
payment of interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay all the principal of
(and premium, if any) and any interest on the Debt Securities of such series on
the dates such payments are due (which may include one or more redemption dates
designated by the Issuer) in accordance with the terms of such Debt Securities.
Such a trust may only be established if, among other things, (a) no Event of
Default or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under the applicable Indenture shall have
occurred and be continuing on the date of such deposit, (b) no Event of Default
described under clause (f) under "Events of Default" above or event which with
the giving of notice or lapse of time, or both, would become an Event of
Default described under such clause (f) shall have occurred and be continuing
at any time during the period ending on the 91st day following such date of
deposit, and (c) the Issuer shall have delivered an Opinion of Counsel to the
effect that the Holders of the Debt Securities will not recognize gain or loss
for United States Federal income tax purposes as a result of such deposit or
defeasance and will be subject to United States Federal income tax in
17
<PAGE>
the same manner as if such defeasance had not occurred. In the event the Issuer
omits to comply with its remaining obligations under the applicable Indenture
after a defeasance of such Indenture with respect to the Debt Securities of any
series as described under clause (ii) above and the Debt Securities of such
series are declared due and payable because of the occurrence of any undefeased
Event of Default, the amount of money and U.S. Government Obligations on
deposit with the Trustee may be insufficient to pay amounts due on the Debt
Securities of such series at the time of the acceleration resulting from such
Event of Default. However, the Company will remain liable in respect of such
payments (Article Thirteen).
Notwithstanding the description set forth under "Subordination of Senior
Subordinated Securities, Subordinated Securities and Guarantees" above, in the
event that the Company deposits money or U.S. Government Obligations in
compliance with such Senior Subordinated Indenture or the Indenture in order to
defease all or certain of its obligations with respect to any Senior
Subordinated Securities or Subordinated Securities, the moneys or U.S.
Government Obligations so deposited will not be subject to the subordination
provisions of such Indenture and the indebtedness evidenced by such Securities
will not be subordinated in right of payment to the holders of Senior
Indebtedness to the extent of the moneys or U.S. Government Obligations so
deposited.
NOTICES
Except as otherwise provided in the Indenture, notices to holders of Bearer
Debt Securities will be given by publication at least twice in a daily
newspaper in the City of New York and London or other capital city in Western
Europe and in such other city or cities as may be specified in such Securities.
Notices to holders of Registered Debt Securities will be given by mail to the
addresses of such holders as they appear in the Security Register.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York (Section 1.12).
REGARDING THE TRUSTEE
The Indentures contain certain limitations on the right of the Trustee,
should it become a creditor of the Issuer, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received
in respect of any such claim as security or otherwise (Section 6.13). The
Trustee will be permitted to engage in certain other transactions; however, if
it acquires any conflicting interest and there in a default under the Debt
Securities, it must eliminate such conflict or resign (Section 6.8).
18
<PAGE>
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock
will be described in the applicable Prospectus Supplement. If so indicated in
a Prospectus Supplement, the terms of any such series may differ from the
terms set forth below. Certain provisions applicable to the Preferred Stock
are set forth below in "Description of Common Stock."
The summary of terms of the Company's preferred stock (including the
Preferred Stock) contained in this Prospectus does not purport to be complete
and is subject to, and qualified in its entirety by, the provisions of the
Company's Certificate of Incorporation and the certificate of designations
relating to each series of the Preferred Stock (the "Certificate of
Designations"), which will be filed as an exhibit to or incorporated by
reference in the Registration Statement of which this Prospectus is a part at
or prior to the time of issuance of such series of the Preferred Stock.
The Company's Certificate of Incorporation authorizes the issuance of
20,000,000 shares of preferred stock, par value of $1.00 per share. In the
Cyprus/Amax Merger 4,666,653 shares of Series A Convertible Preferred Stock
were issued and are currently outstanding, and the Company has reserved for
issuance 500,000 shares of its Series A Junior Participating Preferred Stock
issuable pursuant to the Rights Plan. A description of the Series A
Convertible Preferred Stock and the Series A Junior Participating Preferred
Stock has been incorporated by reference herein. The Company's preferred stock
may be issued from time to time in one or more series, without stockholder
approval. Subject to limitations prescribed by law, the Board of Directors is
authorized to determine the voting powers (if any), designation, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, for each series of
preferred stock that may be issued, and to fix the number of shares of each
such series. Thus, the Board of Directors, without stockholder approval, could
authorize the issuance of preferred stock with voting, conversion and other
rights that could adversely affect the voting power and other rights of
holders of Common Stock or other series of preferred stock or that could have
the effect of delaying, deferring or preventing a change in control of the
Company. See "Description of Common Stock" herein.
The Preferred Stock shall have the dividend, liquidation, redemption, voting
and other rights set forth below unless otherwise provided in a Prospectus
Supplement relating to a particular series of the Preferred Stock. The
applicable Prospectus Supplement will describe the following terms of the
series of Preferred Stock in respect of which this Prospectus is being
delivered: (1) the designation and stated value per share of such Preferred
Stock and the number of shares offered; (2) the amount of liquidation
preference per share; (3) the initial public offering price at which such
Preferred Stock will be issued; (4) the dividend rate (or method of
calculation), the dates on which dividends shall be payable and the dates from
which dividends shall commence to cumulate, if any; (5) any redemption or
sinking fund provisions; (6) any conversion or exchange rights; (7) whether
the Company has elected to offer Depositary Shares as described below under
"Description of Depositary Shares"; and (8) any additional voting, dividend,
liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations and restrictions.
GENERAL
The Preferred Stock offered hereby will be issued in one or more series. The
holders of Preferred Stock will have no preemptive rights. Preferred Stock,
upon issuance against full payment of the purchase price therefor, will be
fully paid and nonassessable. Neither the par value nor the liquidation
preference is indicative of the price at which the Preferred Stock will
actually trade on or after the date of issuance. The applicable Prospectus
Supplement will contain a description of certain United States Federal income
tax consequences relating to the purchase and ownership of the series of
Preferred Stock offered by such Prospectus Supplement.
As described under "Description of Depositary Shares," the Company may, at
its option, elect to offer depositary shares ("Depositary Shares") evidenced
by depositary receipts ("Depositary Receipts"), each representing a fractional
interest (to be specified in the Prospectus Supplement relating to the
particular series
19
<PAGE>
of the Preferred Stock) in a share of the particular series of the Preferred
Stock issued and deposited with a Depositary (as defined below).
RANK
The Preferred Stock shall, with respect to dividend rights and rights on
liquidation, winding up and dissolution of the Company, rank prior to the
Company's Common Stock and to all other classes and series of equity securities
of the Company now or hereafter authorized, issued or outstanding (the Common
Stock and such other classes and series of equity securities collectively may
be referred to herein as the "Junior Stock"), other than any classes or series
of equity securities of the Company ranking on a parity with (the "Parity
Stock") or senior to (the "Senior Stock") the Preferred Stock as to dividend
rights and rights upon liquidation, winding up or dissolution of the Company.
The Preferred Stock shall be junior to all outstanding debt of the Company. The
Preferred Stock shall be subject to creation of Senior Stock, Parity Stock and
Junior Stock to the extent not expressly prohibited by the Company's
Certificate of Incorporation.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds of the Company legally
available for payment, cash dividends, payable at such dates and at such rates
per share per annum as set forth in the applicable Prospectus Supplement. Such
rate may be fixed or variable or both. Each declared dividend shall be payable
to holders of record as they appear at the close of business on the stock books
of the Company (or, if applicable, on the records of the Depositary (as
hereinafter defined) referred to below under "Description of Depositary
Shares") on such record dates, not more than 60 calendar days preceding the
payment dates therefor, as are determined by the Board of Directors (each of
such dates, a "Record Date").
Such dividends may be cumulative or noncumulative, as provided in the
Prospectus Supplement. If dividends on a series of Preferred Stock are
noncumulative and if the Board of Directors fails to declare a dividend in
respect of a dividend period with respect to such series, then holders of such
Preferred Stock will have no right to receive a dividend in respect of such
dividend period, and the Company will have no obligation to pay the dividend
for such period, whether or not dividends are declared payable on any future
Dividend Payment Dates. Dividends on the shares of each series of Preferred
Stock for which dividends are cumulative will accrue from the date on which the
Company initially issues shares of such series.
No full dividends shall be declared or paid or set apart for payment on
preferred stock of the Company of any series ranking, as to dividends, on a
parity with or junior to the series of Preferred Stock offered by the
Prospectus Supplement attached hereto for any period unless full dividends for
the immediately preceding dividend period on such Preferred Stock (including
any accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such Preferred Stock are cumulative) have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for such payment. When dividends are not so
paid in full (or a sum sufficient for such full payment is not so set apart)
upon such Preferred Stock and any other preferred stock of the Company ranking
on a parity as to dividends with the Preferred Stock, dividends upon shares of
such Preferred Stock and dividends on such other preferred stock shall be
declared pro rata so that the amount of dividends declared per share on such
Preferred Stock and such other preferred stock shall in all cases bear to each
other the same ratio that accrued dividends for the then-current dividend
period per share on the shares of such Preferred Stock (including any
accumulation in respect of unpaid dividends for prior dividend periods, if
dividends on such Preferred Stock are cumulative) and accrued dividends,
including required or permitted accumulations, if any, on shares of such other
preferred stock, bear to each other. Unless full dividends on the series of
Preferred Stock offered by the Prospectus Supplement attached hereto have been
declared and paid or set apart for payment for the immediately preceding
dividend period (including any accumulation in respect of unpaid dividends for
prior dividend periods, if dividends on such Preferred Stock are cumulative)
(a) no cash dividend or distribution (other than in shares of Junior Stock) may
be declared, set aside or paid on the Junior Stock, (b) the Company
20
<PAGE>
may not repurchase, redeem or otherwise acquire any shares of its Junior Stock
(except by conversion into or exchange for Junior Stock) and (c) the Company
may not, directly or indirectly, repurchase, redeem or otherwise acquire any
shares of Preferred Stock or Parity Stock otherwise than pursuant to certain
pro rata offers to purchase or a concurrent redemption of all, or a pro rata
portion, of the outstanding shares of such Preferred Stock and Parity Stock
(except by conversion into or exchange for Junior Stock). The Company does not
currently have outstanding any Parity Stock.
CONVERTIBILITY
The terms, if any, on which shares of Preferred Stock of any series may be
exchanged for or converted (mandatorily or otherwise) into shares of Common
Stock of the Company or another corporation or another series of Preferred
Stock or other securities of the Company or another corporation will be set
forth in the Prospectus Supplement relating thereto. See "Description of Common
Stock."
REDEMPTION
The terms, if any, on which shares of Preferred Stock of any series may be
redeemed will be set forth in the related Prospectus Supplement.
LIQUIDATION
Unless otherwise specified in the applicable Prospectus Supplement, in the
event of a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, the holders of a series of Preferred Stock will be
entitled, subject to the rights of creditors, but before any distribution or
payment to the holders of Common Stock or any other security ranking junior to
the Preferred Stock on liquidation, dissolution or winding up of the Company,
to receive an amount per share as set forth in the related Prospectus
Supplement plus accrued and unpaid dividends for the then-current dividend
period (including any accumulation in respect of unpaid dividends for prior
dividend periods, if dividends on such series of Preferred Stock are
cumulative). If the amounts available for distribution with respect to the
Preferred Stock and all other outstanding stock of the Company ranking on a
parity with the Preferred Stock upon liquidation are not sufficient to satisfy
the full liquidation rights of all the outstanding Preferred Stock and stock
ranking on a parity therewith, then the holders of each series of such stock
will share ratably in any such distribution of assets in proportion to the full
respective preferential amount (which in the case of preferred stock may
include accumulated dividends) to which they are entitled. After payment of the
full amount of the liquidation preference, the holders of shares of Preferred
Stock will not be entitled to any further participation in any distribution of
assets by the Company.
VOTING
The Preferred Stock of a series will not be entitled to vote, except as
provided below or in the applicable Prospectus Supplement and as required by
applicable law. Unless otherwise specified in the related Prospectus
Supplement, at any time dividends in an amount equal to six quarterly dividend
payments on the Preferred Stock shall have accrued and be unpaid, holders of
the Preferred Stock shall have the right to a separate class vote (together
with the holders of shares of any Parity Stock upon which like voting rights
have been conferred and are exercisable, "Voting Parity Stock") to elect two
members of the Board of Directors at the next annual meeting of stockholders
and thereafter until dividends on the Preferred Stock have been paid in full
for four consecutive dividend periods, including the last preceding dividend
period. Additionally, without the affirmative vote of the holders of two-thirds
of the shares of Preferred Stock then outstanding (voting separately as a class
together with any Voting Parity Stock), the Company may not, either directly or
indirectly or through merger or consolidation with any other corporation, (i)
approve the authorization, creation or issuance, or an increase in the
authorized or issued amount, of any class or series of stock ranking prior to
the shares of Preferred Stock in rights and preferences or (ii) amend, alter or
repeal its Certificate of Incorporation or the Certificate of Designations so
as to materially and adversely change the specific terms of
21
<PAGE>
the Preferred Stock. An amendment which increases the number of authorized
shares of or authorizes the creation or issuance of other classes or series of
preferred stock ranking junior to or on a parity with the Preferred Stock with
respect to the payment of dividends or distribution of assets upon liquidation,
dissolution or winding up, or substitutes the surviving entity in a merger,
consolidation, reorganization or other business combination for the Company,
shall not be considered to be such an adverse change.
As more fully described under "Description of Depositary Shares" below, if
the Company elects to issue Depositary Shares, each representing a fraction of
a share of a series of the Preferred Stock, each such Depositary Share will, in
effect, be entitled to such fraction of a vote per Depositary Share.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the related Prospectus Supplement, the
Certificate of Incorporation and in the certificate of designations or as
otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be described in
the related Prospectus Supplement.
22
<PAGE>
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject
to and qualified in its entirety by reference to the forms of Deposit Agreement
and Depositary Receipts relating to each series of the Preferred Stock which
have been or will be filed with the Commission at or prior to the time of the
offering of such series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in shares
of Preferred Stock, rather than shares of Preferred Stock. In the event such
option is exercised, the Company will provide for the issuance by a Depositary
to the public of receipts for Depositary Shares, each of which will represent a
fractional interest (to be set forth in the Prospectus Supplement relating to a
particular series of the Preferred Stock which will be filed with the
Commission at or prior to the time of the offering of such series of the
Preferred Stock as described below).
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name
and address of the Depositary. Subject to the terms of the Deposit Agreement,
each owner of a Depositary Share will be entitled, in proportion to the
applicable fractional interest in a share of Preferred Stock underlying such
Depositary Shares, to all the rights and preferences of the Preferred Stock
underlying such Depositary Share (including dividend, voting, redemption,
conversion and liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to all the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will
be exchangeable for definitive Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to
the terms thereof, a holder of Depositary Shares is entitled to have the
Depositary deliver to such holder the whole shares of Preferred Stock
underlying the Depositary Shares evidenced by the surrendered Depositary
Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash distributions
received in respect of the Preferred Stock to the record holders of Depositary
Shares relating to such Preferred Stock in proportion to the numbers of such
Depositary Shares owned by such holders on the relevant record date. The
Depositary shall distribute only such amount, however, as can be distributed
without attributing to any holder of Depositary Shares a fraction of one cent,
and any balance not so distributed shall be added to and treated as part of the
next sum received by the Depositary for distribution to record holders of
Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
23
<PAGE>
The Deposit Agreement will also contain provisions relating to the manner in
which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the
proceeds received by the Depositary resulting from the redemption, in whole or
in part, of such series of the Preferred Stock held by the Depositary. The
Depositary shall mail notice of redemption not less than 30 and not more than
60 days prior to the date fixed for redemption to the record holders of the
Depositary Shares to be so redeemed at their respective addresses appearing in
the Depositary's books. The redemption price per Depositary Share will be
equal to the applicable fraction of the redemption price per share payable
with respect to such series of the Preferred Stock. Whenever the Company
redeems shares of Preferred Stock held by the Depositary, the Depositary will
redeem as of the same redemption date the number of Depositary Shares relating
to shares of Preferred Stock so redeemed. If less than all of the Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed will be
selected by lot or pro rata as may be determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which
the holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Stock underlying such holder's Depositary Shares. The Depositary will
endeavor, insofar as practicable, to vote the number of shares of Preferred
Stock underlying such Depositary Shares in accordance with such instructions,
and the Company will agree to take all action which may be deemed necessary by
the Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares relating
to such Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which
materially and adversely alters the rights of the existing holders of
Depositary Shares will not be effective unless such amendment has been
approved by the record holders of at least a majority of the Depositary Shares
then outstanding. A Deposit Agreement may be terminated by the Company or the
Depositary only if (i) all outstanding Depositary Shares relating thereto have
been redeemed or (ii) there has been a final distribution in respect of the
Preferred Stock of the relevant series in connection with any liquidation,
dissolution or winding up of the Company and such distribution has been
distributed to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection
24
<PAGE>
with the initial deposit of the Preferred Stock and any redemption of the
Preferred Stock. Holders of Depositary Shares will pay other transfer and other
taxes and governmental charges and such other charges as are expressly provided
in the Deposit Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
25
<PAGE>
DESCRIPTION OF COMMON STOCK
The Company's Certificate of Incorporation authorizes the issuance of
150,000,000 shares of common stock, without par value ("Common Stock"). A
description of the Company's Preferred Share Purchase Rights, which are
attached to and trade with the Common Stock, is incorporated by reference
herein.
The holders of Common Stock are entitled to receive dividends when and as
declared by the Board of Directors of the Company out of funds legally
available therefor, provided that if any shares of preferred stock are at the
time outstanding, the payment of dividends on Common Stock or other
distributions (including purchases of Common Stock) may be subject to the
declaration and payment of full cumulative dividends, and the absence of
arrearages in any mandatory sinking fund, on outstanding shares of preferred
stock.
The holders of Common Stock are entitled to one vote for each share of all
matters voted on by stockholders, including elections of directors. The
holders of Common Stock do not have any conversion, redemption or preemptive
rights. In the event of the dissolution, liquidation or winding up of the
Company, holders of Common Stock are entitled to share ratably in any assets
remaining after the satisfaction in full of the prior rights of creditors,
including holders of the Company's indebtedness, and the aggregate liquidation
preference of any preferred stock then outstanding.
All outstanding shares of Common Stock are, and the shares offered hereby,
upon issuance, will be, fully paid and non-assessable.
Under the Certificate of Incorporation and By-Laws of the Company, the Board
of Directors is classified into three classes of members with staggered terms.
Action can be taken by stockholders only at an annual or special meeting,
action by written consent by stockholders being prohibited. No business may be
proposed by a stockholder at the annual meeting of stockholders without giving
written notice to the Company at least 90 days prior to the anniversary date
of the previous annual meeting. No nominations for director positions may be
proposed by a stockholder at any annual or special meeting of stockholders
without giving written notice to the Company at least 90 days before the
anniversary date of the previous annual meeting or within 10 days after notice
of a special meeting is mailed to Cyprus. A special meeting can be called by
the Board of Directors, the Chairman of the Board, the President or holders of
at least 50 percent of the shares entitled to vote at such meeting. Directors
can be removed only with cause by the vote of holders of at least 75 percent
of outstanding shares of Common Stock.
Certain "business combinations" (as defined) involving "interested
stockholders" (defined generally to be holders of 10 percent or more of Common
Stock) require approval by vote of holders of at least 75 percent of shares
eligible to vote if not previously approved by a majority of the disinterested
members of the Board of Directors unless certain minimum price criteria and
procedural requirements are satisfied. In a business combination involving
cash or other consideration being paid to the Company's stockholders, the
consideration would be required to be either cash or the same type of
consideration used by the interested stockholder in acquiring the largest
portion of its shares prior to the first public announcement of the terms of
the proposed business combination. In the case of payments to holders of
Common Stock, the per share fair market value of such payments would generally
have to be at least equal in value to the higher of (i) the highest per share
price paid by the interested stockholder in acquiring any share of Common
Stock during the two years prior to such announcement date (although not an
interested stockholder at the time of any such acquisitions) or in the
transaction in which it became an interested stockholder (whichever is higher)
or (ii) the fair market value per share of Common Stock on such announcement
date or on the date on which the interested stockholder became an interested
stockholder, whichever is higher, in either case appropriately adjusted for
any stock dividend, stock split or combination of shares. Unless a business
combination is approved by a majority of disinterested directors, it would be
subject to the 75 percent stockholder vote requirement, even if it satisfied
the minimum price criteria, if the interested stockholder acquired any
additional shares of Common Stock, directly from the Company or otherwise, in
any transaction subsequent to the transaction pursuant to which it became an
interested stockholder. The Certificate of Incorporation also contains an
"anti-greenmail" provision
26
<PAGE>
prohibiting certain purchases of shares by the Company from "interested
stockholders" without a majority vote of disinterested stockholders. These
provisions could limit stockholders' participation in certain types of
business combinations or other transactions that might be proposed in the
future whether or not such transactions were favored by a majority of
stockholders and could enhance the ability of officers and directors to retain
their positions. Because no more than one-third of the directors are to be
elected at each annual meeting, action would be required at two annual
meetings to change a majority of the Board members, even by holders of a
majority of shares who believe a change may be beneficial.
The transfer agent for the Common Stock is Society National Bank, One Park
Central, 1515 Arapahoe Street, Suite 1505, Denver, Colorado 80202.
27
<PAGE>
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), as well as other types of Warrants. Warrants may
be issued independently or together with any Debt Securities and may be
attached to or separate from such Debt Securities. Each series of Warrants will
be issued under a separate warrant agreement (each a "Warrant Agreement") to be
entered into between the Company and a warrant agent ("Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in connection with the
Warrants of such series and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of Warrants. The
following sets forth certain general terms and provisions of the Warrants
offered hereby. Further terms of the Warrants and the applicable Warrant
Agreement are set forth in the applicable Prospectus Supplement or Pricing
Supplement.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the following terms of the
Debt Warrants in respect of which this Prospectus is being delivered: (1) the
title of such Debt Warrants; (2) the aggregate number of such Debt Warrants;
(3) the price or prices at which such Debt Warrants will be issued; (4) the
currency or currencies, including composite currencies, in which the price of
such Debt Warrants may be payable; (5) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise of such Debt
Warrants; (6) if applicable, the designation and terms of the Debt Securities
with which such Debt Warrants are issued and the number of such Debt Warrants
issued with each such Debt Security; (7) the currency or currencies, including
composite currencies, in which the principal of or any premium or interest on
the Debt Securities purchasable upon exercise of such Debt Warrant will be
payable; (8) if applicable, the date on and after which such Debt Warrants and
the related Debt Securities will be separately transferable; (9) the price at
which and the currency or currencies, including composite currencies, in which
the Debt Securities purchasable upon exercise of such Debt Warrants may be
purchased; (10) the date on which the right to exercise such Debt Warrants
shall commence and the date on which such right shall expire; (11) if
applicable, the minimum or maximum amount of such Debt Warrants which may be
exercised at any one time; (12) information with respect to book-entry
procedures, if any; (13) if applicable, a discussion of certain United States
Federal income tax considerations; and (14) any other terms of such Debt
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Debt Warrants.
OTHER WARRANTS
The Company may issue other Warrants. The applicable Prospectus Supplement
will describe the following terms of any such other Warrants in respect of
which this Prospectus is being delivered: (1) the title of such Warrants; (2)
the securities (which may include Preferred Stock or Common Stock) for which
such Warrants are exercisable; (3) the price or prices at which such Warrants
will be issued; (4) the currency or currencies, including composite currencies,
in which the price of such Warrants may be payable; (5) if applicable, the
designation and terms of the Debt Securities or Preferred Stock with which such
Warrants are issued and the number of such Warrants issued with each such Debt
Security or share of Preferred Stock; (6) if applicable, the date on and after
which such Warrants and the related Debt Securities or Preferred Stock will be
separately transferable; (7) if applicable, a discussion of certain United
States Federal income tax considerations; and (8) any other terms of such
Warrants, including terms, procedures and limitations relating to the exchange
and exercise of such Warrants.
28
<PAGE>
PLAN OF DISTRIBUTION
The Company may offer Securities to or through underwriters, through agents
or directly to other purchasers. Such Underwriters or agents may include
Kidder, Peabody & Co. Incorporated ("Kidder, Peabody")
The distribution of Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, at market
prices prevailing at the time of sale, at prices related to such market prices
or at negotiated prices.
In connection with the sale of Securities, underwriters or agents may receive
compensation from the Company or from purchasers in the form of discounts,
concessions or commissions. Underwriters, agents and dealers participating in
the distribution of the Securities may be deemed to be underwriters within the
meaning of the Securities Act.
Pursuant to agreements which may be entered into between the Company and any
underwriters or agents named in the Prospectus Supplement, such underwriters or
agents may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as agents for the Company to solicit
offers by certain institutional investors to purchase Debt Securities or
Preferred Stock from the Company pursuant to contracts providing for payment
and delivery on a future date. Institutions with which such contracts may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but
shall in all cases be subject to the approval of the Company. The obligations
of the purchaser under any such contract will not be subject to any conditions
except (i) the investment in the Debt Securities or Preferred Stock by the
institution shall not at the time of delivery be prohibited by the laws of any
jurisdiction in the United States to which such institution is subject, and
(ii) if a portion of the Debt Securities or Preferred Stock is being sold to
underwriters, the Company shall have sold to such underwriters the Debt
Securities or Preferred Stock not sold for delayed delivery. Underwriters and
such other persons will not have any responsibility in respect of the validity
or performance of such contracts.
All Debt Securities, Preferred Stock and Warrants offered will be a new issue
of securities with no established trading market. Any underwriters to whom such
Debt Securities, Preferred Stock and Warrants are sold by the Company for
public offering and sale may make a market in such Debt Securities, Preferred
Stock and Warrants, but such underwriters will not be obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of or the trading markets for any Debt Securities,
Preferred Stock or Warrants.
The Company and Kidder, Peabody intend to enter into a Sales Agency Agreement
(the "Sales Agency Agreement"), a copy of the form of which is filed as an
exhibit to the Registration Statement and is incorporated by reference herein.
Subject to the terms and conditions of the Sales Agency Agreement, the Company
may issue and sell up to 4,000,000 shares of Common Stock from time to time
through Kidder, Peabody, as exclusive sales agent for the Company. Such sales,
if any, will be made by means of ordinary brokers' transactions on any national
securities exchange, including the New York Stock Exchange, on which such
shares of Common Stock are listed. Such sales will be effected during a series
of one or more pricing periods (each a "Pricing Period"), each consisting of
five consecutive calendar days in duration. During any Pricing Period, no more
than 105,000 shares ("Average Market Shares") will be sold subject to the
calculation of Net Proceeds as defined below. The aggregate number of shares of
Common Stock sold in all Pricing Periods will not exceed 4,000,000. In
addition, for each Pricing Period, an Average Market Price (as hereinafter
defined) will be computed. With respect to any Pricing Period, "Average Market
Price" shall equal the average of the arithmetic mean of the daily high and low
sale prices of the Common Stock reported on the New York Stock Exchange for
each trading day of such Pricing Period.
29
<PAGE>
The net proceeds to the Company with respect to sales of Average Market Price
Shares will equal 97.5% percent of the Average Market Price for each share of
Common Stock sold during the Pricing Period (subject to adjustment in certain
circumstances), plus Excess Proceeds (as defined below), if any. The
compensation to Kidder, Peabody for such sales in any Pricing Period will equal
the difference between the actual sale prices at which such sales are effected
and the net proceeds to the Company for such sales, but in no case will exceed
ten percent of such actual sales prices. To the extent that such actual sales
prices are less than the Average Market Price, the compensation to Kidder,
Peabody would be correspondingly reduced; to the extent that such actual sales
prices are greater than the Average Market Price, the compensation to Kidder,
Peabody will be correspondingly increased (but in no event will exceed ten
percent of the actual sales price). In the event that the average actual sales
price in any Pricing Periods equals 97.5% percent of Average Market Price (or
less) for such Pricing Period, all of the proceeds from such sales would be for
the account of the Company and no compensation would be payable to Kidder,
Peabody. To the extent that Kidder, Peabody's compensation under the foregoing
formula would otherwise exceed ten percent of the actual sales prices in any
Pricing Period, the excess over ten percent will constitute additional net
proceeds to the Company (the "Excess Proceeds").
Any shares of Common Stock sold by Kidder, Peabody during the Pricing Period
on behalf of the Company other than Average Market Price Shares ("Additional
Shares") will be at a fixed commission rate of $0.10 per share for the first
105,000 Additional Shares and $0.40 per share for any Additional Shares in
excess of 105,000. In no event will the compensation to Kidder, Peabody be in
excess of any applicable National Association of Securities Dealers, Inc.
requirements.
Settlements of sales of Additional Shares will occur on the fifth business
day following the date on which such sales are made. Settlements for sales of
Average Market Price Shares will occur on a weekly basis on each Monday (or the
next succeeding business day if such Monday is not a business day) following
the end of each Pricing Period. Purchases of Common Stock from Kidder, Peabody
for the Company will settle regular way on the national securities exchange
where such purchases were executed. Compensation to Kidder, Peabody with
respect to sales of Average Market Price Shares will be paid out of the
proceeds of such settlements. There is no arrangement for funds to be received
in an escrow, trust or similar arrangement.
At the end of each Pricing Period, the Company will file a Prospectus
Supplement under Rule 424(b)(3) promulgated under the Act, which Prospectus
Supplement will set forth the number of such shares of Common Stock sold
through Kidder, Peabody as sales agent (identifying separately the number of
Average Market Shares and any Additional Shares), the high and low prices at
which Average Market Shares were sold during such Pricing Period, the net
proceeds to the Company and the compensation payable by the Company to Kidder,
Peabody with respect to such sales pursuant to the formula set forth above.
Unless otherwise indicated in a Prospectus Supplement, Kidder, Peabody will act
on a best efforts basis.
In connection with the sale of the Common Stock on behalf of the Company,
Kidder, Peabody may be deemed to be an "underwriter" within the meaning of the
Act, and the compensation of Kidder, Peabody may be deemed to be underwriting
commissions or discounts. The Company has agreed to provide indemnification and
contribution to Kidder, Peabody against certain civil liabilities, including
liabilities under the Securities Act of 1933, as amended. Kidder, Peabody may
engage in transactions with, or perform services for, the Company in the
ordinary course of business.
The offering of Common Stock pursuant to the Sales Agency Agreement will
terminate upon the earlier (i) the sale of all 4,000,000 shares of Common Stock
subject thereto and (ii) termination of the Sales Agency Agreement. The Sales
Agency Agreement may be terminated by the Company in its sole discretion on the
date occurring 60 days after the date of the Sales Agency Agreement and every
60 days thereafter. The Company may also terminate the Sales Agency Agreement
at any time if the Company chooses to effect any offering of equity securities
of equity-related securities other than pursuant to the Sales Agency Agreement.
30
<PAGE>
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with and perform services for the Company in the
ordinary course of business.
The specific terms and manner of sale of the Securities in respect of which
this Prospectus is being delivered are set forth or summarized in the
Prospectus Supplement.
VALIDITY OF SECURITIES
The validity of the Securities offered will be passed upon for the Company by
Davis, Graham & Stubbs, L.L.C., Denver, Colorado. Certain legal matters will be
passed upon for Kidder, Peabody by Latham & Watkins, Washington, D.C.
EXPERTS
The consolidated financial statements and the related financial statement
schedules as of December 31, 1993 and December 31, 1992 and for each of the
three years in the period ended December 31, 1993, incorporated by reference in
this Prospectus from the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, have been audited by Price Waterhouse, independent
accountants, as stated in their reports which are incorporated by reference
herein, and have been so included and incorporated in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
The combined financial statements and the related financial statement
schedules of the Amax Business to be Merged as of December 31, 1992 and
December 31, 1991 and for each of the three years in the period ended December
31, 1992, incorporated by reference in this Prospectus from the Company's
Report on Form 8-K dated September 24, 1993 have been audited by Coopers &
Lybrand, independent accountants, as stated in their report which is
incorporated by reference herein, and have been so included and incorporated in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
31
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS, IN CONNEC-
TION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PRO-
SPECTUS SUPPLEMENT AND THE PROSPECTUS ARE NOT AN OFFER TO SELL OR A SOLICITA-
TION OF AN OFFER TO BUY THE NOTES OFFERED HEREBY IN ANY JURISDICTION IN WHICH
IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
PROSPECTUS SUPPLEMENT
<S> <C>
The Company............................................................... S-2
Use of Proceeds........................................................... S-2
Ratios of Earnings to Fixed Charges and Earnings to Combined Fixed Charges
and Preferred Stock Dividends of the Company............................. S-2
Description of the Notes.................................................. S-3
Underwriting.............................................................. S-5
Legal Matters............................................................. S-6
Experts................................................................... S-6
PROSPECTUS
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 4
Use of Proceeds........................................................... 4
Ratios of Earnings to Fixed Charges and Preferred Stock Dividends of the
Company.................................................................. 4
Price Range of Common Stock and Dividends................................. 5
Description of Debt Securities and
Guarantees............................................................... 6
Description of Preferred Stock............................................ 19
Description of Depositary Shares.......................................... 23
Description of Common Stock............................................... 26
Description of Warrants................................................... 28
Plan of Distribution...................................................... 29
Validity of Securities.................................................... 31
Experts................................................................... 31
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$250,000,000
[LOGO OF CYPRUS AMAX MINERALS COMPANY APPEARS HERE]
7 3/8% NOTES
DUE MAY 15, 2007
--------
PROSPECTUS SUPPLEMENT
MAY 10, 1995
--------
SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
PAINEWEBBER INCORPORATED
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
