As filed with the Securities and Exchange Commission on May 19, 1995
REGISTRATION NO. 33-
Post-Effective Amendment No. 1 to Registration No. 33-67556
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-3
Registration Statement and Post-Effective Amendment No. 1
under the Securities Act of 1933
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DIAMOND SHAMROCK, INC.
(Exact Name of Registrant as specified in its charter)
Delaware 74-2456753
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
9830 Colonnade Boulevard
San Antonio, Texas 78230
(210) 641-6800
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
---------------------
TIMOTHY J. FRETTHOLD, ESQ.
SENIOR VICE PRESIDENT/GROUP EXECUTIVE AND GENERAL COUNSEL
9830 COLONNADE BOULEVARD
San Antonio, Texas 78230
(210) 641-6800
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
-----------------------
Copies to:
ROBERT A. PROFUSEK, ESQ. JOHN B. TEHAN, ESQ.
JONES, DAY, REAVIS & POGUE SIMPSON THACHER & BARTLETT
599 LEXINGTON AVENUE 425 LEXINGTON AVENUE
30TH FLOOR NEW YORK, NEW YORK 10017
NEW YORK, NEW YORK 10022 (212) 455-2000
(212) 326-3800
-------------------- --------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box. [x]
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OFFERING AGGREGATE
OF SECURITIES TO BE AMOUNT TO BE PRICE PER OFFERING AMOUNT OF
REGISTERED(1) REGISTERED(2) UNIT(2)(3)(4) PRICE(4)(5) REGISTRATION FEE
Debt Securities
Debt Warrants
Preferred Stock
Preferred Stock
Warrants
Common Stock(6)
Common Stock Warrants
Total - - $150,000,000 $51,724.14
(1) This Registration Statement also covers (i) Debt Securities,
Common Stock, and Preferred Stock which may be issued upon the
exercise of Securities Warrants, and (ii) such indeterminate
amount of securities as may be issued in exchange for, or upon
conversion of, as the case may be, the securities registered
hereunder. Any of the securities registered hereunder may be
sold separately or as units with other securities registered
hereunder.
(2) Not specified as to each class of securities to be registered
hereunder pursuant to General Instruction II.D of Form S-3
under the Securities Act.
(3) The proposed maximum offering price per unit will be
determined from time to time by the Registrant in connection
with, and at the time of, the issuance by the Registrant of
the Securities registered hereunder.
(4) In United States Dollars or the equivalent thereof in one or
more foreign currencies or composite currencies, including
European Currency Units.
(5) Estimated solely for purposes of calculation of the
registration fee pursuant to Rule 457(o) of the Securities
Act.
(6) Includes Preferred Stock Purchase Rights ("Rights"). The
Rights are associated with and trade with the Common Stock.
See "Preferred Stock - Preferred Stock Purchase Rights" in the
prospectus contained herein. The value, if any, attributable
to the Rights is reflected in the market price of the Common Stock.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
In accordance with Rule 429 under the Securities Act, the Prospectus
contained herein also relates to $25,000,000 aggregate principal amount of
unsold Debt Securities covered by Registration Statement No. 33-67556 of the
Registrant.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION, OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MAY 19, 1995
PROSPECTUS
DIAMOND SHAMROCK, INC.
$175,000,000 $150,000,000
Debt Securities Common Stock
Preferred Stock
Warrants
Diamond Shamrock, Inc. (the "Company") may, from time to time, offer or
solicit offers to purchase (a) its unsecured senior debt securities, (the "Debt
Securities") having an aggregate initial public offering price not to exceed
$175,000,000 or the equivalent thereof in one or more foreign currencies or
composite currencies, including European Currency Units, on terms to be
determined at the time of sale, or (b) its (i) warrants to purchase the Debt
Securities (the "Debt Warrants"), (ii) shares of preferred stock, par value
$0.01 per share (the "Preferred Stock"), (iii) warrants to purchase shares of
Preferred Stock ("Preferred Stock Warrants"), (iv) shares of common stock, par
value $0.01 per share (the "Common Stock"), and (v) warrants to purchase shares
of Common Stock ("Common Stock Warrants"), having an aggregate initial public
offering price not to exceed $150,000,000 or the equivalent thereof in one or
more foreign currencies or composite currencies, including European Currency
Units, on terms to be determined at the time of sale (the Debt Warrants,
Preferred Stock Warrants and Common Stock Warrants being referred to herein
collectively as the "Securities Warrants"). The Debt Securities, Preferred
Stock, Common Stock and Securities Warrants offered hereby (collectively, the
"Offered Securities") may be offered separately or as units with other Offered
Securities, in separate series, in amounts, at prices, and on terms, to be
determined at the time of sale and to be set forth in a supplement to this
Prospectus (a "Prospectus Supplement").
The specific terms of the Offered Securities in respect of which this
prospectus is being delivered, such as, where applicable, (i) in the case of
Debt Securities, the specific designation, aggregate principal amount,
denominations, maturity, interest rate (which may be fixed or variable) and time
of payment of interest, if any, coin or currency in which principal, premium, if
any, and interest, if any, will be payable, any terms for redemption, exchange,
or conversion, any terms for sinking fund payments, the initial public offering
price, the names of, the principal amounts to be purchased by, and the
compensation of, underwriters, dealers, or agents, if any, (ii) in the case of
Preferred Stock, the specific title and stated value, number of shares, the
dividend, liquidation, exchange, redemption, conversion, voting, and other
rights, and the initial public offering price, (iii) in the case of Common
Stock, the initial public offering price; (iv) in the case of Securities
Warrants, the duration, offering price, exercise price and detachability
thereof; and (v) in the case of all Offered Securities, whether such Offered
Securities will be offered separately or as a unit with other Offered
Securities, will be set forth in the accompanying Prospectus Supplement.
The Prospectus Supplement will also contain information, where applicable,
concerning certain United States Federal income tax considerations relating to,
and any listing on a securities exchange of, the Offered Securities covered by
the Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Offered Securities may be sold directly to purchasers or through
underwriters, dealers, or agents. If any underwriters, dealers, or agents are
involved in the sale of any Offered Securities, their names and any applicable
fee, commission, or discount arrangements will be set forth in the Prospectus
Supplement. The principal amount or number of shares of Offered Securities, the
purchase price thereof, and the net proceeds to the Company from sales of
Offered Securities will be set forth in the Prospectus Supplement. The net
proceeds to the Company of the sale of Offered Securities will be the purchase
price of such Offered Securities less attributable issuance expenses, including
underwriters', dealers', or agents' compensation arrangements. See "Plan of
Distribution" for indemnification arrangements for underwriters, dealers, and
agents.
This prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is May , 1995
<PAGE>
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT
DELIVERED HEREWITH AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER, DEALER, OR AGENT. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OFFERED
SECURITIES BY ANYONE IN ANY JURISDICTION IN WHICH THE OFFER OR SOLICITATION IS
NOT AUTHORIZED OR IN WHICH THE PERSON MAKING THE OFFER OR SOLICITATION IS NOT
AUTHORIZED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information filed by the Company can be inspected and
copied at the Public Reference Room of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and at the public reference
facilities maintained by the Commission at 7 World Trade Center, Suite 1300, New
York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such materials can be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. Documents filed by the
Company can also be inspected at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005, on which exchange certain of the
Company's securities are listed.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), relating to the securities offered hereby. This Prospectus
omits certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
securities offered hereby. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and in each instance
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates into this Prospectus by reference the
Company's (i) Annual Report on Form 10-K for the year ended December 31, 1994
(the "1994 Form 10-K"), filed pursuant to the Exchange Act, which contains the
consolidated financial statements of the Company and the report thereon of Price
Waterhouse LLP, (ii) Quarterly Report on Form 10-Q for the quarter ended March
31, 1995, and (iii) Current Reports on Form 8-K, dated January 25, 1995 and
February 6, 1995.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14, or 15(d) of the Exchange Act, prior to the termination of the
offering made hereby, shall be deemed incorporated by reference in this
Prospectus and to be a part of this Prospectus from the date of the filing of
such reports.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests should
be directed to: Investor Relations, Diamond Shamrock, Inc., P.O. Box 696000, San
Antonio, Texas 78269-6000 (telephone 210-641-6800).
THE COMPANY
Diamond Shamrock, Inc. is the leading independent refiner and marketer of
petroleum products in the southwestern United States. Its principal activities
consist of crude oil refining, wholesale marketing of petroleum products, and
retail marketing of petroleum products and other merchandise through Company-
operated retail outlets. In addition, the Company processes petrochemicals and
is engaged in the marketing, distribution, and storage of natural gas liquids.
The Company's principal executive offices are located at 9830 Colonnade
Boulevard, San Antonio, Texas 78230 (in person); P.O. Box 696000, San Antonio,
Texas 78269-6000 (by mail). Its telephone number is 210-641-6800.
EARNINGS RATIOS
The following table sets forth the ratio of earnings to fixed charges and
the ratio of earnings to combined fixed charges and preferred stock dividends
the three month periods ended March 31, 1995 and 1994 and for each of the years
in the five-year period ended December 31, 1994. For purposes of computing the
ratio of earnings to fixed charges and the ratio of earnings to combined fixed
charges and preferred stock dividends, earnings consist of income before income
taxes and fixed charges, and fixed charges consist of interest on outstanding
debt, amortization of debt issuance expense, and one-third of rental payments on
operating leases (such amount having been deemed by the Company to represent the
interest portion of such payments).
Three Months
Ended
March 31 Year Ended December 31,
1995 1994 1994 1993 1992 1991 1990
Ratio of Earnings to 1.5 2.4 3.2 2.0 1.7 2.1 3.5
Fixed Charges
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends 1.4 2.2 2.9 1.8 1.7 2.1 3.3
USE OF PROCEEDS
The Offered Securities may be offered by the Company from time to time when
market conditions are determined by the Company to be favorable. Unless
otherwise indicated in the applicable Prospectus Supplement, the net proceeds
from the sale of the Offered Securities will be added to the Company's funds and
used for general corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities to which any Prospectus Supplement
may relate. The particular terms of the Debt Securities offered by any
Prospectus Supplement (the "Offered Debt Securities") and the extent, if any, to
which such general provisions do not apply to the Offered Debt Securities will
be described in the Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities to which this Prospectus relates will be issued under
an Indenture dated as of December 15, 1989 (the "Indenture"), between the
Company and The First National Bank of Chicago, as trustee (the "Trustee"),
which is filed as an exhibit to the Registration Statement. The following
summaries of certain provisions of the Indenture do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indenture, including the definitions therein of certain terms.
Numerical references in parentheses below are to sections in the Indenture.
Whenever particular sections or defined terms of the Indenture are referred to,
such sections or defined terms are incorporated herein by reference.
General
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued thereunder
from time to time in one or more series up to the aggregate principal amount
which may be authorized from time to time by the Company. All Debt Securities
will be unsecured and will rank pari passu with all other unsecured
unsubordinated indebtedness of the Company. The Company is primarily a holding
company and the Debt Securities will not be guaranteed by any of the Company's
Subsidiaries. As a result, the right of creditors of the Company upon its
liquidation, reorganization, or otherwise is necessarily subject to the claims
of creditors of the Company's Subsidiaries, except to the extent that claims of
the Company itself as a creditor of any of its Subsidiaries may be recognized.
Except as described below, the Indenture does not limit the amount of other
indebtedness or securities which may be issued by the Company.
Reference is made to the Prospectus Supplement relating to the particular
series of Offered Debt Securities offered thereby for the following terms of
such series of Offered Debt Securities: (i) the designation, aggregate principal
amount, and authorized denominations of such Offered Debt Securities; (ii) the
purchase price of such Offered Debt Securities (expressed as a percentage of the
principal amount thereof); (iii) the date or dates on which such Offered Debt
Securities will mature; (iv) the rate or rates per annum, if any (which may be
fixed or variable), at which such Offered Debt Securities will bear interest or
the method by which such rate or rates will be determined; (v) the dates on
which such interest will be payable and the record dates for payment of
interest, if any; (vi) the coin or currency in which payment of the principal of
(and premium, if any) or interest, if any, on such Offered Debt Securities will
be payable; (vii) the terms of any mandatory or optional redemption (including
any sinking fund) or any obligation of the Company to repurchase Offered Debt
Securities; (viii) whether such Offered Debt Securities are to be issued in
whole or in part in the form of one or more temporary or permanent global Debt
Securities ("Global Securities") and, if so, the identity of the depositary, if
any, for such Global Security or Securities; and (ix) any other additional
provisions or specific terms which may be applicable to that series of Offered
Debt Securities.
Principal, premium, if any, and interest, if any, will be payable, and the
Debt Securities will be transferable or exchangeable, at the office or agency of
the Company maintained for such purposes in the Borough of Manhattan, The City
of New York, provided that payment of interest on any Debt Securities may, at
the option of the Company, be made by check mailed to the registered holders.
Interest, if any, will be payable on any Interest Payment Date to the persons in
whose names the Debt Securities are registered at the close of business on the
record date with respect to such Interest Payment Date (Sections 305, 307 and
1202).
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Debt Securities will be issued only in fully registered form, without
coupons, in denominations of $1,000 or any integral multiple thereof. No
service charge will be made for any registration of transfer or exchange of the
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith
(Sections 302 and 305).
Some or all of the Debt Securities may be issued as discounted Debt
Securities (bearing no interest or interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with or on behalf
of a depositary located in the United States (a "Depositary") identified in the
Prospectus Supplement relating to such series.
The specific terms of the depositary arrangements with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series. The Company anticipates that the following provisions will
apply to all depositary arrangements.
Unless otherwise specified in an 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 a Global
Security in registered form, the Depositary for such Global Security 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 shall 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 Company. Ownership of
beneficial interests in such Global Securities will be limited to participants
or persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Securities 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 Global Securities 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 definitive
form. Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security in registered form, 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 Debt Securities represented by such Global Security for all purposes under
the Indenture governing such Debt Securities. Except as set forth below, 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 definitive form, and will not be considered
the owners or holders thereof under the Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or the holder of the Global Security representing such Debt Securities.
None of the Company, the Trustee, any Paying Agent, or the Security Registrar
for such Debt Securities will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in a Global Security for such Debt Securities or for
maintaining, supervising, or reviewing any records relating to such beneficial
ownership interests.
The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium, or interest in respect of a
permanent Global Security, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of the
Depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such participants. However,
the Company has no control over the practices of the Depositary and/or the
participants and there can be no assurance that these practices will not be
changed.
A Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor (Section 304). If a Depositary for
Debt Securities of a series is at any time unwilling or unable to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Debt Securities in definitive registered form in
exchange for the Global Security or Securities representing such Debt
Securities. In addition, the Company may at any time and in its sole discretion
determine not to have any Debt Securities in registered form represented by one
or more Global Securities and, in such event, will issue Debt Securities in
definitive form in exchange for the Global Security or Securities representing
such Debt Securities. In any such instance, an owner of a beneficial interest in
a Global Security will be entitled to physical delivery in definitive form of
Debt Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name.
Limitations on the Company and Certain Subsidiaries
Limitations on Mortgages. The Indenture provides that neither the Company
nor any Subsidiary of the Company will issue, assume, or guarantee any notes,
bonds, debentures, or other similar evidences of indebtedness for money borrowed
("Debt") secured by any mortgages, liens, pledges, or other encumbrances
("Mortgages") upon any asset or any interest it may have therein or of or upon
any stock or indebtedness of any Subsidiary, whether now owned or hereafter
acquired, without effectively providing that all Debt Securities issued under
the Indenture (together with, if the Company so determines, any other
indebtedness or obligation then existing or thereafter created ranking equally
with the Debt Securities) will be secured equally and ratably with (or prior to)
such Debt so long as such Debt will be so secured, except that this restriction
will not apply to: (i) Mortgages securing the purchase price or cost of
construction of property (or additions, substantial repairs, alterations, or
substantial improvements thereto if the amount of such Debt does not exceed the
cost thereof), provided such Debt and the Mortgages are incurred within 18
months of the acquisition or completion of construction and full operation, or
the completion of such repairs, alterations, or improvements, as the case may
be; (ii) Mortgages existing on property at the time of its acquisition by the
Company or a Subsidiary or on the property of a corporation at the time of the
acquisition of such corporation by the Company or a Subsidiary (including
acquisitions through merger or consolidation); (iii) Mortgages to secure Debt on
which the interest payments are exempt from federal income tax under Section 103
of the Internal Revenue Code of 1986, as amended (the "Code"); (iv) in the case
of a Subsidiary, Mortgages in favor of the Company or a Subsidiary; (v)
Mortgages existing on the date of the Indenture; (vi) certain Mortgages incurred
in the ordinary course of business and Mortgages to governmental entities; (vii)
Mortgages incurred in connection with the borrowing of funds if within 120 days
such funds are used to repay Debt in the same principal amount secured by other
Mortgages on assets or receivables having a fair market value (as determined by
the chief financial officer of the Company) at least equal to the fair market
value of the assets or receivables which secure the new Mortgage; (viii)
Mortgages incurred within 90 days (or any longer period, not in excess of one
year, as permitted by law) after acquisition of the property or equipment
subject to such Mortgage arising solely in connection with the transfer of tax
benefits in accordance with Section 168(f)(8) of the Code (or any similar
provision adopted hereafter); (ix) Mortgages on accounts receivable of the
Company or its Subsidiaries which secure obligations not exceeding at any time
the lesser of 90% of Consolidated Receivables (as defined below) or
$100,000,000, provided that the dollar limitation of $100,000,000 will increase
at a compounded rate of 10% each April 1, with the first such increase effective
on April 1, 1990 and subsequent increases to be effective on and as of each
succeeding April 1, provided further, however, that in no event will such dollar
limitation exceed $300,000,000; and (x) any extension, renewal, or replacement
of any Mortgage referred to in the foregoing clauses (i) through (ix), provided
the dollar amount secured is not increased (Section 1205).
Limitations on Sale and Lease-Back Transactions. The Indenture provides
that neither the Company nor any Subsidiary will enter into any Sale and Lease-
Back Transaction with respect to any asset owned by it with any person (other
than the Company or a Subsidiary) unless either (i) the Company or such
Subsidiary would be entitled, pursuant to the provisions described in clauses
(i) through (x) under "Limitations on Mortgages" above, to incur Debt secured by
a Mortgage on the asset to be leased without equally and ratably securing the
Debt Securities, or (ii) the Company during or immediately after the expiration
of 120 days after the effective date of such transaction applies to the
voluntary retirement of its Funded Debt an amount equal to the greater of the
net proceeds of the sale of the property leased in such transaction or the fair
market value (as determined by the chief financial officer of the Company) of
the leased property at the time such transaction was entered into, in each case
net of the principal amount of all Debt Securities delivered under the Indenture
(Section 1206).
Exempted Transactions. Notwithstanding the foregoing, the Company and any
one or more Subsidiaries may, without securing the Debt Securities, issue,
assume, or guarantee Debt secured by Mortgages and enter into Sale and Lease-
Back Transactions which would otherwise be subject to the foregoing restrictions
in an aggregate principal amount which, together with all other such Debt of the
Company and its Subsidiaries secured by Mortgages (not including Debt permitted
to be secured pursuant to clauses (i) through (x) under "Limitations on
Mortgages" above) and the aggregate Attributable Debt (as defined below) in
respect of Sale and Lease-Back Transactions (not including those permitted as
described under "Limitations on Sale and Lease-Back Transactions" above), does
not exceed 15% of Consolidated Net Tangible Assets (as defined below) of the
Company and its consolidated Subsidiaries (Section 1207).
Certain Definitions. The term "Consolidated Net Tangible Assets" at any
date means the total assets shown on a consolidated balance sheet of the Company
and its Subsidiaries, prepared in accordance with generally accepted accounting
principles, less (i) all current liabilities, and (ii) goodwill and like
intangibles included on such balance sheet. The term "Attributable Debt" means
(a) as to any capitalized lease obligations, the Debt carried on the balance
sheet in accordance with generally accepted accounting principles, and (b) as to
any operating leases, the total net amount of rent required to be paid under
such leases during the remaining term thereof discounted at the rate of 1% per
annum over the weighted average yield to maturity of all Debt Securities issued
and outstanding under the Indenture, including any outstanding Debt Securities,
compounded semi-annually. The term "Consolidated Receivables" at any date means
the aggregate amount of all accounts receivable of the Company and its
Subsidiaries at the end of the most recent fiscal quarter, as shown on the
consolidated balance sheet of the Company and its Subsidiaries in respect of
such quarter, or in respect of the fiscal year in the case of the fourth quarter
(Section 101).
Events of Default
The following are "Events of Default" under the Indenture with respect to
Debt Securities of any series: (i) failure to pay principal of or any premium on
any Debt Security of that series when due; (ii) failure to pay any interest on
any Debt Security of that series when due, and the continuation of such failure
for 30 days; (iii) failure to deposit any sinking fund payment in respect of any
Debt Security of that series when due; (iv) failure to perform any other
covenant of the Company in the Indenture (other than a covenant included in the
Indenture solely for the benefit of a series of Debt Securities other than the
series), continued for 60 days after written notice as provided in the
Indenture; (v) certain events in bankruptcy, insolvency, or reorganization; (vi)
indebtedness for borrowed money of the Company or any Subsidiary in excess of
$10,000,000 (whether such indebtedness now exists or is hereafter created) is
not paid at final maturity or becomes or is declared due and payable prior to
the date or dates on which such indebtedness would otherwise have become due and
payable as a result of the occurrence of one or more events of default as
defined in any mortgages, indentures, or instruments under which such
indebtedness may have been issued or by which such indebtedness may have been
secured, and such failure to pay shall not be cured or such acceleration or
accelerations, as the case may be, shall not be rescinded, annulled, or cured,
in any case prior to the expiration of 30 days after the date such failure to
pay or acceleration or accelerations occurred; and (vii) any other Event of
Default provided with respect to Debt Securities of that series (Section 501).
If any Event of Default with respect to Debt Securities of any series at any
time outstanding occurs and is continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the outstanding Debt Securities of
that series may declare the principal amount (or, if the Debt Securities of that
series are Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all the Debt Securities of that series
to be due and payable immediately. 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 acceleration has been obtained, the Holders
of a majority in aggregate principal amount of outstanding Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration (Section 502).
The Indenture provides that, subject to the duty of the Trustee during the
continuance of an Event of Default to act with the required standard of care,
the Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture at the request or direction of any of the Holders, unless
such Holders have offered to the Trustee reasonable indemnity (Section 603).
Subject to such provisions for the indemnification of the Trustee, the Holders
of a majority in aggregate 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 Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Debt Securities
of that series (Section 512).
The Company is required to furnish the Trustee annually with a statement as
to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance (Section 1208).
Modification and Waiver
Modifications of and amendments to the Indenture may be made by the Company
and the Trustee with the consent of the Holders of not less than two-thirds in
aggregate principal amount of the outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
outstanding Debt Security affected thereby, (i) change the Stated Maturity of
the principal of, or any installment of interest, if any, on, any Debt Security,
(ii) reduce the principal amount of, or any premium or interest on, any Debt
Security, (iii) reduce the amount of principal of Discount Securities payable
upon acceleration of the stated maturity thereof, (iv) change the currency of
payment of principal of, or any premium or interest on, any Debt Security, (v)
impair the right to institute suit for the enforcement of any payment on or with
respect to any Debt Security, or (vi) reduce the percentage in principal amount
of outstanding Debt Securities of any series, the consent of whose Holders is
required for modification or amendment of the Indenture or for waiver of
compliance with certain provisions of the Indenture or for waiver of certain
defaults (Section 1102).
The Holders of a majority in aggregate principal amount of the outstanding
Debt Securities of each series may, on behalf of all Holders of Debt Securities
of that series, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default in the payment of principal or any
premium or interest or a covenant or provision that cannot be modified or
amended without the consent of the Holders of each outstanding Debt Security
affected thereby (Section 513).
Consolidation, Merger, Sale, or Lease of Assets
The Company, without the consent of the Holders of any of the outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any corporation
organized under laws of any domestic jurisdiction, provided that the successor
corporation assumes the Company's obligations on the Debt Securities and that
under the Indenture, after giving effect to the transactions, no Event of
Default, and no event which, after notice or lapse of time, would become an
Event of Default, shall have occurred and be continuing, and that certain other
conditions are met (Section 1001).
Defeasance
The Indenture provides that the Company, at its option, (i) will be
discharged from any and all obligations in respect of any series of Debt
Securities (except for certain obligations to register the transfer or exchange
of the Debt Securities; replace stolen, lost, or mutilated Debt Securities;
maintain paying agencies; and hold money for payment in trust), or (ii) will not
be subject to provisions of the Indenture concerning limitations upon Mortgages;
Sale and Lease-Back Transactions; and consolidation, merger, and sale of assets,
in each case if the Company deposits with the Trustee, in trust, money or U.S.
Government Obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money in an amount
sufficient to pay all principal, premium, if any, and interest on the Debt
Securities of such series on the dates such payments are due in accordance with
the terms of such Debt Securities. To exercise any such option, the Company is
required, among other things, to deliver an opinion of counsel to the Trustee to
the effect that (a) the Company has received from or there has been published by
the Internal Revenue Service a ruling to the effect that the deposit and related
defeasance would not cause the Holders of such series of Debt Securities to
recognize income, gain, or loss for United States federal income tax purposes
and (b) if such series of Debt Securities are then listed on any national
securities exchange, such Debt Securities would not be delisted from such
exchange as a result of the exercise of such option (Article Fifteen).
Notices
Notices to Holders will be given by mail to the addresses of such Holders
as they appear in the Security Register (Sections 101, 105).
Governing Law
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York (Section 111).
Concerning the Trustee
The Trustee has normal banking relationships with the Company.
DESCRIPTION OF CAPITAL STOCK
The following description of the Company's capital stock is subject to the
detailed provisions of the Company's Certificate of Incorporation (the
"Certificate"). These statements do not purport to be complete and are
qualified in their entity by reference to the terms of the Certificate, which is
incorporated by reference in this Prospectus.
Under the Certificate, the Company has the authority to issue 25,000,000
shares of Preferred Stock, $.01 par value, and 75,000,000 shares of Common
Stock, $.01 par value. As of April 30, 1995, 1,725,000 shares of the Company's
5% Cumulative Convertible Preferred Stock and 29,022,475 shares of Common Stock
were issued, of which 8,015 shares of Common Stock were held in treasury. The
outstanding shares of Common Stock and Preferred Stock are fully paid and
nonassessable. As of such date, 1,983,911 shares of Common Stock were reserved
for issuance pursuant to the Company's 1987 and 1990 Long-Term Incentive Plans,
and 750,000 shares of the Company's Series A Junior Participating Preferred
Stock, $.01 par value, were reserved for issuance pursuant to the Rights
Agreement (the "Rights Agreement"), dated March 6, 1990, between the Company and
Society National Bank, as Rights Agent. An additional 3,254,716 shares of
Common Stock are reserved for issuance upon conversion of the Company's 5%
Cumulative Convertible Preferred Stock. See "5% Cumulative Convertible
Preferred Stock."
Preferred Stock
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of Preferred Stock. The description set
forth below is subject to and qualified in its entirety by reference to the
Certificate and the form of Certificate of Designations (the "Designation")
establishing a particular series of Preferred Stock which will be filed with the
Commission in connection with the offering of such series of Preferred Stock.
General. Under the Certificate, the Board of Directors of the Company (the
"Board of Directors") is authorized, without further shareholder action, to
provide for the issuance of up to 25,000,000 shares of Preferred Stock, in one
or more series, and to fix the designations, terms, and relative rights and
preferences, including the dividend rate, voting rights, conversion rights,
redemption and sinking fund provisions and liquidation values of each such
series. The Company may amend the Certificate from time to time to increase the
number of authorized shares of Preferred Stock. Any such amendment would
require the approval of the holders of a majority of the outstanding shares of
all series of Preferred Stock voting together as a single class without regard
to series. As of the date of this Prospectus, the Company has one series of
Preferred Stock outstanding.
The Preferred Stock will have the dividend, liquidation, redemption,
conversion, and voting rights set forth below unless otherwise provided in the
Prospectus Supplement relating to a particular series of Preferred Stock.
Reference is made to the Prospectus Supplement relating to the particular series
of the Preferred Stock offered thereby for specific terms, including, (i) the
title and liquidation preference per share of such Preferred Stock and the
number of shares offered; (ii) the price at which such Preferred Stock will be
issued; (iii) the dividend rate (or method of calculation), the dates on which
dividends shall be payable and the dates from which dividends shall commence to
accumulate; (iv) any redemption or sinking fund provisions of such Preferred
Stock; (v) any conversion or exchange provisions of such Preferred Stock; (vi)
the voting rights, if any, of such Preferred Stock; and (vii) any additional
dividend, liquidation, redemption, sinking fund and other rights, preferences,
privileges, limitations, and restrictions of such Preferred Stock. The
Preferred Stock will, when issued, be fully paid and nonassessable.
Dividend Rights. The Preferred Stock will be preferred over the Common
Stock as to payment of dividends. Before any dividends or distributions on the
Common Stock shall be declared and set apart for payment or paid, the holders or
shares of each series of Preferred Stock shall be entitled to receive dividends
(either in cash, shares of Common Stock or Preferred Stock, or otherwise) when,
as, and if declared by the Board of Directors, at the rate and on the date or
dates as set forth in the Prospectus Supplement. With respect to each series of
Preferred Stock, the dividends on each share of such series with respect to
which dividends are cumulative shall be cumulative from the date of issue of
such share unless some other date is set forth in the Prospectus Supplement
relating to any such series. Accruals of dividends shall not bear interest.
Rights Upon Liquidation. The Preferred Stock shall be preferred over the
Common Stock as to assets so that the holders of each series of Preferred Stock
shall be entitled to be paid, upon the voluntary or involuntary liquidation,
dissolution, or winding up of the Company, and before any distribution is made
to the holders of Common Stock, the amount set forth in the Prospectus
Supplement relating to any such series, but in such case the holders of such
series of Preferred Stock shall not be entitled to any other or further
payment. If upon any such liquidation, dissolution, or winding up of the Company
its net assets shall be insufficient to permit the payment in full of the
respective amounts to which the holders of all outstanding Preferred Stock are
entitled, the entire remaining net assets of the Company shall be distributed
among the holders of each series of Preferred Stock in amounts proportionate to
the full amounts to which the holders of each such series are respectively so
entitled.
Redemption and Conversion. All shares of any series of Preferred Stock
shall be redeemable to the extent set forth in the Prospectus Supplement
relating to any such series. All shares of any series of Preferred Stock shall
be convertible into shares of Common Stock or into shares of any other series of
Preferred Stock to the extent set forth in the Prospectus Supplement relating to
any such series.
Voting Rights. All shares of any series of Preferred Stock shall have the
voting rights set forth in the prospectus supplement relating to any such
series.
5% Cumulative Convertible Preferred Stock. In June 1993, the Company
issued 1,725,000 shares of 5% Cumulative Convertible Preferred Stock, $.01 par
value per share (the "5% Preferred"). Each share of 5% Preferred has a
liquidation preference of $50.00 per share, plus accrued and unpaid dividends
thereon. Cash dividends on the 5% Preferred are cumulative from the date of
original issue at an annual rate of $2.50 per share and are payable quarterly in
arrears. Shares of 5% Preferred are convertible at any time commencing 90 days
after the date of original issue at the option of the holder into shares of
Common Stock of the Company at a conversion price of $26.50 per share of Common
Stock, which is equivalent to a conversion rate of approximately 1.8868 shares
of Common Stock for each share of 5% Preferred, subject to adjustment in certain
circumstances.
The shares of 5% Preferred are not redeemable prior to June 15, 1996. On
and after such date and from time to time until June 14, 2000, the 5% Preferred
will be redeemable, in whole or in part, at the option of the Company, for such
number of shares of Common Stock as are issuable at the conversion price for
each share of 5% Preferred. The Company may exercise this option only if, for
20 trading days within any period of 30 consecutive trading days, including the
last trading day of such 30 trading-day period, the closing price of the
Company's Common Stock on the New York Stock Exchange exceeds $34.45, subject to
adjustment in certain circumstances. On and after June 15, 2000, the 5%
Preferred will be redeemable for cash at a redemption price equivalent to $50
per share, plus accrued and unpaid dividends. Shares of 5% Preferred are not be
entitled to the benefit of any sinking fund.
Preferred Stock Purchase Rights. 750,000 shares of Series A Junior
Participating Preferred Stock, $.01 par value ("Junior Preferred Stock"), are
reserved for issuance pursuant to the Rights Agreement. Pursuant to the Rights
Agreement, one right (a "Right") to purchase 1/100th of a share of Junior
Preferred Stock (structured so as to be substantially the equivalent of Common
Stock) is attached to each issued and outstanding share of Common Stock. The
Rights are not exercisable and are attached to, and may not trade separately
from, the Common Stock unless certain change of control events occur.
Common Stock
The holders of the Company's Common Stock are entitled to one vote per
share on all matters voted on by the stockholders, including elections of
directors, and, except as otherwise required by law or provided in any
resolution adopted by the Board of Directors of the Company with respect to any
series of Preferred Stock, the holders of such shares will exclusively possess
all voting power. Subject to any preferential rights of any outstanding series
of Preferred Stock, the holders of Common Stock are entitled to such dividends
as may be declared from time to time by the Board of Directors from funds
available therefor, and upon liquidation are entitled to receive pro rata all
assets of the Company available for distribution to such holders. No holder of
Common Stock has any preemptive right to subscribe to any securities of the
Company of any kind or class. The Company's Common Stock is listed on the New
York Stock Exchange and prices are reported by the New York Stock Exchange
Composite Tape under the symbol DRM. The Transfer Agent and Registrar of the
Company's Common Stock is KeyCorp Shareholder Services, Inc., Cleveland, Ohio.
Certain Provisions of the Certificate and By-laws
The Certificate and By-laws of the Company contain certain provisions which
may have the effect of delaying, deferring, or preventing a change of control of
the Company. The Certificate provides that the Board shall be divided into
three classes, with directors serving three-year terms, and limits the ability
of stockholders to change the number of directors. Special meetings of the
Company's stockholders may only be called by the Board of Directors or the
Chairman of the Board, and any action required or permitted to be taken by the
stockholders of the Company must be effected at an annual or special meeting of
stockholders of the Company and may not be effected by any consent in writing of
such stockholders. In addition, the Board has generally the authority, without
further action by stockholders, to fix the relative powers, preferences, and
rights of the unissued shares of preferred stock of the Company. Provisions
which could discourage an unsolicited tender offer or takeover proposal, such as
extraordinary voting, dividend, redemption, or conversion rights, could be
included in such preferred stock.
Under the Certificate, holders of the Company's Common Stock are entitled
to cumulative voting rights in certain limited circumstances in which the
Company becomes aware that a shareholder of the Company (other than the Company
or a subsidiary of the Company) has become the beneficial owner, directly or
indirectly, of 30% or more of the outstanding capital stock of the Company
entitled to vote generally in the election of Company directors. Holders of the
Company's Common Stock are not otherwise entitled to cumulative voting rights.
Under cumulative voting, a shareholder may multiply the number of shares owned
by the number of directors to be elected, and cast that total number of votes in
any proportion among as many nominees as the shareholder desires.
The By-laws of the Company contain certain requirements concerning advance
notice of (i) nominations by stockholders of persons for election to the Board,
and (ii) other matters introduced by stockholders at annual meetings.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities, Preferred Stock or Common Stock. Securities Warrants may be issued
independently or together with Debt Securities, Preferred Stock or Common Stock
offered by any Prospectus Supplement and may be attached to or separate from any
such Offered Securities. Each series of Securities Warrants will be issued
under a separate warrant agreement (a "Securities Warrant Agreement") to be
entered into between the Company and a bank or trust company, as warrant agent
(the "Securities Warrant Agent"), all as set forth in the Prospectus Supplement
relating to the particular issue of Securities Warrants. The Securities Warrant
Agent will act solely as an agent of the Company in connection with the
Securities Warrants and will not assume any obligation or relationship of agency
or trust for or with any holders of Securities Warrants or beneficial owners of
Securities Warrants. The following summary of certain provisions of the
Securities Warrants does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all provisions of the Securities
Warrant Agreements.
Reference is made to the Prospectus Supplement relating to the particular
issue of Securities Warrants offered thereby for the terms of such Securities
Warrants, including, where applicable: (i) the designation, aggregate principal
amount, currencies, denominations, and terms of the series of Debt Securities
purchasable upon exercise of Debt Warrants and the price at which such Debt
Securities may be purchased upon such exercise; (ii) the designation, number of
shares, stated value, and terms (including, without limitation, liquidation,
dividend, conversion, and voting rights) of the series of Preferred Stock
purchasable upon exercise of Preferred Stock Warrants and the price at which
such number of shares of Preferred Stock of such series may be purchased upon
such exercise; (iii) the number of shares of Common Stock purchasable upon the
exercise of Common Stock Warrants and the price at which such number of shares
of Common Stock may be purchased upon such exercise; (iv) the date on which the
right to exercise such Securities Warrants shall commence and the date on which
such right shall expire (the "Expiration Date"); (v) United States Federal
income tax consequences applicable to such Securities Warrants; and (vi) any
other terms of such Securities Warrants. Preferred Stock Warrants and Common
Stock Warrants will be offered and exercisable for U.S. dollars only.
Securities Warrants will be issued in registered form only. The exercise price
for Securities Warrants will be subject to adjustment in accordance with the
applicable Prospectus Supplement.
Each Securities Warrant will entitle the holder thereof to purchase such
principal amount of Debt Securities or such number of shares of Preferred Stock
or Common Stock at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the Securities Warrants,
which exercise price may be subject to adjustment upon the occurrence of certain
events as set forth in such Prospectus Supplement. After the close of business
on the Expiration Date (or such later date to which such Expiration Date may be
extended by the Company), unexercised Securities Warrants will become void. The
place or places where, and the manner in which, Securities Warrants may be
exercised shall be specified in the Prospectus Supplement relating to such
Securities Warrants.
Prior to the exercise of any Securities Warrants to purchase Debt
Securities, Preferred Stock, or Common Stock, holders of such Securities
Warrants will not have any of the rights of holders of the Debt Securities,
Preferred Stock, or Common Stock, as the case may be, purchasable upon such
exercise, including the right to receive payments of principal of, premium, if
any, or interest, if any, on the Debt Securities purchasable upon such exercise
or to enforce covenants in the applicable Indenture, or to receive payments of
dividends, if any, on the Preferred Stock or Common Stock purchasable upon such
exercise, or to exercise any applicable right to vote.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to which this Prospectus
relates to or for resale to the public through one or more underwriters, acting
alone or in underwriting syndicates led by one or more managing underwriters,
and also may sell such Offered Securities directly to other purchasers or
dealers or through agents.
The distribution of Offered Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed from
time to time, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Offered Securities.
In connection with the sale of Offered Securities, such underwriters,
dealers, and agents may receive compensation from the Company, or from
purchasers of Offered Securities for whom they may act as agents, in the form of
discounts, concessions, or commissions. Underwriters, dealers, and agents that
participate in the distribution of Offered Securities and, in certain cases,
direct purchasers from the Company, may be deemed to be "underwriters" and any
discounts or commissions received by them and any profit on the resale of
Offered Securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriters, dealers, or agents
will be identified and any such compensation will be described in the applicable
Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters,
dealers, and agents who participate in the distribution of Offered Securities
may be entitled to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act. The place and time of delivery
for Offered Debt Securities in respect of which this Prospectus is delivered
will be set forth in the applicable Prospectus Supplement.
LEGAL MATTERS
The validity of the Offered Securities will be passed upon for the Company
by Timothy J. Fretthold, Esq., Senior Vice President/Group Executive and General
Counsel of the Company, and for the underwriters, dealers, or other agents by
Simpson Thacher & Bartlett (a partnership which includes professional
corporations), New York, New York. As of May 1, 1995, Mr. Fretthold
beneficially owned 50,210 shares of Common Stock of the Company including 23,180
shares which he had the right to acquire within 60 days through the exercise of
employee stock options.
EXPERTS
The financial statements incorporated in this Prospectus by reference to
the 1994 Form 10-K have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
With respect to the unaudited consolidated financial information of the
Company for the three-month periods ended March 31, 1995 and 1994, incorporated
by reference in this Prospectus, Price Waterhouse LLP reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate report dated May 11, 1995,
incorporated by reference herein, states that they do not express an opinion on
that unaudited consolidated financial information. Price Waterhouse LLP has not
carried out any significant or additional audit tests beyond those which would
have been necessary if their report had not been included. Accordingly, the
degree of reliance on their report on such information should be restricted in
light of the limited nature of the review procedures applied. Price Waterhouse
LLP is not subject to the liability provisions of Section 11 of the Securities
Act of 1933 (the "Act") for their report on the unaudited consolidated financial
information because that report is not a "report" or a "part" of the
Registration Statement prepared or certified by Price Waterhouse LLP within the
meaning of Sections 7 and 11 of the Act.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the issuance and distribution of the
securities to be registered, other than underwriters' or agents' discounts and
commissions, are as follows:
Registration Fee $ 51,724
Blue Sky Fees and Expenses 10,000
Printing Expenses 15,000
Legal Fees and Expenses 20,000
Accounting Fees and Expenses 10,000
Indenture Trustee Fees and Expenses 1,500
Miscellaneous 1,776
Total $110,000
Item 15. Indemnification of Directors and Officers
Set forth below is a description of Article Tenth ("Article Tenth") of the
Certificate. This description is intended as a summary only and is qualified in
its entirety by reference to the Certificate.
Elimination of Liability in Certain Circumstances. Article Tenth protects
the Company's directors against monetary damages for breaches of their fiduciary
duty of care, except as set forth below. Under the Delaware General Corporation
Law (the "Delaware Law"), absent Article Tenth, directors could generally be
held liable for gross negligence for decisions made in the performance of their
duty of care but not for simple negligence. Article Tenth eliminates director
liability for negligence in the performance of their duties, including gross
negligence. Directors remain liable for breaches of their duty of loyalty to the
Company and its stockholders, as well as acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law and
transactions from which a director derives improper personal benefit.
Article Tenth does not limit a stockholder's ability to pursue injunctive
or other equitable relief and does not apply to claims arising under violations
of the federal securities laws.
Indemnification and Insurance. Under Delaware Law, directors and officers
as well as other employees and individuals may be indemnified against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement in
connection with specified actions, suits, or proceedings, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the corporation such as a derivative action) if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Article Tenth provides, in general, that each person who was or is made a
party to, or is involved in, any action, suit, or proceeding by reason of the
fact that he or she is or was a director, officer, employee, or agent of the
Company (or was serving at the request of the Company as a director, officer,
employee, or agent for another entity) will be indemnified and held harmless by
the Company, to the full extent authorized by Delaware Law, as currently in
effect (or, to the extent indemnification is broadened, as it may be amended)
against all expense, liability, or loss (including attorneys' fees, judgments,
fines, ERISA excise taxes, or penalties and amounts to be paid in settlement)
reasonably incurred by such person in connection therewith. Article Tenth
provides that persons indemnified thereunder may bring suit against the Company
to recover unpaid amounts claimed thereunder, and that if such suit is
successful, the expenses of bringing such a suit will be reimbursed by the
Company. Article Tenth further provides that while it is a defense to such a
suit that the person claiming indemnification has not met the applicable
standards of conduct making indemnification permissible under Delaware Law, the
burden of proving the defense will be on the Company and neither the failure of
the Company's Board to have made a determination that indemnification is proper,
nor an actual determination that the claimant has not met the applicable
standard of conduct will be a defense to the action or create a presumption that
the claimant has not met the applicable standard of conduct.
Article Tenth provides that the Company may maintain insurance, at its
expense, to protect itself and any of its directors, officers, employees, or
agents against any expense, liability, or loss, whether or not the Company would
have the power to indemnify such person against such expense, liability, or loss
under Delaware Law. Finally, Article Tenth provides that the rights to
indemnification and the payment of expenses incurred in defending a proceeding
in advance of its final disposition conferred therein will not be exclusive of
any other right which any person may have or acquire under any statute,
provision of the Certificate or the Company's By-Laws, agreement, or vote of
stockholders or disinterested directors, or otherwise.
The Company and each of the Directors have entered into indemnification
agreements providing for indemnification that is broader than that provided by
Article Tenth. Each of the Directors of the Company is entitled to
indemnification pursuant to the indemnification agreements whether the
Director's acts, failures to act, neglect, or breach of duty giving rise to the
right to indemnity thereunder occurred prior or subsequent to the date of such
agreement. Such right, however, is not available with respect to acts, failures
to act, neglect, or breaches of duty of a Director occurring prior to the date
such person was elected as a Director of the Company and does not apply to acts,
failures to act, neglect, or breaches of duty of any Director of the Company
while acting in such Director's prior position, if any, with Maxus Energy
Corporation, the Company's former parent company.
Item 16. Exhibits
Exhibit No. Description
1.1 -- Agency Agreement, dated January 25, 1990 (filed as
Exhibit 1.1 to the Registration Statement, File No.
33-32024 ("Registration Statement No. 33-32024")
and incorporated herein by reference).
1.2 -- Amendment No. 1 to the Agency Agreement (filed as
Exhibit 1.2 to the Registration Statement, File No.
33-43502 and incorporated herein by reference).
1.3 -- Amendment No. 2 to the Agency Agreement (filed as
Exhibit 1.3 to the Registration Statement, File No.
33-58744 and incorporated herein by reference).
1.4 -- Form of Amendment No. 3 to the Agency Agreement
(filed as Exhibit 1.4 to the Registration
Statement, File No. 33-67556 (Registration
Statement No.33-67556) and incorporated herein by
reference).
1.5 -- Underwriting Agreement Standard Provisions.
4.1 -- Indenture, dated as of December 15, 1989, between
the Company and The First National Bank of Chicago,
as trustee (filed as Exhibit 4.1 to Registration
Statement No. 33-32024 and incorporated herein by
reference).
4.2 -- Forms of Medium-Term Notes (filed as Exhibit 4.2 to
Registration Statement No. 33-67556 and
incorporated herein by reference).
4.3 -- Certificate of Incorporation of the Company (filed
as Exhibit 3.1 to the Company's Form 10
Registration No. 1-9409 (the "Form 10") and
incorporated herein by reference).
4.4 -- By-Laws of the Company (filed as Exhibit 3.2 to the
Form 10 and incorporated herein by reference).
4.5 -- Form of Common Stock Certificate (filed as Exhibit
4.3 to the Form 10 and incorporated herein by
reference).
4.6 -- Form of Right Certificate (filed as Exhibit 1 to
the Company's Form 8-A Registration Statement,
dated March 6, 1990 (the "Form 8-A"), and
incorporated herein by reference).
4.7 -- Rights Agreement, dated as of March 6, 1990,
between the Company and Ameritrust Company National
Association (filed as Exhibit 2 to the Form 8-A and
incorporated herein by reference).
4.8 -- Form of Certificate of Designations of Series A
Junior Participating Preferred Stock (filed as
Exhibit 3 to the Form 8-A and incorporated herein
by reference).
**4.9 -- Form of Warrant Agreement for Debt Securities.
**4.10 -- Form of Warrant Certificate for Debt Securities.
**4.11 -- Form of Warrant Agreement for Preferred Stock.
**4.12 -- Form of Warrant Certificate for Preferred Stock.
**4.13 -- Form of Warrant Agreement for Common Stock.
**4.14 -- Form of Warrant Certificate for Common Stock.
*5.1 -- Opinion of Timothy J. Fretthold, Esq., Senior Vice
President/Group Executive and General Counsel
regarding legality of Debt Securities registered
under Registration Statement No. 33-67556.
5.2 -- Opinion of Timothy J. Fretthold, Esq., Senior
Vice-President/Group Executive and General Counsel
regarding legality of Offered Securities registered
under this Registration Statement.
12.1 -- Computation of ratio of earnings to fixed charges
and earnings to fixed charges and preferred stock
dividends for the three month periods ended
March 31, 1995 and 1994 and for each of the five
years ended December 31, 1994.
15.1 -- Independent Accountants Awareness Letter
23.1 -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Timothy J. Fretthold, Esq. (included in
Exhibit 5.1 and Exhibit 5.2).
*24.1 -- Powers of Attorney of directors and officers of the
Company relating to Registration Statement No.
33-67556.
*24.2 -- Power of Attorney of the Company relating to
Registration Statement No. 33-67556.
*24.3 -- Certified copies of resolutions of the Board of
Directors of the Company relating to Debt
Securities registered under Registration Statement
No. 33-67556.
24.4 -- Power of Attorney of directors and officers of the
Company relating to this Registration Statement.
24.5 -- Power of Attorney of the Company relating to this
Registration Statement.
24.6 -- Certified copy of resolutions of the Board of
Directors of the Company relating to Offered
Securities registered under this Registration
Statement.
25.1 -- Statement as to the eligibility of the Trustee
under the Indenture.
27.1 -- Financial Data Schedule.
* Previously filed as part of Registration Statement No. 33-67556.
** To be filed as an Exhibit to Form 8-K in reference to the
specific offering of Securities Warrants to which it relates.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement and/or Registration
Statement No. 33-67556:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, unless
the information required to be included in such
post-effective amendment is contained in periodic
reports filed by the registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act
of 1934 and incorporated herein by reference;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
Registration Statement and/or Registration
Statement No. 33-67556 (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
this Registration Statement and/or Registration
Statement No. 33-67556, unless the information
required to be included in such post-effective
amendment is contained in periodic reports filed by
the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 and
incorporated herein by reference;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in this Registration Statement and/or Registration
Statement No. 33-67556 or any material change to
such information in this Registration Statement
and/or Registration Statement No. 33-67556;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering; and
(4) That for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement and/or Registration
Statement No. 33-67556 shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement and Post-Effective Amendment No. 1 to Registration Statement No.
33-67556 to be signed on its behalf by the undersigned, thereunto duly
authorized pursuant to Powers of Attorney executed on behalf of the Registrant
and previously filed with the Securities and Exchange Commission or
contemporaneously filed herewith, in the City of San Antonio, State of Texas on
May 19, 1995.
DIAMOND SHAMROCK, INC.
By /S/ TODD WALKER
Todd Walker
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on May 19, 1995 by the following persons
in the capacities indicated below.
Signature Title
R. R. HEMMINGHAUS* Chairman, President, and
R. R. Hemminghaus Chief Executive Officer
(Principal Executive Officer)
and Director
ROBERT C. BECKER* Vice President and Treasurer
Robert C. Becker (Principal Financial Officer)
GARY E. JOHNSON* Vice President and Controller
Gary E. Johnson (Principal Accounting Officer)
B. CHARLES AMES* Director
B. Charles Ames
E. GLENN BIGGS* Director
E. Glenn Biggs
W. E. BRADFORD* Director
W. E. Bradford
LAURO F. CAVAZOS* Director
Lauro F. Cavazos
W. H. CLARK* Director
W. H. Clark
WILLIAM L. FISHER* Director
William L. Fisher
KATHERINE D. ORTEGA* Director
Katherine D. Ortega
BOB MARBUT* Director
Bob Marbut
* The undersigned, by signing his name hereto, does sign and execute this
Registration Statement pursuant to the Powers of Attorney executed by the above-
named officers and directors and previously filed with the Securities and
Exchange Commission or contemporaneously filed herewith.
/S/ Todd Walker
Todd Walker
Attorney-in-Fact
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Pages
1.1 -- Agency Agreement, dated January 25, 1990 (filed as
Exhibit 1.1 to the Registration Statement, File No.
33-32024 ("Registration Statement No. 33-32024")
and incorporated herein by reference).
1.2 -- Amendment No. 1 to the Agency Agreement (filed as
Exhibit 1.2 to the Registration Statement, File No.
33-43502 and incorporated herein by reference).
1.3 -- Amendment No. 2 to the Agency Agreement (filed as
Exhibit 1.3 to the Registration Statement, File No.
33-58744 and incorporated herein by reference).
1.4 -- Form of Amendment No. 3 to the Agency Agreement
(filed as Exhibit 1.4 to the Registration
Statement, File No. 33-67556 (Registration
Statement No.33-67556) and incorporated herein by
reference).
1.5 -- Underwriting Agreement Standard Provisions.
4.1 -- Indenture, dated as of December 15, 1989, between
the Company and The First National Bank of Chicago,
as trustee (filed as Exhibit 4.1 to Registration
Statement No. 33-32024 and incorporated herein by
reference).
4.2 -- Forms of Medium-Term Notes (filed as Exhibit 4.2 to
Registration Statement No. 33-67556 and
incorporated herein by reference).
4.3 -- Certificate of Incorporation of the Company (filed
as Exhibit 3.1 to the Company's Form 10
Registration No. 1-9409 (the "Form 10") and
incorporated herein by reference).
4.4 -- By-Laws of the Company (filed as Exhibit 3.2 to the
Form 10 and incorporated herein by reference).
4.5 -- Form of Common Stock Certificate (filed as Exhibit
4.3 to the Form 10 and incorporated herein by
reference).
4.6 -- Form of Right Certificate (filed as Exhibit 1 to
the Company's Form 8-A Registration Statement,
dated March 6, 1990 (the "Form 8-A"), and
incorporated herein by reference).
4.7 -- Rights Agreement, dated as of March 6, 1990,
between the Company and Ameritrust Company National
Association (filed as Exhibit 2 to the Form 8-A and
incorporated herein by reference).
4.8 -- Form of Certificate of Designations of Series A
Junior Participating Preferred Stock (filed as
Exhibit 3 to the Form 8-A and incorporated herein
by reference).
**4.9 -- Form of Warrant Agreement for Debt Securities.
**4.10 -- Form of Warrant Certificate for Debt Securities.
**4.11 -- Form of Warrant Agreement for Preferred Stock.
**4.12 -- Form of Warrant Certificate for Preferred Stock.
**4.13 -- Form of Warrant Agreement for Common Stock.
**4.14 -- Form of Warrant Certificate for Common Stock.
*5.1 -- Opinion of Timothy J. Fretthold, Esq., Senior Vice
President/Group Executive and General Counsel
regarding legality of Debt Securities registered
under Registration Statement No. 33-67556.
5.2 -- Opinion of Timothy J. Fretthold, Esq., Senior
Vice-President/Group Executive and General Counsel
regarding legality of Offered Securities registered
under this Registration Statement.
12.1 -- Computation of ratio of earnings to fixed charges
and earnings to fixed charges and preferred stock
dividends for the three month periods ended
March 31, 1995 and 1994 and for each of the five
years ended December 31, 1994.
15.1 -- Independent Accountants Awareness Letter
23.1 -- Consent of Price Waterhouse LLP.
23.2 -- Consent of Timothy J. Fretthold, Esq. (included in
Exhibit 5.1 and Exhibit 5.2).
*24.1 -- Powers of Attorney of directors and officers of the
Company relating to Registration Statement No.
33-67556.
*24.2 -- Power of Attorney of the Company relating to
Registration Statement No. 33-67556.
*24.3 -- Certified copies of resolutions of the Board of
Directors of the Company relating to Debt
Securities registered under Registration Statement
No. 33-67556.
24.4 -- Power of Attorney of directors and officers of the
Company relating to this Registration Statement.
24.5 -- Power of Attorney of the Company relating to this
Registration Statement.
24.6 -- Certified copy of resolutions of the Board of
Directors of the Company relating to Offered
Securities registered under this Registration
Statement.
25.1 -- Statement as to the eligibility of the Trustee
under the Indenture.
27.1 -- Financial Data Schedule.
* Previously filed as part of Registration Statement No. 33-67556.
** To be filed as an Exhibit to Form 8-K in reference to the
specific offering of Securities Warrants to which it relates.
W2929.TW
DIAMOND SHAMROCK, INC.
Securities
Underwriting Agreement Standard Provisions
May, 1995
From time to time Diamond Shamrock, Inc. (the "Company") proposes to
enter into one or more Pricing Agreements (each a "Pricing Agreement")
substantially in the form of Annex I(A), I(B) or I(C) hereto, with such
additions and deletions as the parties thereto may determine, and, subject to
the terms and conditions stated herein and therein, to issue and sell to the
firms named in Schedule I to the applicable Pricing Agreement (such firms
constituting the "Underwriters" with respect to such Pricing Agreement) certain
of its debt securities ("Debt Securities"), preferred stock and common stock
("Equity Securities") and warrants ("Warrants") to purchase Debt Securities
("Warrant Debt Securities") or the Equity Securities ("Warrant Equity
Securities", collectively with the Warrant Debt Securities, the "Warrant
Securities" and collectively with the Debt Securities and preferred and Equity
Securities, the "Securities") specified in Schedule II to such Pricing Agreement
(such Securities so specified being referred to herein as the "Designated
Securities").
1. The Designated Securities shall be sold pursuant to a Pricing
Agreement. Particular sales of Designated Securities may be made from time to
time to the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (each a "Representative"). The
term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any firm
being designated as their representative. This Underwriting Agreement shall not
be construed as an obligation of the Company to sell any of the Securities or as
an obligation of any of the Underwriters to purchase the Securities. The
obligation of the Company to issue and sell any of the Securities and the
obligation of any of the Underwriters to purchase any of the Securities shall be
evidenced by the Pricing Agreement with respect to the Designated Securities
specified therein. Each Pricing Agreement shall specify, as applicable, the
aggregate amount of such Designated Securities, the initial public offering
price of such Designated Securities, the purchase price to the Underwriters of
such Designated Securities, the names of the Underwriters of such Designated
Securities, the names of the Representatives of such Underwriters and the amount
of such Designated Securities to be purchased by each Underwriter and shall set
forth the date, time and manner of delivery of such Designated
Securities and payment therefor. The Debt Securities and Warrant Debt
Securities shall be sold pursuant to the indenture (the "Indenture") identified
in Schedule II to the applicable Pricing Agreement. Preferred stock,
including preferred stock purchasable upon exercise of Warrants, if any, will be
issued in one or more series, which series may vary as to voting rights,
dividends, optional and mandatory redemption provisions, liquidation preference
and conversion provisions and other terms, with all such terms for any
particular series or issue of the preferred stock being determined at the time
of issue. The Warrants are to be issued pursuant to the provisions of a Warrant
Agreement (the "Warrant Agreement") specified in the applicable Pricing
Agreement between the Company and the Warrant Agent named in the Pricing
Agreement (the "Warrant Agent"). A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designated to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement in respect of the Securities and more
particularly described in the applicable Pricing Agreement has been filed with
the Securities and Exchange Commission (the "Commission") in the form
heretofore delivered or to be delivered to the Representative, and such
registration statement in such form has been declared effective by the
Commission and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission (any preliminary prospectus included in such
registration statement being hereinafter called a "Preliminary Prospectus"); if
any post-effective amendment to such registration statement has been filed with
the Commission prior to the date of the applicable Pricing Agreement, the most
recent such amendment has been declared effective by the Commission; "Effective
Date" means the date as of which such registration statement, or the most recent
post-effective amendment thereto, if any, was declared effective by the
Commission; such registration statement, as amended at the Effective Date,
including all documents incorporated by reference therein and, if the date of
the Pricing Agreement is on or before the fifth business day after the Effective
Date, including all information deemed to be a part thereof as of the Effective
Date pursuant to paragraph (b) of Rule 430A under the Securities Act of 1933, as
amended (the "Act"), is hereinafter referred to as the "Registration Statement,"
and the form of prospectus relating to the Designated Securities, as first filed
pursuant to paragraph (1) or (4) of Rule 424(b) ("Rule 424(b)") under the Act
or, if the date of the Pricing Agreement is after the fifth business day after
the Effective Date, pursuant to Rule 424(b)(2) or (5), as such form of
prospectus may be supplemented as contemplated by Section 1 to reflect the terms
of the Designated Securities and the terms of offering thereof, including all
documents incorporated by reference therein, is hereinafter referred to as the
"Prospectus;" any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to the applicable form under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and
incorporated therein by reference;
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; any further
documents so filed and incorporated by reference in the Prospectus or in any
amendments or supplements thereto, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall apply only to
documents so filed and incorporated by reference during the period that a
prospectus relating to the Designated Securities is required to be delivered in
connection with sales of such Designated Securities (such period being
hereinafter sometimes referred to as the "prospectus delivery period"); and
provided further, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of an
Underwriter through the Representative expressly for use in the Prospectus or to
any statements in or omissions from the statement of eligibility and
qualifications on Form T-1 of the Trustee under the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act");
(c) The Registration Statement and the Prospectus conform, and any
amendments or supplements thereto will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act, and the rules and
regulations of the Commission thereunder, and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and any
supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this representation
and warranty shall apply only to amendments or supplements filed or made during
the prospectus delivery period; and provided further, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of an Underwriter through the Representative expressly
for use in the Prospectus or to any statements in or omissions from the
statement of eligibility and qualifications on Form T-1 of the Trustee, if any,
under the Trust Indenture Act;
(d) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as disclosed in the
Prospectus, (i) there has not been any material adverse change in the business,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole, and (ii) there has been no material transaction entered into
by the Company or any of its significant subsidiaries (as defined in Rule 405
under the Act) other than those in the ordinary course of business;
(e) Each of the Company and its significant subsidiaries has been
duly incorporated, is validly existing in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is in good
standing as a foreign corporation in each jurisdiction in which its ownership of
properties or the conduct of its business requires such qualification (except
where the failure to so qualify or be in good standing would not have a material
adverse effect upon the Company and its subsidiaries taken as a whole), and has
the necessary corporate power to conduct the businesses in which it is engaged,
as described in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and non-
assessable;
(g) (i) The Indenture, if any, described in the applicable Pricing
Agreement has been duly authorized, executed and delivered by the Company and is
duly qualified under the Trust Indenture Act and constitutes the valid and
binding obligation of the Company, enforceable in accordance with its terms
(except as enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally and subject to general
equitable principles); the Debt Securities, if any, described in the applicable
Pricing Agreement have been validly authorized for sale pursuant to the
applicable Pricing Agreement and, when such Debt Securities or any Warrant Debt
Securities have been duly executed, authenticated, delivered and paid for as
provided in the applicable Pricing Agreement and the applicable Indenture or, in
the case of Warrant Debt Securities, the applicable Indenture, such Debt
Securities or Warrant Debt Securities will constitute valid and binding
obligations of the Company entitled to the benefits of the applicable Indenture;
(ii) if the Designated Securities are convertible, the shares of capital stock
issuable upon conversion are duly and validly authorized, have been duly
reserved for issuance upon conversion of the Designated Securities, and when
issued upon the conversion of the Designated Securities, will be duly and
validly issued, fully paid and non-assessable; (iii) the Equity Securities
and/or Warrant Equity Securities, if any, described in the applicable Pricing
Agreement have been duly and validly authorized, when issued and paid for as
provided in the applicable Warrant Agreement, will be fully paid and non-
assessable and, in the case of Warrant Equity Securities, will be duly reserved
for issuance upon exercise of the applicable Warrant, (iv) the Warrants and the
Warrant Agreement, if any, described in the Pricing Agreement have been duly
executed and delivered and the Warrants, when duly executed, countersigned and
delivered, will constitute the valid and legally binding obligations of the
Company, enforceable in accordance with their terms (except as enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditor's rights generally, and subject to general equitable principles); (v)
no further approval or authority of the stockholders or the Board of Directors
of the Company will be required for the issuance and sale of the Designated
Securities as contemplated herein or, if applicable, the issuance of the shares
of capital stock upon conversion of the Designated Securities or exercise of the
Warrants; and (vi) the Designated Securities, the Indenture and the Warrant
Agreement, if any, conform in all material respects to the descriptions thereof
contained in the Prospectus.
(h) Neither the Company nor any of its significant subsidiaries is in
default under any agreement, indenture or instrument, the effect of which
violation or default would be material to the Company and its subsidiaries taken
as a whole; the execution, delivery and performance of the applicable Pricing
Agreement and the Indenture, if any, and compliance by the Company with the
provisions of the Designated Securities and the Indenture, if any, have been
duly authorized by all necessary corporate action and will not conflict with,
result in the creation or imposition of any lien, charge or encumbrance upon any
of the assets of the Company or any of its significant subsidiaries pursuant to
the terms of, or constitute a default under, any agreement, indenture or
instrument, or result in a violation of any order, rule or regulation of any
court or governmental agency having jurisdiction over the Company, any of its
significant subsidiaries or their respective properties; and except as required
by the Act, the Trust Indenture Act, the Exchange Act and applicable state
securities laws, no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance of the transactions contemplated by the
applicable Pricing Agreement or the Indenture, if any.
(i) Other than as described in the Prospectus, there is no material
litigation or governmental proceeding pending or, to the actual knowledge of the
executive officers of the Company, threatened against the Company or any of its
subsidiaries which if adversely decided could reasonably be expected to result
in any material adverse change in the business, financial condition or results
of operations of the Company and its subsidiaries taken as a whole.
3. Upon the execution of the applicable Pricing Agreement and the
authorization by the Representative of the release of the Designated Securities,
the several Underwriters propose to offer such Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. The Designated Securities to be purchased by each Underwriter, in
definitive form to the extent practicable, and in such authorized denominations
and registered in such names as the Representative may request upon at least
forty-eight hours' prior notice to the Company, shall be delivered by or on
behalf of the Company to the Representative for the accounts of the
Underwriters, against payment by each such Underwriter or on its behalf of the
purchase price therefor by certified or official bank check or checks payable to
the order of the Company in the funds specified in the applicable Pricing
Agreement, all at the place and time and date specified in such Pricing
Agreement or at such other place and time and date as the Representative and the
Company may agree upon in writing, such time and date being herein called the
"Time of Delivery" for such Designated Securities. Each Pricing Agreement will
also specify the firm or firms which will be Underwriters, the names of any
Representatives, the amount to be purchased by each Underwriter, the purchase
price to be paid by the Underwriters and certain terms of the Designated
Securities. It is understood that the Underwriters propose to offer the
Designated Securities for sale as set forth in the Prospectus. The Debt
Securities delivered to the Underwriters on the Closing Date will be in such
form, in such denominations and registered in such names as the Underwriters may
request.
5. The Company agrees with each of the Underwriters of the Designated
Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives (which approval shall not be unreasonably withheld) and to file
such Prospectus with the Commission (i) pursuant to Rule 424(b)(1) (or, if
applicable and if consented to by the Representatives, pursuant to Rule
424(b)(4)) not later than the Commission's close of business on the earlier of
(A) the second business day following the date of the applicable Pricing
Agreement or (B) the fifth business day after the Effective Date, or (ii) if the
date of the Applicable Pricing Agreement is after the fifth business day after
the Effective Date, pursuant to Rule 424(b)(2) (or, if applicable and if
consented to by the Representatives, pursuant to Rule 424(b)(5)) not later than
the second business day following the date of the applicable Pricing Agreement;
the Company will advise the Representatives promptly of any such filing
pursuant to Rule 424(b); to advise the Representative promptly of any amendment
or supplement to the Registration Statement or Prospectus after the Time of
Delivery and during the prospectus delivery period and furnish the
Representative with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and during the prospectus
delivery period; and during such same period to advise the Representative,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or become effective or any supplement to
the Prospectus or any amended Prospectus has been filed, or mailed for filing,
of the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any prospectus relating to the Designated Securities,
of the suspension of the qualification of the Designated Securities for offering
or sale in any jurisdiction, of the initiation of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus; and, in the event of the issuance
of any such stop order or of any such order preventing or suspending the use of
any prospectus relating to the Designated Securities or suspending any such
qualification, to promptly use reasonable efforts, to obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representative may reasonably request to qualify the Designated Securities for
offering and sale under the securities laws of such jurisdictions as the
Representative may reasonably request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Designated
Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus in such
quantities as the Representative may from time to time reasonably request, and,
if the delivery of a prospectus is required at any time prior to the expiration
of nine months after the time of issue of such Prospectus in
connection with the offering or sale of the Designated Securities and if at such
time any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in order
to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify
the Representative and upon the request of the Representative to file such
document and to prepare and furnish without charge to each Underwriter and to
any dealer in securities as many copies as the Representative may from time to
time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus in
connection with sales of the Designated Securities at any time nine months or
more after the time of issue of the Prospectus, upon the request of the
Representative but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as the Representative may request of an amended
or supplemented Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as
practicable an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158); and
(e) Without the prior consent of the Representative, the Company will
not, (A) in the event of an offering of Equity Securities, convertible Debt
Securities or Warrant Equity Securities, offer, sell, contract to sell or
otherwise dispose of any shares of common stock or any securities convertible
into or exchangeable or exercisable for or any rights to purchase or acquire
common stock for that period specified in the Pricing Agreement, other than (i)
shares of common stock or options to purchase common stock granted under the
Company's existing employee benefit or compensation plans or (ii) the issuance
of common stock upon conversion of existing convertible securities or upon
exercise of existing rights, options or warrants and, (B) for a period
beginning from the date of the applicable Pricing Agreement and continuing to
and including the Time of Delivery, in the event of an offering of Debt
Securities or Warrants to purchase Warrant Debt Securities, will not offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company which mature more than one year after such Time of Delivery and which
are substantially similar to the Designated Securities.
6. The Company covenants and agrees with the several Underwriters
that the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements (except as expressly provided in the last clause of
Section 5(c) hereof) thereto and the mailing and delivering of copies thereof to
the Underwriters and dealers; (ii) the cost of printing or producing any
Agreement among Underwriters, the Pricing Agreement, any Indenture, any Blue Sky
and Legal Investment Memoranda and any other documents in connection with the
offering, purchase, sale and delivery of the Designated Securities; (iii) the
costs of filing with the National Association of Securities Dealers, Inc., if
necessary, (iv) all expenses in connection with the qualification of the
Designated Securities for offering and sale under state securities laws as
provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(v) any fees charged by securities rating services for rating the Designated
Securities; (vi) the cost of preparing, issuing, and printing the
Designated Securities; (vii) the fees and expenses of any Transfer agent, of any
Trustee and any agent of any Trustee and the fees and disbursements of counsel
for any Trustee in connection with any Indenture and the Designated Securities;
and (viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
Section 5(c), Section 8 and Section 11 hereof or as may be provided in the
applicable Pricing Agreement, the Underwriters will pay all of their own costs
and expenses, including the fees of their counsel, transfer taxes on resale of
any of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters of the Designated Securities
specified in the applicable Pricing Agreement shall be subject, in the
discretion of the Representative, to the accuracy of the representations and
warranties and other statements of the Company herein, at and as of the Time of
Delivery, the performance by the Company of all of its obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with
Section 5(a) of this Agreement; and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened in writing by the Commission;
(b) Simpson Thacher & Bartlett, counsel for the Underwriters, shall
have furnished to the Representative such opinion or opinions, dated the Time of
Delivery, with respect to the incorporation of the Company, the validity of the
Designated Securities, the Registration Statement, the Prospectus as
amended or supplemented and other related matters as the Representative may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Timothy J. Fretthold, Esq., Senior Vice President/Group
Executive and General Counsel of the Company, shall have furnished to the
Representative his written opinion, dated the Time of Delivery, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and in good standing
as a foreign corporation in all jurisdictions in the United States in
which its ownership of properties or the conduct of its business
requires such qualification (except where the failure so to qualify or be in
good standing would not have a material adverse effect upon the Company and its
subsidiaries taken as a whole), and has all necessary corporate power and
authority, and to such counsel's knowledge has all material governmental
franchises, licenses and permits, necessary to conduct the businesses in which
it is engaged as described in the Prospectus;
(ii) The Registration Statement is effective under the Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made within
the time period required by Rule 424(b); to the knowledge of such counsel after
due inquiry, no stop order suspending its effectiveness has been issued and no
proceeding for that purpose is pending or has been threatened in writing by the
Commission;
(iii) Based upon such counsel's participation in the preparation
of the Registration Statement and Prospectus and his discussions with officers,
directors and employees of the Company, the independent accountants who examined
the financial statements of the Company and its consolidated subsidiaries
included in the Registration Statement and Prospectus and the Representative
concerning the information contained in the Registration Statement and
Prospectus and the proposed responses to various items in Form S-3, such counsel
is of the opinion that the Registration Statement (except for the operating
statistics, financial and statistical statements, financial schedules, and other
financial data included therein, as to which he need express no opinion), as of
its effective date, and the Prospectus (with the foregoing exceptions), as of
its date, complied as to form in all material respects with the Act, the
rules and regulations of the Commission thereunder, the Trust Indenture Act and
the rules and regulations of the Commission thereunder;
(iv) Although such counsel has not independently verified and
is not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the information contained in the Registration
Statement and Prospectus, based upon the participation and discussion described
in paragraph (iii) above, no facts have come to his attention that cause him to
believe that the Registration Statement (except for the operating statistics,
financial statements, financial schedules and other financial and statistical
data included therein, as to which he need express no opinion), as of its
effective date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus (with the
foregoing exceptions), at the effective date and as amended and supplemented to
the date of such opinion, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(v) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company or
any of its subsidiaries relating to the applicable Pricing Agreement
or which is required to be disclosed in the Prospectus which is not
disclosed as so required;
(vi) Such counsel does not know of any contracts or other
documents which are required to be filed as exhibits to the Registration
Statement by the Act or by the rules and regulations of the Commission
thereunder, or which are required to be filed by the Exchange Act or the rules
and regulations of the Commission thereunder as exhibits to any document
incorporated by reference in the Prospectus, which have not been filed as
exhibits to the Registration Statement or to such document or incorporated
therein by reference as permitted by the rules and regulations of the Commission
under the Act or the rules and regulations of the Commission under the Exchange
Act;
(vii) To the knowledge of such counsel, neither the Company nor
any of its significant subsidiaries is in default under any material agreement,
indenture or instrument;
(viii) The Indenture, if any, described in the applicable
Pricing Agreement has been duly authorized, executed and delivered by
the Company and duly qualified under the Trust Indenture Act; the
Warrant Agreement, if any, described in the applicable Pricing
Agreement has been duly authorized, executed and delivered by the
Company; and each, as applicable, is a valid and binding obligation of the
Company enforceable in accordance with its terms (except as enforcement thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and subject to general equitable principles);
(ix) If any Designated Securities to be issued are convertible
into or are exercisable for capital stock of the Company, the shares
of such capital stock are duly and validly authorized, have been duly
reserved for issuance upon conversion or exercise of such Designated
Securities, and when issued upon the conversion or exercise of such
Designated Securities, will be duly and validly issued, fully paid and non-
assessable;
(x) The Equity Securities, if any, described in the applicable
Pricing Agreement have been duly and validly authorized by the Company
and, when paid for in accordance with the applicable Pricing Agreement
or, in the case of Warrant Equity Securities, the applicable Warrant
Agreement and when certificates therefor have been duly countersigned,
will be validly issued, fully paid, and non-assessable.
(xi) The Debt Securities, if any, described in the applicable
Pricing Agreement are in a form contemplated by the applicable
Indenture and have been duly authorized by all necessary corporate
action on the part of the Company and, assuming such Debt Securities
have been duly authenticated as specified in the applicable Indenture
and delivered against payment therefor in accordance with the
applicable Pricing Agreement, such Debt Securities will be valid and
binding obligations of the Company enforceable in accordance with
their terms (except as enforcement thereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and
subject to general equitable principles), and entitled to the benefits of the
applicable Indenture;
(xii) The Warrants, if any, described in the applicable Pricing
Agreement, are in a form contemplated by the applicable Warrant Agreement, have
been duly authorized by all necessary corporate action on the part of the
Company and assuming such Warrants have been duly countersigned by the Warrant
Agent and delivered against payment therefor in accordance with the applicable
Pricing Agreement, such Warrants will be valid and binding obligations of the
Company enforceable in accordance with their terms (except as enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and subject to general equitable
principles), and entitled to the benefits of the applicable Warrant Agreement;
and the Warrants, if any, described in the applicable Pricing Agreement, may be
exercised to purchase the securities for which they are exercisable in
accordance with their terms and the terms of the applicable Warrant Agreement;
(xiii) The Warrant Debt Securities, if any, described in the
applicable Pricing Agreement, issuable upon exercise of the Warrants,
are in a form contemplated by the applicable Indenture and by the
applicable Warrant Agreement and have been duly authorized by all necessary
corporate action on the part of the Company and, assuming such
Warrant Debt Securities have been duly authenticated as specified in
the applicable Indenture and delivered against payment therefor in
accordance with the applicable Warrant Agreement, such Warrant Debt
Securities will be valid and binding obligations of the Company
enforceable in accordance with their terms (except as enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and subject to general equitable principles), and
entitled to the benefits of the applicable Indenture;
(xiv) The Debt Securities, the Indenture, if any, described in
the applicable Pricing Agreement and the Warrant Agreement, if any,
described in the applicable Pricing Agreement, conform in all
material respects as to legal matters to the statements relating to
them in the Registration Statement and the Prospectus; and
(xv) The execution, delivery and performance of the applicable
Pricing Agreement and compliance by the Company with the provisions of the
Designated Securities, the Indenture, if any, and the Warrant Agreement, if any,
will not conflict with, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the assets of the Company or any of its
significant subsidiaries pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument known to such counsel, or result
in a violation of any order, rule or regulation known to such counsel
(also as in effect on the date of such opinion) of any court or
governmental agency having jurisdiction over the Company, any of its
significant subsidiaries or their respective properties; and no
consent, authorization with, any court or governmental agency is
required for the execution, delivery and performance by the Company of the
applicable Pricing Agreement except such as may be required by the Act, the
Trust Indenture Act, the Exchange Act or state securities laws;
(d) Jones, Day, Reavis & Pogue, counsel to the Company, shall have
furnished to the Representative such firm's written opinion, dated the Time of
Delivery, to the effect that:
(i) The Company is validly existing as a corporation in good
standing under the laws of the State of Delaware;
(ii) The Indenture, if any, described in the applicable
Pricing Agreement has been duly authorized, executed and delivered by the
Company and duly qualified under the Trust Indenture Act; the Warrant Agreement,
if any, described in the applicable Pricing Agreement has been duly authorized,
executed and delivered by the Company; and each, as applicable, is a valid and
binding obligation of the Company enforceable in accordance with its terms
(except as enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and subject
to general equitable principles);
(iii) The Debt Securities, if any, described in the applicable
Pricing Agreement, are in a form contemplated by the applicable Indenture and
have been duly authorized by all necessary corporate action on the part of the
Company and, assuming such Debt Securities have been duly authenticated as
specified in the applicable Indenture and delivered against payment therefor in
accordance with the applicable Pricing Agreement, such Securities will be valid
and binding obligations of the Company enforceable in accordance with their
terms (except as enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and subject to general
equitable principles), and entitled to the benefits of the applicable Indenture;
(iv) If any Designated Securities to be issued are convertible
into or are exercisable for capital stock of the Company, the shares
of such capital stock are duly and validly authorized, have been duly
reserved (based upon the initial conversion price) for issuance upon
conversion or exercise of such Designated Securities, and when
certificates therefor have been duly countersigned and when issued
upon the conversion or exercise of such Designated Securities, will be duly and
validly issued, fully paid and non-assessable;
(v) The Equity Securities, if any, described in the applicable
Pricing Agreement have been duly and validly authorized by the Company and, when
paid for in accordance with the applicable Pricing Agreement or, in the case of
Warrant Equity Securities, the applicable Warrant Agreement and when
certificates therefor have been duly countersigned, will be validly issued and
are fully paid and non-assessable;
(vi) The Warrants, if any, described in the applicable Pricing
Agreement, are in a form contemplated by the applicable Warrant Agreement, have
been duly authorized by all necessary corporate action on the part of the
Company and assuming such Warrants are duly countersigned by the Warrant Agent
and delivered against payment therefor in accordance with the applicable Pricing
Agreement, such Warrants will be valid and binding obligations of the Company
enforceable in accordance with their terms (except as enforcement thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and subject to general equitable principles), and entitled to the
benefits of the applicable Warrant Agreement; and the Warrants, if any,
described in the applicable Pricing Agreement, may be exercised to purchase the
securities for which they are exercisable in accordance with their terms and the
terms of the applicable Warrant Agreement;
(vii) The Warrant Debt Securities, if any, described in the
applicable Pricing Agreement, issuable upon exercise of the Warrants,
are in a form contemplated by the applicable Indenture and by the applicable
Warrant Agreement and have been duly authorized by all necessary corporate
action on the part of the Company and, assuming such Warrant Debt Securities
have been duly authenticated as specified in the applicable Indenture and
delivered against payment therefor in accordance with the applicable Warrant
Agreement, such Warrant Debt Securities will be valid and binding obligations of
the Company enforceable in accordance with their terms (except as enforcement
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally and subject to general equitable principles), and
entitled to the benefits of the applicable Indenture;
(viii) The Designated Securities, the Indenture, if any, and
the Warrant Agreement, if any, conform in all material respect as to legal
matters to the statements relating to them in the Registration Statement and the
Prospectus;
(ix) The Company has the corporate power and authority necessary
to execute and deliver the applicable Pricing Agreement and to perform its
obligations thereunder (including the sale and delivery of the Designated
Securities under the applicable Pricing Agreement); and the applicable Pricing
Agreement has been duly authorized, executed and delivered by the Company;
(x) Based upon such counsel's participation in the preparation
of the Registration Statement and Prospectus and such counsel's discussions with
officers and employees of the Company and the Representative concerning the
information contained in the Registration Statement and Prospectus and the
proposed responses to various items in Form S-3, such counsel is of the opinion
that the Registration Statement (except for the operating statistics, financial
statements, financial schedules, and other financial and statistical data
included therein, as to which such counsel need express no opinion), as of its
effective date, and the Prospectus (with the foregoing exceptions), as of its
date, complied as to form in all material respects with the Act, the rules and
regulations of the Commission thereunder, and, if applicable, the Trust
Indenture Act and the rules and regulations of the Commission thereunder; and
(xi) Although such counsel has not independently verified and is
not passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the information contained in the Registration
Statement and Prospectus, based upon the participation and discussions described
in paragraph (x) above, no facts have come to such counsel's attention that
cause such counsel to believe that the Registration Statement (except for the
operating statistics, financial statements, financial schedules and other
financial and statistical data included therein, as to which such counsel need
express no opinion), as of its effective date, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus (with the foregoing exceptions), at the effective date and
as amended and supplemented to the date of such opinion, contained or contains
any untrue statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(e) The Trustee, if any, shall have furnished to the Representative a
certificate, dated the Time of Delivery, as to its due authorization,
execution and delivery of the Indenture and its due authentication of the
Designated Securities;
(f) At the Time of Delivery, the independent accountants who have
certified the financial statements of the Company and its subsidiaries included
or incorporated by reference in the Registration Statement shall have furnished
to the Representative a letter, dated the Time of Delivery, of the type
described in the American Institute of Certified Public Accountant's Statement
on Auditing Standards No. 72 and as to such other matters as the Representative
may reasonably request and in form and substance reasonably satisfactory to the
Representative;
(g) Subsequent to the date of the applicable Pricing Agreement there
shall not have occurred any of the following:
(i) a suspension in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or the over-the-counter
market, or the establishment of minimum prices on either of such exchanges or
such market, or
(ii) a general banking moratorium declared by federal, Texas or
New York State authorities, or
(iii) any outbreak or escalation of hostilities in which the
United States is or becomes engaged which would likely result in the
declaration of a national emergency, or
(iv) any downgrading in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization," as
that term is defined by the Commission for purposes of Rule 436(g) under the Act
or any public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); or
(v) any material adverse change in the existing economic,
political or financial conditions in the United States, including any effect of
international conditions on the financial markets in the United States that, in
the reasonable judgment of the Representative, makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Securities on the terms and in the manner contemplated in the
Prospectus; and
(h) The Company shall have furnished or caused to be furnished to the
Representative at the Time of Delivery a certificate or certificates of officers
of the Company as to the accuracy of the representations and warranties of the
Company herein at and as of the Time of Delivery, as to the performance by the
Company of all of its obligations hereunder to be performed at or prior to the
Time of Delivery, and as to the matters set forth in subsection (a) of this
Section.
8. (a) The Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act from and against any loss, claim, damage or
liability, joint or several, and any action in respect thereof, to which such
Underwriter or controlling person may become subject, under the Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the Prospectus or
any other prospectus relating to the Designated Securities, or any amendment or
supplement thereto, or arises out of, or is based upon, the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each Underwriter and controlling person for any legal and other expenses
reasonably incurred by such Underwriter or controlling person in investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus or any other prospectus relating to the Designated Securities, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Underwriter through
the Representative specifically for inclusion therein. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to any Underwriter or controlling person of any Underwriter.
(b) Each Underwriter shall indemnify and hold harmless the Company,
each of its directors, each of its officers who signed the Registration
Statement and any person who controls the Company within the meaning of Section
15 of the Act from and against any loss, claim, damage or liability, joint or
several, and any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Act, the
Exchange Act or federal or state statutory law or regulation, at common law or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus, or any other
prospectus relating to the Designated Securities, or any amendment or
supplement thereto, or arises out of, or is based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter
through the Representative specifically for inclusion therein, and shall
reimburse the Company or any such director, officer or controlling person for
any legal and other expenses reasonably incurred by such indemnified party in
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action. The foregoing indemnity agreement is in addition
to any liability which any Underwriter may otherwise have to the Company or any
of its directors, officers or controlling persons.
(c) Promptly after receipt by an indemnified party under this Section
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section, notify the indemnifying party in writing of the claim
or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section except to the
extent that the indemnifying party is actually prejudiced by such failure. If
any such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein, and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice from
the indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
(i) the Underwriters shall have the right to employ counsel to represent the
Underwriters who may be subject to liability arising out of any claim in respect
of which indemnity may be sought by the Underwriters against the Company under
this Section if, in the reasonable judgment of the Representative, it is
advisable for the Underwriters to be represented by separate counsel, and in
that event the fees and expenses of such counsel shall be paid by the Company
and (ii) the Company shall have the right to employ counsel to represent the
Company, each of its directors and officers and each of its controlling persons
who may be subject to liability arising out of any claim in respect to which
indemnity may be sought by the Company or such other persons under this Section
if, in the reasonable judgment of the Company, it is advisable for the Company,
its directors and officers, and controlling persons to be represented by
separate counsel and, in that event, the fees and expenses of such separate
counsel shall be paid by the Underwriters. The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel to which it is entitled under this
Section, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement.
9. (a) If any Underwriter shall default in its obligations to
purchase the Designated Securities which it has agreed to purchase under the
Pricing Agreement, the Representative may in its discretion arrange for any
Underwriter or Underwriters or another party or other parties to purchase such
Designated Securities on the terms contained herein. If within thirty-six hours
after such default by any Underwriter the Representative does not arrange for
the purchase of such Designated Securities, then the Company shall be entitled
to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to the Representative to purchase
such Designated Securities on such terms. In the event that, within the
respective prescribed periods, the Representative notifies the Company that it
has so arranged for the purchase of such Designated Securities, or the Company
notifies the Representative that it has so arranged for the purchase of such
Designated Securities, the Representative or the Company shall have the right to
postpone the Time of Delivery for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in the opinion of the
Representative may thereby be made necessary. The term "Underwriter" as used in
this Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to the Agreement with
respect to such Designated Securities.
(b) If, after giving effect to any arrangement for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by the
Representative and the Company as provided in subsection (a) above, the
aggregate principal amount of such Designated Securities which remains
unpurchased does not exceed one-tenth of the aggregate principal amount of all
the Designated Securities, then the Company shall have the right to require each
non-defaulting Underwriter to purchase the principal amount of Designated
Securities which such Underwriter agreed to purchase hereunder and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the principal amount of such Designated Securities which such
Underwriter agreed to purchase hereunder) of the Designated Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters by the
Representative and the Company as provided in subsection (a) above, the
aggregate principal amount of Designated Securities which remains unpurchased
exceeds one-tenth of the aggregate principal amount of Designated Securities, or
if the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Designated Securities of a
defaulting Underwriter or Underwriters, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Designated Securities.
Anything herein to the contrary notwithstanding, the indemnity
agreement of the Company in subsection (a) of Section 8 hereof, the
representations and warranties in subsections (b) and (c) of Section 2 hereof
and any representation or warranty as to the accuracy of the Registration
Statement or the Prospectus contained in any certificate furnished by the
Company pursuant to Section 7 hereof, insofar as they may constitute a basis for
indemnification for liabilities (other than payment by the Company of expenses
incurred or paid in the successful defense of any action, suit or proceeding)
arising under the Act, shall not extend to the extent of any interest therein of
a controlling person or partner of an Underwriter who is a director, officer or
controlling person of the Company when the Registration Statement has become
effective (or when any amendment thereto made by the Company becomes effective)
or who, with his consent, is named in the Registration Statement as about to
become a director of the Company, except in each case to the extent that an
interest of such character shall have been determined by a court of appropriate
jurisdiction as not against public policy as expressed in the Act. Unless in
the opinion of counsel for the Company the matter has been settled by
controlling precedent, the Company will, if a claim for such indemnification is
asserted, submit to a court of appropriate jurisdiction the question whether
such interest is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
11. If the applicable Pricing Agreement shall be terminated pursuant
to clause (i), (ii), (iii) or (v) of subsection 7(g) hereof or pursuant to
Section 9 hereof, the Company shall not then be under any liability to any
Underwriter with respect to the Designated Securities except as provided in
Section 6 and Section 8 hereof; but if for any other reason the Designated
Securities are not delivered by or on behalf of the Company as provided herein
by reason of the Company's breach of any representation, warranty or covenant
herein or in the applicable Pricing Agreement, the Company will reimburse the
Underwriters through the Representative for all out-of-pocket expenses approved
in writing by the Representative, including fees and disbursements of counsel,
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of such Designated Securities, but the Company shall
then be under no further liability to any Underwriter with respect to such
Designated Securities except as provided in Section 6 and Section 8
hereof.
12. In all dealings hereunder, the Representative shall act on behalf
of each of the Underwriters, and the parties hereto shall be entitled to act and
rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Representative.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriters shall be sufficient in all respects if delivered or sent by
registered mail to the address of the Representative as set forth in the
applicable Pricing Agreement; and if to the Company shall be sufficient in all
respects if delivered or sent by registered mail to the address of the Company
set forth in the Registration Statement, Attention: Treasurer; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall
be delivered or sent by registered mail to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which addresses have been supplied to the Company by the
Representative.
13. This Agreement and the Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Company and, to the
extent provided in Section 8 and Section 10 hereof, the officers and directors
of the Company and each person who controls the Company or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence in connection with the Pricing
Agreement.
15. This Agreement and the Pricing Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York applicable
to contracts made and to be performed therein.
16. This Agreement and the Pricing Agreement may be executed by any
one or more of the parties hereto in any number of counterparts, each of which
shall be deemed to be an original, but all such respective counterparts shall
together constitute one and the same instrument.
<PAGE>
ANNEX I(A)
Form of Pricing Agreement
(Debt Securities)
[INSERT NAME],
As Representatives of the several
Underwriters named in Schedule I hereto,
[Insert Address]
, 199_
Dear Sirs:
Diamond Shamrock, Inc. (the "Company") proposes, subject to the terms
and conditions stated herein and in the Underwriting Agreement Standard
Provisions filed as an exhibit to the Company's registration statement on Form
S-3 (No. 33- ) (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, provided that each
representation and warranty with respect to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Representatives
designated to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the principal amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us two counterparts hereof, and upon acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company. It is understood that your acceptance of this letter on behalf
of each of the Underwriters is or will be pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination, upon request, but without warranty on the part of
the Representatives as to the authority of the signers thereof.
Very truly yours,
DIAMOND SHAMROCK, INC.
By:__________________________
Accepted as of the date hereof:
[Insert Name]
By:___________________________
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Principal Amount of
Designated Securities
to be Purchased
Underwriter
[Names of Underwriters] . . . . . . . . . . . . . . $
__________
Total . . . . . . . . . . . . . . . . . . . . . . . $__________
<PAGE>
SCHEDULE II
Title of Designated Securities:
[ %] [Floating Rate] [Zero Coupon] [Notes]
[Debentures] due
Aggregate principal amount:
$
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from
to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from to [and accrued amortization, if any, from
to ]
Specified funds for payment of purchase price:
[New York] Clearing House funds
Indenture:
Indenture, dated as of , between the Company and
, as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates]
Warrant Provisions:
[See Schedule II to Annex I(C)]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than
through the sinking fund, in whole or in part at the option of the
Company, in the amount of $ or an integral multiple thereof,
[on or after , at the following
redemption price (expressed in percentages of principal amount).] If
[redeemed on or before , %, and if] redeemed during the
12-month period beginning
Redemption
Year
Price
and thereafter at 100% of their principal amount, together
in each case with accrued interest to the redemption date.]
[on any interest payment date falling or after , , at
the election of the Company, at a redemption price equal to the
principal amount thereof, plus accrued interest to the date of
redemption.]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a
sinking fund to retire $ principal amount of Designated
Securities on in each of the years through
at 100% of their principal amount plus accrued interest] [,
together with [cumulative] [noncumulative] redemptions at the
option of the Company to retire an additional $
principal amount of Designated Securities in the years
through at 100% of their principal amount plus accrued
interest].
[If Securities are extendable debt Securities, insert --
Extendable Provisions:
Securities are repayable on , [insert date and
years], at the option of the holder, at their principal amount with
accrued interest. Initial annual interest rate will be %, and
thereafter annual interest rate will be adjusted on , and
to a rate not less than % of the effective annual interest
rate on U.S. Treasury obligations with -year maturities as of the
[insert date 15 days prior to maturity date] prior to such [insert
maturity date].]
[If Securities are Floating Rate debt Securities, insert --
Floating Rate Provisions:
Initial annual interest rate will be % through
[and thereafter will be adjusted [monthly] [on each , ,
and ] [to an annual rate of % above the average rate for
- -year [month] [securities] [certificates of deposit] by and
[insert names of banks].] [and the annual interest rate [thereafter]
[from through ] will be the interest yield equivalent
of the weekly average per annum market discount rate for -
month Treasury bills plus % of Interest Differential (the excess, if
any, of (i) then current weekly average per annum secondary market
yield for -month certificates of deposit over (ii) then current
interest yield equivalent of the weekly average per annum market
discount rate for -month Treasury bills); [from and thereafter
the rate will be the then current interest yield equivalent plus %
of Interest Differential].]
Time of Delivery:
Method of Delivery:
Closing Location:
Name and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]:
<PAGE>
ANNEX I(B)
Form of Pricing Agreement
(Equity Securities)
[INSERT NAME],
As Representatives of the several
Underwriters named in Schedule I hereto,
[Insert Address]
, 199_
Dear Sirs:
Diamond Shamrock, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Underwriting Agreement Standard
Provisions filed as an exhibit to the Company's registration statement on Form
S-3 (No. 33- ) (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, provided that each
representation and warranty with respect to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the principal number of shares of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination, upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
DIAMOND SHAMROCK, INC.
By:__________________________
Accepted as of the date hereof:
[Insert Name]
By:___________________________
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Number of
Underwriter Shares
[Names of Underwriters] . . . . . . . . . . . . . . . . .
__________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . __________
<PAGE>
SCHEDULE II
Title of Designated Securities:
[Common Stock] [Preferred Stock, Series ______]
Number of Shares to be issued:
[ shares]
[For Preferred Stock:
Voting Rights:
Preferred Stock Dividends:
[cash dividends of $ to $ per share payable quarterly in arrears
on _____ __, ______ __, _______ __ and _______ __.]
Optional Redemption:
Mandatory Redemption/Sinking Fund:
Liquidation Preference:
[$ per share plus ].
Name of Exchange or Market:
[New York Stock Exchange] [NASDAQ National Market System] [American
Stock Exchange]
[Period Designated Pursuant to Section 5(e) of the Underwriting Agreement:
______ days.]
Conversion Provisions:
Warrant Provisions:
[See Schedule II to Annex I(C)]
[Other Terms]
Price to Public: $ per share
Underwriting Discounts and Commission:
Proceeds to Company:
Over-Allotment Option:
Time of Delivery:
A.M. on , 19 , at
in New York [Clearing House (next day)]
[Federal (same-day)] funds.
<PAGE>
Name of Transfer Agent and Registrar:
[Name[s] and Address[es] of Representative[s]:]]
[For Common Stock:
Name of Exchange or Market:
[New York Stock Exchange] [NASDAQ National Market System] [American
Stock Exchange]
[Period Designated Pursuant to Section 5(e) of the Underwriting Agreement:
______ days.]
[Other Terms]
Price to Public:
$ per share
Underwriting Discounts and Commission:
Proceeds to Company:
Over-Allotment Option:
Time of Delivery:
A.M. on , 19 , at in New
York [Clearing House (next day)] [Federal (same-day)] funds.
Name of Transfer Agent and Registrar:]
Name and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
<PAGE>
ANNEX I(C)
Form of Pricing Agreement
(Warrants)
[INSERT NAME],
As Representatives of the several
Underwriters named in Schedule I hereto,
[Insert Address]
, 199_
Dear Sirs:
Diamond Shamrock, Inc. (the "Company") proposes, subject to the
terms and conditions stated herein and in the Underwriting Agreement Standard
Provisions filed as an exhibit to the Company's registration statement on Form
S-3 (No. 33- ) (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Securities
specified in Schedule II hereto (the "Designated Securities"). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, provided that each
representation and warranty with respect to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of this
Pricing Agreement. Each reference to the Representatives herein and in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The
Representatives designated to act on behalf of the Representatives and on behalf
of each of the Underwriters of the Designated Securities pursuant to Section 12
of the Underwriting Agreement and the address of the Representatives referred to
in such Section 12 are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Company, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Warrants (the "Warrants") to purchase [principal amount of
the Company's Debt Securities] [shares of the Company's Common Stock] [shares of
the Company's Preferred Stock] set forth opposite the name of such Underwriter
in Schedule I hereto.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, and upon acceptance hereof
by you, on behalf of each of the Underwriters, this letter and such acceptance
hereof, including the provisions of the Underwriting Agreement incorporated
herein by reference, shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination, upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
Very truly yours,
DIAMOND SHAMROCK, INC.
By:__________________________
Accepted as of the date hereof:
[Insert Name]
By:___________________________
On behalf of each of the Underwriters
<PAGE>
SCHEDULE I
Number of
Underwriter Warrants
[Names of Underwriters] . . . . . . . . . . . . . . . .
__________
Total . . . . . . . . . . . . . . . . . . . . . . . . . __________
<PAGE>
SCHEDULE II
Title of Warrant Securities:
[Common Stock] [Preferred Stock, Series ______]
Number of Warrants to be issued:
[ Warrants]
Warrant Agent:
Exercise Price:
$ per Warrant
Expiration Date:
Currency:
Currency of Warrant Securities:
Maturity of Warrant Securities
Principal Amount [Number] of Warrant Securities:
Interest Rate of Warrant Securities:
Interest Rate Payment Dates of Warrant Securities:
Listing Requirement:
Additional Terms of Warrants and Warrant Securities
Period Designated Pursuant to Section 5(e) of the Underwriting Agreement:
______ days.
Underwriting Discounts and Commission:
Proceeds to Company:
Over-Allotment Option:
Time of Delivery:
A.M. on , 19 , at in New
York [Clearing House (next day)] [Federal (same-day)] funds.
Name of Transfer Agent and Registrar:]
Name and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
W2940.asc
May 19, 1995
Diamond Shamrock, Inc.
9830 Colonnade
San Antonio, Texas 78230
Re: Registration Statement on Form S-3 of Diamond Shamrock,
Inc. (Registration No. ______________)
Gentlemen:
I am Senior Vice President/Group Executive and General Counsel of Diamond
Shamrock, Inc. (the "Company"). This letter is delivered in connection with the
registration, issuance, and sale of up to an aggregate amount of $150,000,000 of
Debt Securities, Debt Warrants, Common Stock, Common Stock Warrants, Preferred
Stock, and Preferred Stock Warrants (collectively the "Offered Securities")
pursuant to the resolutions authorizing the issuance and sale of the Offered
Securities, and such other acts as are necessarily incident to the registration,
issuance and sale of the Offered Securities (the "Authorizing Resolutions")
adopted by the Company's Board of Directors at a meeting of the Company's Board
of Directors held on May 2, 1995. The Debt Securities will be issued pursuant
to the terms of an indenture (the "Indenture") dated as of December 15, 1989,
between the Company and The First National Bank of Chicago acting as trustee
(the "Trustee").
I have examined such documents, records, and matters of law as I have deemed
necessary for the purposes of this opinion, and based thereon I am of the
opinion that the Offered Securities have been duly authorized and will be valid
and binding obligations of the Company (except as enforcement thereof may be
limited by bankrupcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and subject to general equitable principles) when the Offered
Securities are issued, authenticated or countersigned, and delivered by the
Company for valid consideration in accordance with the Authorizing Resolutions
and (i) in the case of the Debt Securities, the terms of the Indenture, (ii) in
the case of Preferred Stock, the applicable Designation of Preferences and the
Company's Certificate of Incorporation (the "Certificate"), (iii) in the case of
Common Stock, the Certificate and (iv) in the case of Debt Warrants, Common
Stock Warrants, and Preferred Stock Warrants, the applicable Warrant Agreement.
This opinion is based on the Company's Certificate and Bylaws and applicable
law as of the date hereof. No assurance can be provided as to the effect on
this opinion of any amendment or other change to the Company's Certificate or
Bylaws or applicable law after the date hereof.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement on Form S-3 filed by the Company to effect registration under the
Securities Act of 1933, as amended, of the Offered Securities and to the
reference to me under the caption "Legal Matters" in the Prospectus comprising
part of such Registration Statement.
Very truly yours,
/S/ TIMOTHY J. FRETTHOLD
Timothy J. Fretthold
TJF:es
TJF\TW:es
W2906.TW
EXHIBIT 12.1
DIAMOND SHAMROCK, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(dollars in millions)
Three Months
Ended Mar. 31 Year Ended December 31,
1995 1994 1994 1993 1992 1991 1990
Income from continuing
operations, before
income taxes $ 9.1 $20.7 $125.8 $ 57.5 $ 44.0 $ 57.7 $118.3
Fixed Charges:
Interest Expense 11.4 10.5 43.3 40.6 40.5 37.7 35.5
Capitalized interest 1.1 0.9 2.3 6.1 6.1 2.5 2.9
One-third of rental
expense(1) 2.5 2.3 9.7 7.3 7.6 8.2 6.9
Dividend requirement on
preferred stock(2) 1.5 1.6 6.0 3.4 - - 3.7
Total Fixed Charges 16.5 15.3 61.3 57.4 54.2 48.4 49.0
Less capitalized interest 1.1 0.9 2.3 6.1 6.1 2.5 2.9
Less dividend requirement
on preferred stock(2) 1.5 1.6 6.0 3.4 - - 3.7
Adjustment to income 13.9 12.8 53.0 47.9 48.1 45.9 42.4
Income, as adjusted $23.0 $33.5 $178.8 $105.4 $ 92.1 $103.6 $160.7
Ratio of Earnings to
Fixed Charges and
Preferred Stock Dividends 1.4 2.2 2.9 1.8 1.7 2.1 3.3
(1) The amount deemed by the Company to represent the interest portion of
such expense.
(2) The preferred stock dividend requirement has been increased to an amount
representing the pre-tax earnings which would be required to cover such
dividend requirements.
<PAGE>
DIAMOND SHAMROCK, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
Three Months
Ended Mar. 31, Year Ended December 31,
1995 1994 1994 1993 1992 1991 1990
Income from continuing
operations, before
income taxes $ 9.1 $ 20.7 $125.8 $ 57.5 $ 44.0 $ 57.7 $118.3
Fixed Charges:
Interest Expense 11.4 10.5 43.3 40.6 40.5 37.7 35.5
Capitalized interest 1.1 0.9 2.3 6.1 6.1 2.5 2.9
One-third of rental
expense(1) 2.5 2.3 9.7 7.3 7.6 8.2 6.9
Total Fixed Charges 15.0 13.7 55.3 54.0 54.2 48.4 45.3
Less capitalized interest 1.1 0.9 2.3 6.1 6.1 2.5 2.9
Adjustment to income 13.9 12.8 53.0 47.9 48.1 45.9 42.4
Income, as adjusted $ 23.0 $ 33.5 $178.8 $105.4 $ 92.1 $103.6 $160.7
Ratio of Earnings to Fixed
Charges 1.5 2.4 3.2 2.0 1.7 2.1 3.5
(1) The amount deemed by the Company to represent the interest portion of
such expense.
W2905.TW
EXHIBIT 15.1
INDEPENDENT ACCOUNTANTS' AWARENESS LETTER
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware that Diamond Shamrock, Inc. has included our report dated May 11,
1995 (issued pursuant to the provisions of Statement on Auditing Standards No.
71) in the Prospectus to be filed on or about May 18, 1995. We are also aware
of our responsibilities under the Securities Act of 1933.
Yours very truly,
/S/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
San Antonio, Texas
May 18, 1995
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated February 24, 1995, which is attached as Exhibit 13.3 to Diamond Shamrock,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1994. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedules, which is included in Item 14(a)(2) of such Annual Report on
Form 10-K. We also consent to the references to us under the heading "Experts"
in such Prospectus.
/S/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
San Antonio, Texas
May 18, 1995
W2336.TW
POWER OF ATTORNEY
The undersigned directors and/or officers of Diamond Shamrock, Inc.,
hereby constitute and appoint Timothy J. Fretthold, Todd Walker, Robert A.
Profusek, James E. O'Bannon, Edward H. Molter and Wendy Dann Adato, or any of
them, as the true and lawful attorneys-in-fact and agents of the undersigned,
each with full power of substitution and resubstitution, to do any and all acts
and things in their names and in their respective capacities as a director
and/or an officer of Diamond Shamrock, Inc., and to execute any and all
instruments for them and in their names in the capacities indicated above,
which said attorneys-in-fact and agents, or any of them, may deem necessary
or advisable to enable Diamond Shamrock, Inc. to comply with the Securities
Act of 1933, as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in connection with a Registration
Statement on Form S-3, including without limitation power and authority to
sign for them, in their name in the capacities indicated above, such
Registration Statement and any and all amendments (including post-effective
amendments) thereto, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that the said
attorneys-in-fact and agents, or their substitute or substitutes, or any one
of them, shall do or cause to be done by virtue hereof.
/S/ B. CHARLES AMES /S/ BOB MARBUT
B. Charles Ames Bob Marbut
/S/ E. GLENN BIGGS /S/ KATHERINE D. ORTEGA
E. Glenn Biggs Katherine D. Ortega
/S/ W. E. BRADFORD /S/ R. C. BECKER
W. E. Bradford R. C. Becker
/S/ LAURO F. CAVAZOS /S/ GARY E. JOHNSON
Lauro F. Cavazos Gary E. Johnson
/S/ W. H. CLARK /S/ R. R. HEMMINGHAUS
W. H. Clark R. R. Hemminghaus
/S/ WILLIAM L. FISHER
William L. Fisher
Dated: February 7, 1995
W2773.TW
POWER OF ATTORNEY
Diamond Shamrock, Inc. hereby constitutes and appoints Timothy
J. Fretthold, Todd Walker, Robert A. Profusek, James E. O'Bannon
and Mark E. Betzen, or any of them, its true and lawful attorneys-in-fact
and agents, each with full power of substitution and resubstitution, to do any
and all acts and things in its name and behalf, and to execute any and all
instruments for it and in its name which the said attorneys-in-fact and agents,
or any of them, may deem necessary or advisable to enable Diamond Shamrock, Inc.
to comply with the Securities Act of 1933, as amended, and any rules,
regulations and requirements of the Securities and Exchange Commission in
connection with a Registration Statement on Form S-3, including without
limitation power and authority to sign for it such Registration Statement and
power and any and all amendments (including post-effective amendments) thereto,
and to file the same, with all exhibits thereto, and other documents in
connection therewith with the Securities and Exchange Commission, hereby
ratifying and confirming all that the said attorneys-in-fact and
agents, or their substitute or substitutes, or any one of them,
shall do or cause to be done by virtue hereof.
DIAMOND SHAMROCK, INC.
By: /S/ R. R. HEMMINGHAUS
R. R. Hemminghaus
Chairman, President, and
Chief Executive Officer
Dated: February 7, 1995
W2772.TW
DIAMOND SHAMROCK, INC.
SECRETARY'S CERTIFICATE
I, Jerry D. King, do hereby certify that I am the duly appointed and acting
Secretary of Diamond Shamrock, Inc. (the "Corporation"), and do further hereby
certify that attached hereto as Exhibit "A" is a true and correct copy of
resolutions duly adopted by the Board of Directors of the Corporation on
May 2, 1995, and such resolutions have not been amended, modified, or rescinded.
WITNESS the seal of the Corporation and my signature on this 19th day of
May, 1995.
By: /s/ JERRY D. KING
Jerry D. King,
Secretary
<PAGE>
I. AUTHORIZATION OF SECURITIES
RESOLVED that in addition to any securities previously
authorized by the Board of Directors of the Corporation, the
Corporation is hereby authorized to offer and sell from time
to time its common stock with associated rights and its
preferred stock ("Equity Securities") and its bonds,
debentures, notes or similar instruments ("Debt Securities")
(Equity Securities and Debt Securities being hereinafter
collectively referred to as "Securities"), provided that the
amount of additional Securities authorized hereby shall be
limited in aggregate principal amount at maturity and/or
market value at issuance to not more than $150,000,000;
II. ISSUANCE OF DEBT SECURITIES
FURTHER RESOLVED that the Chairman of the Board and any Vice
President of the Corporation be, and each of them hereby is,
authorized and empowered in his sole discretion, on behalf of
the Corporation, to authorize the Corporation to offer and
sell one or more issues of Debt Securities from time to time
pursuant to public offerings, private placements or other
transactions, and in connection with any such issuance to
determine:
(a) the type of Debt Security or Debt Securities and title or
titles thereof; provided, however, that without further
action by the Board or the Executive Committee thereof no
Debt Securities shall be secured or convertible into any
equity securities of the Corporation;
(b) whether the Debt Securities are to be issued as
registered securities or bearer securities or both and,
if bearer securities are issued, whether coupons will be
attached thereto;
(c) the aggregate principal amount and denominations of the
Debt Securities;
(d) the maturity or maturities of the Debt Securities, which
shall not be more than 30 years from the date of
issuance;
(e) the dates on which or periods during which the Debt
Securities may be issued, and the dates on which the
principal of and interest and premium, if any, on the
Debt Securities are or may be payable;
(f) the price to be received by the Corporation in any public
or private offering of the Debt Securities (which may be
at a discount from the principal amount of the Debt
Securities at their maturity), the offering price and any
discount received by, or commission or other remuneration
paid to, any underwriters, placement or sales agents or
others (collectively, "Sales Agents");
(g) the interest rate or rates, if any, to be established for
the Debt Securities and the yield or yields to maturity
to be established for the Debt Securities;
(h) if the amount of any payments of principal of (and
premium, if any) or interest on the Debt Securities may
be determined with reference to an index, including
without limitation an index based on a currency or
currencies other than that in which the Debt Securities
are payable, the manner in which such amounts shall be
determined;
(i) the sinking fund, if any, and related redemption prices;
(j) the mandatory and optional redemption rights, if any, of
the Corporation and of the holders of the Debt Securities
and related redemption prices;
(k) provisions, if any, for the defeasance of the Debt
Securities;
(l) the covenants, if any, of the Corporation relating to any
of the Debt Securities;
(m) any trustee, authenticating or paying agents, warrant
agents, transfer agents or registrars for the Debt
Securities (collectively, the "Fiduciaries"); and
(n) such other terms, conditions and provisions as the
officers of the Corporation or any of them shall deem
appropriate; and
that the officers of the Corporation be, and each of them
hereby is, authorized, on behalf of the Corporation, to take
any and all such actions and to do, or authorize to be done,
all such things that any of them deems necessary or
appropriate in connection with any such issuance of Debt
Securities;
FURTHER RESOLVED that the officers of the Corporation be, and
each of them hereby is, authorized to execute and deliver, on
behalf of the Corporation (and, if any such officer deems it
appropriate, under its corporate seal attested by its
Secretary or any Assistant Secretary), an indenture or
indentures relating to any Debt Securities or the possible
future sale thereof, and that each of the Authorized Officers
is authorized to execute and deliver, in similar manner, such
indentures supplemental thereto as he may approve (each such
indenture, as amended by indentures supplemental thereto, and
as executed and delivered on behalf of the Corporation, being
hereinafter referred to as an "Indenture");
III. ISSUANCE OF EQUITY SECURITIES
FURTHER RESOLVED that the executive committee of the Board of
Directors (the "Executive Committee") be, and it hereby is,
authorized and empowered in its discretion to determine the
number of shares and the specific terms of Equity Securities
authorized hereby, including without limitation, the par
value, designations, rights and restrictions, including
preferences, the amount of any liquidation preference, the
dividend rate and payment dates, redemption price or prices
and terms, and conversion price and terms, and to approve a
form of stock certificate evidencing shares of the Equity
Securities and a Certificate of Designations, if appropriate,
for purposes of amending the Certificate of Incorporation of
the Corporation (the "Certificate") and is further authorized
to approve the final terms, prices and conditions of the
issuance and sale of the shares of the Equity Securities; and
FURTHER RESOLVED that when the Equity Securities are issued,
the same shall be fully paid and nonassessable;
FURTHER RESOLVED that KeyCorp Shareholder Services, Inc.
("KeyCorp") or any other bank or trust company approved by
the Chairman of the Board or any Vice President of the
Corporation be, and it hereby is, appointed the Transfer
Agent and Registrar for the Equity Securities (the "Transfer
Agent"); and that the Transfer Agent be, and it hereby is,
authorized and directed to countersign and record certificates
for the Equity Securities, on its transfer records, to
countersign as Registrar and to deliver certificates as
instructed by the officers of the Corporation;
FURTHER RESOLVED that the Chairman of the Board or any Vice
President of the Corporation be, and each of them hereby is,
authorized and directed to execute and deliver, or behalf of
the Corporation and under its corporate seal attested by the
Secretary or an Assistant Secretary of the Corporation,
certificates representing the Equity Securities, including but
not limited to one or more global certificates, containing
such restrictive legends as are appropriate, and to replace
lost, stolen, mutilated or destroyed certificates and all
certificates required for exchange, substitution or transfer,
all as provided in the Certificate and the By-Laws of the
Corporation; and
FURTHER RESOLVED that the signatures of the Chairman of the
Board, any Vice President, the Secretary or any Assistant
Secretary on the Certificates representing the Equity
Securities shall be the manual or facsimile signatures of the
present or any further persons holding such offices,
notwithstanding the fact that at the time such certificates
are signed or delivered the officer so executing or delivering
shall have ceased to be the Chairman of the Board, Vice
President, Secretary or Assistant Secretary, as the case may
be.
IV. ADDITIONAL AGREEMENTS, DOCUMENTS, CERTIFICATES, INSTRUMENTS;
INDEMNIFICATION
FURTHER RESOLVED that the officers of the Corporation be, and
each of them hereby is, authorized to execute and deliver, on
behalf of the Corporation, such other agreements, documents,
certificates and instruments as may be required by any
Fiduciary in connection with an Indenture or by any Sales
Agent in connection with any offering or sale of Securities or
as any of such officers may deem appropriate in connection
with any issuance of any of the Securities; and
FURTHER RESOLVED that, to the extent provided in any agreement
or instrument executed on behalf of the Corporation by any
such officer, (1) any Fiduciary or Sales Agent be, and it
hereby is, authorized to rely and act upon, and shall be fully
protected in relying and acting upon, any instructions
received by it and signed by any officer of the Corporation,
and to rely and act upon, and shall be fully protected in
relying and acting upon, any assignment, power of attorney,
certificate, order, instruction, notice or other instrument or
paper reasonably believed by it to be genuine and duly
authorized and properly executed, (2) the Corporation may
reimburse any such Fiduciary or Sales Agent for all expenses
incurred by it in the performance of it duties, and (3) the
Corporation may indemnify and hold harmless each Fiduciary or
Sales Agent from and against any and all claims, suits,
damages, losses, expenses (including attorneys' fees and
expenses) and liabilities which may be incurred by it or to
which it may be subjected by reason of, or in connection with,
its appointment and duties;
That the officers of the Corporation be, and each of them
hereby is, authorized to execute and deliver, on behalf of the
Corporation, a written order to the appropriate Fiduciary
directing such Fiduciary when Securities have been properly
executed by the Corporation to authenticate them in such
amount or quantities as shall have been determined by an
authorized officer (as defined in the appropriate Indenture)
with respect to Debt Securities, or by the Executive
Committee, with respect to Equity Securities, to deliver such
Securities and thereafter to authenticate and deliver such
other Securities as may be necessary upon registration and
transfer of, in exchange for, or in lieu of, any outstanding
Securities.
V. REGISTRATION OF SECURITIES
RESOLVED that if (in the opinion of counsel to the
Corporation) required by applicable law, or otherwise
determined to be appropriate by any of such officers, the
officers of the Corporation be, and each of them hereby is,
authorized to execute and file with the Securities and
Exchange Commission (the "Commission"), on behalf of the
Corporation, one or more Registration Statements and any
amendments including post-effective amendments to any such
Registration Statement with respect to any Securities under
the Securities Act of 1933, as amended, with such changes
therein, additions thereto and deletions therefrom as the
officers, or any of them, shall approve, such approval to be
conclusively evidenced by the execution thereof, or to take
such other action, as such officers or counsel of the
Corporation deem appropriate in connection with the offering
or sale of any Securities, including without limitation the
qualification of any Indenture under the Trust Indenture Act
of 1939, as amended, provided, however, that the maximum
aggregate value of Securities authorized to be registered
pursuant to these resolutions shall be $150,000,000 less the
portion of any existing effective registration statement of
the Corporation which is amended by post-effective amendment
such that Securities may be offered and sold pursuant to such
existing effective registration statement and such post-effective
amendment is hereby authorized if (in the opinion of counsel
to the Corporation) appropriate and permissible under
existing law;
FURTHER RESOLVED that Timothy J. Fretthold, Todd Walker,
Robert A. Profusek, James E. O'Bannon, Edward H. Molter, and
Wendy Dann Adato be, and each of them hereby is, appointed as
attorney-in-fact for the Corporation, with full power of
substitution and resubstitution, for the purpose of executing
and filing any such Registration Statement and amendments
thereto, and any such post-effective amendments, and the
officers of the Corporation be, and each of them hereby is,
authorized, on behalf of the Corporation, to execute such
documents as such officers deem to be appropriate to evidence
such appointment;
FURTHER RESOLVED that the proper officers of the Corporation
be, and each of them hereby is, authorized, on behalf of the
Corporation, to take any action which any such officer deems
to be appropriate to register or qualify the offer and sale of
the Securities under the securities or blue sky laws of any
and all states or other jurisdictions of the United States,
including without limitation the execution, acknowledgment,
verification, delivery and filing of consents to, and
appointments of agents for, service of process, applications,
reports, resolutions, prospectuses and other documents as may
be appropriate in connection therewith, and to take any
further action which they deem to be appropriate to maintain
any such registration or qualification for as long as such
officers deem to be necessary or appropriate; and
FURTHER RESOLVED that if in connection with any of the
foregoing a prescribed form of resolution of the Board or any
Committee thereof is required to be filed on behalf of the
Corporation, such resolution be, and it hereby is, adopted,
and that the Secretary or any Assistant Secretary of the
Corporation be, and he hereby is, authorized and directed to
certify the adoption of any such resolution as though it was
adopted at this meeting, all such resolutions to be inserted
in the minute book and appropriately marked by the Secretary
of the Corporation.
VI. LISTING OF SECURITIES
RESOLVED that the officers of the Corporation be, and each of
them hereby is, authorized, on behalf of the Corporation, to
prepare, execute and file with the New York Stock Exchange,
Inc. or such other exchange as such officers may deem
appropriate, a listing of the Securities, and to take such
further action as such officers deem to be necessary or
appropriate to secure such listing or listings, including,
without limitation, the negotiation and execution of any
required listing application, listing fee agreement or listing
agreement.
FURTHER RESOLVED that, if a prescribed form of resolution of
the Board of Directors is required to be filed in connection
with such listing on behalf of the Corporation, such
resolution be, and it hereby is, adopted, and that the
Secretary or an Assistant Secretary of the Corporation be, and
he hereby is, authorized and directed to certify the adoption
of any such resolution as though it was adopted at this
meeting, all such resolutions to be inserted in the minute
book and appropriately marked by the Secretary of the
Corporation.
VII. GENERAL AUTHORITY
RESOLVED that the officers of the Corporation be, and each of
them hereby is, authorized to execute and deliver, on behalf
of the Corporation, any and all other agreements, documents,
filings, papers or instruments, to make any and all payments
and to do or cause to be done any and all such acts and things
as they deem to be appropriate in connection with the issuance
of any Securities and/or to enable the Corporation to carry
out the purposes and intent of the foregoing resolutions.
W2907.TW
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
DIAMOND SHAMROCK, INC.
(Exact name of obligor as specified in its charter)
Delaware 74-2456753
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
9830 Colonnade Boulevard
San Antonio, Texas 78230
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1995.
The First National Bank of Chicago,
Trustee,
By /s/ R. D. Manella
R. D. Manella
Vice President and Senior Counsel
Corporate Trust Services Division
* Exhibit 1,2,3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of The
CIT Group Holdings, Inc., filed with the Securities and Exchange Commission on
February 16, 1993 (Registration No. 33-58418).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
May 16, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Diamond Shamrock,
Inc. and The First National Bank of Chicago, the undersigned, in accordance
with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby
consents that the reports of examinations of the undersigned, made by Federal
or State authorities authorized to make such examinations, may be furnished by
such authorities to the Securities and Exchange Commission upon its request
therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R. D. Manella
R. D. Manella
Vice President and Senior Counsel
Corporate Trust Services Division
<PAGE>
EXHIBIT 7
A copy of the latest report of conditions of the trustee published
pursuant to law or the requirements of its supervising or examining authority.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/94
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-1
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
Dollar Amounts C400 <-
in Thousands RCFD BIL MIL THOU
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances
and currency and coin(1)... 0081 3,776.149 1.a.
b. Interest-bearing balances(2).. 0071 7,670,634 1.b.
2. Securities
a. Held-to-maturity securities
(from Schedule RC-B, column A). 1754 163,225 2.a.
b. Available-for-sale securities
(from Schedule RC-B, column D). 1773 533,857 2.b.
3. Federal funds sold and securities
purchased under agreements to resell
in domestic offices of the bank and
its Edge and Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold. . . . . . . . 0276 4,037,205 3.a.
b. Securities purchased under
agreements to resell. . . . . . . 0277 423,381 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned RCFD 2122
income (from Schedule RC-C) . . 15,617,618 4.a.
b. LESS: Allowance for loan and RCFD 3123
lease losses. . . . . . . . . . 351,191 4.b.
c. LESS: Allocated transfer risk RCFD 3128
reserve . . . . . . . . . . . . 0 4.c.
d. Loans and leases, net of unearned
income, allowance, and reserve
(item 4.a minus 4.b and 4.c) . . 2125 15,266,427 4.d.
5. Assets held in trading accounts . . . 3545 8,227,304 5.
6. Premises and fixed assets (including
capitalized leases) . . . . . . . . 2145 512,222 6.
7. Other real estate owned
(from Schedule RC-M) . . . . . . . 2150 46,996 7.
8. Investments in unconsolidated subsidiaries
and associated companies
(from Schedule RC-M). . . . . . . . 2130 7,571 8.
9. Customers' liability to this bank on
acceptances outstanding . . . . . . 2155 507,151 9.
10. Intangible assets
(from Schedule RC-M). . . . . . . . 2143 120,504 10.
11. Other assets (from Schedule RC-F) . . 2160 1,250,306 11.
12. Total assets
(sum of items 1 through 11) . . . . 2170 42,542,932 12.
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/94
ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page RC-2
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts
in Thousands Bil Mil Thou
LIABILITIES
13. Deposits:
a. In domestic offices (sum of
totals of columns A and C
from Schedule RC-E, part 1)... RCON 2200 15,103,504 13.a.
(1) Noninterest-bearing(1) ... RCON 6631
6,129,078 13.a.(1)
(2) Interest-bearing . . . . . . . RCON 6636
8,974,426 13.a.(2)
b. In foreign offices, Edge and
Agreement subsidiaries, and
IBFs (from Schedule RC-E,
part II). . . . . . . . . . RCFN 2200 10,633,999 13.b.
(1) Noninterest bearing. . . RCFN 6631
460,916 13.b.(1)
(2) Interest-bearing . . . . RCFN 6636
10,173,083 13.b.(2)
14. Federal funds purchased and securities
sold under agreements to repurchase
in domestic offices of the bank and
of its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal funds purchased . . . RCFD 0278 2,883,499 14.a.
b. Securities sold under agreements
to repurchase . . . . . . . RCFD 0279 502,401 14.b.
15. a. Demand notes issued to the U.S.
Treasury. . . . . . . . . . RCON 2840 112,289 15.a.
b. Trading Liabilities . . . . . RCFD 3548 4,798,720 15.b.
16. Other borrowed money:
a. With original maturity of one
year or less. . . . . . . . RCFD 2332 2,355,421 16.a.
b. With original maturity of more
than one year . . . . . . . RCFD 2333 382,801 16.b.
17. Mortgage indebtedness and obligations
under capitalized leases. . . . RCFD 2910 275,794 17.
18. Bank's liability on acceptance
executed and outstanding. . . . RCFD 2920 507,151 18.
19. Subordinated notes and debentures RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G). . . . . . . . . RCFD 2930 860,989 20.
21. Total liabilities (sum of
items 13 through 20). . . . . . RCFD 2948 39,641,568 21.
22. Limited-Life preferred stock and
related surplus . . . . . . . . RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and
related surplus . . . . . . . . RCFD 3838 0 23.
24. Common stock. . . . . . . . . . . RCFD 3230 200,858 24.
25. Surplus (exclude all surplus
related to preferred stock) . . RCFD 3839 2,273,657 25.
26. a. Undivided profits and
capital reserves. . . . . . RCFD 3632 431,545 26.a.
b. Net unrealized holding
gains (losses) on
available-for-sale
securities. . . . . . . . . RCFD 8434 (4,184) 26.b.
27. Cumulative foreign currency
translation adjustments . . . . RCFD 3284 (512) 27.
28. Total equity capital (sum of
items 23 through 27). . . . . . RCFD 3210 2,901,364 28.
29. Total liabilities, limited-life
preferred stock, and equity
capital (sum of items 21, 22,
and 28) . . . . . . . . . . . . RCFD 3300 42,542,932 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external
Number
RCFD 6724 N/A M.1.
auditors as of any date during 1993. . . .
1 = Independent audit of the bank conducted in
accordance with generally accepted auditing
standards by a certified public accounting
firm which submits a report on the bank
2 = Independent audit of the bank's parent holding
company conducted in accordance with generally
accepted auditing auditors standards by a
certified public accounting firm which submits
a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in
accordance with generally accepted auditing
standards by a certified public accounting firm
(may be required by state chartering authority)
4 = Directors' examination of the bank performed by
other external auditors (may be required by
state chartering authority)
5 = Review of the bank's financial statements by
external auditors
6 = Compilation of the bank's financial statements
by external auditors
7 = Other audit procedures (excluding tax
preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
W2903.doc
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<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-END> MAR-31-1995 DEC-31-1994
<CASH> 16,500 27,400
<SECURITIES> 0 0
<RECEIVABLES> 211,700 217,400
<ALLOWANCES> 6,600 5,800
<INVENTORY> 203,500 291,000
<CURRENT-ASSETS> 432,100 540,400
<PP&E> 1,698,900 1,635,400
<DEPRECIATION> 628,000 609,300
<TOTAL-ASSETS> 1,558,770 1,620,800
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0 0
0 0
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<TOTAL-LIABILITY-AND-EQUITY> 1,558,700 1,620,800
<SALES> 676,700 2,606,300
<TOTAL-REVENUES> 676,700 2,606,300
<CGS> 613,100 2,269,500
<TOTAL-COSTS> 613,100 2,269,500
<OTHER-EXPENSES> 43,100 167,700
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 11,400 43,300
<INCOME-PRETAX> 9,100 125,800
<INCOME-TAX> 3,700 50,000
<INCOME-CONTINUING> 5,400 75,800
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 5,400 75,800
<EPS-PRIMARY> 0.15 2.45
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