<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 28, 1998
REGISTRATION NO. 333-60175
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WELLMAN, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 04-1671740
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
1040 BROAD STREET, SHREWSBURY, NEW JERSEY 07702
(732) 542-7300
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
CHRISTINE M. MARX, ESQ.
EDWARDS & ANGELL, LLP
150 JOHN F. KENNEDY PARKWAY
SHORT HILLS, NEW JERSEY 07078
(973) 376-7700
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES OF ALL COMMUNICATIONS TO:
DANIEL DUNSON, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NY 10004
(212) 558-4000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: FROM TIME TO TIME
AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT AS DETERMINED BY MARKET
CONDITIONS.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Proposed
Maximum Maximum
Title of each Class of Amount to be Offering Price Aggregate Amount of
Securities to be Registered Registered Per Unit(1) Offering Price(1)(2) Registration Fee
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<S> <C> <C> <C> <C>
Debt Securities(4)(6).............. (3) (3) (3) (3)
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Common Stock, par value $.001 per
share(5)(6)...................... (3) (3) (3) (3)
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Warrants(7)........................ (3) (3) (3) (3)
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Rights(8).......................... -- -- -- --
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Total.............................. $400,000,000(9) 100% $400,000,000(9) $118,000(10)
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</TABLE>
(footnotes on next page)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
(footnotes from previous page)
(1) The proposed maximum per unit and aggregate offering prices per class of
security will be determined from time to time by the Registrant in
connection with the issuance by the Registrant of the securities registered
hereunder.
(2) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933, as amended (the
"Securities Act").
(3) Not required to be included in accordance with General Instruction II.D. of
Form S-3 under the Securities Act.
(4) Subject to note (9) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from time
to time, by the Registrant. If any Debt Securities are issued at an
original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price not
to exceed $400,000,000 less the dollar amount of any securities previously
issued hereunder.
(5) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Common Stock of the Company as may be
sold from time to time.
(6) Subject to note (9) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities, and an indeterminate
number of shares of Common Stock of the Company, as shall be issuable upon
conversion or redemption, or upon the exercise of Warrants of the Company
registered hereunder of Debt Securities or Common Stock of the Company, as
the case may be, registered hereunder.
(7) Subject to note (9) below, there is being registered hereunder an
indeterminate amount and number of Warrants of the Company, representing
rights to purchase certain of the Debt Securities or Common Stock of the
Company registered hereunder.
(8) The Rights are "poison pill" rights that automatically accompany the Common
Stock for no additional consideration.
(9) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$400,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. The aggregate amount of
Common Stock registered hereunder and issued in an at the market offering
is further limited to that which is permissible under Rule 415(a)(4) under
the Securities Act. The securities registered hereunder may be sold
separately or as units with other securities registered hereunder.
(10) The Registration Fee in the amount of $118,000 was paid in full with the
initial filing of this Registration Statement.
<PAGE> 3
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 SEPTEMBER 28, 1998
PROSPECTUS
$400,000,000
WELLMAN, INC.
DEBT SECURITIES
COMMON STOCK
WARRANTS
------------------------
Wellman, Inc. (the "Company" or "Wellman") may offer from time to time, in
one or more series, (i) unsecured senior debt securities (the "Senior Debt
Securities"), (ii) unsecured subordinated debt securities (the "Subordinated
Debt Securities" and, together with the Senior Debt Securities, the "Debt
Securities"), (iii) warrants to purchase Debt Securities (the "Debt Warrants"),
(iv) shares of common stock, $.001 par value per share ("Common Stock"), or (v)
warrants to purchase shares of Common Stock (the "Common Stock Warrants"), in
amounts, at prices, and on terms to be determined by market conditions at the
time of offering. The Debt Warrants and Common Stock Warrants are referred to
herein collectively as the "Securities Warrants." The Debt Securities, Common
Stock and Securities Warrants are referred to herein collectively as the
"Offered Securities."
The specific terms of the Offered Securities with respect to which this
Prospectus is being delivered will be set forth in a supplement to this
Prospectus (a "Prospectus Supplement"), together with the terms of the offering
and sale of the Offered Securities, the initial offering price and the net
proceeds to the Company from the sale thereof. The Prospectus Supplement will
include, with regard to the particular Offered Securities, the following
information: (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, ranking, authorized denomination, maturity, rate or
method of calculation of interest and dates for payment thereof, any terms for
optional or mandatory redemption or payment of additional amounts or any sinking
fund provisions, any index or formula for determining the amount of any
principal or premium, the currency or currency unit in which principal, premium,
or interest is payable, whether the securities are issuable in registered form
or in the form of global securities and any provisions for the conversion or
exchange of such Debt Securities; (ii) in the case of Common Stock, the number
of shares and offering price; (iii) in the case of Securities Warrants, the
duration, offering price, exercise price and detachability; and (iv) in the case
of all Offered Securities, whether such Offered Securities will be offered
separately or as a unit with other Offered Securities. The Prospectus Supplement
also will contain information, where applicable, about material United States
federal income tax considerations relating to, and any listing on a securities
exchange of, the Offered Securities covered by such Prospectus Supplement.
The Company's Common Stock is listed on the New York Stock Exchange. Any
Common Stock offered hereby will be listed, subject to notice of issuance, on
such exchange.
The Debt Securities of any series may be issued with Securities Warrants.
The Debt Securities may be Senior Debt Securities or Subordinated Debt
Securities. The Senior Debt Securities, when issued, will rank on a parity with
all the unsecured and unsubordinated indebtedness of the Company, and the
Subordinated Debt Securities, when issued, will be subordinated in right of
payment to all obligations of the Company to its other creditors, except
obligations ranking on a parity with or junior to the Subordinated Debt
Securities. See "Description of Debt Securities -- Subordination of Subordinated
Debt Securities."
The Offered Securities may be sold directly by the Company, through agents
designated from time to time or to or through underwriters or dealers. See "Plan
of Distribution." If any agents of the Company, underwriters or dealers are
involved in the sale of any Offered Securities in respect of which this
Prospectus is being delivered, the names of such agents, underwriters or dealers
and any applicable commissions or discounts and the net proceeds to the Company
will be set forth in a Prospectus Supplement.
The Offered Securities may be issued in one or more series or issuances and
will be limited to $400,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Offered
Securities are issued for one or more foreign currencies or currency units). The
Offered Securities may be sold for U.S. dollars, or any foreign currency or
currencies or currency units, and the principal of, any premium on, and any
interest on, the Debt Securities may be payable in U.S. dollars, or any foreign
currency or currencies or currency units.
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 or prior to the time of sale. The sale of other securities under
the Registration Statement of which this Prospectus forms a part or under a
Registration Statement to which this Prospectus relates will reduce the amount
of Offered Securities which may be sold hereunder.
------------------------
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 date of this Prospectus is , 1998.
<PAGE> 4
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR
ANY PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER, AGENT OR DEALER. NEITHER THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Securities and
Exchange Commission (the "Commission"). Reports, proxy statements and other
information concerning the Company may be inspected and copies may be obtained
(at prescribed rates) at the Commission's Public Reference Section, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, at the web site
(http://www.sec.gov) maintained by the Commission and at the Commission's
Regional Offices located at Seven World Trade Center, 13th Floor, New York, New
York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Company's Common Stock is listed on the New York Stock
Exchange, where reports, proxy statements and other information concerning the
Company can also be inspected. The offices of the New York Stock Exchange are
located at 20 Broad Street, New York, New York 10005.
The Company has filed a registration statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with the Commission with respect to the Offered Securities.
As permitted by the rules and regulations of the Commission, this Prospectus
omits certain information contained in the Registration Statement. For further
information with respect to the Company and the Offered Securities, reference is
hereby made to such Registration Statement, including the exhibits filed as a
part thereof. Statements contained in this Prospectus concerning the provisions
of certain documents filed with, or incorporated by reference in, the
Registration Statement are not necessarily complete, each such statement being
qualified in all respects by such reference. Copies of all or any part of the
Registration Statement, including the documents incorporated by reference
therein or exhibits thereto, may be obtained upon payment of the prescribed
rates at the offices of the Commission set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant
to the Exchange Act are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997; and
(b) The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1998 and June 30, 1998.
All documents filed by the Company pursuant to section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Offered Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing such documents. Any statement contained herein or in a document,
all or a portion of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document or portion thereof which also is or is deemed to be
incorporated by reference herein modifies or
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supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, on written or oral request
of such person, a copy of any or all of the documents incorporated by reference
herein (other than exhibits to such documents unless such exhibits are
incorporated by reference into such documents). Such written requests should be
addressed to: Investor Relations Manager, Wellman, Inc., 1040 Broad Street,
Shrewsbury, New Jersey 07702. Telephone requests may be directed to the Investor
Relations Manager at (732) 542-7300.
THE COMPANY
Wellman manufactures and sells polyester products, including Fortrel(R)
brand polyester textile fibers, polyester fibers made from recycled raw
materials and PermaClear(R) PET (polyethylene terephthalate) packaging resins.
The Company's current annual production capacity is approximately 1.1 billion
pounds of fiber and approximately 610 million pounds of packaging resins. The
Company is currently constructing a new PET packaging resin and polyester fiber
production facility in the state of Mississippi (the "Facility"). The Facility,
expected to commence operation in phases beginning in late 1998, is designed to
provide initial additional annual production capacity of 230 million pounds of
polyester fiber and 470 million pounds of PET packaging resins. The total
capitalized cost of the Facility is estimated to range between $470 million and
$500 million.
The address of the principal executive office of the Company is 1040 Broad
Street, Shrewsbury, New Jersey 07702. The telephone number of the Company is
(732) 542-7300.
RISK FACTORS
Prospective investors should carefully consider the following risk factors
in addition to the other information set forth in this Prospectus before making
an investment in the securities offered hereby.
IMPACT OF ECONOMIC CONDITIONS
Capacity utilization, which is the demand for product divided by its
supply, is a critical factor affecting the Company's financial performance.
Demand for polyester fiber historically has been cyclical because it is subject
to changes in consumer preferences and spending, retail sales patterns, and
fiber or textile product imports, all of which are driven primarily by general
economic conditions. Demand, prices and raw material costs for both fiber and
PET resins may be affected by global economic conditions. Supply is expanding
for both fiber and resins in the United States. Any significant expansion of
supply over demand could reduce profitability. A material change in demand,
supply or general economic conditions or uncertainties regarding future economic
prospects could have a material adverse effect on the Company's results of
operations.
IMPACT OF FAR EASTERN FINANCIAL CRISIS
In the fourth quarter of 1997, the Far Eastern economies, which are the
largest and were, until recently, the fastest growing polyester markets,
experienced a significant economic and financial crisis. This crisis is expected
to affect the size of the polyester market and future expansions. Given the
inherent uncertainties surrounding the Far Eastern polyester markets, it is
unknown what long-term effects the crisis will have on the U.S. polyester fiber
and resins markets. Given the size of the Far Eastern markets, the impact could
be significant and could have a material adverse effect on the Company's results
of operations.
DEPENDENCY ON AVAILABILITY OF RAW MATERIALS
The Company's chemical fiber and PET resin operations are substantially
dependent on the availability of its two primary raw materials, PTA and MEG. The
Company currently relies on a single source for the supply of PTA and a limited
number of sources for MEG. The effect of the loss of any of such sources, or a
disruption in their business or a failure to meet the Company's product needs on
a timely basis would depend primarily
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upon the length of time necessary to find a suitable alternative source. At a
minimum, temporary shortages in needed raw materials could have a material
adverse effect on the Company's results of operations. There can be no assurance
that precautions taken by the Company would be adequate or that an alternative
source of supply could be located or developed in a timely manner.
CONSTRUCTION PROGRAM; IMPACT OF INCREASED PRODUCTION
The Company is currently constructing a new packaging resin and polyester
fiber production facility in Mississippi at a total capitalized cost estimated
to range between $470 million and $500 million. The Facility, which is expected
to commence operations in three phases beginning in late 1998 through the third
quarter of 1999, will add initial annual capacity of approximately 470 million
pounds of PET packaging resins and 230 million pounds of polyester fiber.
However, there can be no assurance that the Company will be able to commence
operations as scheduled, that it will not encounter significant disruptions in
its operations, that the Facility will operate as effectively as expected, or
that the Company will be able to sell at acceptable prices the added volumes
from this Facility.
The selling prices, profit margins and profitability of the Company's
products are significantly influenced by supply and demand factors. As a result,
the increased supply being added to the market by the Company's new facility
could adversely affect selling prices, profit margins and the Company's overall
financial position.
ENVIRONMENTAL MATTERS
The Company's operations are subject to numerous environmental laws and
regulations in each of the jurisdictions in which it operates governing, among
other things, air emissions, wastewater discharges, the handling and disposal
hazardous substances and the investigation and remediation of soil and
groundwater contamination. As with other companies engaged in similar
activities, a risk of environmental liability is associated with the past and
present manufacturing activities of the Company.
The Company currently estimates its future non-capital expenditures related
to environmental matters to range between $10.3 million and $25.9 million. As of
June 30, 1998, the Company has accrued $17.2 million for non-capital
environmental expenditures. In addition, aggregate future capital expenditures
related to environmental matters are expected to range from $8.7 million to
$28.3 million. Actual costs to be incurred for identified environmental
situations in future periods may vary from the estimates, given inherent
uncertainties in evaluating environmental exposures due to unknown conditions,
changing government regulations and legal standards regarding liability, and
evolving related technologies. While the Company does not believe that
environmental compliance and remediation requirements are likely to have a
material adverse effect on its business or results of operations, there can be
no assurance that future environmental requirements could not have such an
effect.
YEAR 2000
In addition to the Company's procedures to review and modify its software
and process systems relating to the Year 2000, the Company has initiated formal
communications with all of its significant suppliers and large customers to
determine the extent to which the Company's interface systems are vulnerable to
those third parties' failure to remediate their own Year 2000 issues. There can
be no guarantee that the systems of other companies on which the Company's
systems rely will be timely converted and would not have an adverse effect on
the Company's systems.
The Company expects to complete its Year 2000 project by mid 1999, which is
prior to any anticipated impact on its operating systems. The total project
cost, which will be expensed as incurred, is not expected to have a material
effect on the results of operations.
The costs of the Company's Year 2000 project and the date on which the
Company believes it will complete the Year 2000 modifications are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events, including the continued availability of certain resources,
third party modification plans and other factors. However, there can be no
guarantee that these estimates will be achieved and actual results could differ
materially from those anticipated. Specific factors that might cause such
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material differences include, but are not limited to, the availability and cost
of personnel trained in this area, the ability to locate and correct all
relevant computer codes and similar uncertainties.
CONSEQUENCES OF HIGHLY LEVERAGED TRANSACTION
The Indentures do not contain provisions that afford holders of the Debt
Securities protection in the event of a highly leveraged transaction, including
a change of control or a sale of substantially all of the Company's assets, or
other similar transactions involving the Company that may adversely affect such
holders.
IMPACT OF COMPANY'S HEDGING TRANSACTIONS
The Company intends to continue its practice of entering into and
maintaining financial instruments that fix the interest rate of various existing
and anticipated debt obligations. It also enters into forward foreign currency
transactions to reduce the impact of foreign currency translation adjustments,
fix the purchase price of machinery and equipment, and reduce the risk of
working capital that is denominated in foreign currencies. If any of the
anticipated hedge transactions do not occur and the current interest rates and
foreign currency rates differ from those in effect at the time the financial
instrument was entered into, then the Company could be subject to losses. The
exposure changes depending on the extent of the difference between the forward
interest rate or foreign currency rate and the related current interest or
foreign currency rate.
ORIGINAL ISSUE DISCOUNT; LIMITATIONS ON HOLDERS CLAIMS
Debt Securities may be offered at a discount from their principal amount at
maturity. Holders of any Debt Securities issued at an original issue discount
will be required to include amounts in gross income for federal income tax
purposes in advance of receipt of the cash payments to which the income is
attributable.
Under the Indentures, in the event of an acceleration of the maturity of
the Debt Securities upon the occurrence of an Event of Default, the holders of
any Debt Securities issued at an original issue discount may be entitled to
recover only the amount which may be declared due and payable pursuant to the
Indentures, which will be less than the principal amount at maturity of such
Debt Securities. If a bankruptcy case is commenced by or against the Company
under the federal bankruptcy code, the claim of a holder of such Debt Securities
with respect to the principal amount thereof may be limited to an amount equal
to the sum of (i) the issue price of such Debt Securities and (ii) that portion
of the original issue discount (as determined on the basis of the issue price)
which is not deemed to constitute "unmature interest" for purposes of the
federal bankruptcy code. Any original issue discount that was not amortized as
of any such bankruptcy filing would constitute "unmatured interest."
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used by the Company for
general corporate purposes, which may include the repayment of indebtedness,
capital expenditures and working capital requirements.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges for the six months ended June 30, 1998 and 1997 and
for each of the Company's fiscal years 1997, 1996, 1995, 1994 and 1993:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, FISCAL YEAR ENDED DECEMBER 31,
- ---------------- ----------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
3.0x 2.8x 2.6x 3.1x 6.9x 5.7x 3.8x
</TABLE>
For purposes of computing the ratio of earnings to fixed charges, earnings
consist of earnings before cumulative effect of changes in accounting
principles, taxes on income, amortization of capitalized interest
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<PAGE> 8
and fixed charges (less capitalized interest), and fixed charges consist of
interest expense, amortization of debt expense, the portion of rents
representative of an interest factor and capitalized interest.
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture, dated as of
July 31, 1998 (the "Senior Indenture"), between the Company and The Chase
Manhattan Bank, as trustee. The Subordinated Debt Securities are to be issued
under a second Indenture, dated as of July 31, 1998 (the "Subordinated
Indenture"), also between the Company and The Chase Manhattan Bank, as trustee.
Copies of the Senior Indenture and the Subordinated Indenture have been filed
with the Commission and are incorporated by reference as exhibits to the
Registration Statement. The Senior Indenture and the Subordinated Indenture are
sometimes referred to collectively as the "Indentures." The Chase Manhattan Bank
is hereinafter referred to as the "Senior Debt Trustee" when referring to it in
its capacity as trustee under the Senior Indenture, as the "Subordinated Debt
Trustee" when referring to it in its capacity as trustee under the Subordinated
Indenture, and as the "Debt Trustee" when referring to it in its capacity as
trustee under both of the Indentures. The following is a summary of certain
material provisions of the Senior Debt Securities, the Subordinated Debt
Securities and the Indentures. The following summary does not purport to be
complete and is subject to and is qualified in its entirety by reference to all
the provisions of the Indenture applicable to a particular series of Debt
Securities (the "Applicable Indenture"), including the definitions therein of
certain terms. Wherever particular Sections, Articles or defined terms of the
Applicable Indenture are referred to, it is intended that such Sections,
Articles or defined terms shall be incorporated herein by reference. Article and
Section references used herein are references to the Applicable Indenture.
Capitalized terms not otherwise defined herein shall have the meaning given in
the Applicable Indenture.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Debt Securities") will be described
in the Prospectus Supplement relating to such Offered Debt Securities (the
"Applicable Prospectus Supplement").
GENERAL
The Indentures do not limit the amount of Debt Securities that may be
issued thereunder and provide that Debt Securities may be issued thereunder from
time to time in one or more series. The Debt Securities will be unsecured
obligations of the Company.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, and any premium and interest on the Debt Securities will be
payable, and the transfer of Debt Securities will be registrable, at the office
or agency of the Company in each Place of Payment maintained by the Company and
at any other office or agency maintained by the Company for such purpose, except
that, at the option of the Company, interest may be paid by mailing a check to
the address of the Person entitled thereto as it appears on the register for the
Debt Securities (Sections 301, 305, 307 and 1002). The Debt Securities will be
issued only in fully registered form without coupons and, unless otherwise
indicated in the Applicable Prospectus Supplement, in denominations of $1,000 or
integral multiples thereof (Section 302). 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 imposed in connection therewith (Section 305).
The Applicable Prospectus Supplement will describe the following terms of
the Offered Debt Securities: (i) the title of the Offered Debt Securities; (ii)
whether the Offered Debt Securities are Senior Debt Securities or Subordinated
Debt Securities; (iii) any limit on the aggregate principal amount of the
Offered Debt Securities; (iv) the Person to whom any interest on the Offered
Debt Securities is payable if other than the Person in whose name any such
Offered Debt Securities are registered; (v) the date or dates on which the
principal of the Offered Debt Securities will mature; (vi) the rate or rates per
annum (which may be fixed or variable) at which the Offered Debt Securities will
bear interest, if any, and the date or dates from which such interest, if any,
will accrue; (vii) the dates on which such interest, if any, on the Offered Debt
Securities will be payable and the Regular Record Dates for such Interest
Payment Dates; (viii) the place or places where
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the principal of and any premium and interest on the Offered Debt Securities
shall be payable; (ix) any mandatory or optional sinking funds or analogous
provisions; (x) the date, if any, after which and the price or prices at which
the Offered Debt Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed and the other terms and conditions of any
such optional or mandatory redemption provision; (xi) the obligation of the
Company, if any, to redeem or repurchase the Offered Debt Securities at the
option of the Holder; (xii) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which the Offered Debt
Securities shall be issuable; (xiii) if other than the principal amount thereof,
the portion of the principal amount of the Offered Debt Securities that will be
payable upon the declaration of acceleration of the Maturity thereof; (xiv) the
currency of payment of principal of and any premium and interest on the Offered
Debt Securities and, if other than United States currency, the manner of
determining the equivalent thereof in United States currency for any purpose;
(xv) any index used to determine the amount of payment of principal of, and any
premium and interest on, the Offered Debt Securities; (xvi) if the Offered Debt
Securities will be issuable only in the form of a Global Security, the
Depositary or its nominee with respect to the Offered Debt Securities and the
circumstances under which the Global Security may be registered for transfer or
exchange in the name of a Person other than the Depositary or its nominee;
(xvii) the applicability, if any, of the provisions described under "Defeasance
and Covenant Defeasance"; (xviii) whether the Debt Securities are convertible
into any other securities and the terms and conditions of such convertibility;
(xix) any additional Event of Default, and in the case of any Offered Debt
Securities that are Subordinated Debt Securities, any additional Event of
Default that would result in the acceleration of the Maturity thereof; and (xx)
any other material terms of the Offered Debt Securities (Section 301).
Both Senior Debt Securities and Subordinated Debt Securities may be issued
as Original Issue Discount Debt Securities to be offered and sold at a
substantial discount below their stated principal amount. "Original Issue
Discount Debt Security" means any Debt Security which provides for an amount
less than the principal amount thereof to be due and payable upon the
declaration of acceleration of the Maturity thereof upon the occurrence of an
Event of Default and the continuation thereof (Section 101).
The Applicable Prospectus Supplement will also describe any material United
States federal income tax consequences or other special considerations
applicable to the series of Debt Securities to which such Prospectus Supplement
relates, including those applicable to (i) Debt Securities with respect to which
payments of principal, premium or interest are determined with reference to an
index or formula (including changes in prices of particular securities,
currencies or commodities), (ii) Debt Securities with respect to which
principal, premium or interest is payable in a foreign or composite currency,
(iii) Original Issue Discount Securities, and (iv) variable rate Debt Securities
that are exchangeable for fixed rate Debt Securities.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Applicable Prospectus Supplement, the
following provisions will apply to the Subordinated Debt Securities.
The payment of the principal of and any premium and interest on the
Subordinated Debt Securities will be subordinated in right of payment to the
prior payment in full of all Senior Indebtedness (as defined below) (Section
1301). Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency or similar
proceedings of the Company, the holders of all Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the Subordinated Debt Securities will be entitled to
receive any payment in respect of the principal of or premium or interest on the
Subordinated Debt Securities (Section 1302). In the event of the acceleration of
the Maturity of any Subordinated Debt Securities of any series, the holders of
all Senior Indebtedness will be entitled to receive payment in full of all
amounts due or to become due thereon before the Holders of the Subordinated Debt
Securities will be entitled to receive any payment of the principal of or
premium or interest on the Subordinated Debt Securities of such series or on
account of the purchase or other acquisition of Subordinated Debt Securities of
such series (Section 1303). Accordingly, in case of such an acceleration, all
Senior
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Indebtedness would have to be repaid before any payment could be made in respect
of the Subordinated Debt Securities. No payments on account of principal,
premium or interest in respect of the Subordinated Debt Securities or on account
of the purchase or other acquisition of Subordinated Debt Securities may be made
if there shall have occurred and be continuing a default in any payment with
respect to any Senior Indebtedness, or an Event of Default with respect to any
Senior Indebtedness permitting the holders thereof to accelerate the maturity
thereof, or if any judicial proceeding shall be pending with respect to any such
default (Section 1304).
By reason of such subordination, in the event of the insolvency of the
Company, creditors of the Company who are not holders of Senior Indebtedness or
the Subordinated Debt Securities may recover less, ratably, than holders of
Senior Indebtedness and may recover more, ratably, than Holders of the
Subordinated Debt Securities.
"Senior Indebtedness" is defined in the Subordinated Indenture to mean the
principal of and premium, if any, and interest on (i) all indebtedness of the
Company for money borrowed, other than the Subordinated Debt Securities, and any
other indebtedness of the Company represented by a note, bond, debenture or
other similar evidence of indebtedness (including indebtedness of others
guaranteed by the Company), in each case whether outstanding on the date of
execution of the Subordinated Indenture or thereafter created, incurred or
assumed, and (ii) any amendments, renewals, extensions, modifications and
refundings of any such indebtedness, unless in any case in the instrument
creating or evidencing any such indebtedness or pursuant to which it is
outstanding it is provided that such indebtedness is not superior in right of
payment to the Subordinated Debt Securities. For the purposes of this
definition, "indebtedness for money borrowed" is defined as (A) any obligation
of, or any obligation guaranteed by, the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments, (B) any deferred payment obligation of, or any such obligation
guaranteed by, the Company for the payment of the purchase price of property or
assets evidenced by a note or similar instrument, and (C) any obligation of, or
any such obligation guaranteed by, the Company for the payment of rent or other
amounts under a Synthetic Lease or under a lease of property or assets if such
obligation is required to be classified and accounted for as a capitalized lease
on the balance sheet of the Company under GAAP (Section 101).
The Subordinated Indenture will not limit the amount of other indebtedness,
including Senior Indebtedness, that may be issued by the Company or any of its
Subsidiaries. On June 30, 1998, the Company's outstanding Senior Indebtedness
was $474,046,000.
EVENTS OF DEFAULT
Unless otherwise provided in the Applicable Prospectus Supplement, the
Senior Indenture (with respect to any series of Senior Debt Securities then
Outstanding) and the Subordinated Indenture (with respect to any series of
Subordinated Debt Securities then Outstanding) define an Event of Default as any
one of the following events: (i) default in the payment of any interest on any
Debt Security of that series when it becomes due and payable, and continuance of
such default for a period of 30 days (in the case of the Subordinated Indenture,
whether or not payment is prohibited by the subordination provisions); (ii)
default in the payment of the principal of, or premium, if any, on any Debt
Security of that series at its Maturity (in the case of the Subordinated
Indenture, whether or not payment is prohibited by the subordination
provisions); (iii) failure to deposit any sinking fund payment when and as due
by the terms of a Debt Security of that series (in the case of the Subordinated
Indenture, whether or not payment is prohibited by the subordination
provisions); (iv) failure to perform any other covenants or agreements of the
Company in the Applicable Indenture (other than covenants or agreements included
in the Applicable Indenture solely for the benefit of a series of Debt
Securities thereunder other than that series) and continuance of such default
for a period of 60 days after either the Debt Trustee or the Holders of at least
25% of the principal amount of the Outstanding Debt Securities of that series
have given written notice specifying such failure as provided in the Applicable
Indenture; (v) certain events in bankruptcy, insolvency or reorganization of the
Company; and (vi) any other Event of Default provided with respect to Debt
Securities of that series (Section 501). If an Event of Default occurs with
respect to Debt Securities of any series, the Debt Trustee shall give the
Holders of Debt Securities
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of such series notice of such default, provided, however, that in the case of a
default described in (iv) above, no such notice to Holders shall be given until
at least 30 days after the occurrence thereof (Section 602).
If an Event of Default with respect to the Senior Debt Securities of any
series at the time Outstanding occurs and is continuing, either the Debt Trustee
or the Holders of at least 25% of the 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 Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified in the
terms thereof) of all the Senior Debt Securities of that series to be due and
payable immediately. Payment of the principal of the Subordinated Debt
Securities may be accelerated only in the case of certain events of bankruptcy,
insolvency or reorganization of the Company. The Debt Trustee and the Holders
will not be entitled to accelerate the maturity of the Subordinated Debt
Securities upon the occurrence of any of the Events of Default described above
except for those described in clause (v) (i.e., certain events in bankruptcy,
insolvency or reorganization of the Company). Accordingly, there is no right of
acceleration in the case of a default in the performance of any other covenant
with respect to the Subordinated Debt Securities, including the payment of
interest or principal. 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 of the
aggregate principal amount of Outstanding Debt Securities of that series may,
under certain circumstances, rescind and annul such acceleration (Section 502).
The Indentures provide that, subject to the duty of the Debt Trustee during
default to act with the required standard of care, the Debt 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 shall
have offered to the Debt Trustee reasonable security or indemnity (Section 603).
Subject to such provisions for the indemnification of the Debt Trustee and to
certain other conditions, the Holders of a majority of the 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 Debt Trustee, or exercising any trust or power conferred on the
Debt Trustee, with respect to the Debt Securities of that series (Section 512).
No Holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Applicable Indenture or for any remedy
thereunder, unless: (i) such Holder previously has given to the Debt Trustee
under the Applicable Indenture written notice of a continuing Event of Default
with respect to Debt Securities of that series; (ii) the Holders of at least 25%
of the aggregate principal amount of the Outstanding Debt Securities of that
series have made written request, and offered reasonable indemnity, to the Debt
Trustee to institute such proceeding as trustee; (iii) in the 60-day period
following receipt of a written notice from a Holder, the Debt Trustee has not
received from the Holders of a majority of the aggregate principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with such
request; and (iv) the Debt Trustee shall have failed to institute such
proceeding within such 60-day period (Section 507). However, such limitations do
not apply to a suit instituted by a Holder of a Debt Security for enforcement of
payment of the principal of and premium, if any, or interest on such Debt
Security on or after the respective due dates expressed in such Debt Security
(Section 508).
The Company is required to furnish to the Debt Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Applicable Indenture, and as to any default in such performance (Section 1008).
DEFEASANCE AND COVENANT DEFEASANCE
The Indentures provide that, if such provision is made applicable to the
Debt Securities of any series pursuant to Section 301 of the Applicable
Indenture (which will be indicated in the Applicable Prospectus Supplement), the
Company may elect either (i) to defease and be discharged from any and all
obligations in respect of such Debt Securities then outstanding (including, in
the case of Subordinated Debt Securities, the provisions described under
"Subordination of Subordinated Debt Securities" and except for certain
obligations to register the transfer of or exchange of such Debt Securities,
replace stolen, lost or mutilated Debt
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Securities, maintain paying agencies and hold monies for payment in trust)
("defeasance") or (ii) to be released from its obligations with respect to such
Debt Securities concerning the subordination provisions described under
"Subordination of Subordinated Debt Securities" and any other covenants
applicable to such Debt Securities which are determined pursuant to Section 301
of the Applicable Indenture to be subject to covenant defeasance ("covenant
defeasance"), and the occurrence of an event described in clause (iv) or (vi)
under "Events of Default" above (insofar as with respect to covenants subject to
covenant defeasance) shall no longer be an Event of Default, in the case of
either (i) or (ii) if the Company deposits, in trust, with the Debt Trustee
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, without reinvestment, to pay all the principal of and
premium, if any, and interest on such Debt Securities on the dates such payments
are due (which may include one or more redemption dates designated by the
Company) and any mandatory sinking fund or analogous payments thereon in
accordance with the terms of such Debt Securities. Such a trust may only be
established if, among other things, (A) no Event of Default or event which with
the giving of notice or lapse of time, or both, would become an Event of Default
under the Applicable Indenture shall have occurred and be continuing on the date
of such deposit, (B) such deposit will not cause the Debt Trustee to have any
conflicting interest with respect to other securities of the Company and (C) the
Company shall have delivered an Opinion of Counsel to the effect that the
Holders will not recognize income, gain or loss for federal income tax purposes
(and, in the case of legal defeasance only, such Opinion of Counsel must be
based on a ruling of the Internal Revenue Service or other change in applicable
federal income tax law) as a result of such deposit or defeasance and will be
subject to federal income tax in the same manner as if such defeasance had not
occurred.
The Company may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its defeasance option, payment of such Debt Securities
may not be accelerated because of a subsequent Event of Default. If the Company
exercises its covenant defeasance option, payment of such Debt Securities may
not be accelerated by reference to a subsequent breach of any of the covenants
noted under clause (ii) in the preceding paragraph. In the event the Company
omits to comply with its remaining obligations with respect to such Debt
Securities under the Applicable Indenture after exercising its covenant
defeasance option and such Debt Securities are declared due and payable because
of the subsequent occurrence of any Event of Default, the amount of money and
U.S. Government Obligations on deposit with the Debt Trustee may be insufficient
to pay amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable in respect of such payments. (See Article Thirteen and Article
Fourteen of the Senior Indenture and the Subordinated Indenture, respectively.)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company
and the Debt Trustee with the consent of the Holders of not less than a majority
of the aggregate principal amount of the Outstanding Debt Securities of all
series issued under the Indenture and affected by the modification or amendments
(voting as a single class); provided, however, that no such modification or
amendment may, without the consent of the Holders of all Debt Securities
affected thereby (i) change the stated Maturity of the principal of, or any
installment of principal of or interest on, any Debt Security; (ii) reduce the
principal amount of, or the premium, if any, or (except as otherwise provided in
the Applicable Prospectus Supplement) interest on, any Debt Security (including
in the case of an Original Issue Discount Debt Security the amount payable upon
acceleration of the Maturity thereof); (iii) change the place or currency of
payment of principal of, or premium, if any, or interest on any Debt Security;
(iv) impair the right to institute suit for the enforcement of any payment on
any Debt Security on or after the Stated Maturity thereof (or in the case of
redemption, on or after the Redemption Date); (v) in the case of the
Subordinated Indenture, modify the subordination provisions in a manner adverse
to the Holders of the Subordinated Debt Securities; or (vi) reduce the
percentage of the 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 902).
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The Holders of a majority of the aggregate principal amount of the Senior
Debt Securities or the Subordinated Debt Securities may, on behalf of all
Holders of the Senior Debt Securities or the Subordinated Debt Securities,
respectively, waive any past default under the Applicable Indenture, except a
default in the payment of principal, premium or interest or in the performance
of certain covenants (Section 513).
CERTAIN COVENANTS OF THE COMPANY
Limitation on Liens. The Senior Indenture contains a covenant that the
Company may not, nor may it permit any Significant Subsidiary (as defined below)
to, create, incur, assume or permit to exist any Lien (as defined below) on any
property or asset (including any stock or other securities of any Person,
including any Significant Subsidiary), or on any income or revenues or rights in
respect of any thereof, unless the Senior Debt Securities of any series then or
thereafter Outstanding shall be equally and ratably secured. This restriction
does not apply, however, to (i) Liens on property or assets of the Company and
its Subsidiaries existing on the date of the Senior Indenture, provided that
such Liens shall secure only those obligations which they secure as of the date
of the Senior Indenture; (ii) any Lien existing on any property or asset prior
to the acquisition thereof by the Company or any Subsidiary (including by way of
merger or consolidation), provided that (x) such Lien is not created in
contemplation of or in connection with such acquisition and (y) such Lien does
not apply to any other property or assets of the Company or any Significant
Subsidiary; (iii) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves, to the extent required by GAAP, have been set aside; (iv) carriers',
warehousemen's, mechanics', materialsmen's, repairmen's or other like Liens
arising in the ordinary course of business and securing obligations that are not
due and payable or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves, to the extent required
by GAAP, have been set aside; (v) pledges and deposits made in the ordinary
course of business in compliance with worker's compensation, unemployment
insurance and other social security laws or regulations; (vi) zoning
restrictions, easements, rights-of-way, restrictions on use of real property and
other non-financial encumbrances incurred in the ordinary course of business
which do not materially detract from the value of the property subject thereto
or interfere with the ordinary conduct of the business of the Company and its
Subsidiaries taken as a whole; (vii) Liens upon any property acquired,
constructed or improved by the Company or any Subsidiary which are created or
incurred within 360 days of the later of the acquisition, completion of
construction or commencement of operation of the property to secure or provide
for the payment of up to the purchase price of such property or the cost of such
construction or improvement, including carrying costs (but no other amounts),
provided that any such Lien shall not apply to any other property of the Company
or any Significant Subsidiary; (viii) Liens on the property or assets of any
Subsidiary in favor of the Company or a Significant Subsidiary; (ix) Liens upon
any property or assets of the Company and its Subsidiaries on property subject
to a Synthetic Lease or any right-of-access or other non-financial encumbrance
relating thereto; (x) extensions, renewals or replacements of Liens referred to
in clauses (i) through (ix) above, provided that any such extension, renewal or
replacement Lien shall be limited to the property or assets covered by the Lien
extended, renewed or replaced and that the obligations secured by any such
extension, renewal or replacement Lien shall be in an amount not greater than
the amount of the obligations secured by the Lien extended, renewed or replaced;
(xi) Liens arising in connection with any Permitted Receivables Program (to the
extent the sale by the Company or the applicable Significant Subsidiary of its
accounts receivable is deemed to give rise to a Lien in favor of the purchaser
thereof in such accounts receivable or the proceeds thereof); (xii) Liens on the
capital stock or assets of any Subsidiary that is not a Significant Subsidiary;
and (xiii) Liens to secure Indebtedness if, immediately after the grant thereof
and the application of the proceeds of such Indebtedness, the aggregate amount
of all Indebtedness secured by Liens that would not be permitted but for this
clause (xiii) does not exceed 10% of Consolidated Net Tangible Assets (as
defined below) as shown on the most recent consolidated balance sheet of the
Company filed with the Commission pursuant to the Exchange Act.
Limitation on Sale/Leaseback Transactions. The Senior Indenture contains a
covenant that transactions involving any sale and leaseback by the Company or
any Significant Subsidiary of any Principal Property (as defined below) are
prohibited, unless the Company or any such Significant Subsidiary, within 120
days after the effective date of the lease, either (A) applies the net proceeds
to the acquisition of another Principal Property of equal or greater fair market
value or (B) applies to the retirement of any Funded Debt (as defined
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below) of the Company or any Subsidiary an amount equal to the greater of (i)
the net proceeds received by the Company and its Subsidiaries for the sale of
the property leased or (ii) the fair market value of the property leased within
90 days prior to the effective date of the lease or (C) any combination of (A)
and (B). The amount to be so applied in respect of any such transaction will be
reduced, however, by the principal amount of any Senior Debt Securities
surrendered to the Debt Trustee by the Company for cancellation and by the
principal amount of Funded Debt other than Senior Debt Securities, voluntarily
retired by the Company, within 120 days after the effective date of the lease,
provided that no retirement may be effected by payment on the final maturity
date or pursuant to mandatory sinking fund or prepayment provisions. This
restriction does not apply, however, to the Company or any Significant
Subsidiary: (i) entering into any transaction not involving a lease with a term
of more than five years; (ii) entering into any transaction to the extent the
Lien on any such property subject to such sale and leaseback would be permitted
under the covenant described above under "Limitation on Liens"; (iii) entering
into any transaction for the sale and leaseback of any property in connection
with any Tax Reduction Agreement (as defined below); (iv) a sale and leaseback
transaction between the Company and a Significant Subsidiary or between
Significant Subsidiaries; or (v) entering into any transaction for the sale and
leaseback of any property if such lease is entered into within 360 days after
the later of the acquisition, completion of construction or commencement of
operation of such property.
Limitation on Funded Debt of Significant Subsidiaries. The Senior
Indenture provides that the Company will not permit any Significant Subsidiary
(a) to create, incur, assume or suffer to exist any Funded Debt other than (i)
Funded Debt that is or could be secured by a Lien on Principal Property which is
permitted under the provision described above under "Limitations on Liens", (ii)
Funded Debt owed to the Company or any Subsidiary, (iii) Funded Debt of a
corporation which is merged with or into a Significant Subsidiary, (iv) Funded
Debt in existence on the date of the Senior Indenture, (v) Funded Debt created
in connection with, or with a view to, compliance by a Significant Subsidiary
with the requirements of any program adopted by a federal, state or local
governmental authority and applicable to such Significant Subsidiary and
providing financial or tax benefits to such Significant Subsidiary which are not
available directly to the Company, or (vi) extensions, renewals or replacements,
in whole or in part, of Funded Debt referred to in clauses (i) through (v)
above, or (b) to guarantee any Funded Debt (without duplication) except for (i)
guarantees which, on the date of the Senior Indenture, a Significant Subsidiary
is obligated to give, (ii) guarantees of Funded Debt permitted under clause (a)
of this paragraph, and (iii) guarantees of Funded Debt if, after giving effect
thereto, the aggregate amount of all Funded Debt guaranteed by Significant
Subsidiaries that would not be permitted but for this clause (iii) does not
exceed the aggregate amount of all indebtedness for borrowed money guaranteed by
Significant Subsidiaries as of the date of the Senior Indenture. In addition to
that permitted in this paragraph, any Significant Subsidiary may create, incur,
assume or guarantee the payment of Funded Debt provided that at the time of such
creation, incurrence, assumption or guarantee, and after giving effect thereto,
(i) the aggregate principal amount of all Funded Debt of Significant
Subsidiaries does not exceed 15% of Consolidated Net Tangible Assets as shown on
the most recent consolidated balance sheet of the Company filed with the
Commission pursuant to the Exchange Act, or (ii) the Significant Subsidiaries
shall have guaranteed the payment of all series of Senior Debt Securities,
provided, however, that such guarantee shall rank senior to or pari passu with
any such Funded Debt or guarantee thereof.
Leveraged Transactions. Except for the limitations on liens,
sale/leaseback transactions and Funded Debt of Significant Subsidiaries in the
Senior Indenture referred to above and on consolidations, mergers or transfers
of the Company's assets substantially as an entirety referred to below, the
Indentures and the terms of the Debt Securities do not contain any covenants or
other provisions designed to afford holders of any Debt Securities protection in
the event of a highly leveraged transaction involving the Company.
Applicability of Covenants. Any series of Senior Debt Securities may
provide that any or all of the covenants described above shall not be applicable
to the Senior Debt Securities of such series (Section 301). None of these
covenants will be applicable to Subordinated Debt Securities.
CERTAIN DEFINITIONS
Certain terms are defined in the Indenture and are used in this Prospectus
as follows:
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"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities, except for (a) notes and loans payable,
(b) current maturities of long-term debt and (c) current maturities of
obligations under capital leases, and (ii) goodwill and other intangibles.
"Funded Debt" means all Indebtedness that will mature, pursuant to a
mandatory sinking fund or prepayment provision or otherwise, and all
installments of Indebtedness that will fall due, more than one year from the
date of determination. In calculating the maturity of any Indebtedness, there
shall be included the term of any unexercised right of the debtor to
unilaterally renew or extend such Indebtedness existing at the time of
determination.
"GAAP" means generally accepted accounting principles which are in effect
on the date of the Indenture.
"Indebtedness" of any Person means, as at any date of determination, all
indebtedness for borrowed money (including capitalized lease obligations) of
such Person and its consolidated subsidiaries at such date that would be
required to be included as a liability on a consolidated balance sheet
(excluding the footnotes thereto) of such Person prepared in accordance with
GAAP.
"Lien" means any mortgage, lien, pledge, charge, security interest,
conditional sale or other title retention agreement or other encumbrance of any
nature whatsoever; however, Lien does not include any encumbrance relating to
any Tax Reduction Agreement.
"Permitted Receivables Program" means any agreement of the Company or any
of its Subsidiaries providing for sales, transfers or conveyances of accounts
receivable purporting to be sales (and considered sales under GAAP) that do not
provide, directly or indirectly, for recourse against the seller of such
accounts receivable (or against any of such seller's Subsidiaries or Affiliates)
by way of a guaranty or any other credit support arrangement, with respect to
the amount of such accounts receivable (based on the financial condition or
circumstances of the obligor thereunder), other than such limited recourse for
customary representations, warranties, covenants and indemnities as is
reasonable given market standards for transactions of a similar type, taking
into account such factors as historical bad debt loss experience and obligor
concentration levels.
"Principal Property" means any manufacturing, processing, distribution,
research, research and development, warehousing or principal administration
facility (including, without limitation, land, fixtures and equipment) owned or
leased by the Company or any Subsidiary (including any of the foregoing acquired
or leased after the date of the Indenture) and located within the United States
of America, other than any of the foregoing which the Board of Directors of the
Company by Board Resolution and in good faith declares, together with all other
manufacturing, processing, distribution, research, research and development,
warehousing and principal administration facilities (including, without
limitation, land, fixtures and equipment) previously so declared, are not of
material importance to the business conducted by the Company and its
subsidiaries taken as an entirety.
"Significant Subsidiary" means any wholly owned Subsidiary of the Company
substantially all of the assets of which are located in the United States
(excluding territories or possessions) and which owns a Principal Property,
except for a Subsidiary that is principally engaged in a business of financing,
or of exporting goods or merchandise from or importing goods or merchandise into
the United States.
"Subsidiary" means any corporation, partnership, limited liability company,
joint venture, trust or unincorporated organization more than 50% of the
outstanding voting interest of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries.
"Synthetic Lease" means any transaction for the lease of property or assets
designed to permit the lessee (i) to claim depreciation on such property or
assets under U.S. tax laws and (ii) to treat such lease as an operating lease or
not to reflect the property or assets on the lessee's balance sheet under GAAP.
"Tax Reduction Agreement" means any fee-in-lieu-of-tax agreement as
permitted under applicable state or municipal law or any other arrangement
providing similar benefits or any agreement which is designed to permit the
depreciation of the same property to be claimed under the tax laws of two
different countries.
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CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge into any other Person or
transfer or lease its assets substantially as an entirety to any Person unless
any successor or purchaser is a corporation organized under the laws of the
United States of America, any State or the District of Columbia, any such
successor or purchaser expressly assumes the Company's obligations on the Debt
Securities under a supplemental indenture, and immediately after giving effect
to the transaction, no Event of Default shall have occurred and be continuing.
The Debt Trustee may receive an Opinion of Counsel as conclusive evidence of
compliance with these provisions (Article Eight).
CONVERSION RIGHTS
The terms, if any, on which Debt Securities of a series may be exchanged
for or converted into shares of Common Stock or any other security, including
the conversion price or exchange ratio (or the method of calculating the same),
the conversion or exchange period (or the method of determining the same),
whether conversion or exchange will be mandatory or at the option of the holder
or the Company, provisions for adjustment of the conversion price or the
exchange ratio and provisions affecting conversion or exchange in the event of
the redemption of such Debt Securities, will be set forth 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 (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued in either registered or
bearer form and in either temporary or definitive form. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive form, 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 305)
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series if other than or in addition to the description below. The
Company anticipates that the following provisions will apply to all depositary
arrangements.
Upon the issuance of a Global Security, 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
("participants"). The accounts to be credited shall be designated by the
underwriters of such Debt Securities, by certain agents of the Company or by the
Company, if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depositary for such Global Security or by participants or persons that hold
through participants. The laws of some states 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, or its nominee, is the 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 a
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 governing such Debt Securities. Accordingly, each person owning a
beneficial interest in a Global Security must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of the
participant and that, if applicable, the indirect participant, through which
such person owns its interest, to exercise any rights of a holder under the
Indenture.
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<PAGE> 17
Principal, premium, if any, and interest payments 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 for such Debt Securities, any paying agent or the 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.
Wellman expects that the Depositary for Debt Securities of a series, upon
receipt of any payment of principal, premium or interest in respect of a
definitive 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.
If a Depositary for Debt Securities of a series at any time is unwilling or
unable to continue as Depositary and a successor Depositary is not appointed by
the Company within 90 days, Wellman will issue Debt Securities of such series in
definitive form in exchange for the Global Security representing the Debt
Securities of such series. In addition, Wellman may at any time determine not to
have any Debt Securities of a series represented by a Global Security, and, in
such event, will issue Debt Securities of such series in definitive form in
exchange for such Global Security representing such Debt Securities. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of Debt Securities of the series represented by
such Global Security in definitive form equal in principal amount to such
beneficial interest in such Global Security and to have such Debt Securities
registered in its name. Debt Securities of such series so issued in definitive
form will be issued in denominations of $1,000 and integral multiples thereof
and will be issued in registered form only, without coupons.
GOVERNING LAW
The Indentures provide that they and the Debt Securities will be governed
by, and construed in accordance with, the laws of the State of New York.
CONCERNING THE DEBT TRUSTEE
The Chase Manhattan Bank is Debt Trustee under the Indentures. The Debt
Trustee performs services for the Company in the ordinary course of business.
DESCRIPTION OF COMMON STOCK
COMMON STOCK
The Company's Restated Certificate of Incorporation authorizes the issuance
of 55,000,000 shares of Common Stock, par value $.001 per share, and 5,500,000
shares of Class B Common Stock, par value $.001 per share. As of June 30, 1998,
there were 33,768,823 shares of Common Stock outstanding (including 2,500,000
shares held in treasury); no Class B Common Stock is outstanding.
The Common Stock has no preemptive rights and no redemption, sinking fund
or conversion provisions. Each holder of Common Stock on the applicable record
date is entitled to receive such dividends as may be declared by the Board of
Directors out of funds legally available therefor, and, in the event of
liquidation, to share pro rata in any distribution of the Company's assets after
payment of liabilities. Each holder of Common Stock is entitled to one vote for
each share held of record on the applicable record date on all matters presented
to a vote of stockholders. The Common Stock does not have cumulative voting
rights. The outstanding Common Stock is fully paid and non-assessable and is
traded on the New York Stock Exchange.
Class B Common Stock is identical to Common Stock in all respects except as
to voting and conversion rights. The holders of Class B Common Stock are
entitled to vote, together with the holders of the Common Stock, voting as a
single class, on certain Business Combinations, as described below, and on any
matters required to be submitted to a vote of the Company's stockholders, except
that they have no right to vote in the election of directors. In accordance with
Delaware General Corporation Law, the holders of outstanding Class B Common
Stock are entitled to vote as a separate class upon any proposed amendment to
the Restated
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Certificate of Incorporation that would increase or decrease the aggregate
number of authorized shares of such class, increase or decrease the par value of
shares of such class or alter or change the powers or rights of the shares of
such class so as to affect them adversely. The affirmative vote of a majority of
the outstanding shares of Class B Common Stock is required to approve any such
amendment. Each share of Class B Common Stock is convertible by the holder into
one share of Common Stock only in connection with the sale of such share to a
purchaser who is not an affiliate of the holder of such share. The Company's
Class B Common Stock was originally authorized to provide a non-voting capital
stock for certain stockholders that were subject to certain restrictions on
their ownership of voting securities. There are no shares of Class B Common
Stock outstanding, and the Company has no intention of issuing such shares in
the future.
Continental Stock Transfer & Trust Company is the registrar and transfer
agent for the Common Stock.
COMMON STOCK PURCHASE RIGHTS
In August 1991, the Company adopted a Shareholder Rights Plan under which
Common Stock Purchase Rights ("Rights") were distributed as a dividend at the
rate of one Right for each share of Common Stock outstanding. The Rights will
expire on August 5, 2001, unless earlier redeemed or exchanged. Each Right,
which trades automatically with the Common Stock, entitles the holder to
purchase one share of Common Stock at an exercise price of $90 per share,
subject to adjustment (the "Purchase Price"). The Rights will be exercisable
only if a person or group has acquired beneficial ownership of 20% or more of
the outstanding Common Stock (an "Acquiring Person") or announces a tender or
exchange offer that would result in such person or group owning 20% or more of
the Company's Common Stock, unless the Board of Directors determines that a
person that has become an Acquiring Person has become such inadvertently and
such person promptly diverts a sufficient number of shares of Common Stock so
that such person would no longer be an Acquiring Person (the earlier of such
dates being called the "Distribution Date").
In the event any person becomes an Acquiring Person, the Rights would give
holders (other than such Acquiring Person and its transferees) the right to buy,
for the Purchase Price, Common Stock with a market value of twice the Purchase
Price. If, at the time the Rights become exercisable for Common Stock, there is
not a sufficient number of shares of Common Stock authorized so as to provide
for the exercise of all Rights entitled to be exercised, the Company will be
required to substitute cash, property or other securities with a value equal to
that of the shares of Common Stock for which the Rights are exercisable, unless
the Board is able to cause a sufficient number of shares of Common Stock to be
authorized within 90 days after the date the Rights become so exercisable.
At any time after any person becomes an Acquiring Person, the Board may, at
its option and in lieu of any transaction described in the preceding paragraph,
exchange the outstanding and exercisable Rights (other than Rights held by such
Acquiring Person and its transferees) for shares of Common Stock or Common Stock
equivalents at an exchange ratio of one share of Common Stock per Right, subject
to certain adjustments.
In the event of any merger or consolidation involving the Company, or if
50% or more of the Company's assets or earning power is sold or transferred,
after the Rights become exercisable, each Right will be converted into the right
to purchase, for the Purchase Price, common stock of the acquiring corporation
(or its ultimate parent company or other controlling entity) with a market value
of twice the Purchase Price.
The Rights Agreement may be amended or the Rights redeemed by the Board for
$.01 (payable in cash or securities) each at any time until there is an
Acquiring Person. Thereafter, the Board can amend the Rights Agreement and the
terms of the Rights under certain circumstances, but not in any matter that
adversely affects the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution. The
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number of outstanding Rights and the one share of Common Stock issuable upon
exercise of each Right are also subject to adjustment from time to time to
prevent dilution.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Common Stock will be issued upon
exercise of the Rights and, in lieu thereof, a cash payment will be made based
on the market price of the Common Stock on the last trading day prior to the
date of exercise.
The Rights have certain "anti-takeover" effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board, except pursuant to an offer conditioned on a
substantial number of Rights being acquired. The Rights should not interfere
with any merger or other business combination approved by the Board prior to the
time that there is an Acquiring Person (at which time holders of the Rights
become entitled to exercise their Rights for shares of Common Stock at one-half
the market price), since until such time the Rights generally may be redeemed by
the Board at $.01 per Right.
CERTAIN PROVISIONS OF THE CERTIFICATE OF INCORPORATION AND BY-LAWS
The following summary of certain provisions of the Company's Restated
Certificate of Incorporation and Amended and Restated By-Laws (the "Amended and
Restated By-Laws") does not purport to be complete and is subject to and
qualified in its entirety by reference to the Restated Certificate of
Incorporation and the Amended and Restated By-Laws which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus is
a part.
CERTAIN BUSINESS COMBINATIONS
Article Seventh to the Company's Restated Certificate of Incorporation
governs any proposed "Business Combination" between the Company and/or its
subsidiaries and a "Related Person." In addition to the affirmative vote of the
requisite number of shares necessary to approve any such Business Combination
under the Delaware General Corporation Law, Article Seventh requires the
affirmative vote of a majority of the outstanding Capital Stock entitled to vote
held by stockholders other than the Related Person and affiliates of the Related
Person in order for such Business Combination to be approved. A "Related Person"
is defined to include a person, entity or affiliated group of persons or
entities that has acquired 40% or more of the Capital Stock of the Company. A
"Business Combination" is defined to include mergers, leases, consolidations,
sales and exchanges of assets and similar transactions involving the Company or
its subsidiaries which amount to 10% or more of the consolidated assets of the
Company, including any securities issued by a subsidiary, between the Company
(or a subsidiary of the Company) and a Related Person or certain defined parties
related to a Related Person. The definition also includes certain other
transactions (including reclassifications and recapitalizations) which would
have the effect of, directly or indirectly, increasing the Related Persons'
proportionate share of Capital Stock in the Company; and complete or partial
liquidations, spin-offs, splitoffs, and splitups on which the Related Person and
certain defined parties related to a Related Person receive 10% or more of the
Company's consolidated assets.
REQUIREMENT TO OFFER TO PURCHASE STOCK OF MINORITY STOCKHOLDERS
Article Seventh also requires that in the event any person or entity,
together with certain defined parties related to such person or entity (a
"Control Group"), acquires 75% or more of the Capital Stock of the Company, the
Company must offer to purchase for cash all of its outstanding stock (including
stock issuable upon the exercise of outstanding options, warrants and rights and
upon the conversion of convertible securities) not owned by the Control Group at
the highest price per share paid by any member of the Control Group in acquiring
any of its holdings. The Company must thereafter purchase all shares as to which
such offer is accepted, subject to the Company's right to defer the purchase of
such stock until the earliest time thereafter at which such stock can be
purchased without violating Section 160 of the Delaware General Corporation Law
or the current provisions of any loan agreement or debt instrument which is in
effect on the effective date of the Restated Certificate of Incorporation.
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CERTAIN ANTI-TAKEOVER PROVISIONS OF DELAWARE LAW
The Company is a Delaware corporation and is subject to Section 203 of the
Delaware General Corporation Law. In general, Section 203 prevents an
"interested stockholder" (defined generally as a person owning 15% or more of
the Company's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with the Company (or its majority-owned
subsidiaries) for three years following the time such person became an
interested stockholder unless: (i) before such person became an interested
stockholder, the Company's Board of Directors approved the transaction in which
the interested stockholder became an interested stockholder or approved the
business combination; (ii) upon consummation of the transaction that resulted in
the interested stockholder becoming an interested stockholder, the interested
stockholder owns at least 85% of the Company's voting stock outstanding at the
time the transaction commenced (excluding stock held by directors who are also
officers of the Company and by employee stock plans that do not provide
employees with the rights to determine confidentially whether shares held
subject to the plan will be tendered in a tender or exchange offer); or (iii) at
or following the transaction in which such person became an interested
stockholder, the business combination is approved by the Company's Board of
Directors and approved at a meeting of stockholders by the affirmative vote of
the holders of at least two-thirds of the Company's outstanding voting stock not
owned by the interested stockholder. Under Section 203, the restrictions
described above also do not apply to certain business combinations proposed by
an interested stockholder following the earlier of the announcement or
notification of one of certain extraordinary transactions involving the Company
and a Person who had not been an interested stockholder during the previous
three years or who became an interested stockholder with the approval of a
majority of the Company's directors, if such extraordinary transaction is
approved or not opposed by a majority of the directors who were directors prior
to any person becoming an interested stockholder during the previous three years
or were recommended for election or elected to succeed such directors by a
majority of such directors.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of Debt
Securities or Common Stock. Securities Warrants may be issued independently or
together with Debt Securities or shares of Common Stock offered by any
Prospectus Supplement and may be attached to or separate from such Debt
Securities or shares of Common Stock. 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 Continental Stock Transfer & Trust
Company or another 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 offered 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. Copies of the forms of Securities Warrant Agreements,
including the forms of Securities Warrant Certificates representing the
Securities Warrants, are filed as exhibits to the Registration Statement of
which this Prospectus is a part. The following is a summary of certain material
provisions of the Securities Warrants. The following summary does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
all the 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 Securities Warrants to purchase Debt Securities and
the price at which such Debt Securities may be purchased upon such exercise;
(ii) the number of shares of Common Stock purchasable upon the exercise of
Securities Warrants to purchase Common Stock and the price at which such number
of shares of Common Stock may be purchased upon such exercise; (iii) the date on
which the right to exercise such Securities Warrants shall commence and the date
(the "Expiration Date") on which such right shall expire; (iv) U.S. federal
income tax consequences applicable to such Securities Warrants; and (v) any
other terms of such Securities Warrants. Securities Warrants for the purchase of
Common Stock will be offered and exercisable for U.S. dollars only. Securities
Warrants will be issued in registered form only. The exercise price
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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 Common Stock, as
the case may be, at such exercise price as shall in each case be set forth in,
or calculable from, the Prospectus Supplement relating to the offered 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, holders of such Securities Warrants will not have any of the rights
of holders of the Debt Securities 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. Prior to the exercise of any Securities Warrants to
purchase Common Stock, holders of such Securities Warrants will not have any
rights of holders of the Common Stock purchasable upon such exercise, including
the right to receive payments of dividends, if any, on the Common Stock
purchasable upon such exercise or to exercise any applicable right to vote.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in or outside the United States
through underwriters or dealers, directly to one or more purchasers, or through
agents. The Prospectus Supplement with respect to the Offered Securities will
set forth the terms of the offering of the Offered Securities, including the
name or names of any underwriters, dealers or agents, the purchase price of the
Offered Securities and the proceeds to the Company from such sale, any delayed
delivery arrangements, any underwriting discounts and other items constituting
underwriters' compensation, the initial public offering price, any discounts or
concessions allowed or re-allowed or paid to dealers, and any securities
exchanges on which the Offered Securities may be listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering, and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters or agents to purchase the Offered Securities will be subject to
conditions precedent, and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased. The initial public offering price and
any discounts or concessions allowed or re-allowed or paid to dealers may be
changed from time to time.
If dealers are used in the sale of Offered Securities with respect to which
this Prospectus is delivered, the Company will sell such Offered Securities to
the dealers as principals. The dealers may then resell such Offered Securities
to the public at varying prices to be determined by such dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the
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Prospectus Supplement relating thereto. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
Offered Securities may be sold directly by the Company to institutional
investors or others, who may be deemed to be underwriters within the meaning of
the Securities Act with respect to any resale thereof. The terms of any such
sales will be described in the Applicable Prospectus Supplement.
In connection with the sale of the Offered Securities, underwriters or
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, agents and dealers participating in the
distribution of the Offered Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of the Offered Securities by them may be deemed to be underwriting
discounts or commissions under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments that such agents, dealers, or underwriters may be
required to make with respect thereto.
Some or all of the Offered Securities may be new issues of securities with
no established trading market. Any underwriters to whom Offered Securities are
sold by the Company for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any Offered Securities.
Certain of the underwriters, dealers or agents and their affiliates may
engage in transactions with and perform services for the Company in the ordinary
course of business.
VALIDITY OF OFFERED SECURITIES
The validity of the Offered Securities will be passed upon for the Company
by Edwards & Angell, LLP, Short Hills, New Jersey, and for any underwriters by
Sullivan & Cromwell, New York, New York. David K. Duffell, Secretary of the
Company, is a partner of Edwards & Angell, LLP.
EXPERTS
The consolidated financial statements (including the related financial
statement schedules) of Wellman, Inc. appearing in Wellman, Inc.'s Annual Report
(Form 10-K) for the year ended December 31, 1997 have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference which is based in part on the
report dated January 29, 1998 of KPMG, independent auditors, on the consolidated
financial statements of Wellman International Limited and subsidiaries for the
year ended December 31, 1997. Such consolidated financial statements of Wellman,
Inc. are incorporated herein by reference in reliance upon such reports given
upon the authority of such firms as experts in accounting and auditing.
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[WELLMAN LOGO]
<PAGE> 24
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
S.E.C. Registration Fee..................................... $118,000
Legal Fees and Expenses..................................... 70,000
Accounting Fees and Expenses................................ 50,000
Trustee's Fees and Expenses................................. 10,000
Rating Agency Fees.......................................... 175,000
Blue Sky Fees and Expenses.................................. 2,500
Printing and Engraving Fees................................. 35,000
Miscellaneous............................................... 14,500
--------
$475,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware reads
as follows:
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if such person acted in good faith and in a
manner such person 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 such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which such person 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 reasonable cause to
believe that such person's conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably
incurred by such person in connection with the defense or settlement of
such action or suit if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of
any claim, issue or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a present or former director or officer of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b)
II-1
<PAGE> 25
of this section, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the present or former director, officer, employee or agent is proper in
the circumstances because such person has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made with respect to a person who is a director or
officer at the time of such determination (1) by a majority vote of the
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) by a committee of such directors
designated by a majority vote of such directors, even though less than a
quorum, (3) if there are no such directors, or if such directors so direct,
by independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the corporation as authorized in this
section. Such expenses (including attorneys' fees) incurred by former
directors and officers or other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors deems
appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors, or otherwise, both as to action
in such person's official capacity and as to action in another capacity
while holding such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by such person in
any such capacity, or arising out of such person's status as such, whether
or not the corporation would have the power to indemnify such person
against such liability under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to any employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner such person reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
II-2
<PAGE> 26
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligations to advance
expenses (including attorneys' fees).
Article 7 of the Registrant's Restated By-Laws provides as follows:
(a) Right to Indemnification. Each person who was or is made a party,
or is threatened to be made a party to, or is involved in any action, suit
or proceeding, whether criminal, administrative or investigative by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Corporation or is or
was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or
in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by the Delaware General Corporation Law, as the
same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment) against all expense,
liability and loss (including attorneys fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith;
provided, however, that the Corporation shall indemnify any such person
seeking indemnity in connection with any action, suit or proceeding (or
part thereof) initiated by such person only if such action, suit or
proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation. Such right shall be a contract right and shall include the
right to be paid by the Corporation expenses incurred in defending any such
proceeding in advance of its final disposition; provided, however, that the
payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer
including, without limitation, service to an employee benefit plan) in
advance of the final disposition of such proceeding shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it should be
determined ultimately that such director or officer is not entitled to be
indemnified under this Section or otherwise.
(b) Right of Claimant to Bring Suit. If a claim under paragraph (a)
is not paid in full by the Corporation within ninety days after a written
claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be
a defense to any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking has been tendered to the
Corporation) that the claimant has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors, independent
legal counsel, or its stockholders) to have made a determination prior to
the commencement of such action that indemnification of the claimant is
proper in the circumstances because he or she has met the applicable
standards of conduct set forth in the Delaware General Corporation Law, nor
an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) that the claimant
had not met such applicable standards of conduct, shall be a defense to the
action or create a presumption that claimant had not met the applicable
standards of conduct.
II-3
<PAGE> 27
(c) Non-Exclusivity of Rights. The rights conferred on any person by
paragraphs (a) and (b) shall not be exclusive of any other right which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(d) Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any such director, officer, employee or
agent of the Corporation or another corporation, partnership, joint
venture, trust or other enterprise against any such expense, liability or
loss, whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Delaware General
Corporation Law.
Article Eighth of Registrant's Restated Certificate of Incorporation
provides as follows:
The Corporation shall indemnify its officers, directors, employees and
agents to the fullest extent permitted by the General Corporation Law of
Delaware and the Corporation's by-laws.
Article Eleventh of Registrant's Restated Certificate of Incorporation
provides as follows:
No director of the Corporation shall be liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability, (i) for any breach of the director's duty
of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, and (iv) for any transaction from which the director
derived an improper personal benefit.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement for the Senior Debt
Securities and the Subordinated Debt Securities
*1.2 Form of Underwriting Agreement for the Common Stock
4.1 Senior Trust Indenture dated as of July 31, 1998 between
Wellman, Inc. and The Chase Manhattan Bank
+4.2 Subordinated Trust Indenture dated as of July 31, 1998,
between Wellman, Inc. and The Chase Manhattan Bank
*4.3 Form of Note for Senior Debt Securities
*4.4 Form of Note for Subordinated Debt Securities
+4.5 Restated Certificate of Incorporation (Exhibit 3.1 of the
Company's Registration Statement on Form S-1, File No.
33-13458, refiled as Exhibit 3(a)(1) of the Company's Form
10-K for the year ended December 31, 1993, incorporated by
reference herein)
+4.6 Certificate of Amendment to Restated Certificate of
Incorporation (Exhibit 3(a)(2) of the Company's Registration
Statement on Form S-4, File No. 33-31043, refiled as Exhibit
3(a)(2) of the Company's Form 10-K for the year ended
December 31, 1993, incorporated by reference herein)
+4.7 Certification of Amendment to Restated Certificate of
Incorporation (Exhibit 28 of the Company's Registration
Statement on Form S-8, File No. 33-38491, refiled as Exhibit
3(a)(3) of the Company's Form 10-K for the year ended
December 31, 1993, incorporated by reference herein)
+4.8 Certificate of Amendment to Restated Certificate of
Incorporation (Exhibit 3(c)(4) of the Company's Form 10-K
for the year ended December 31, 1993 incorporated by
reference herein)
+4.9 By-Laws, as amended (Exhibit 3(b) of the Company's Form 10-K
for the year ended December 31, 1993 incorporated by
reference herein)
+4.10 Rights Agreement dated as of August 6, 1991 between the
Company and First Chicago Trust Company of New York, as
Rights Agent (Exhibit 1 of the Company's Form 8-K dated as
of August 6, 1991 incorporated by reference herein)
</TABLE>
II-4
<PAGE> 28
<TABLE>
<C> <S>
+4.11 Amendment to Rights Agreement dated February 26, 1996
between the Company and Continental Stock Transfer and Trust
Company (Exhibit 4.1 of the Company's Form 8-K dated
February 28, 1996 incorporated by reference herein)
*4.12 Form of Warrant Agreement for Common Stock
*4.13 Form of Warrant Agreement for Debt Securities
+5.1 Opinion of Edwards & Angell, LLP with respect to the
validity of the Offered Securities
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of Ernst & Young LLP
23.2 Consent of KPMG
+23.3 Consent of Edwards & Angell, LLP (included in Exhibit 5.1)
+24.1 Power of Attorney (included on signature page)
+25.1 Statement of Eligibility of The Chase Manhattan Bank for
Senior Debt Securities
+25.2 Statement of Eligibility of The Chase Manhattan Bank for
Subordinated Debt Securities
</TABLE>
- ---------------
* To be filed either by amendment or as an exhibit to an Exchange Act report and
incorporated herein by reference.
+ Previously filed.
ITEM 17. UNDERTAKINGS.
(A) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(B) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Exchange Act that is incorporated
by reference in the registration statement) shall be
II-5
<PAGE> 29
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(D) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-6
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Wellman, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Shrewsbury, State of New Jersey, on the 28th day
of September, 1998.
WELLMAN, INC.
By /s/ THOMAS M. DUFF
------------------------------------
THOMAS M. DUFF
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below on September 28, 1998 by the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY
--------- --------
<S> <C>
/s/ THOMAS M. DUFF Chief Executive Officer (Principal
- --------------------------------------------------- Executive Officer) and Director
THOMAS M. DUFF
/s/ KEITH R. PHILLIPS Chief Financial Officer (Principal
- --------------------------------------------------- Financial Officer)
KEITH R. PHILLIPS
* Controller (Principal Accounting Officer)
- ---------------------------------------------------
MARK J. ROSENBLUM
* Director
- ---------------------------------------------------
JAMES B. BAKER
* Director
- ---------------------------------------------------
CLIFFORD J. CHRISTENSON
* Director
- ---------------------------------------------------
ALLAN R. DRAGONE
* Director
- ---------------------------------------------------
RICHARD F. HEITMILLER
* Director
- ---------------------------------------------------
JONATHAN M. NELSON
* Director
- ---------------------------------------------------
JAMES E. ROGERS
* Director
- ---------------------------------------------------
RAYMOND C. TOWER
* Director
- ---------------------------------------------------
ROGER A. VANDENBERG
*By /s/ KEITH R. PHILLIPS
---------------------------------------------
KEITH R. PHILLIPS,
ATTORNEY-IN-FACT
</TABLE>
II-7
<PAGE> 31
EXHIBIT INDEX
<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement for the Senior Debt
Securities and the Subordinated Debt Securities
*1.2 Form of Underwriting Agreement for the Common Stock
4.1 Senior Trust Indenture dated as of July 31, 1998 between
Wellman, Inc. and The Chase Manhattan Bank
+4.2 Subordinated Trust Indenture dated as of July 31, 1998,
between Wellman, Inc. and The Chase Manhattan Bank
*4.3 Form of Note for Senior Debt Securities
*4.4 Form of Note for Subordinated Debt Securities
+4.5 Restated Certificate of Incorporation (Exhibit 3.1 of the
Company's Registration Statement on Form S-1, File No.
33-13458, refiled as Exhibit 3(a)(1) of the Company's Form
10-K for the year ended December 31, 1993, incorporated by
reference herein)
+4.6 Certificate of Amendment to Restated Certificate of
Incorporation (Exhibit 3(a)(2) of the Company's Registration
Statement on Form S-4, File No. 33-31043, refiled as Exhibit
3(a)(2) of the Company's Form 10-K for the year ended
December 31, 1993, incorporated by reference herein)
+4.7 Certification of Amendment to Restated Certificate of
Incorporation (Exhibit 28 of the Company's Registration
Statement on Form S-8, File No. 33-38491, refiled as Exhibit
3(a)(3) of the Company's Form 10-K for the year ended
December 31, 1993, incorporated by reference herein)
+4.8 Certificate of Amendment to Restated Certificate of
Incorporation (Exhibit 3(c)(4) of the Company's Form 10-K
for the year ended December 31, 1993 incorporated by
reference herein)
+4.9 By-Laws, as amended (Exhibit 3(b) of the Company's Form 10-K
for the year ended December 31, 1993 incorporated by
reference herein)
+4.10 Rights Agreement dated as of August 6, 1991 between the
Company and First Chicago Trust Company of New York, as
Rights Agent (Exhibit 1 of the Company's Form 8-K dated as
of August 6, 1991 incorporated by reference herein)
+4.11 Amendment to Rights Agreement dated February 26, 1996
between the Company and Continental Stock Transfer and Trust
Company (Exhibit 4.1 of the Company's Form 8-K dated
February 28, 1996 incorporated by reference herein)
*4.12 Form of Warrant Agreement for Common Stock
*4.13 Form of Warrant Agreement for Debt Securities
+5.1 Opinion of Edwards & Angell, LLP with respect to the
validity of the Offered Securities
12.1 Computation of ratio of earnings to fixed charges
23.1 Consent of Ernst & Young LLP
23.2 Consent of KPMG
+23.3 Consent of Edwards & Angell, LLP (included in Exhibit 5.1)
+24.1 Power of Attorney (included on signature page)
+25.1 Statement of Eligibility of The Chase Manhattan Bank for
Senior Debt Securities
+25.2 Statement of Eligibility of The Chase Manhattan Bank for
Subordinated Debt Securities
</TABLE>
- ---------------
* To be filed either by amendment or as an exhibit to an Exchange Act report and
incorporated herein by reference.
+ Previously filed.
II-8
<PAGE> 1
EXHIBIT 4.1
WELLMAN, INC.
TO
THE CHASE MANHATTAN BANK,
-----------------------------
TRUSTEE
-------------------
SENIOR DEBT SECURITIES
-------------------
INDENTURE
DATED AS OF JULY 31, 1998
-------------------
<PAGE> 2
Wellman, Inc.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- --------------- -------
Section 310(a)(1)............................................................609
(a)(2)......................................................................609
(a)(3)...........................................................Not Applicable
(a)(4)...........................................................Not Applicable
(b).........................................................................608
........................................................................610
Section 311(a)...............................................................613
(b).........................................................................613
Section 312(a)...............................................................701
.........................................................................702(a)
(b)......................................................................702(b)
(c) .....................................................................702(c)
Section 313(a)............................................................703(a)
(b)......................................................................703(a)
(c)......................................................................703(a)
(d)......................................................................703(b)
Section 314(a)...............................................................704
(a)(4)......................................................................101
...........................................................................1008
(b)..............................................................Not Applicable
(c)(1)......................................................................102
(c)(2)......................................................................102
(c)(3)...........................................................Not Applicable
(d)..............................................................Not Applicable
(e).........................................................................102
Section 315(a)...............................................................601
(b).........................................................................602
(c).........................................................................601
(d).........................................................................601
(e).........................................................................514
Section 316(a)...............................................................107
(a)(1)(A)...................................................................502
...........................................................................512
(a)(1)(B)...................................................................513
(a)(2)...........................................................Not Applicable
(b).........................................................................508
(c)......................................................................104(c)
Section 317(a)(1)............................................................503
(a)(2)......................................................................504
(b)........................................................................1004
Section 318(a)...............................................................107
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-2-
<PAGE> 3
TABLE OF CONTENTS
Page
----
PARTIES.......................................................................1
RECITALS OF THE COMPANY.......................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions
Act...........................................................................1
Affiliate; control............................................................1
Authenticating Agent..........................................................2
Board of Directors............................................................2
Board Resolution..............................................................2
Business Day..................................................................2
Commission....................................................................2
Company.......................................................................2
Company Request; Company Order................................................2
Company Sale..................................................................2
Corporate Trust Office........................................................2
Corporation...................................................................2
Defaulted Interest............................................................3
Defeasible Covenant...........................................................3
Depositary....................................................................3
Event of Default..............................................................3
Exchange Act..................................................................3
Funded Debt...................................................................3
GAAP..........................................................................3
Global Security...............................................................3
Holder........................................................................3
Indebtedness..................................................................3
Indenture.....................................................................3
interest......................................................................3
Interest Payment Date.........................................................3
Lien..........................................................................4
Maturity......................................................................4
Officers' Certificate.........................................................4
Opinion of Counsel............................................................4
Original Issue Discount Security..............................................4
Outstanding...................................................................4
- ---------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-3-
<PAGE> 4
Page
----
Paying Agent..................................................................5
Permitted Receivables Program.................................................5
Person........................................................................5
Place of Payment..............................................................5
Predecessor Security..........................................................5
Principal Property............................................................5
Redemption Date...............................................................6
Redemption Price..............................................................6
Regular Record Date...........................................................6
Responsible Officer...........................................................6
Securities....................................................................6
Security Register; Security Registrar.........................................6
Significant Subsidiary........................................................6
Special Record Date...........................................................6
Stated Maturity...............................................................6
Subsidiary....................................................................6
Successor Company.............................................................6
Synthetic Lease...............................................................6
Tax Reduction Agreement.......................................................6
Trustee.......................................................................7
Trust Indenture Act...........................................................7
Vice President................................................................7
Yield to Maturity.............................................................7
Section 102. Compliance Certificates and Opinions..............................7
Section 103. Form of Documents Delivered to Trustee............................8
Section 104. Acts of Holders; Record Dates.....................................8
Section 105. Notices, Etc., to Trustee and Company.............................9
Section 106. Notice to Holders; Waiver........................................10
Section 107. Conflict with Trust Indenture Act................................10
Section 108. Effect of Headings and Table of Contents.........................10
Section 109. Successors and Assigns...........................................10
Section 110. Separability Clause..............................................10
Section 111. Benefits of Indenture............................................10
Section 112. Governing Law....................................................10
Section 113. Legal Holidays...................................................11
ARTICLE TWO
SECURITY FORMS
Section 201. Forms Generally..................................................11
Section 202. Form of Face of Security.........................................11
Section 203. Form of Reverse of Security......................................13
Section 204. Form of Legend for Global Securities.............................16
Section 205. Form of Trustee's Certificate of Authentication..................16
- ---------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-4-
<PAGE> 5
ARTICLE THREE
THE SECURITIES
Page
----
Section 301. Amount Unlimited; Issuable in Series.............................16
Section 302. Denominations....................................................18
Section 303. Execution, Authentication, Delivery and Dating...................18
Section 304. Temporary Securities.............................................20
Section 305. Registration, Registration of Transfer and Exchange..............20
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.................21
Section 307. Payment of Interest; Interest Rights Preserved...................22
Section 308. Persons Deemed Owners............................................23
Section 309. Cancellation.....................................................23
Section 310. Computation of Interest..........................................24
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture..........................24
Section 402. Application of Trust Money.......................................25
ARTICLE FIVE
REMEDIES
Section 501. Events of Default................................................25
Section 502. Acceleration of Maturity; Rescission and Annulment...............26
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.......................................................27
Section 504. Trustee May File Proofs of Claim.................................27
Section 505. Trustee May Enforce Claims
Without Possession of Securities.................................28
Section 506. Application of Money Collected...................................28
Section 507. Limitation on Suits..............................................28
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.............................................29
Section 509. Restoration of Rights and Remedies...............................29
Section 510. Rights and Remedies Cumulative...................................29
Section 511. Delay or Omission Not Waiver.....................................29
Section 512. Control by Holders...............................................30
Section 513. Waiver of Past Defaults..........................................30
Section 514. Undertaking for Costs............................................30
Section 515. Waiver of Stay or Extension Laws.................................30
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE> 6
ARTICLE SIX
THE TRUSTEE
Page
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Section 601. Certain Duties and Responsibilities..............................31
Section 602. Notice of Defaults...............................................31
Section 603. Certain Rights of Trustee........................................31
Section 604. Not Responsible for Recitals or
Issuance of Securities...........................................32
Section 605. May Hold Securities..............................................33
Section 606. Money Held in Trust..............................................33
Section 607. Compensation and Reimbursement...................................33
Section 608. Disqualification; Conflicting Interests..........................34
Section 609. Corporate Trustee Required; Eligibility..........................34
Section 610. Resignation and Removal; Appointment of Successor................34
Section 611. Acceptance of Appointment by Successor...........................35
Section 612. Merger, Conversion, Consolidation
or Succession to Business........................................36
Section 613. Preferential Collection of Claims Against Company................36
Section 614. Appointment of Authenticating Agent..............................37
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names
and Addresses of Holders.........................................38
Section 702. Preservation of Information;
Communications to Holders........................................38
Section 703. Reports by Trustee...............................................39
Section 704. Reports by Company...............................................39
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc.,
Only on Certain Terms............................................39
Section 802. Successor Corporation to be Substituted..........................40
Section 803. Opinion of Counsel to Be Given Trustee...........................40
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE> 7
ARTICLE NINE
SUPPLEMENTAL INDENTURES
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Section 901. Supplemental Indentures Without Consent of Holders...............40
Section 902. Supplemental Indentures with Consent of Holders..................41
Section 903. Execution of Supplemental Indentures.............................42
Section 904. Effect of Supplemental Indentures................................42
Section 905. Conformity with Trust Indenture Act..............................42
Section 906. Reference in Securities to Supplemental Indentures...............42
ARTICLE TEN
COVENANTS
Section 1001.Payment of Principal, Premium and Interest.......................43
Section 1002.Maintenance of Office or Agency..................................43
Section 1003.Vacancy in the Office of Trustee.................................44
Section 1004.Money for Securities Payments to Be Held in Trust................44
Section 1005.Liens............................................................45
Section 1006.Limitation on Sale and Leaseback Transactions....................46
Section 1007.Limitation on Funded Debt of Significant
Subsidiaries.....................................................47
Section 1008.Statement by Officers as to Default..............................48
Section 1009.Existence........................................................48
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101.Applicability of Article.........................................49
Section 1102.Election to Redeem; Notice to Trustee............................49
Section 1103.Selection by Trustee of Securities to Be Redeemed................49
Section 1104.Notice of Redemption.............................................50
Section 1105.Deposit of Redemption Price......................................50
Section 1106.Securities Payable on Redemption Date............................50
Section 1107.Securities Redeemed in Part......................................51
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE> 8
ARTICLE TWELVE
SINKING FUNDS
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Section 1201.Applicability of Article.........................................51
Section 1202.Satisfaction of Sinking Fund Payments
with Securities..................................................51
Section 1203.Redemption of Securities for Sinking Fund........................51
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
Section 1301.Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance.........................52
Section 1302.Defeasance and Discharge.........................................52
Section 1303.Covenant Defeasance..............................................53
Section 1304.Conditions to Defeasance or Covenant Defeasance..................53
Section 1305.Deposited Money and U.S. Government Obligations
to be Held in Trust; Other Miscellaneous Provisions............. 55
Section 1306.Reinstatement....................................................55
TESTIMONIUM...................................................................56
SIGNATURES AND SEALS..........................................................56
ACKNOWLEDGMENTS...............................................................56
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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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<PAGE> 9
INDENTURE, dated as of July 31, 1998, between WELLMAN, INC., a corporation
duly organized and existing under the laws of the State of Delaware (herein
called the "Company"), having its principal offices at 1040 Broad Street,
Shrewsbury, New Jersey 07702, and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured senior
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted on the
date hereof; and
(4) the words "herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
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<PAGE> 10
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the term "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board or any directors or officers of the
Company to whom such board of directors shall have delegated its authority to
act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Trustee.
"Company Sale" has the meaning specified in Section 801.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities except for (a) notes and loans payable,
(b) current maturities of long-term debt and (c) current maturities of
obligations under capital leases, and (ii) goodwill and other intangibles.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered which
office at the date of the execution of this Indenture is located at 450 West
33rd Street, 15th Floor, New York, New York 10001-2697, Attention: Global Trust
Services or at any other time at such other address as the Trustee may designate
from time to time by notice to the Company.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
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<PAGE> 11
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasible Covenant" has the meaning specified in Section 1303.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary for such series by the Company pursuant to
Section 301, which Person shall be a clearing agency registered under the
Exchange Act; and if at any time there is more than one such Person,
"Depositary", as used with respect to the Securities of any series, shall mean
the Depositary with respect to the Securities of such series.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 as it may be
amended and any successor act thereto.
"Funded Debt" of any Person means all Indebtedness of such Person that will
mature, pursuant to a mandatory sinking fund or prepayment provision or
otherwise, and all installments of Indebtedness that will fall due, more than
one year from the date of determination. In calculating the maturity of any
Indebtedness, there shall be included the term of any unexercised right of the
debtor to unilaterally renew or extend such Indebtedness existing at the time of
determination.
"GAAP" means generally accepted accounting principles in effect on the date
hereof applied on a consistent basis.
"Global Security" means a Security bearing the legend prescribed in Section
204 (or such legend as may be specified as contemplated by Section 301 for such
Securities) evidencing all or part of a series of Securities, authenticated and
delivered to the Depositary for such series or its nominee, and registered in
the name of such Depositary or nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" of any Person means, as at any date of determination, all
indebtedness for borrowed money (including capitalized lease obligations) of
such Person and its consolidated subsidiaries at such date that would be
required to be included as a liability on a consolidated balance sheet
(excluding the footnotes thereto) of such Person prepared in accordance with
GAAP.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument, and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
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<PAGE> 12
"Lien" means any mortgage, pledge, lien, charge, security interest,
conditional sale or other title retention agreement or other encumbrance of any
nature whatsoever; provided, however, that Lien shall not include any
encumbrance relating to any Tax Reduction Agreement.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as or herein provided, whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, Chief Financial Officer or Controller
and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1008 shall be the
principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii)Securities for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying
Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made;
(iii) Securities as to which defeasance has been effected pursuant to
Section 1302; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
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<PAGE> 13
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as contemplated by
Section 301 on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such security of the amount
determined as provided in (i) above) of such Security, and (iii) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Permitted Receivables Program" means any agreement of the Company or any
of its Subsidiaries providing for sales, transfers or conveyances of accounts
receivable purporting to be sales (and considered sales under GAAP) that do not
provide, directly or indirectly, for recourse against the seller of such
accounts receivable (or against any of such seller's Subsidiaries or Affiliates)
by way of a guaranty or any other credit support arrangement, with respect to
the amount of such accounts receivable (based on the financial condition or
circumstances of the obligor thereunder), other than such limited recourse for
customary representations, warranties, covenants and indemnities as is
reasonable given market standards for transactions of a similar type, taking
into account such factors as historical bad debt loss experience and obligor
concentration levels.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any series,
means the place or places where the principal of and any premium and interest on
the Securities of that series are payable as specified as contemplated by
Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any manufacturing, processing, distribution,
research, research and development, warehousing or principal administration
facility (including without limitation, land, fixtures, and equipment) owned or
leased by the Company or any Subsidiary (including any of the foregoing acquired
or leased after the date of this Indenture) and located within the United States
of America, other than any of the foregoing which the Board of Directors by
Board Resolution and in good faith declares, together with all other
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<PAGE> 14
manufacturing, processing, distribution, research, research and development,
warehousing and principal administration facilities (including, without
limitation, land, fixtures and equipment) previously so declared, are not of
material importance to the business conducted by the Company and its
Subsidiaries taken as an entirety.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust Office including any Vice President, Managing
Director, Assistant Vice President, Secretary, Assistant Secretary, Treasurer or
Assistant Treasurer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Significant Subsidiary" means any directly or indirectly wholly-owned
Subsidiary of the Company substantially all of the assets of which are located
in the United States (excluding territories or possessions) and which owns a
Principal Property, except for a Subsidiary that is principally engaged in a
business of financing or of exporting goods or merchandise from or importing
goods or merchandise into the United States.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a Person (other than an individual or a government or
any agency or political subdivision thereof) more than 50% of the outstanding
voting interest of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries.
"Successor Company" has the meaning specified in Section 801.
"Synthetic Lease" means any transaction for the lease of property or assets
designed to permit the lessee (i) to claim depreciation on such property or
assets under U.S. tax laws and (ii) to treat such lease as an operating lease
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<PAGE> 15
or not to reflect the property or assets on the lessee's balance sheet under
GAAP.
"Tax Reduction Agreement" means any fee-in-lieu-of-tax agreement as
permitted under applicable state or municipal law or any other arrangement
providing similar benefits or any agreement which is designed to permit
depreciation of the same property to be claimed under the tax laws of two
different countries.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president (but shall not include any assistant vice president),
whether or not designated by a number or a word or words added before or after
the title "vice president".
"Yield to Maturity", when used with respect to any Original Issue Discount
Security shall mean the yield to maturity, if any, set forth in the prospectus
supplement relating thereto, which shall be equal to the yield to maturity, if
any, set forth on the face of such Security.
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
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(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
Without limiting the generality of the foregoing, a Holder, including a
Depositary that is a Holder of a Global Security, may make, give or take, by a
proxy or proxies duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided or permitted in this
Indenture to be made, given or taken by Holders, and a Depositary that is a
Holder of a Global Security may provide its proxy or proxies to the beneficial
owners of interest in any such Global Security.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where
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<PAGE> 17
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust Indenture
Act, fix any day as the record date for the purpose of determining the Holders
of Securities of any series entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other Act, or to vote on
any action authorized or permitted to be given or taken by Holders of Securities
of such series. If not set by the Company prior to the first solicitation of a
Holder of Securities of such series made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to any
record date for action to be taken by the Holders of one or more series of
Securities, only the Holders of Securities of such series on such date (or their
duly designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
(d) The ownership of Securities shall be proved by the Security Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(f) Without limiting the foregoing, a Holder entitled hereunder to give or
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any different part of such principal amount.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and sent by fax or mailed, first-class postage prepaid, to the
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument, marked "Attention: Assistant
Treasurer", or at any other address previously furnished in writing to the
Trustee by the Company.
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Section 106. Notice to Holders; Waiver.
Where this Indenture provides for any notice to Holders, such notice shall
be sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Holder entitled to receive such
notice, at his address as it appears in the Security Register, not later than
the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
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<PAGE> 19
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section 202. Form of Face of Security.
{Insert any legend required by the Internal Revenue Code and the regulations
thereunder.}
WELLMAN, INC.
No._________ $__________
Wellman, Inc., a corporation duly organized and existing under the laws of
the State of Delaware (herein called the "Company", which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or registered assigns, the principal sum
of __________________ {Dollars} on _____________, ______ {if the Security is to
bear interest prior to Maturity, insert -- , and to pay interest thereon from
______________ or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually on __________ and ___________
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<PAGE> 20
in each year, commencing _________, at the rate of ___% per annum, until the
principal hereof is paid or made available for payment {if applicable, insert --
, and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of __% per annum on any overdue principal and premium
and on any overdue installment of interest}. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the ______ or
______ (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly provided
for will forthwith cease to be payable to the Holder on such Regular Record Date
and may either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture}.
{If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ___% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of ____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.}
Payment of the principal of (and premium, if any) and {if applicable,
insert -- any such} interest on this Security will be made at the office or
agency of the Company maintained for that purpose {in ____________} in such coin
or currency of {the United States of America} {insert other currency, if
applicable} as at the time of payment is legal tender for payment of public and
private debts {if applicable, insert -- ; provided, however, that at the option
of the Company payment of interest may be made by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register}.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
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<PAGE> 21
WELLMAN, INC.
By:_____________________________
Attest:
- ---------------------
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of July 31, 1998 (herein called the
"Indenture"), between the Company and The Chase Manhattan Bank, as Trustee
(herein called the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof{, limited in aggregate principal amount to $
________}.
{If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, {if applicable, insert --
(1) on ___________ in any year commencing with the year ____ and ending with the
year ____ through operation of the sinking fund for this series at a Redemption
Price equal to 100% of the principal amount, and (2)} at any time on or after
_________, 19__}, as a whole or in part, at the election of the Company, at the
following Redemption Prices (expressed as percentages of the principal amount):
If redeemed {on or before ___________, __%, and if redeemed} during the 12-month
period beginning _________ of the years indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption {if applicable, insert --(whether
through operation of the sinking fund or otherwise)} with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.}
{If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on _______ in any
year commencing with the year ____ and ending with the year ____ through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time {on or
after ____________}, as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ___________ of the
years indicated,
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<PAGE> 22
Redemption Price Redemption Price For
For Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
- ---- ------------------- -------------------
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Date referred to on the face hereof, all as provided in the Indenture.}
{Notwithstanding the foregoing, the Company may not, prior to________,
redeem any Securities of this series as contemplated by {Clause (2) of} the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than ___% per annum.}
{The sinking fund for this series provides for the redemption on ________
in each year beginning with the year ____ and ending with the year ____ of {not
less than $_________ ("mandatory sinking fund") and not more than} $________
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through {mandatory}
sinking fund payments may be credited against subsequent {mandatory} sinking
fund payments otherwise required to be made {if applicable, insert -- in the
inverse order in which they become due}.}
{If the Security is subject to redemption, insert -- In the event of
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.}
{If applicable, insert -- This Security is not subject to redemption prior
to maturity.}
{If applicable, insert -- The Indenture contains provisions for defeasance
at any time of {(a)} {the entire indebtedness evidenced by this Security} {and
(b)} {certain restrictive covenants,} {in each case} upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.}
{If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.}
{If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to {-- insert formula for determining the
amount}. Upon payment {if applicable, insert --(i)} of the amount of principal
so declared due and payable {if applicable, insert -- and (ii) of interest on
any overdue principal and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable)}, all of the Company's
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<PAGE> 23
obligations in respect of the payment of the principal of and interest, if any,
on the Securities of this series shall terminate.}
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected (voting as a single class).
The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ ______ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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<PAGE> 24
Section 204. Form of Legend for Global Security.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, any Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange for
or in lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances."
Section 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK
As Trustee
By:
---------------------------------
Authorized Officer
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series:
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities which
may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107 and except for any
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<PAGE> 25
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of the Securities of the
series is payable;
(5) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which such interest shall accrue,
the Interest Payment Dates on which any such interest shall be payable and
the Regular Record Date for any interest payable on any Interest Payment
Date;
(6) the place or places where the principal of and any premium and interest
on Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which and
the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(8) the obligation, if any, of the Company to redeem or purchase Securities
of the series pursuant to any sinking fund or analogous provisions or at
the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities
of the series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(10) the currency, currencies or currency units in which payment of the
principal of and any premium and interest on any Securities of the series
shall be payable if other than the currency of the United States of America
and the manner of determining the equivalent thereof in the currency of the
United States of America for purposes of the definition of "Outstanding" in
Section 101;
(11) if the amount of payments of principal of or any premium or interest
on any Securities of the series may be determined by reference to an index
or formula, the manner in which such amounts shall be determined;
(12) if the principal of or any premium or interest on any Securities of
the series is to be payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units other than that or
those in which the Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which such election
is made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made;
(13) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502;
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<PAGE> 26
(14) the application, if any, of either or both of Section 1302 and Section
1303 to the Securities of the series;
(15) whether the Securities of the series shall be issuable in whole or in
part in the form of one or more Global Securities and, in such case, the
Depositary or Depositaries for such Global Security or Global Securities
and any circumstances other than those set forth in Section 305 in which
any such Global Security may be transferred to, and registered and
exchanged for Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which any
such transfer may be registered;
(16) if other than as specified in Section 501, the events of default
applicable with respect to the Securities of the series;
(17) if other than as specified in Section 502, the events of default the
occurrence of which would permit the declaration of the acceleration of
maturity pursuant to Section 502;
(18) any other covenant or warranty included for the benefit of Securities
of the series in addition to (and not inconsistent with) those included in
this Indenture for the benefit of Securities of all series, or any other
covenant or warranty included for the benefit of Securities of the series
in lieu of any covenant or warranty included in this Indenture for the
benefit of Securities of all series, or any provision that any covenant or
warranty included in this Indenture for the benefit of Securities of all
series shall not be for the benefit of Securities of such series, or any
combination of such covenants, warranties or provisions; and
(19) any other term of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section
901(5)).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of a series are established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.
Section 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of any
series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its President or one of its Vice Presidents, under its corporate
seal reproduced thereon attested by its Secretary or one of its Assistant
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<PAGE> 27
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established in or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating,
(a) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or pursuant to
Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an Authorized Officer, and such
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<PAGE> 28
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and shall
never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office a register
(the register maintained in such office and in any other office or agency of the
Company in a Place of Payment being herein sometimes collectively referred to as
the "Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities and
of transfers of Securities. The Trustee is hereby appointed "Security Registrar"
for the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security of any series
at the office or agency in a Place of Payment for that series, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series, of any authorized denominations and of a like aggregate principal amount
and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
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All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 301, no Global Security shall be exchangeable pursuant
to this Section 305 or Sections 304, 906 and 1107 for Securities registered in
the name of, and no transfer of a Global Security of any series may be
registered to, any Person other than the Depositary for such Security or its
nominee, unless (1) such Depositary (A) notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Security or (B)
ceases to be a clearing agency registered under the Exchange Act, (2) the
Company executes and delivers to the Trustee a Company Order that such Global
Security shall be so exchangeable and the transfer thereof so registerable, or
(3) there shall have occurred and be continuing an Event of Default, or an event
which with notice or lapse of time or both would become an Event of Default,
with respect to the Securities evidenced by such Global Security. Upon the
occurrence in respect of any Global Security of any series of any one or more of
the conditions specified in clause (1), (2) or (3) of the preceding sentence or
such other conditions as may be specified as contemplated by Section 301 for
such series, such Global Security may be exchanged for Securities registered in
the names of, and the transfer of such Global Security may be registered to,
such Persons (including Persons other than the Depositary with respect to such
series and its nominees) as such Depositary shall direct. Notwithstanding any
other provision of this Indenture, any Security authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, any Global
Security shall also be a Global Security and shall bear the legend specified in
Section 204 except for any Security authenticated and delivered in exchange for,
or upon registration of transfer of, a Global Security pursuant to the preceding
sentence.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
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If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date
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for the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Securities of such series at his address as it appears in
the Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of as directed by a Company Order.
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Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1004) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company, and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and any premium and
interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614, and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1004, shall survive.
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1004, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee. The
Company may, from time to time, deliver to the Trustee written investment
directions and the Trustee shall be obligated to follow any such lawful written
directions.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
particular series, means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) default in the due and punctual payment of any installment of
interest upon any of the Securities of that series as and when the
same shall become due and payable and continuance of such default for
a period of 30 days; or
(b) default in the due and punctual payment of the principal of (or
premium, if any, on) any of the Securities of that series as and when
the same shall become due and payable either at Maturity, by
declaration as authorized by this Indenture, or otherwise; or
(c) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(d) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company set
forth in the Securities of that series or in this Indenture (other
than those set forth exclusively in the terms of Securities of any
series other than that series, or those which have been included in
this Indenture for the benefit of Securities of any series other than
that series) continued for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee,
or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Securities of that series at the time
Outstanding, a written notice specifying such failure and requiring
the same to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
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(e) the entry of a decree or order by a court having jurisdiction in
the premises granting relief in respect of the Company in an
involuntary case under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law adjudging the Company
as being bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
Federal or State law, or appointing a receiver, liquidator, custodian,
assignee, trustee, sequestrator (or other similar official) of the
Company, or of any substantial part of its properties, or ordering the
winding up or liquidation of the affairs of the Company, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(f) the institution by the Company of proceedings to be adjudicated as
being bankrupt or insolvent, or the consent by the Company to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by the Company of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law, or the
consent by the Company to the filing of any such petition or to the
appointment of a receiver, liquidator, custodian, assignee, trustee,
sequestrator (or other similar official) of the Company, or of any
substantial part of its properties, or the making by the Company of an
assignment for the benefit of creditors, or the admission by the
Company in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in
furtherance of any such action; or
(g) any other Event of Default provided with respect to Securities of
that series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
In case one or more of the Events of Default specified in Section 501 shall
have occurred and be continuing with respect to any particular series of
Securities, then and in each and every such case, unless the principal of all of
the Securities of that series shall have already become due and payable, either
the Trustee or the Holders of not less than 25% in aggregate principal amount of
the Securities of that series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by Holders), may declare the
principal or, in the case of Original Issue Discount Securities, such amount of
principal as may be provided for in such Securities, of all the Securities of
that series to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, anything in this
Indenture or in the Securities of that series contained to the contrary
notwithstanding. This provision, however, is subject to the condition that if,
at any time after such principal or such amount of principal, as the case may
be, shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all Securities
of that series and the principal of (and premium, if any, on) any and all
Securities of that series which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest (to the extent
that payment of such interest is enforceable under applicable law) and on such
principal (and premium, if any) at the rate of interest prescribed therefor by
such Securities, to the date of such payment or deposit) and the expenses of the
Trustee, including the reasonable fees and expenses of its counsel, and any and
all defaults under this Indenture with respect to the Securities of the series,
other than the nonpayment of principal of (and premium, if any) and accrued
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interest on the Securities of that series which shall have become due by
acceleration shall have been remedied -- then and in every such case the Holders
of a majority in aggregate principal amount of the Securities of that series
then Outstanding, by written notice to the Company and to the Trustee, may waive
all defaults and rescind and annul such declaration and its consequences; but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair any right consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any,
on) any Security at the Maturity thereof,
the Company will, upon written demand of the Trustee, pay to it, for the benefit
of the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may (but shall have no obligation to) proceed to
protect and enforce its rights and rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607. To the extent that the payment of any
such compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section 607
hereof out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, money, securities and other properties that
the Holders of Securities may be entitled to receive in such proceeding whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
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No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
the Trustee may vote on behalf of the Holders for the election of a trustee in
bankruptcy or similar official and may be a member of a creditors' or other
similar committee.
Section 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607; and
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and any premium and interest,
respectively.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series; it being
understood and intended that no one or more of such Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
of such Holders, or to obtain or to seek to obtain priority or preference
over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307) any
interest on such Security on the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
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Section 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, provided, that the Trustee
may refuse to follow any direction that conflicts with law or this
Indenture or which the Trustee determines may be unduly prejudicial to the
rights of the other Holders of the Securities or that may involve the
Trustee in personal liability.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences except a default
(1) in the payment of the principal of or any premium or interest on any
Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Trustee or the holders of 10%
aggregate principal amount of the Securities.
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or indemnity reasonably
satisfactory to it against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Except during the continuance of an Event of Default, the duties of the Trustee
shall be determined solely by the Trust Indenture Act or the express provisions
of this Indenture and the Trustee need perform, and be liable for (as set forth
herein), only those duties that are specifically set forth in the Trust
Indenture Act or this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee. If an Event
of Default has occurred and is continuing, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of its own affairs.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(d) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
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evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon an Officers' Certificate, except
that in the case of any such Officers' Certificate which by any provision
hereof is specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not it
conforms to the requirements of this Indenture;
(d) the Trustee may consult with counsel and the advice of such counsel or
any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon, except that in the case of
any such Opinion of Counsel which by any provision hereof is specifically
required to be furnished to the Trustee, the Trustee shall be under a duty
to examine the same to determine whether or not it conforms to the
requirements of this Indenture;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any
of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity, reasonably
satisfactory to it, against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, or
attorneys, custodians and nominees and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) in no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Trustee shall
have no liability in respect of losses incurred as a result of the
liquidation of any such investment prior to its stated maturity or the
failure of the party directing such investment to provide timely written
investment direction. The Trustee shall have no obligation to invest or
reinvest any amounts held hereunder in the absence of such written
investment direction; and
(i) in the event that the Trustee is also acting as Paying Agent, transfer
agent, or Security Registrar hereunder, the rights and protections afforded
to the Trustee pursuant to this Article shall also be afforded to such
Paying Agent, transfer agent, or Security Registrar.
Section 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
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sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation as
mutually agreed upon for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee and its officers, directors, employees
and agents for, and to hold it and them harmless against, any loss,
liability or expense incurred without negligence or bad faith on its
or their part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The obligations of the Company under this Section shall survive the
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities. Such lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 501(e) or (f) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
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Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and its Corporate Trust
Office in the United States or any State or Territory thereof or the District of
Columbia and subject to supervision or examination by Federal or State
authority. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
as being bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation,
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then, in any such case (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder provided that all sums owed to the
retiring Trustee hereunder have been paid and subject to the lien provided by
Section 607 hereof.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
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one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
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Section 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
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If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
As Trustee
By:
----------------------------
As Authenticating Agent
By:
----------------------------
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later then June 30 and December 31 in each year, a
list for each series of Securities, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities
of such series as of the preceding June 15 or December 15, and
(b) at such other times as the Trustee may request in writing, within 15
days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 10 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar, if it is acting as such.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar, if it is acting as such. The Trustee may destroy any list furnished
to it as provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee
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nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. To
the extent that any such report is required by the Trust Indenture Act with
respect to any 12-month period, such report shall cover the 12-month period
ending May 15 and shall be transmitted by the next succeeding July 15.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company may Consolidate, Etc., Only on Certain Terms.
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other
Person, or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety to any other Person authorized to acquire and
operate the same (with each of the foregoing transactions referred to as a
"Company Sale"); provided, however, (i) that the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety (the "Successor Company") shall be a
corporation, shall be organized and validly existing under the laws of the
United States of America, any State thereof or the District of Columbia, (ii)
the Company hereby covenants and agrees that, as a condition precedent to any
such consolidation, merger, sale or conveyance, the due and punctual payment of
the principal of (and premium, if any) and interest, if any, on all of the
Securities, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company shall be expressly assumed by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee, by
the Successor Company and (iii) the Company shall not be permitted to effect any
Company Sale if the completion of such Company Sale would create an Event of
Default or an event under this Indenture which, with the passage of time or the
giving of notice or both, would become an Event of Default.
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Section 802. Successor Corporation to Be Substituted.
In case of any such Company Sale, such Successor Company shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the Company. Such Successor Company thereupon may cause to be signed,
and may issue either in its own name or in the name of Wellman, Inc. or in the
name of any corporation which previously shall have become the Company in
accordance with the provisions of this Article any or all of the Securities
issuable hereunder, which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such Successor Company
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
which such Successor Company thereafter shall cause to be signed and delivered
to the Trustee for that purpose. All of the Securities of a particular series so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities of such series theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date or the execution hereof.
Nothing contained in this Indenture or in any of the Securities shall
prevent the Company from merging into itself any other Person or acquiring by
purchase or otherwise all or any part of the property of any other Person.
Section 803. Opinion of Counsel to Be Given Trustee.
The Trustee, subject to Sections 601 and 603, may receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance and any such assumption complies with the provisions of this Article.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to
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principal, and with or without interest coupons, or to permit or facilitate
the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities, provided that any such
addition, change or elimination (i) shall neither (A) apply to any Security
of any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision nor (B) modify the rights of
the Holder of any such Security with respect to such provision or (ii)
shall become effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as permitted
by Sections 201 and 301; or
(8) to establish the terms upon which the Securities of one or more series
may be convertible into, or exchangeable for, shares of common stock or
preferred stock or other securities of the Company; or
(9) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series
and to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
611(b); or
(10) to evidence and provide for the Significant Subsidiaries' guarantee of
the Securities of all series, pursuant to the requirements of Section
1007(d); or
(11) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture, provided that such action pursuant to this clause (11) shall not
adversely affect the interests of the Holders of Securities of any series
in any material respect.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of all series affected by such supplemental
indenture (voting as a single class), by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of each such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502, or change any
Place of Payment where, or the coin or currency in which, any Security or
any premium or interest thereon is payable or
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impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption, on
or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
or
(3) modify any of the provisions of this Section or Section 513, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby, provided, however,
that this Clause shall not be deemed to require the consent of any Holder
with respect to changes in the references to "the Trustee" and concomitant
changes in this Section, or the deletion of this proviso, in accordance
with the requirements of Sections 611(b) and 901(9).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if
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required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay or cause to be paid the
principal of and any premium and interest on the Securities of that series in
accordance with the terms of the Securities and this Indenture. Interest on
Securities shall be payable without presentment of such Securities, and only to
the registered Holders thereof determined as provided in Section 307. The
Company shall have the right to require a Holder, in connection with the payment
of the principal of and any premium and interest on a Security, to present at
the office or agency of the Company at which such payment is made a certificate,
in such form as the Company may from time to time prescribe, to enable the
Company to determine its duties and liabilities with respect to any taxes,
assessments or governmental charges which it may be required to deduct or
withhold therefrom under any present or future law of the United States of
America or of any State, County, municipality or taxing or withholding authority
therein, and the Company shall be entitled to determine its duties and
liabilities with respect to such deduction or withholding on the basis of
information contained in such certificate or, if no such certificate shall be so
presented, on the basis of any presumption created by any such law, and shall be
entitled to act in accordance with such determination.
Section 1002. Maintenance of Office or Agency.
So long as any Securities remain outstanding, the Company will maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
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Section 1003. Vacancy in the Office of Trustee.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Article Six, a Trustee, so that
there shall at all times be a Trustee hereunder.
Section 1004. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of or any premium
or interest on any Securities of that series, deposit with a Paying Agent a sum
sufficient to pay such amount, such sum to be held as provided by the Trust
Indenture Act and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (i) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
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the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 1005. Liens.
Except as hereinafter provided in this Section, so long as the Securities
of any series are Outstanding, the Company will not, and will not permit any
Significant Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any Person,
including any Significant Subsidiary) now owned or hereafter acquired by it or
on any income or revenues or rights in respect of any thereof, without making
effective provision, and the Company covenants that in any such case it will
make, or cause the applicable Significant Subsidiary to make, effective
provision, whereby the Securities of any series then or thereafter Outstanding
shall be secured by such Lien equally and ratably with any and all other
obligations and indebtedness thereby secured, so long as any such other
obligations and indebtedness shall be so secured.
Nothing in this Section shall be construed to prevent the Company or any
Significant Subsidiary from creating, incurring, assuming or permitting to exist
any Lien of the following character, to all of which the provisions of the first
paragraph of this Section shall not be applicable:
(a) Liens on property or assets of the Company and its Subsidiaries
existing on the date hereof, provided that such Liens shall secure only
those obligations which they secure as of the date hereof;
(b) any Lien existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary (including by way of merger or
consolidation), provided that (i) such Lien is not created in contemplation
of or in connection with such acquisition and (ii) such Lien does not apply
to any other property or assets of the Company or any Significant
Subsidiary;
(c) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves, to
the extent required by GAAP, have been set aside;
(d) carriers', warehousemen's, mechanics', materialsmen's, repairmen's or
other like Liens arising in the ordinary course of business and securing
obligations that are not due and payable or which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves, to the extent required by GAAP, have been set aside;
(e) pledges and deposits made in the ordinary course of business in
compliance with worker's compensation, unemployment insurance and other
social security laws or regulations;
(f) zoning restrictions, easements, rights-of-way, restrictions on use of
real property and other non-financial encumbrances incurred in the ordinary
course of business which do not materially detract from the value of the
property subject thereto or interfere with the ordinary conduct of the
business of the Company and its Subsidiaries taken as a whole;
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(g) Liens upon any property acquired, constructed or improved by the
Company or any Subsidiary which are created or incurred within 360 days of
the later of the acquisition, completion of construction or commencement of
operation of the property to secure or provide for the payment of up to the
purchase price of such property or the cost of such construction or
improvement, including carrying costs (but no other amounts), provided that
any such Lien shall not apply to any other property of the Company or any
Significant Subsidiary;
(h) Liens on the property or assets of any Subsidiary in favor of the
Company or a Significant Subsidiary;
(i) Liens upon any property or assets of the Company and its Subsidiaries
on property subject to a Synthetic Lease or any right-of-access or other
non-financial encumbrance relating thereto;
(j) extensions, renewals or replacements of Liens referred to in paragraphs
(a) through (i) of this Section, provided that any such extension, renewal
or replacement Lien shall be limited to the property or assets covered by
the Lien extended, renewed or replaced and that the obligations secured by
any such extension, renewal or replacement Lien shall be in an amount not
greater than the amount of the obligations secured by the Lien extended,
renewed or replaced;
(k) Liens arising in connection with any Permitted Receivables Program (to
the extent the sale by the Company or the applicable Significant Subsidiary
of its accounts receivable is deemed to give rise to a Lien in favor of the
purchaser thereof in such accounts receivable or the proceeds thereof);
(l) Liens on the capital stock or assets of any Subsidiary that is not a
Significant Subsidiary; and
(m) Liens to secure Indebtedness if, immediately after the grant thereof
and the application of the proceeds of such Indebtedness, the aggregate
amount of all Indebtedness secured by Liens that would not be permitted but
for this clause (l) does not exceed 10% of Consolidated Net Tangible Assets
as shown on the most recent consolidated balance sheet of the Company and
the Subsidiaries filed with the Commission pursuant to the Exchange Act.
Section 1006. Limitation on Sale and Leaseback Transactions.
So long as the Securities of any series are Outstanding, the Company will
not, and will not permit any Significant Subsidiary to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any Principal Property, whether now owned or hereafter acquired, and
thereafter rent back or lease such Principal Property; provided, however, that
this Section shall not prevent the Company or any Significant Subsidiary from:
(a) entering into any transaction not involving a lease with a term of more
than five years;
(b) entering into any transaction to the extent the Lien on any such
property subject to such sale and leaseback would be permitted under
Section 1005;
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(c) entering into any transaction for the sale and leaseback of any
property in connection with any Tax Reduction Agreement;
(d) entering into any transaction for the sale and leaseback of any
property between the Company and a Significant Subsidiary or between
Significant Subsidiaries;
(e) entering into any transaction for the sale and leaseback of any
property if such lease is entered into within 360 days after the later of
the acquisition, completion of construction or commencement of operation of
such property;
(f) entering into any sale and leaseback transaction if the Company or such
Significant Subsidiary within 120 days after the effective date of the
lease, either (A) applies the net proceeds to the acquisition of another
Principal Property of equal or greater fair market value or (B) applies an
amount equal to the greater of (i) the net proceeds received by the Company
and its Subsidiaries for the sale of the property leased in such sale and
leaseback transaction or (ii) the fair market value (as determined in good
faith by the Board of Directors) of such property on any date within 90
days prior to the effective date of the lease, to the retirement of Funded
Debt of the Company or any Subsidiary or (C) any combination of (A) and
(B); provided, however, that the amount to be applied to the retirement of
Funded Debt of the Company or a Subsidiary shall be reduced by:
(1) the principal amount of any Securities surrendered to the Trustee
by the Company for cancellation within 120 days after the effective
date of the lease, and
(2) the principal amount of Funded Debt other than Securities
voluntarily retired by the Company within 120 days after the effective
date of the lease;
and provided further that no retirement referred to in this clause (e) may
be effected by payment on the final maturity date or pursuant to any
mandatory sinking fund or prepayment provision.
Section 1007. Limitation on Funded Debt of Significant Subsidiaries.
(a) Except as hereinafter provided in this Section, so long as the
Securities of any series are Outstanding, the Company will not permit any
Significant Subsidiary to create, incur, assume or suffer to exist any Funded
Debt, other than:
(1) Funded Debt that is or could be secured by a Lien on Principal Property
which would be permitted under Section 1005;
(2) Funded Debt owed to the Company or any Subsidiary;
(3) Funded Debt of a corporation which is merged with or into a Significant
Subsidiary;
(4) Funded Debt existing on the date hereof;
(5) Funded Debt created in connection with, or with a view to, compliance
by a Significant Subsidiary with the requirements of any program adopted by
any federal, state or local governmental authority and
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applicable to such Significant Subsidiary and providing financial or tax
benefits to such Significant Subsidiary which are not available directly to
the Company; or
(6) Extensions, renewals or replacements, in whole or in part, of Funded
Debt referred to in paragraphs (1) through (5) of this Section.
(b) Except as hereinafter provided in this Section, so long as the
Securities of any series are Outstanding, the Company will not permit any
Significant Subsidiary to guarantee the payment of any Funded Debt (without
duplication), other than:
(1) guarantees which a Significant Subsidiary is obligated to give on the
date hereof;
(2) guarantees of Funded Debt permitted under paragraph (a) of this
Section; or
(3) guarantees of Funded Debt if, after giving effect thereto, the
aggregate amount of all Funded Debt guaranteed by Significant Subsidiaries
that would not be permitted but for this clause (3) does not exceed the
aggregate amount of all indebtedness for money borrowed guaranteed by
Significant Subsidiaries as of the date hereof.
(c) In addition to the foregoing, any Significant Subsidiary may create,
incur, assume or guarantee the payment of Funded Debt provided that at the time
of such creation, incurrence, assumption or guarantee and after giving effect
thereto, the aggregate principal amount of all Funded Debt of Significant
Subsidiaries does not exceed 15% of the Consolidated Net Tangible Assets as
shown on the most recent consolidated balance sheet of the Company and
Subsidiaries filed with the Commission pursuant to the Exchange Act.
(d) In addition to the foregoing, any Significant Subsidiary may create,
incur, assume or guarantee the payment of Funded Debt if the Significant
Subsidiaries shall have guaranteed the payment of all series of Securities then
or thereafter Outstanding; provided, however, that such guarantee of the
Securities (i) shall rank senior to or pari passu with any such Funded Debt or
guarantee thereof and (ii) shall be expressly evidenced and provided for by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Company and the Significant Subsidiaries.
Section 1008. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
Section 1009. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises to carry on its business;
provided, however, that nothing in this Section shall prevent (i) any
consolidation or merger of the Company, or any conveyance, transfer or lease of
its property and assets substantially as an entirety, permitted by Article
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Eight, or (ii) the liquidation or dissolution of the Company after such
conveyance, transfer or lease of its property and assets substantially as an
entirety permitted by Article Eight.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed in
accordance with this Article (unless all of the Securities of such series and of
a specified tenor are to be redeemed), the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the minimum authorized denomination for Securities of
that series. If less than all of the Securities of such series and of a
specified tenor are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Trustee from the Outstanding Securities of such series and specified tenor not
previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
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Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and accrued interest, if any,
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial
redemption of any Securities, the principal amounts) of the particular
securities to be redeemed,
(4) that on the Redemption Date the Redemption Price and accrued
interest, if any, will become due and payable upon each such Security
to be redeemed and, if applicable, that interest thereon will cease to
accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest, if any, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
Section 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1004) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, required as such at the close
of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
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If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Security Registrar so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Security Registrar shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 90 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
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that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Security Registrar any
Securities to be so delivered. Not less than 60 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1105, 1106 and 1107.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article; Company's Option to Effect Defeasance or
Covenant Defeasance.
If pursuant to Section 301 provision is made for either or both of (a)
defeasance of the Securities of a series under Section 1302 or (b) covenant
defeasance of the Securities of a series under Section 1303, then the provisions
of such Section or Sections, as the case may be, together with the other
provisions of this Article, shall be applicable to the Securities of such
series, and the Company may at its option by Board Resolution, at any time, with
respect to the Securities of such series, elect to have either Section 1302 (if
applicable) or Section 1303 (if applicable) be applied to the Outstanding
Securities of such series upon compliance with the conditions set forth below in
this Article.
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of the above option applicable to this Section,
the Company shall be deemed to have been discharged from its obligations with
respect to the Outstanding Securities of such series on and after the date the
conditions precedent set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by the Outstanding
Securities of such series and to have satisfied all its other obligations under
such Securities and this Indenture insofar as such Securities are concerned (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same), except for the following which shall survive until
otherwise terminated or discharged hereunder: (A) the rights of Holders of
Outstanding Securities of such series to receive, solely from the trust fund
described in Section 1305 as more fully set forth in such Section, payments of
the principal of (and premium, if any) and interest on such Securities when such
payments are due, (B) the Company's obligations with respect to such Securities
under Sections 304, 305, 306, 1002 and 1004 and such obligations as shall be
ancillary thereto, (C) the rights, powers, trusts, duties, immunities and other
provisions in respect of the Trustee hereunder and the Company's obligations in
connection therewith, and (D) this Article. Subject to compliance with this
Article, the Company may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1303 with respect to the
Securities of such series. Following a defeasance, payment of the Securities of
such series may not be accelerated because of an Event of Default.
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<PAGE> 61
Section 1303. Covenant Defeasance.
Upon the Company's exercise of the above option applicable to this Section
and after the date the conditions set forth below are satisfied, the Company
shall be released from its obligations under Sections 1005, 1006 and 1007 and
under any additional or substitute covenant established with respect to the
Securities of any series pursuant to Section 301(18) if the Securities of such
series have been determined pursuant to Section 301 to be subject to this
provision (with Section 1005, Section 1006, Section 1007 and any such additional
or substitute covenant referred to herein as a "Defeasible Covenant"), and the
occurrence of an event specified in Section 501(d) with respect to such
Defeasible Covenant shall not be deemed to be an Event of Default with respect
to the Outstanding Securities of such series (hereinafter, "covenant
defeasance"). For this purpose, such covenant defeasance means that, with
respect to the Outstanding Securities of such series, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Defeasible Covenant whether directly or
indirectly by reason of any reference elsewhere herein to any such Defeasible
Covenant or by reason of any reference in any such Defeasible Covenant to any
other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby. Following a covenant
defeasance, payment of the Securities of such series may not be accelerated
because of an Event of Default specified in Section 501(e) or Section 501(f) or
by reference to Section 501(d) and such Defeasible Covenant.
Section 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions precedent to application of either
Section 1302 or Section 1303 to the Outstanding Securities of such series:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section
609 who shall agree to comply with the provisions of this Article
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to the benefit of the Holders of such Securities, (A) money in an
amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, sufficient,
without reinvestment, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied
by the Trustee (or other qualifying trustee) to pay and discharge, the
principal of (and premium, if any) and interest on the outstanding
Securities of such series on the Maturity of such principal, premium, if
any, or interest and any mandatory sinking fund payments or analogous
payments applicable to the Outstanding Securities of such series on the due
dates thereof. Before such a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future
date or dates in accordance with Article Eleven, which shall be given
effect in applying the foregoing. For this purpose, "U.S. Government
Obligations" means securities that are (x) direct obligations of the United
States of America for the payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt
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<PAGE> 62
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of
1933, as amended) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such
U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal of or interest on the U.S. Government
Obligation evidenced by such depository receipt.
(2) No Event of Default or event which with notice or lapse of time or both
would become an Event of Default with respect to the Securities of such
series shall have occurred and be continuing (A) on the date of such
deposit or (B) insofar as subsections 501(e) and (f) are concerned, at any
time during the period ending on the 91st day after the date of such
deposit or, if longer, ending on the day following the expiration of the
longest preference period applicable to the Company in respect of such
deposit (it being understood that the condition in this Clause (B) shall
not be deemed satisfied until the expiration of such period).
(3) Such defeasance or covenant defeasance shall not (A) cause the Trustee
for the Securities of such series to have a conflicting interest as defined
in Section 608 or for purposes of the Trust Indenture Act with respect to
any securities of the Company or (B) result in the trust arising from such
deposit to constitute, unless it is qualified as, a regulated investment
company under the Investment Company Act of 1940, as amended.
(4) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it is
bound.
(5) Such defeasance or covenant defeasance shall not cause any Securities
of such series then listed on any registered national securities exchange
under the Exchange Act to be delisted.
(6) In the case of an election under Section 1302, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (x) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling, or (y) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such opinion shall confirm that, the Holders
of the outstanding Securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of such defeasance
and will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such defeasance
had not occurred.
(7) In the case of an election under Section 1303, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(8) Such defeasance or covenant defeasance shall be effected in compliance
with any additional terms, conditions or limitations which may
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<PAGE> 63
be imposed on the Company in connection therewith pursuant to Section 301.
(9) The Company shall have paid, or provided for the payment of, the fees
and expenses of the Trustee payable pursuant to Section 607.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section 1302
or the covenant defeasance under Section 1303 (as the case may be) have
been complied with.
Section 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1004, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively, for purposes of this
Section, the "Trustee") pursuant to Section 1304 in respect of the Outstanding
Securities of such series shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (but not including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in respect
of principal (and premium, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 1304 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall deliver
or pay to the Company from time to time upon Company Request any money or U.S.
Government Obligations held by it as provided in Section 1304 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
Section 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1305 by reason of any order or judgment or any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 1305; provided, however, that if
the Company makes any payment of principal of (and premium, if any) or interest
on any such Security following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money held by the Trustee or the Paying Agent.
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<PAGE> 64
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
WELLMAN, INC.
By:_____________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:____________________
Name:
Title:
STATE OF NEW JERSEY )
ss.:
COUNTY OF MONMOUTH )
On the _______day of ____, 1998, before me personally came ______________,
to me known, who, being by as duly sworn, did depose and say that he is
______________ of Wellman, Inc., one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
-----------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the _________ day of ____, 1998, before me personally came
_____________, to me known, who, being by me duly sworn, did depose and say that
he is a ______________________ of The Chase Manhattan Bank, a bank described and
which executed the foregoing instrument; that he knows the seal of said
association; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
association, and that he signed his name thereto by like authority.
------------------------------
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<PAGE> 1
Exhibit 12.1
Wellman, Inc.
Computation of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
------------------- -----------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
------------------- -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated pretax income
from continuing operations $42,713 $24,611 $51,190 $54,149 $115,711 $108,000 $73,021
Fixed charges 17,065 12,514 26,374 23,607 19,215 22,295 25,081
Amortization of capitalized
interest 586 813 1,468 1,305 939 624 353
Less interest capitalized
during the period 9,558 2,826 9,820 4,755 3,125 2,920 2,375
--------------------- ------------------------------------------------------------
Earnings $50,806 $35,112 $69,212 $74,306 $132,740 $127,999 $96,080
===================== ============================================================
Interest $ 6,098 $ 8,858 $14,562 $16,910 $14,229 $15,741 $17,366
Interest capitalized during
the period 9,558 2,826 9,820 4,755 3,125 2,920 2,375
Amortization of debt expense 44 93 185 185 185 1,735 3,514
Interest portion of rental
expense 1,365 737 1,807 1,757 1,676 1,899 1,826
--------------------- ------------------------------------------------------------
Fixed Charges $17,065 $12,514 $26,374 $23,607 $ 19,215 $ 22,295 $25,081
===================== ============================================================
Ratio of Earnings to
Fixed Charges 3.0 2.8 2.6 3.1 6.9 5.7 3.8
===================== ============================================================
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Wellman, Inc. for
the registration of $400,000,000 maximum aggregate offering price of Debt
Securities, Common Stock and/or Warrants and to the incorporation by reference
therein of our report dated February 12, 1998, with respect to the consolidated
financial statements and schedules of Wellman, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Charlotte, North Carolina
September 25, 1998
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
OF WELLMAN INTERNATIONAL AND SUBSIDIARIES
We consent to the reference of our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Wellman, Inc. dated
30 July 1998 relating to the registration of US $400,000,000 maximum aggregate
offering price of Debt Securities, Common Stock and/or Warrants and to the
incorporation by reference therein of our audit report dated 29 January 1998,
with respect to the consolidated financial statements of Wellman International
Limited and Subsidiaries referred to in the Annual Report (Form 10-K) for
Wellman, Inc. for the year ended 31 December 1997, filed with the Securities and
Exchange Commission.
/s/ KPMG 25 September 1998
- --------------------- Dublin, Ireland
KPMG
Chartered Accountants
