<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1997
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ARCO CHEMICAL COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 51-0104393
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
3801 WEST CHESTER PIKE, NEWTOWN SQUARE, PENNSYLVANIA 19073-2387
(610) 359-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT J. MILLSTONE, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
3801 WEST CHESTER PIKE, NEWTOWN SQUARE, PENNSYLVANIA 19073-2387
(610) 359-3255
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on the 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, please 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 registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT* PRICE* FEE*
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities........ $350,000,000* $350,000,000 $106,060.61
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</TABLE>
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* THE AGGREGATE OFFERING PRICE PER UNIT HAS BEEN OMITTED PURSUANT TO
SECURITIES ACT RELEASE NO. 6964. THE REGISTRATION FEE HAS BEEN CALCULATED IN
ACCORDANCE WITH RULE 457(O) UNDER THE SECURITIES ACT OF 1993. THE AGGREGATE
AMOUNT TO BE REGISTERED REFLECTS THE OFFERING PRICE RATHER THAN THE PRINCIPAL
AMOUNT OF ANY DEBT SECURITIES ISSUED AT A DISCOUNT.
----------------
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>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+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
PROSPECTUS
- ----------
ARCO CHEMICAL COMPANY
$350,000,000
DEBT SECURITIES
------------
ARCO Chemical Company, a Delaware corporation (the "Company"), intends to
issue from time to time debt securities (the "Debt Securities") from which the
Company will receive up to an aggregate principal amount of $350,000,000, or
the equivalent thereof in one or more foreign currencies or composite
currencies, including European Currency Units ("ECU"). The Debt Securities may
be sold for U.S. dollars or one or more foreign or composite currencies, and
the principal of and any interest on the Debt Securities may likewise be
payable in U.S. dollars or one or more foreign or composite currencies.
The Debt Securities will be offered to the public on terms determined by
market conditions at the time of sale. The Debt Securities may be issued in one
or more series with the same or various maturities at par or a premium or with
an original issue discount. The specific designation, aggregate principal
amount, currency, purchase price, maturity, rate and time of payment of
interest, whether such Debt Securities are to be issued in book-entry form, any
other specific terms and any listing on a securities exchange of the Debt
Securities in respect of which this Prospectus is being delivered (the "Offered
Debt Securities") are set forth in the accompanying prospectus supplement (the
"Prospectus Supplement") together with the terms of offering of the Offered
Debt Securities.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE 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 Debt Securities will be sold directly, through agents designated from
time to time, through underwriting syndicates represented by managing
underwriters, by underwriters without a syndicate, or by dealers. If any agents
of the Company or any underwriters are involved in the sale of the Offered Debt
Securities, the names of such agents or underwriters and any applicable
commissions or discounts are set forth in the Prospectus Supplement. The net
proceeds to the Company from such sale are also set forth in the Prospectus
Supplement. This Prospectus may not be used to consummate sales of Debt
Securities unless accompanied by a Prospectus Supplement.
------------
The date of this Prospectus is
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT
IN CONNECTION WITH THE OFFER MADE BY 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 BY ANY UNDERWRITER,
DEALER OR AGENT. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE 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 OFFER OR SOLICITATION IN SUCH JURISDICTION. THIS
PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THOSE TO WHICH
THEY RELATE.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission") relating to its
business, financial position, results of operations and other matters. Such
reports, proxy statements and other information filed by the Company with the
Commission pursuant to the informational requirements of the Exchange Act can
be inspected and copied at the Public Reference Section maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549
as well as the Commission's regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade Center,
13th Floor, New York, New York 10048. Copies of such material can be obtained
from the Commission by mail at prescribed rates. Requests should be directed
to the Commission's Public Reference Section located at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549. Such material may also be accessed
electronically by means of the Commission's web site on the Internet
(http://www.sec.gov). Such reports, proxy statements and other information can
also be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, on which one or more of the Company's
securities are listed.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Reference is made
to the Registration Statement and to the exhibits relating thereto for further
information with respect to the Company and the securities offered thereby.
Statements contained herein concerning any document filed as an exhibit are
not necessarily complete and, in each instance, reference is made to the copy
of such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference herein its Quarterly Report on
Form 10-Q for the three months ended March 31, 1997 and its Annual Report on
Form 10-K for the year ended December 31, 1996, which have been filed with the
Commission under File No. 1-9678.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date hereof and prior to the termination
of the offering of the Debt Securities offered hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in the
accompanying Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
2
<PAGE>
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information incorporated
herein by reference (not including exhibits to such information, unless such
exhibits are specifically incorporated by reference into such information).
Requests should be directed to: Manager, Investor Relations, ARCO Chemical
Company, 3801 West Chester Pike, Newtown Square, Pennsylvania 19073-2387
(Telephone: (610) 359-3171 or (610) 359-2000).
ARCO CHEMICAL COMPANY
ARCO Chemical Company, a Delaware corporation ("ARCO Chemical" or the
"Company"), is a leading international manufacturer and marketer of
intermediate chemicals and specialty products used in a broad range of
consumer goods.
The Company's principal executive offices are located at 3801 West Chester
Pike, Newtown Square, Pennsylvania 19073-2387 (Telephone: (610) 359-2000).
The Company is the successor to certain portions of the ARCO Chemical
Division of Atlantic Richfield Company, a Delaware corporation ("ARCO"). On
June 9, 1987, ARCO transferred substantially all the assets and liabilities of
the oxygenates and polystyrenics business of the then ARCO Chemical Division
to the Company in exchange for 80,000,001 shares of the Company's common
stock, par value $1.00 (the "Common Stock"). On October 5, 1987, the Company
completed an initial public offering of 19,550,000 additional shares of Common
Stock. As of the date of this Prospectus, ARCO's 80,000,001 shares represent
approximately 82.6 percent of the outstanding shares of Common Stock.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds to be received from the sale of the Offered Debt Securities will
be used for general corporate purposes, including capital expenditures.
Additional information on the use of net proceeds from the sale of Offered
Debt Securities may be set forth in the Prospectus Supplement relating to such
Offered Debt Securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for the periods indicated. The ratios of earnings to fixed charges for
the years ended December 31, 1992 through December 31, 1996 have been derived
from the audited financial statements of the Company for such periods and the
ratio for the three months ended March 31, 1997 has been derived from the
unaudited financial statements of the Company for such period.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED
------------------------ MARCH 31,
1992 1993 1994 1995 1996 1997
---- ---- ---- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED CHARGES........ 2.9 3.5 4.8 7.6 5.2 3.3
</TABLE>
For purposes of these calculations, earnings consist of pretax income from
continuing operations, adjusted for interest expense and a rental expense
factor. Fixed charges consist of interest expense, capitalized interest and a
rental expense factor.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Offered Debt Securities offered by any Prospectus
Supplement and the extent, if any, to which such general provisions may apply
to the Offered Debt Securities will be described in the Prospectus Supplement
relating to such Offered Debt Securities.
The Debt Securities will be unsecured obligations issued under the
Indenture, dated as of June 15, 1988 (the "Indenture"), between the Company
and The Bank of New York, as trustee (the "Trustee"). The following statements
are subject to the detailed provisions of the Indenture, a copy of which is
incorporated by reference into the Registration Statement. Wherever particular
provisions of the Indenture or terms defined therein are referred to herein or
in the Prospectus Supplement, such provisions or terms are incorporated by
reference as a part of the statements made, and the statements are qualified
in their entirety by such reference. References in italics are to the
Indenture. Capitalized terms used but not otherwise defined herein have the
meaning given to them in the Indenture.
GENERAL
The Debt Securities will rank equally with all other unsecured and
unsubordinated debt of the Company. The Indenture does not limit the amount of
debt, either secured or unsecured, that may be issued by the Company under the
Indenture or otherwise.
Debt Securities may be issued from time to time up to an aggregate principal
amount of $350,000,000 and will be offered to the public on terms determined
by market conditions at the time of sale. The Debt Securities may be issued in
one or more series with the same or various maturities, at par or a premium or
with an original issue discount.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities offered thereby: (i) the designation of and any limit upon
the aggregate principal amount of such Debt Securities; (ii) the percentage of
principal amount at which such Debt Securities will be issued; (iii) the date
or dates on which such Debt Securities will mature; (iv) the currency of
denomination of such Debt Securities, which may be in Dollars or in any
Foreign Currency or composite currency, including ECUs; (v) the designation of
the currency or currencies in which payment of the principal of, and premium,
if any, and the interest on such Debt Securities will be made, and whether, in
the event the currency of denomination is other than Dollars but the payment
of principal thereof, and premium, if any, and interest thereon is payable in
Dollars, payment of the principal of, and premium, if any, or the interest on
such Debt Securities, at the election of a Holder thereof, may instead be
payable in the currency of denomination; (vi) the rate or rates (which may be
fixed or floating) per annum, if any, at which such Debt Securities will bear
interest; (vii) the times at which any such interest will be payable; (viii)
any index used to determine the amounts of payments of principal of, and
premium, if any, and interest on such Debt Securities; and (ix) any redemption
terms or other specific terms associated with such Debt Securities.
One or more series of Debt Securities may be sold at a substantial discount
from their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. One or more series of
Debt Securities may be floating rate debt securities or floating rate debt
securities which are exchangeable for fixed rate debt securities. Federal
income tax consequences and special considerations applicable to any such
series will be described in the Prospectus Supplement relating thereto.
Any series of Debt Securities may be issued in whole or in part in book-
entry form. The Prospectus Supplement relating to a series of Debt Securities
which may be issued in book-entry form will specify the terms and procedures
relating thereto. Debt Securities, to the extent evidenced in registered form,
will be issued in denominations of $1,000 and integral multiples thereof. The
Prospectus Supplement relating to a series of Debt Securities denominated in a
composite currency or any Foreign Currency or Currencies will specify the
4
<PAGE>
denominations thereof. Unless otherwise indicated in the Prospectus Supplement
relating thereto, principal, and premium, if any, and interest are to be
payable at the principal corporate trust office of the Trustee in New York,
New York, or at any paying agency maintained at the time by the Company for
such purpose. At the option of the Company, payment of interest may be made by
check mailed to the address of the person entitled thereto as it appears on
the register for Debt Securities. Debt Securities may be presented for
registration of transfer or exchange at such office of the Trustee or at such
other location or locations as may be established pursuant to the Indenture
without any service charge but subject to the limitations provided in the
Indenture.
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 only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, 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 a successor Depositary or any
nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and
transfer system, the respective principal amounts of the individual Debt
Securities represented by such Global Security to the accounts of persons that
have accounts with such Depositary. Such accounts shall be designated by the
dealers, underwriters or agents with respect to such Debt Securities 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
persons that have accounts with the applicable Depositary ("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 applicable
Depositary or its nominee (with respect to interests of participants) and the
records of participants (with respect to interests of persons other than
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 for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided herein, owners of beneficial interests in a
Global Security will not be entitled to have any of the individual 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
any such 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.
Payments of principal, any premium on, and any interest on, individual Debt
Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as
the case may be, as the registered owner of the Global Security representing
such Debt Securities. Neither the Company, the Trustee for such Debt
Securities, any paying agent, nor the security registrar for such Debt
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such
5
<PAGE>
Debt Securities, immediately will credit participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
principal amount of such Global Security for such Debt Securities as shown on
the records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
Such payments will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, the Company will issue individual
Debt Securities of such series in exchange for the Global Security
representing such series of Debt Securities. In addition, the Company may at
any time and in its sole discretion, subject to any limitations described in
the Prospectus Supplement relating to such Debt Securities, determine not to
have any Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue individual Debt Securities of such
series in exchange for the Global Security or Securities representing such
series of Debt Securities. Further, if the Company so specifies with respect
to the Debt Securities of a series, an owner of a beneficial interest in a
Global Security representing Debt Securities of such series may, on terms
acceptable to the Company, the Trustee and the Depositary for such Global
Security, receive individual Debt Securities of such series in exchange for
such beneficial interests, subject to any limitations described in the
Prospectus Supplement relating to such Debt Securities. In any such instance,
an owner of a beneficial interest in a Global Security will be entitled to
physical delivery of individual Debt Securities of the series represented by
such Global Security equal in principal amount to such beneficial interest and
to have such Debt Securities registered in its name. Individual Debt
Securities of such series so issued will be issued in denominations, unless
otherwise specified by the Company, of $1,000 and integral multiples thereof.
LIMITATION ON LIENS
The Company agrees that neither it nor any Restricted Subsidiary will issue,
assume or guarantee any notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed ("Debt") secured by a mortgage, lien, pledge
or other encumbrance ("Mortgages") upon any Restricted Property without
effectively providing that the Debt Securities (together with, if the Company
so determines, any other indebtedness or obligation then existing or
thereafter created ranking equally with the Debt Securities) shall be secured
equally and ratably with (or prior to) such Debt so long as such Debt shall be
so secured, except that this restriction will not apply to: (a) Mortgages
affecting property of a corporation existing at the time it becomes a
Subsidiary or at the time it is merged into or consolidated with the Company
or a Subsidiary; (b) Mortgages on property existing at the time of acquisition
thereof or incurred to secure payment of the purchase price thereof or to
secure Debt incurred prior to, at the time of, or within 24 months after the
acquisition for the purpose of financing all or part of the purchase price;
(c) Mortgages on any property to secure all or part of the cost of improvement
or construction thereon or Debt incurred to provide funds for such purpose in
a principal amount not exceeding the cost of such improvements or
construction; (d) Mortgages which secure only indebtedness owing by a
Subsidiary to the Company or a Subsidiary; (e) certain Mortgages to government
entities, including pollution control or industrial revenue bond financing;
(f) Mortgages required by any contract or statute in order to permit the
Company or a Subsidiary to perform any contract or subcontract made by it with
or at the request of the United States of America, any state or any
department, agency or instrumentality or political subdivision of either; and
(g) subject to certain conditions, any extension, renewal or replacement of
any Mortgage referred to in the foregoing clauses (a) through (f).
Notwithstanding the foregoing, the Company and any one or more Restricted
Subsidiaries may, without securing the Debt Securities, issue, assume or
guarantee Debt which would otherwise be subject to the foregoing restrictions
in an aggregate principal amount which, together with all other such Debt of
the Company and its Restricted Subsidiaries which would otherwise be subject
to the foregoing restrictions (not including Debt permitted to be secured
under clauses (a) to (g) inclusive above) and the aggregate Value of Sale and
Lease-Back Transactions (other than those in connection with which the Company
has voluntarily retired Funded Debt) does not at any one time exceed 10% of
the Consolidated Net Tangible Assets of the Company and its consolidated
Subsidiaries. (Sections 5.03 and 5.04)
6
<PAGE>
The term Restricted Property means any of the Company's or a Subsidiary's
manufacturing plants for the production of oxygenated chemicals or styrene-
based polymers (other than such determined by the Board of Directors not to be
a principal plant) located in the continental United States, and any shares of
capital stock or indebtedness of a Restricted Subsidiary. The term Restricted
Subsidiary means any Subsidiary which owns Restricted Property unless
substantially all such Subsidiary's physical properties are located outside the
continental United States. The term Subsidiary means any corporation at least a
majority of the outstanding securities of which having ordinary voting power to
elect a majority of the board of directors of such corporation is at the time
owned or controlled directly or indirectly by the Company or one or more
Subsidiaries or by the Company and one or more Subsidiaries. The term
Consolidated Net Tangible Assets means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed), and (ii) all goodwill, trade names, trademarks, patents, purchased
technology, unamortized debt discount and other like intangible assets, all as
set forth on the most recent quarterly balance sheet of the Company and its
consolidated Subsidiaries and computed in accordance with generally accepted
accounting principles. (Article One)
The Company agrees that, if, upon any consolidation or merger of the Company
with or into any other corporation, or upon any sale or conveyance of all or
substantially all of its property to any other corporation, any of the property
of the Company or of any Restricted Subsidiary would thereupon become subject
to any mortgage, lien or pledge, the Company will first secure the Debt
Securities equally and ratably with any other obligations of the Company or any
Restricted Subsidiary then entitled thereto, by a direct lien on all such
property prior to all liens other than any theretofore existing thereon.
(Section 12.02)
LIMITATION ON DEBT
The Indenture does not contain any limitation on the aggregate amount of Debt
that may be assumed by the Company and does not offer any credit or event risk
protection to holders of Debt Securities in the event that the Company engages
in or is the subject of a highly leveraged transaction. The Indenture
provisions described under "Limitation on Liens," however, may have the effect
of inhibiting the Company from engaging in, or preventing the Company from
being the subject of, some types of highly leveraged transactions.
LIMITATION ON SALE AND LEASE-BACK
The Company agrees that neither it nor any Restricted Subsidiary will enter
into any Sale and Lease-Back Transaction with respect to any Restricted
Property with any person (other than the Company or a Subsidiary) unless either
(a) the Company or such Restricted Subsidiary would be entitled, pursuant to
the above provisions, to incur Debt in a principal amount equal to or exceeding
the Value of such Sale and Lease-Back Transaction secured by a Mortgage on the
property to be leased without equally and ratably securing the Debt Securities,
or (b) the Company during or immediately after the expiration of four months
after the effective date of such transaction applies to the voluntary
retirement of its Funded Debt an amount equal to the greater of: (1) the net
proceeds of the sale of the property leased in such transaction or (2) the fair
value in the opinion of the Board of Directors of the leased property at the
time such transaction was entered into (subject to credits for certain
voluntary retirements of Funded Debt, including the Debt Securities). (Sections
5.04 and 5.05)
MODIFICATION OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of not less than 50% in principal amount of the
Debt Securities of each series affected by the modification or amendment at the
time outstanding, to modify the Indenture or any supplemental indenture or the
rights of the Holders of the Debt Securities; provided that no such
modification may (a) extend the fixed maturity of any Debt Security, or reduce
the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or the time during which a premium is payable thereon,
or change the method of computing the amount of principal thereof at any date,
or change the currency in which the Debt Security is payable, without the
consent
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of the Holder of each Debt Security so affected, or (b) reduce the aforesaid
percentage of Debt Securities, the consent of the Holders of which is required
for any such modification, without the consent of the Holders of all
outstanding Debt Securities of such series so affected. (Section 11.02)
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to a particular series
of Debt Securities as being any one of the following events and such other
event as may be established for the Debt Securities of such series: (a) default
for 30 days in any payment of interest on such series; (b) default in any
payment of principal, and premium, if any, on such series when due; (c) default
for 30 days in the payment of any sinking fund installment when due; (d)
default for 90 days after appropriate notice in performance of any other
covenant in the Indenture applicable to that series; or (e) certain events of
bankruptcy, insolvency or reorganization. No Event of Default with respect to a
particular series of Debt Securities issued under the Indenture necessarily
constitutes an Event of Default with respect to any other series of Debt
Securities issued thereunder. In case an Event of Default shall occur and be
continuing with respect to a particular series of Debt Securities, the Trustee
or the Holders of not less than 25% in aggregate principal amount of the Debt
Securities then outstanding of the series (or, in the case of defaults under
(d) or (e), of the Debt Securities of all series) may declare the principal or,
in the case of Debt Securities issued with original issue discount, the amount
specified in the terms thereof, of such series (or of all outstanding Debt
Securities, as the case may be) to be due and payable. Any Event of Default
with respect to a particular series of Debt Securities may be waived by the
Holders of a majority in aggregate principal amount of the outstanding Debt
Securities of such series (or of the outstanding Debt Securities of all series,
in the case of defaults under (d) or (e)), except in each case a failure to pay
principal, or premium, if any, or interest on such Debt Securities. (Section
7.01)
The Indenture requires the Company to file annually with the Trustee an
Officers' Certificate as to the absence of certain defaults under the terms of
the Indenture. (Section 5.08) The Indenture provides that the Trustee may
withhold notice to the Holders of the Debt Securities of any default (except in
payment of principal, or premium, if any, or interest) if it considers it in
the interest of the Holders of the Debt Securities to do so. (Section 7.08)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request, order or
direction of the Holders of the Debt Securities unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 7.04, 8.01 and 8.02)
Subject to such provisions for indemnification and certain other rights of the
Trustee, the Indenture provides that the Holders of a majority in principal
amount of the outstanding Debt Securities of the particular series affected
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. (Sections 7.07 and 8.02)
CONSOLIDATION, MERGER AND TRANSFER OF ASSETS
The Company may not consolidate with or merge into any corporation, or
transfer its assets substantially as an entirety to any person, unless the
successor corporation or transferee assumes the Company's obligations on the
Debt Securities and under the Indenture, and certain other conditions are met,
except that no such assumption will be required in any case where the Company
transfers all or substantially all its assets located in the United States to
one or more wholly owned Subsidiaries organized under the laws of the United
States or any political subdivision thereof. (Article Twelve) To the extent any
such assets constitute Restricted Property, the Subsidiary to which they were
transferred would be a Restricted Subsidiary. See "Limitation on Liens."
DEFEASANCE
If so specified in the Prospectus Supplement with respect to Debt Securities
of any series, the Company, at its option, (i) will be discharged from any and
all obligations in respect of the Debt Securities of such series
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(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, replace stolen, lost or mutilated Debt Securities
of such series, maintain paying agencies, and hold moneys for payment in
trust) or (ii) will not be subject to provisions of the Indenture described
above under "Limitation on Liens," "Limitation on Sale and Lease-Back" and
"Consolidation, Merger and Transfer of Assets" with respect to the Debt
Securities of such series, in each case if the Company deposits with the
Trustee, in trust, money or U.S. Government Obligations which through the
payment of interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay all the principal
(including any mandatory sinking fund payments) of, premium, if any, and
interest on, the Debt Securities of such series on the dates such payments are
due in accordance with the terms of such Debt Securities. In case any Debt
Securities of a series are to be redeemed prior to their Stated Maturity, the
Company must have given the Trustee such irrevocable notices and instructions
as are required for redemption pursuant to the terms of the Debt Securities of
such series. To exercise any such defeasance option, the Company is required
to deliver to the Trustee an Opinion of Counsel to the effect that, if the
Debt Securities of such series are then listed on the New York Stock Exchange,
such Debt Securities would not be delisted as a result of the exercise of such
option. (Sections 14.01, 14.02 and 14.03)
Under Federal income tax laws as of the date of this Prospectus, such
deposit and discharge may be treated as an exchange of the related Debt
Securities. Each holder of such Debt Securities might be required to recognize
gain or loss equal to the difference between the holder's cost or other tax
basis for the Debt Securities and the value of the holder's interest in the
trust. Such holders might be required to include in income a different amount
than would be includable without the discharge. Prospective investors are
urged to consult their own tax advisers as to the consequences of such a
deposit and discharge, including the applicability and effect of tax laws
other than the Federal income tax law.
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Bank of New
York also acts as Trustee under the Indenture for the Company's 9.9%
Debentures due 2000, 9.375% Debentures due 2005, 10.25% Debentures due 2010
and 9.8% Debentures due 2020. The Bank of New York also acts as trustee for
ARCO with respect to three public debt issues and extends credit to ARCO in
the ordinary course of business. The Trustee may extend credit to the Company
and its Subsidiaries in the future.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (i) through underwriters or
dealers; (ii) directly to a limited number of institutional purchasers or to a
single purchaser; (iii) through agents; or (iv) through a combination of any
such methods of sale. The Prospectus Supplement with respect to the Offered
Debt Securities sets forth the terms of the offering of the Offered Debt
Securities, including the name or names of any underwriters, the purchase
price of the Offered Debt Securities and the proceeds to the Company from such
sale, any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers and any securities
exchanges on which the Offered Debt Securities may be listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale. The
Debt Securities may be offered to the public through underwriting syndicates
represented by managing underwriters. Unless otherwise set forth in the
Prospectus Supplement, the obligations of the underwriters to purchase the
Offered Debt Securities will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all the Offered Debt Securities
if any are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time
to time.
Offered Debt Securities may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Offered Debt Securities in respect of which this
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Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Debt 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 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 which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be customers
of, engage in transactions with, or perform services for the Company in the
ordinary course of business.
Each series of Offered Debt Securities will be a new issue of securities
with no established trading market. Any underwriters to whom Offered Debt
Securities are sold by the Company for public offering and sale may make a
market in such Offered Debt 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 the trading market
for any Offered Debt Securities.
PRINCIPAL STOCKHOLDER; CONTROL OF THE COMPANY
As of the date of this Prospectus, ARCO owns 80,000,001 shares of Common
Stock, representing approximately 82.6% of the outstanding shares of Common
Stock.
Under applicable provisions of the General Corporation Law of Delaware, ARCO
is able, acting alone, to elect the entire Board of Directors of the Company
and to approve any action requiring stockholder approval. ARCO's percentage
ownership of the outstanding voting stock will preclude any acquisition of
control of the Company not favored by ARCO.
ARCO, including its subsidiaries, is one of the largest integrated
enterprises in the petroleum industry. ARCO conducts operations in two
business segments, resources and products. ARCO owns an 82.3% equity interest
in Vastar Resources, Inc., which conducts natural gas and, to a lesser extent,
oil, exploration, production and marketing operations. ARCO also owns a 49.9%
equity interest in Lyondell Petrochemical Company, which operates
petrochemical processing and petroleum refining businesses. In 1994, ARCO
issued Exchangeable Notes due September 15, 1997 ("Notes"), which, at ARCO's
option, can be exchanged at maturity into Lyondell common stock or cash of
equal value. In March, 1997, ARCO announced its intention to deliver shares of
Lyondell common stock at maturity to settle all of the Notes. Upon such an
exchange, ARCO's equity interest in Lyondell will be substantially reduced or
eliminated. ARCO intends to make a final decision regarding whether to
exchange the Notes for cash or Lyondell common stock before August 1997. The
Company continues to treat Lyondell as a related party.
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
that are included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1996, incorporated by reference in this Prospectus, have
been incorporated herein in reliance on the report of Coopers & Lybrand
L.L.P., independent accountants, given on the authority of such firm as
experts in accounting and auditing.
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LEGAL OPINIONS
Certain matters relating to the legality of the Debt Securities offered
hereby will be passed upon for the Company by Robert J. Millstone, Esq., Vice
President, General Counsel and Secretary of the Company. As of April 30, 1997,
Mr. Millstone owned an aggregate of 2,332 shares of Common Stock, held directly
and under a Company benefit plan, and options to purchase another 48,300 shares
of Common Stock. Mr. Millstone disclaims beneficial ownership of 313 shares of
Common Stock held for or in trust for certain family members as of April 30,
1997. Certain matters relating to the legality of the Debt Securities offered
hereby will be passed upon for any underwriters, agents or purchasers by
Drinker Biddle & Reath LLP.
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PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............. $106,060.61
Fees and expenses of the Trustee................................ 15,000.00*
Printing and engraving expenses................................. 75,000.00*
Rating Agency fees.............................................. 125,000.00*
Legal fees...................................................... 100,000.00*
Accounting fees................................................. 25,000.00*
Qualification under state securities laws....................... 10,000.00*
Miscellaneous................................................... 14,000.00*
-----------
Total......................................................... $470,060.61
===========
</TABLE>
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* Estimated (except for registration fee) and subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Reference is made to Section 25 of the By-Laws of the Company and to Section
145 of the General Corporation Law of the State of Delaware as set forth
below.
Section 25 of the By-Laws of the Company provides:
(a) Right to Indemnification. Each person who was or is a party or is
threatened to be made a party to or is involved or is threatened to be
involved (as a witness or otherwise) in or otherwise requires representation
by counsel in connection with any threatened, pending or completed action,
suit or proceeding, or any inquiry that such person in good faith believes
might lead to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or officer of the
Company or is or was serving at the request of the Company 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, and the basis of such proceeding is alleged action or inaction
in an official capacity or in any other capacity while serving as such a
director, officer, employee or agent, shall be indemnified and held harmless
by the Company to the fullest extent authorized by the General Corporation Law
of Delaware, as the same exists or may hereafter be amended (but, in the case
of any such amendment with reference to events occurring prior to the
effective date thereof, only to the extent that such amendment permits the
Company to provide broader indemnification rights than such law permitted the
Company to provide prior to such amendment), against all costs, charges,
expenses, liabilities and losses (including attorneys fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director
or officer (or to serve another entity at the request of the Company) and
shall inure to the benefit of such persons heirs, personal representatives and
estate; provided, however, that, except as provided in paragraph (b) hereof,
the Company shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person
against the Company only if such proceeding (or part thereof) was authorized
prior to its initiation by a majority of the disinterested members of the
Board of Directors of the Company. The rights to indemnification conferred in
this Section shall include the right to be paid by the Company any expenses
incurred in defending any such proceeding in advance of its final disposition;
provided, however, that, if the General Corporation Law of Delaware requires,
payment shall be made to or on behalf of a person only upon delivery to the
Company of an undertaking, by or on behalf of such person, to repay all
amounts so advanced if it shall ultimately be determined that such person is
not entitled to be indemnified under this Section or otherwise. The rights to
indemnification conferred in this Section shall be deemed to be a contract
between the Company and each person who serves in the capacities described
above at any time while this Section is in effect. Any repeal or modification
of this Section shall not in any way diminish any rights to indemnification of
such person or the obligations of the Company arising hereunder.
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(b) Right of claimant to appeal and to bring suit. If a claim under
paragraph (a) of this Section is not paid in full by the Company within thirty
days after a written claim has been received by the Company, the claimant may
submit a written appeal to the Chairman of the Board. If the claim is not paid
in full by the Company within thirty days after a written appeal has been
received by the Chairman of the Board, the claimant may at any time thereafter
bring suit against the Company to recover the unpaid amount of the claim. If
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting or defending such claim. In any action brought by
the claimant to enforce a right to indemnification hereunder or by the Company
to recover payments by the Company for expenses incurred by a claimant in a
proceeding in advance of its final disposition, the burden of proving that the
claimant is not entitled to be indemnified under this Section or otherwise
shall be on the Company. Neither the failure of the Company (including its
Board of Directors or its independent legal counsel) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because the claimant has met the
applicable standard of conduct set forth in the General Corporation Law of
Delaware, nor an actual determination by the Company (including its Board of
Directors or its independent legal counsel) that the claimant has not met such
applicable standard of conduct, shall create a presumption that the claimant
has not met the applicable standard of conduct or, in the case of such an
action brought by the claimant, be a defense to the action.
(c) Non-exclusivity of rights. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, the
Company's Certificate of Incorporation, any By-Law, any agreement, a vote of
Company stockholders or of disinterested Company directors or otherwise, both
as to action in that person's official capacity and as to action in any other
capacity by holding such office, and shall continue after the person ceases to
serve the Company as a director or officer or to serve another entity at the
request of the Company.
(d) Insurance. The Company may maintain insurance, at its expense, to
protect itself and any director or officer of the Company or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under the
General Corporation Law of Delaware.
(e) Indemnity agreements. The Company may from time to time enter into
indemnity agreements with the persons who are members of its Board of
Directors and with such officers or other persons as the Board may designate,
such indemnity agreements to provide in substance that the Company will
indemnify such persons to the fullest extent of the provisions of this Section
25.
(f) Indemnification of employees and agents of the Company. The Company may,
under procedures authorized from time to time by the Board of Directors, grant
rights to indemnification, and to be paid by the Company the expenses incurred
in defending any proceeding in advance of its final disposition, to any
employee or agent of the Company to the fullest extent of the provisions of
this Section 25.
Section 145 of the General Corporation Law of the State of Delaware ("DGCL")
provides:
(a) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that the 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 the person in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the
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 the persons 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
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presumption that the person did not act in good faith and in a manner which
the 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 the person's conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that the 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 the person in connection with the defense or settlement of such action or
suit if the person acted in good faith and in a manner the person 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 director, officer, employee or agent 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) of this
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him 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 director, officer, employee or agent is proper in the circumstances
because the person has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made (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) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (3) 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 he is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses (including attorneys'
fees) incurred by 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 his
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 him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him 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
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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 he 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 an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
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.
(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 obligation to advance expenses (including attorneys'
fees).
The Company's Certificate of Incorporation provides that the personal
liability of a director of the Company to the Company or to its stockholders
for monetary damages for breach of fiduciary duty as a director shall be
limited or eliminated to the fullest extent permitted by the DGCL, as amended
from time to time. Section 102(b)(7) of the DGCL permits a Delaware
corporation such as the Company to include in its certificate of incorporation
a provision that eliminates or limits the ability of the corporation and its
stockholders to recover monetary damages from a director for breach of
fiduciary duty as a director; but does not permit such a provision to
eliminate or limit the liability of a director for (i) any breach of the duty
of loyalty to the corporation or its stockholders, (ii) acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided under certain provisions of Delaware law, or (iv) any
transaction from which the director derived an improper personal benefit.
Under an Administrative Services Agreement between ARCO and the Company,
ARCO provides the Company with insurance coverage under ARCO's Directors' and
Officers' Liability Insurance, which currently has a limit of $205 million, to
the extent authorized by the By-Laws of the Company and the laws of the State
of Delaware.
Under the Underwriting Agreement and Selling Agency Agreement to be entered
into between the Company and the underwriters or selling agents, as the case
may be, the underwriter or selling agents, as applicable, will agree to
indemnify the Company, its directors and certain of its officers against
certain civil liabilities, including civil liabilities under the Securities
Act.
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ITEM 16. EXHIBITS
1.1 Form of proposed Underwriting Agreement.*
1.2 Form of proposed Selling Agency Agreement.*
4 Form of Indenture, dated as of June 15, 1988, between the Company and the
Trustee, filed as Exhibit 4.2 to the Company's Registration Statement on
Form S-3 No. 33-23340 and incorporated herein by reference.
5 Opinion (with consent) of Robert J. Millstone, Esq., Vice President,
General Counsel and Secretary of the Company.
12 Statement re computation of ratios.
23.1 Consent of Robert J. Millstone, Esq., Vice President, General Counsel and
Secretary of the Company (included in Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney.
25 Statement on Form T-1 of eligibility of Trustee under the Indenture.
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* To be filed by amendment.
ITEM 17. UNDERTAKINGS
A. Undertaking Pursuant to Rule 415.
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 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% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act") that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-5
<PAGE>
(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. Undertaking Regarding Documents Subsequently Filed Under the Exchange Act.
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 that is incorporated by reference in this Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Undertaking in Respect of Indemnification.
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 provisions described under Item 15 above, 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 the 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. Undertaking Pursuant to Rule 430A.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN NEWTOWN SQUARE, COMMONWEALTH OF PENNSYLVANIA, ON MAY 14, 1997.
ARCO Chemical Company
Alan R. Hirsig
By: _________________________________
ALAN R. HIRSIG
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Mike R. Bowlin* Chairman of the May 14, 1997
- ------------------------------------- Board and Director
MIKE R. BOWLIN
Alan R. Hirsig President, Chief May 14, 1997
- ------------------------------------- Executive Officer
ALAN R. HIRSIG and Director
Marvin O. Schlanger* Executive Vice May 14, 1997
- ------------------------------------- President, Chief
MARVIN O. SCHLANGER Operating Officer
and Director
Walter J. Tusinski* Senior Vice May 14, 1997
- ------------------------------------- President, Chief
WALTER J. TUSINSKI Financial Officer
and Director
Walter F. Beran* Director May 14, 1997
- -------------------------------------
WALTER F. BERAN
</TABLE>
II-7
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Anthony G. Fernandes* Director May 14, 1997
- -------------------------------------
ANTHONY G. FERNANDES
Marie L. Knowles* Director May 14, 1997
- -------------------------------------
MARIE L. KNOWLES
James A. Middleton* Director May 14, 1997
- -------------------------------------
JAMES A. MIDDLETON
Stephen R. Mut* Director May 14, 1997
- -------------------------------------
STEPHEN R. MUT
Frank Savage* Director May 14, 1997
- -------------------------------------
FRANK SAVAGE
Robert H. Stewart, III* Director May 14, 1997
- -------------------------------------
ROBERT H. STEWART, III
Van Billet Vice President and May 14, 1997
- ------------------------------------- Controller
VAN BILLET (principal
accounting officer)
<CAPTION>
<S> <C>
Robert J. Millstone May 14, 1997
*By:_________________________________
ROBERT J. MILLSTONE
(ATTORNEY IN FACT)
</TABLE>
II-8
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBITS
------- --------
<C> <S>
1.1 Form of proposed Underwriting Agreement.*
1.2 Form of proposed Selling Agency Agreement.*
4 Form of Indenture, dated as of June 15, 1988, between the Company and
the Trustee, filed as Exhibit 4.2 to the Company's Registration
Statement on Form S-3 No. 33-23340 and incorporated herein by
reference.
5 Opinion (with consent) of Robert J. Millstone, Esq., Vice President,
General Counsel and Secretary of the Company.
12 Statement re computation of ratios.
23.1 Consent of Robert J. Millstone, Esq., Vice President, General Counsel
and Secretary of the Company (included in Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney.
25 Statement on Form T-1 of eligibility of Trustee under the Indenture.
</TABLE>
- --------
* To be filed by amendment.
<PAGE>
May 14, 1997
Securities and Exchange Commission
450 Fifth Street, N. W.
Washington, DC 20549
Re: ARCO Chemical Company Registration Statement on Form S-3
for Debt Securities to be Offered Pursuant to Rule 415
--------------------------------------------------------
Dear Sir or Madam:
I have acted as counsel to ARCO Chemical Company, a Delaware corporation
(the "Company"), in connection with the filing by the Company of a Registration
Statement on Form S-3 (the "Registration Statement") relating to the proposed
public offering and sale from time to time of up to $350,000,000 aggregate
principal amount of the Company's debt securities (the "Debt Securities"). The
Debt Securities will be issued to the Company pursuant to the Indenture, dated
as of June 15, 1988 (the "Indenture"), between the Company and The Bank of New
York, as Trustee (the "Trustee"). I and attorneys under my supervision have
examined such corporate records, documents and other matters as I have
considered necessary in order to render this opinion.
Based upon the foregoing, I am of the opinion that, when (i) the terms of
the Debt Securities and of their issuance and sale have been duly authorized and
established in conformity with the Indenture and (ii) the Debt Securities have
been duly executed by the Company and authenticated by the Trustee in accordance
with the Indenture and delivered to the purchasers thereof against payment
therefor, such Debt Securities will constitute the legal, valid and binding
obligations of the Company, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws now or hereafter in effect relating to or affecting
creditors' rights and to general equity principles.
I am counsel admitted to practice in the Commonwealth of Pennsylvania. My
opinion is limited solely to the laws of the United States of America, the State
of New York and the Commonwealth of Pennsylvania, in each case to the extent
applicable. With respect to all matters of New York law, I have relied solely
upon an opinion letter, dated May 13, 1997, from Morgan, Lewis & Bockius LLP.
I consent to the filing of this opinion as an exhibit to the Registration
Statement referred to above and to the use of my name under the caption "Legal
Opinion" in the Prospectus included as part of such Registration Statement. In
giving such consent, I do not thereby admit that I am in the category of persons
whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ Robert J. Millstone
Robert J. Millstone
Exhibit 5
Exhibit 23.1
<PAGE>
ARCO CHEMICAL COMPANY AND CONSOLIDATED SUBSIDIARIES
Computation of the Ratio of Earnings to Fixed Charges
(Million of Dollars)
<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31, 1997
---------------------------------------- ---------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Pretax income from continuing operations $322 $311 $416 $756 $487 $ 73
Add:
Interest expense ................................ 91 105 85 89 86 22
Rental expense factor ........................... 26 20 22 25 27 7
---- ---- ---- ---- ---- ----
Earnings available for fixed charges .................... $439 $436 $523 $870 $600 $102
==== ==== ==== ==== ==== ====
Interest expense ........................................ $ 91 $105 $ 85 $ 89 $ 86 $ 22
Add capitalized interest ................................ 37 - 3 1 3 2
Rental expense factor ................................... 26 20 22 25 27 7
---- ---- ---- ---- ---- ----
Fixed charges ........................................... $154 $125 $110 $115 $116 $ 31
==== ==== ==== ==== ==== ====
Ratio of earnings to fixed charges ...................... 2.9 3.5 4.8 7.6 5.2 3.3
==== ==== ==== ==== ==== ====
</TABLE>
EXHIBIT 12
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
ARCO Chemical Company
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of our report dated February 12, 1997, on our audits of the
consolidated financial statements of ARCO Chemical Company and Subsidiaries as
of December 31, 1996 and 1995, and for each of the three years in the period
ended December 31, 1996, which report is included in ARCO Chemical Company's
Annual Report on Form 10-K for the year ended December 31, 1996. We also consent
to the reference to our Firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
May 14, 1997
Exhibit 23.2
<PAGE>
ARCO CHEMICAL COMPANY
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Alan R. Hirsig, Robert J. Millstone, John A. Shaw, and Walter J. Tusinski, and
each of them, his or her true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to effect the following
acts as necessary or appropriate for the conduct of the business and affairs
of ARCO Chemical Company (the "Company"):
I. In connection with any outstanding security of the Company registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as amended
(1) to execute any singular or periodic report required or permitted
to be filed under the Securities Exchange Act of 1934, as amended,
including SPECIFICALLY the Company's Annual Report on Form 10-K for the
------------
fiscal year ended December 31, 1996; and
(2) to file or cause to be filed such report with the Securities and
Exchange Commission (the "Commission"), any national or foreign
securities exchange, any securities industry self-regulatory
organization, any state or other jurisdiction of the United States, and
any jurisdiction outside the United States, in each case as required or
permitted by applicable law;
II. In connection with the issuance, offering, or sale of any securities
authorized by the Board of Directors of the Company or by the Executive
Committee thereof pursuant to due authorization by such Board, or in
connection with the issuance, offering or sale of any security,
participation or interest in any employee or executive compensation or
benefit plan authorized and approved by the Board of Directors of the
Company or by the Executive or Compensation Committees thereof pursuant to
due authorization by such Board
(1) to execute and file, or cause to be filed, with the Commission,
(A) Registration Statements and any and all amendments (including post-
effective amendments) thereto, and to file, or cause to be filed, all
exhibits thereto and other documents in connection therewith as
required or permitted by the Commission in connection with such
registration under the Securities Act of 1933, as amended, and (B) any
singular or periodic report or other document required or permitted to
be filed by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended;
(2) to execute and file, or cause to be filed, any application for
registration or exemption therefrom, or any report or any other
document required or permitted to be filed by the Company under the
Blue Sky or securities laws of any state or other jurisdiction of the
United States, and to furnish any other information required in
connection therewith, including any reports or other documents required
or permitted to be filed subsequent to the issuance of such securities;
(3) to execute and file, or cause to be filed, any application for
registration or exemption therefrom under the securities laws of any
jurisdiction outside the United States, including any reports or other
documents required or permitted to be filed subsequent to the issuance
of such securities; and
(4) to execute and file, or cause to be filed, any application for
listing such securities on any national or foreign securities exchange;
granting to such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act required to be done as he
or she might or could do in person, hereby ratifying and confirming all that
such attorneys-in-fact and agents, and each of them, may lawfully do or cause
to be done by virtue of this Power of Attorney.
EXHIBIT 24
<PAGE>
Each such attorney-in-fact and agent shall have the right to indemnification
for any action taken or omitted pursuant to this Power of Attorney provided in
the By-Laws of the Company to officers and directors for service as such,
including, but not limited to, the non-exclusivity provisions of such By-Laws.
Each person whose signature appears below may at any time revoke this Power
of Attorney, as to himself or herself only, by an instrument in writing
specifying that this Power of Attorney is revoked as to him or her as of the
date of delivery of such revocation to the Secretary of the Company or at a
subsequent specified date. This Power of Attorney shall be revoked
automatically with respect to any person whose signature appears below
effective on the date he or she ceases to be a member of the Board of
Directors, or in the case of Mr. Millstone, on the date he ceases to be Vice
President, General Counsel and Secretary, or in the case of Mr. Shaw, on the
date he ceases to be principal accounting officer of the Company. Any
revocation shall not void or otherwise affect any acts performed by any
attorney-in-fact and agent named herein pursuant to this Power of Attorney
prior to the effective date of such revocation.
This instrument may be executed in multiple counterparts each of which shall
be deemed an original and all of which together shall be deemed one instrument.
SIGNATURE TITLE DATE
Chairman of the
/s/ MIKE R. BOWLIN Board and Director
- -------------------------------------
Mike R. Bowlin
/s/ ALAN R. HIRSIG President, Chief
- ------------------------------------- Executive Officer
Alan R. Hirsig and Director
/s/ MARVIN O. SCHLANGER Executive Vice
- ------------------------------------- President, Chief
Marvin O. Schlanger Operating Officer
and Director
February 25, 1997
/s/ WALTER J. TUSINSKI Senior Vice
- ------------------------------------- President, Chief
Walter J. Tusinski Financial Officer
and Director
/s/ WALTER F. BERAN
- ------------------------------------- Director
Walter F. Beran
/s/ ANTHONY G. FERNANDES Director
- -------------------------------------
Anthony G. Fernandes
/s/ MARIE L. KNOWLES
- ------------------------------------- Director
Marie L. Knowles
<PAGE>
SIGNATURE TITLE DATE
Director
/s/ JAMES A. MIDDLETON
- -------------------------------------
James A. Middleton
/s/ STEPHEN R. MUT
- ------------------------------------- Director
Stephen R. Mut February 25, 1997
/s/ FRANK SAVAGE
- ------------------------------------- Director
Frank Savage
/s/ ROBERT H. STEWART, III Director
- -------------------------------------
Robert H. Stewart, III
<PAGE>
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
ARCO CHEMICAL COMPANY
(Exact name of obligor as specified in its charter)
Delaware 51-0104393
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3801 West Chester Pike
Newton Square, Pennsylvania 19073-2387
(Address of principal executive offices) (Zip code)
------------------------
Debt Securities
(Title of the indenture securities)
================================================================================
EXHIBIT 25
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 25th day of April, 1997.
THE BANK OF NEW YORK
By: /s/ Walter N. Gitlin
------------------------------
Name: Walter N. Gitlin
Title: Vice President
<PAGE>
- --------------------------------------------------------------------------------
EXHIBIT 7
Consolidated Report of Condition of THE BANK OF NEW YORK of 48 Wall Street, New
York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal
Reserve System, at the close of business September 30, 1996, published in
accordance with a call made by the Federal Reserve Bank of this District
pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin ........................................ $ 4,404,522
Interest-bearing balances ................................................................. 732,833
Securities:
Held-to-maturity securities ............................................................... 789,964
Available-for-sale securities ............................................................. 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold .......................................................................... 3,364,838
Loans and lease financing receivables:
Loans and leases, net of unearned income .................................................. 28,728,602
LESS: Allowance for loan and lease losses ................................................. 584,525
LESS: Allocated transfer risk reserve ..................................................... 429
Loans and leases, net of unearned income, allowance, and reserve ........................ 28,143,648
Assets held in trading accounts ............................................................. 1,004,242
Premises and fixed assets (including capitalized leases) .................................... 605,668
Other real estate owned ..................................................................... 41,238
Investments in unconsolidated subsidiaries and associated companies ......................... 205,031
Customers' liability to this bank on acceptances outstanding ................................ 949,154
Intangible assets ........................................................................... 490,524
Other assets ................................................................................ 1,305,839
------------
Total assets ................................................................................ $ 44,043,010
============
<CAPTION>
LIABILITIES
<S>.......................................................................................... <C>
Deposits:
In domestic offices ....................................................................... $ 20,441,318
Noninterest-bearing ....................................................................... 8,158,472
Interest-bearing .......................................................................... 12,282,846
In foreign offices, Edge and Agreement subsidiaries, and IBFs ............................. 11,710,903
Noninterest-bearing ....................................................................... 46,182
Interest-bearing .......................................................................... 11,664,721
Federal funds purchased in domestic offices of the bank:
Federal funds purchased ................................................................... 1,565,288
Demand notes issued to the U.S. Treasury .................................................... 293,186
Trading liabilities ......................................................................... 826,856
Other borrowed money:
With original maturity of one year or less ................................................ 2,103,443
With original maturity of more than one year .............................................. 20,766
Bank's liability on acceptances executed and outstanding .................................... 951,116
Subordinated notes and debentures ........................................................... 1,020,400
Other liabilities ........................................................................... 1,522,884
------------
Total liabilities ........................................................................... 40,456,160
============
<CAPTION>
EQUITY CAPITAL
<S>.......................................................................................... <C>
Common stock ................................................................................ 942,284
Surplus ..................................................................................... 525,666
Undivided profits and capital reserves ...................................................... 2,129,376
Net unrealized holding gains (losses) on available-for-sale securities ...................... (2,073)
Cumulative foreign currency translation adjustments ......................................... (8,403)
------------
Total equity capital ........................................................................ 3,586,850
------------
Total liabilities and equity capital ........................................................ $ 44,043,010
============
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot }
Thomas A. Renyi } Directors
Alan R. Griffith }
- --------------------------------------------------------------------------------
