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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
---
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended June 30, 1995
OR
--- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ---------- to ----------
Commission file number 1-9759
IMC GLOBAL INC.
(Formerly IMC Fertilizer Group, Inc.)
(Exact name of registrant as specified in its charter)
Delaware 36-3492467
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2100 Sanders Road
Northbrook, Illinois 60062
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708)-272-9200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock, par value $1 per share New York Stock Exchange
Chicago Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X . No .
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-
affiliates of the registrant: $1,845,211,984 as of August 31, 1995.
Market value is based on the August 31, 1995, closing price of
Registrant's Common Stock.
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS: Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by
Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by
a court. Yes-------. No-------.
APPLICABLE ONLY TO CORPORATE REGISTRANTS: Indicate the number of
shares outstanding of each of the registrant's classes of common stock:
29,628,619 shares, excluding 2,776,420 treasury shares as of August 31,
1995.
DOCUMENTS INCORPORATED BY REFERENCE: Information required by Items 10,
11, 12, and 13 of Part III is incorporated by reference from pages 2
through 6, pages 7 through 16, pages 6 and 7 and page 7, respectively,
of the Registrant's definitive proxy statement for the annual meeting
of stockholders to be held on October 19, 1995.
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1995 FORM 10-K CONTENTS
Item Page
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Part I:
1. Business 1
Introduction 1
Product Line Information 2
International Operations 13
Working Capital 14
Relationship Between the Company and
Mallinckrodt Group Inc. 14
Other Activities 15
2. Properties 17
3. Legal Proceedings 17
4. Submission of Matters to a Vote of Security Holders 18
Executive Officers of the Registrant 19
Part II:
5. Market for the Registrant's Common Stock and Related
Stockholder Matters 20
6. Selected Financial Data 22
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 23
8. Financial Statements and Supplementary Data 30
9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 54
Part III:
10. Directors and Executive Officers of the Registrant 54
11. Executive Compensation 54
12. Security Ownership of Certain Beneficial Owners
and Management 54
13. Certain Relationships and Related Transactions 54
Part IV:
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 55
Signatures 66
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PART I.
Item 1. Business.
INTRODUCTION
------------
Company Profile
---------------
IMC Global Inc., formerly IMC Fertilizer Group, Inc., is the parent
corporation of several subsidiaries and joint venture operations which
together comprise one of the world's leading producers of crop
nutrients for the international community. The Company mines and
processes potash in the United States and Canada, and is a joint
venture partner in IMC-Agrico Company, the nation's largest producer,
marketer and distributor of phosphate crop nutrients. The Company
believes that it is one of the lower-cost North American producers of
phosphate rock, potash and concentrated phosphates. The Company also
manufactures high-value crop nutrients which are marketed principally
in the southeastern United States under the Rainbow (Registered
Trademark) brand name. In addition, it produces sulphur and oil at
other joint venture businesses and operates a railcar repair facility
in Georgia.
The Company's business strategy focuses on maintaining its
worldwide position as a leading crop nutrient producer and supplier
through extensive customer service, efficient distribution and
transportation, and to supply crop nutrient products worldwide at
competitive prices by taking advantage of economies of scale and
state-of-the-art technology to reduce costs.
The corporate headquarters of the Company is located at 2100
Sanders Road, Northbrook, Illinois 60062-6146, and the telephone number
is (708) 272-9200.
Unless the context indicates otherwise, the "Company" includes IMC
Global Inc. and its consolidated subsidiaries and joint ventures,
including, subsequent to June 30, 1993, IMC-Agrico Company. Unless
otherwise specified, references herein to years are fiscal years ended
June 30.
Seasonal and Other Factors Affecting the Company's Business
-----------------------------------------------------------
In general, the Company's product lines are not materially affected
by seasonal factors except in the case of its high-value crop nutrients
product line.
The Company's revenues are highly dependent upon conditions in the
domestic agriculture industry, and can be affected by crop failure,
changes in agricultural productivity and agricultural policies, and
weather, all of which are beyond the Company's control.
In addition, the Company's results of operations can also be
affected by other factors beyond its control such as the relative value
of the U.S. dollar and its impact upon costs to the importers of crop
nutrients, the status of domestic and foreign political subsidies of
agriculture, and other factors.
Methods of Competition
----------------------
The Company's products are commodities that are available from
other sources, and the marketplaces in which these products are sold,
both domestic and foreign, are highly competitive. Apart from
competitive pricing, the Company's principal method of competition is
through customer service. Such service includes the maintenance of an
extensive North American transportation system made up of approximately
2,400 railroad cars, both leased and owned, the maintenance of in-
market warehouse networks to meet changing needs within the domestic
marketplace, and the operation of ocean terminals for the storage and
shipment of product to international markets.
PRODUCT LINE INFORMATION
------------------------
The Company's most significant investments in plants and properties
in the United States are in its phosphate operations in Florida and
Louisiana and its potash operations in New Mexico. The Company also
has 25 percent participation interests in joint ventures to mine
sulphur and oil & natural gas deposits offshore Louisiana. The most
significant investment outside the United States is in its potash
operations in the province of Saskatchewan, Canada. In February 1992,
the Company sold its two anhydrous ammonia plants located in
Sterlington, Louisiana.
The amounts and relative proportion of net sales and operating
earnings contributed by various product lines of the Company have
varied from year to year and may continue to do so in the future as a
result of changing business, economic and competitive conditions, and
technical developments.
The table below shows the Company's net sales by product line in
millions of dollars for each of the past five years:
1995 1994 1993 1992 1991
---------------------------------------------------------------
Phosphate rock $ $ $ $ $
230.8 188.1 167.0 202.0 224.2
Concentrated 1,248.4 876.5 387.1 423.1 447.8
phosphates
Potash 249.4 210.5 221.8 224.1 231.3
High-value crop 115.1 98.4 97.9 103.3 96.6
nutrients
Uranium 10.9 9.2 6.7 63.9 70.9
Ammonia 34.3 52.1
Other 69.4 58.8 16.6 7.8 8.3
Total net sales $1,924. $1,441. $ $1,058. $1,131.
0 5 897.1 5 2
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In 1995, sales of concentrated phosphates and potash to China
accounted for approximately 20 percent of the Company's net sales. No
other single customer or group of related or affiliated customers
accounted for more than 5 percent of the Company's net sales.
IMC-Agrico Company
-------------------
On July 1, 1993, IMC Global Operations Inc. (IMC), formerly IMC
Fertilizer, Inc., and Freeport-McMoRan Resource Partners, Limited
Partnership (FRP) entered into a joint venture partnership in which
both companies contributed their respective phosphate businesses,
including the mining and sale of phosphate rock and the production,
distribution and sale of concentrated phosphates, uranium oxide and
related products to IMC-Agrico Company (IMC-Agrico), a Delaware general
partnership. IMC has a 56.5 percent interest in IMC-Agrico over the
term of the partnership. IMC-Agrico is governed by a Policy Committee
which has equal representation from each company and is operated by
IMC. IMC-Agrico makes cash distributions to IMC and FRP based on
formulas and sharing ratios for Current Interest Cash and Capital
Interest Cash as defined in the partnership agreement. Current
Interest Cash is shared at a ratio of 45.0 percent and 55.0 percent in
1995 to IMC and FRP, respectively, adjusting thereafter until 1998 when
the ratios will be fixed at 59.4 percent to IMC and 40.6 percent to
FRP. Capital Interest Cash is shared at a ratio of 54.9 percent and
45.1 percent in 1995 to IMC and FRP, respectively, adjusting thereafter
until 1998 when the ratios will be fixed at 59.4 percent to IMC and
40.6 percent to FRP.
The formation of IMC-Agrico continues the Company's strategy of
pursuing competitive cost positions in its markets. As a result of
this transaction, IMC-Agrico has realized transportation and
distribution cost savings by reducing unit costs to transport product
between various IMC-Agrico locations, by taking advantage of multiple
shipping locations to reduce the cost to transport product to
customers, and by reducing per unit warehousing costs through
opportunities created by the size of operations of IMC-Agrico as
compared to the operations of the two partners individually.
IMC-Agrico has reduced production costs by eliminating duplicative
plant administrative functions, by applying operational technologies
that have proven successful at each of the partner's respective plant
locations to the other partner's contributed plants and by more
efficiently utilizing in-process product at plants that previously had
underutilized upgrading capacity. IMC's and FRP's selling, general and
administrative expenses have been reduced through reduced headcount
which was achieved by eliminating duplicative headquarters functions
and consolidating the partners' sales forces.
The following discussion describes the Company's operations,
including those of IMC-Agrico. Subsequent to June 30, 1993, all of the
Company's phosphate rock and concentrated phosphate operations have
been conducted through IMC-Agrico.
Phosphate Rock
--------------
IMC-Agrico's phosphate mining operations and production plants,
located in Polk, Hillsborough, Hardee and Manatee counties in central
Florida, produce phosphate rock, with production principally going into
the manufacture of concentrated phosphates. IMC-Agrico sells phosphate
rock to crop nutrient manufacturers in the United States, to foreign
distributors and manufacturers and to animal feed manufacturers for the
production of feed phosphates. IMC-Agrico also uses phosphate rock
internally in the production of concentrated phosphates at its New
Wales, Nichols and South Pierce production facilities located in
central Florida and its Faustina and Uncle Sam production facilities
located in Louisiana. Phosphate rock is generally mixed with sulfuric
acid to produce phosphoric acid from which various concentrated
phosphate products can be produced. About 84 percent of U.S. phosphate
rock is produced in Florida and North Carolina. The Florida/North
Carolina production rate was at 86 percent of capacity for 1995,
including idle and unused facilities.
Production and Reserves
Phosphate deposits were formed 15 million years ago by mineral
precipitation from seawater. Varying in thickness from five to 25
feet, these deposits are covered by a 10 to 50 foot layer of sandy
overburden. The ore is extracted through surface mining after removal
of the overburden and is then processed at one of IMC-Agrico's 10
plants (two of which were temporary idled at June 30, 1995) where it
goes through washing, screening, sizing and flotation procedures
designed to separate it from sands, clays and other foreign materials.
IMC-Agrico's production capacity is approximately 27 million tons
of product per year. However, production has been at less than
capacity because of reduced demand.
In June 1994, the Company purchased two phosphate rock processing
plants which previously had been leased under a long-term contract with
Brewster Phosphates. The annual capacity of these two plants is
approximately five million tons. Currently, both plants are closed
indefinitely subject to improved market conditions.
IMC-Agrico has estimated reserves of 328 million tons of phosphate
rock in central Florida as of June 30, 1995 that are mineable from
existing operations. These reserves are either owned by IMC-Agrico or
controlled by it through long-term lease or royalty agreements.
Reserve grades range from 58 percent to 78 percent bone phosphate of
lime (BPL), with an average grade of 67 percent BPL. (Bone phosphate
of lime is the standard industry term used to grade phosphate rock.)
The phosphate rock mined by the Company in the last three years
averaged 68 percent BPL, which is typical for phosphate rock mined in
Florida during this period.
In March 1994, IMC-Agrico and U.S. Agri-Chemicals (USAC) entered
into an agreement in which IMC-Agrico agreed to mine certain phosphate
rock reserves owned by USAC and process such reserves for its own use.
In return, IMC-Agrico agreed to supply all of USAC's internal phosphate
rock requirements (1.3 million to 2.0 million tons per year) at its
Fort Meade, Florida, concentrated phosphate facility beginning October
1, 1994 at a price based on market plus escalations in IMC-Agrico's
cost of production. This agreement will end on September 30, 2004, at
which time it may be renewed, if agreed to by both parties, for an
additional five years.
IMC-Agrico also owns or controls phosphate rock deposits in
Manatee, DeSoto and Hardee counties, Florida, about 40 miles south of
its current mining operations, which are called the South Florida
deposits. (Reserves are ore bodies which are believed to be
economically recoverable at current costs and prices. Deposits are ore
bodies which require additional economic and mining feasibility studies
before they can be classified as reserves.) These deposits differ in
physical and chemical characteristics from the reserves now being mined
in Polk, Hillsborough and Manatee counties, Florida. The South Florida
deposits contain estimated recoverable phosphate rock of approximately
533 million tons (289 million tons of which are available under option
arrangements) with an average grade of approximately 65 percent BPL.
Some of these deposits are located in what may be classified as
unmineable wetland areas under standards set forth in current state and
federal dredge and fill regulations.
In July 1994, IMC-Agrico entered into an option agreement with
Mississippi Chemical Corporation (MCC) to purchase 9,472 acres of land
in Florida (the Property). The Property, along with 2,508 acres of
land previously purchased from MCC (the Adjacent Property), contains
approximately 87.5 million tons of phosphate rock deposits included in
the South Florida deposits discussed above. The option period began
July 16, 1994 and will end January 16, 1998. During this time,
IMC-Agrico may exercise its option to purchase the Property or it may
continue to make annual payments ranging from $1.0 million to $3.0
million to keep the option in effect. If by the end of the option
period IMC-Agrico exercises its option to purchase the Property, the
purchase price will be financed by MCC over a six-year term at interest
rates approximating IMC-Agrico's borrowing rate. If IMC-Agrico fails
to make an option payment during the option period or fails to exercise
its option by January 16, 1998, MCC has the right to sell the Property
to IMC-Agrico for a specified amount. If the option to purchase the
Property is not exercised by IMC-Agrico and MCC does not exercise its
right to sell the Property to IMC-Agrico, MCC has the right to purchase
the Adjacent Property from IMC-Agrico at an agreed upon price. In
fiscal 1995, IMC-Agrico paid $3.0 million to keep the option in effect.
The Market
IMC-Agrico sells its phosphate rock under long-term contracts and
in the spot market. IMC-Agrico also consumes a significant portion of
its phosphate rock in the production of concentrated phosphates at its
New Wales, Nichols, South Pierce, Faustina and Uncle Sam facilities.
Most of IMC-Agrico's export sales of phosphate rock are made
through the Phosphate Rock Export Association, formed under the Webb-
Pomerene Act by the Company and certain other Florida phosphate rock
producers. Under that Act, members of an industry may form
associations to negotiate prices and other terms for the export sales
of their products in order to compete more effectively in foreign
markets. Export markets for phosphate rock are highly competitive,
with the nationally-controlled mines of Morocco and other countries
being significant factors in terms of supply and price.
IMC-Agrico's phosphate rock shipments in millions of tons for 1995
and 1994 were as follows:
1995 1994
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Tons % Tons %
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Domestic
Major long-term contracts thru 2004 7.9 32% 5.9 28%
Spot market .8 3 .8 4
Export 2.1 8 2.2 10
Captive 14.2 57 12.3 58
Total shipments 25.0 100% 21.2 100%
IMC-Agrico has contractual commitments from customers for the
shipment of phosphate rock amounting to approximately 4.4 million tons
in fiscal 1996.
Overall, phosphate rock prices averaged $21.29 per ton in 1995 vs.
$21.16 per ton in 1994.
Concentrated Phosphates
-----------------------
Once phosphate rock is mined, it can then be processed into
concentrated phosphates. Concentrated phosphate production facilities
are located in Florida and Louisiana. IMC-Agrico's annual concentrated
phosphate production capacity is approximately four million tons of
phosphoric acid (P2O5 equivalent), or approximately 32 percent of total
U.S. concentrated phosphate production capacity, or 11 percent of world
capacity.
Production
The Florida concentrated phosphate facilities consist of three
plants: New Wales, Nichols and South Pierce. The New Wales
concentrated phosphate complex, located near Mulberry, Florida, is the
largest concentrated phosphate plant in the world with an estimate
annual capacity of 1.76 million tons of phosphoric acid (P2O5
equivalent). P2O5 is an industry term indicating a product's phosphate
content measured chemically in units of phosphorous pentoxide. New
Wales primarily manufactures four forms of concentrated phosphates:
diammonium (DAP) and monoammonium (MAP) phosphate, granular triple
superphosphate (GTSP) and merchant grade phosphoric acid. The Nichols
plant, located near Nichols, Florida, manufactures phosphoric acid and
DAP and has an estimated annual capacity of .28 million tons of
phosphoric acid (P2O5 equivalent). This plant was acquired from
Conserv, Inc. in 1992. The South Pierce plant, located near Bartow,
Florida, produces phosphoric acid, GTSP and technical grade DAP and MAP
for industrial use and has an estimated annual capacity of .52 million
tons of phosphoric acid (P2O5 equivalent).
The Louisiana concentrated phosphate facilities consist of three
plants: Uncle Sam, Faustina and Taft. The Uncle Sam plant, located in
Uncle Sam, Louisiana, produces phosphoric acid which is then shipped to
the nearby Faustina and Taft plants where it is used to produce DAP and
MAP. Uncle Sam has an estimated annual capacity of .89 million tons of
phosphoric acid (P2O5 equivalent). The Faustina plant, located near
St. James, Louisiana, manufactures DAP and MAP and has an estimated
annual capacity of .58 million tons of phosphoric acid (P2O5
equivalent). The Taft plant, located near Hahnville, Louisiana, only
manufactures DAP. However, based on market demand, operations at Taft
are routinely suspended to keep IMC-Agrico's output in balance with
customer needs.
Phosphate rock, sulphur and ammonia are the three principal raw
materials used in the production of concentrated phosphates. Phosphate
rock is supplied by IMC-Agrico's mines in Florida. The Company and FRP
both have interests in a joint venture which began mining sulphur
reserves at Main Pass 299 (Main Pass) offshore Louisiana in April 1992.
In the past, sulphur was purchased exclusively from domestic suppliers.
IMC and FRP have an agreement to supply IMC-Agrico's sulphur
requirements. FRP supplies its share of the requirements through its
Sulphur Division and the Company supplies its share of the requirements
through its share of Main Pass production and purchases from FRP and
third parties. Nearly all of the Company's ammonia needs were supplied
by the Company's Sterlington, Louisiana, production facilities until
February 1992, when the operations were sold. Since then, the
Company's needs primarily have been fulfilled by domestic suppliers
under long-term contracts. Subsequent to July 1, 1993, IMC-Agrico's
needs were supplied by its Faustina ammonia production facility and by
domestic suppliers under long-term contracts.
The Market
IMC-Agrico sells its concentrated phosphates in the spot market and
under long-term contracts. Virtually all of IMC-Agrico's export sales
are marketed through the Phosphate Chemicals Export Association
(PhosChem), a Webb-Pomerene Act organization. The table below shows
the Company's 1995 and 1994 shipments in thousands of tons of P2O5
equivalent:
1995 1994
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Tons % Tons %
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Domestic
Spot market 1,319 33% 1,449 42%
Contracts expiring in 1996 165 4 115 4
Mallinckrodt (for animal
feed ingredients) 279 7 279 8
Captive (for high-value
crop nutrients) 60 2 46 1
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1,823 46 1,889 55
Export 2,138 54 1,564 45
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Total shipments 3,961 100% 3,453 100%
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IMC-Agrico has contractual commitments from customers for the
shipment of concentrated phosphates amounting to approximately 1
million tons (P2O5 equivalent) in fiscal 1996.
Animal Feed Ingredients Agreements
IMC has a management agreement with Mallinckrodt Veterinary, Inc.
(Mallinckrodt), a wholly-owned subsidiary of Mallinckrodt Group Inc.,
under which IMC operates certain Mallinckrodt facilities at the New
Wales concentrated phosphate complex, which manufacture animal feed-
grade phosphate products, and supplies utilities for the operation of
such facilities until at least June 30, 1997. There is also a similar
management agreement under which IMC operates a limestone mine for
Mallinckrodt Group Inc. to obtain limestone for use in the animal feed
plant. Under the management agreement, charges for the conversion of
raw materials, described below, into finished products, as well as for
supplying utilities to the plant, are based on IMC's actual cost.
In addition, IMC-Agrico has supply agreements with Mallinckrodt
under which IMC-Agrico will supply Mallinckrodt's requirements of raw
materials for its animal feed plant. Under these agreements,
IMC-Agrico will supply phosphoric acid through at least June 30, 1997.
In addition, IMC-Agrico has an agreement to supply Mallinckrodt 85,000
to 105,000 tons of phosphate rock annually until June 30, 1998. IMC
has also entered into an agreement to supply Mallinckrodt with its
requirements of animal feed-grade potassium products from IMC's
Carlsbad, New Mexico, potash operations. These potassium supply
contracts extend year-to-year unless terminated by either party. IMC
also supplies Mallinckrodt with railcars for transporting its product.
Potash
------
The Company mines potash, the second primary crop nutrient, at
three underground mines and modern refineries in the United States and
Canada. Two of the mines and refineries are located near the town of
Esterhazy in the Canadian province of Saskatchewan. The remaining mine
and refinery is located near Carlsbad, New Mexico. In addition to the
Company, there are 12 North American potash producers -- seven in the
United States and five in Canada. With a combined capacity of over
five million tons per year, the Company is one of the largest private
enterprise potash producers in the world. In 1995, these operations
accounted for approximately 9 percent of world output.
The term potash applies generally to the common salts of potassium.
Since the amount of potassium in these salts varies, the industry has
established a common standard of measurement by defining a product's
potassium content in terms of equivalent percentages of potassium oxide
(K2O). A K2O equivalent of 60 percent is the customary minimum
standard for muriate of potash products.
The North American potash industry's production rate was at 78
percent of capacity for 1995, including idle and unused facilities.
Most of the potash produced by the Company was sold as crop nutrient
materials, while small portions were sold as animal feed ingredients
and to non-agricultural markets.
Saskatchewan Potash Operations
The Company's two interconnected potash mines in Saskatchewan are
owned and operated by a wholly-owned subsidiary, International Minerals
& Chemical (Canada) Global Limited (IMC-Canada). The total annual
production capacity of IMC-Canada's refinery facilities is estimated to
be 4.2 million tons of finished product.
Potash mining takes place under ground at depths of over 3,000 feet
where continuous mining machines cut out the ore face and move jagged
chunks of salt to conveyor belts. The ore is then crushed and moved to
storage bins where it awaits hoisting to refineries above ground. IMC-
Canada produces six different potash products, some through patented
processes. Product grades produced are Standard, Special Standard,
Coarse, Granular and White Muriate, and Refined KCl.
Potash Corporation of Saskatchewan Inc. (PCS) controls several
potash-producing properties in the province. The mining operations
associated with these properties give PCS control of approximately 56
percent of Saskatchewan's potash production capacity.
One of PCS's properties consists of reserves located in the
vicinity of IMC-Canada's potash operations. Under a long-term contract
with PCS, IMC-Canada is obligated to mine and refine these reserves for
a fee plus a pro rata share of production costs. The specified
quantities of potash to be produced for PCS may, at the option of PCS,
amount to an annual maximum of approximately one-fourth of the tons
produced by IMC-Canada, but no more than 1,050,000 tons. The current
contract can be continued in effect until June 30, 1996, and, at the
option of PCS, can be renewed on the same terms for six additional five-
year periods.
Since December 1985, the Company has experienced an inflow of water
into one of its two interconnected potash mines. As a result, the
Company has suffered losses and has been forced to take substantial
remedial efforts to stop the flooding. The Company's share of
expenditures for ongoing remedial efforts totaled $14 million in 1995
and is expected to total approximately $15 million in 1996.
The Company has significantly reduced the water inflow since the
initial discovery and has been able to meet all sales obligations and
requirements from production at the mines. Despite the relative
success of such measures, there can be no assurance that the amounts
required for remedial efforts in the future will not increase or that
inflows will not increase to a level which would cause the Company to
abandon the mine. There can be no assurance that such action would not
have a material adverse effect on the Company. However, the long-term
outlook of the water inflow has caused the Company to consider
alternatives to its current mining operations and studies are under way
in this regard. Any solution to the water inflow situation at the
mines could result in substantial capital expenditures and/or charges
to operations. The Company does not presently have in place, nor can
it reasonably obtain, any insurance to cover damage to its underground
potash operations.
In 1987, legislation was adopted in the province of Saskatchewan
that authorized the provincial government to control production at
potash mines located in the province. The provincial government stated
that the purpose of such legislation was to deal with an oversupply of
potash in world markets. The legislation was not self-implementing.
It permits the Lieutenant Governor in Council of Saskatchewan to create
a Potash Resources Board to prescribe rates of potash production in the
province and to allocate production among the individual mines.
Increases in production capacity would be subject to provincial
approval. Although such regulations are in place, they have never been
implemented. The Company cannot predict if or when the legislation
will be implemented or the effects of this legislation on the
profitability of its potash operations.
Saskatchewan Potash Reserves
IMC-Canada presently controls the rights to mine 204,926 acres of
potash-bearing land in southeastern Saskatchewan. This land, of which
51,453 acres have already been mined or abandoned, contains over 1.4
billion tons of recoverable ore at an average grade of 24.5 percent K2O
-- enough to support current operations for more than a century. This
ore will yield approximately 498 million tons of finished product with
a K2O content of approximately 61 percent.
IMC-Canada's mineral rights consist of 113,548 acres owned in fee,
70,613 acres leased from the province of Saskatchewan, and 20,765 acres
leased from other parties. All leases are renewable by IMC-Canada for
successive terms of 21 years. Royalties, established by regulation of
the province of Saskatchewan, amounted to $3.9 million (Canadian) in
1995 and $3.7 million (Canadian) in 1994.
Agreement Suspending Potash Dumping Investigation
In January 1988, the U.S. Department of Commerce (Commerce) signed
an agreement with all of the potash producers in Canada, suspending an
investigation by Commerce to determine whether Canadian potash was, or
was likely to be, sold in the United States at less than "fair value."
The agreement stipulated that each such producer's minimum price for
potash sold in the United States, compared with its potash prices in
Canada, would be based upon a formula related to preliminary dumping
margins determined by Commerce for each producer, to assure that there
would be no dumping by that producer in the future. Compliance with
the agreement is being monitored by Commerce. Originally, this
agreement was to remain in effect until 1993 unless it was terminated
by Commerce or by the withdrawal from the agreement by producers having
15 percent or more of the total Canadian capacity, or unless there was
a violation of the terms of the agreement, in any of which events the
investigation could be renewed. In January 1993, this agreement was
extended by Commerce for an indefinite period. The intent of the
agreement is to prevent the sale of Canadian potash into the United
States at less than "fair value."
Saskatchewan Potash Production Costs
In addition to royalties, potash resource tax payments to the
province of Saskatchewan amounted to $9 million in 1995 and $5 million
in 1994. These payments are not deductible in determining Canadian
federal income taxes.
New Brunswick Potash Exploration
In August 1995, IMC-Canada was chosen by the Minister of State for
Mines and Energy for the Canadian province of New Brunswick to explore
potash deposits near the town of Sussex. IMC-Canada has agreed to
enter into a three-year agreement under which it will perform a
geological reassessment of the property and feasibility study to
determine whether to develop the potash deposits. IMC-Canada had
conducted a similar exploration program on property near Sussex in the
mid-1970s.
Carlsbad Potash Operations
The Company's Carlsbad mine, located in New Mexico with workings at
levels 700 to 900 feet under ground, has an annual production capacity
of over one million tons of finished product. The ore mined is of
three types: (1) sylvinite, a mixture of potassium chloride and sodium
chloride, the same as the ore mined in Saskatchewan; (2) langbeinite, a
double sulphate of potassium and magnesium; and (3) a mixed ore,
containing both potassium chloride and langbeinite.
Both continuous and conventional mining methods are utilized for
ore extraction. In the continuous mining sections, drum type mining
machines are used to cut sylvite ore from the face. Mining heights are
as low as four feet. In the conventional areas, a wide ore face is
undercut and holes drilled to accept explosive charges. Ore from both
continuous and conventional sections is loaded onto conveyors and
transported to storage areas where it is hoisted above ground for
further processing at the refinery.
Three types of potash are produced at the refinery: muriate of
potash, which is the primary source of potassium for the crop nutrient
industry; a double sulphate of potash magnesia, marketed under the
brand name Sul-Po-Magr, containing significant amounts of sulphur,
potassium and magnesium, with low levels of chlorine; and sulphate of
potash, supplying sulphur and a high concentration of potassium with
low levels of chlorine. The Company believes it is the larger of the
two U.S. producers of double sulphate of potash magnesia and the
largest of several U.S. producers of sulphate of potash.
Carlsbad Potash Reserves
The Company mines and refines potash from 43,239 acres of reserves
which the Company controls under long-term leases. These reserves
contain an estimated total of 162 million tons of recoverable ore in
four mining beds evaluated at thicknesses ranging from five to 12 feet.
At average refinery rates, these ore reserves are estimated to be
sufficient to yield 11.8 million tons of concentrate from sylvinite
with an average grade of 60 percent K2O and 28.5 million tons of
langbeinite concentrate with an average grade of approximately 22
percent K2O.
At current elevated rates of production, the Company's reserves of
sylvinite and langbeinite are estimated to be sufficient to support
operations for more than 23 years.
The Market
Potash is sold throughout the world, with the Company's largest
markets being in the United States, People's Republic of China, Japan,
Malaysia, Korea, Australia, New Zealand and Latin America. Potash is
also used internally in the manufacture of high-value crop nutrients.
The Company's exports from Canada, except to the United States, are
made through Canpotex Limited, an export association of Saskatchewan
potash producers.
The following table summarizes the Company's shipments of potash in
thousands of tons in 1995 and 1994:
1995 1994
-----------------------------------------------------------------
Tons % Tons %
-----------------------------------------------------------------
Domestic (United States and
Canada) 2,406 60% 2,287 65%
Foreign 1,322 33 963 27
Captive (principally for
crop nutrients) 282 7 280 8
-----------------------------------------------------------------
4,010 100% 3,530 100%
-----------------------------------------------------------------
The average selling price for all Company potash products was $66
per ton in 1995, compared with $64 per ton in 1994.
Rainbow Division
----------------
The Company's Rainbow Division produces high-value crop nutrients
through granulation and bulk-blending. Granulation is a process in
which various dry and liquid raw materials are chemically combined and
then pelletized. Bulk-blending is a simple physical mixing or blending
of suitable crop nutrient materials.
The Rainbow Division operates four large granulation plants which
are located in Americus, Georgia, Florence, Alabama, Hartsville, South
Carolina and Winston-Salem, North Carolina. It also operates 15
smaller facilities, primarily in the southeastern United States, for
bulk-blending and/or warehousing. Most of the potash and phosphate raw
materials used by these operations are supplied by the Company's mines
and plants.
The Products
Shipments of Rainbow (Registered Trademark) and Super Rainbow
(Registered Trademark) (premium, high-value crop nutrient products)
accounted for about 47 percent of the Company's total 1995 high-value
crop nutrient sales. These crop nutrients are formulated for specific
kinds of crops, soils, and soil conditions, and, in addition to the
three major plant nutrients, may contain as many as seven secondary
elements and micronutrients.
The Rainbow Division also sells phosphate rock, concentrated
phosphates, potash and nitrogen products for direct application to the
soil.
The Market
High-value crop nutrients are marketed in the United States and
sold principally to independent dealers, distributors and farmers, with
some sales made directly to other crop nutrient manufacturers. Sales
are largely concentrated in the spring planting season. Weather has
some impact on the timing and length of the planting season and can
have a significant effect on high-value crop nutrient prices. The
Rainbow division experienced its best year ever with record shipments
and operating earnings. High-value crop nutrient shipments in 1995
approximated 798,000 tons vs. 725,000 tons in 1994.
The Company believes its share of the southeastern U.S. market, the
market in which it operates, was about 15 percent in 1995. The
competition consists of many relatively small enterprises and other
large high-value crop nutrient companies.
Uranium Oxide
-------------
Phosphate rock is the source of uranium oxide, with the uranium
content varying from deposit to deposit. When phosphate rock is
converted into phosphoric acid, there is approximately a pound of
uranium oxide in each ton of the acid (P2O5 equivalent).
Uranium oxide production facilities are located in Louisiana and
Florida. In Louisiana, IMC-Agrico owns and operates uranium oxide
recovery and processing facilities which are located adjacent to its
Uncle Sam and Faustina concentrated phosphate plants. In 1995, these
production facilities recovered 1,061,813 pounds of uranium oxide from
phosphoric acid produced at these facilities.
Under a joint venture agreement with Denison Mines Ltd. (Denison),
IMC-Agrico was responsible for the production of uranium oxide at its
Uncle Sam and Faustina facilities, and Denison was responsible for
marketing the uranium oxide under long-term contracts. This agreement
was terminated on December 31, 1994. IMC-Agrico now sells its uranium
oxide production under a sales contract which expires in June 1997.
The contract currently yields prices above spot market prices.
IMC-Agrico also owns uranium oxide recovery and processing
facilities which are located adjacent to its New Wales concentrated
phosphate plant in Florida. Prior to 1992, uranium oxide produced at
the New Wales facilities was sold under long-term contracts which
supplied uranium oxide to nuclear power plants. Since the expiration
of these contracts, the Company has not been able to secure contracts
favorable enough to warrant continued operation of the New Wales
facilities, and production has been suspended. However, the suspension
of production at New Wales is expected to be temporary, and production
will resume when future uranium oxide market prices warrant resumption
of operations.
Another primary recovery unit is located adjacent to a concentrated
phosphate plant owned and operated by a subsidiary of CF Industries
(CF), located in Plant City, Florida. This facility extracted uranium
oxide from CF's phosphoric acid production at that plant. Under
contracts which ran through 1992, the Company extracted and purchased
CF's uranium oxide. After expiration of the contracts, the market
price for uranium oxide was not sufficient to justify continued
operation of the primary recovery unit and production was suspended.
Ammonia
-------
IMC-Agrico produces ammonia at its Faustina plant located at St.
James, Louisiana. Production from the Faustina plant, which has an
estimated annual capacity of 530,000 tons of anhydrous ammonia, is
primarily used internally to produce urea, DAP and MAP.
Until early 1992, the Company produced anhydrous ammonia at two
plants located in Sterlington, Louisiana. In February 1992, this
facility was sold. In connection with the sale of this facility, the
Company entered into contracts to meet its ammonia requirements.
Sulphur and Oil & Natural Gas
-----------------------------
See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" for a discussion of the status of
the Company's sulphur and oil & natural gas ventures.
INTERNATIONAL OPERATIONS
------------------------
Foreign operations and investments are subject to risks customarily
encountered in such foreign operations and investments, including
fluctuations in foreign currency exchange rates and controls,
expropriation and other economic, political and regulatory policies of
local governments, and laws and policies of the United States affecting
foreign trade and investment.
Internationally, the Company's products are sold primarily through
one Canadian and three U.S. export associations. Due to economic and
political factors, customers can change dramatically from year to year.
In 1995, principal customer countries included the People's Republic of
China, India, Thailand, Japan, Korea, Australia, New Zealand and
several Latin American and European countries. The Company maintains
an international marketing sales force which works with and provides a
variety of agronomic and technical services to foreign customers
including government agencies to help improve economic yields and
agricultural technology. For further information concerning the
Company's foreign operations and business, see the following captions
in Item 1:
Heading Matter
-----------------------------------------------------------------
Phosphate Rock Export sales of phosphate rock
Concentrated Phosphates Export sales of concentrated
phosphates
Potash Potash mining operations
-----------------------------------------------------------------
See also Note 20 - Operations by Geographic Area of Notes to
Consolidated Financial Statements for additional information.
WORKING CAPITAL
---------------
The working capital requirements for inventory and receivables of
the Company are not materially affected by seasonal or other factors
except for its high-value crop nutrient business. Sales of high-value
crop nutrients are largely concentrated in the spring season, requiring
a higher than average level of inventory to meet anticipated customer
demand for the product.
The Company does not extend long-term credit to customers. The
Company believes this non-extension of credit as well as its working
capital requirements are not materially different from the credit
policies and working capital requirements of its competitors.
RELATIONSHIP BETWEEN THE COMPANY AND MALLINCKRODT GROUP INC.
------------------------------------------------------------
The Company was at one time a wholly-owned subsidiary of
Mallinckrodt Group Inc. As a result of a public offering of the
Company's common stock by Mallinckrodt Group Inc. and stock purchases
by the Company, Mallinckrodt Group Inc.'s ownership interest in the
Company was completely eliminated by July 1991.
The Company continues to have contractual relationships with
Mallinckrodt Group Inc., which originated at the time the Company was a
subsidiary of Mallinckrodt Group Inc. These include arrangements under
which the Company operates an animal feed-grade phosphate facility,
that is located at IMC-Agrico's New Wales concentrated phosphate
complex, for Mallinckrodt and supplies utilities and the requirements
of phosphoric acid and phosphate rock for the facility. The Company
also operates for Mallinckrodt Group Inc. a mine to obtain limestone
for use in Mallinckrodt's animal feed plant. Each company has agreed
to indemnify the other against certain liabilities.
See "Product Line Information - Concentrated Phosphates - Animal
Feed Ingredients Agreements" for discussion of various supply
agreements with Mallinckrodt Group Inc.
Other agreements between Mallinckrodt Group Inc. and the Company
provide for a tax sharing arrangement relating in part to the period
from July 1, 1987 to February 2, 1988 when the Company was included in
Mallinckrodt Group Inc.'s consolidated income tax returns. Also, if a
subsequent adjustment by any taxing authority were to result in an
increase in the tax liability of Mallinckrodt Group Inc. or the Company
or any of their domestic or foreign subsidiaries and result in a
corresponding reduction in the tax liability of the other party, then
an equitable reimbursement by the benefited party will be paid to the
other party.
OTHER ACTIVITIES
----------------
Environmental Matters
---------------------
The Company is subject to various environmental laws and regulations
in the United States and Canada. Although significant capital
expenditures and operating costs have been and will continue to be
incurred based on these requirements, the Company does not believe they
have had a material adverse effect on its business. However, the
impact of future laws and regulations or of future changes to existing
laws and regulations cannot be predicted.
Environmental capital expenditures for the past fiscal year were
primarily related to air emission control, wastewater treatment and
solid waste disposal, and totaled approximately $5.0 million in fiscal
1995. In addition, expenditures for land reclamation activities
totaled $14.5 million. For fiscal 1996, the Company expects
environmental capital expenditures to be approximately $14.0 million
and expenditures for land reclamation activities to be approximately
$18.0 million.
Florida law may require that IMC-Agrico close one or more of its
unlined phosphogypsum stacks and/or associated cooling ponds in 2001,
if any are shown to be negatively impacting groundwater standards. IMC-
Agrico cannot predict at this time whether any of its stacks or ponds
will have to be closed; however, the cost of closing could be
significant.
The 1990 Clean Air Act Amendments require certain sources to control
emissions of hazardous air pollutants and by the year 2000 the
Environmental Protection Agency (U.S. EPA) will have promulgated
standards applicable to certain of the Company's operations. At this
time, the Company cannot estimate the costs of compliance with such
future standards.
In 1994, a large hole (believed to have been caused by a sinkhole)
was discovered during a routine inspection of the top of the north
phosphogypsum stack at IMC-Agrico's New Wales, Florida concentrated
phosphate production facility. The Florida Department of Environmental
Protection (DEP) was notified and IMC-Agrico pumped grout material into
the sinkhole, thereby plugging it and preventing further collapse at a
cost of approximately $6.8 million. DEP required IMC-Agrico to install
additional groundwater monitoring wells and samples from these wells
indicate that only sulfate exceeds Florida secondary drinking water
standards. Furthermore, it appears that the pumping action of the New
Wales production wells has caused impacts from the sinkhole to be
contained on-site to date.
As a result of earlier, unrelated findings of elevated sulfate
levels at the New Wales site, IMC-Agrico had been required by the
Central Florida Regional Planning Council (the Council) before
September 1997 to plug certain former recharge wells, believed to be
the source of elevated sulfate levels, and either to show that the
groundwater sulfate levels had returned to acceptable standards or to
line or relocate the cooling pond associated with the stack.
Monitoring data gathered between July 1993 and June 1994 evidenced a
consistent downward trend in the sulfate levels and the Council was
informed in writing of the success of plugging the recharge wells;
however, when the sinkhole discussed above was discovered, a sharp
increase in sulfate levels was noted. If the sulfate levels continue a
downward trend, as current data suggests, IMC-Agrico will likely meet
the September 1997 deadline. If the levels do not reach acceptable
standards, IMC-Agrico will request an extension of this deadline. If
IMC-Agrico were required to line or relocate the cooling pond, the
estimated cost could be between $35 million and $68 million.
Two earthen dams at IMC-Agrico's phosphate rock mining facilities in
Florida were breached during calendar 1994. The appropriate
governmental agencies were notified and corrective measures were
promptly implemented. Property damage to neighbors has been estimated
to be no more than $1.5 million; IMC-Agrico's insurers, apparently,
will cover some of this amount. The State issued a notice of
violation to IMC-Agrico for each breach, and, based on current
negotiations, potential penalties are not expected to be material.
The United States Comprehensive Environmental Response Compensation
and Liability Act (CERCLA), also known as "Superfund," imposes
liability, without regard to fault or to the legality of a party's
conduct, on certain categories of persons that are considered to have
contributed to the release of "hazardous substances" into the
environment. Currently, the Company is involved or concluding
involvement at between 15 and 20 Superfund sites. With two possible
exceptions, discussed below, at none of these sites is the Company's
liability currently expected to be material. As more information is
obtained regarding the sites and the PRPs (potentially responsible
parties) involved, this expectation may change.
At the Old Marsh Site and the Petroleum Products Site, the lack of
information regarding the Company's level of involvement makes it very
difficult to estimate the Company's share (if any) of investigative and
cleanup costs. In the former case, a corporation has brought a cost
recovery action against certain other PRPs for recovery of the $11.5
million spent to clean up the Old Marsh Site, located in Maricopa
County, Arizona. (Goodyear Farms, Inc. et al. v. Estrella Flying
Services, Inc. et al. (D. Ariz.)). The Company received a vague and
ambiguous summons and third-party complaint in this case. The Company
has requested additional information from counsel for third-party
plaintiffs and is considering how to proceed in this matter.
IMC-Agrico is one of 70 PRPs participating in the investigation of
the Petroleum Products Site and has a known allocation, to date, of
20,774 gallons of waste oil. As of August 1995, IMC-Agrico ranks 27th
out of the 70-member PRP group. Because the investigation of the site
is incomplete and the required remedy has not been determined, a
reliable cleanup cost cannot be estimated. However, estimates as high
as $40 to $50 million have been made. While IMC-Agrico does not
anticipate that the remedy will cost that much or that its share of the
costs will be de minimis, an estimate of IMC-Agrico's total
contribution cannot be made at this time.
Employees
---------
The Company had approximately 6,800 employees at June 30, 1995.
The work force was comprised of 1,900 salaried, 4,850 hourly, and 50
temporary or part-time employees.
Labor Relations
---------------
The Company has 11 collective bargaining agreements with three
international unions or their affiliated local chapters. Four
agreements covering 35 percent of the hourly work force were negotiated
during calendar 1994. Resulting wage and benefit increases were
consistent with competitive industry and community patterns. Four
agreements covering 40 percent of the hourly workers will expire or are
subject to renegotiation in calendar 1995. The Company has not
experienced a significant work stoppage in recent years and considers
its employee relations to be good.
Item 2. Properties.
Information regarding the plant and properties of the Company is
included in Item 1, "Business."
Item 3. Legal Proceedings.
Pursuant to certain agreements between the Company and Mallinckrodt
Group Inc., the Company has agreed to indemnify Mallinckrodt Group Inc.
against any liability or costs attributable to, among other things,
litigation involving the crop nutrient business, whether or not the
events which give rise to the litigation predated July 1, 1987.
In the ordinary course of its business, the Company is and will
from time to time be involved in routine litigation. Except for the
matters discussed below, none of the litigation pending or known to be
threatened at this time is regarded by the Company as potentially
material.
Sterlington Litigation
----------------------
Angus Chemical Company (Angus) and the Company are involved in
various litigation arising out of the Sterlington matter discussed in
Note 4 of Notes to Consolidated Financial Statements. Angus wants the
Company to accept responsibility for approximately 240 lawsuits
currently pending in Louisiana for injuries arising out of the
explosion, and to reimburse Angus for amounts that it has paid for
settled demands in connection with Sterlington. In addition, Angus is
seeking direct payment from the Company's insurers for certain damages.
The Company may have obligations to indemnify certain of the insurers
if Angus is successful in this case. The Company has established a
reserve to cover the estimated cost of resolving the remaining
third-party suits in Louisiana.
The Company continues to vigorously litigate each of the matters
arising out of the Sterlington explosion. A jury trial is scheduled to
commence in November, 1995 in Texas with respect to Angus' and the
Company's claims for contribution and indemnity for the settled
demands. Discovery is still not complete with respect to the lawsuits
scheduled for trial in November, 1995, and all of the other lawsuits
are in very early stages. The Company is also pursuing additional
recoveries from one of its insurance carriers relating to Sterlington.
Given the uncertainties inherent in litigation as well as the early
stages of preparation, the Company is unable to evaluate possible
defenses or make a reliable determination as to potential liability, if
any, with respect to the Sterlington matters.
In addition, Angus, in an action filed in federal court in Monroe,
Louisiana, in February 1995, is seeking compensation from the Company
pursuant to CERCLA for contamination to the environment prior to the
explosion from the storage tank on the grounds of the Sterlington
property. No trial date has been scheduled for this additional claim
by Angus against the Company. Given the early stages of this lawsuit,
the Company is unable to evaluate possible defenses or make a reliable
determination as to potential liability, if any.
Potash Antitrust Litigation
---------------------------
The Company has been named as a defendant, along with other
Canadian and U.S. potash producers, in lawsuits filed in federal court
in Minnesota and state court in California. The plaintiffs are
purchasers of potash who allege a price fixing conspiracy among North
American potash producers beginning in 1987 and continuing until the
filing of the lawsuits in 1994. Discovery has begun in the Minnesota
case, following certification of a class of all U.S. potash purchasers
as plaintiffs. While the Company believes that the allegations in the
complaints are without merit, until discovery is completed it is unable
to evaluate possible defenses or to make a reliable determination as to
the potential liability exposure, if any.
The Company has also received a U.S. grand jury subpoena seeking
information related to the sale of potash in the United States from
1986 to the present. The Company is cooperating with the government
and is assembling the information needed to comply with the subpoena.
As in the civil antitrust matters described above, while the Company
does not believe that violations of the antitrust laws have occurred,
the Company is unable to predict the outcome of the government
investigation or make a reliable determination as to the potential
exposure, if any.
Environmental Proceedings
-------------------------
Information regarding environmental proceedings is included in Item
1, "Business - Other Activities."
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted to a vote of security holders,
through the solicitation of proxies or otherwise, during the three
months ended June 30, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The ages and five-year employment history of the Company's
executive officers at June 30, 1995, were as follows:
Wendell F. Bueche
-----------------
Age 64. Chairman and Chief Executive Officer of the Company; President
of the Company from 1993 until 1994; joined the Company in 1993;
retired from full time employment from 1989 until 1993; member of the
Board of Directors of the Company since 1991.
James D. Speir
--------------
Age 55. President and Chief Operating Officer of the Company;
Executive Vice President, Operations from 1992 until 1994; Senior Vice
President from 1987 until 1992.
Robert C. Brauneker
-------------------
Age 57. Executive Vice President and Chief Financial Officer of the
Company; Senior Vice President and Chief Financial Officer from 1987
until 1992.
Robert M. Felsenthal
--------------------
Age 43. Senior Vice President, Business Development of the Company;
Vice President, Financial Controls and Planning from 1992 until 1994;
Vice President, Financial Planning and Analysis from 1990 until 1992.
C. Steven Hoffman
-----------------
Age 46. Senior Vice President of the Company; Senior Vice President,
Marketing from 1993 until 1994; Senior Vice President, Sales from 1992
until 1993; Senior Vice President, Wholesale Marketing from 1990 until
1992.
Peter Hong
----------
Age 37. Vice President and Treasurer of the Company; joined the
Company in 1994; Vice President of Citibank, N.A., Chicago from 1988
until 1994.
Allen C. Miller
---------------
Age 49. Senior Vice President, Human Resources of the Company; Vice
President, Human Resources from 1988 until 1994.
Marschall I. Smith
-------------------
Age 50. Senior Vice President, Secretary and General Counsel of the
Company; joined the Company in 1993; Senior Vice President and General
Counsel of American Medical International from 1992 until 1993;
Associate General Counsel of Baxter International from 1980 until 1992.
Brian S. Turner
---------------
Age 43. Vice President, North American Sales of the Company; Vice
President, Rainbow Division in 1994; General Manager, Rainbow Division
from 1991 until 1994; Area Sales Manager, Rainbow Division from 1985
until 1991.
All of the Company's executive officers are elected annually, with
the terms of the officers listed above to expire in October 1995. No
"family relationships," as that term is defined in Item 401(d) of
Regulation S-K, exist among any of the listed officers.
PART II.
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters.
Common Stock Prices and Dividends
---------------------------------
Quarter First Second Third Fourth
-----------------------------------------------------------------
Fiscal 1995
Dividends per common - $ .10 $ .10 $ .10
share
Common stock prices
High $44 5/8 44 3/4 52 1/2 54 5/8
Low 34 1/8 36 1/4 41 1/4 44 1/2
Quarter First Second Third Fourth
-----------------------------------------------------------------
Fiscal 1994
Dividends per common - - - -
share
Common stock prices
High $34 1/4 $47 1/4 $49 1/4 $44 1/4
Low 26 33 38 1/2 30 3/4
The Company's common stock is traded on the New York and Chicago
Stock Exchanges under the symbol IGL. As of August 31, 1995, the
Company had 29,628,619 shares of common stock outstanding, excluding
2,776,420 treasury shares. Common stock prices are from the composite
tape for New York Stock Exchange issues as reported in The Wall Street
Journal.
Pursuant to a Shareholders Rights Plan adopted by the Company in
June 1989, a dividend of one preferred stock purchase right (a Right)
for each outstanding share of common stock of the Company was issued on
July 12, 1989, to shareholders of record on that date. Under certain
conditions, each Right may be exercised to purchase one one-hundredth
of a share of Junior Preferred Stock, Series C, par value $1.00 per
share, at a price of $150. This preferred stock is designed to
participate in dividends and vote on essentially equivalent terms with
a whole share of common stock. The Rights become exercisable apart
from the common stock only if a person or group acquires 20 percent or
more of the common stock or makes a tender offer for 20 percent or more
of the outstanding common stock. However, the Rights do not become
exercisable if a person or group becomes the owner of 20 percent or
more of the common stock as a result of the purchase of common stock by
the Company which reduces the number of shares outstanding and
increases the proportionate number of shares owned by such person or
group to 20 percent or more, unless such person or group subsequently
becomes the owner of any additional shares of the common stock. In
addition, upon the acquisition by a person or group of 20 percent or
more of the common stock, each Right will entitle the holder to
purchase, at the then-current exercise price of the Right, a number of
shares of common stock having a market value at that time of twice the
exercise price. The Rights may be redeemed at a price of $.01 per
Right under certain circumstances prior to their expiration on June 21,
1999. No event during 1995 made the Rights exercisable.
In August 1995, the Company amended the Shareholders Rights Plan.
The amendment effectively reduced the triggering threshold of the
Rights from 20 percent to 15 percent.
As of August 31, 1995, the number of registered holders of common
stock as reported by the Company's registrar was 224. However, an
indeterminable number of shareholders beneficially own shares of the
Company's common stock through investment funds and brokers.
In April 1993, the Company's Board of Directors voted to suspend
cash dividend payments on its common stock as a result of business
conditions at the time. In December 1994, after a period of favorable
operating results, the Company's Board of Directors voted to reinstate
dividend payments. As a result, for the year ended June 30, 1995, the
Company paid $8.8 million of cash dividends. The Company's debt
instruments contain provisions which limit the Company's ability to pay
dividends on its common stock.
Item 6. Selected Financial Data.
Years ended June 30,
-----------------------------------------------------------------------
(In millions except per
share amounts) 1995(1) 1994(1) 1993(1) 1992(2) 1991(3)
------------------------------------------------------------------------
Net sales $1,924.0 $1,441.5 $ 897.1 $1,058.5 $1,131.2
Earnings (loss) before
income taxes, extraordinary
item and cumulative effect
of accounting changes 207.4 7.8 (177.3) 141.4 152.8
Provision (credit) for
income taxes 80.3 11.4 (57.3) 50.5 57.0
-------- -------- -------- ----------------
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes 127.1 (3.6) (120.0) 90.9 95.8
Extraordinary loss -
debt retirement (6.5) (25.2)
Cumulative effect of
accounting changes (5.9) (47.1) (165.5)
-------- -------- -------- ----------------
Net earnings (loss) $ 114.7 $ (28.8)$ (167.1)$ (74.6) $ 95.8
======== ======== ======== ================
Earnings (loss) per share:
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes $ 4.30 $ (.14)$ (5.44) $ 4.12$ 3.85
Extraordinary loss - debt
retirement (.22) (1.00)
Cumulative effect of
accounting changes (.20) (2.13) (7.50)
-------- -------- -------- ----------------
Net earnings (loss) $ 3.88 $ (1.14)$ (7.57) $ (3.38)$ 3.85
======== ======== ======== ================
Dividends per share $ .30 - $ .81 $ 1.08$ 1.08
Book value per share $ 25.84 $ 22.23 $ 19.51 $ 27.91$ 32.24
OTHER DATA
June 30,
-----------------------------------------------------------------------
(Dollars in millions) 1995 1994 1993 1992 1991
-----------------------------------------------------------------------
Total assets $2,693.2 $2,778.3 $2,055.6 $1,838.4 $1,739.3
Working capital 252.4 324.6 195.1 80.2 48.1
Working capital ratio 2.0:1 2.6:1 1.8:1 1.4:1
1.2:1
Long-term debt - less
current maturities $ 515.5 $ 688.1 $ 893.4 $ 630.6 $ 607.7
Total debt 524.3 689.2 926.7 642.8 630.6
Stockholders' equity 762.9 655.0 430.4 615.4 698.6
Total capitalization 1,287.2 1,344.2 1,357.1 1,258.2 1,329.2
Debt/total capitalization 40.7% 51.3% 68.3% 51.1%
47.4%
Cash provided by
operating activities $ 488.6 $ 143.1 $ 26.2 $ 122.4 $ 174.4
Capital expenditures 64.2 40.7 106.1 177.7 168.5
Cash dividends paid 8.8 - 17.8 23.8 28.0
(1) See "Notes to Consolidated Financial Statements" for a description
of non-recurring items and accounting changes. Beginning in 1994,
operating results reflect the consolidation of the joint venture
partnership formed on July 1, 1993 with FRP.
(2) Includes a gain of $34.2 million, $18.2 million after taxes, from
the Company's sale of its Sterlington, Louisiana, ammonia
production facility, a charge of $5.3 million, $3.3 million after
taxes, from the temporary shutdown and mothballing of the Company's
uranium production facilities, and a charge of $165.5 million for
the cumulative effect on prior years of adopting SFAS No. 109,
"Accounting for Income Taxes" on July 1, 1991.
(3) Includes a gain of $17.9 million, $11.2 million after taxes, from
the installment sale of certain potash reserve interests to the
U.S. government.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
1995 vs. 1994
-------------
IMC Global's net earnings for the year ended June 30, 1995 totaled
$114.7 million, or $3.88 per share, up significantly over last year
when the Company reported a net loss of $28.8 million, or $1.14 per
share. Capitalizing on ideal business conditions throughout the year,
IMC Global recorded the highest sales and second best earnings in its
corporate history.
Included in 1995 operating results were a one-time charge of $5.9
million, or $.20 per share, for the cumulative effect on prior years of
a change in accounting for postemployment benefits resulting from the
adoption of Statement of Financial Accounting Standards (SFAS) No. 112
on July 1, 1994 and an extraordinary charge of $6.5 million, or $.22
per share, related to the early extinguishment of debt. In 1994, the
loss included an extraordinary charge of $25.2 million, or $1.00 per
share, related to the early extinguishment of debt; a charge of $20.3
million, $12.4 million after taxes, or $.49 per share, related to the
write-down of the Company's investment in an oil and gas joint venture;
and a charge of $4.1 million, or $.16 per share, for an adjustment to
the Company's net deferred tax liability for the effect of changes in
U.S. corporate tax rates. Partially offsetting these charges was a
gain of $1.9 million, or $.07 per share, resulting from the sale by
IMC-Agrico of its Florida cattle ranch (IMC-Agrico still retains the
rights to phosphate rock reserves located on this property). See Notes
to Consolidated Financial Statements for further discussion of these
non-recurring items.
Net sales for 1995 were $1,924.0 million, a 34 percent increase over
1994 when sales were $1,441.5 million. Sales were higher primarily due
to continued strong concentrated phosphate demand and record purchases
of potash and concentrated phosphates by China. Product line sales
information may be found on page 2 of this annual report.
Gross margins increased $240.9 million, or 116 percent over last
year, primarily due to higher margins for concentrated phosphates, a
$189 million increase; potash, a $30 million increase; high-value crop
nutrients, a $5 million increase, and phosphate rock, a $4 million
increase.
Concentrated phosphate margins increased significantly primarily due
to higher prices ($217 million) and volume ($57 million) as average
diammonium phosphate (DAP) sales realizations increased 25 percent over
the same period a year ago. Domestically, sales volume was marginally
lower, due primarily to abnormally wet weather in the spring which
delayed fieldwork, planting and, therefore, crop nutrient shipments.
However, record purchases by China resulted in a 38 percent increase in
export volume when compared to last year. Partially offsetting the
price and volume increases were higher production costs ($85 million)
primarily due to higher raw material costs and, to a lesser degree,
remediation costs associated with a sinkhole at the IMC-Agrico's New
Wales concentrated phosphate production facility in Florida. See
"Other Matters" below and Note 5 of Notes to Consolidated Financial
Statements for further discussion of the sinkhole.
Potash margins also increased primarily due to higher sales volume
($12 million) as export shipments rose 37 percent, reflecting record
potash purchases by China. In addition, domestic potash shipments rose
5 percent over a year ago. As a result, producer inventory levels were
below normal and resulted in higher prices ($14 million) as demand
increased during the year. Production costs were lower ($4 million)
due primarily to lower water inflow control spending at the Company's
potash mines in Canada.
High-value crop nutrient margins increased primarily due to
increased price ($6 million) and sales volume ($3 million) as the
Company's Rainbow division recorded record shipments (a 13 percent
increase) primarily due to increased plantings of cotton, corn and hay,
all of which use premium, higher-margin crop nutrients. Partially
offsetting these increases were higher production costs ($4 million)
primarily due to higher raw material costs.
Phosphate rock margins increased primarily due to increased sales
volume and price ($12 million), mostly due to the addition of a new
long-term supply contract to 1995 operating results. Partially
offsetting the increase were higher production costs ($8 million) as
excessive rainfalls in Florida early in the first half of fiscal 1995
affected phosphate rock production levels. In addition, costs were
incurred in the startup of IMC-Agrico's previously idled Payne Creek
mine, while repair and cleanup costs associated with earthen dam
breaches at IMC-Agrico's Payne Creek and Hopewell phosphate mining
facilities in Florida also contributed to higher costs.
Selling, general and administrative expenses increased $9.2 million
over the same period a year ago primarily due to higher legal expenses
and charges related to shifting the marketing and administrative
functions of PhosChem to its member companies.
Other operating income and expense in 1995 included a gain of $5.0
million from the sale of land in Florida and $3.0 million from the
amortization of a deferred gain resulting from the exchange of the
Company's phosphate business in 1994 for a 56.5 percent interest in
IMC-Agrico. In 1994, other operating income and expense included $16.0
million (including $12.7 million related to finished goods inventory)
of such amortization.
Interest charges in 1995 were $28.8 million lower than last year as
the Company purchased and retired $165.0 million of its high-cost,
long-term indebtedness throughout the year.
1994 vs. 1993
-------------
IMC Global's results of operations for the year ended June 30, 1994
showed significant improvement over the previous year. In fiscal 1994,
the Company incurred a net loss of $28.8 million, or $1.14 per share.
This compared to a net loss of $167.1 million. or $7.57 per share, a
year ago.
In 1994, the loss included an extraordinary charge of $25.2 million,
or $1.00 per share, related to the early extinguishment of debt; a
charge of $20.3 million, $12.4 million after taxes, or $.49 per share,
for the write-down of an oil and gas investment; and a charge of $4.1
million, or $.16 per share, for an adjustment to the Company's deferred
tax liability for the effect of changes in U.S. corporate tax rates.
Partially offsetting these charges was a gain of $1.9 million, or $.07
per share, resulting from the sale by IMC-Agrico of its Florida cattle
ranch (IMC-Agrico still retains the rights to phosphate rock reserves
located on this property). See Notes to Consolidated Financial
Statements for further discussion of these non-recurring items.
In 1993, the loss included a one-time charge of $47.1 million, or
$2.13 per share, for the cumulative effect on prior years of a change
in accounting for postretirement benefits as a result of the adoption
of SFAS No. 106 as of July 1, 1992; a charge of $109.1 million, or
$4.94 per share, from the settlement of litigation resulting from an
explosion at a Sterlington, Louisiana, nitroparaffins plant managed by
the Company; and a charge of $11.4 million, or $.52 per share, related
to the settlement of an insurance claim receivable resulting from a
water inflow at the Company's potash mines in Canada. See Notes to
Consolidated Financial Statements for further discussion of these non-
recurring items.
Excluding the non-recurring items described above, the Company had
net earnings in 1994 of $11.0 million, or $.44 per share, compared to
1993 earnings of $.5 million, or $.02 per share.
IMC-Agrico, a joint venture partnership between IMC, a subsidiary of
the Company, and FRP, began operations July 1, 1993 and is consolidated
for financial reporting purposes. Comparisons between the years ended
June 30, 1994 and 1993 have been made, where applicable, on a pro forma
basis assuming IMC-Agrico had begun operations on July 1, 1992.
Net sales for 1994 were $1,441.5 million, compared to $897.1 million
in 1993. On a pro forma basis, 1993 sales would have been $1,470.3
million. The sales decline in 1994 as compared to 1993 on a pro forma
basis reflected the Company's decision to reduce production at its
concentrated phosphate production facilities consistent with its policy
to better match production with demand.
Gross margins increased $82.7 million from 1993. On a pro forma
basis, gross margins would have increased $90.1 million, or 77 percent,
primarily due to higher margins for concentrated phosphates.
Concentrated phosphate margins increased primarily due to higher
prices throughout the year. DAP sales realizations were, at year end,
50 percent higher than last year as DAP prices rose from a 20-year low
of $100 per ton. Other related concentrated phosphate products showed
similar price improvements. Several factors contributed to this rise
in prices. Domestic crop nutrient consumption increased 4 percent as
farmers sought to recover from 1993's generally poor harvest due
primarily to flooding in the Midwest. Internationally, China, a major
concentrated phosphate customer, increased crop nutrient imports after
a reduction in exchange rate subsidies resulted in a 50 percent drop in
U.S. DAP imports in 1993. The Former Soviet Union reduced its exports
of crop nutrient products dramatically over 1993 when, in an attempt to
increase foreign exchange and hard currency reserves, it sold
concentrated phosphates at below market price levels. Unit production
costs were lower when compared to last year, in spite of sharply higher
ammonia prices, primarily due to lower raw material costs for sulphur.
Potash margins remained largely unchanged as favorable production
costs ($11 million), primarily from lower water inflow control
spending, were almost totally offset by a 9 percent decrease in prices
($9 million) and lower sales volume ($1 million). Sulphur production
at Main Pass continued to exceed design capacity and averaged 6,250
tons per day by the end of fiscal 1994.
Selling, general and administrative costs increased $5.6 million
primarily resulting from higher legal expenses and increased sales
commissions.
Interest charges were $36.2 million higher than last year as a
result of higher average debt balances and lower capitalized interest
as the Main Pass sulphur mine became operational in 1994.
The Company's effective tax rate of 146.2 percent for 1994 reflected
the impact of foreign earnings (at higher foreign tax rates) and the
inclusion of non-recurring items which impacted domestic operating
results for 1994. If such non-recurring items (described above) were
excluded, the effective tax rate would have been 53.9 percent. See
Note 15 of Notes to Consolidated Financial Statements for further
discussion of income taxes.
CAPITAL RESOURCES AND LIQUIDITY
Working capital at June 30, 1995 was $252 million compared to $325
million at June 30, 1994. The decrease was due primarily to lower
accounts receivable as a result of the sale of $50 million receivable
interests discussed in Note 7 of Notes to Consolidated Financial
Statements. The Company's working capital ratio at June 30, 1995 was
2.0 versus 2.6 at June 30, 1994. Debt to total capitalization improved
to 40.7 percent at June 30, 1995 compared to 51.3 percent a year ago,
which, along with increased earnings, reflected management's efforts to
reduce high-cost, long-term indebtedness. Total long-term debt at June
30, 1995 was $524.3 million, a $164.9 million reduction when compared
to June 30, 1994.
At June 30, 1995, the Company had an unsecured revolving credit
facility (the Working Capital Facility) under which the Company could
borrow up to $100 million for general corporate purposes until June 30,
1996. At June 30, 1995, $29.6 million was drawn down under the Working
Capital Facility in the form of letters of credit principally to
support industrial revenue bonds and other debt and credit risk
guarantees. There were no other borrowings under the Working Capital
Facility at June 30, 1995.
In July 1995, the Company entered into a new unsecured revolving
credit facility (the New Credit Facility) with a group of banks which
extended the length and credit limit of the Working Capital Facility.
Under the terms of the New Credit Facility, the Company may borrow up
to $150 million until July 31, 2000.
IMC-Agrico also has an agreement with a group of banks to provide it
with a $75 million unsecured revolving credit facility (the Partnership
Working Capital Facility) initially until February 1997. At June 30,
1995, $12.5 million was drawn down in the form of letters of credit.
There were no other borrowings under this agreement at June 30, 1995.
The Working Capital Facility and certain note obligations contain
provisions which restrict the Company's ability to make capital
expenditures and dispose of assets, limit the payment of dividends or
other distributions to stockholders, and limit the incurrence of
additional indebtedness. The Working Capital Facility also contains
financial ratios and tests which must be met with respect to interest
and fixed charge coverage, tangible net worth, working capital and debt
to total capitalization. In addition, the Partnership Working Capital
Facility contains financial ratios and tests with respect to fixed
charge coverage, current ratio and minimum net partners' capital
requirements. The Partnership Working Capital Facility also places
limitations on indebtedness of IMC-Agrico and restricts the ability of
IMC-Agrico to make cash distributions in excess of Distributable Cash
(as defined). The Company and IMC-Agrico are currently in compliance
with all of the covenants in the indentures and other agreements
governing their indebtedness.
In October 1994, IMC-Agrico entered into a one-year agreement with a
financial institution to sell, on an ongoing basis, an undivided
percentage interest in a designated pool of receivables in an amount
not to exceed $75 million. At June 30, 1995, IMC-Agrico had sold $50
million of such receivable interests. The Company's portion of the
proceeds from the initial sale of receivable interests ($32.5 million)
was used primarily to retire long-term debt.
The Company estimates that its capital expenditures for 1996 will
total approximately $81 million (including $59 million by IMC-Agrico
and $14 million relating to environmental matters). The Company
expects to finance these expenditures (including its portion of
IMC-Agrico's capital expenditures) from operations. See "Other
Matters" for a discussion of environmental capital expenditures.
Since December 1985, the Company has experienced an inflow of water
into one of its two interconnected potash mines in Saskatchewan,
Canada. As a result, the Company has suffered losses and has been
forced to undertake substantial remedial efforts to stop the flooding.
The Company's share of expenditures for ongoing remedial efforts
totaled $14 million in 1995 and is expected to total approximately $15
million in 1996.
The Company has significantly reduced the water inflow since the
initial discovery and has been able to meet all sales obligations and
requirements from production at the mines. Despite the relative
success of such measures, there can be no assurance that the amounts
required for remedial efforts in future years will not increase or that
inflows will not increase to a level which would cause the Company to
abandon the mines. There can be no assurance that such action would
not have a material adverse effect on the Company. However, the
long-term outlook of the water inflow has caused the Company to
consider alternatives to its current mining operations and studies are
under way in this regard. Any solution to the water inflow situation
at the mines could result in substantial capital expenditures and/or
charges to operations. The Company does not presently have in place,
nor can it reasonably obtain, any insurance to cover damage to its
underground potash operations.
In July 1994, IMC-Agrico entered into an option agreement with
Mississippi Chemical Corporation (MCC) to purchase 9,472 acres of land
in Florida (the Property). The Property, along with 2,508 acres of
land previously purchased from MCC (the Adjacent Property), contains
approximately 87.5 million tons of phosphate rock reserves. The option
period began July 16, 1994 and will expire January 16, 1998. During
this time, IMC-Agrico may exercise its option to purchase the Property
or it may continue to make annual payments ranging from $1.0 million to
$3.0 million to keep the option in effect. If IMC-Agrico exercises its
option prior to its expiration, the purchase price will be financed by
MCC over a six-year term at interest rates approximating IMC-Agrico's
borrowing rate. If IMC-Agrico fails to make an option payment during
the option period or fails to exercise its option by January 16, 1998,
MCC has the right to sell the Property to IMC-Agrico , and IMC-Agrico
will be obligated to purchase the property for a specified amount. If
the option to purchase the Property is not exercised by IMC-Agrico and
MCC does not exercise its right to sell the Property to IMC-Agrico, MCC
has the right to purchase the Adjacent Property from IMC-Agrico for a
specified amount. In fiscal 1995, IMC-Agrico paid $3.0 million to keep
the option in effect.
During fiscal 1995, the Company utilized $488.6 million of cash from
operations to distribute $228.1 million of cash sharing distributions
to FRP, $165.0 million to purchase and retire portions of the Company's
outstanding Senior Notes and $64.2 million to fund capital
expenditures. Further information on the Company's consolidated cash
flows for the past three years may be found on the Consolidated
Statement of Cash Flows on page 34 of this annual report.
In April 1993, the Company's Board of Directors voted to suspend
cash dividend payments on its common stock as a result of business
conditions at the time. In December 1994, after a period of favorable
operating results, the Company's Board of Directors voted to reinstate
dividend payments. As a result, for the year ended June 30, 1995, the
Company paid $8.8 million of cash dividends. The Company's debt
instruments contain provisions which limit the Company's ability to pay
dividends on its common stock.
The Company does not consider the impact of inflation to be
significant in the business in which it operates.
JOINT VENTURE PARTNERSHIP
On July 1, 1993, IMC and FRP contributed their respective phosphate
businesses, including the mining and sale of phosphate rock and the
production, distribution and sale of concentrated phosphates, uranium
oxide and related products, to a joint venture partnership in return
for a 56.5 percent and 43.5 percent economic interest, respectively, in
IMC-Agrico , over the term of the partnership. IMC-Agrico is governed
by a Policy Committee which has equal representation from each company
and is being operated by an affiliate of the Company. The partnership
agreement contains a cash sharing arrangement under which distributable
cash, as defined in the agreement, was shared at a ratio of 45.0
percent and 55.0 percent in 1995 to IMC and FRP, respectively, and will
be adjusted thereafter until 1998 when the sharing ratio will be fixed
at 59.4 percent and 40.6 percent to IMC and FRP, respectively.
SULPHUR AND OIL & NATURAL GAS VENTURES
The Company has a 25 percent interest in the Main Pass 299 sulphur
mine located in the Gulf of Mexico. In fiscal 1995, FRP, the joint
venture operator, produced sulphur at levels which averaged 6,263 long
tons per day or 2.3 million long tons per year. This production level
exceeded the plant's designed operating rate of 5,500 long tons per
day. Using a hot-water injection process, Main Pass is one of the most
thermally efficient sulphur mines ever operated. The Company's share
of sulphur produced is used to satisfy a portion of the Company's
obligations to supply sulphur to IMC-Agrico for the production of
concentrated phosphates. At June 30, 1995, the underwater sulphur
deposit contained an estimated 69.2 million long tons of recoverable
sulphur, or 17.3 million long tons net to the Company, before
royalties.
Oil and gas reserves which are located in the same immediate area
are also being developed. At June 30, 1995, the field contained proved
and probable reserves of 3.2 million barrels of oil. All gas
production is consumed internally in heating water for extraction of
sulphur.
OTHER MATTERS
The Company is subject to various environmental laws and regulations
in the United States and Canada. Although significant capital
expenditures and operating costs have been and will continue to be
incurred based on these requirements, the Company does not believe they
have had a material adverse effect on its business. However, the
impact of future laws and regulations or of future changes to existing
laws and regulations cannot be predicted.
Environmental capital expenditures for the past fiscal year were
primarily related to air emission control, wastewater treatment and
solid waste disposal, and totaled approximately $5.0 million in fiscal
1995. In addition, expenditures for land reclamation activities
totaled $14.5 million. For fiscal 1996, the Company expects
environmental capital expenditures to be approximately $14.0 million
and expenditures for land reclamation activities to be approximately
$18.0 million.
Florida law may require that IMC-Agrico close one or more of its
unlined phosphogypsum stacks and/or associated cooling ponds in 2001,
if any are shown to be negatively impacting groundwater standards. IMC-
Agrico cannot predict at this time whether any of its stacks or ponds
will have to be closed; however, the cost of closing could be
significant.
The 1990 Clean Air Act Amendments require certain sources to control
emissions of hazardous air pollutants and by the year 2000 the
Environmental Protection Agency (U.S. EPA) will have promulgated
standards applicable to certain of the Company's operations. At this
time, the Company cannot estimate the costs of compliance with such
future standards.
In 1994, a large hole (believed to have been caused by a sinkhole)
was discovered during a routine inspection of the top of the north
phosphogypsum stack at IMC-Agrico's New Wales, Florida concentrated
phosphate production facility. The Florida Department of Environmental
Protection (DEP) was notified and IMC-Agrico pumped grout material into
the sinkhole, thereby plugging it and preventing further collapse at a
cost of approximately $6.8 million. DEP required IMC-Agrico to install
additional groundwater monitoring wells and samples from these wells
indicate that only sulfate exceeds Florida secondary drinking water
standards. Furthermore, it appears that the pumping action of the New
Wales production wells has caused impacts from the sinkhole to be
contained on-site to date.
As a result of earlier, unrelated findings of elevated sulfate
levels at the New Wales site, IMC-Agrico had been required by the
Central Florida Regional Planning Council (the Council) before
September 1997 to plug certain former recharge wells, believed to be
the source of elevated sulfate levels, and either to show that the
groundwater sulfate levels had returned to acceptable standards or to
line or relocate the cooling pond associated with the stack.
Monitoring data gathered between July 1993 and June 1994 evidenced a
consistent downward trend in the sulfate levels and the Council was
informed in writing of the success of plugging the recharge wells;
however, when the sinkhole discussed above was discovered, a sharp
increase in sulfate levels was noted. If the sulfate levels continue a
downward trend, as current data suggests, IMC-Agrico will likely meet
the September 1997 deadline. If the levels do not reach acceptable
standards, IMC-Agrico will request an extension of this deadline. If
IMC-Agrico were required to line or relocate the cooling pond, the
estimated cost could be between $35 million and $68 million.
Two earthen dams at IMC-Agrico's phosphate rock mining facilities in
Florida were breached during calendar 1994. The appropriate
governmental agencies were notified and corrective measures were
promptly implemented. Property damage to neighbors has been estimated
to be no more than $1.5 million; IMC-Agrico's insurers, apparently,
will cover some of this amount. The State issued a notice of
violation to IMC-Agrico for each breach, and, based on current
negotiations, potential penalties are not expected to be material.
CERCLA, also known as "Superfund," imposes liability, without regard
to fault or to the legality of a party's conduct, on certain categories
of persons that are considered to have contributed to the release of
"hazardous substances" into the environment. Currently, the Company is
involved or concluding involvement at between 15 and 20 Superfund
sites. With two possible exceptions, discussed below, at none of these
sites is the Company's liability currently expected to be material. As
more information is obtained regarding the sites and the PRPs
(potentially responsible parties) involved, this expectation may
change.
At the Old Marsh Site and the Petroleum Products Site, the lack of
information regarding the Company's level of involvement makes it very
difficult to estimate the Company's share (if any) of investigative and
cleanup costs. In the former case, a corporation has brought a cost
recovery action against certain other PRPs for recovery of the $11.5
million spent to clean up the Old Marsh Site, located in Maricopa
County, Arizona. (Goodyear Farms, Inc. et al. v. Estrella Flying
Services, Inc. et al. (D. Ariz.)). The Company received a vague and
ambiguous summons and third-party complaint in this case. The Company
has requested additional information from counsel for third-party
plaintiffs and is considering how to proceed in this matter.
IMC-Agrico is one of 70 PRPs participating in the investigation of
the Petroleum Products Site and has a known allocation, to date, of
20,774 gallons of waste oil. As of August 1995, IMC-Agrico ranks 27th
out of the 70-member PRP group. Because the investigation of the site
is incomplete and the required remedy has not been determined, a
reliable cleanup cost cannot be estimated. However, estimates as high
as $40 to $50 million have been made. While IMC-Agrico does not
anticipate that the remedy will cost that much or that its share of the
costs will be de minimis, an estimate of IMC-Agrico's total
contribution cannot be made at this time.
Item 8. Financial Statements and
Supplementary Data.
Page
----
Report of Independent Auditors 31
Consolidated Statement of Operations 32
Consolidated Balance Sheet 33
Consolidated Statement of Cash Flows 34
Consolidated Statement of Changes in Stockholders' Equity 35
Notes to Consolidated Financial Statements 36-51
Supplementary Financial Information - Quarterly
Results (Unaudited) 52-53
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
of IMC Global Inc.
We have audited the accompanying consolidated balance sheet of IMC
Global Inc. (formerly IMC Fertilizer Group, Inc.) as of June 30, 1995
and 1994, and the related consolidated statements of operations, cash
flows, and changes in stockholders' equity for each of the three years
in the period ended June 30, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of IMC Global Inc. at June 30, 1995 and 1994, and the consolidated
results of its operations and its cash flows for each of the three
years in the period ended June 30, 1995, in conformity with generally
accepted accounting principles.
As discussed in the Notes to Consolidated Financial Statements, the
Company changed its method of accounting for postemployment benefits in
1995.
Ernst & Young LLP
Chicago, Illinois
July 26, 1995
IMC GLOBAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In millions except per share amounts)
Years ended June 30,
1995 1994 1993
-----------------------------------------------------------------------
Net sales $1,924.0 $1,441.5 $ 897.1
Cost of goods sold 1,475.5 1,233.9 772.2
-------- -------- --------
Gross margins 448.5 207.6 124.9
Selling, general and administrative expenses 75.2 66.0 60.4
Sterlington litigation settlement, net 169.1
Other operating (income) and expense, net (8.5) (25.7) 25.1
-------- -------- --------
Operating earnings (loss) 381.8 167.3 (129.7)
Equity in (earnings) loss of oil and gas
joint venture (3.1) 20.0 (3.3)
Interest earned and other non-operating
(income) and expense, net (3.1) 3.4 6.1
Interest charges 52.2 81.0 44.8
-------- -------- --------
Earnings (loss) before minority
interest and items noted below 335.8 62.9 (177.3)
Minority interest in earnings of
consolidated joint venture 128.4 55.1
-------- -------- --------
Earnings (loss) before items noted below 207.4 7.8 (177.3)
Provision (credit) for income taxes 80.3 11.4 (57.3)
-------- -------- --------
Earnings (loss) before extraordinary
item and cumulative effect of
accounting changes 127.1 (3.6) (120.0)
Extraordinary loss - debt retirement (6.5) (25.2)
Cumulative effect on prior years of
changes in accounting for post-
employment benefits in 1995 and
postretirement benefits other than
pensions in 1993 (5.9) (47.1)
-------- -------- --------
Net earnings (loss) $ 114.7 $ (28.8) $(167.1)
======== ======== ========
Earnings (loss) per share:
Earnings (loss) before extraordinary
item and cumulative effect of
accounting changes $ 4.30 $ (.14) $ (5.44)
Extraordinary loss - debt retirement (.22) (1.00)
Cumulative effect of accounting
changes (.20) (2.13)
-------- -------- --------
Net earnings (loss) $ 3.88 $ (1.14) $ (7.57)
======== ======== ========
(See Notes to Consolidated Financial Statements)
IMC GLOBAL INC.
CONSOLIDATED BALANCE SHEET
(Dollars in millions except per share amounts)
At June 30,
Assets 1995 1994
-----------------------------------------------------------------
Current assets:
Cash and cash equivalents $ 196.1 $ 169.0
Receivables, net 48.6 109.1
Inventories
Products (principally finished) 185.6 185.5
Operating materials and supplies 68.8 67.6
-------- --------
254.4 253.1
Prepaid expenses 5.3 2.8
-------- --------
Total current assets 504.4 534.0
Investment in oil and gas joint venture 16.0 19.0
Property, plant and equipment 3,455.2 3,394.1
Accumulated depreciation and depletion (1,587.0) (1,466.7)
-------- --------
Net property, plant and equipment 1,868.2 1,927.4
Deferred income taxes 241.2 223.6
Other assets 63.4 74.3
-------- --------
Total assets $2,693.2 $2,778.3
======== ========
Liabilities and Stockholders' Equity
-----------------------------------------------------------------
Current liabilities:
Accounts payable $ 106.0 $ 110.3
Accrued liabilities 137.2 98.0
Current maturities of long-term debt 8.8 1.1
-------- --------
Total current liabilities 252.0 209.4
Long-term debt, less current maturities 515.5 688.1
Deferred income taxes 399.2 372.6
Other noncurrent liabilities 283.7 275.1
Minority interest in consolidated
joint venture 479.9 578.1
Stockholders' equity:
Common stock, $1 par value,
authorized 50,000,000 shares;
issued 32,302,029 and 32,232,865
shares in 1995 and 1994, respectively 32.3 32.2
Capital in excess of par value 738.4 736.2
Retained earnings (deficit) 99.6 (6.3)
Treasury stock, at cost, 2,776,420
and 2,770,259 shares in 1995 and 1994,
respectively (107.4) (107.1)
-------- --------
Total stockholders' equity 762.9 655.0
-------- --------
Total liabilities and stockholders' equity$2,693.2 $2,778.3
======== ========
(See Notes to Consolidated Financial Statements)
IMC GLOBAL INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
Years ended June 30,
1995 1994 1993
-----------------------------------------------------------------------
Cash Flows from Operating Activities
------------------------------------
Net earnings (loss) $ 114.7 $ (28.8) $(167.1)
Adjustments to reconcile net earnings
(loss) to net cash provided by operating
activities:
Depreciation, depletion and amortization 134.4 122.4 61.5
Minority interest in earnings of
consolidated joint venture 128.4 55.1
Postemployment employee benefits 9.5
Deferred income taxes 9.0 1.6 (78.4)
Cash distributions in excess of equity
in operating results of oil and gas
joint venture (including a $20.3 write-
down in 1994) 4.7 36.1 18.6
Postretirement employee benefits 8.4 82.8
Sterlington litigation settlement (80.0) 80.0
Loss on insurance claim settlement 11.4
Other charges and credits, net (6.3) (42.9) 8.0
Changes in:
Receivables, net 60.5 81.2 22.3
Inventories (1.3) 46.6 3.5
Prepaid expenses (2.5) 9.5 (2.3)
Accounts payable (1.7) (32.3) (18.9)
Accrued liabilities 39.2 (33.8) 4.8
------- ------- -------
Net cash provided by operating
activities 488.6 143.1 26.2
------- ------- -------
Cash Flows from Investing Activities
------------------------------------
Capital expenditures (64.2) (40.7) (106.1)
Sales of property, plant and equipment 6.2 19.9 .5
Investment in oil and gas joint venture (1.7) (3.3)
------- ------- -------
Net cash used in investing activities (59.7) (20.8) (108.9)
------- ------- -------
Net cash provided (used) before
financing activities 428.9 122.3 (82.7)
------- ------- -------
Cash Flows from Financing Activities
------------------------------------
Joint venture cash distributions to FRP (228.1) (146.8)
Payments of long-term debt (166.0) (349.0) (66.9)
Proceeds from issuance of long-term
debt, net 1.1 175.4 246.4
Cash dividends paid (8.8) (17.8)
Issuances of common stock from treasury 255.5
------- ------- -------
Net cash (used in) provided by
financing activities (401.8) (64.9) 161.7
------- ------- -------
Net increase in cash and cash equivalents 27.1 57.4 79.0
Cash and cash equivalents-beginning of year 169.0 111.6 32.6
------- ------- -------
Cash and cash equivalents-end of year $ 196.1 $ 169.0 $ 111.6
======= ======= =======
Supplemental cash flow disclosures:
Interest paid $ 53.8 $ 78.0 $ 73.0
Income taxes paid (refunded) $ 44.5 $ (4.8) $ 8.8
(See Notes to Consolidated Financial Statements)
IMC GLOBAL INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In millions except per share amounts)
Capital Retained
Common in Excess Earnings Treasury
Stock of Par Value (Deficit) Stock
-----------------------------------------------------------------------
Balance at June 30, 1992 $ 32.1 $ 768.0 $ 207.4 $(392.1)
Net loss (167.1)
Dividends ($.81 per share) (17.8)
Restricted stock awards .1 .3 (.6)
Stock options exercised .1
------- ------- ------- -------
Balance at June 30, 1993 32.2 768.4 22.5 (392.7)
Net loss (28.8)
Sale of common stock (34.1) 289.7
Restricted stock awards 1.7 (4.1)
Stock options exercised .2
------- ------- ------- -------
Balance at June 30, 1994 32.2 736.2 (6.3) (107.1)
Net earnings 114.7
Dividends ($.30 per share) (8.8)
Restricted stock awards .3
Stock options exercised .1 1.9 (.3)
------- ------- ------- -------
Balance at June 30, 1995 $ 32.3 $ 738.4 $ 99.6 $(107.4)
======= ======= ======= =======
(See Notes to Consolidated Financial Statements)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions except as otherwise indicated)
1. Business of the Company
-----------------------
IMC Global Inc. (the Company), formerly IMC Fertilizer Group, Inc.,
which operates in a single industry segment, is the parent corporation
of several subsidiaries and joint venture operations which together
comprise one of the world's leading producers of crop nutrients for the
international agricultural community. The Company mines and processes
potash in the United States and Canada, and is a joint-venture partner
in IMC-Agrico Company, the nation's largest producer, marketer and
distributor of phosphate crop nutrients. The Company also manufactures
and markets specialized, high-value crop nutrients through its Rainbow
division and through interests in other joint ventures, produces
sulphur and oil & natural gas.
2. Accounting Policies
-------------------
Basis of Presentation
---------------------
The consolidated financial statements include the accounts of IMC
Global Inc. and all subsidiaries which are more than 50 percent owned
and controlled. The Consolidated Financial Statements also include the
accounts of IMC-Agrico, a joint venture partnership with FRP formed on
July 1, 1993. The Company also consolidates its proportionate share of
the assets and liabilities of the Company's sulphur venture, while its
25 percent investment in its oil and natural gas venture is accounted
for using the equity method. All significant intercompany accounts and
transactions are eliminated in consolidation. Certain amounts in the
consolidated financial statements for periods prior to June 30, 1995
have been reclassified to conform to the current presentation. The
Company's fiscal year ends June 30.
Cash Equivalents
----------------
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash equivalents which
are reflected at their approximate fair value. The effect of foreign
currency exchange rate fluctuations on the total cash and cash
equivalents balance was not significant.
Inventories
-----------
Inventories are valued at the lower of cost or market (net
realizable value). Cost for substantially all inventories is
determined on a cumulative annual average basis.
Property, Plant and Equipment
-----------------------------
Property, plant and equipment are carried at cost. Cost of
significant assets includes capitalized interest incurred during the
construction and development period. Expenditures for replacements and
improvements are capitalized; maintenance and repair expenditures are
charged to operations when incurred.
Depreciation and depletion expenses for mining and production
operations, including mineral interests, are determined using the unit-
of-production method based on estimates of recoverable reserves. Other
asset classes or groups are depreciated or amortized on a straight-line
basis over their estimated useful lives as follows: buildings, 17 to
50 years; machinery and equipment, five to 25 years.
Postemployment Benefits
-----------------------
The Company provides benefits such as workers' compensation and
disabled employee medical care to former or inactive employees after
employment but before retirement. Effective July 1, 1994, the Company
adopted SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," which requires the Company to accrue the cost of providing
such postemployment benefits when the event occurs giving rise to the
obligation.
Accrued Reclamation Costs
-------------------------
The Company is subject to various laws and regulations which
require the reclamation of certain mineral and related properties. The
cost of restoring lands disturbed by mining and concentrated phosphate
production activities includes earthmoving, dewatering and revegetation
activities. The Company accrues for reclamation costs in accordance
with approved reclamation plans using estimates of future expenditures
based on an inflation rate of 3 percent and discount rates
approximating 7 percent at June 30, 1995. As reclamation laws and
regulations change, revisions to current estimates are made.
Derivatives
-----------
The Company periodically enters into futures contracts to manage
its exposure to price fluctuations on one of its major products. Net
hedging gains and losses are recognized as a part of the transactions
hedged and were not significant in 1995. The Company monitors its
market risk on an ongoing basis and considers its risk to be minimal.
Earnings Per Share
------------------
Earnings per share are based on the weighted average number of
shares and equivalent shares outstanding. Shares used in the
calculations were 29,595,071, 25,256,999 and 22,082,053 shares for the
years ended June 30, 1995, 1994 and 1993, respectively. Fully diluted
earnings per share are not significantly different from primary
earnings per share and, accordingly, are not presented.
3. Joint Venture Partnership
-------------------------
On July 1, 1993, IMC and FRP entered into a joint venture
partnership in which both companies contributed their respective
phosphate businesses to create IMC-Agrico, a Delaware general
partnership, in return for a 56.5 percent and a 43.5 percent economic
interest, respectively, in IMC-Agrico. The activities of IMC-Agrico,
which is operated by the Company, include the mining and sale of
phosphate rock, and the production, distribution and sale of
concentrated phosphates, uranium oxide and related products.
For financial reporting purposes, the acquisition of 56.5 percent
of FRP's phosphate business net assets is being accounted for as a
purchase and resulted in a deferred gain which is recognized in the
Consolidated Statement of Operations as the related FRP assets are
being used in operations, generally over 20 years. Other operating
income and expense, net included $3.0 million from the amortization of
such gain for the year ended June 30, 1995 versus $16.0 million
(including $12.7 million related to finished goods inventory) in 1994.
FRP's 43.5 percent interest in IMC-Agrico has been reported as minority
interest in consolidated joint venture on the Company's Consolidated
Balance Sheet; and the earnings therefrom have been reported as
minority interest in earnings of consolidated joint venture on the
Company's Consolidated Statement of Operations.
IMC-Agrico makes cash distributions to each partner based on
formulas and sharing ratios as defined in the partnership agreement.
For the year ended June 30, 1995, distributable cash generated by IMC-
Agrico totaled $467.4 million, of which $254.9 million was distributed
to FRP, including $49.0 million to be distributed in August 1995.
4. Sterlington Litigation
----------------------
Operating earnings for the year ended June 30, 1993 included a
charge of $169.1 million, net of insurance recoveries and legal fees,
which reflected settlement of a lawsuit for damages arising out of an
explosion at a nitroparaffins plant in Sterlington, Louisiana. The
Company is defending other lawsuits for property damage and personal
injury arising out of this explosion and has established a reserve to
cover the estimated cost of resolving the remaining lawsuits. See Note
19 for further discussion of this litigation.
5. Other Non-Recurring Operating Items
-----------------------------------
In addition to the amortization of the deferred gain discussed in
Note 3, other operating income and expense, net, in 1995, included
provisions totaling $10.3 million ($5.8 million net of minority
interest) for remediation costs associated with a sinkhole beneath a
phosphogypsum storage stack at IMC-Agrico's concentrated phosphate
production facility in Florida and repair and cleanup costs related to
earthen dam breaches at IMC-Agrico's Payne Creek and Hopewell phosphate
mining facilities in Florida. These charges were partially offset by a
gain of $5.0 million from the sale of land in Florida. In 1994, other
operating income and expense, net included a gain of $5.5 million ($3.1
million net of minority interest) from IMC-Agrico's sale of its Florida
cattle ranch. In 1993, other operating income and expense, net
included charges of $32.4 million from the settlement of a claim
relating to losses arising out of a water inflow at one of the
Company's potash mines in Canada and $3.0 million from the settlement
of an environmental issue. 1993 also included a gain of $8.1 million
from the resolution of a contract dispute with a major uranium
customer.
6. Write-Down of Investment in Oil and Gas Joint Venture
-----------------------------------------------------
The Company's investment in its oil and gas joint venture is
subject to a quarterly ceiling limitation test based on a computed
value of the Company's share of future net revenues from proved
reserves using current prices. Due to the low price of crude oil at
December 31, 1993, the Company was required to reduce the carrying
value of its investment in its oil and gas joint venture. As a result,
the Company recorded a charge of $20.3 million in fiscal 1994 to
reflect this reduction.
7. Receivables, Net
----------------
Accounts receivable at June 30 were as follows:
1995 1994
-------- --------
Trade accounts $ 83.3 $ 94.5
Non-trade receivables 18.0 16.8
------ ------
101.3 111.3
Less:
Allowances 2.7 2.2
Receivable interests sold 50.0
------ ------
$ 48.6 $109.1
====== ======
In October 1994, IMC-Agrico entered into a one-year agreement with
a financial institution to sell, on an ongoing basis, an undivided
percentage interest in a designated pool of receivables, subject to
limited recourse provisions, in an amount not to exceed $75 million.
Related costs, charged to interest earned and other non-operating
income and expense totaled $2.5 million in 1995. The Company's portion
of the proceeds from the initial sale of receivable interests ($32.5
million) was used primarily to retire long-term debt.
8. Property, Plant and Equipment
-----------------------------
The Company's investment in property, plant and equipment (at cost)
at June 30 is summarized as follows:
1995 1994
---------- ----------
Land $ 79.2 $ 79.8
Mineral properties and rights 497.4 488.4
Buildings and leasehold improvements 409.0 406.0
Machinery and equipment 2,416.6 2,383.9
Construction in progress 53.0 36.0
-------- --------
3,455.2 3,394.1
Accumulated depreciation 1,427.1 1,325.3
Accumulated depletion 159.9 141.4
-------- --------
1,587.0 1,466.7
-------- --------
Net property, plant and equipment $1,868.2 $1,927.4
======== ========
9. Accrued Liabilities
-------------------
Accrued liabilities at June 30 were as follows:
1995 1994
------ ------
Salaries, wages and bonuses $ 26.3 $ 19.2
Taxes other than income taxes 25.0 16.2
Income taxes 23.4 4.4
Land reclamation 15.5 13.5
Interest 6.7 8.0
Other 40.3 36.7
------ ------
$137.2 $ 98.0
------ ------
10. Long-Term Debt
--------------
Long-term debt at June 30 consisted of the following:
1995 1994
------ -------
9.25% Senior notes, due 2000 $ 61.6 $111.2
10.125% Senior notes, due 2001 60.4 116.5
10.75% Senior notes, due 2003 54.3 113.6
6.25% Convertible subordinated notes,
due 2001 115.0 115.0
9.45% Senior debentures, due 2011 100.0 100.0
7.525% Industrial revenue bonds, due 2015 75.0 75.0
7.7% Industrial revenue bonds, due 2022 26.8 25.6
Other debt 31.2 32.3
------ ------
524.3 689.2
Less current maturities 8.8 1.1
------ ------
$515.5 $688.1
====== ======
On June 30, 1995, the estimated fair value of long-term debt
described above was approximately the same as the carrying amount of
such debt on the Consolidated Balance Sheet. The fair value was
calculated in accordance with the requirements of SFAS No. 107,
"Disclosures About the Fair Value of Financial Instruments," and was
estimated by discounting the future cash flows using rates currently
available to the Company for debt instruments with similar terms and
remaining maturities.
In 1995, the Company purchased $165.0 million principal amount of
its Senior Notes prior to maturity. As a result, the Company recorded
an extraordinary loss of $6.5 million, net of taxes, for redemption
premium incurred and write-off of previously deferred finance charges
in connection with the purchase of such Notes. In 1994, the Company
recorded an extraordinary loss of $25.2 million, net of taxes, in
connection with the purchase of $220.0 million principal amount of its
11.25 percent Notes and $78.6 million of its Senior Notes.
Under the Company's Working Capital Facility, the Company may borrow
up to $100 million for general corporate purposes until June 30, 1996.
Borrowings under the Working Capital Facility are limited to $40
million during a specified period in any year and bear interest at
rates based on a base rate, a three-month certificate of deposit rate
or an adjusted Eurodollar rate. There is a commitment fee ranging from
1/4 to 1/2 percent (depending on the Company's leverage ratio) on the
unused portion of the credit line. At June 30, 1995, $29.6 million was
drawn down in the form of standby letters of credit principally to
support the industrial revenue bonds and other debt and credit risk
guarantees. There were no other borrowings under the Working Capital
Facility at June 30, 1995.
The Working Capital Facility and the Company's Senior Notes contain
provisions which
(i) restrict the Company's ability to make capital expenditures and
dispose of assets, (ii) limit the payment of dividends or other
distributions to stockholders, and (iii) limit the incurrence of
additional indebtedness. The Working Capital Facility also contains
financial ratios and tests which must be met with respect to interest
and fixed charge coverage, tangible net worth, working capital and debt
to total capitalization. The Company is currently in compliance with
all of the covenants in the indentures and other agreements governing
its indebtedness.
IMC-Agrico has an agreement with a group of banks to provide it with
a $75 million Partnership Working Capital Facility. The Partnership
Working Capital Facility, which has a letter of credit subfacility for
up to $25 million, expires on February 9, 1997. Borrowings under the
Partnership Working Capital Facility are unsecured with a negative
pledge on substantially all of IMC-Agrico's assets. Borrowings under
the Partnership Working Capital Facility bear interest at rates based
on a base rate or an adjusted Eurodollar rate. The Partnership Working
Capital Facility has minimum net Partners' capital, fixed charge and
current ratio requirements, and places limitations on indebtedness of
IMC-Agrico and restricts the ability of IMC-Agrico to make cash
distributions in excess of Distributable Cash (as defined). At June
30, 1995, IMC-Agrico was in compliance with all of the covenants
governing this agreement. There is a 1/4 percent commitment fee on the
unused portion of the credit line. At June 30, 1995, IMC-Agrico had
drawn down $12.5 million under the letter of credit subfacility and had
no borrowings under the remainder of the Partnership Working Capital
Facility.
The Convertible Subordinated Notes are exchangeable for
approximately 1.8 million shares of the Company's common stock at
$63.50 per share.
Scheduled maturities of long-term debt for the next five years are
as follows:
1996 $ 8.8
1997 1.7
1998 1.8
1999 2.0
2000 10.1
11. Interest Charges
----------------
The Company capitalizes interest costs relating to the financing of
major projects under development. All other interest is expensed as
incurred.
1995 1994 1993
----- ----- -----
Amount charged to expense $52.2 $81.0 $44.8
Amount capitalized .2 .7 19.4
----- ----- -----
$52.4 $81.7 $64.2
===== ===== =====
12. Other Noncurrent Liabilities
----------------------------
Other noncurrent liabilities at June 30 were as follows:
1995 1994
------- -------
Postretirement employee benefits $ 93.8 $ 91.2
Land reclamation 81.2 85.2
Deferred gain 43.7 46.7
Postemployment employee benefits 15.9
Other 49.1 52.0
------ ------
------ ------
$283.7 $275.1
====== ======
13. Pension Plans
-------------
The Company has non-contributory pension plans that cover
substantially all of its employees. Benefits are based on a
combination of years of service and compensation levels, depending on
the plan. Generally, contributions to the U.S. plans are made to meet
minimum funding requirements of the Employee Retirement Income Security
Act of 1974 (ERISA), while contributions to Canadian plans are made in
accordance with Pension Benefits Acts, instituted by the provinces of
Saskatchewan and Ontario.
Employees in the United States and Canada whose pension benefits
exceed Internal Revenue Code and Revenue Canada limitations,
respectively, are covered by supplementary non-qualified, unfunded
pension plans which are provided for by charges to earnings sufficient
to meet projected benefit obligations.
The components of net pension expense, computed actuarially, were
as follows:
1995 1994 1993
------ ------ ------
Service cost for benefits earned
during the year $ 9.0 $ 8.9 $ 6.5
Interest cost on projected benefit
obligation 14.7 13.1 13.4
Return on plan assets (11.8) (7.3) (14.8)
Net amortization and deferral (.1) (4.4) 5.3
----- ----- -----
Net pension expense $11.8 $10.3 $10.4
====== ===== =====
Net pension expense in 1993 included $1.6 million related to the
settlement of certain pension obligations.
The plans' assets consist mainly of corporate equity and U.S.
government and corporate debt securities, and units of participation in
a collective short-term investment fund.
In a number of these plans, the plan assets exceed the accumulated
benefit obligations (overfunded plans) and in the remainder of the
plans, the accumulated benefit obligations exceed the plan assets
(underfunded plans).
The funded status of the Company's pension plans and amounts
recognized in the Consolidated Balance Sheet were as follows:
Overfunded Underfunded
Plans Plans
------------- ----------
----
1995 1994 1995 1994
------ ------ ------ ------
Plans' assets at fair value $133.0 $119.0 $ 26.2$ 26.4
Actuarial present value of
projected benefit obligations:
Vested benefits 111.5 95.0 31.4 33.2
Non-vested benefits .8 .6 .4 .2
------ ------ ------ ------
Accumulated benefit obligations 112.3 95.6 31.8 33.4
Projected future salary increases 37.3 33.7 11.9 9.2
------ ------ ------ ------
Total projected benefit obligations 149.6 129.3 43.7 42.6
------ ------ ------ ------
Plans' assets less than projected
benefit obligations (16.6) (10.3) (17.5) (16.2)
Items not yet recognized in earnings:
Unrecognized net loss (gain) 8.2 .1 1.3 (2.9)
Unrecognized transition (asset)
liability (.9) (.8) .2 (.1)
Unrecognized prior service cost 7.0 7.2 12.3 13.5
Additional minimum liability (7.4) (8.4)
------ ------ ------ ------
Accrued pension liability $ (2.3)$ (3.8) $(11.1)$(14.1)
====== ====== ====== ======
Significant actuarial assumptions were as follows:
1995 1994 1993
---- ---- ----
Discount rate 8.2% 8.4% 8.6%
Long-term rate of return on assets:
U.S. plans 7.5% 7.5% 9.0%
Canadian plans 9.0% 9.5% 10.0%
---- ---- ----
.8% 7.9% 9.2%
==== ==== ====
Rate of increase in compensation levels 5.2% 5.3% 5.3%
14. Postretirement and Postemployment Benefit Plans
-----------------------------------------------
The Company provides certain health care benefit plans for retired
employees. The plans may be either contributory or non-contributory
and contain certain other cost sharing features such as deductibles and
coinsurance. The plans are unfunded. Employees are not vested and
such benefits are subject to change. Health care benefits of those
employees who retired prior to February 1, 1988 are paid by
Mallinckrodt Group Inc.; the Company is charged for one-half of such
costs, not exceeding $.8 million in any fiscal year.
The Company adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," effective July 1, 1992.
This statement requires that the cost of providing other postretirement
benefits (OPEBS) be accrued during the active service period of the
employees. The Company recorded an after-tax charge of $47.1 million
for the cumulative effect of this accounting change.
The components of OPEBS expense for years ending June 30 were as
follows:
1995 1994 1993
---- ---- ----
Service cost $1.5 $1.5 $2.3
Interest cost 5.3 5.2 6.3
Net amortization and deferral (1.5) (1.6)
---- ---- ----
$5.3 $5.1 $8.6
==== ==== ====
On July 1, 1993, the Company amended its postretirement plans in an
effort to control cash outlays while protecting the interests of those
employees who have retired or will retire in the near future. This
plan amendment had the effect of reducing the accumulated
postretirement benefit liability on July 1, 1993 by $15.9 million. As
a result, OPEBS expense was reduced by $1.1 million in 1995 and 1994 to
reflect the amortization of this plan change over 13.8 years.
The significant assumptions used in determining postretirement
benefit costs were as follows:
1995 1994 1993
---- ---- ----
Discount rate 8.2% 8.4% 8.5%
Health care trend rate:
Under age 65 9.8% (1) 10.4% (1) 15.0% (1)
Over age 65 6.3% (2) 7.0% (2) 8.2% (2)
(1) Decreasing gradually to 5.5% in 2003 and thereafter.
(2) Decreasing gradually to 5.5% in 1999 and thereafter.
If the health care trend rate assumptions were increased by 1.0
percent, the accumulated postretirement benefit obligation would
increase by 6.3 percent as of June 30, 1995. This would have the
effect of an 8.7 percent increase on OPEBS expense in 1995.
The components of the Company's postretirement benefit liability at
June 30 were as follows:
1995 1994
----- -----
Retirees $33.1 $29.3
Actives:
Fully eligible 12.0 11.6
Not-fully eligible 24.3 23.3
----- -----
Total 69.4 64.2
Items not yet recognized in earnings:
Unrecognized prior service cost 13.2 14.3
Unrecognized net gain 11.6 12.7
----- -----
Accrued postretirement benefits liability $94.2 $91.2
===== =====
The Company also provides benefits such as workers' compensation
and disability to former or inactive employees after employment but
before retirement. The plans are unfunded. Employees are not vested
and plan benefits are subject to change.
Effective July 1, 1994, the Company adopted SFAS No. 112,
"Employers' Accounting for Postemployment Benefits," to account for
disability benefits. Prior to July 1, 1994, the Company recognized the
cost of providing certain of these benefits on a cash basis. SFAS No.
112 requires the cost of providing these benefits be recognized when it
becomes probable that such benefits will be paid and when sufficient
information exists to make reasonable estimates of the amounts to be
paid. Consequently, the Company recognized a $13.3 million liability
for postemployment benefits as of July 1, 1994 and recorded a charge of
$5.9 million, net of taxes, for the cumulative effect of the Company's
unfunded obligation prior to July 1, 1994. The effect of the adoption
of SFAS No. 112 on 1995 earnings before the cumulative effect of the
accounting change was not material. As permitted by SFAS No. 112,
prior year financial statements have not been restated to reflect the
change in accounting method.
15. Income Taxes
------------
Deferred income taxes reflect the net tax effects of temporary
differences between the amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities
and assets at June 30 were as follows:
1995 1994
------ ------
Deferred tax liabilities:
Tax over book depreciation $333.1 $315.2
Taxes on undistributed foreign earnings 28.6 29.8
Other liabilities 37.5 27.6
------ ------
Total deferred tax liabilities 99.2 372.6
------ ------
Deferred tax assets:
Net operating loss carryforwards 78.2 105.6
Postretirement benefit reserves 35.7 33.4
Sterlington litigation settlement 31.5 29.9
Reclamation and decommissioning reserves 26.2 25.8
Alternative minimum tax credit carryforward 34.0 9.3
Other assets 35.6 19.6
------ ------
Total deferred tax assets 241.2 223.6
------ ------
Net deferred tax liabilities $158.0 $149.0
====== ======
At June 30, 1995, the Company had net operating loss carryforwards
for U.S. federal tax purposes of $196.7 million. If not utilized
against taxable income, the federal tax loss carryforwards will expire
in 2009. The tax benefit of these loss carryforwards has been provided
in the 1995 and 1994 Consolidated Balance Sheet as deferred tax assets.
The provision (credit) for income taxes consisted of the following:
1995 1994 1993
------ ------ ------
Current
Federal $ 28.5 $(24.0) $(15.2)
State and local 7.5 1.2 1.4
Foreign 30.2 13.8 10.0
------ ------ ------
66.2 (9.0) (3.8)
Deferred
Federal 11.1 16.9 (34.3)
State and local (.9) (3.8) (13.1)
Foreign 3.9 7.3 (6.1)
------ ------ ------
14.1 20.4 (53.5)
------ ------ ------
$ 80.3 $ 11.4 $(57.3)
====== ====== ======
The components of earnings (loss) before income taxes, extraordinary
loss and cumulative effect of accounting changes, and the effects of
significant adjustments to tax computed at the federal statutory rate
were as follows:
1995 1994 1993
------- ------- ------
Domestic $ 146.1 $ (23.0) $(175.5)
Foreign 61.3 30.8 (1.8)
------- ------- -------
Earnings (loss) before income
taxes, extraordinary loss and
cumulative effect of accounting
changes $ 207.4 $ 7.8 $(177.3)
======= ======= =======
Computed tax at the federal statutory
rate of 35% (34% in 1993) $ 72.6 $ 2.7 $ (60.3)
Foreign income and withholding taxes 12.7 10.3 4.5
Percentage depletion (9.7) (7.4) (9.4)
Deferred tax adjustment for the effect of
changes in U.S. corporate tax rates 4.1
Federal taxes on undistributed
foreign earnings 4.4 2.9 5.6
State income taxes, net of federal
income tax benefit 4.3 (1.7) (7.7)
Sterlington litigation settlement 3.3
Other items (none in excess of 5%
of computed tax) (4.0) .5 6.7
------- ------- -------
Provision (credit) for income taxes $ 80.3 $ 11.4 $ (57.3)
======= ======= =======
Effective tax rate 38.7% 146.2% 32.3%
======= ======= =======
The effective tax rate for 1994 reflected the write-down of an
investment in an oil and gas venture (see Note 6) and a deferred tax
adjustment resulting from an increase in U.S. corporate income tax
rates. If these items were excluded, the Company's effective tax rate
would have been 53.9 percent.
U.S. income and foreign withholding taxes are provided on the
earnings of foreign subsidiaries that are expected to be remitted to
the extent that taxes on the distribution of such earnings would not be
offset by foreign tax credits. The Company has no present intention of
remitting undistributed earnings of foreign subsidiaries aggregating
$105.9 million at June 30, 1995 and, accordingly, no deferred tax
liability has been established relative to these earnings.
The Internal Revenue Service (IRS) has conducted examinations of
the Company's U.S. federal income tax returns for the years 1988
through 1990 and has proposed various adjustments to increase taxable
income. Revenue Canada is currently examining the Canadian federal
income tax returns of the Company's wholly-owned Canadian subsidiary
for the years 1991 through 1993 and no adjustments have been proposed.
Management does not believe that resolution of these matters will have
a material impact on the Company.
16. Capital Stock
-------------
Changes in the number of shares of common stock issued and in
treasury were as follows:
1995 1994 1993
---------- ---------- ----------
Common stock issued
Balance, beginning of year 32,232,865 32,156,920 32,130,080
Stock options exercised 59,324 5,565 8,675
Award of restricted shares 9,840 70,380 18,165
---------- ---------- ----------
Balance, end of year 32,302,029 32,232,865 32,156,920
---------- ---------- ----------
Treasury common stock
Balance, beginning of year 2,770,259 10,097,808 10,082,779
Common stock issued (7,450,000)
Purchases 6,161 122,451 15,029
---------- ---------- ----------
Balance, end of year 2,776,420 2,770,259 10,097,808
---------- ---------- ----------
Common stock outstanding,
end of year 29,525,609 29,462,606 22,059,112
========== ========== ==========
On October 5, 1993 and May 5, 1994, the Company completed public
offerings of 3,450,000 shares and 4,000,000 shares of common stock at
$34.50 and $37.00 per share, respectively. Net proceeds of these
offerings, net of issuance costs and expenses, were used to reduce
long-term indebtedness.
Pursuant to a Shareholders Rights Plan adopted by the Company in
June 1989, a dividend of one preferred stock purchase right (a Right)
for each outstanding share of common stock of the Company was issued on
July 12, 1989 to shareholders of record on that date. Under certain
conditions, each Right may be exercised to purchase one one-hundredth
of a share of Junior Preferred Stock, Series C, par value $1.00 per
share, at a price of $150. This preferred stock is designed to
participate in dividends and vote on essentially equivalent terms with
a whole share of common stock. The Rights become exercisable apart
from the common stock only if a person or group acquires 20 percent or
more of the common stock or makes a tender offer for 20 percent or more
of the outstanding common stock. However, the Rights do not become
exercisable if a person or group becomes the owner of 20 percent or
more of the common stock as a result of the purchase of common stock by
the Company to reduce the number of shares outstanding and increase the
proportionate number of shares owned by such person or group to 20
percent or more, unless such person or group subsequently becomes the
owner of any additional shares of the common stock. In addition, upon
the acquisition by a person or group of 20 percent or more of the
common stock, each Right will entitle the holder to purchase, at the
then-current exercise price of the Right, a number of shares of common
stock having a market value at that time of twice the exercise price.
The Rights may be redeemed at a price of $.01 per Right under certain
circumstances prior to their expiration on June 21, 1999. No event
during 1995 made the Rights exercisable.
17. Stock Plans
-----------
In 1988, the Company adopted the 1988 Stock Option Plan (the Plan)
under which the Company may grant non-qualified stock options, stock
appreciation rights (SARs) and restricted stock to officers and key
managers of the Company. The Plan, as amended, provides for the
issuance of a maximum of two million shares of common stock of the
Company which may be authorized but unissued shares or treasury shares.
Under the terms of the Plan, the option price per share may not be
less than 100 percent of the fair market value on the date of the
grant. Stock options and SARs granted under the Plan extend for 10
years and generally become exercisable 50 percent one year after the
date of the grant and 100 percent two years after the date of the
grant. Certain stock options granted in fiscal 1995 become exercisable
in one-third increments; one-third one year after the date of the
grant, two-thirds two years after the date of the grant, and 100
percent three years after the date of the grant. At June 30, 1995, no
SARs had been granted under the Plan.
The Company also adopted a long-term incentive plan in fiscal 1994
under which officers and key managers were awarded shares of restricted
common stock of the Company along with contingent stock units. Based
on performance objectives, these shares and units will vest in whole or
in part during and at the end of a three-year performance period ending
June 30, 1997. Restricted stock is valued on the issuance date, and
the related expense is amortized over the vesting period.
The Company had a similar long-term incentive plan in 1991 which
expired June 30, 1994. Out of a total of 171,736 shares (net of
cancellations) granted under this plan, 115,251 shares were cancelled
on June 30, 1994 due to non-attainment of performance objectives.
Stock options and restricted stock activities are as follows:
Stock Stock Restricted Available
Options Options Stock for
Outstanding Exercisable Outstanding Grant
----------- ----------- ----------- ---------
Balance at June 30, 1992 476,285 165,185 175,800 716,201
Granted 18,165 (18,165)
Vested 155,550
Exercised (8,675) (8,675) (17,595)
Cancelled (25,180) (12,630) (15,029) 40,209
------- ------- ------- -------
Balance at June 30, 1993 442,430 299,430 161,341 738,245
Granted 428,650 70,380 (499,030)
Vested 143,000
Exercised (5,565) (5,565) (20,525)
Cancelled (7,360) (5,060) (122,451) 129,811
------- ------- ------- -------
Balance at June 30, 1994 858,155 431,805 88,745 369,026
Granted 138,525 9,840 (148,365)
Vested 157,125
Exercised (57,080) (57,080) (21,884)
Cancelled (27,222) (8,944) (5,961) 33,183
------- ------- ------- -------
Balance at June 30, 1995 912,378 522,906 70,740 253,844
======= ======= ======= =======
Market prices for stock options granted ranged from $38.125 to
$48.3125 per share in fiscal 1995 and from $34.1875 to $40.875 per
share in fiscal 1994. Market prices for stock options exercised ranged
from $22 to $51.125 per share in fiscal 1995 and from $22 to $32 per
share in fiscal 1994 and 1993. The average purchase price of
outstanding stock options at June 30, 1995 was $41.09 per share, based
on an aggregate purchase price of $37.5 million. Outstanding stock
options will expire over a period of time ending no later than June 15,
2005.
Another stock option plan provides for the granting of awards of up
to 100,000 shares of common stock to directors of the Company who are
not also employees of the Company. Options may be exercised at any
time the director holding the option remains a director of the Company
and within two years after the director ceases to be a director of the
Company. Under the terms of the plan, options granted are exercisable
over 10 years beginning with the grant date of the option. In fiscal
1995, options were granted to purchase 7,000 shares of common stock at
an option price of $38.125 per share. A total of 2,244 shares were
exercised during the year.
18. Commitments
-----------
The Company leases various types of properties, including
buildings, railcars, data processing equipment, and machinery and
equipment through operating leases.
Summarized below is a schedule of future minimum lease payments
under non-cancellable operating leases as of June 30, 1995:
1996 $16.0
1997 12.2
1998 10.4
1999 9.2
2000 6.1
Subsequent years 15.3
-----
Future minimum lease payments $69.2
=====
Rental expense for 1995, 1994 and 1993 amounted to $23.5 million,
$21.9 million and $18.3 million, respectively.
The Company's Canadian subsidiary is committed under a service
agreement with Potash Corporation of Saskatchewan Inc. (PCS) to produce
annually from mineral reserves specified quantities of potash for a
fixed fee plus a pro rata share of production and capital costs. The
agreement extends through June 30, 1996 and is renewable at the option
of PCS for six additional five-year periods. Potash produced for PCS
may, at PCS's option, amount to an annual maximum of approximately one-
fourth of the Canadian subsidiary's production capacity. During 1995,
production of potash for PCS amounted to 500,000 tons, or 15 percent of
tons produced.
19. Contingencies
-------------
Since December 1985, the Company has experienced an inflow of water
into one of its two interconnected potash mines in Saskatchewan,
Canada. In recent years, the trend of the water inflow has stabilized
and the Company has successfully reduced the per ton spending required
to contain the inflow. However, the long-term outlook of the water
inflow has caused the Company to consider alternatives to its current
mining operations and studies are under way in this regard. Any
solution to the water inflow situation at the mines could result in
substantial capital expenditures and/or charges to operations.
Angus and the Company are involved in various litigation arising
out of the Sterlington matter discussed in Note 4 of Notes to
Consolidated Financial Statements. Angus wants the Company to accept
responsibility for approximately 240 lawsuits currently pending in
Louisiana for injuries arising out of the explosion, and to reimburse
Angus for amounts that it has paid for settled demands in connection
with Sterlington. In addition, Angus is seeking direct payment from
the Company's insurers for certain damages. The Company may have
obligations to indemnify certain of the insurers if Angus is successful
in this case. The Company has established a reserve to cover the
estimated cost of resolving the remaining third-party suits in
Louisiana.
The Company continues to vigorously litigate each of the matters
arising out of the Sterlington explosion. A jury trial is scheduled to
commence in November, 1995 in Texas with respect to Angus' and the
Company's claims for contribution and indemnity for the settled
demands. Discovery is still not complete with respect to the lawsuits
scheduled for trial in November 1995, and all of the other lawsuits are
in very early stages. The Company is also pursuing additional
recoveries from one of its insurance carriers relating to Sterlington.
Given the uncertainties inherent in litigation as well as the early
stages of preparation, the Company is unable to evaluate possible
defenses or make a reliable determination as to potential liability, if
any, with respect to the Sterlington matters.
In addition, Angus, in an action filed in federal court in Monroe,
Louisiana, in February 1995, is seeking compensation from the Company
pursuant to CERCLA for contamination to the environment prior to the
explosion from the storage tank on the grounds of the Sterlington
property. No trial date has been scheduled for this additional claim
by Angus against the Company. Given the early stages of this lawsuit,
the Company is unable to evaluate possible defenses or make a reliable
determination as to potential liability, if any.
The Company has been named as a defendant, along with other
Canadian and U.S. potash producers, in lawsuits filed in federal court
in Minnesota and state court in California. The plaintiffs are
purchasers of potash who allege a price fixing conspiracy among North
American potash producers beginning in 1987 and continuing until the
filing of the lawsuits in 1994. Discovery has begun in the Minnesota
case, following certification of a class of all U.S. potash purchasers
as plaintiffs. While the Company believes that the allegations in the
complaints are without merit, until discovery is completed it is unable
to evaluate possible defenses or to make a reliable determination as to
the potential liability exposure, if any.
The Company has also received a U.S. grand jury subpoena seeking
information related to the sale of potash in the United States from
1986 to the present. The Company is cooperating with the government
and is assembling the information needed to comply with the subpoena.
As in the civil antitrust matters described above, while the Company
does not believe that violations of the antitrust laws have occurred,
the Company is unable to predict the outcome of the government
investigation or make a reliable determination as to the potential
exposure, if any.
The Company also has certain other contingent liabilities with
respect to litigation, claims and guarantees of debt obligations to
third parties arising in the ordinary course of business. The Company
does not believe that any of these contingent liabilities will have a
material adverse impact on the Company's financial position.
20. Operations by Geographic Area
-----------------------------
Net operating results of consolidated foreign subsidiaries, before
consolidation eliminations, amounted to earnings of $40.0 million in
1995, $10.0 million in 1994 and a loss of $6.0 million in 1993. Net
assets of such subsidiaries were $204.2 million and $173.0 million at
June 30, 1995 and 1994, respectively.
Financial information relating to the Company's operations in
various geographic areas was as follows:
Net Sales
--------------------------------
1995 1994 1993
-------- -------- -------
United States $1,854.1 $1,405.2 $ 856.8
Canada 184.1 137.5 138.0
Other 11.7 1.3 4.2
Transfers between geographic areas
(principally from Canada) (125.9) (102.5) (101.9)
-------- -------- --------
Consolidated $1,924.0 $1,441.5 $ 897.1
======== ======== ========
<TABLE>
<CAPTION>
Earnings (Loss)
Before Income Taxes,
Extraordinary Loss and
Accounting Changes Identifiable Assets
------------------------- ---------------------------
1995 1994 1993 1995 1994 1993
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> C>
United States $ 326.4$ 136.5$ (130.5)$2,531.4$2,565.1 $1,763.9
Canada 55.6 30.8 (1.9) 246.3 223.0 281.4
Other 10.2 (.4) 2.0 8.2 8.1 12.5
Eliminations (10.4) .4 .7 (92.7) (17.9) (2.2)
-------- -------- --------
Operating earnings (loss)381.8 167.3 (129.7)
Interest earned and other
non-operating (income) and
expense, net (6.2) 23.4 2.8
Interest charges 52.2 81.0 44.8
Minority interest 128.4 55.1
-------- -------- -------- -------- -------- --------
Consolidated $ 207.4$ 7.8$ (177.3)$2,693.2$2,778.3$2,055.6
======== ======== ======== ======== ======== ========
</TABLE>
Transfers of product between geographic areas were at prices
approximating those charged to unaffiliated customers.
Sales from the United States, as shown in the preceding table,
included sales to unaffiliated customers in other geographic areas as
follows:
1995 1994 1993
------ ------ ------
Far East $643.9 $377.1 $190.7
Latin America 121.7 113.0 25.9
Europe 27.1 6.6 22.6
------ ------ ------
$792.7 $496.7 $239.2
====== ====== ======
QUARTERLY RESULTS (UNAUDITED)
(In millions except per share amounts)
Quarter
--------------------------------
First Second Third Fourth Year
-----------------------------------------------------------------------
Fiscal 1995
Net sales $ 420.8 $ 451.8 $ 550.0 $ 501.4$1,924.0
Gross margins 76.7 113.9 150.0 107.9 448.5
Earnings before income
taxes, extraordinary item
and cumulative effect of
accounting change 34.7 45.5 75.2 52.0 207.4
Earnings before extraordinary
item and cumulative effect
of accounting change 21.8 27.9 45.7 31.7 127.1
Extraordinary loss -
debt retirement (1.2) (1.8) (.7) (2.8) (6.5)
Cumulative effect of
accounting change (5.9) (5.9)
-------- -------- -------- ------
-- -------
Net earnings $ 14.7 $ 26.1$ 45.0 $ 28.9$ 114.7
======== ======== ========
======== =======
Earnings (loss) per share:
Earnings before extra-
ordinary item and
cumulative effect of
accounting change $ .74$ .94 $ 1.54 $ 1.07$ 4.30
Extraordinary loss -
debt retirement (.04) (.06) (.02) (.09) (.22)
Cumulative effect of
accounting change (.20) (.20)
-------- -------- -------- ------
-- -------
Net earnings $ .50$ .88 $ 1.52 $ .98$ 3.88
======== ======== ========
======== =======
-----------------------------------------------------------------------
Fiscal 1994
Net sales $ 266.4 $ 329.0 $ 410.5 $ 435.6$1,441.5
Gross margins 7.4 33.8 77.7 88.7 207.6
Earnings (loss) before
income taxes and extra-
ordinary item (24.3) (26.3) 21.7 36.7 7.8
Earnings (loss) before
extraordinary item (22.5) (3.6) 5.4 17.1 (3.6)
Extraordinary loss -
debt retirement (23.8) (1.4) (25.2)
-------- -------- -------- ------
-- -------
Net earnings (loss) $ (46.3)$ (3.6)$ 5.4 $ 15.7 $ (28.8)
======== ======== ========
======== =======
Earnings (loss) per share:
Earnings (loss) before
extraordinary item $ (1.02)$ (.14)$ .21 $ .61 $ (.14)
Extraordinary loss -
debt retirement (1.08) (.05) (1.00)
-------- -------- -------- ------
-- -------
Net earnings (loss) $ (2.10)$ (.14) .21 $ .56 $ (1.14)
======== ======== ========
======== =======
-----------------------------------------------------------------------
Fiscal 1995
First quarter earnings included after-tax provisions of $1.7
million, or $.06 per share, for additional remediation costs
associated with a sinkhole at IMC-Agrico's New Wales concentrated
phosphate production facility in Florida and $.9 million, or $.03
per share, for anticipated repair and cleanup costs related to an
earthen dam breach at IMC-Agrico's Payne Creek phosphate rock
mining facility in Florida. First quarter earnings also included
an after-tax gain of $3.1 million, or $.10 per share, from the sale
of land in Florida.
Second quarter earnings included after-tax provisions of $.5
million, or $.01 per share, for additional repair and cleanup costs
related to earthen dam breaches at IMC-Agrico's Payne Creek and
Hopewell phosphate mining facilities in Florida and $2.5 million,
or $.08 per share, for restructuring charges which shifted the
marketing and administrative functions of PhosChem to its member
companies.
Fourth quarter earnings included after-tax provisions of $.4
million, or $.02 per share, for additional repair and cleanup costs
related to earthen dam breaches at IMC-Agrico's Payne Creek and
Hopewell phosphate mining facilities in Florida.
-----------------------------------------------------------------------
Fiscal 1994
Second quarter results included an after-tax charge of $12.4
million, or $.49 per share, from the write-down of the Company's
investment in an oil and gas joint venture due to the low price of
crude oil.
Fourth quarter results included an after-tax gain of $1.9 million,
or $.07 per share, from IMC-Agrico's sale of its Florida cattle
ranch.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial
Disclosure.
Not applicable.
PART III.
Item 10. Directors and Executive
Officers of the Registrant.
For information concerning directors of the Registrant, see pages 2
through 6, incorporated herein by reference, of IMC Global's definitive
Proxy Statement for the Annual Meeting of Stockholders to be held on
October 19, 1995. Information concerning executive officers of the
Registrant is included in Part I of this report.
Item 11. Executive Compensation.
For information concerning executive compensation, see pages 7
through 16 (excluding the sections therein entitled "Compensation
Committee Report on Executive Compensation" and "Company Stock
Performance"), incorporated herein by reference, of IMC Global's
definitive Proxy Statement for the Annual Meeting of Stockholders to be
held on October 19, 1995.
Item 12. Security Ownership of
Certain Beneficial Owners and Management.
For information concerning security ownership of certain beneficial
owners and management, see pages 6 and 7, incorporated herein by
reference, of IMC Global's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held on October 19, 1995.
Item 13. Certain Relationships and
Related Transactions.
For information concerning certain relationships and related
transactions, see page 7, incorporated herein by reference, of IMC
Global's definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on October 19, 1995.
PART IV.
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
(a) FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
(1) Financial Statements:
Consolidated financial statements filed as part of this report
are listed under Part II,
Item 8 of this Form 10-K.
(2) Financial Statement Schedules:
No additional schedules are required because either the required
information is not
present or is not present in amounts sufficient to require
submission of the schedule, or
because the information required is included in the consolidated
financial statements or
the notes thereto.
(3) Exhibits:
The exhibits listed in the accompanying index are filed as part
of this report.
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
-------------------------------------------------------------------
3.1 Restated Certificate of Company's Report on
Incorporation, as amended Form 8-K dated
November 1, 1994
3.2 Bylaws, amended as of July Company's Report on
2, 1991, and as currently in Form 8-K dated July
effect 2, 1991
3.3 Rights Agreement dated June Company's Report on
21, 1989, amended as of Form 8-A/A dated
August 17, 1995, with The September 7, 1995.
First National Bank of
Chicago (including the
Shareholder Rights Plan).
4.1 Indenture dated as of Exhibit 4.4 to the
December 1, 1991 between the Company's Form SE
Registrant and The Bank of filed on December
New York, as Trustee, 3, 1991
relating to $100,000,000
aggregate principal amount
of 9.45% Senior Debentures
due 2011
4.2 Form of Senior Debentures Exhibit 4.5 to the
due 2011 Company's Form SE
filed on December
3, 1991
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
4.3 Indenture dated as of Exhibit 4.6 to the
December 1, 1991 between the Company's Form SE
Registrant and The Bank of filed on December
New York, as Trustee, 3, 1991
relating to $115,000,000
aggregate principal amount
of 6 1/4% Convertible
Subordinated Notes due 2001
4.4 Form of Convertible Exhibit 4.7 to the
Subordinated Notes due 2001 Company's Form SE
filed on December
3, 1991
4.5 Supplemental Indenture, Exhibit 4.5 to the
dated as of June 29, 1993, Company's
between the Registrant and Registration
The Bank of New York, as Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Senior Debentures
4.6 Supplemental Indenture, Exhibit 4.6 to the
dated as of June 29, 1993, Company's
between the Registrant and Registration
The Bank of New York, as Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Convertible Subordinated
Notes
4.7 Indenture, dated as of June Exhibit 4.7 to the
15, 1993, between IMC Global Company's
Inc. and NationsBank of Registration
Georgia, National Statement on Form S-
Association, as Trustee 4, (No. 33-49795)
4.8 First Supplemental Exhibit 4.1 to the
Indenture, dated as of Company's Report on
October 13, 1993, between Form 8-K dated
IMC Global Inc. and October 12, 1993
NationsBank of Georgia,
National Association, as
Trustee
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.1 Intercorporate Agreement Exhibit 10.1 to the
dated as of July 1, 1987, by Company's
and between Mallinckrodt and Registration
IMC Global Operations Inc. Statement on Form S-
with Exhibits, including the 1, (Amendment No.
Restated Certificate of 2)
Incorporation of IMC Global (No. 33-17091)
Inc., as amended; Bylaws of
IMC Global Inc.; Preliminary
Agreement for K-2 Advances;
Registration Rights
Agreement; Services
Agreement; Management
Services Agreement;
Agreement regarding
Pollution Control and
Industrial Revenue Bonds;
License Agreement; office
lease and sublease;
management agreements;
supply agreements; and
transportation service
agreements
10.2 Supply agreements (Included Exhibit 10.1 to the
in Exhibit 10.1) Company's
Registration
Statement on Form S-
1, (No. 33-17091)
10.3 Agreement dated June 27, Exhibit 10.6 to the
1985, supplementing, Company's
amending and continuing Registration
Potash Resource Payment Statement on Form S-
Agreement dated October 15, 1, (Amendment No.
1979, between Mallinckrodt 2)
and the Province of (No. 33-22914)
Saskatchewan
10.4 Mining and Processing Exhibit 10.7 to the
Agreement dated January 31, Company's
1978, between Potash Registration
Corporation of Saskatchewan Statement on Form S-
Inc. and International 1, (No. 33-17091)
Minerals & Chemical (Canada)
Global Limited
10.5 * Management Incentive
Compensation Program, as
amended through July 1, X
1995, and as currently in
effect
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.6 * 1991 Long-Term Performance Exhibit 10.7 to the
Incentive Plan, as amended Company's
through July 2, 1991, and as Registration
currently in effect Statement on Form S-
1
(No. 33-17091)
10.7 * 1988 Stock Option & Award Exhibit 10.7 to the
Plan, as amended through Company's
July 2, 1991, and as Registration
currently in effect Statement on Form S-
1
(No. 33-17091)
10.8 * 1994 Stock Option Plan for Exhibit 4(a) to the
Non-Employee Directors Company's
Registration
Statement on Form S-
8
(No. 33-56911)
10.9 * Retirement Plan for Salaried
Employees, as amended
through November 1, 1994, X
and as currently in effect
10.10* Supplemental Benefit Plan Exhibit 10.12 to
the Company's
Registration
Statement on Form S-
1
(No. 33-17091)
10.11* Supplemental Executive Exhibit 10.7 to the
Retirement Plan, as amended Company's
through June 30, 1992, and Registration
as currently in effect Statement on Form S-
1
(No. 33-17091)
10.12* Investment Plan for Salaried
Employees, as amended
through July 1, 1994, and as X
currently in effect
10.13 Suspension Agreement Exhibit 10.17 to
concerning Potassium the Company's
Chloride from Canada among Registration
the U.S. Department of Statement on Form S-
Commerce and the signatory 1
purchasers/exporters of (No. 33-17091)
potassium chloride from
Canada dated January 7, 1988
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.14 Settlement Agreement dated Exhibit 10.18 to
as of November 3, 1987, by the Company's
and among the Board of Registration
Trustees of the Internal Statement on Form S-
Improvement Trust Fund of 1
the State of Florida, the (No. 33-17091)
Department of Natural
Resources of the State of
Florida and Mallinckrodt
10.15* Management Compensation and Exhibit 10.17 to
Benefit Assurance Program, the Company's
as amended through June 30, Registration
1992, and as currently in Statement on Form S-
effect 1
(No. 33-17091)
10.16* Corporate Staff Employee Exhibit 10.32 to
Severance & Benefit 1989 10-K
Assurance Policy
10.17 Form of Trust Agreement with Exhibit 10.33 to
Wachovia Bank & Trust Co., 1992 10-K
N.A., as amended through
August 15, 1991
10.18* Form of Contingent
Employment Agreement dated
September 1, 1995, with X
Officers of Corporation
10.19* Directors Retirement Service Exhibit 10.36 to
Plan 1989 10-K
10.20* Form of "Gross Up" Agreement Exhibit 10.37 to
dated September 1, 1995, 1990 10-K
with Officers of Corporation X
10.21 Sulphur Joint Operating Exhibit 10.40 to
Agreement dated as of May 1, 1990 10-K
1988, among Freeport-McMoRan
Resource Partners, IMC
Global Operations Inc. and
Felmont Oil Corporation
10.22 Oil/Gas Operating Agreement Exhibit 10.41 to
dated as of June 5, 1990, 1990 10-K
among Freeport-McMoRan
Resource Partners, IMC
Global Operations Inc. and
Felmont Oil Corporation
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.23 Agreement in Principle dated Exhibit 10.43 to
September 7, 1990, with 1990 10-K
Mallinckrodt
10.24 Agreement dated as of Exhibit 10.44 to
September 12, 1990, with 1990 10-K
Mallinckrodt
10.25 Memorandum of Agreement as Exhibit 10.51 to
of December 21, 1990, 1991 10-K
amending Mining and
Processing Agreement of
January 31, 1978, between
Potash Corporation of
Saskatchewan Inc. and
International Minerals &
Chemical (Canada) Global
Limited
10.26 Division of Proceeds Exhibit 10.52 to
Agreement dated December 21, 1991 10-K
1990, between Potash
Corporation of Saskatchewan
Inc. and International
Minerals & Chemical (Canada)
Global Limited
10.27 Directors' Retirement Exhibit 10.54 to
Services Plan Effective July 1992 10-K
1, 1989
10.28 Contribution Agreement dated Exhibit 10.55 to
April 5, 1993 between the Company's March
Freeport-McMoRan Resource 31, 1993 Form 10-
Partners, Limited Q/A (Amendment No.
Partnership and IMC Global 1) filed on May 19,
Operations Inc. 1993
10.29 Form of Partnership
Agreement, dated as of July
1, 1993, as further amended
and restated as of May 26,
1995, between IMC-Agrico GP
Company, Agrico L.P. and IMC- X
Agrico MP Inc., including
definitions
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.30 Form of Parent Agreement,
dated as of July 1, 1993, as
further amended and restated
as of May 26, 1995, between
IMC Global Operations Inc.,
Freeport-McMoRan Resource
partners, Limited X
Partnership, Freeport-
McMoRan Inc. and IMC-Agrico
Company
10.31 Amendment, Waiver and
Consent, dated May 26, 1995,
among IMC Global Inc., IMC
Global Operations Inc., IMC-
Agrico GP Company, IMC-
Agrico MP, Inc., IMC-Agrico
Company, Freeport-McMoRan
Inc., Freeport-McMoRan X
Resource Partners, Limited
Partnership, and Agrico,
Limited Partnership
10.32 Agreement and Plan of
Complete Liquidation and
Dissolution, dated May 26,
1995, among IMC Global
Operations Inc., IMC-Agrico X
GP Company, and IMC-Agrico
MP, Inc.
10.33 Sterlington Settlement Exhibit 10.58 to
Agreement between IMC Global the Company's March
Inc., Angus Chemical Company 31, 1993 Form 10-
and Industrial Risk Insurers Q/A (Amendment No.
dated April 1, 1993 1) filed on May 19,
1993
10.34 First Amendment to Exhibit 10.59 to
Contribution Agreement, the Company's
dated as of July 1, 1993, Report on Form 8-K
between Freeport-McMoRan dated July 16, 1993
Resource Partners, Limited
Partnership and IMC Global
Operations Inc.
10.35 Credit Agreement, dated as Exhibit 10.63 to
of June 29, 1993, between the Company's
IMC Global Operations Inc., Registration
IMC Global Inc. and the Statement on Form S-
Banks Listed Therein 4, (No. 33-49795)
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.36 Loan Agreement, dated as of Exhibit 10.64 to
December 1, 1991, between the Company's
IMC Global Operations Inc. Registration
and the Polk County Statement on Form S-
Industrial Development 4, (No. 33-49795)
Authority (Florida)
10.37 Amended and Restated Exhibit 10.65 to
Unconditional Guaranty, the Company's
dated as of December 1, 1991 Registration
of IMC Global Inc. with Statement on Form S-
respect to Polk County 4, (No. 33-49795)
Industrial Development
Authority (Florida)
Industrial Development
Revenue Bonds (IMC Global
Operations Inc. Project)
1991 Tax-Exempt Series A and
1992 Tax-Exempt Series A
10.38 Supplemental Loan Agreement, Exhibit 10.66 to
dated as of January 1, 1992, the Company's
between IMC Global Registration
Operations Inc. and the Polk Statement on Form S-
County Industrial 4, (No. 33-49795)
Development Authority
(Florida)
10.39 Second Supplemental Loan Exhibit 10.67 to
Agreement, dated as of June the Company's
30, 1993, between IMC Global Registration
Operations Inc. and the Polk Statement on Form S-
County Industrial 4, (No. 33-49795)
Development Authority
(Florida)
10.40 Amendment to Guaranty, dated Exhibit 10.68 to
June 30, 1993, with respect the Company's
to Polk County Industrial Registration
Development Authority Statement on Form S-
(Florida) Industrial 4, (No. 33-49795)
Development Revenue Bonds
(IMC Global Operations Inc.
Project) 1991 Tax-Exempt
Series A and 1992 Tax-Exempt
Series A
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.41 Indenture of Trust, dated as Exhibit 10.69 to
of December 1, 1991, between the Company's
Polk County Industrial Registration
Development Authority (the Statement on Form S-
"Authority") and The Bank of 4, (No. 33-49795)
New York, as Trustee (the
"IRB Trustee") relating to
the Industrial Development
Revenue Bonds (IMC Global
Operations Inc. Project)
1991 Tax-Exempt Series A
(the "Series 1991 Bonds")
10.42 Supplemental Indenture of Exhibit 10.70 to
Trust, dated as of January the Company's
1, 1992, between the Registration
Authority and the IRB Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Industrial Development
Revenue Bonds (IMC Global
Operations Inc. Project)
1992 Tax-Exempt Series A
(the "Series 1992 Bonds")
10.43 Second Supplemental Exhibit 10.71 to
Indenture of Trust, dated as the Company's
of June 30, 1993, between Registration
the Authority and the IRB Statement on Form S-
Trustee, relating to the 4, (No. 33-49795)
Series 1991 Bonds and the
Series 1992 Bonds
10.44 Amendment Number 2 to Exhibit 10.44 to
Investment Plan for Salaried the Company's
Employees effective March 1, Registration
1988 and restated effective Statement on Form S-
January 1, 1992 4, (No. 33-49795)
10.45* First Amendment, dated July Exhibit 10.45 to
2, 1991, to form of the Company's
Contingent Employment Registration
Agreement with Officers of Statement on Form S-
Corporation 4, (No. 33-49795)
10.46* Amendment, dated July 2, Exhibit 10.46 to
1991, to Form of "Gross Up" the Company's
Agreement with Officers of Registration
Corporation Statement on Form S-
4, (No. 33-49795)
10.47* Employment Agreement, dated Exhibit 10.47 to
April 15, 1993, between The Company's
Wendell F. Bueche and IMC Registration
Global Inc. Statement on Form S-
4, (No. 33-49795)
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.48* Consulting Agreement, dated Exhibit 10.48 to
July 19, 1993, between the Company's
Wendell F. Bueche and IMC Registration
Global Inc. Statement on Form S-
4, (No. 33-49795)
10.49* Amendment and Extension
Agreement, dated as of June
15, 1995, to Employment
Agreement dated as of April
15, 1993 and Consulting
Agreement dated as of July X
19, 1993, between Wendell F.
Bueche and IMC Global Inc.
10.50* Consulting Agreement, dated Exhibit 10.49 to
March 1, 1993, between the Company's
Billie B. Turner and IMC Registration
Global Inc. Statement on Form S-
4, (No. 33-49795)
10.51 Amendment No. 1 and Waiver Exhibit 10.51 to
No. 1, dated as of June 30, 1993 10-K
1993, to Credit Agreement
dated as of June 29, 1993
among IMC Global Operations
Inc., IMC Global Inc. and
the Banks Listed Therein
10.52 Amendment No. 2, Waiver No. Exhibit 10.52 to
2 and Consent No. 1, dated 1993 10-K
as of September 3, 1993, to
Credit Agreement dated as of
June 29, 1993 among IMC
Global Operations Inc., IMC
Global Inc. and the Banks
Listed Therein
10.53 Amendment No. 1, dated as of
June 24, 1994 to Credit
Agreement, dated as of
February 9, 1994 between IMC-
Agrico Company, NationsBank X
of Georgia and the Banks
Listed Therein
10.54 Amendment No. 2, dated as of
February 24, 1995 to Credit
Agreement, dated as of
February 9, 1994 between IMC-
Agrico Company, NationsBank X
of Georgia and the Banks
Listed Therein
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
10.55 Credit Agreement, dated as Exhibit 99.1 to the
of February 9, 1994, between Company's
IMC-Agrico Company, Registration
NationsBank of Georgia, and Statement on Form S-
the Banks Listed Therein 3, (Amendment No.
1) (No. 33-52377)
10.56 Amendment No. 3, dated as of Exhibit 10.52 to
December 30, 1993, to Credit 1994 10-K
Agreement dated as of June
29, 1993 among IMC Global
Operations Inc., IMC Global
Inc. and the Banks Listed
Therein
10.57 Amendment No. 4, dated as of Exhibit 10.53 to
March 10, 1994, to Credit 1994 10-K
Agreement dated as of June
29, 1993 among IMC Global
Operations Inc., IMC Global
Inc. and the Banks Listed
Therein
10.58 Amendment No. 5, dated as of Exhibit 10.54 to
June 30, 1994, to Credit 1994 10-K
Agreement dated as of June
29, 1993 among IMC Global
Operations Inc., IMC Global
Inc. and the Banks Listed
Therein
10.59 Amendment No. 6, dated as of Exhibit 10.55 to
November 30, 1994, to Credit the Company's
Agreement dated as of June December 31, 1994
29, 1993 among IMC Global Form 10-Q filed
Operations Inc., IMC Global February 13, 1995
Inc. and the Banks Listed
Therein
10.60 Transfer and Administration
Agreement, dated as of
October 31, 1994, between
Enterprise Funding X
Corporation and IMC-Agrico
Company
10.61 Amended and Restated Credit
Agreement, dated as of July
31, 1995, between IMC Global
Operations Inc., IMC Global X
Inc. and the Banks Listed
Therein
Filed with
Exhibit Incorporated Herein Electronic
No. Description By Reference to Submission
--------------------------------------------------------------------
11.1 Fully diluted earnings
(loss) per share for the
years ended June 30, 1995, X
1994 and 1993
21.1 Subsidiaries of the X
Registrant
23.1 Consent of Ernst & Young LLP X
27.1 Financial Data Schedule X
99.1 Registrant's Definitive Registrant's Proxy
Proxy Statement for Annual Statement filed
Meeting on October 19, 1995 September 11, 1995
* Denotes management contract or compensatory plan.
(b) REPORTS ON FORM 8-K
During the fourth quarter and through the date of this filing, the
following reports were filed:
1 A report under Item 5 Dated June 15, 1995
2 A report under Item 5 Dated August 17, 1995
INDEX TO FINANCIAL STATEMENTS, SUPPLEMENTARY DATA
AND FINANCIAL STATEMENT SCHEDULES
Page References
---------------
Consolidated balance sheet at June 30, 1995 and 1994 33
For the years ended June 30, 1995, 1994, and 1993:
Consolidated statement of operations 32
Consolidated statement of cash flows 34
Consolidated statement of changes in
stockholders' equity 35
Notes to consolidated financial statements 36-51
Supplementary financial information - quarterly results (unaudited) 52-53
-------------------------
Financial statements and schedules and summarized financial
information of 50 percent or less owned persons are omitted as none of
such persons are individually or in the aggregate significant under the
tests specified in Regulation S-X under Article 3.09 of general
instructions to the financial statements.
SIGNATURES
Pursuant to the requirements of 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
IMC GLOBAL INC.
-------------------
(Registrant)
Robert C. Brauneker
-------------------------------------
Robert C. Brauneker
Executive Vice President
and Chief Financial Officer
Date: September 21, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated:
Signature Title Date
-------------------------------------------------------------
Wendell F. Bueche
-----------------
Wendell F. Bueche Chairman September 21, 1995
(Chief Executive Officer)
James D. Speir
--------------
James D. Speir President September 21, 1995
(Chief Operating Officer)
Robert C. Brauneker
-------------------
Robert C. Brauneker Executive Vice President September 21, 1995
(Chief Financial Officer)
(Principal Accounting Officer)
Raymond F. Bentele
------------------
Raymond F. Bentele Director September 21, 1995
Frank W. Considine
------------------
Frank W. Considine Director September 21, 1995
Dr. James M. Davidson
---------------------
Dr. James M. Davidson Director September 21, 1995
Richard A. Lenon
----------------
Richard A. Lenon Director September 21, 1995
David B. Mathis
---------------
David B. Mathis Director September 21, 1995
Thomas H. Roberts, Jr.
----------------------
Thomas H. Roberts, Jr. Director September 21, 1995
Billie B. Turner
----------------
Billie B. Turner Director September 21, 1995
EXHIBIT 10.5
IMC GLOBAL INC.
Management Incentive Compensation Program
Effective July 1, 1988
As Amended Through July 2, 1991 and July 1, 1995 Respectively
1. Purpose. The purpose of the Company's Management Incentive
Compensation Program is to further the growth and success of the
Company and its subsidiaries by providing officers and certain other
employees with additional incentive to contribute to such growth and
success and by aiding the Company in attracting and retaining such
employees.
2. Administration. The Program will be administered by the
Compensation Committee (the "Committee") of the Board of Directors of
the Company. The Committee is authorized, subject to the provisions of
the Program, to establish such rules and regulations and make such
interpretations and determinations as it may deem necessary or
advisable for the proper administration of the Program. All such
rules, regulations, interpretations and determinations will be binding
on all participants in the Program.
3. Participation.
3.1 The following employees are eligible to become
participants in the Program in accordance with Section 3.2:
(i) any employee of the Company, other
than the Chief Executive Officer, who is an Elected
Officer of the Company and who is required to file a
Form 3 with the Securities and
Exchange Commission.
(ii) any other employee of the Company or
any subsidiary who shall be classified in Grade 19 or
higher.
3.2 Within the first month of a fiscal year the Senior Human
Resources Officer shall designate, contingent upon approval of the
Chief Executive Officer, the participants in the Program for that year
from among those persons who as of the beginning of the fiscal year are
eligible to participate under Section 3.1. Promptly after the end of
each month of the fiscal year, the Senior Human Resources Officer may
designate, from among those persons who become eligible employees
during such month, additional participants in the Program. Each such
designation shall be in writing and subject to approval of the Chief
Executive Officer.
4. Target Incentive Awards. The Target Incentive Award ("Target
Award") for a participant in a fiscal year shall be determined by
taking his base monthly salary as of the first day of each month in
such year in which he shall be a participant, multiplying each such
amount by the percentage applicable to the incentive award
classification to which he is assigned by the Senior Human Resources
Officer as of the first day of such month consistent with Exhibit I
attached hereto and adding the products so obtained. Each such
assignment shall be in writing and subject to the approval of the Chief
Executive Officer as provided in Section 3.2. Such assignment shall
continue to be applicable during the fiscal year except that at the
beginning of any month in such year it may be changed by the Senior
Human Resources Officer because of any change in duties of the
participant for that and subsequent months in the year consistent with
Exhibit I.
5. Performance Objective.
5.1 Not later than the end of the third month of the fiscal year
the Committee, after consultation with the Chief Executive Officer,
shall determine the Performance Objective for the Company for that
fiscal year. Such Objective shall be expressed in terms of earnings
per share of Common Stock of the Company. Subject to the provisions of
Section 5.2, earnings per share shall mean fully diluted earnings per
share of Common Stock, as shown on the consolidated statement of
earnings of the Company and its subsidiaries for the fiscal year,
certified by the independent public accountants of the Company.
5.2 Notwithstanding the provisions of Section 5.1, the
Committee, after consultation with the Chief Executive Officer and the
Chief Financial Officer, may cause to be excluded from the computation
of earnings per share for purposes of this Program income or loss
attributable to any business acquired during the
fiscal year or any other transaction or any adjustment on the books of
account of the Company occurring during the fiscal year and identified
by the Committee as being of an unusual and nonrecurring nature,
provided that the Committee shall not so exclude any such item unless
it shall be satisfied that it was not taken into account in arriving at
a Performance Objective for that year.
5.3 Not more than 120 days after the beginning of a fiscal year
the Chief Executive Officer or his designee shall notify each
participant who is an elected officer, in writing, of the Performance
Objective applicable for that fiscal year. At his discretion the Chief
Executive Officer or his designee may send written notice to other
participants. After such notices have been sent, the Performance
Objective will not change.
6. Threshold Percentage; Maximum Percentage.
6.1 Not later than the end of the third month of the fiscal
year, the Committee, after consultation with the Chief Executive
Officer, shall establish a minimum percentage of achievement of the
Performance Objective for that fiscal year (the "Threshold
Percentage"). The Threshold Percentage may not be less than 75% nor
more than 90% of the Performance Objective without the approval of the
Board of Directors. If the Threshold Percentage is not achieved, there
will be no Award Pool and participants will not receive incentive
awards under the Program on account of performance, except as provided
in Section 9 below.
6.2 Not later than the end of the third month of the fiscal
year, the Committee, after consultation with the Chief Executive
Officer, shall establish a Maximum Percentage of achievement of the
Performance Objective for that fiscal year (the "Maximum Percentage")
for the purpose set forth in Section 7.5 below. The Maximum Percentage
may not be less than 110% without the approval of the Board of
Directors.
7. Award Pools.
7.1 Subject to the provisions of Section 6.1, an Award Pool will
be accrued with respect to each fiscal year, and determined in
accordance with this Section.
7.2 If the percentage of the Performance Objective which is
achieved in a fiscal year (the "Performance Percentage") is 100%, the
Award Pool for that year will be equal to the sum of the Target Awards
for participants (the "Target Pool").
7.3 If a Performance Percentage for a fiscal year equals the
Threshold Percentage, the Award Pool shall be the Target Pool
multiplied by a percentage which shall not be less than 50% nor more
than the Threshold Percentage, as determined by the Committee, except
that the Board of Directors may set a different percentage.
7.4 If a Performance Percentage for a fiscal year exceeds the
Threshold Percentage but does not exceed 100%, the Award Pool will be
determined by (i) taking a fraction, the numerator of which is the
number of percentage points by which the Performance Percentage exceeds
the Threshold Percentage and the denominator of which is the percentage
point spread between the Threshold Percentage and 100%; (ii)
multiplying such fraction by the excess of the Target Pool over the
Award Pool as determined in Section 7.3 above; and (iii) adding the
resulting amount to such Award Pool.
7.5 If a Performance Percentage for a fiscal year exceeds 100%,
the Award Pool will be determined by multiplying the Target Pool by a
percentage which is not more than 125% and which is determined by the
Committee (except that the Board of Directors may set a different
percentage).
8. Payment of Incentive Awards.
8.1 Promptly after the end of each fiscal year:
(a) The Senior Human Resources Officer, after
consultation with the Chief Financial Officer and after the
Committee has taken any action which it is authorized to
take under Section 5.2, shall report to the Chief Executive
Officer and the Committee, the Award Pool, if any, for the
Company in respect of that year.
(b) The Chief Executive Officer shall designate
the amount, if any, of the Actual Incentive Award to be made
to each participant in the Plan who is not an elected
officer, and shall recommend the amount, if any, of the
Incentive Award to be made to each elected officer in respect
of that year, within the limits of the Award Pool for the
Company.
(c) The Committee shall approve the recommendations
of the Chief Executive Officer and shall submit to the Board
of Directors for its approval (i)the Actual Incentive Award
in respect of that year for each participant in the Program
who is an elected officer, and (ii) the aggregate Actual
Incentive Awards under the Program in respect of that year.
With such submissions the Committee shall also submit to the
Board of Directors its recommendation for the Incentive
Award, if any, outside of the Plan for the Chief Executive
Officer in respect of that fiscal year. Before taking any
action or making any recommendations to the Board of
Directors as contemplated by this Section 8.1(c) the
Committee may consult on such matters with an independent
consultant generally recognized as being an expert in
executive compensation matters.
8.2 The Chief Executive Officer and the Committee, in making
their determinations and recommendations for Actual Incentive Awards
pursuant to Section 8.1(b) and (c) above, will evaluate each
participant's performance during a year, taking into account all
relevant factors, including the degree to which the participant
achieved assigned objectives.
8.3 Promptly after receiving the Committee's recommendations
referred to in Section 8.1(c)(i) and (ii) above, the Board of Directors
will approve or modify such recommendations all within the limitations
set forth in Section 8.1(b). In considering these matters, the Board
will take into account the amount of the incentive award, if any, to be
approved by it for the Chief Executive Officer in respect of that year.
8.4 Unless the participant elects otherwise pursuant to
paragraph 8.5, payment of Actual Incentive Awards to participants under
the Program with respect to a fiscal year shall be made in cash in a
lump sum within 120 days after the close of such fiscal year.
8.5 A participant may elect to defer payment of his Actual
Incentive Award by written notice to the Senior Human Resources Officer
prior to the beginning of the fiscal year for which the award to be
deferred will be payable. A participant electing to defer may have his
award paid to him in one of the following ways:
a) in a lump sum payment or in a series of not less than 5 or
more than 10 installments commencing not later than 60 days after the
end of the calendar year in which the participant terminates his
employment, whether by death, disability, normal or early retirement
pursuant to the Company's Retirement Plan for Salaried Employees, or
any other reason. The Committee may, upon request by a participant
prior to his termination of employment in its sole discretion, deem
that any period of consultancy with the Company which is commenced
immediately upon a participant's termination of employment is a
continuation of employment for purposes of this subparagraph alone.
b) with the consent of the Committee, in a lump sum payment on
any other date or in a series of not less than 5 or more than 10
installments commencing on any other date as may be agreed upon by a
participant and the Committee. However, should a participant terminate
employment prior to such agreed upon date for reasons other than
disability or normal early retirement, the Committee may, in its sole
discretion, pay all such participant's awards deferred pursuant to this
subparagraph plus interest accrued thereon to such participant no later
than 60 days after the date of termination of employment.
All deferred awards will be paid in cash.
The Company and each participant electing to defer will specify
the method of payment of the deferred award, the date of commencement
of such payments, the rate of interest accrued on such award, and such
other terms of deferral as may be agreed upon between the parties.
Each such agreement will be executed by the Company and the participant
prior to the beginning of the fiscal year for which the award to be
deferred is payable.
Notwithstanding any election to defer made by the participant
pursuant to the foregoing, upon the death of a participant the Company
in its sole discretion, may pay the participant's deferred awards under
this Plan plus accrued interest thereon to such participant's
designated beneficiary. Payment will be made in a lump sum no later
than 60 days after the end of the calendar year in which the
participant's death occurs.
A participant's deferred compensation account will not be
trusteed, nor will such account represent any obligation on the part of
the Company other than the contractual obligations specified in the
award deferral agreement. The Company agrees to accrue interest on the
participant's deferred compensation account no more frequently than
each calendar quarter of each year at a rate not greater than the prime
rate then currently quoted by the Wall Street Journal under the heading
"Money Rates".
9. Special Pool. If in respect of any fiscal year there is no
Award Pool for the Company, the Committee may establish a Special Pool
which shall not be in excess of 40% of the Target Pool and within the
limitations of that Special Pool, Incentive Awards may be made to
participants in accordance with the procedures set forth in Sections
8.1(b) and (c), and 8.2, 8.3 and 8.4.
10. Amendment and Termination. By action of the Board of
Directors, the Plan may be amended at any time and from time to time or
terminated at any time, provided, however, that no such amendment shall
divest any participant of rights which have been accrued under the Plan
with respect to the fiscal year in which the amendment was made or any
prior fiscal year.
11. Plan Operation in the Event of a Change in Control.
11.1 Application: This Section 11 shall be applicable to
and govern Awards and their vesting and payment, in the event of a
change in control of IMC Global Inc.
11.2 Definitions: For purposes of this Section 11 only
the following terms shall have the following meanings:
a) Company: IMC Global Inc.
b) Change in Control: The term "Change in Control" of the
Company when used in this Plan, shall mean, and be deemed to have
occurred as of the first day that any one or more of the following
conditions have been satisfied.
(i) the acquisition by any individual, entity or
group (a "Person"), including any "person" within the
meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange
Act, of 15% or more of either (i) the then outstanding
shares of common stock of the company (the
"Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding
securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the
following: (A) any acquisition directly from the
Company (excluding any acquisition resulting from the
exercise of an exercise, conversion or exchange
privilege unless the security being so exercised,
converted or exchanged was acquired directly from the
Company; (B) any acquisition by the Company, (C) any
acquisition by an employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company (D) any
acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and
(iii) of subsection (3) of this definition;
(ii) individuals who, as of the date hereof,
constitute the Board of Directors (the "Incumbent
Board") cease for any reason to constitute at least a
majority of such Board; provided that any individual
who becomes a director of the Company subsequent to
the date hereof whose election, or nomination for
election by the Company's stockholders, was approved
by the vote of at least a majority of the directors
then comprising the Incumbent board shall be deemed a
member of the Incumbent Board; and provided further,
that any individual who was initially elected a
director of the Company as a result of an actual or
threatened election contest, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of
any Person other than the Board shall not be deemed a
member of the Incumbent Board;
(iii) approval by the stockholders of the Company
of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of
the assets of the Company (a "Corporate Transaction");
excluding, however, a Corporate Transaction pursuant
to which (i) all or substantially all of the
individuals or entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than
60% of, respectively, the outstanding shares of common
stock, and the combined voting power of the
outstanding securities of such corporation entitled to
vote generally in the election of directors, as the
case may be, of the corporation resulting from such
Corporate Transaction (including, without limitation,
a corporation which as a result of such transaction
owns the Company or all or substantially all of the
Company's assets either directly or indirectly) in
substantially the same proportions relative to each
other as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company
Common Stock and the Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other
than: the Company; the corporation resulting from such
Corporation Transaction; and any Person which
beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or
more of the Outstanding Company Common Stock of the
corporation resulting from such Corporate Transaction
or the combined voting power of the outstanding
securities of such corporation entitled to vote
generally in the election of directors and (iii)
individuals who were members of the Incumbent Board
will constitute at least a majority of the members of
the board of directors of the corporation resulting
from such corporation Transaction; or
(iv) approval by the stockholders of the Company of
a plan of complete liquidation or dissolution of the
Company.
11.3 In the event that a Change in Control occurs then the Trust
between IMC Global Inc. and Wachovia Bank Trust Company, N.A. for the
Management Incentive Compensation Plan ("Trust") shall become
immediately funded to the level of target awards for the fiscal year in
which such Change in Control occurs and also as to all awards
previously deferred under Section 8.
11.4 If a change in control occurs and a participant is
terminated from employment (as defined in this Section 11) prior to the
end of the fiscal year in which such change of control occurs, then
such participant's target award shall be prorated to the date of
termination of employment and paid to him by the Trustee of the Trust
on the business day next following the end of the applicable fiscal
year. Target awards of participants terminated other than as defined
shall be forfeited. If a change in control occurs and a participant's
award has not been paid to him in accordance with the terms of the
Plan, by the Company for the fiscal year during which such change in
control occurred then the Trustee shall pay the participant his target
award from the Trust as soon as practicable after the date on which his
award should have been paid or, if the award was previously deferred,
on the previously elected payment date.
11.5 If a change in control occurs and the Plan is terminated
during the fiscal year in which such change in control has occurred,
then target awards for all participants still employed and for those
terminated as defined shall be paid by the Trustee from the Trust as
soon as practicable, on a prorated basis as applicable to terminated
participants, after the end of the fiscal year in which Plan
termination occurred.
IN WITNESS WHEREOF, IMC Global Inc. has caused this instrument to be
executed, effective as of --------------------.
IMC GLOBAL INC.
By
----------------------------
Its
(corporate seal)
ATTEST:
By
-------------------------
Its
EXHIBIT I
MANAGEMENT INCENTIVE COMPENSATION PROGRAM BONUS CLASSIFICATIONS
Classifications Target %
--------------- --------
Class I 35 to 50%
-------
Elected Officers
Class II 25 to 35%
--------
Key Employees
Class III 15 to 35%
---------
All Others in Grade 19 or above
EXHIBIT 10.9
RETIREMENT PLAN
FOR
SALARIED EMPLOYEES
OF
IMC GLOBAL OPERATIONS INC.
Effective February 1, 1988
Including Amendments Number One and Two
and Amended and Restated
Effective January 1, 1989
RETIREMENT PLAN FOR SALARIED EMPLOYEES
OF
IMC GLOBAL OPERATIONS INC.
TABLE OF CONTENTS
-----------------
ARTICLE & SECTION PAGE
----------------- ----
Article 1 - Title 2
Article 2 - Definitions 2
Article 3 - Participation - Commencement of Participation 14
Article 4 - Contributions
Section 4.1. Contributions 14
Section 4.2. Trust 15
Article 5 - Pensions
Section 5.1. Normal and Deferred Retirement 16
Section 5.2. Early Retirement 16
Section 5.3. Minimum Normal, Deferred and Early
Retirement Benefits 18
Section 5.4. Vested Termination Prior to Early Retirement 18
Section 5.5. Responsibility to Advise Administrator
of Current Address 19
Section 5.6. Commencement of Benefits 19
Section 5.7. Benefit Commencement Pursuant to a Qualified
Domestic Relations Order 20
Section 5.8 Transferred Employees 20
ARTICLE & SECTION PAGE
----------------- ----
Article 6 - Pension Forms
Section 6.1. Basic Pension Form 21
Section 6.2. Optional Pension Forms 22
Section 6.3. Survivor Benefits 23
Section 6.4. Election Procedures 24
Section 6.5. Payment of Small Benefits in a Lump Sum 29
Section 6.6. Election of Option 6 under Section 6.2 29
Section 6.7. Coordination with Limitations on
Contributions and Benefits 30
Section 6.8. Direct Rollovers 30
Article 7 - Limitations on Pensions
Section 7.1. Maximum Annual Benefits 30
Section 7.2. Limitation Year and Combination Plan Limits 31
Section 7.3. Distribution Restrictions 31
Article 8 - Special Participation and Distribution Rules
Relating to Reemploymentof Terminated
Employees and Employment by Related Entities
Section 8.1. Reemployment of Terminated or Retired Employees
32
Section 8.2. Employment by Related Entities 35
Section 8.3. Change of Status of Participant to Hourly
Employee 36
Section 8.4. Change of Status of Hourly Employee
to Salaried Employee 37
Article 9 - Administration
Section 9.1. The Committee 38
ARTICLE & SECTION PAGE
----------------- ----
Section 9.2. The Administrator 41
Section 9.3. Claims Procedure 41
Section 9.4. Actuary to be Employed 42
Section 9.5. Funding Policy 43
Section 9.6. Notices to Participants, Beneficiaries and
Contingent Pensioners 43
Section 9.7. Notices to Employers, Administrator or Committee
43
Section 9.8. Records 44
Section 9.9 Limitation of Responsibility 44
Article 10 - Participation by Other Employers
Section 10.1. Adoption of Plan 45
Section 10.2. Withdrawal from Participation 46
Section 10.3. Company as Agent for Employers 45
Article 11 - Continuance by a Successor 46
Article 12 - Miscellaneous
Section 12.1. Expenses 47
Section 12.2. Non-Assignability 47
Section 12.3. Divestment for Cause 48
Section 12.4. Benefits Payable to Incompetents 48
Section 12.5. Employment Non-Contractual 49
Section 12.6. Limitation of Rights 49
ARTICLE & SECTION PAGE
----------------- ----
Section 12.7. Merger or Consolidation with Another Plan 49
Section 12.8. Liability for Benefit Payments 50
Section 12.9 Mistake 50
Article 13 - Amendment, Withdrawal and Termination
Section 13.1. Amendment 50
Section 13.2. Withdrawal 52
Section 13.3. Termination 53
Section 13.4. Trust to be Applied Exclusively for
Participants andTheir Beneficiaries 56
Article 14 - Top Heavy Provisions
Section 14.1. Introduction 57
Section 14.2. Definitions 57
Section 14.3. Minimum Accrued Benefit 59
Section 14.4. Adjustment of Benefit 60
Section 14.5. Nonforfeitability of Benefit 60
Section 14.6. Minimum Vesting 61
Section 14.7. Further Limitations 61
Article 15 - Change in Control Provisions 61
RETIREMENT PLAN FOR SALARIED EMPLOYEES
OF
IMC GLOBAL OPERATIONS INC.
The Retirement Plan (the "Plan") for Salaried Employees of IMC
Global Operations Inc. (formerly IMC Fertilizer, Inc.), as adopted,
effective February 1, 1988, is hereby amended and restated effective
January 1, 1989, except as otherwise noted or required by law, and
applies to Participants who retire or otherwise terminate employment
after that date.
Assets were transferred to the Trust for this Plan representing
accrued benefits and liabilities for active participants in the
predecessor plan on January 31, 1988 who became participants in this
Plan on February 1, 1988. Additionally, assets were later transferred
representing accrued benefits and liabilities for participants in the
predecessor plan who became participants in this Plan on or prior to
March 31, 1989.
All such predecessor plan participants who became participants in
this Plan subsequent to April 1, 1989 accrue service and credited
service from the date of initial participation in this Plan only.
Since original adoption certain provisions have been added to the
Plan to reflect accruals of Service and Credited Service for
participants in the Predecessor Plan and to include adoption of Model
Amendments and other changes required by applicable law and regulation.
Certain salaried employees of Freeport-McMoRan, Inc. were
transferred to the Plan on or after July 1, 1993. Additionally,
effective April 16, 1992 the Retirement Plan for Hourly Employees of
IMC Fertilizer, Inc. Represented by Local #4-786 Oil, Chemical and
Atomic Workers International Union AFL-CIO was merged into this Plan
pursuant to the terms of Amendment Number Two to that Plan as set forth
in Appendix A.
ARTICLE 1
TITLE
The title of this plan, on and after November 1, 1994, shall
be "Retirement Plan for Salaried Employees of IMC Global Operations
Inc." Prior to November 1, 1994 this Plan was known as "Retirement Plan
for Salaried Employees of IMC Fertilizer, Inc."
ARTICLE 2
DEFINITIONS
As used herein the following words and phrases shall have the
following respective meanings unless the context clearly indicates
otherwise:
(1) Accrued Benefit. A Participant's Normal Retirement
Benefit determined under Article 5, based on his Salary,
Final Average Earnings (if applicable), and Credited Service
as of the date when his Accrued Benefit is being determined.
Effective January 1, 1994, and except as otherwise provided
by the Plan, the Accrued Benefit of each Section 401(a)(17)
Employee under the Plan will be the greater of:
(a) The Employee's Accrued Benefit determined under the
benefit formula applicable for the Plan Year beginning
January 1, 1994, as applied to the Employee's total years of
Credited Service taken into account for
determining his Accrued Benefit; or
(b) The sum of:
(i) The Employee's Accrued Benefit as of
December 31, 1993, frozen in accordance with Treas. Reg.
1.401(a)(4)-13, and
(ii) The Employee's Accrued Benefit determined
under the benefit formula applicable for the Plan Years
beginning on or after January 1, 1994, as applied to the
Employee's years of Credited Service for Plan Years
beginning on or after January 1, 1994.
A Section 401(a)(17) Employee
is an Employee whose current Accrued
Benefit as of a date on or after January
1, 1994 is based on Salary for a year
beginning before January 1, 1994 that
exceeded $150,000.
(1) Actuarial (or Actuarially) Equivalent. A benefit of
value equivalent to the value of the benefit replaced as
determined under actuarial mortality and interest
assumptions. Except where otherwise provided by the Plan or
required by applicable law and regulations, Actuarial
Equivalent benefit forms will be determined under this Plan
by applying an interest rate of the lesser of (A) six
percent, or (B) the applicable interest rate as determined
below; and mortality rates under the applicable mortality
table as determined below. For purposes of this definition:
(a) The applicable interest rate is the interest
rate(s) that would be used by the Pension Benefit
Guaranty Corporation for valuing single sum benefits
upon termination of a single employer Plan as of the
month containing the Pension Starting Date for which the
determination is made.
(b) The applicable mortality table is the 1976
Projected Experience Table rates, based on the
experience underlying the 1971 Group Mortality Tables,
without margins, with a projection for mortality
improvements to 1976 by Scale E, and with mortality
rates for Beneficiaries assumed to be equal to that for
Participants seven years younger.
No amendment of this definition will be applied to cause
the Actuarial Equivalent of a Participant's accrued benefit
to be less than it would have been, calculated as of the
later of the date the amendment is adopted or effective, on
the basis of the preamendment mortality and interest
assumptions.
(3) Administrator. The administrator of the plan appointed
by the Company pursuant to Section 9.2.
(4) Affiliate. Any corporation, trade or business that is
a member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which includes the Company; any
trade or business (whether or not incorporated) that is under
common control (as defined in Section 414(c) of the Code)
with the Company; any entity (whether or incorporated) which
is a member of an affiliated service group (as defined in
Section 414(m) of the Code) that includes the Company; and
any other entity required to be aggregated with the Company
pursuant to regulations under Code Section 414(o). For
purposes of applying this definition and Sections 414(b) and
(c) of the Code (and their cross-reference to Section
1563(a)(1) of the Code) to Article VII of the Plan, the
phrase "more than 50 percent" shall be substituted for the
phrase "at least 80 percent" at each place it appears in
Section 1563(a)(1) of the Code. For purposes of this
definition, an Affiliate shall be considered an Affiliate
only for the time during which it satisfies the above
conditions for being an Affiliate.
(5) Beneficiary or Designated Beneficiary. The person or
persons, designated by a participant to receive the benefits
provided by Sections 6.3(a) and 6.3(c).
(6) Break in Service. Any period during which an Employee
is not employed by an Employer or an Affiliate and which is
not included in a period of employment. For purposes of
determining whether an Employee has incurred a break in
service, the Employee shall be deemed to be employed by an
Employer or an Affiliate during any period in which he is in
Military Service, provided that such Military Service does
not extend beyond the date on which he could, with or without
application, have been discharged and after discharge from
such military service he returns to the employ of an Employer
within the period prescribed by laws relating to the
reemployment rights of persons in military service.
(7) Change in Control: The term "Change in Control" of IMC
Global Operations Inc. ("Group") when used in this Plan, is
defined to occur on the date of the first to occur of the
following:
(a) there occurs a change in control of Group of a
nature that would be required to be reported in response
to Item 6(3) of Schedule 14A of Regulations 14A or Item
1 of Form 8-K, promulgated under the Securities Exchange
Act of 1934 as in effect on the date of this Agreement
or, if neither item remains in effect, any regulations
issued by the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934 which
serve similar purposes;
(b) any 'person' (as such term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of
1934) is or becomes a beneficial owner, directly or
indirectly, of securities of the Company representing
20% or more of the combined voting power of the Group's
then outstanding securities;
(c) the individuals who were members of the Board
of Directors of Group, or of any class into which it is
divided, immediately prior to a meeting of the
shareholders of Group involving a contest for the
election of directors shall not constitute a majority of
the Board of Directors, or of such class, following such
election;
(d) Group shall have merged into or consolidated
with another corporation, or merged another corporation
into Group, on a basis whereby less than 50% of the
total voting power of the surviving corporation is
represented by shares held by former shareholders of
Group prior to such merger or consolidation.
(8) Code. The Internal Revenue Code of 1986, as amended.
(9) Committee. The Committee appointed by the Board of
Directors of the Company pursuant to Section 9.1.
(10) Company. IMC Global Operations Inc., a Delaware
corporation, and any corporation which succeeds to the
business of such corporation and adopts the Plan pursuant to
Article 11. Any action required by the Company shall be
taken by resolution of the Board of Directors of the Company
or by an officer of the Company authorized by such resolution
or by the by-laws of the Company to take actions of that type
respecting the Plan.
(11) Contingent Pensioner. A participant's spouse, or the
person (which may be the participant's spouse) designated by
a participant to receive a pension if such person shall
survive the participant under one of the options set forth in
Section 6.2.
(12) Covered Compensation. The thirty-five year average
amount of the maximum taxable wage bases for purposes of
Social Security ending with the calendar year in which a
Participant attains Social Security Retirement Age. If a
Participant retires or otherwise terminates employment prior
to attainment of Social Security Retirement Age, this
thirty-five year average shall be calculated assuming that
the taxable wage base in future years equals the taxable wage
base in effect for the last calendar year in which the
Participant is employed.
(13) Credited Service. A participant's period of employment,
used to determine the amount of his pension. The Credited
Service of a Predecessor Plan Participant who was a
participant in the Predecessor Plan on January 31, 1988 and
who became a Participant in this Plan on February 1, 1988,
shall be the sum of (1) his "credited service" under the
predecessor plan as of January 31, 1988 and (ii) his Period
of Employment subsequent to the effective date.
A Predecessor Plan Participant who was a participant in
the Predecessor Plan before January 31, 1988 and who became a
Participant in this Plan after February 1, 1988, but on or
before April 1, 1989, shall have his "credited service" under
the Predecessor Plan recognized under this Plan; and a
Transferred Employee shall have his "credited service" under
the Freeport McMoRan Employees Retirement Plan recognized
under this Plan to the extent required by Section 5.8(b),
provided in either case that 1) he has not received or is not
receiving benefits under the Predecessor Plan or the Freeport-
McMoRan Employees Retirement Plan, and 2) such service would
otherwise be recognized under the provisions of this
Paragraph (13) and Paragraphs (28), (36) and (45) of Article
2.
A Participant who participated in the Predecessor Plan
and first became eligible to participate in this Plan
subsequent to April 1, 1989 shall accrue Service and Credited
Service only from the date of eligibility to participate in
this Plan.
(14) Distributee. A person entitled to receive a
distribution from the trust under Article 6. A Distributee
includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse or former
Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in
Article 12 and Section 414(p) of the Code, are Distributees
with regard to the interest of the spouse or former spouse.
(15) Effective Date. The effective date of the plan with
respect to an Employee's Employer, which in the case of the
Company shall be February 1, 1988, and in the case of any
other Employer shall be the date designated by such employer.
(16) Eligible Employee. An Employee of an Employer other
than an hourly-paid employee, except to the extent provided
by Section 8.3, and other than a leased employees within the
meaning of Section 414(n)(2) or 414(o)(2) of the Code;
(17) Eligible Retirement Plan. An Eligible Retirement Plan
is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the
Distributee's eligible rollover distribution. However, in the
case of an Eligible Rollover Distribution to the surviving
spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(18) Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
eligible rollover distribution does not include:
(a) any distribution that is one of a series of
substantially equal periodic payments made less
frequently than annually for the life (or life
expectancy) of the distributee or the joint lives (or
joint life expectancies) of the Distributee and the
Distributee's designated beneficiary, or for a specified
period of ten years or more;
(b) any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; and
(c) the portion of any distribution that is not
includible in gross income (determined without regard to
the exclusion for net unrealized appreciation with
respect to Employer securities).
(19) Employee. An individual who is employed by an Employer
or any Affiliate. Employee shall include leased employees
within the meaning of Sections 414(n)(2) and 414(o)(2) of the
Code, unless leased employees constitute less than 20% of the
Employers' and Affiliates' nonhighly compensated workforce
within the meaning of Section 414(n)(5)(c)(ii) of the Code
and the leased employee is covered by a safe harbor plan of
the leasing organization meeting the requirements of Section
414(n)(5)(B) of the Code as in effect at the relevant time.
Any person employed by a foreign corporation shall be
deemed to be an Employee of an Employer during his period of
employment by such foreign corporation if
(i) not less than 100% of the voting stock of
such foreign corporation is owned by an employer;
(ii) the employer has entered into an
agreement under Section 3121(1) of the Code which
applies to such foreign corporation;
(iii) the employee is a citizen of the United
or is a permanent resident alien in the United States;
and
(iv) contributions under a funded plan of
deferred compensation are not provided by any other
person with respect to the remuneration paid to such
person by such foreign corporation.
The term Employee shall exclude all independent
contractors and any other individuals whose only remuneration
from the Company is reported on an IRS Form 1099.
(20) Employer. The Company and any other corporation which,
with the consent of the Company, elects to participate in the
Plan in the manner described in Section 10.1 and any
successor corporation which adopts the Plan pursuant to
Article 11. If any such corporation withdraws from
participation in the Plan pursuant to Section 10.2, or
terminates its participation in the Plan pursuant to Section
13.3, such corporation shall thereupon cease to be an
Employer.
(21) ERISA. The Employee Retirement Income Security Act of
1974.
(22) Family Member. An individual described in Section
414(q)(6)(B) of the Code.
(23) Final Average Salary. The average of a participant's
annual Salary for the five consecutive years within the ten
successive years of service immediately preceding the
Participant's retirement date, or date of termination of
Service in which he has the greatest aggregate salary.
(24) Highly Compensated Employee. A participant or former
participant who is a highly compensated employee as defined
in Code Section 414(q) the requirements of which are herein
incorporated into this Plan by specific reference.
(25) Highly Compensated Former Employee. A former Employee
who separated from Service and ceased participation in the
Plan and was a Highly Compensated Employee at the time he
ceased participation after attaining age 55. A Highly
Compensated Former Employee shall be treated as a Highly
Compensated Employee.
(26) Maternity or Paternity Leave. A leave of absence taken
by an employee for any period by reason of such employee's
pregnancy, birth of an employee's child, placement of a child
with the employee in connection with the adoption of such
child or any absence for the purpose of caring for such child
for a period immediately following such birth or placement.
Leaves of absence taken in accordance with this subsection
shall not include any leave of absence which is deemed to be
a short term disability under the Short-Term Disability Plan
for Salaried Employees of IMC Global Operations Group, Inc.
whether or not the employee is eligible for benefits under
that plan.
(27) Military Service. (a) Service in active duty in the
armed forces of the United States or of any State thereof;
(b) service in the uniformed services of the United States or
of any State thereof; or (c) service in the armed forces of
the United States or any of its allies in time of war in
which the United States is engaged.
(28) Minimum Vesting Requirement. Completion of ten years of
Service or attainment of age 65, whichever first occurs. For
a participant credited with Service on or after January 1,
1989 and effective as of such date, completion of five years
of Service or attainment of age 65, whichever first occurs.
A Participant's service under any pension plan of
International Minerals & Chemical Corporation shall be
recognized as Service under this Plan provided such
participant became eligible to participate in this Plan no
later than March 31, 1989 so long as such prior service would
have been recognized in any event under the provisions of
Paragraphs 2(31) and 2(39) of this Plan.
(29) Non-Highly Compensated Employee. An Employee of the
Employer who is neither a Highly Compensated Employee nor a
Family Member.
(30) Normal Retirement Age. The date the Participant attains
age 65.
(31) Normal Retirement Date. The first day of the month
coincident with or next following the date the Participant
attains his Normal Retirement Age.
(32) Old Plan. The Retirement Plan for Salaried Employees of
International Minerals & Chemical Corporation as in effect on
December 31, 1969.
(33) Participant. An employee who has satisfied the
requirements set forth in Article 3.
(34) Pension. The annual benefit, payable in monthly
installments, which continues for the lifetime of the payee,
except as payable under Option 6 of Section 6.2.
(35) Pension Starting Date. The first day on which a pension
is payable which is always the first day of the month.
(36) Period of Employment. Each period of time measured in
months during which a Participant is employed by an employer.
A Participant's Period of Employment shall not be terminated
by reason of a leave of absence from active employment
granted by his employer, pursuant to a policy uniformly
applied in all similar circumstances, because of (a) Military
Service, attendance at a school or training program at the
request of his employer, mandatory government service in a
civilian capacity, jury duty, layoff, leave under the Family
and Medical Leave Act, or any applicable state family leave
statute, or personal hardship; or (b) because of disability,
provided that if he does not return to active employment with
an employer before the later of (i) the time specified in his
leave, or (ii) cessation of his disability, as the case may
be, his employment shall be considered terminated as of the
earlier of twelve months after the last day of the month in
which such leave began and the last day of the month in which
such leave of absence terminated.
Maternity or Paternity Leave shall be deemed to be a
Period of Employment where necessary to prevent a Break in
Service, either in the plan year such leave is begun or the
following year.
An employee's absence from service because of engagement
in Military Service shall be considered a leave of absence
granted by his employer and notwithstanding any provision of
the first paragraph of this subdivision shall not terminate
his service if he returns to active employment with an
employer within thirty days following the period of time
during which he has reemployment rights under any applicable
federal law.
(37) Plan. The Plan herein set forth, as amended from time
to time.
(38) Plan Year. February 1 through December 31, 1988 and
January 1 through December 31 thereafter.
(39) Predecessor Plan. The Retirement Plan for Salaried
Employees of International Minerals & Chemical Corporation as
in effect on the last day the participant was eligible to
participate in that plan so long as such date was on or prior
to March 31, 1989.
(40) Predecessor Plan Participant. A Participant in the
Plan, whose participation commenced prior to April 1, 1989,
and who was a participant in the predecessor plan prior to
March 31, 1989 so long as such prior service would otherwise
be recognized under the rules set forth in Article 2,
Paragraphs 5, 11, 23, 31 and 39. A participant in the
predecessor plan who was on short term disability leave as of
January 31, 1988 shall, if he is employed by the Company upon
recovery from the disability, be deemed to be a predecessor
plan participant.
(41) Primary Social Security Benefit. The annual amount
available for the benefit of a participant at Social Security
Retirement Age (and excluding payments for a spouse or
dependents) under the old age benefit provisions of the
federal Social Security Act as in effect as of the date his
employment terminates.
The amount of the Primary Social Security Benefit which
is required for the purposes of the plan at any time shall be
the amount estimated on a uniform basis by the administrator.
Such estimated amount shall not exceed the Primary
Social Security Benefit that would result based on (a) the
employee's Average Monthly Wage at Social Security Retirement
Age under the Social Security Act, computed using the lesser
of the annualized rate of compensation as of the
determination date or the annual compensation of the employee
in the prior calendar year (annualized, where the employee
worked for less than a full year) assuming compensation
increased prior thereto at the rate of increase in the
Average Per Worker Total Wages reported by the Social
Security Administration and assuming continuation of such
compensation without increase thereafter until Social
Security Retirement Age and (b) the Table of Social Security
Benefits in effect as of the January 1 of the calendar year.
If applicable a written notice shall be provided to each
such terminating employee which shall indicate that the
amount of Social Security is estimated and that, in the event
the employee obtains a record of his earnings from the Social
Security Administration, then the amount of Social Security
shall be based on such record of actual earnings; provided,
however, that such record of Social Security earnings shall
be utilized only if such record is submitted to the
administrator by the employee no later than 120 days
following the later of the date of the employee's termination
and the time the employee receives such written notice.
(42) Qualified Joint and Survivor Annuity. For a Participant
married on his pension starting date, a monthly annuity
payable to a Participant for his life, with a monthly
survivor annuity payable after his death to the spouse to
whom the Participant was married on his Annuity Starting
Date, if the spouse survives the Participant, and the monthly
payment under which equals fifty-percent (50%) of the monthly
payment to the Participant.
For a Participant who is not married on his pension
starting date, the annuity for the life of the Participant.
(43) Regulations. Written promulgations of the Department of
Labor construing Title I of ERISA or the Department of
Treasury construing the Code.
(44) Salary. Salary shall mean earnings listed on the
Employee's Form W-2, Box 1, plus any salary reduction amounts
elected by a Participant pursuant to the terms of the
Investment Plan for Salaried Employees of IMC Global
Operations Inc. and the IMC Global Operations Inc. Flexible
Benefits Program, but then excluding:
(a) 50% of any incentive payment or bonus, and
(b) Any annual earnings in excess of the
compensation limit. For this purpose, the "compensation
limit" means the amount established by Section
401(a)(17) of the Code, as such amount is adjusted for
increases in the cost of living in accordance with
Section 401(a)(17)(b) of the Code. (This limit is
$200,000 for Plan Years beginning after December 31,
1988 and $150,000 for Plan Years beginning after
December 31, 1993.) If salary is being determined for a
period, not exceeding 12 months, that is not a calendar
year, the adjusted annual compensation limit for the
calendar year in which that determination period begins
will apply to that determination period. If the
determination period consists of fewer than 12 months,
the adjusted annual Compensation Limit will be
multiplied by a fraction, the numerator of which is the
number of months in the determination period and the
denominator of which is 12. If an Employee's benefit
accruing in any current Plan Year depends on salary for
an earlier determination period, the adjusted annual
Compensation Limit for that earlier determination period
will apply to that Salary. For this purpose, the
adjusted annual Compensation Limit to be applied for
benefit accruals after 1993 that depend on salary for
periods before 1994 is $150,000. In applying this
limitation, Highly Compensated Employee who is subject
to the family member aggregation rules of Section
414(q)(6) of the Code because the Employee is either a
five percent (5%) owner of the Company or one of the ten
Highly Compensated Employees paid the greatest
compensation during the year, and all his family members
shall be treated as a single Employee, except that for
this purpose family members shall include only the
affected Employee's spouse and any lineal descendants
who have not attained age nineteen (19) before the close
of the year. If, as a result of the application of such
rules the adjusted compensation limit is exceeded, the
compensation Limit shall be apportioned among affected
Family Members in proportion to each such Family
Member's compensation prior to the application of the
compensation limit.
(45) Service. A Participant's employment which is used, if
his employment terminates prior to his Normal Retirement Age,
to determine whether he is entitled to receive a Pension. A
Predecessor Plan Participant's Service shall be the total of
(i) the Periods of his Employment by an Employer after the
Effective Date and (ii) his Service as of January 31, 1988
under the Predecessor Plan.
In addition, a Participant who left the employ of the
Predecessor Employer prior to January 31, 1988 and had
credited service under the Predecessor Plan and became a
participant in this Plan subsequent to February 1, 1988 but
prior to April 1, 1989 will have such service under the
Predecessor Plan recognized under this Plan provided that
such predecessor plan service would otherwise be recognized
under the terms of this Paragraph (45) as well as Paragraphs
(13), (28) and (36) of Article 2. A Participant who
participated in the Predecessor Plan and became eligible to
participate in this Plan subsequent to April 1, 1989 shall
accrue service from the date of eligibility to participate in
this Plan.
In addition, a Participant who left the employ of
Freeport-McMoRan Inc., who had vesting and credited service
under the Freeport McMoRan retirement plan, was transferred
employment to IMC Fertilizer, Inc.on or after July 1, 1993,
and became a Participant in the Plan subsequent thereto, will
have such service under the Freeport-McMoRan plan recognized
under the Plan provided that the Freeport McMoRan plan
service would otherwise be recognized under the terms of this
Paragraph (45) as well as Paragraphs (13, (28) and (36) of
Article 2. A Participant who participated in the Freeport-
McMoRan plan and became eligible to participate in this Plan
subsequent to July 1, 1993 shall accrue service from the date
of eligibility to participate in the Plan.
Any Break in Service of twelve months or less shall be
included in an Employee's Service.
(46) Social Security Retirement Age. Age sixty-five (65) as
to any Participant born prior to January 1, 1938; age sixty-
six (66) as to any Participant born after December 31, 1937
but prior to January 1, 1955; age sixty-seven (67) as to any
Participant born after December 31, 1954.
(47) Termination of Employment: For purposes of the Plan
other than Article 15, the date on which an Employee's
employment with the Employers and Affiliates terminates for
any reason.
(48) Transferred Employee. Each person who becomes an
Employee on or after July 1, 1993 and who was an employee of
Freeport-McMoRan Inc. prior to the date on which he first
became an Employee.
(49) Trust. The trust created by agreement between the
Employers and the Trustee, as from time to time amended.
(50) Trust Fund. All money and property of every kind held
by the Trustee under the trust agreement.
(51) Trustee. The trustee provided for in Section 4.2, any
successor trustee or, if there shall be more than one trustee
acting at any time, all of such trustees collectively.
ARTICLE 3
PARTICIPATION
Commencement of Participation. Each person who became an
Employee of the Company on February 1, 1988 and who was a Participant
in the Predecessor Plan as of January 31, 1988 became a Participant in
this Plan as of February 1, 1988. If the Plan becomes effective with
respect to any Employer after the Effective Date, any Eligible Employee
of such Employer on the Effective Date with respect to such Employer
shall become a Participant as of such Effective Date. Any other
Employee shall become a Participant on the date he becomes an Eligible
Employee.
If a Participant is transferred from one Employer to another or
from an Employer to an Affiliate or from an Employer to International
Minerals & Chemical Corporation (Canada) Limited, such transfer may not
terminate the Participant's participation in the Plan and such
Participant may continue to participate in accordance with Sections
8.2, 8.3 and 8.4 of this Plan.
ARTICLE 4
CONTRIBUTIONS
Section 4.1. Contributions. The Employers intend to make
contributions to the Trust (a) sufficient to maintain for the Plan a
non-negative funding standard account balance; and (b) not in excess of
the amount currently deductible in computing the Employer's federal
income tax. The Employer shall contribute to the Trust Fund with
respect to Participants for which this Plan has been adopted, periodic
payments established under the funding policy explained in this Article
4. Contributions by any Employer for each Plan Year shall be paid to
the Trustee no later than as may be permitted under Section 412(c)(10)
of the Code.
Employees shall not be required or permitted to make
contributions.
Subject to Article 7, any contribution made by an Employer shall
be irrevocable and shall be held and disposed of by the Trustee solely
in accordance with the provisions of the Plan and the Trust Agreement.
Each contribution made by an Employer shall be deemed to be
conditioned upon the deductibility of the contribution under Section
404 of the Code. If the deduction of all or part of any contribution
is disallowed, it shall, to the extent disallowed, be repaid to the
Employer within one year after the date of disallowance. A
contribution also shall be repaid to an Employer, within one year after
the date made, if made in error because of a mistake of fact.
Section 4.2. Trust. A Trust shall be created by the
execution of a Trust Agreement between the Employers and the Trustee.
All contributions under the Plan shall be paid to the Trustee. The
Trustee shall hold all monies and other property received by it and
invest and reinvest the same, together with the income therefrom, on
behalf of the Participants collectively in accordance with the
provisions of the Trust Agreement. The Trustee shall make
distributions from the Trust Fund at such time or times to such person
or persons and in such amounts as the Administrator shall direct in
accordance with the Plan.
ARTICLE 5
PENSIONS
Section 5.1. Normal and Deferred Retirement. (a) Effective
for Participants whose employment is terminated before January 1, 1989,
and subject to the provisions of paragraph (b) below, Option 6 under
Section 6.2, any Supplements, Article 6 and Article 7, each Participant
whose employment is terminated on or after his Normal Retirement Date
shall be entitled to receive an annual Pension, commencing on such
date, in an amount equal to the greater of:
(i) $192.00 times the Participant's years of Credited
Service, or
(ii) the sum of
(A) an amount equal to 2% of the Participant's Final
Average Salary multiplied by his years of Credited Service,
up to and including 25 years, plus
(B) an amount equal to 1% of the Participant's Final
Average Salary multiplied by his years of Credited Service
over 25 years, to a total maximum 35 years, less
(C) an amount equal to 2% of a Participant's Primary
Social Security Benefit multiplied by his years of Credited
Service up to and including 25 years.
(b) Notwithstanding the above, the Pension benefit of a
participant in the Predecessor Plan who became a Participant in this
Plan on or prior to March 31, 1989 and for whom assets were transferred
to the Plan shall be computed as follows:
The value of the difference, if any, between a Participant's
accrued Pension under the Predecessor Plan as of the last day he was an
eligible participant in the Predecessor Plan and the Participant's
theoretical Pension under this Plan as if he had accrued a Pension for
the same length of Credited Service, and at the same Salary which is
attributed to the inclusion or exclusion of incentive pay in such
Predecessor Plan's monthly Pension formula, shall be preserved and
added to such Participant's final Pension at the time of his early,
deferred or normal retirement, as applicable.
In addition, the Pension accrued to any Participant under this
Plan who was a participant in the Predecessor Plan and on whose behalf
assets were transferred to this Plan shall never be less than the
Pension which would accrue to such Participant under the Predecessor
Plan as of the last day he was an eligible participant in the
Predecessor Plan.
(c) Effective January 1, 1989, for Participants whose employment
terminates then or thereafter, and subject to the provisions of Option
6 under Section 6.2, any Supplement, Article 6 and 7, each Participant
whose employment is terminated on or after his Normal Retirement Date
shall be entitled to receive an annual Pension, commencing on such
date, in an amount equal to the greater of:
(i) his Pension as computed under Section 5.1(a) above
for all years of Credited Service through December 31, 1988,
or
(ii) the sum of
(A) an amount equal to 1.35% of the Participant's Final
Average Salary multiplied by his years of Credited Service,
up to and including 25 years, plus
(B) an amount equal to 1% of the Participant's Final
Average Salary multiplied by his years of Credited Service
over 25 years to a maximum of 35 years, plus
(C) an amount equal to .43% of the Participant's Final
Average Salary in excess of Covered Compensation multiplied
by his years of Credited Service up to a maximum of 35 years.
Section 5.2. Early Retirement. Each Participant whose
employment is terminated prior to his Normal Retirement Date but after
he has attained ten years of Service and age 55 shall be entitled,
subject to Article 6 and Article 7 and Option 6 under Section 6.2, to
receive a Pension, commencing on the first day of the month coincident
with or next following his termination of employment (or on the first
day of any month subsequent to such date and prior to his Normal
Retirement Date which he shall designate by 90 days advance written
notice to the Administrator) in the amount as determined under Section
5.1 but reduced by one-third of one per cent for each month by which
the commencement of his Pension under this Section precedes the first
day of the month coincident with or next following his 62nd birthday.
Section 5.3. Minimum Normal, Deferred and Early Retirement
Benefits. The Pension to which a Participant is entitled under Section
5.1 or Section 5.2 shall in no event be less than the hypothetical
Pension which he would have been entitled to receive had he retired
under Section 5.2 at any time prior to his actual date of retirement
and elected to have such hypothetical Pension commence the first date
on which he was eligible for early retirement, provided, however, that
any difference between such Pensions which is attributable to an
increase in the amount of the Participant's Primary Social Security
Benefit due to changes in the Federal Social Security Act between the
first date on which he was eligible for early retirement and his
Pension Starting Date shall be disregarded. Similarly, increases in
the Covered Compensation amount will not reduce his benefit.
Section 5.4. Vested Termination Prior to Early Retirement.
Each Participant whose employment is terminated prior to his attainment
of age 55 but after he has satisfied the Minimum Vesting Requirement
shall be entitled, subject to Article 6 and Article 7, to receive a
Pension in any of the optional forms listed in Section 6.2, commencing
on the first day of the month coincident with or next following his
termination date (or on the first day of any month subsequent to such
date which he shall designate by 90 days advance notice, as determined
under Section 5.1), but actuarially reduced for each month by which the
commencement of his Pension under this Section precedes the first day
of the month coincident with or next following his 65th birthday.
Section 5.5. Responsibility to Advise Administrator of
Current Address. Each person entitled to receive a payment under the
Plan shall file with the Administrator in writing his complete mailing
address and each change therein. A check or communication mailed to
any person at his address on file with the Administrator shall be
deemed to have been received by such person for all purposes of the
Plan, and none of the Administrator, the Committee, the Employers or
the Trustee shall be obliged to search for or ascertain the location of
any person. If the Administrator is in doubt as to whether payments
are being received by the person entitled thereto, he shall, by
registered mail addressed to the person concerned at his last address
known to the Administrator, notify such person that all future Pension
payments will be withheld until such person submits to the
Administrator evidence of his continued life and his proper mailing
address.
Section 5.6. Commencement of Benefits. The entire interest
of any Participant in the Plan must be distributed or commenced to be
distributed by no later than April 1 of the calendar year following the
calendar year in which such Participant attained age 70-1/2. Payment
of benefits to a Participant or a Beneficiary must commence in
accordance with the requirements of Section 401(a)(9) of the Code, and
regulations promulgated thereunder, including those pertaining to
incidental death benefits. These regulations, at 1.401 (a)(9)-2, are
incorporated herein by specific reference.
No cash-out distribution of a Pension to a Participant or a
surviving spouse may be made after the Participant's Pension Starting
Date unless it is consented to in writing by the Participant and the
Participant's spouse, if any, or where the Participant is deceased, by
the Participant's surviving spouse. Any written consent required by
this Section must be obtained not more that ninety (90) days before
distribution and shall be made in a manner consistent with Section 6.4.
Section 5.7. Benefit Commencement Pursuant to a Qualified
Domestic Relations Order. Effective January 1, 1989, a Pension may be
paid to an Alternate Payee, as defined in Section 414(p) of the Code,
in any form payable under the Plan other than in the form of a joint
and survivor annuity with respect to the Alternate Payee and a joint
annuitant, prior to attainment of earliest retirement age, as defined
in Section 414(p) of the Code, by the Participant, if paid pursuant to
a Qualified Domestic Relations Order, as defined in Section 414(p) of
the Code.
Section 5.8. Transferred Employees. Notwithstanding the
foregoing provisions of this Article, as of any date, the Accrued
Benefit (when expressed as a straight life annuity commencing at age
65) of a Participant who is a Transferred shall be equal to the greater
of:
a) such Participant's Accrued Benefit (expressed as a straight life
annuity commencing at age 65) determined under the provisions of the
Plan, based on his Credited Service determined in accordance with the
terms of the Plan; or
b) such Participant's accrued benefit (expressed as a straight life
annuity commencing at age 65) determined under the provisions of the
Plan, based on his Credited Service determined in accordance with the
terms of the Plan and determined as though his service with Freeport-
McMoRan Inc. were Credited Service for purposes of the Plan, reduced by
the Participant's accrued benefit (expressed as a straight life annuity
commencing at age 65) under the Freeport-McMoRan Inc. Employees
Retirement Plan.
ARTICLE 6
PENSION FORMS
Section 6.1. Basic Pension Form. A Participant who is married
on his Pension Starting Date and has not made an election at the time
and in the manner prescribed in paragraph (a) of Section 6.4, shall
receive in lieu of the Pension described in Article 5, a Qualified
Joint and Survivor Annuity comprising a reduced Pension payable during
his lifetime and, thereafter, if his spouse on his pension starting
date survives him, such spouse shall receive during the remainder of
her lifetime a Pension equal to one-half of such reduced Pension
received by the Participant. The aggregate Pensions expected to be
paid to the Participant and his spouse shall be the Actuarial
Equivalent of the Pension which the Participant would otherwise be
entitled to receive under Article 5. If a Participant is not married
on his Pension Starting Date and has not made an election at the time
and in the manner described in paragraph (a) of Section 6.4, such
Participant shall receive the Pension described in Article 5.
Section 6.2. Optional Pension Forms. Upon written request to
the Administrator made at the time and in the manner prescribed in
paragraph (a) of Section 6.4 and with appropriate spousal consent, as
applicable, for Options 1 through 6, a Participant may elect to receive
a Pension in one of the following optional forms:
Option 1: The Pension described in Article 5.
Option 2: A reduced Pension payable to the Participant
during his lifetime and, in the event of the Participant's death
within a period of ten years after his Pension Starting Date, in
the same reduced monthly amount payable to the Contingent
Pensioner designated by the Participant for the balance of such
ten year period. If both the Participant and his Contingent
Pensioner die prior to the end of said ten year period, the
commuted value of the remaining payments shall be paid in a lump
sum to the estate of the last to die of such Participant and his
Contingent Pensioner. Should the Contingent Pensioner die prior
to the end of said ten year period, and a new Contingent
Pensioner has not been named, then any remaining payments shall
be paid in a lump sum to the Participant's estate.
Option 3: A reduced Pension payable to the Participant
during his lifetime and, thereafter, 50% of such reduced amount
payable to the Contingent Pensioner designated by the
Participant during the remaining lifetime of such Contingent
Pensioner.
Option 4: A reduced Pension payable to the Participant
during his lifetime and, thereafter, 75% of such reduced amount
payable to the Contingent Pensioner designated by the
Participant during the remaining lifetime of such Contingent
Pensioner.
Option 5: A reduced Pension payable to the Participant
during his lifetime and, thereafter, in the same reduced amount
payable to the Contingent Pensioner designated by the
Participant during the remaining lifetime of such Contingent
Pensioner.
Option 6: A single lump sum payment inclusive of the benefit
mentioned in Section 6.3(c) as defined in the Plan, which is
equivalent to the full actuarial value of the Participant's
accrued Pension benefit on a life only basis calculated using
the effective rate of interest defined in Paragraph (2) of
Article 2 of the Plan for the first $1750 of such Pension
benefit, and by using the "applicable interest rate" referred to
in Paragraph (2) of Article 2 for such Pension benefit in excess
of $1750, for the calendar month in which such lump sum payment
is paid.
The aggregate of the Pensions expected to be paid to a Participant
and his Contingent Pensioner under any optional form of Pension shall
be the Actuarial Equivalent of the Pension which the Participant would
otherwise be entitled to receive.
Notwithstanding any provision hereof, if a Participant elects Option
2, 3, 4 or 5, the Participant's Contingent Pensioner is other than the
Participant's spouse and the value of the Participant's Pension under
any such option is not more than 50% of the value of the Pension he
would have been entitled to receive had he elected Option 1, then the
Pension payable to the Participant shall be increased and the Pension
payable to the Contingent Pensioner shall be decreased until the value
of the Participant's Pension under the option is more than 50% of the
value of the Pension which would have been payable to the Participant
had he elected Option 1.
Section 6.3. Survivor Benefits. (a) After Termination But
Prior to Pension Starting Date. A Participant who at his termination
of employment is entitled to a Pension under Section 5.2 or 5.4 will
have a Pension paid to his spouse or his Beneficiary if he dies after
his termination date but before his Pension Starting Date in the form
of a survivor benefit parallel to the form under Option 3 of Section
6.2 as if the Participant had started receiving such Pension on the
date immediately preceding his death.
Such Pension payments may begin at any time upon ninety (90) days
written notice to the Administrator by the spouse or Beneficiary.
A Participant who is married at the time of termination will have the
Pension described in this Section 6.3(a) paid to his spouse.
(b) Survivor Benefit While Employed. A Participant is entitled to
have a Pension paid to his spouse if he has satisfied the requirements
of Article 2 (23) and he dies while in the employ of an Employer. The
amount of such Pension shall be equal to one-half the amount which
would have been payable to such Participant had his Pension commenced
on the date of his death on a life only basis without reduction for
early retirement. If the Participant dies after having attained age
55, the survivor benefit may commence immediately without reduction.
If the Participant dies prior to attainment of age 55, the survivor
benefit will commence at the spouse's option: a) at the time the
Participant would have attained age 55 without reduction, or b) upon 90
days written notice to the Administrator but actuarially reduced for
each year the Participant's theoretical age at the commencement date
precedes his 55th birthday.
(c) Post-Retirement Death Benefit. Upon the death of a Participant
who commences receiving a monthly Pension under Section 5.1 or 5.2,
such Participant's Beneficiary shall be entitled to receive in addition
to any Pension benefit otherwise payable under the Plan, an amount
equal to such Participant's annual retirement Pension or early
retirement Pension, as the case may be, computed pursuant to Section
5.1 or 5.2, respectively, assuming the election of Option 1 under
Section 6.2. Such amount shall be paid in a lump sum to such
Beneficiary within 60 days of the Administrator's receipt of
notification of the death of such Participant.
Section 6.4. Election Procedures. (a) Election of Optional
Form of Pension. An election of an optional form of Pension
described at Section 6.2 must be in writing, must be signed by the
Participant, and must be delivered to the Plan Administrator during the
period (the "Election Period") within 90 days before the Participant's
Pension Starting Date. An election of an optional form of Pension
(other than an election to take Option 3, 4 or 5 with the spouse as the
Contingent Annuitant) by a married Participant will not be valid
unless the Participant's spouse consents to the election.
The spouse's consent must be in writing, must be signed by the
spouse, must be delivered to the Administrator during the Election
Period, must acknowledge the effect of such election, and must be
witnessed by a notary public. If the spouse is legally incompetent to
give consent, the spouse's legal guardian, even if such guardian is the
Participant, may give consent. The election to which the spouse
consents must designate a Beneficiary and a form of benefits that the
Participant may not thereafter change without a new consent of his or
her spouse, unless the original consent of the spouse expressly permits
such changes by the Participant without further consent of the spouse.
The consent of a spouse to a Participant's election shall be
irrevocable unless and until the Participant thereafter changes or
revokes his or her election in accordance with subsection (b) below.
However, the consent of a spouse shall be binding only on that spouse
and shall not be binding on a subsequent spouse. The consent of a
spouse under this Section shall not required if it is established to
the satisfaction of the Administrator that the required consent cannot
be obtained because the spouse cannot be located, or because of other
circumstances that may be prescribed by Regulations.
(b) Changes and Revocations of Election. The election made by the
Participant and (where applicable) consented to by his spouse may be
revoked by the Participant in writing, without the consent of the
spouse, at any time during the Election Period, and a new election made
in the manner prescribed by subsection (a), with the consent of the
spouse (where applicable) at any time during the Election Period. Such
election and revocation may be made any number of times during the
Election Period ending on the Pension Starting Date, but the last valid
election so made during the Election Period shall be irrevocable from
and after the Pension Starting Date.
(c) Notices to Participants. With regard to the election, the Plan
Administrator shall provide the Participant, no less than thirty (30)
days and no more than ninety (90) days before the Pension Starting
Date, a written explanation of:
(i) the terms and conditions of the Qualified Joint
and Survivor Annuity,
(ii) the Participant's right to make, and the effect
of, an election to waive the Qualified Joint and Survivor
Annuity,
(iii) the right of the Participant's spouse to consent
to any election to waive the Qualified Joint and Survivor
Annuity,
(iv) the right of the Participant to revoke such
election and the effect of such revocation,
(v) general information on the relative financial
effect on the Participant values of the various optional
forms of benefit under the Plan, and
(vi) if the Pension Starting Date is before the
Participant's Normal Retirement Date, the right of the
Participant to defer receipt of the distribution as provided
in subsection (e) below.
(d) Time of Payment. Unless a Participant otherwise elects as
provided in this Section, payment of a benefits under this Plan will
begin on later of the Participant's Normal Retirement Date or the
first day of the month after termination of employment; but in no event
later than April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2. The start of benefits under
this Plan will not be delayed without the consent of the Participant
beyond sixty (60) days after the end of the Plan Year in which occurs
the later of the Participant's Normal Retirement Date or the date of
the Participant's Termination of Employment. Such consent shall be
deemed to be given by the Participant's failure to consent to an
earlier distribution as provided in this Section.
(e) Consent to Earlier Distribution A Participant who has met the
Minimum Vesting Requirement may elect to have payment of his or her
early retirement Pension or vested Pension begin before the date that
would otherwise be his Normal Retirement Date, but not before he or
she attains age 55 or his Termination of Employment, whichever occurs
later. Such election shall be made by an initial notice in writing to
the Administrator in a form acceptable to the Administrator designating
at least 120 days in advance the Participant's Early Retirement Date or
other Pension Starting Date. At least 30 but no more than 90 days
before the selected date, the Administrator will provide the
Participant with election forms and the material required by subsection
(c) above, including a written explanation of the Participant's right
to defer receipt of the distribution. The Participant must give
written consent to the distribution after receiving the notice and not
more than ninety 90 days before the Pension Starting Date. No consent
shall be valid if a significant detriment is imposed under the Plan on
any Participant who does not consent to the distribution.
(f) Beneficiary and Contingent Pensioner Designation. Each
Participant electing an optional form of benefit with a survivorship
feature shall designate in writing to the Administrator a Contingent
Pensioner to receive any benefits payable under that optional form
after the death of the Participant. A Participant may change such
designation from time to time before the Pension Starting Date (or in
the case of the benefit form under Option 2, also after the Pension
Starting Date but before the death of the Participant) by filing a new
designation with the Administrator in like manner, with the consent of
his spouse where applicable under subsection (a); but no such
designation or change shall be effective unless and until it is singed
by the Participant and received by the Administrator during the
Participant's lifetime. Each Participant whose termination of
employment occurs before his or her Pension Starting Date may designate
in writing to the Administrator a Beneficiary to receive any survivor
benefits payable under Section 6.3(a) if the Participant dies before
his Pension Starting Date without a surviving spouse. A Participant
may change such designation from time to time by filing a new
designation with the Administrator in like manner; but no such
designation or change shall be effective unless and until it is
received by the Administrator during the Participant's lifetime.
A designation of Beneficiary other than the Participant's surviving
spouse will not be given effect if the Participant is survived by a
surviving spouse, in which event the survivor benefit under Section 6.
3(a) will be paid only to the surviving spouse. If upon a
Participant's death after his termination of employment and before his
Pension Starting Date there is neither a surviving spouse nor a valid
designation of Beneficiary on file, the survivor benefit under Section
6.3(a), if any, will be paid to the Participant's executor or
administrator in his, her or its capacity as such.
Section 6.5. Payment of Small Benefits in a Lump Sum. (a) In the
event that the Actuarial Equivalent value of the Pension payable to or
on behalf of a terminated or retired Participant, surviving spouse,
Designated Beneficiary or Alternate Payee of a Participant who dies
before his Pension Starting Date is less than $3500, the Administrator
will direct payment of such value in a lump sum.
(b) Deemed Cash Out. For purposes of this Section 6.5 if the
Actuarial Equivalent value of a terminated or retired Participant's
benefit is zero, the Participant shall be deemed to have received a
distribution of such benefit.
Section 6.6. Election of Option 6 under Section 6.2. (a) In
addition to the other requirements enumerated in Article 6 regarding
election procedures, a Participant who wishes to elect payment of
Pension benefits under Option 6 must also submit to the Administrator
a letter which shall be in the form prescribed by the Administrator,
certifying that the Participant understands that by electing Option 6,
he will take full, complete and final distribution of all benefits,
rights and entitlements under the Plan and that his participation in
the Plan will cease as of the date of such distribution.
(b) Additionally, a Participant who receives a distribution
under Option 6, due to the provisions of Section 5.6 and continues in
employment with an Employer will continue to participate in the Plan
and shall receive Credited Service based on employment after such
distribution date. Any such additional benefits will be subject to the
limitations set forth in Article 8.
Section 6.7. Coordination with Limitations on Contributions and
Benefits. In no event shall the amount of any benefit determined under
Article 5 or 6 exceed the maximum benefit permitted under Section 415
of the Code, as set forth in Article VII.
Section 6.8. Direct Rollovers. For any Eligible Rollover
Distribution (as defined below) on or after January 1, 1993, the
Distributee may elect, at the time and in the manner prescribed by the
Plan Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover. For purposes of this Section 6.8
"Direct Rollover" means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
ARTICLE 7
LIMITATIONS ON PENSIONS
Section 7.1. Maximum Annual Benefits. Notwithstanding any other
provision of this Plan to the contrary, benefits under the Plan and
combined benefits payable under this Plan and any defined contribution
plan of an Employer and Affiliates shall be limited as necessary to
meet the requirements of Section 415 of the Code, the provisions of
which are herein incorporated into this Plan by specific reference. For
purposes of this Article 7 "Affiliate" includes any entity that would
otherwise be an Affiliate if the ownership tests under sections 414(b)
and (c) of the Code were "more than 50%" rather than "at least 80%".
Section 7.2. (a) Limitation Year. The limitation year shall
be the calendar year.
(b) Combination Plan Limits. The benefits payable (on an annual
basis) under this Plan, rather than benefits payable under the
Investment Plan for Salaried Employees of IMC Global Operations Inc. or
any other qualified plan maintained by an Employer or an Affiliate,
shall be adjusted in accordance with Code Section 415 and Regulations
thereunder so that the combined defined benefit and defined
contribution plan fractions referred to in Section 415 of the Code with
respect to a Participant do not exceed 1.0.
Section 7.3. Distribution Restrictions. Effective January 1,
1994, in the event of termination of the Plan, the benefit of any
Employee who is a Highly Compensated Employee is limited to a benefit
that is nondiscriminatory under Section 401(a)(4) of the Code:
(a) Benefits distributed to any of the twenty-five (25) most highly
compensated active and former Highly Compensated Employees are
restricted such that the annual payments are no
greater than an amount equal to the payment that would be made on
behalf of the Employee under a single life annuity that is the
Actuarial Equivalent of the sum of the Employee's Accrued Benefit and
the Employee's other benefits under the Plan.
(b) The preceding paragraph shall not apply if: (i) after payment
of the benefit to an Employee described in the preceding paragraph, the
value of Plan assets equals or exceeds one hundred ten percent (110%)
of the value of current liabilities, as defined in Section 412(l)(7),
or (ii) the value of the benefits for an Employee described above is
less than one percent (1%) of the value of current liabilities.
(c) For purposes of this Section, benefits include loans in excess
of the amount set forth in Section 72(p)(2)(A), any periodic income,
any withdrawal values payable to a living Employee, and any death
benefits not provided for by insurance on the Employee's life.
ARTICLE 8
SPECIAL PARTICIPATION AND DISTRIBUTION RULES
RELATING TO REEMPLOYMENT OF TERMINATED
EMPLOYEES AND EMPLOYMENT BY RELATED ENTITIES
Section 8.1. Reemployment of Terminated or Retired Employees.
(a) If a person who was previously a Participant and who is eligible
to receive a Pension is reemployed by an Employer, Pension payments
shall be suspended upon the expiration of a period of six consecutive
calendar months of such reemployment for the duration of such period of
reemployment. If an Employee continues employment with the Employer
after attaining his Normal Retirement Date, Pension payments shall be
withheld for such period of continued employment until the April 1 of
the year following the year in which such person attains age 70-1/2 at
which time he must begin receiving Pension payments whether he is
employed or not. This date shall be treated as the Participant's
Pension Starting Date and the form of pension benefit selected pursuant
to Article 6 during the 90 day Election Period shall apply to all
future benefits. The Participant's benefits shall be re-determined as
of each December 31 following his pension starting date and if the
value of additional benefits accrued exceeds the value of the
distributions to the Participant, the Participant's benefit shall be
increased to reflect that value.
Upon such person's subsequent retirement or termination of employment
the amount of Pension to which he shall be entitled shall be the
greater of:
(i) the Pension determined as if his employment had
then first terminated, reduced by the Actuarial Equivalent
of any benefits previously paid to the Participant, and
(ii) the Pension which he was receiving or eligible
to receive prior to his reemployment.
If a Participant's benefit is suspended pursuant to this paragraph
during any calendar month following his Normal Retirement Date for
which he is credited less than with 40 hours of Service (as defined in
Department of Labor regulation 2530.200b-2(a)(1)), then his Pension
shall be increased by the greater of Actuarial Equivalent of the amount
which would have been paid to such Participant for each such month but
for the application of this paragraph and the increase in his Pension
due to any increases in the Participant's Final Average Salary or
additional credited service, or if such Participant shall die before
his Pension Starting Date, such amount shall be paid to his
Beneficiary.
(b) The Committee is authorized to use a four or five week payroll
period ending within a calendar month in lieu of calendar months
described in subsection (a) and to use eight days in a calendar month
(or in such payroll period) in lieu of the 40 hour test described in
such sub-section and section. For such eight day test, a day shall be
credited for any day that one hour of employment Service is performed.
The Committee is also authorized to adopt a verification and status
determination procedure described in Department of Labor regulation
2530.203-3.
(c) The Plan may offset against benefit payments any payment
previously made which should have been withheld on account of
employment; provided, however, that such offset shall not exceed in any
one month 25% of the monthly benefit payment that would be due without
regard to any offset except that the initial benefit payment upon the
resumption of payments may be offset without limitation.
(d) If a Participant's benefits are withheld on account of
employment on or after the attainment of the Normal Retirement Date,
the Plan shall notify the Participant of such withholding of benefit
payments by personal delivery or first class mail during the first
calendar month after the attainment of the Normal Retirement Date in
which the Plan withholds payments. The notification shall contain a
description of the specific reason for the withholding of payments, a
general description of the Plan provisions relating to the withholding,
a copy of such provisions, a statement that the relevant Department of
Labor Regulations may be found in Section 2530.203-3 of Title 29, Code
of Federal Regulations and that a review of such withholding may be
obtained pursuant to the claim procedure in subsection 10.3 of the
Plan. If the summary plan description ("SPD") contains information
which is substantially the same as the information required by this
paragraph, the notification may refer the Participant to the relevant
pages of the SPD, provided that the Participant is informed how to
obtain a copy of the SPD or the relevant pages, and provided requests
for information are honored within 30 days.
(e) If a person who was previously a Participant or an Employee, but
who is not eligible to receive a Pension, is re-employed by an Employer
and such person is an Eligible Employee, then he shall be deemed to
have become a Participant as of the first day of the month in which he
was re-employed; otherwise he shall become a Participant as of the
first day of the month in which he becomes an Eligible Employee.
(f) A Participant who previously received a distribution under
Option 6 of Section 6.2 and later returns to the employ of an Employer
will have all his prior Credited Service restored under the Plan. At
his subsequent retirement the pension he receives will be offset by the
value of benefit previously received.
(g) No payment shall be withheld by the Plan under this Section
after the Participant's required beginning date under Section 5.6. If
a Participant continues in Employment or is reemployed after such
required beginning date, his Pension shall continue, or begin, in at
least the amount of his Accrued Benefit as of the last day of the
calendar year before such required beginning date. His pension shall be
increased beginning with the first payment due in each calendar year
after such required beginning date to reflect any increase in his or
her Accrued Benefit attributable to Credited Service in the preceding
calendar year.
Section 8.2. Employment by Related Entities. Any period in
which the Employee is employed by an Affiliate other than an Employer
while it is Affiliated shall be taken into account for the purpose of
measuring such Employee's Service for the sole purpose of determining
whether he has satisfied the Minimum Vesting Requirement to the same
extent it would have been had such Period of Employment been employment
by an Employer.
In addition, any period in which the Employee is employed by
International Minerals & Chemical Corporation (Canada) Limited for a
period of less than five years shall be taken into account for the
purpose of measuring such Employee's Service and Credited Service to
the same extent it would have been had such Period of Employment been
employment by the Company. Any period in excess of five years in which
the Employee is employed by International Minerals & Chemical
Corporation (Canada) Limited shall be taken into account solely for the
purpose of measuring such Employee's Service to the same extent it
would have been had such Period of Employment been with the Company.
Such Participant shall be entitled to a Pension benefit from each plan
based upon his Credited Service under the applicable plan. For
purposes of determining the Participant's Salary, Annual Salary and
Final Average Salary under each plan, the Participant's Final Average
Salary will be computed under the last plan in which he was a
Participant converted to relevant currency value using an annual
average of published exchange rates.
Section 8.3. Change of Status of Participant to Hourly Employee.
If a Participant under the Plan changes status from salaried Employee
to hourly-paid Employee, then he shall continue to be an Eligible
Employee and a Participant under this Plan for any subsequent period of
time during which he is an Employee but not a Participant in any other
defined benefit retirement plan. However, all periods of employment,
even when he is a participant in another defined benefit retirement
plan, shall be recognized for purposes of measuring such Participant's
Service. Such Participant shall be entitled to a Pension benefit from
each plan he participated in based upon his Credited Service under each
applicable plan. For the purposes of determining the terms "Salary",
and "Final Average Salary", as defined in Article 2, with respect to
any such Participant, "Salary" shall be deemed to be his actual
compensation in each of the highest consecutive five years out of the
last ten years of employment as shown by the records of the Company,
including 50% of any bonus actually paid out in a year, overtime pay
and all other special payments, as specified at Article 2(44), subject
to the Compensation Limit specified therein.
Section 8.4. Change of Status of Hourly Employee to Salaried
Employee. If an hourly paid Employee becomes an Eligible Employee then
he shall become a Participant on the date he becomes an Eligible
Employee and his periods of employment as an hourly Employee shall be
taken into account for all purposes of measuring such Employee's
Service and Credited Service under this Plan to the same extent it
would have been had such total Period of Employment been as an Eligible
Employee under this Plan. Additionally, the Employer shall insure that
assets representing the present value of the Participant's accrued
benefit under the hourly plan are transferred from the Trust for that
plan to the Trust for this Plan. In the event that assets cannot or
may not be transferred to the Trust for this Plan, the Participant's
benefit computed under this Plan shall be offset by the value of the
Pension to which the Participant was entitled to receive from the
hourly plan as of the date immediately preceding the date he ceased to
be eligible to participate in the hourly plan.
ARTICLE 9
ADMINISTRATION
Section 9.1. The Committee. (a) The Board of Directors of the
Company has appointed a committee known as the Employee Benefits
Committee consisting of certain members responsible (except for duties
specifically vested in the Trustee) for the administration of the
provisions of the Plan. The Company and the Committee are hereby
designated "named fiduciaries" within the meaning of such term as used
in ERISA. The Board of Directors of the Company shall have the right
at any time, with or without cause, to remove any member of the
Committee. A member of the Committee may resign and his resignation
shall be effective upon delivery of his written resignation to the
Company. Upon the resignation, removal or failure or inability for any
reason of any member of the Committee to act hereunder, the Board of
Directors of the Company may appoint a successor member. Any successor
members of the Committee shall have all the rights, privileges and
duties of their predecessors, but shall not be held accountable for the
acts of their predecessors.
(b) Any member of the Committee may, but need not, be an Employee
and/or a director, officer or shareholder of any of the Employers, and
such status shall not disqualify him from taking any action hereunder
or render him accountable for any distribution or other material
advantage received by him under the Plan, provided that no member of
the Committee who is a Participant shall take part in any action of the
Committee or any other matter involving solely his rights under the
Plan.
(c) Promptly after the appointment of the original members of the
Committee and promptly after the appointment of any successor member of
the Committee, the Trustee shall be notified as to the names of the
persons appointed as members or successor members of the Committee.
(d) The Committee has the duty, authority and discretion to
interpret and construe the Plan in regard to all questions of
eligibility, the status and rights of Participants, distributees and
other persons under the Plan, and the manner, time, and amount of
payment of any distributions under the Plan. Each Employer shall, from
time to time, upon request of the Committee, furnish to the Committee
such data and information as the Committee shall require in the
performance of its duties.
(e) The members of the Committee may allocate their responsibilities
among themselves and may designate any person, partnership or
corporation to carry out any of their responsibilities. Any such
allocation or designation shall be reduced to writing and such writing
shall be kept with the records of the meetings of the Committee.
(f) The Committee may act at a meeting, or by writing without a
meeting, by the vote of assent of a majority of its members. The
Committee shall elect one of its members to serve as the Plan's agent
for legal process and keep the Trustee advised of the identity of the
member holding that office. The Committee shall elect a secretary who
need not be a member of the Committee. The secretary shall keep
records of all meetings of the Committee, and may forward all necessary
communications to the Trustee. The Committee may adopt such rules and
procedures as it deems desirable for the conduct of its affairs and the
administration of the Plan, provided that any such rules and procedures
shall be consistent with the provisions of the Plan and ERISA.
(g) The members of the Committee, and each of them, shall discharge
their duties with respect to the Plan (i) solely in the interest of the
Participants, Contingent Pensioners and Beneficiaries, (ii) for the
exclusive purpose of providing benefits to Employees participating in
the Plan, their Contingent Pensioners and Beneficiaries and of
defraying reasonable expenses of administering the Plan and (iii) with
the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar
with such matters would use in the conduct of an enterprise of a like
character and with like aims. The Company shall indemnify the members
of the Committee, and each of them, from the effects and consequences
of their acts, omissions and conduct in their official capacity as
members of the Committee. Such indemnification shall extend to any
action, suit or proceeding to which the members shall be made or
threatened to be made a party, whether civil, criminal, administrative
or investigative, and whether or not terminated by judgment,
settlement, conviction or upon a plea of nolo contendere or its
equivalent; provided, however, such indemnification shall not extend to
any action, suit, or proceeding in which it shall be finally
adjudicated that (i) a member did not act in good faith and (ii) with
respect to any criminal action or proceeding, the member did not have
reasonable cause to believe his conduct was lawful.
(h) No member of the Committee shall receive any compensation or fee
for his services, unless otherwise agreed between such member of the
Committee and the Employers, but the Employers shall reimburse the
Committee members for any necessary expenditures incurred in the
discharge of their duties as Committee members.
(i) The Committee may employ such counsel (who may be of counsel for
any Employer) and agents and may arrange for such clerical and other
services as it may require in carrying out the provisions of the Plan.
Section 9.2. The Administrator. (a) The Company shall appoint
an Administrator of the Plan and who may but need not be a Participant
or a shareholder of the Company, and such status shall not disqualify
him from taking any action hereunder or render him accountable for any
distribution or other material advantage received by him under the
Plan, provided that he shall not take part in any matter involving
solely his rights under the Plan. The Administrator shall be the "Plan
Administrator" as such term is used in ERISA.
(b) The Administrator shall be responsible for the operation of and
has the discretion to interpret the Plan within the policies,
interpretations and rules made by the Committee. The Administrator
shall also perform such ministerial functions with respect to the Plan
as the Committee shall from time to time designate.
Section 9.3. Claims Procedure. If any Participant or Contingent
Pensioner or Beneficiary believes he is entitled to benefits in an
amount greater than those which he is receiving or has received, he may
file a claim with the Administrator. Such a claim shall be in writing
and state the nature of the claim, the facts supporting the claim, the
amount claimed, and the address of the claimant. The Administrator
shall review the claim and, within a reasonable period of time after
receipt of the claim, give written notice by registered or certified
mail to the claimant of his decision with respect to the claim. Such
notice shall be written in a manner calculated to be understood by the
claimant and, if the claim is wholly or partially denied, set forth the
specific reasons for the denial, specific references to the pertinent
plan provisions on which the denial is based, a description of any
additional material or information necessary for the claimant to
perfect the claim, an explanation of why such material or information
is necessary and an explanation of the claim review procedure under the
Plan.
The Administrator shall also advise the claimant that he or his duly
authorized representative may request a review by the Committee of the
denial by filing with the Committee, within sixty-five days after
notice of the denial has been received by the claimant, a written
request for such review. The claimant shall be informed that he may
have reasonable access to pertinent documents and submit comments in
writing to the Committee within the same sixty-five day period. If a
request is so filed, review of the denial shall be made by the
Committee within sixty days after receipt of such request, and the
claimant shall be given written notice of the final decision. Such
notice shall include specific reasons for the decision and specific
references to the pertinent Plan provisions on which the decision is
based and shall be written in a manner calculated to be understood by
the claimant.
Section 9.4. Actuary to be Employed. The Committee shall engage
an actuary to do such technical and advisory work as the Committee may
request, including analyses of the experience of the Plan from time to
time, the preparation of actuarial tables for the making of
computations thereunder, and the submission to the Committee of an
annual actuarial report, which report shall contain an actuarial
balance sheet showing the financial condition of the Plan, a statement
of the contributions to be made by the Employers for the ensuing year,
and such other information as may be requested by the Committee.
Section 9.5. Funding Policy. The Committee shall establish a
funding policy and method consistent with the objectives of the Plan
and the requirements of Title I of ERISA and shall communicate, to the
extent necessary, such policy and method, and any changes in such
policy and method, to the Trustee.
Section 9.6. Notices to Participants, Beneficiaries and
Contingent Pensioners. All notices, reports and statements given,
made, delivered or transmitted to a Participant, Beneficiary or
Contingent Pensioner shall be deemed to have been duly given, made or
transmitted when mailed by first class mail with postage prepaid and
addressed to such Participant, Beneficiary or Contingent Pensioner at
the address last appearing on the records of the Administrator. A
Participant or Contingent Pensioner may record any change of his
address from time to time by written notice filed with the
Administrator.
Section 9.7. Notices to Employers, Administrator or Committee.
Written directions, notices and other communications from Participants,
Beneficiaries or Contingent Pensioners to the Employers, the
Administrator or the Committee shall be deemed to have been duly given,
made or transmitted either when delivered to such location as shall be
specified upon the forms prescribed by the Committee for the giving of
such directions, notices or other communications or when mailed by
first-class mail with postage prepaid and addressed to the addressee at
the address specified upon such forms.
Section 9.8. Records. The Committee shall keep a record of all
of its proceedings and shall keep or cause to be kept all books of
account, records and other data as may be necessary or advisable in its
judgment for the administration of the Plan.
Section 9.9. Limitation of Responsibility. The Company, the
other Employers (if any), the Committee, the Plan Administrator, and
the Trustee shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under
this Plan and the Trust. In general, the Company, in its capacity as
sponsor of the Plan and not as a fiduciary, shall have the sole
responsibility for amending and terminating this Plan in accordance
with Article XIV. The Company and any other Employer, in their
capacities as employers and not as Fiduciaries, shall have the sole
responsibility for funding this Plan in accordance with Article IX. The
Company, as a fiduciary, shall have the responsibility to appoint and
remove the Trustee, the members of the Committee and the Plan
Administrator. The Committee shall have the responsibility to oversee
the administration of the Plan as provided in Section 10.02 and the
Plan Administrator shall have the responsibility for day-to-day
administration of the Plan as provided in Section 10.03. The Trustee
shall have sole responsibility for administering the Trust and the
management and control of funds deposited under the Trust. Each of the
Company, the other Employers, the Committee, the Plan Administrator and
the Trustee may rely upon any direction, information or action of
another such person as being proper under the Plan, and is not required
under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under this Plan that each such
person shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under this Plan and shall not
be responsible for any act or failure to act of another such person
except as expressly provided in ERISA. Neither the Company nor any
Employer, the Committee or the Plan Administrator guarantees the Fund
in any manner against investment loss or depreciation in asset value.
ARTICLE 10
PARTICIPATION BY OTHER EMPLOYERS
Section 10.1. Adoption of Plan. With the consent of the
Company, any corporation may become a participating Employer under the
Plan by (a) taking such action as shall be necessary to adopt the Plan,
(b) becoming a party to the Trust agreement establishing the Trust Fund
and (c) executing and delivering such instruments and taking such other
action as may be necessary or desirable to put the Plan into effect
with respect to such corporation.
Section 10.2. Withdrawal from Participation. Any Employer may
withdraw from participation in the Plan at any time by filing with the
Committee a duly certified copy of a resolution of its board of
directors to that effect and giving notice of its intended withdrawal
to the Committee, the other Employers and the Trustee prior to the
effective date of withdrawal.
Section 10.3. Company as Agent for Employers. Each corporation
which becomes a participating Employer pursuant to Section 10.1 or
Article 11 shall be deemed to have appointed the Company as its agent
to exercise on its behalf all of the powers and authorities hereby
conferred upon the Company or such Employer by the terms of the Plan,
including, but not by way of limitation, the power to amend and
terminate the Plan. The authority of the Company to act as such agent
shall continue until such Employer shall withdraw from the Plan.
ARTICLE 11
CONTINUANCE BY A SUCCESSOR
In the event that any Employer shall be reorganized by way of
merger, consolidation, transfer of assets or otherwise, so that another
corporation other than an Employer shall succeed to all or
substantially all of such Employer's business, such successor
corporation may be substituted for such Employer under the Plan by
adopting the Plan and becoming a party to the Trust agreement.
Contributions by such Employer shall be automatically suspended from
the effective date of any such reorganization until the date upon which
the substitution of such successor corporation for the Employer under
the Plan becomes effective. If, within ninety (90) days following the
effective date of any such reorganization, such successor corporation
shall not have elected to become a party to the Plan, or if the
Employer shall adopt a plan of complete liquidation other than in
connection with a reorganization, the Plan shall be automatically
terminated with respect to Employees of such Employer as of the close
of business on the 90th day following the effective date of such
reorganization or as of the close of business on the date of adoption
of such plan of complete liquidation, as the case may be.
ARTICLE 12
MISCELLANEOUS
Section 12.1. Expenses. The Employers shall pay all expenses
incurred in the administration of the Plan, including expenses and fees
of the Trustee. The Committee, in its sole discretion, having regard
to the nature of a particular expense, shall determine the portion of
such expense which is to be borne by a particular Employer.
Notwithstanding the foregoing, to the extent not paid by the several
Employers, the Trustee is authorized and directed to pay from the Trust
Fund all costs and expenses incurred in administering the Plan,
including the expenses of the Committee, the fees of counsel and any
agents for the Committee, the fees and expenses of the Trustee, the
fees of counsel for the Trustee and other administrative expenses.
Section 12.2. Non-Assignability. (a) Subject to the exception
provided in paragraph (b) below, it is a condition of the Plan, and all
rights of each Participant, Beneficiary and Contingent Pensioner shall
be subject thereto, that no right or interest of any Participant,
Beneficiary or Contingent Pensioner in the Plan shall be assignable or
transferable in whole or in part, either directly or by operation of
law or otherwise, including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge or bankruptcy, but excluding
devolution by death or mental incompetency, and no right or interest of
any Participant, Beneficiary or Contingent Pensioner in the Plan shall
be liable for, or subject to, any obligation or liability of such
Participant, Beneficiary or Contingent Pensioner, including claims for
alimony or the support of any spouse
(b) This Section 12.2 shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a "qualified domestic relations order", a former
spouse of a Participant shall be treated as the surviving spouse for
all purposes under the Plan.
Section 12.3. Divestment for Cause. It shall be impossible for
any Participant who is either voluntarily or involuntarily terminated
to forfeit any portion of his vested Pension after meeting the
requirements of Article 2(23).
Section 12.4. Benefits Payable to Incompetents. Whenever and as
often as any person entitled to payments hereunder shall be under a
legal disability, or, in the sole judgment of the Administrator, shall
otherwise be unable to apply such payments to his own best interest and
advantage, the Administrator, in the exercise of his discretion, may
direct all or any portion of such payments to be made in any one or
more of the following ways:
(a)Directly to such person;
(b)To his legal guardian or conservator;
(c)To his spouse or to any other person, to be expended for his
benefit; or
(d)By the Administrator himself, receiving and expending, or
directing the expenditure of, the same for the benefit of such
person.
The decision of the Administrator shall, in each case, be final
and binding upon all persons, and, except in the case of (d) above, the
Administrator shall not be obliged to see to the proper application or
expenditures of any payments so made. Any payment made pursuant to the
power herein conferred upon the Administrator shall operate as a
complete discharge of the obligations of the Trustee, the
Administrator, the Committee and the Company.
Section 12.5. Employment Non-Contractual. The Plan confers no
right upon any Employee to continue in employment.
Section 12.6. Limitation of Rights. A Participant, Beneficiary
or Contingent Pensioner shall have no right, title or claim in or to
any specific asset of the Trust, but shall have the right only to
distributions from the Trust Fund on the terms and conditions herein
provided.
Section 12.7. Merger or Consolidation with Another Plan. A
merger or consolidation with, or transfer of assets or liabilities to,
any other plan shall not be affected unless the terms of such merger,
consolidation or transfer are such that each Participant, Contingent
Pensioner or Beneficiary entitled to receive benefits from the Plan
would if the Plan then terminated receive a benefit immediately after
the merger, consolidation or transfer which is equal to or greater than
the benefit such person would have been entitled to receive immediately
before the merger, consolidation, or transfer if the Plan had then
terminated.
Section 12.8. Liability for Benefit Payments. It is the
intention of the Employers to continue the Plan indefinitely, but
neither the Employers, nor any of their officers, Employees,
stockholders, directors or agents guarantee or have any liability for
the payment of the benefits under the Plan, nor shall the Employers or
any of such persons have any liability for the administration of the
Plan or of the funds or assets paid over to the Trustee, except to the
extent required by ERISA.
Section 12.9. Mistake. In the event of a mistake or
misstatement as to the date of birth of a Participant or any other
person, or a mistake as to the date of employment or eligibility of a
Participant or in his Period of Employment, Service, or Credited
Service or otherwise affecting the amount of a benefit payment made or
to be made to the Participant, the Plan Administrator shall make, if
possible, such adjustment in the future benefit payment as will in its
judgment accord to such Participant or other person the benefit to
which he is properly entitled under the Plan.
ARTICLE 13
AMENDMENT, WITHDRAWAL AND TERMINATION
Section 13.1. Amendment. (a) The Company may at any time and
from time to time amend or modify the Plan by written instrument duly
adopted by the Board of Directors of the Company or by the Committee to
the extent so delegated by such Board. Any such amendment or
modification shall become effective on such date as the Company or the
Committee shall determine and may apply to Participants in the Plan at
the time thereof as well as to future Participants.
(b) No amendment shall operate either directly or indirectly to
give the Employer any interest whatsoever in any funds or property held
by the Trustee under the terms hereof, or to permit corpus or income of
the Trust to be used for or diverted to purposes other than the
exclusive benefit of persons who are at any time on or after the date
hereof Employees of an Employer and the Beneficiaries of such persons.
(c) Except as otherwise provided or permitted by applicable laws
and regulations, no amendment shall operate either directly or
indirectly to deprive any Participant of his nonforfeitable beneficial
interest or of benefits accrued under the Plan, as constituted at the
time of the amendment.
(d) No amendment shall change any vesting schedule unless each
Participant who has completed five or more years of Service (three (3)
or more years of Service effective January 1, 1989) is permitted to
elect, within such reasonable period after the adoption of such an
amendment as an Employer may from time to time designate, to have his
non-forfeitable benefit computed under the Plan without regard to such
amendment. Notwithstanding the foregoing, no election shall need to be
offered to a Participant whose percentage of nonforfeitable benefits
cannot at any time be lower than such percentage determined without
regard to such amendment.
(e) Except as permitted by applicable law and regulations, no
amendment shall eliminate or reduce an early retirement benefit or a
retirement-type subsidy or eliminate an optional form of benefit.
(f) If the effect of any amendment is to increase current
liability (as defined in Section 401(a)(29)(E) of the Code) under the
Plan for a Plan Year, and the funded current liability percentage of
the Plan for the Plan Year in which the amendment takes effect,
including the amount of the unfunded current liability under the Plan
attributable to the amendment, is less than sixty percent (60%), the
amendment shall not take effect unless and until the Employers (or any
Affiliate of an Employer) in its discretion provides security to the
Plan. The form and amount of such security shall satisfy the
requirements of Section 401(a)(29)(B) and (C) of the Code. Such
security may be released provided the requirements of Section
401(a)(29)(D) of the Code are satisfied.
Section 13.2. Withdrawal. If an Employer shall withdraw from
the Plan under Section 10.2, the Committee shall determine the portion
of the Trust Fund held by the Trustee which is applicable to the
Employees and former Employees of such Employer, and shall direct the
Trustee to segregate such portion in a separate Trust. Such separate
Trust shall thereafter be held and administered as a part of the
separate plan of such Employer.
Solely for the purpose of being able to determine the portion of the
Trust Fund which at any given time is applicable to the Employees and
former Employees of an Employer, the Committee shall cause to be
maintained memorandum records showing the portion of the net worth of
the Trust allocable to each Employer. The portion of such net worth
allocable to each Employer shall be the total contributions of such
Employer less the total distributions from the Trust to former
Employees of such Employer, plus the net income of the Trust and
unrealized appreciation (or less unrealized depreciation) in Trust
assets allocated to such Employer. The net income of the Trust and
unrealized appreciation or depreciation in Trust assets shall be
allocated at the end of each Plan Year and at such other time as the
Committee may determine. The amount of such net income and unrealized
appreciation or depreciation to be allocated to each Employer for each
Plan Year or other period shall be that portion of the net income of
the Trust and unrealized appreciation or depreciation for the period
elapsing since the date of the last allocation which the average amount
allocated to such Employer during such period bears to the average
amount allocated to all Employers during such period. The average
amount allocated to an Employer during a period shall be deemed to be
one-half of the sum of (i) the amount allocated to such Employer on the
first day of such period and (ii) the amount allocated to such Employer
on the first day of such period plus any contributions made by such
Employer to the Trust during such period less all distributions from
the Trust during such period to former Employees of such Employer.
Section 13.3. Termination. (a) The Employer shall have the
right to terminate the Plan by delivering to the Trustee and
Administrator written notice of such termination. However, any
termination (other than a partial termination or an involuntary
termination pursuant to ERISA Section 4042) must satisfy the
requirements and follow the procedures outlined herein and in ERISA
Section 4041 for a Standard Termination or a Distress Termination.
Upon any termination (full or partial), all amounts shall be allocated
in accordance with the provisions hereof and the benefits accrued for
each affected Participant to the extent funded shall become fully
vested and shall not thereafter be subject to forfeiture.
(b)Standard Termination Procedure:
(1) The Administrator shall first notify all
"affected parties" (as defined in ERISA Section 4001(a)(21)
of the Employer's intention to terminate the Plan and the
proposed date of termination. Such termination notice must
be provided at least sixty (60) days prior to the proposed
termination date. However, in the case of a standard
termination, it shall not be necessary to provide such
notice to the Pension Benefit Guaranty Corporation (PBGC).
As soon as practicable after the termination notice is
given, the Administrator shall provide a follow-up notice to
the PBGC setting forth the following:
(i) a certification of an enrolled
actuary of the projected amount of the assets of the
Plan as of the proposed date of final distribution of
assets, the actuarial present value of the "benefit
liabilities" (as defined in ERISA Section 4001(a)(16))
under the Plan as of the proposed termination date, and
confirmation that the Plan is projected to be sufficient
for such "benefit liabilities" as of the proposed date
of final distribution;
(ii) a certification by the
Administrator that the information provided to the PBGC
and upon which the enrolled actuary based his
certification is accurate and complete; and
(iii) such other information as the
PBGC may prescribe by regulation.
(2) No later than the date on which the follow-up
notice is sent to the PBGC, the Administrator shall provide
all Participants and Beneficiaries under the Plan with an
explanatory statement specifying each such person's "benefit
liabilities", the benefit form on the basis of which such
amount is determined, and any additional information used in
determining "benefit liabilities" that may be required
pursuant to regulations promulgated by the PBGC.
(3) A standard termination may only take place if at
the time the final distribution of assets occurs, the Plan
is sufficient to meet all "benefit liabilities" determined
as of the termination date.
(c)Distress Termination Procedure:
(1) he Administrator shall first notify all
"affected parties" of the Employer's intention to terminate
the Plan and the proposed date of termination. Such
termination notice must be provided at least 60 days prior
to the proposed termination date. As soon as practicable
after the termination notice is given, the Administrator
shall also provide a follow-up notice to the PBGC setting
forth the following:
(i) a certification of an enrolled
actuary of the amount, as of the proposed termination
date, of the current value of the assets of the Plan,
the actuarial present value (as of such date) of the
"benefit liabilities" under the Plan, whether the Plan
is sufficient for "benefit liabilities" as of such date,
the actuarial present value (as of such date) of
benefits under the Plan guaranteed under ERISA Section
4022, and whether the Plan is sufficient for guaranteed
benefits as of such date;
(ii) in any case in which the Plan is
not sufficient for "benefit liabilities" as of such
date, the name and address of each Participant and
Beneficiary under the Plan as of such date;
(iii) a certification by the
Administrator that the information provided to the PBGC
and upon which the enrolled actuary based his
certification is accurate and complete; and
(iv) such other information as the
PBGC may prescribe by regulation.
(2)A distress termination may only take place if:
(i) the Employer demonstrates to the
PBGC that such termination is necessary to enable the
Employer to pay its debts while staying in business, or
to avoid unreasonably burdensome Pension costs caused by
a decline in the Employer's work force;
(ii) the Employer is the subject of a
petition seeking liquidation in a bankruptcy or
insolvency proceeding which has not been dismissed as of
the proposed termination date; or
(iii) the Employer is the subject of a
petition seeking reorganization in a bankruptcy or
insolvency proceeding which has not been dismissed as of
the proposed termination date, and the bankruptcy court
(or such other appropriate court) approves the
termination and determines that the Employer will be
unable to continue in business outside a Chapter 11
reorganization process and that such termination is
necessary to enable the Employer to pay its debts
pursuant to a plan of reorganization.
(d) Priority and Payment of Benefits. In the case of a distress
termination, upon approval by the PBGC that the Plan is sufficient for
"benefit liabilities" or for "guaranteed benefits", or in the case of a
standard termination, a letter of non-compliance has not been issued
within the sixty (60) day period (as extended) following the receipt by
the PBGC of the follow-up notice, the Administrator shall allocate the
assets of the Plan among Participants and Beneficiaries pursuant to
ERISA Section 4044(a). As soon as practicable thereafter, the assets
of the Trust Fund shall be distributed to the Participants and
Beneficiaries, in cash, in kind, or through the purchase of irrevocable
commitments from an insurer. However, if all liabilities with respect
to Participants and Beneficiaries under the Plan have been satisfied
and there remains a balance in the Trust Fund due to erroneous
actuarial calculation, such balance, if any, shall be returned to the
Employer. In the case of a distress termination in which the PBGC is
unable to determine that the Plan is sufficient for guaranteed
benefits, the assets of the Plan shall only be distributed in
accordance with proceedings instituted by the PBGC.
(e) The termination of the Plan shall comply with such other
requirements and rules as may be promulgated by the PBGC under
authority of Title IV of ERISA, including any rules relating to time
periods or deadlines for providing notice or for making a necessary
filing.
Section 13.4. Trust to be Applied Exclusively for Participants
and their Beneficiaries. Subject only to the provisions of Sections
4.1, 13.2 and 13.3, and no other provision of the Plan to the contrary
notwithstanding, it shall be impossible for any part of the Trust to be
used for or diverted to any purpose not for the exclusive benefit of
Participants, Contingent Pensioners and Beneficiaries either by
operation or termination of the Plan, power of amendment or other
means.
ARTICLE 14
TOP-HEAVY PROVISIONS
Section 14.1. Introduction: If the Plan is or becomes Top-Heavy
in any Plan Year,
the provisions of this Article will supersede any conflicting
provisions in the Plan.
Section 14.2. Definitions:
(i) Key Employee: A person who at any time during
the Plan Year meets the criteria of a Key Employee as
defined in Section 416(i)(1) of the Code.
(ii) Non-Key Employee: Any person who is not a Key
Employee as defined in Section 14.2(i) above.
(iii) Top Heavy Plan: If the Top Heavy Ratio for all
plans in the Required Aggregation Group (RAG) exceeds
six-tenths (6/10) then all plans in the RAG are Top Heavy
unless there exists a Permissive Aggregation Group (PAG) for
which the Top Heavy Ratio does not exceed six-tenths (6/10)
in which case no plan in the PAG is Top Heavy.
(iv) Top Heavy Ratio:
(a) If an Employer maintains one or more
defined benefit plans and the Employer has never
maintained any defined contribution plans (including
any Simplified Employee Pension Plan) which has
covered or could cover a Participant in this Plan,
the Top Heavy Ratio is a fraction, the numerator of
which is the sum of the present values of accrued
benefits of all Key Employees as of the determination
date (including any part of any accrued benefit
distributed in the five-year period ending on the
determination date), and the denominator of which is
the sum of all accrued benefits (including any part
of any accrued benefit distributed in the five-year
period ending on the determination date) of all
Participants as of the determination date.
(b) If an Employer maintains one or more defined
contribution plans (including a Simplified Employee Pension
Plan) and the Employer maintains or has maintained one or
more defined benefit plans which have covered or could cover
a Participant in this Plan, the Top Heavy Ratio is a
fraction, the numerator of which is the sum of account
balances under the defined contribution plans for all Key
Employees and the present value of accrued benefits under
the defined benefit plans for all Key Employees, and the
denominator of which is the sum of the account balances
under the defined contribution plans for all Participants
and the present value of accrued benefits under the defined
benefit plans for all Participants. Both the numerator and
denominator of the Top Heavy Ratio are adjusted for any
distribution of an account balance or an accrued benefit
made in the five-year period ending on the determination
date and any contribution due but unpaid as of the
determination date.
(c) For purposes of (a) and (b) above, the values of
account balances and the present value of accrued benefits
will be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on the
determination date. The account balances and accrued
benefits of a Participant who is not a Key Employee but who
was a Key Employee in a prior year will be disregarded.
The account balance or accrued benefit of and
Employee shall be disregarded if the Employee has not
received any compensation from and has not performed any
services for the Employer over the five year period ending
on the determination date. The calculation of the Top Heavy
Ratio, and the extent to which distributions, rollovers an
transfers are taken into account will be made in accordance
with Section 416 of the Code and the Regulations thereunder.
Deductible Employer contributions will not be taken into
account for purposes of computing the Top Heavy Ratio.
However, Participant Contribution Accounts are included in
such computation. When aggregating plans, the value of
account balances and accrued benefits will be calculated
with reference to the determination dates that fall within
the same calendar year.
(v) Permissive Aggregation Group: The required
aggregation group of plans plus any other plan or plans of
an Employer which, when considered as a group with the
required aggregation group, would continue to satisfy the
requirements of Sections 401(a)(4) and 410 of the Code.
(vi) Required Aggregation Group: (1) Each qualified
plan of an Employer in which at least one Key Employee
participates, and (2) any other qualified plan of the
Employer which enables a plan described in (1) to meet the
requirements of Sections 401(a)(4) or 410 of the Code.
(vii) Determination Date: For any Plan Year
subsequent to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan Year of the Plan,
the last day of that year.
(viii) Valuation Date: The last day of the Plan Year
as of which account balances or accrued benefits are valued
for purposes of calculating the Top Heavy Ratio.
(ix) Present Value: Present value shall be based
only on the interest and mortality rates specified in
Article 2(1).
Section 14.3. Minimum Accrued Benefit: (1) Notwithstanding any
other provision in this Plan except (3) and (4) below, a Participant
who is not a Key Employee will accrue a minimum benefit for each year
of Service. Years of Service shall be excluded for the Plan Year
ending during such year of Service the Plan was not Top Heavy. This
minimum benefit shall be derived entirely from Employer contributions
and when expressed as a life annuity shall be not less than two (2%)
percent of his highest average compensation for the five consecutive
years for which the Participant had the highest compensation. The
minimum accrual is determined without regard to any Social Security
contribution. The minimum accrual applies even though under other Plan
provisions the Participant would not otherwise be entitled to receive
an accrual, or would have received a lesser accrual for the year
because (i) the Non-Key Employee's compensation is less than a stated
amount, (ii) the Non-Key Employee is not employed on the last day of
the accrual computation period, or (iii) the Plan is integrated with
Social Security.
(2) For purposes of computing the minimum accrued benefit,
compensation will include either (i) all compensation, as that term is
defined for Section 415 purposes, (ii) all wages subject to tax under
Section 3101(a) without the dollar limitation of Section 3121(a), or
(iii) W-2 wages for the calendar year ending with or within the Plan
Year.
(3) No additional benefit accruals shall be provided pursuant to (1)
above to the extent that the total accruals on behalf of the
Participant attributable to Employer contributions will provide a
benefit expressed as a life annuity commencing at Normal Retirement Age
that equals or exceeds twenty (20%) percent of the Participant's
highest average compensation for the five (5) consecutive years for
which the Participant had the highest compensation.
(4) The provisions in (1) above shall not apply to any Participant
to the extent that the Participant is covered under any other plan or
plans of the Employer. The maximum allocation or benefit requirement
applicable to this Top Heavy Plan will be met in the other plan or
plans.
Section 14.4. Adjustment of Benefit: If the form of benefit is
other than a single life annuity, the Employee must receive an amount
that is the actuarial equivalent of the minimum single life annuity
benefit. If the benefit commences at a date other than at Normal
Retirement Age, the Employer must receive at least an amount that is
the actuarial equivalent of the minimum single life annuity benefit
commencing at Normal Retirement Age.
Section 14.5. Nonforfeitability of Benefit: The minimum accrued
benefit required to be nonforfeitable under Section 416(b) may not be
forfeited under Code Sections 411(a)(3)(B) or 411(a)(3)(D).
Section 14.6. Minimum Vesting: For any Plan Year in which this
Plan is Top Heavy, and for all subsequent Plan Years, an Employee who
has completed at least three years of Service with an Employer is fully
and non-forfeitably vested in his Pension.
Section 14.7. Further Limitations. If the Plan is Top Heavy
"100%" shall be substituted for "125%" in the Code Section 415
limitations which are incorporated by reference into Article 7, unless:
(a) The Plan would not be Top Heavy if "9/10" were substituted for
"6/10" under 14.2(iii) and
(b) "Three percent" is substituted for "two percent" under Section
14.3 or the defined contribution plan provides a integrated Top Heavy
minimum allocation equal to 7.5% of the Participant's compensation.
ARTICLE 15
CHANGE IN CONTROL PROVISIONS
For purposes of this Article 15 only, termination of employment
means the termination of employment by IMC Global Operations Group,
Inc., the Company or its successor company of an employee who is a
participant in the Plan, that occurs after a Change in Control has
occurred and is not due to cause and is not voluntary. Termination of
Employment shall not be deemed to be voluntary if the Employee elects
to resign because his or her position, responsibility, benefits, or
compensation have been adversely changed or diminished.
A Participant who has experienced termination of employment (as that
term is defined in Article 2(40), as a result of a Change in Control
(as defined in Article 2(6)) of IMC Fertilizer Group, Inc., the parent
corporation of IMC Global Operations Inc., shall be fully and
immediately vested in his accrued benefits under the Plan whether or
not he was otherwise vested under the terms of the Plan prior to the
happening of such event. In addition, a Participant who has
experienced termination from employment (as defined in Article 2(40))
as a result of Change in Control (as defined in Article 2(6)) will be
credited with twenty-four months of Credited Service and Service for
all purposes under the Plan in addition to such Service and Credited
Service as he had otherwise earned immediately prior to such
Termination of Employment as a result of a Change in Control of IMC
Fertilizer Group, Inc. Such additional Credited Service shall be
assumed under Section 5.1(b)(ii)(B) and (C) where applicable.
IN WITNESS WHEREOF, IMC Global Operations Inc. has caused its
corporate seal to be hereunto affixed by its officers thereunto duly
authorized this 31st day of December, 1994.
IMC GLOBAL OPERATIONS INC.
By Allen C. Miller
-------------------------
(Corporate Seal)
ATTEST:
Marschall I. Smith
-------------------------
APPENDIX A TO THE
RETIREMENT PLAN
FOR
SALARIED EMPLOYEES
OF
IMC GLOBAL OPERATIONS INC.
This Appendix A applies only to participants covered by a plan
known as the Retirement Plan for Hourly Employees of IMC Fertilizer,
Inc. Represented by Local #4-786 Oil, Chemical and Atomic Workers
International Union (hereinafter the "Sterlington Union Plan").
Effective April 16, 1992 the Sterlington Union Plan was merged with
this Plan, and all participants in the Sterlington Union Plan are
Participants in this Plan for purposes of their frozen benefits under
the Sterlington Union Plan, as herein provided.
The accrued benefit of each participant in the Sterlington Union
Plan is fully vested and will, for each participant of that plan as a
Participant under this Plan, be limited to his accrued benefit as of
April 16, 1992, as such benefits were determined under the Sterlington
Union Plan in effect on that date. Participants under the Sterlington
Union Plan will accrue no further benefits.
With the exception of the foregoing, the terms of this Plan as
amended and restated shall apply, to Participants who participated in
the Sterlington Union Plan, in the same manner as they apply to all
other Participants under this Plan.
EXHIBIT 10.12
INVESTMENT PLAN FOR SALARIED EMPLOYEES
OF
IMC GLOBAL OPERATIONS INC.
restated effective March 1, 1988
INVESTMENT PLAN FOR SALARIED EMPLOYEES
OF
IMC GLOBAL OPERATIONS INC.
TABLE OF CONTENTS
---------------------------------------------
Article Section Page
1 TITLE 1
2 DEFINITIONS 2
3 PARTICIPATION
3.1 Eligibility Requirements 6
3.2 Applications 8
3.3 Termination of Participation 9
3.4 Safe-Harbor For Leased Employees 9
3.5 Special Enrollment 10
4 EMPLOYEE CONTRIBUTIONS AND SALARY REDUCTION
CONTRIBUTIONS
4.1 Contributions Allowed 10
4.2 Changes in Amount of Contributions 13
4.3 Automatic Suspension of Contributions 13
4.4 Voluntary Suspension of Contributions 14
4.5 Rollover Contributions 14
4.6 Contribution Percentage 16
4.7 Definitions 17
4.8 Special Rules 17
4.9 Distribution of Excess Aggregate Contributions 18
4.10 Salary Reduction Contributions 19
4.11 Definitions 20
4.12 Special Rules 21
4.13 Distribution of Excess Deferrals 22
4.14 Distribution of Excess Contributions 23
4.15 Aggregate Rule 24
Article Section Page
5 EMPLOYER CONTRIBUTIONS
5.1 Amount of Contributions 24
5.2 Statutory Limitations on Contributions 26
5.3 Limitation Year 29
6 TRUST AND INVESTMENT PROVISIONS
6.1 Trustee 29
6.2 Investment of Contributions 30
6.3 Limitation on Investment Directions 33
6.4 Change in Investment Direction 34
6.5 Investment Income 35
6.6 Expenses of Funds 35
6.7 Investment Manager 35
7 PARTICIPANTS' PLAN ACCOUNT
7.1 Plan Account and Vesting 37
7.2 Dollars 39
7.3 Valuation of Funds 40
7.4 Valuation of Fund Sub-Accounts as of a
Valuation Date 41
7.5 Valuation of Fund Sub-Accounts on Other Than
a Valuation Date 41
7.6 Value of Plan Accounts 41
7.7 Committee to Furnish Annual Statements of Value
of Plan Accounts 41
7.8 Transfers from Hourly Savings and Profit
Sharing Plans 42
8 WITHDRAWALS, DISTRIBUTIONS AND LOANS
8.1 Withdrawal of Employee Payroll Deduction and
Recharacterization Contributions 44
8.2 Hardship Withdrawal from Employer, Employee and
Recharacterization Accounts 45
8.3 Withdrawal from Salary Reduction Account 48
8.4 Distribution Upon Election to Discontinue
Contributions for an Indefinite Period 49
8.5 Loans 50
8.6 Distribution Upon Termination of Employment 52
8.7 Time and Manner of Distributions 52
Article Section Page
8.8 Designation of Beneficiary 53
8.9 Distribution to Minor and Disabled Distributees 55
8.10 Distribution upon Termination of Employment 55
8.11 Conditions for Distribution to Beneficiary, Upon
Death of a Participant 59
8.12 Direct Rollovers 59
9 SPECIAL RULES RELATING TO RE-EMPLOYMENT OF
TERMINATED EMPLOYEES AND EMPLOYMENT
BY RELATED ENTITIES 60
10 ADMINISTRATION
10.1 The Committee 60
10.2 Plan Administrator 63
10.3 Claims Procedure 64
10.4 Notices to Participants and Distributees 65
10.5 Notices to Committee or Employers 65
10.6 Records 66
10.7 Reports of Trust Fund 66
11 PARTICIPATION BY OTHER EMPLOYERS
11.1 Adoption of Plan 66
11.2 Withdrawal from Plan 67
11.3 Company as Agent for Employers 67
12 CONTINUANCE BY A SUCCESSOR 67
13 DOMESTIC RELATIONS, ORDERS AND LOANS
13.1 68
13.2 69
14 MISCELLANEOUS
14.1 Expenses 69
14.2 Non-Assignability 70
14.3 Employment Non-Contractual 70
14.4 Limitation of Rights 70
14.5 Merger or Consolidation with Another Plan 70
Article Section Page
14.6 Reversion of Employer Contributions 71
15 AMENDMENT, WITHDRAWAL AND TERMINATION
15.1 Amendment 72
15.2 Withdrawal 72
15.3 Termination 73
15.4 Trust to be Applied Exclusively for
Participants and Their Beneficiaries 74
15.5 Distribution Upon Sale of Assets 74
15.6 Distributions Upon Sale of Subsidiary 74
16 TOP-HEAVY PLAN YEARS
16.1 75
16.2 77
16.3 77
16.4 78
16.5 79
16.6 79
17 TERMINATED INVESTMENT AND SAVINGS PLAN FOR
HOURLY EMPLOYEES AT STERLINGTON,
LOUISIANA 80
INVESTMENT PLAN FOR SALARIED EMPLOYEES
OF
IMC GLOBAL OPERATIONS INC.
Restated Effective March 1, 1988
--------------------------------
The Investment Plan for Salaried Employees of IMC Global
Operations Inc. (the "Plan", known before November 1, 1994 as the
"Investment Plan for Salaried Employees of IMC Fertilizer, Inc.") was
adopted effective March 1, 1988 and restated effective January 1, 1992
and again effective July 1, 1994 to incorporate various amendments to
the Plan. All changes are effective July 1, 1994 unless otherwise
noted.
In all cases where this Plan refers to a person, the
reference pertains to both genders.
Account balances of participants in the Investment Plan for
Salaried Employees of International Minerals Chemical Corporation on
February 29, 1988 were transferable to this Plan through March 31, 1989
fully vested and nonforfeitable.
ARTICLE 1
TITLE
The title of this plan on and after November 1, 1994 is the
"Investment Plan for Salaried Employees of IMC Global Operations Inc."
Prior to November 1, 1994 the Plan was known as the "Investment Plan
for Salaried Employees of IMC Fertilizer, Inc.".
ARTICLE 2
DEFINITIONS
As used herein, the following words and phrases shall have
the following respective meanings unless the context clearly indicates
otherwise:
(1) Active Participant. A participant who is presently
making contributions to the plan pursuant to Section 4.1.
(2) Administrator. The Plan Administrator appointed by the
Company pursuant to Section 10.2. and as defined in ERISA.
(3) Affiliate. Any corporation which is a member of the
same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as an employer or an
unincorporated trade or business which is under common
control with an employer (as determined under Section 414(c)
of the Code).
(4) Beneficiary. The person or persons who shall be
entitled under Section 8.8 to receive benefits in the event
of the death of a participant.
(5) Break in Service. The period of time beginning on the
first day of the month following termination of an
individual's employment and ending on the last day of the
month immediately preceding the month in which an individual
is reemployed if such period is at least 12 months long,
provided that an individual shall be deemed to be employed
during any period in which he is in Military Service,
provided that he returns to the employ of an Employer within
the period prescribed by law relating to the reemployment
rights of persons in Military Service, during any period for
which he is entitled to receive compensation even though he
performs no services during such period (such as vacation,
leave of absence, sick leave or disability leave), and during
any period for which he is laid off or is on an uncompensated
leave of absence duly granted by his Employer or is on a
maternity or paternity leave of absence which has been
approved by the Administrator for purposes of eligibility
service under this Plan, determined under uniform rules
adopted by the Committee in accordance with Regulations.
(6) Code. The Internal Revenue Code of 1986, as amended,
and the regulations issued thereunder.
(7) Committee. The Committee appointed by the Board of
Directors of the Company pursuant to Section 10.1.
(8) Company. IMC Global Operations Inc., a Delaware
corporation, and any organization which shall succeed to the
business of such corporation and adopt the plan pursuant to
Article 12.
(9) Compensation. The base monthly salary paid to a
participant. Effective January 1, 1989, compensation
considered under the plan shall not be in excess of $200,000
annually, as adjusted by the Secretary in accordance with
Section 401(a)(17) of the Code. Effective January 1, 1994,
compensation considered under the Plan shall not be in excess
of $150,000 annually as adjusted by the Secretary in
accordance with Section 401(a)(17) of the Code. For purposes
of Article 4 the term "compensation" shall have the meaning
prescribed in Section 414(s) of the Code and for purposes of
Article 5, the term "compensation" shall have the meaning
prescribed by Section 415 of the Code.
(10) Direct Rollover. A Direct Rollover is a payment by the
Plan to the Eligible Retirement Plan specified by the
Distributee.
(11) Distributee. A person entitled to receive a
distribution from the trust under Article 8. A Distributee
includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse or former
Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in
Article 13 and Section 414(p) of the Code, are Distributees
with regard to the interest of the spouse or former spouse.
(12) Eligible Retirement Plan. An Eligible Retirement Plan
is an individual retirement account described in Section
408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the
Distributee's eligible rollover distribution. However, in
the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
(13) Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of the
balance to the credit of the Distributee, except that an
eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the
joint lives (or joint life expectancies) of the Distributee
and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to
the extent such distribution is required under Section
401(a)(9) of the Code; and the portion of any distribution
that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with
respect to Employer securities.)
(14) Employee. An individual who is employed by an Employer
and shall include leased employees within the meaning of
414(n)(2) of the Code. Notwithstanding the foregoing, if
such leased employees constitute less than 20% of an
Employer's non-highly compensated work force within the
meaning of Section 414(n)(5)(C)(ii) of the Code, the term
Employee shall not include those leased employees covered by
a plan described in Section 414(n)(5) of the Code. Any
person employed by a foreign corporation shall be deemed to
be an Employee of an Employer during his period of employment
by such foreign corporation if (i) not less than 20% of the
voting stock of such foreign corporation is owned by an
employer; (ii) the employer has entered into an agreement
under Section 3121(1) of the Code which applies to such
foreign corporation; (iii) the employee is a citizen or
permanent resident of the United States; and (iv)
contributions under a funded plan of deferred compensation
are not provided by any other person with respect to the
remuneration paid to such person by such foreign corporation.
(15) Employer. The Company and any other corporation which
shall, with the consent of the Company, elect to participate
in the plan in the manner described in Section 11.1 and any
successor corporation which shall adopt the plan pursuant to
Article 12. If any such corporation shall withdraw from
participation in the plan pursuant to Section 11.2, or shall
terminate its participation in the plan pursuant to Section
15.3, such corporation shall thereupon cease to be an
employer.
(16) Employer Contributions. The contributions made by an
employer pursuant to Section 5.1.
(17) Family Member. An individual described in Section
414(q)(6)(B) of the Code.
(18) Highly Compensated Employee. A participant or former
participant who is a highly compensated employee as defined
in Code Section 414(q). Generally, any participant or former
participant is considered a Highly Compensated Participant if
during the Plan Year or the preceding Plan Year such
participant or former participant:
(a) was at any time a "five percent owner" as
defined in Section 16.1.
(b) received "415 Compensation" from the Employer
in excess of $78,353 (or such other amount as indexed
from time to time by the Internal Revenue Service). In
determining whether an individual has "415 Compensation"
of more than $78,353, "415 Compensation" from each
employer required to be aggregated under Code Sections
414(b), (c), and (m) shall be taken into account.
(c) received "415 Compensation" from the Employer
in excess of $52,235 (or such other amount as indexed
from time to time by the Internal Revenue Service) and
was in the top-paid group of Employees for the Plan
Year. An Employee is in the top-paid group of Employees
for any Plan Year if such Employee is in the group
consisting of the top twenty (20) percent of the
Employees when ranked on the basis of "415 Compensation"
paid during the Plan Year. In determining whether an
individual has "415 Compensation" of more than $52,235,
"415 Compensation" from each employer required to be
aggregated under Code Section 414(b), (c), and (m) shall
be taken into account.
(d) was at any time an officer as defined in
Section 16.1 with "415 Compensation" greater than 50% of
the amount in effect under Code Section 415(b)(1)(A) for
such Plan.
(19) Investment Manager. The investment manager who may be
appointed pursuant to Section 6.6.
(20) Maternity or Paternity Leave. A leave of absence taken
by an employee for any period by reason of such employee's
pregnancy, birth of an employee's child, placement of a child
with the employee in connection with the adoption of such
child or any absence for the purpose of caring for such child
for a period immediately following such birth or placement.
Leaves of absence taken in accordance with this subsection
shall not include any leave of absence which is deemed to be
a short term disability under the Short Term Disability Plan
for Salaried Employees of IMC Global Operations Inc.
(21) Military Service. (a) Service on active duty, in time
of national or local emergency, in the armed forces of the
United States or any State thereof; (b) service in the armed
forces of the United States or of any State thereof under any
compulsory service law; or (c) service in the armed forces of
the United States or any of its allies in time of war in
which the United States is engaged.
(22) Non-Highly Compensated Employee. An Employee of the
Employer who is neither a Highly Compensated Employee nor a
Family Member.
(23) Participant. An employee who has satisfied the
requirements set forth in Section 3.1, has elected to
participate in the plan pursuant to Section 3.2, and whose
participation has not terminated pursuant to Section 3.3.
(24) Plan. The plan herein set forth, as from time to time
amended.
(25) Plan Account. The sum of a participant's Employer
Account, Employee Account, Salary Reduction Account and
Rollover Account.
(26) Plan Year. The accounting period of the Company for
federal income tax purposes.
(27) Predecessor Plan. Investment Plan for Salaried
Employees of International Minerals Chemical Corporation as
in effect on February 29, 1988 under which full account
balances of participants eligible to participate in this Plan
were transferred, if such participants became eligible to
participate in this Plan between March 1, 1988 and March 31,
1989.
(28) Prior Plan Statement. The predecessor plan as in effect
as of June 30, 1982.
(29) Salary Reduction Contributions. Contributions to the
trust pursuant to Section 4.1 by an employer on behalf of an
active participant in lieu of current compensation.
(30) Service. Any period of time beginning on the first day
of the month in which an individual's employment commences
and ending on the last day of the month in which his
employment terminates. An individual's service shall include
employment with International Minerals Chemical Corporation
so long as such participant became eligible to participate in
this Plan prior to April 1, 1989.
(31) Trust. The trust created by agreement between the
employers and the trustee, as from time to time amended.
(32) Trustee. The trustee provided for in Section 6.1, or
any successor trustee or, if there shall be more than one
trustee acting at any time, all of such trustees
collectively.
(33) Trust Fund. All money and property of every kind held
by the trustee under the trust agreement.
(34) Valuation Date. The last day of each calendar quarter.
Effective July 1, 1988 the Valuation Date shall be the last
day of each calendar month.
ARTICLE 3
PARTICIPATION
Section 3.1. Eligibility Requirements. (a) Prior
Participants. Each Employee who was a Participant in the Predecessor
Plan on February 29, 1988, terminated employment with the predecessor
Employer, became employed by an Employer and eligible to participate in
this Plan between March 1, 1988 and March 31, 1989 shall have his full
account balance under the Predecessor Plan transferred to this Plan
fully vested and invested, where possible, in identical Funds, as
described in Article 6 of this Plan.
(b) Active Participants. A person who:
(1) is an Employee of an Employer;
(2) is paid on a salaried basis;
(3) is either regularly employed in the United
States or is a citizen of the United States;
(4) has an effective application under Section
3.2 on file with the Committee; and
(5) is credited with one year of Service (as
defined in subsection (d) below);
shall be eligible to be a Participant in the Plan and shall commence
active participation on the date specified in subsection (c). For
purposes of this subsection (b), clause (5) above shall not be
applicable to a person who satisfies clauses (1), (2) and (3) on March
1, 1988, and who elects to participate on that date. A Participant who
discontinued contributions to the Predecessor Plan and is ineligible to
participate in the Predecessor Plan pursuant to Sections 8.1 or 8.4 of
such plan may not become an active Participant under this Plan until
such period of ineligibility expires.
(c) Commencement Date for Active Participation. A person who has
satisfied the conditions of subsection (b) above shall become an Active
Participant on the next January 1 or July 1 (whichever occurs first)
following the date such conditions are first satisfied.
Notwithstanding the preceding sentence, if such January 1 or July 1
occurs more than six months after a person is credited with his first
year of Service, Active Participation shall commence on the first date
the requirements of subsection (b) are satisfied.
(d) Eligibility Service. An Employee of an Employer shall
satisfy the service requirement if he completes a year of service in
the 12 month period beginning on the date of his employment, or if he
completes a year of service in any Plan Year subsequent to the date of
his employment. If an Employee terminates employment with an Employer
and all affiliates, but returns to such employment prior to incurring a
Break in Service, the period prior to and following such termination
shall be credited as service. If an Employee terminates employment
with an Employer and all Affiliates prior to completing a year of
service, but returns to such employment at a later date, all periods of
his employment shall be credited as service. An Employee who has once
satisfied the eligibility requirement, terminates employment and later
returns to employment shall be eligible to participate in the Plan as
of the date of his reemployment.
Section 3.2. Applications. An eligible Employee under
Section 3.1(b) may become an Active Participant by filing a written
application with his Employer in the form prescribed by the Committee.
Such application must be filed at least 20 days prior to the date
upon which participation is to commence or, if participation is to
commence on an effective date, such application must be filed prior to
a date to be prescribed by the Committee and communicated to all
eligible Employees. Such application shall authorize the Employee's
Employer to reduce his current Compensation in the amount elected by
the Employee pursuant to Article 4 and to contribute the amount of such
reduction to the Trust Fund and/or authorize the Employee's Employer to
deduct monthly contributions from the Employee's Compensation in the
amount specified by the Employee pursuant to Article 4. This
application shall evidence the Employee's acceptance of and agreement
to all of the provisions of the Plan.
Section 3.3. Termination of Participation. A Participant
shall continue as such until his termination of employment for whatever
reason; provided, however, if a Participant shall be transferred from
one Employer to another or from an Employer to a corporation which is a
member of the same controlled group of corporations (within the meaning
of Section 1563(a) of the Code, determined without regard to Section
1563(a)(4) and (e)(3)(C)) as his prior Employer or from an Employer to
a corporation or other employing entity which is under common control
(within the meaning of Section 414(c) of the Code) with his prior
Employer, such transfer shall not terminate the Participant's
participation in the Plan and such Participant shall continue to
participate in the Plan until an event shall occur which would have
terminated his participation had he continued in the service of an
Employer until the occurrence of such event, but during any period
during which he is not employed by an Employer he shall not be an
Active Participant and shall not be entitled to make contributions to
the Plan pursuant to Section 4.1.
Section 3.4. Safe-Harbor For Leased Employees.
Notwithstanding any other provisions of the Plan, for purposes of the
pension requirements of Section 414(n)(3) of the Code, the Employees of
the Employer shall include leased employees within the meaning of
Section 414(n)(2) of the Code. Such leased employees shall become
participants in, or be entitled to contributions under, the Plan based
on service as leased employees only as provided in provisions of the
Plan other than this Article 3.
Section 3.5. Special Enrollment. Notwithstanding any other
provision of the Plan to the contrary, any Participant otherwise
eligible to participate under the terms of the Plan on December 1, 1989
shall be entitled to re-enroll in the Plan on December 1, 1989, to
change investment selections and direction, as provided under Article
6, to change contributions as provided under Section 4.2, and to
otherwise make such decisions regarding their Plan Accounts as are
usually permitted on January 1 of any Plan Year.
There will be no enrollment on January 1, 1990 because of the
special, one-time December 1, 1989 enrollment except as to those
Employees or Participants who were ineligible under the terms of the
Plan to participate on December 1, 1989 but will become eligible for
participation on January 1, 1990.
ARTICLE 4
EMPLOYEE CONTRIBUTIONS AND SALARY REDUCTION CONTRIBUTIONS
Section 4.1. Contributions Allowed. A Participant shall
elect to participate in the Plan by a) Employee contributions effected
by means of payroll deduction and/or by b) all Employer Contributions
to the Trust Fund in an amount the Employee has agreed in writing to
forego in current Compensation. The latter contributions shall be
known as Salary Reduction Contributions.
(a) Employee Contributions
(1) Each Active Participant shall make a regular
contribution under the Plan. Such contribution shall
only be effected by means of payroll deductions each pay
period of a whole dollar amount. Such dollar amount
shall be in percentage points ranging from 1% to 6% of
the Active Participant's Compensation.
(2) Each Active Participant who shall elect or
authorize contributions in an amount equal to 6% of his
Compensation pursuant to paragraph (a) and/or paragraph
(b) of this Section shall be entitled, but shall not be
required, to make an additional contribution by means of
payroll deductions only each pay period of a whole
dollar amount. Such dollar amount shall be in
percentage points ranging from 1% to 9% of the Active
Participant's Compensation.
(3) If the aggregate contribution made by an
Active Participant pursuant to paragraphs (1) and (2) of
this Section is not evenly divisible by five, it shall
be increased to the nearest higher amount which is so
divisible. Contributions shall commence with the first
payroll period ending after participation commences.
Contributions shall be transferred by the Participant's
Employer to the Trustee not less frequently than
monthly.
(b) Salary Reduction Contributions. An Employer shall contribute
to the Trust Fund on behalf of each Active Participant which he
employs, an amount equal to the amount the Active Participant has
agreed in writing to forego in current Compensation. A Participant may
elect an amount equal to percentage points of Compensation. The
maximum percentage by which any Participant may elect to forego in
Compensation shall be designated by the Committee no later than 30 days
prior to each January or July 1 but such percentage shall, in no event,
exceed 15%. Notwithstanding the foregoing, no contributions may be
made under this paragraph, unless such contribution complies with the
provisions of Section 5.1(c) of this Plan and no contribution under
this subsection which is in excess of 6% of Compensation will be
eligible for further Employer contribution under Section 5.1(a).
If the aggregate dollar amount of the current Compensation
reduction made by an Active Participant pursuant to this paragraph is
not evenly divisible by five, it shall be increased to the nearest
higher amount which is so divisible.
An agreement to reduce current Compensation under this
paragraph shall be subject to rules and regulations governing such
agreements as promulgated by the Internal Revenue Service.
Notwithstanding anything in this Section to the contrary, no
salary reduction contribution percentage elected by a Participant may
result in a dollar amount which will exceed $7313 in any calendar year
as multiplied by the Adjustment Factor provided by the Secretary of the
Treasury. In the event a Participant's contribution under this
Subsection exceeds $7313 in any calendar year or such contribution when
combined with any other cash or deferred arrangement contributions
exceeds $7313 as multiplied by the Adjustment Factor provided by the
Secretary of the Treasury in any calendar year, such excess, if it
occurs under this Subsection 4.1(b) shall be refunded to the
Participant along with any accrued interest or earnings thereon no
later than April 15 of the calendar year succeeding the year in which
such excess was contributed. If such excess occurs as a result of
contributions made under this Subsection 4.1(b) when combined with any
other cash or deferred arrangement contributions made by the
Participant, then any refund will be made upon timely and proper
notification to the Plan Administrator of the amount to be refunded by
the Participant.
(c) Limitations on Employee and Salary Reduction Contributions.
A Participant's overall contribution, either by payroll deduction
exclusively or by payroll deduction in combination with salary
reduction may not exceed 15% of the Participant's Compensation and are
nonforfeitable when made.
Section 4.2. Changes in Amount of Contributions. Changes by
the Active Participant. The amount of the Compensation reduction
and/or the dollar amount of payroll deduction elected by an Active
Participant as a percentage of Compensation shall continue in effect
until the Active Participant changes his reduction agreement or his
deduction. An Active Participant may change the amount of his
agreement or payroll deduction within the limitations prescribed in
Section 4.1 as of January 1 or July 1 of any year by giving written
directions to his Employer in the form prescribed by the Committee,
provided such direction is given at least 30 days prior to the
effective date of the change. If at any time an Active Participant's
payroll deduction shall exceed the maximum limitation prescribed in
Section 4.1(a), it shall be automatically reduced to the highest whole
dollar amount which is evenly divisible by five and which is not more
than such maximum limitation.
Section 4.3. Automatic Suspension of Contributions. An
Active Participant's payroll deduction or by salary reduction
contributions shall be suspended automatically for the period and under
the circumstances specified in Section 8.1 and for any period during
which the Active Participant is absent without Compensation or is no
longer an Active Participant.
Section 4.4. Voluntary Suspension of Contributions. Any
Active Participant may, by giving 30 days' written notice to his
Employer, in the form prescribed by the Committee, suspend his
contributions (by payroll deduction or salary reduction) effective as
of the first day of the month which is at least 30 days after the date
such notice has been given. Such a voluntarily suspended Participant
may, by giving 30 days' written notice to his Employer on a prescribed
form, regain active status in the Plan on the earlier of the next
January 1 or July 1 following the suspension of contributions for 12
months.
Section 4.5. Rollover Contributions. (a) With the consent
of the Administrator, amounts may be transferred from other qualified
plans, provided that the Trust from which such funds are transferred
permits the transfer to be made and, in the opinion of legal counsel
for the Employers, the transfer will not jeopardize the tax exempt
status of the Plan or Trust or create adverse tax consequences for the
Employers. The amounts transferred shall be set up in a separate
account herein referred to as "Rollover Account". Such account shall
be fully vested at all times and shall not be subject to forfeiture for
any reason.
(b) Amounts in a Participant's Rollover Account may not be
withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in Paragraph (c) of this Section 4.5. The amount
shall be credited in participating units in accordance with the
Participant's investment direction to the appropriate sub-accounts of
such Rollover Account. If a rollover contribution is made by an
eligible Employee prior to his becoming a Participant, such Employee
shall until such time as he becomes a Participant be deemed to be a
Participant for all purposes of the Plan except for purposes of making
contributions to the Plan pursuant to Section 4.1.
(c) Distributions may be made only in accordance with Sections
8.6, 8.7 and 8.10 of the Plan and such distributions shall be valued in
accordance with Sections 7.3 through 7.6 as applicable.
(d) For purposes of this Section 4.5 the term "amounts
transferred from other qualified plans" shall mean: (i) amounts
transferred to this Plan directly from another qualified plan; (ii)
lump sum distributions received by an Employee which are eligible for
tax free rollover to a qualified plan and which are transferred by the
Employee to this Plan within sixty (60) days following his receipt
thereof; (iii) amounts transferred to this Plan from a conduit
individual retirement account provided that the conduit individual
retirement account has no assets other than assets which (A) were
previously distributed to the Employee by another qualified corporate
(and, after December 31, 1983, noncorporate) plan as a lump-sum
distribution, (B) were eligible for tax free rollover to a qualified
corporate or noncorporate plan and (C) were deposited in such conduit
individual retirement account within sixty (60) days of receipt thereof
and other than earnings on said assets; and (iv) amounts distributed to
the Employee from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the Employee to
this Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account. Prior to accepting any
transfers to which this Section applies, the Administrator may require
the Employee to establish that the amounts to be transferred to this
Plan meet the requirements of this Section and may also require the
Employee to provide an opinion of counsel satisfactory to the Employers
that the amounts to be transferred meet the requirements of this
Section.
(e) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a).
(f) Notwithstanding anything herein to the contrary, this Plan
shall not accept any direct transfers from a defined benefit plan,
money purchase plan (including a target benefit plan), stock bonus or
profit sharing plan which would otherwise have provided for a life
annuity form of payment to the Participant.
Section 4.6. Contribution Percentage. (a) The Average
Contribution Percentage for Eligible Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the Average
Contribution Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 1.25; or
(b) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year shall not exceed
the Average Contribution Percentage for Eligible Participants who are
Non-Highly Compensated Employees for the Plan Year multiplied by 2,
provided that the Average Contribution Percentage for Eligible
Participants who are Non-Highly Compensated Employees by more than two
(2) percentage points or such lesser amount as described in Section
4.15.
Section 4.7. Definitions. For purposes of this Section, the
following definitions shall apply.
(a) "Average Contribution Percentage" shall mean the average
(expressed as percentage) of the Contribution Percentages of
the Eligible Participants in a group.
(b) "Contribution Percentage" shall mean the ratio
(expressed as a percentage), of the sum of the Employee
Contributions and Employer Contributions under the Plan on
behalf of the Eligible Participant for the Plan Year to the
Eligible Participant's Compensation while a Participant in
the Plan for the Plan Year.
(c) "Eligible Participant" shall mean any Employee of the
Employer who is otherwise authorized under the terms of the
Plan to have Employee Contributions or Employer Contributions
allocated to his account for the Plan Year.
Section 4.8. Special Rules. (a) For purposes of this
Section 4, the Contribution Percentage for any Eligible Participant who
is a Highly Compensated Employee for the Plan Year and who is eligible
to make Employee Contributions, or to receive Employer Contributions or
Salary Reduction Contributions allocated to his account under two or
more plans described in Section 401(a) of the Code or arrangements
described in Section 401(k) of the Code that are maintained by the
Employer or an Affiliated Employer shall be determined as if all such
contributions and Salary Reduction Contributions were made under a
single plan.
(b) In the event that this Plan satisfies the requirements of
Section 410(b) of the Code only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of
Section 410(b) of the Code only if aggregated with this Plan, then this
Section 4 shall be applied by determining the Contribution Percentages
of Eligible Participants as if all such plans were a single plan.
(c) For purposes of determining the Contribution Percentage of an
Eligible Participant who is a Highly Compensated Employee, the Employee
Contributions, Employer Contributions and Compensation of such
Participant shall include the Employee Contributions, Employer
Contributions and Compensation of Family Members to the extent required
by Section 401(k) of the Code and the regulations issued thereunder.
(d) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
Section 4.9. Distribution of Excess Aggregate Contributions.
(a) In General. Excess Aggregate Contributions and income allocable
thereto shall be distributed no later than the last day of each Plan
Year beginning after December 31, 1987, to Participants to whose
accounts Employee Contributions or Employer Contributions were
allocated for the preceding Plan Year.
(b) Excess Aggregate Contributions. For purposes of this Plan,
"Excess Aggregate Contributions" shall mean the amount described in
Section 401(m)(6)(B) of the Code.
(c) Determination of Income. The income allocable to Excess
Aggregate Contributions shall be determined by multiplying the income
allocable to the Participant's Employee Contributions and Employer
Contributions for the Plan Year by a fraction, the numerator of which
is the Excess Aggregate Contributions on behalf of the Participant for
the preceding Plan Year and the denominator of which is the sum of the
Participant's account balances attributable to Employee Contributions
and Employer Contributions as of the end of the Plan Year, reduced by
the gain allocable to such total amount for the Plan Year and increased
by the loss allocable to such total amount for the Plan Year.
(d) Maximum Distribution Amount. The Excess Aggregate
Contributions to be distributed to a Participant shall be adjusted for
income, and, if there is a loss allocable to the Excess Aggregate
Contribution, shall in no event be less than the lesser of the
Participant's account under the Plan or the Participant's Employee
Contributions and Employer Contributions for the Plan Year.
(e) Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be distributed from the Participant's
Employee Account, and Employer Account, in proportion to the
Participant's Employee Contributions and Employer Contributions for the
Plan Year.
Section 4.10. Salary Reduction Contributions. (a) Maximum
Amount of Salary Reduction Contributions. Effective as of March 1,
1988, no Employee shall be permitted to have Salary Reduction
Contributions made under this Plan, the Predecessor Plan or any other
plan during any calendar year in excess of $7313 as multiplied by the
Adjustment Factor as provided by the Secretary of the Treasury. The
foregoing limit shall not apply to Salary Reduction Contributions of
amounts attributable to service performed in 1986 and described in
Section 1105(c)(5) of the Tax Reform Act of 1986.
(b) Average Actual Deferral Percentage.
(i) The average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the average Actual Deferral
Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 1.25;
or
(ii) the Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the Average Actual Deferral
Percentage for Eligible Participants who are Non-Highly
Compensated Employees for the Plan Year multiplied by 2,
provided that the Average Actual Deferral Percentage for
Eligible Participants who are Highly Compensated Employees
does not exceed the Average Actual Deferral Percentage for
Eligible Participants who are Non-Highly Compensated
Employees by more than two (2) percentage points or such
lesser amount as described in Section 4.15.
Section 4.11. Definitions. For purposes of Section 4.10 and
succeeding subsections in Section 4, the following definitions shall be
used.
(a) "Actual Deferral Percentage" shall mean the ratio (expressed
as a percentage), of Salary Reduction Contributions on behalf of the
Eligible Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year.
(b) "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of the
Eligible Participants in a group.
(c) "Eligible Participant" shall mean any Employee of the
Employer who is otherwise authorized under the terms of the Plan to
have Salary Reduction Contributions allocated to his account for the
Plan Year.
Section 4.12. Special Rules. (a) For purposes of Section 4.10
and succeeding subsections in Section 4, the Actual Deferral Percentage
for any Eligible Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Salary Reduction
Contributions allocated to his account under two or more plans or
arrangements described in Section 401(k) of the Code that are
maintained by the Employer or an Affiliated Employer shall be
determined as if all such Salary Reduction Contributions were made
under a single arrangement.
(b) For purposes of determining the Actual Deferral Percentage of
a Participant who is a Highly Compensated Employee, the Salary
Reduction Contributions and Compensation of such Participant shall
include the Salary Reduction Contributions and Compensation of Family
Members to the extent required by Section 401(k) of the Code and the
regulations thereunder.
(c) The determination and treatment of the Salary Reduction
Contributions and Actual Deferral Percentage of any Participant shall
satisfy such other requirements as may be prescribed by the Secretary
of the Treasury.
Section 4.13. Distribution of Excess Deferrals. (a)
Notwithstanding any other provision of the Plan, Excess Deferral
Amounts and income allocable thereto shall be distributed no later than
April 15, 1988, and each April 15 thereafter to Participants who claim
such Allocable Excess Deferral Amounts for the preceding calendar year.
(b) For purposes of this Section "Excess Deferral Amount" shall
mean the amount of Salary Reduction Contributions for a calendar year
that the Participant allocates to this Plan pursuant to the claim
procedure set forth in (c) below.
(c) The Participant's claim shall be in writing, shall be
submitted to the Plan Administrator no later than March 1; shall
specify the Participant's Excess Deferral Amount for the preceding
calendar year; and shall be accompanied by the Participant's written
statement that if such amounts are not distributed, such Excess
Deferral Amount, when added to amounts deferred under other plans or
arrangements described in Sections 401(k), 408(k) or 403(b) of the
Code, exceeds the limit imposed on the Participant by Section 402(g) of
the Code for the year in which the deferral occurred.
(d) Maximum Distribution Amount. The Excess Deferral Amount
distributed to a Participant with respect to a calendar year shall be
adjusted for income and, if there is a loss allocable to the Excess
Deferral, shall in no event be less than the lesser of the
Participant's account under the Plan or the Participant's Salary
Reduction Contributions for the Plan Year.
Section 4.14. Distribution of Excess Contributions. (a)
Notwithstanding any other provision of the Plan, Excess Contributions
and income allocable thereto shall be distributed no later than the
last day of each Plan Year beginning after December 31, 1987, to
Participants on whose behalf such Excess Contributions were made for
the preceding Plan Year.
(b) Excess Contributions. For purposes of this amendment,
"Excess Contributions" shall mean the amount described in Section
401(k)(8)(B) of the Code.
(c) Determination of Income. The income allocable to Excess
Contributions shall be determined by multiplying income allocable to
the Participant's Salary Reduction Contributions for the Plan Year by a
fraction, the numerator of which is the Excess Contribution on behalf
of the Participant for the preceding Plan Year and the denominator of
which is the sum of the Participant's account balances attributable to
Salary Reduction Contributions on the last day of the preceding Plan
Year.
(d) Maximum Distribution Amount. The Excess Contributions which
would otherwise be distributed to the Participant shall be adjusted for
income; shall be reduced, in accordance with regulations, by the amount
of Excess Deferrals distributed to the Participant; shall, if there is
a loss allocable to the Excess Contributions, in no event be less than
the lesser of the Participant's account under the Plan or the
Participant's Salary Reduction Contributions for the Plan Year.
(e) Accounting for Excess Contributions. Amounts distributed
under this Section 4 shall first be treated as distributions from the
Participant's Salary Reduction Account.
Section 4.15. Aggregate Rule. The tests referenced in
Section 4.6 and 4.10 shall each be applied independently. If the tests
specified in Section 4.6(b) and 4.10(b)(ii) are used, then the sum of
the Average Contribution Percentages and Average Deferral Percentages
of Highly Compensated Employees may not exceed the sum of
1) 1.25 times the greater of the Average
Contribution Percentages or Average Deferral Percentages
of all other eligible Employees, and
2) the lesser of such Average Deferral Percentage
and Average Contribution Percentage times two or plus
two, whichever is less.
If the limitation described immediately above is exceeded, then
the tests described in Section 4.6 and 4.10 must be applied by using
only the test of Section 4.6(a) or Section 4.10(b)(i). If such test
cannot be met then the reduction methods described in Section 4 shall
be applied.
ARTICLE 5
EMPLOYER CONTRIBUTIONS
Section 5.1. Amount of Contributions. (a) Subject to the
limitations set forth in subsection (c) and Section 5.2, each Employer
shall contribute on the last day of each calendar month or as shortly
thereafter as possible, for and on account of each Active Participant
employed by such Employer on the last day of each calendar month, an
amount which shall be determined by the Board of Directors of the
Company and which shall, in no event, be less than 20% of the amount
contributed during the month by such Active Participant pursuant to
Sections 4.1(a) and/or 4.1(b) up to 6% of the Active Participant's
compensation. Notwithstanding the foregoing, contributions by an
Employer shall be delivered no later than the due date, including
extensions, for the Employer's federal income tax return for such
fiscal year. Employer contributions made pursuant to this paragraph
(a) shall be allocated to the Employer account of each Active
Participant.
(b) Subject to the limitations set forth in subsection (c)
and Section 5.2, each Employer may make an additional contribution at
the end of each fiscal year of the Employer in an amount equal to a
percentage, determined by the Board of Directors of the Company, of
each Active Participant's contributions made to the Plan during the
Employer's fiscal year pursuant to Sections 4.1(a) and/or 4.1(b) up to
6% of each Active Participant's Compensation. Contributions made
pursuant to this paragraph (b) shall be allocated to the Employer
account of each Active Participant who was employed by an Employer on
the last day of the Employer's fiscal year. Employer contributions
made pursuant to this Section shall be delivered to the Trustee no
later than the due date, including extensions thereof, for the
Employer's federal income tax return for such fiscal year.
(1) Notwithstanding the preceding paragraphs, all
or any portion of the Employer Contribution, made under
subparagraphs (a) or (b) of this Section 5.1, which will
be applied to the IMC Global Inc. Stock Fund may be made
in shares of IMC Global Inc. Common Stock. For purposes
of determining the amount of any contribution made in
IMC Global Inc. Common Stock, such stock shall have a
value equal to the average of the closing prices of
Company Stock on the composite tape of New York Stock
Exchange issues for the last twenty (20) trading days
prior to the date the shares are transferred to the
Trustee.
(2) An Employer may decline to make a contribution
on behalf of a Participant if it or the Company
determines that such contribution may result in an
excess contribution under Section 5.2 or may be
discriminatory within the meaning of Section 401(a)(4)
of the Code.
(3) All Employer contributions are nonforfeitable
when made.
Section 5.2. Statutory Limitations on Contributions. (a)
Definition of Annual Additions. For purposes of the Plan, "Annual
Addition" shall mean the amount allocated to a Participant's account
during the Limitation Year which constitutes:
(i) Employer Contributions.
(ii) Employee Contributions.
(iii) Forfeitures, and
(iv) Amounts described in Sections 415(1)(1) and
419(A)(d)(2) of the Code.
(b) Maximum Annual Addition. The maximum Annual Addition that
may be contributed or allocated to a Participant's account under the
Plan for any Limitation Year shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's Compensation,
within the meaning of Section 415(c)(3) of the Code for the
Limitation Year
and the sum of c) and d) below shall not exceed 1.
(c) The aggregate annual additions as of the close of such Plan
Year to the Participant's Plan Account and in all other defined
contribution plans maintained by his Employer divided by the lesser of
(i) 125% of the aggregate maximum dollar amount which
under Section 415(c)(1)(A) of the Code (as adjusted for
increases in the cost of living in accordance with
Treasury Regulations) could have been contributed on behalf
of the Participant to a defined contribution plan for all of
the Participant's years of Service, and
(ii) 35% of the aggregate of the Participant's
Compensation for all of the Participant's years of Service.
(d) The aggregate projected annual benefit of the Participant
under all defined benefit plans maintained by his Employer (determined
as of the close of such Plan Year) divided by the lesser of
(i) 125% of the maximum dollar limitation contained in
Section 415(b)(1)(A) of the Code (as adjusted for increases
in the cost of living in accordance with Treasury
Regulations), and
(ii) 140% of the average of the Participant's
Compensation for the three consecutive calendar years of his
participation in such defined benefit plans during which his
Compensation was the highest.
(e) Special Rules. The Compensation limitation referred to in
this Section 5.2 shall not apply to:
(i) Any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the Code) after separation
from Service which is otherwise treated as an Annual
Addition, or
(ii) Any amount otherwise treated as an Annual Addition
under Section 415(1)(1) of the Code.
(f) Definitions. For purposes of this Section 5.2, "Defined
Contribution Dollar Limitation" shall mean $30,000 or, if greater, one-
fourth of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year.
The term "his Employer" shall include all corporations and
unincorporated businesses which are members of the same controlled
group of corporations under Section 414(b) of the Code or under common
control under Section 414(c) of the Code, as the case may be, with the
Participant's Employer and for this purpose more than 50% control as
referenced in Section 415(h) of the Code shall apply. The terms
"defined contribution plan" and "defined benefit plan" shall have the
meanings set forth in Section 415 of the Code. Salary reduction
contributions shall be treated as Employer Contributions.
(g) If the limitations set forth in the first clause of Section
5.2(b) above would be exceeded by an Employer's contributions on behalf
of a Participant, first Employee contributions which are included in
the annual additions described in 5.2(a) above will be refunded to the
extent of such excess. If, after application of the foregoing rule, as
a result of the allocation of forfeitures, a reasonable error in
estimating a Participant's annual Compensation, or under other facts
and circumstances, the annual additions to a Participant's Account in
fact exceed either of the limitations described in 5.2(b) for a Plan
Year, the excess amount shall be deposited in a suspense account for
such Plan Year. Such suspense account shall remain invested in the
Money Market Fund and shall be allocated during succeeding Plan Years
among the Participant's Accounts until the amount in such suspense
account is exhausted. If, during a Plan Year more than one suspense
account created pursuant to this Section shall exist, allocation of the
amounts contained in such accounts shall be allocated in the order of
the Plan Years to which such accounts relate. Such excess amount or
amounts shall be used to reduce Employer Contributions under Article 5
for the next Limitation Year (and succeeding Limitation Years, if
necessary) for all of the remaining Participants in the Plan. If the
limitation in the second clause of Section 5.2(b) is exceeded, the
benefit under the defined benefit plans shall be reduced until the
requirements of the second clause are satisfied.
Section 5.3. Limitation Year. For purposes of Section 5.2,
"Limitation Year" shall mean the Plan Year.
ARTICLE 6
TRUST AND INVESTMENT PROVISIONS
Section 6.1. Trustee. A Trust shall be created by the
execution of a trust agreement between the Employers and the Trustee.
All Employer and Employee contributions under the Plan shall be paid to
the Trustee, and the Trustee shall have responsibility for the custody
and investment thereof in accordance with the provisions of the Trust
agreement. The Trustee shall make distributions from the Trust Fund at
such time or times, to such person or persons and in such amounts as
the manager shall direct in writing.
The Company shall have the sole right to determine the form and
terms of the Trust agreement, to amend such agreement at any time and
from time to time, and to remove any Trustee or Trustees and select
their successors.
Trust assets shall be valued at least annually at the close of
each Plan Year.
Section 6.2. Investment of Contributions. Each Participant
shall, by written direction to the Administrator, direct that his
contributions together with all Employer Contributions made on his
behalf be invested by the Trustee either entirely in one of the
following funds or in increments of no less than 25% to any combination
of up to four of the following funds.
(a) An Equity Fund which at the discretion of the Committee shall
be invested in mutual fund or similar investment vehicle which consists
substantially of securities comprising the Standard Poors 500 intended
to produce reasonable income.
(b) A Bond Fund which at the discretion of the Committee shall be
invested in a mutual fund or similar investment vehicle which consists
substantially of investments in marketable corporate debt securities,
U.S. Government securities, mortgage related securities and other asset-
booked securities intended to preserve capital.
(c) An IMC Global Inc. Stock Fund which, within the limitations
set forth from time to time in the Trust agreement, shall be invested
solely in common stock of the Company.
The Trustee shall furnish to each Participant who has dollars in
the IMC Global Inc. Stock Fund allocated to his Accounts in accordance
with Section 7.2, notice of the date and purpose of each meeting of
shareholders of the Company, of which the Trustee has notice, at which
shares of stock of the Company are entitled to be voted and request
from each such Participant instructions to be transmitted to the
Trustee as to the voting at such meeting of the number of shares of
stock of the Company equivalent to the total value of the units in the
Participant's Accounts in the IMC Global Inc. Stock Fund divided by the
closing price of Company stock on the Valuation Date which precedes the
date of the meeting by 45 days.
If the Participant furnishes such instructions to the Trustee
within the time specified by him in the notification given to him, the
Trustee shall vote such shares of stock in the Company in accordance
with the instructions of the Participant. If the Participant fails to
furnish such instructions within such specified time, then the Trustee
shall not vote those shares.
Similarly the Trustee shall furnish to each Participant who has
dollars in the IMC Global Inc. Stock Fund allocated to his Accounts in
accordance with Section 7.2, notice of any tender offer for, or a
request or invitation for tenders of shares of stock in the Company,
made to the Trustee, shall request that each such Participant transmit
to the Trustee instructions as to the tendering of shares of stock of
the Company equivalent to the total value of the units in the
Participant's Accounts in the IMC Global Inc. Stock Fund divided by the
closing price of Company stock on the Valuation Date which precedes the
date of the notice of tender offer by 45 days. The Trustee shall
tender or not tender such shares of stock of the Company as to which he
has received instructions according to such instructions and shall not
tender such shares of such stock as to which he has not received
instructions. Notwithstanding the provisions of Section 6.3, a
Participant who instructs the Trustee to tender shares shall
simultaneously select another Fund in which the proceeds from the
tendering of shares shall be used to purchase units of participation,
in the event that the tender offer is successful. Any instructions as
to voting received from Participants shall be held in confidence by the
Trustee and shall not be divulged to the Company or to any officer or
Employee thereof or to any other person. Any instructions as to
tendering received from Participants shall likewise be held in
confidence by the Trustee and shall only be divulged to the Plan
Administrator or his delegate and only to the extent required for
record-keeping of a Participant's Account as to the appropriate number
of units for the appropriate Fund. The Plan Administrator or his
delegate shall not divulge to any officer, Employee, or other Company
representative the identity of any Participant relative to the
instructions such Participant gave to the Trustee for tendering or not
tendering.
The Trustee shall vote or tender all combined fractional shares of
Company stock to the extent possible in the same proportion as the
shares which have been voted or tendered by each Participant.
(d) A Fixed Income Fund under which the funds shall be entrusted
to one or more insurance companies or banks, and/or to a portfolio of
guaranteed insurance contracts or other capital preservation
investments of different maturities and interest rates in which a group
of retirement or savings plans may participate, to be chosen at the
sole discretion of the Committee, which companies and/or banks, as
applicable, pursuant to a contract or contracts or other arrangement to
be approved by the Committee, will invest the funds according to its
sole discretion at fixed or floating rate of interest on the invested
funds.
(e) A Money Market Fund under which the funds shall be entrusted
to an insurance company or an investment company to be chosen at the
sole discretion of the Committee, which company, pursuant to a contract
or in accordance with a prospectus approved by the Committee, will
invest the funds in short-term United States government and agency
obligations, bank certificates of deposit and bankers' acceptances, and
high quality corporate obligations.
(f) A Balanced Fund which shall be invested at the discretion of
the Committee, in a mutual fund and other investment vehicle providing
an investment mix.
(g) A Growth Equity Fund to be invested at the discretion of the
Committee in a mutual fund or funds and other investment vehicles
providing an investment mix.
Section 6.3. Limitations on Investment Directions. (a)
Notwithstanding anything else in this Section or the Plan to the
contrary, no Participant who is an officer of the Company shall be
permitted to direct contributions of any kind to the IMC Global Inc.
Stock Fund at any time. For purposes of this Section the term
"officer" shall have the meaning so designated for purposes of Section
16(a) of the Securities and Exchange Act of 1934 and rules issued
pursuant to such Act.
(b) No contributions may be directed under Section 6.2 where the
instructions (1) would violate the provisions of the Plan, (2) would
cause a Plan fiduciary to maintain the indicia of ownership of any Plan
assets outside the jurisdiction of the United States District Courts,
(3) would jeopardize the Plan's tax qualified status, (4) could bring
about a loss in excess of a Participant's account balance, or (5) would
result in a direct or indirect acquisition, sale or lease of property
between a Participant and the Company or a Company affiliate, or a
direct or indirect loan to the Company or a Company affiliate.
Section 6.4. Change in Investment Direction. Once given, an
investment direction may not be withdrawn or rescinded except as
provided in this Section, and any such investment direction shall
continue in effect until changed pursuant to this Section. A
Participant may elect to change his investment direction and/or
transfer as of January 1, April 1, July 1 and October 1, his existing
account balances in any fund or funds to any other fund or in
increments of no less than 25% of such account balances and/or
contributions to any combination up to four funds so long as the
aggregate amount so transferred or directed is transferred to or
directed to no more than one fund or in increments of 25% to any
combination up to four funds. Notwithstanding the foregoing sentences
relating to change of investment direction, a Participant having funds
invested in the Fixed Income Fund may change investment direction from
that Fund to another fund cited in this Section only if no more than
20% of the total value of the applicable guaranteed insurance contract
in the Fixed Income Fund on December 31st of the previous year is
transferred to other funds. If such total of all funds transferred out
of the applicable guaranteed insurance contract in the Fixed Income
Fund exceeds 20%, then the sub-account each Participant has opted to
transfer to another fund from his Fixed Income Fund sub-accounts will
be reduced on a pro rata basis until the amount transferred from the
guaranteed income contract reaches 20% of the total value of that
guaranteed income contract as at December 31st of such previous year.
The Administrator will notify Participants of any reduction in
transfers from the Fixed Income Fund as soon as possible in the
applicable year.
Notwithstanding any other provision of this Section 6.4 or the
Plan to the contrary, effective July 1, 1991 no transfer of existing
account balances shall be permitted by a Participant between the Fixed
Income Fund and the Bond Fund or the Money Market Fund or between the
Bond Fund or the Money Market Fund and the Fixed Income Fund on any
January 1, April 1, July 1, or October 1. Written notice of any change
in investment direction shall be given at least thirty (30) days prior
to the effective date of any such change to the Administrator in the
form prescribed by the Administrator. Notwithstanding the foregoing,
the Committee may, at any time there is no current registration
statement filed with the Securities and Exchange Commission and in
effect, suspend by notification to the Participants the right of
Participants to direct that their contributions together with all
Employer Contributions made on their behalf be invested in the IMC
Global Inc. Stock Fund. In the event of any such suspension, the
Committee may in its sole discretion select a date as of which
Participants may direct that their contributions together with Employer
Contributions made on their behalf be invested in the IMC Global Inc.
Stock Fund.
Section 6.5. Investment Income. The income of each fund
shall be added to such fund and the fund shall be invested and
reinvested without distinction between principal and income.
Section 6.6. Expenses of Funds. All charges and expenses
incurred in connection with the purchase and sale of investments for a
fund shall be charged to such fund.
Section 6.7. Investment Manager. The Company may appoint an
individual, or individuals, firm or corporation, which shall be known
as the Investment Manager or Investment Managers, and which may be
responsible, within the limitations set forth in the trust agreement,
for selecting the investments to be made for one or more of the Stock
Fund, the Bond Fund, the Fixed Income Fund, the Money Market Fund, the
Balanced Fund and the Growth Equity Fund. The Investment Manager for a
fund may either direct the Trustee to make sales or investments or make
sales and investments with respect to such funds and direct the Trustee
to take all necessary action to complete such sales and investments.
Upon appointment or as soon as practicable after appointment, the
Company and each Investment Manager it has appointed shall enter into a
written agreement, which agreement shall include the following terms
and conditions:
(a) The Company shall have the right, at any time, with or
without cause, to remove the Investment Manager. The Investment
Manager may resign and such resignation shall be effective upon
delivery of a written resignation to the Company. Upon the
resignation, removal or failure or inability for any reason of the
Investment Manager to act hereunder, the Company may appoint a
successor. All successor Investment Managers shall have all of the
rights and privileges and all of the duties of their predecessors, but
shall not be held accountable for the acts of their predecessors.
(b) An Investment Manager shall discharge his duties (i) solely
in the interest of Participants and Beneficiaries, (ii) for the
exclusive purpose of providing benefits to Participants and their
Beneficiaries and of defraying reasonable expenses of administering the
Plan, and (iii) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.
(c) The Investment Manager shall maintain accurate and detailed
records of all investment directions given to the Trustee, and of sales
and investments made by the Investment Manager with regard to the
funds, which shall be available at all reasonable times for inspection
by any person designated by the Committee or the Company. The
Investment Manager, at the direction of the Committee or the Company,
shall submit to the Committee, to the Company, to the Company's
auditors and to others designated by the Committee, such reports or
other information as they may reasonably require.
In the event that an Investment Manager has not been appointed for
any one or more of the Stock Fund, the Bond Fund, the Guaranteed Income
Fund, the Money Market Fund, the Growth Equity Fund or the Balanced
Fund, the Committee shall direct the Trustee with respect to
investments for any such fund until an Investment Manager has been
appointed for such fund.
ARTICLE 7
PARTICIPANTS' PLAN ACCOUNT
Section 7.1. Plan Account and Vesting. Plan Participants'
Accounts were measured in Units of participation under the Predecessor
Plan and under this Plan. Effective April 1, 1989 Participants' Plan
Accounts are measured in dollars and Article 7 is amended as follows:
(a) Plan Account. The Committee shall establish and maintain, or
shall cause to be established and maintained by such agent or agents as
it shall select for this purpose, the following accounts:
(1) Employer Account. This account shall reflect the value
(in dollars) of the Employer Account described in the
Predecessor Plan Statement; of all Employer Contributions
made pursuant to Section 5.1, and of contributions described
in Section 7.8 (pertaining to assets from the IMC Chemical
Group Plan); all investment earnings, gains, expenses and
losses (realized and unrealized), and the amount of any
withdrawals and distributions from the account.
(2) Employee Account. This account shall reflect the value
(in dollars) of the Employee Account described in the
Predecessor Plan Statement and contributions made pursuant to
Section 4.1(a) of the Plan, the investment earnings, gains,
expenses and losses (realized and unrealized), and the amount
of withdrawals and distributions from this account.
(3) Salary Reduction Account. This account shall reflect
the value (in dollars) of amounts described in the
Predecessor Plan Statement and amounts contributed under
Section 4.1(b), investment earnings, gains, expenses and
losses (realized and unrealized), and the amount of any
withdrawals and distributions from the account.
(4) Rollover Account. This account shall reflect the value
(in dollars) of amounts contributed under Section 4.5,
investment earnings, gains, expenses and losses (realized and
unrealized), and the amount of any withdrawals or
distributions from the account.
Each of the foregoing accounts shall be composed of a Stock Fund
Sub-Account, a Bond Fund Sub-Account, a Fixed Income Fund Sub-Account,
a Money Market Fund Sub-Account, an IMC Global Inc. Stock Fund Sub-
Account, a Balanced Fund Sub-Account and a Growth Equity Fund Sub-
Account. Such Accounts and Sub-Accounts shall be solely for accounting
purposes, and there shall be no segregation of assets of the funds
among separate accounts. The books of account, form and accounting
methods used in the administration of Participants' accounts shall be
the sole responsibility of, and shall be subject to the supervision and
control of, the Committee.
(b) Vesting. Participants shall have a full and immediate
nonforfeitable interest in the value of their accounts.
Section 7.2. Dollars. (a) The interest of Participants in
the funds shall be measured by dollars in the particular fund, with
gain or loss determined as of each Valuation Date as provided in the
succeeding subsections. Each dollar shall have an equal beneficial
interest in the fund, and none shall have priority or preference over
any other.
(b) One dollar is allocated to the Employer Account maintained
for each Participant for each dollar paid to the trust on behalf of
such Participant by an Employer prior to the first Valuation Date, and
one dollar is allocated to the Employee Account maintained for each
Participant for each dollar paid to the trust by such Participant by
means of payroll deductions pursuant to Article 4 prior to such date.
Dollars so allocated to accounts are allocated to the appropriate sub-
accounts comprising such accounts in accordance with the Participants'
directions made pursuant to Section 6.2. As soon as practicable after
the first Valuation Date, the Trustee determined the value of each fund
as of such Valuation Date in the manner prescribed in Section 7.4, and
the gain or loss so determined is divided by the total number of
dollars allocated to the accounts and sub-accounts of such fund
maintained for Participants in accordance with the preceding sentence.
The resulting quotient is the value of a dollar in such fund as of such
Valuation Date and constitutes the initial gain or loss of a dollar in
such fund. Fractional dollars shall be calculated to six decimal
places. Employer Contributions due but not received by the Trustee on
a Valuation Date shall not be taken into account for purposes of
determining the gain or loss of dollars under this subsection.
(c) If a Participant's interest in a fund or any part thereof is
distributed, withdrawn or transferred to an interest account pursuant
to Article 8 of the Plan, the number of dollars representing such
interest or portion thereof as of the applicable Valuation Date shall
be cancelled for purposes of any subsequent determination of the gain
or loss of dollars in such fund.
Section 7.3. Valuation of Funds. The value of a fund as of
any Valuation Date shall be the fair market value of all assets
(including any uninvested cash) held by the fund as determined by the
Trustee on the basis of such evidence and information as it may deem
pertinent and reliable, reduced by the amount of any accrued
liabilities of the fund on such Valuation Date. The Trustee's
determination of fair market value shall be binding and conclusive upon
all parties. Employer Contributions due but not received by the
Trustee on a Valuation Date shall not be taken into account in valuing
the fund. Salary reduction contributions pursuant to Section 4.1(b)
which have been withheld from Active Participants' Compensation which
have not been received by the Trustee on a Valuation Date and which,
when received, would be part of the assets of the fund, shall be taken
into account in valuing the fund.
Section 7.4. Valuation of Fund Sub-Accounts as of a
Valuation Date. The value of a Participant's fund sub-accounts as of
any Valuation Date shall be the dollars allocated or allocable to each
such sub-account as of such Valuation Date plus any Employer
Contribution payable on his behalf with respect to a period ending on
or prior to the Valuation Date but not yet paid to the Trustee on such
Valuation Date, and which, when paid, would be allocable to such fund
sub-accounts.
Section 7.5. Valuation of Fund Sub-Accounts on Other Than a
Valuation Date. The value of a Participant's fund sub-accounts as of
any given date other than a Valuation Date shall be the value
determined pursuant to Section 7.3 of said accounts on either the most
recent Valuation Date or the next occurring Valuation Date, whichever
is closest to the date as of which such a value is required. Effective
July 1, 1988 the value of a Participant's fund sub-accounts as of any
given date other than a Valuation Date shall be the value determined
pursuant to Section 7.2 of said accounts on the next occurring
Valuation Date.
Section 7.6. Value of Plan Accounts. The value of a
Participant's Plan Account as of any Valuation Date shall be the sum of
the values of the sub-accounts comprising the Participant's accounts as
described in Section 7.1(a).
Section 7.7. Committee to Furnish Annual Statements of Value
of Plan Accounts. The Committee shall, not less frequently than
annually, deliver to each Participant a statement setting forth the
account balances of such Participant.
Section 7.8. Transfers from Hourly Savings and Profit
Sharing Plans. (a) Transfer from Hourly Plan to this Plan: Account
Credits. Whenever a participant in any savings or profit sharing plan
for hourly employees of the Company (the "Hourly Plan") ceases pursuant
to the terms of the Hourly Plan to be an eligible employees, and he is
not entitled, under the terms of the Hourly Plan, to receive a
distribution thereunder, but he thereafter becomes eligible to, and
elects to become, a Participant in this Plan, then such Hourly Plan
shall be transferred on or after March 1, 1988, to the Trustee of this
Plan to be held, invested, reinvested and distributed pursuant to the
terms of the Plan and the Trust, and, as of the date of the transfer of
any such Participant's interest in the Hourly Plan,
(1) there shall be credited to the Employee Account of such
Participant that portion of his interest in the Hourly Plan
which is transferred to the Trustee and which represents the
Participant's contribution to the Hourly Plan,
(2) there shall be credited to the Employer Account of such
Participant that portion of his interest in the Hourly Plan
which is transferred to the Trustee and which represents the
Employer's contributions to the Hourly Plan, if any, made on
his behalf, and
(3) there shall be credited to the Salary Reduction Account
of such Participant that portion of his interest in the
Hourly Plan which is transferred to the Trustee and which
represents salary reduction contributions, if any, to the
Hourly Plan.
Any amounts credited to a Participant's Employee Account, Employer
Account, or Salary Reduction Account shall be applied by crediting
dollars to such account, the dollars credited to the Employee Account
to be credited in accordance with the interest direction made by the
Participant upon his election to participate in this Plan to the
appropriate sub-accounts of such account.
(b) Transfer of Loan Account Balances. Any outstanding
balance(s) owed by a Participant for loan(s) granted to the Participant
under the Hourly Plan shall be transferred concurrently with the
crediting of his interest to the Plan as described at Section 7.8(a).
All accounting of the loan(s) as assets of the Hourly Plan account,
applicable amortization, interest on the balance outstanding, repayment
credits and promissory note shall concurrently be transferred to the
Plan Account established for the Participant, to preclude any default
under or distribution by the Hourly Plan. The promissory note
evidencing any such loan, and all other documents evidencing any loan
under the Hourly Plan, shall be concurrently transferred to the
Participant's Account under the Plan.
(c) Distribution Under the Plan. Notwithstanding any provision
of the Hourly Plan to the contrary, upon a Participant's termination of
employment, whole a Participant under this Plan, his total interest in
the Plan, including any amount transferred from the Hourly Plan, shall
be distributed pursuant to the provisions of Article 8 of this Plan,
unless distribution pursuant to the corresponding provisions of the
Hourly Plan is necessary to preserve the Participant's protected
benefits under Section 411(d)(6) of the Code.
(d) Transfer from this Plan to Hourly Plan: Account Credits.
Whenever a Participant in the Plan ceases pursuant to its terms to be
an eligible employee, and he is not entitled, under the terms of the
Plan, to receive a distribution hereunder, but he thereafter becomes
eligible to and elects to become a Participant in an Hourly Plan, then
his interest hereunder shall be transferred on or after March 1, 1988,
to the Trustee of the Hourly Plan to be held, invested, reinvested and
distributed pursuant to the terms of the Hourly Plan and its trust, and
as of the date of the transfer of any such Participant's interest in
this Plan,
(1) there shall be credited to the Employee Account of the
Participant that portion of his interest in the Plan which is
transferred to the Hourly Plan's trustee and which represents
the Participant's contribution to this Plan,
(2) there shall be credited to the Employer Account of the
Participant that portion of his interest in this Plan which
is transferred to the Hourly Plan's trustee and which
represents the Employer's contributions to this Plan, if any,
made on his behalf, and
(3) there shall be credited to the Salary Reduction Account
of the Participant that portion of his interest in this Plan
which is transferred to the Hourly Plan trustee and which represents
salary reduction contributions, if any, to this Plan.
ARTICLE 8
WITHDRAWALS, DISTRIBUTION AND LOANS
Section 8.1. Withdrawal of Employee Payroll Deduction
Contributions. As of any given date, a Participant may elect to
withdraw not less than 50% of the value as of such date of the value of
his Employee Account. Such an election shall be made by giving written
notice, specifying the requested date of withdrawal and the portion of
the amount withdrawn to be paid from each of the fund sub-accounts
comprising the Participant's Employee Account, to the Plan
Administrator in the form prescribed by the Plan Administrator at least
30 days prior to such date. The value of the Participant's Employee
Account as of the requested date of withdrawal shall be determined
pursuant to Section 7.4 or Section 7.5, whichever is applicable. A
Participant who makes such a withdrawal shall be ineligible to make
further contributions under the Plan either by payroll deduction or by
salary reduction until the Valuation Date which is at least one year
subsequent to the date of such withdrawal.
Section 8.2. (a) Hardship Withdrawal from Employer and
Employee Accounts. As of any given date a Participant may make a
request to withdraw a portion of the combined value of his Employer and
Employee; provided, however, that if the amount of such withdrawal is
less than such combined value, such amount shall be applied first to
reduce the value of his Employee Account and then his Employer Account.
Such request shall be made in writing, specifying the requested date of
withdrawal (which shall be not less than 30 days nor more than 60 days
after the date of such request) and the portion of such requested
amount to be paid from each of the fund sub-accounts comprising the
Participant's Employee and Employer Accounts, to the Administrator on a
form prescribed by him. The value of a Participant's Employee and
Employer Accounts and of the sub-accounts comprising such Accounts
shall be determined pursuant to Sections 7.4, 7.5 and 7.6 as
applicable. The Committee shall not approve any such application
unless it is satisfied based on the application and supporting
documentation that to deny the application would create a hardship for
the Participant. For purposes of this Section 8.2(a) only, hardship
shall be limited to the following situations:
(1) heavy and immediate financial obligations incurred by
the Participant on account of sickness, accident or death of
his spouse or dependents, or on account of the Participant's
sickness or accident, which the Participant is unable to pay
for from any other source reasonably available to him;
(2) inability to purchase or finance out of any other source
reasonably available to the Participant a principal residence
for the Participant;
(3) inability to pay for or finance out of any other source
reasonably available to the Participant the cost of post-
secondary education for the Participant, his spouse or
dependents;
(4) prevention of eviction from or mortgage foreclosure on
the principal residence of the Participant.
The Participant's application for withdrawal of funds due to
hardship must be accompanied or supplemented by such evidence of
hardship as the Administrator or the Committee shall reasonably
request.
A withdrawal pursuant to this Section shall not operate to suspend
a Participant's contributions for any period of time or to subject the
Participant to any other penalties under this Plan.
The amount of any withdrawal under this Section shall be limited
to that amount which is required to meet the immediate financial needs
created by the hardship.
(b) Hardship Withdrawal from Salary Reduction Account. A
Participant may request in writing, specifying the requested date of
withdrawal (which shall not be less than thirty (30) days nor more than
sixty (60) days after the date of such request) that a hardship
withdrawal be made from his Salary Reduction Account. The value of his
Salary Reduction Account shall be determined pursuant to Sections 7.4,
7.5 and 7.6 as applicable.
No hardship withdrawal under this Section 8.2(b) shall exceed the
sum of a Participant's Salary Reduction contributions made after
December 31, 1988 and the amount of his Salary Reduction contributions
and income allocable thereto as of December 31, 1988.
Approval of any application for hardship withdrawal from a
Participant's Salary Reduction Account shall only be given by the
Committee where the Participant has shown that withdrawal is requested
for one of the following reasons:
(i) Medical expenses of the Participant, the
Participant's spouse, or dependents, or to obtain medical
treatment of the Participant, Participant's spouse or
dependents,
(ii) Expenses for the purchase (excluding mortgage
payments) of the principal residence of the Participant,
(iii) Tuition and room and board expenses for the next
twelve month period of post-secondary education of the
Participant, the Participant's spouse, children or
dependents; and
(iv) Expenses to prevent the eviction from, or
foreclosure on the mortgage on, the principal residence of
the Participant.
In addition the Participant must further show that the amount
requested for hardship withdrawal is not in excess of the amount needed
to satisfy expenses described in (i) through (iv) above of Section
8.2(b).
Hardship withdrawals under this Section 8.2(b)(i) through (iv) may
include amounts necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from the
distribution.
To be eligible for hardship withdrawal the Participant must have
first obtained all distributions and loans available to him under this
Plan and any other qualified plan maintained by the Employers.
A Participant who receives a hardship withdrawal under this
Section 8.2(b) will be suspended from Plan participation until the
January or July 1st which next succeeds twelve months from the date on
which he received his hardship withdrawal.
Salary Reduction contributions made by such Participant in the
taxable year following the year of hardship distribution will be
limited to the annual dollar limitation in effect for that year, as
denoted in Section 4.1(c), minus the Participant's Salary Reduction
contributions for the taxable year in which he received his hardship
withdrawal.
Section 8.3. Withdrawal from Salary Reduction Account.
Withdrawals from the salary reduction account are also permitted under
the following circumstances and such withdrawals will not subject the
Participants to any penalty under the Plan:
(a) Disability Withdrawal. A Participant may make a cash
withdrawal from his accounts at any time if the withdrawal is on
account of a disability. The Committee shall not approve any such
application for disability withdrawal unless it is satisfied that the
Participant is disabled. For the purposes of this subsection, a
Participant shall be considered disabled if (i) he is disabled within
the meaning of the Company's Long-Term Disability Plan, or (ii) he is
unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or to be of long-continued and indefinite
duration, or (iii) he is disabled within the meaning of uniform,
nondiscriminatory rules which the Committee may adopt. The Committee
may require that the Participant submit whatever evidence it deems
necessary to establish whether the Participant is disabled. The
Committee may limit the amount which a disabled Participant may
withdraw from his accounts, if the Committee deems such limitation is
in the best interests of the Participant. The value of the
Participant's account as of the requested withdrawal date shall be
determined pursuant to Sections 7.4, 7.5 or 7.6 as applicable.
(b) Withdrawals from the Salary Reduction Account will also be
permitted for a Participant who has attained the age of 59-1/2 years
upon application made by him to the Administrator.
Section 8.4. Distribution Upon Election to Discontinue
Contributions for an Indefinite Period. As of any given date, an
Active Participant may elect to discontinue his contributions for an
indefinite period by giving written notice specifying the requested
date of discontinuance to the Administrator in the form prescribed by
the Administrator at least 30 days prior to such date. Upon such a
discontinuance by a Participant, the Administrator shall direct the
Trustee to distribute to the Participant an amount equal to the
aggregate value as of such date of all Accounts except the Salary
Reduction Account.
Notwithstanding the preceding paragraph to the contrary,
contributions may not be withdrawn from the Employer Account prior to
the expiration of twenty-four months from the date of contribution to
the Employer Account or unless the Participant making the withdrawal
request has been a Participant in the Plan for a minimum of sixty
months. For purposes of this Section 8.4 participation in the
Predecessor Plan is deemed to be participation in this Plan.
The value of the Participant's Accounts (excluding the Salary
Reduction Account) shall be determined pursuant to Section 7.4 or
Section 7.5, whichever is applicable. A Participant who elects to
discontinue his contributions pursuant to this Section shall be
ineligible to again elect to make contributions to the Plan until the
earlier of the January 1 or July 1 which succeeds by at least twelve
months the date of the election to discontinue contributions.
Section 8.5. (a) Loans. Upon application of an Active or
Inactive Participant or Beneficiary, the Committee shall direct the
Trustee to make a cash loan to a Participant. The terms of a loan
shall be determined at the sole discretion of the Committee subject to
the following conditions:
(1) The term of a loan shall not exceed five years except
that where the Participant has designated that the purpose of
the loan is to purchase a principal residence for the
Participant, the term of the loan shall not exceed ten years.
(2) A general purpose loan may not be used to purchase
securities.
(3) A loan shall bear interest at the prevailing rate in the
surrounding community for loans of similar risk, date of
maturity, and date of grant.
(4) The amount of a loan shall not exceed the lesser of 50%
of the value of the Participant's or Beneficiary's accounts
or $50,000, and the loan shall be secured by the
Participant's or Beneficiary's Plan Account value. The
Committee may require the posting of other or additional
security at any time during the term of the loan. The amount
of a loan secured by a Plan Account shall be equal to a
maximum of the lesser of 50% of the Plan Account or $50,000,
minus the highest outstanding loan balance within the past
year.
a) For purposes of the above paragraph the value
of the Participant's or Beneficiary's Plan Account shall
be determined as at the Valuation Date which first
precedes the date on which the request for the loan is
received.
b) Effective July 1, 1988 the Valuation Date
which next succeeds the date on which the request for
the loan is received shall be used.
(5) A loan shall be evidenced by a promissory note.
(6) Payments of principal and interest shall be made by
approximately equal payments on a basis that would permit the
loan to be fully amortized over its term. Prepayments of
principal and interest of the full remaining balance of the
loan only, may be made without penalty. Loan payments by
active employees shall be made by monthly payroll deductions
except for prepayments or where otherwise permitted by the
Committee, but in no event may loan payments be made on less
than a quarterly basis. Loan payments by inactive employees,
former employees or Beneficiaries shall be made monthly to
the Plan Administrator or his designee on the date and in the
manner prescribed by him.
(7) Loans shall be granted on a reasonably equivalent basis
and highly compensated employees, officers, or shareholders
of an Employer shall not be granted preferential loan terms.
(8) If an active employee defaults in the making of any
payments on a loan when due and such default continues for 60
days thereafter, or in the event of such active employee's
bankruptcy, impending bankruptcy, insolvency or impending
insolvency, the loan shall be deemed to be in default, and
the entire unpaid balance with accrued interest shall become
due and payable. If a former employee or Beneficiary
defaults in the making of any payment on a loan when due and
such default continues for 30 days there- after, or in the
event of the borrower's bankruptcy, impending bankruptcy,
insolvency or impending insolvency, the loan shall be deemed
to be in default and the entire unpaid balance with accrued
interest shall become due and payable. The Committee or its
designee may pursue collection of the debt by any means
generally available to a creditor where a promissory note is
in default, or, if the entire amount due is not paid within
60 days following the default or in the case of a former
employee or Beneficiary, within 30 days following the
default, the Committee or its designee may execute upon the
collateral and apply the proceeds from the sale or
disposition of such collateral in satisfaction of the unpaid
principal and accrued interest. The Participant or
Beneficiary shall remain personally liable for any remaining
deficiency.
(9) Appropriate disclosure shall be made pursuant to the
Truth in Lending Act to the extent applicable.
(10) Amounts of principal and interest received on a loan
shall be credited to the Participant's or Beneficiary's Plan
Account and the loan shall be considered an asset of the Plan
Account.
(11) The Committee shall, from time to time, establish the
terms and conditions on which loans will be made, including
the frequency, interest rate, maturity dates, loan
application fees, if any, and the selection and order of sub-
accounts used in making such loans. In making its
determination with respect to eligibility for loans and
interest rates thereon, the Committee shall adopt uniform and
non- discriminatory rules and its determination shall be
final and binding.
(12) Notwithstanding any other provision of this Section 8.5
to the contrary, loans may be granted only to Participants
and Beneficiaries who are "parties in interest" as defined
under Section 3(14) of ERISA. Determination of who is a
party in interest shall be made by the Plan Administrator
with the advice of counsel.
(13) In the event a Participant's transfer of employment from
another Participating Employer changes such Participant's
current payroll status, any outstanding loan balance will be
reamoritized in accordance with the terms of the Plan.
Section 8.6. Distribution Upon Termination of Employment.
Whenever a Participant terminates his employment with his Employer or
its Affiliate then the Administrator shall instruct the Trustee to
distribute to such Participant, or, in a proper case, to his
Beneficiary, an amount equal to the value of the Participant's Plan
Accounts determined as of the Valuation Date which occurs closest to
the date of termination.
Section 8.7. Time and Manner of Distributions. (a) Any
distribution to which a Participant becomes entitled by reason of a
withdrawal under Section 8.1, 8.2, 8.3 or 8.4 or distribution under
Section 8.6 or which is to be made to an alternate payee pursuant to
the provisions of Article 13, shall be paid by the Trustee in a lump
sum at the instruction of the Administrator within 60 days following
the close of the calendar month in which the withdrawal request or
request for receipt is received.
(b) If full distribution of the amount to which a Distributee
becomes entitled cannot be made within 60 days following the date of
termination or request for receipt, if applicable, pursuant to Section
8.6 because the Participant cannot be located, the undistributed
balance of such amount shall, as of the first Valuation Date after the
close of such 60-day period, be deposited in a savings account or
accounts with such bank as the Committee may from time to time select
for this purpose. The Committee shall establish in the name of the
Distributee an account under the Plan (hereinafter referred to as an
"interest account") to which shall be credited any amount so deposited
and any interest paid from time to time on such savings account or
accounts. All distributions made to any Distributee shall be charged
to the Distributee's interest account.
(c) If a Participant's Plan Account includes the IMC Global Inc.
Stock Fund Sub-Account, the Participant may elect to receive any
distribution under Article 8 wholly in cash or in full shares of such
stock. The election shall be made in writing, addressed to the
Administrator of the Plan, not more than 14 days after receipt by the
Participant of a notice regarding such election. The number of shares
shall not exceed the quotient of the value of the Participant's IMC
Global Inc. Stock Fund Sub-Account as of the Valuation Date determined
pursuant to Section 7.4 or Section 7.5 as applicable divided by the
value as of the applicable Valuation Date assigned by the Trustee to a
share of such stock.
Section 8.8. Designation of Beneficiary. (a) The
Beneficiary of a Participant who is married shall be his spouse.
Should a Participant who is married desire to elect a Beneficiary other
than his spouse, he may do so only in the form prescribed by the
Administrator, which shall require the written consent of such spouse
to the Participant's election of another Beneficiary. To be effective,
such written consent must be notarized or witnessed by the
Administrator or his designee.
(b) If a Participant is not married or if the Participant proves
to the satisfaction of the Administrator that his spouse cannot be
located, then the Participant shall have the right to designate any
Beneficiary or Beneficiaries.
(c) The Beneficiary of a Participant shall receive any
distribution upon the death of the Participant or, in accordance with
Section 8.7, in the case of a Participant who dies subsequent to
termination of his employment but prior to distribution of the entire
amount to which he is entitled under the Plan, to receive any
undistributed balance to which such Participant would have been
entitled subject to the provisions of Section 8.10, if applicable.
A Participant described in Paragraph (b) of this Section 8.8 may
from time to time without the consent of the non-spouse Beneficiary
change or cancel any such designation. A Participant who has obtained
spousal consent in accordance with Paragraph (a) of this Section 8.8
may change or cancel a subsequent Beneficiary designation only upon
obtaining spousal consent, in accordance with Paragraph (a) of this
Section, to the new Beneficiary designation. Such designation and each
change therein shall be made in the form prescribed by the
Administrator and shall be filed with the Administrator or his
designee.
If no Beneficiary has been named by a deceased unmarried
Participant or the spouse of a deceased Participant cannot be located
or the designated Beneficiary or spouse, as applicable, has predeceased
the Participant or the designated Beneficiary or spouse has died prior
to complete disbursement of the Participant's account balance, the
balance of the deceased Participant's accounts shall be distributed by
the Trustee at the direction of the Administrator, where applicable, a)
to the surviving spouse of such deceased Participant, if any, or (b) if
there shall be no surviving spouse, the surviving children of such
deceased Participant, if any, in equal shares, or (c) if there shall be
no surviving spouse or children, to the executors or administrators of
the estate of such deceased Participant, or (d) if no executor or
administrator shall have been appointed for the estate of such deceased
Participant within six months from the date of the Participant's death,
to the person or persons who would be entitled under the intestate
succession laws of the state of the Participant's domicile to receive
the Participant's personal estate.
Nothing in this Section 8.8 shall contravene any applicable
provision (directing payment to an alternate payee) of a qualified
domestic relations order determined to be such by the Administrator or
the Committee in accordance with the procedures set forth in Article
13.
Section 8.9. Distribution to Minor and Disabled
Distributees. Any distribution under this Article which is payable to
a Distributee who is a minor or to a Distributee who, in the opinion of
the Committee, is unable to manage his affairs by reason of illness or
mental incompetency may be made to or for the benefit of any such
Distributee in such of the following ways as the Committee may direct:
(a) directly to any such minor Distributee if, in the opinion of the
Committee, he is able to manage his affairs, (b) to the legal
representative of any such Distributee, (c) to a custodian under a
Uniform Gifts to Minors Act for any such minor Distributee, or (d) to
some near relative of such Distributee to be used for the latter's
benefit. Neither the Committee nor the Trustee shall be required to
see to the application by any third party of any distribution made to
or for the benefit of a distribution pursuant to this Section.
Section 8.10. Distribution upon Termination of Employment.
(a) Notwithstanding anything in this Article or the Plan to the
contrary, a Participant who is terminating his employment and is
eligible for early or normal retirement under any pension plan of the
Company will be permitted to elect, at any time prior to his
termination, to defer either
(1) receipt of distribution of his entire Plan Account, or
(2) receipt of or distribution of his Plan Account exclusive
of the entire amount of his Employee Contributions as defined
in Section 4.1(a) of the Plan which were contributed prior to
January 1, 1987 until no later than his 70th birthday.
A Participant electing deferral of his distribution under this
Section 8.10, shall receive his distribution by notifying the
Administrator or his designee at least sixty days prior to the date he
wishes to receive it. His Plan Account shall then be valued according
to the terms of Section 7.4 or Section 7.5 whichever is applicable. If
a Participant has not notified the Administrator by sixty days prior to
his 70th birthday, his Plan Account shall automatically be distributed
to him on that birthday.
Any Participant who makes a deferral election under this Section
8.10(a) shall retain for the full duration of the deferral period the
authority to direct investments of his Plan Account, as provided under
Section 6.2, 6.3 and 6.4. This Paragraph shall not be interpreted to
allow or require the making of any type of contributions to such
Participant's account.
(b) A Participant who satisfies the following criteria must
consent to any distribution before it is made and is entitled to defer
receipt of his entire Plan Account until no later than his 70th
birthday: i) termination of employment prior to eligibility for early
or normal retirement under any pension plan of the Company and ii) a
Plan Account valued in excess of $3500 as of the Valuation Date
occurring closest to his termination of employment. Such a Participant
may elect to receive the value of his entire Plan Account in a lump sum
at any time prior to his 70th birthday upon sixty days written notice
to the Plan Administrator or his designee. Any Participant who has not
notified the Plan Administrator within sixty days of his 70th birthday
shall automatically receive his distribution on that birthday. Any
Participant who makes a deferral election under this Section 8.10(b)
shall retain, for the full duration of the deferral period, the
authority to direct investments of his Plan Account, as provided under
Sections 6.2, 6.3 and 6.4. This Paragraph shall not be interpreted to
allow or require the making of any type of contributions to such
Participant's Plan Account.
A Participant who makes an election to defer distribution pursuant
to this paragraph shall be considered an inactive Participant for all
purposes of the Plan including Article 5 for the period of time from
termination of employment until distribution on the applicable date of
receipt.
(c) At the time the Participant elects to defer receipt of his
distribution pursuant to this Section, he must also elect to receive
his distribution in: 1) a lump sum on the date of distribution, or 2)
in equal annual installments not to exceed ten which installments shall
commence on the date requested for distribution.
(d) At the time the Participant elects to defer receipt of his
distribution pursuant to this Section, he must also make an election
for the method of distribution in the event of his death prior to total
distribution. The Participant shall elect that his Beneficiary,
designated pursuant to Section 8.7, shall receive his Plan Account
Distribution a) in a lump sum within sixty (60) days following the date
of his death, or b) in equal annual installments not to exceed five
installments commencing on the date of his death.
(e) Notwithstanding the foregoing provisions of this Article
8, distribution of the Participant's Plan Account shall begin not later
than the sixtieth day after the later of the close of the Plan Year in
which:
(1) his termination of employment occurs, or
(2) the tenth anniversary of the commencement of his
participation in the Plan,
except to the extent that the Participant has elected to defer the
distribution pursuant to this Section 8.10.
(f) Notwithstanding subsection (e) and except as provided
otherwise in this subsection (f), distribution of a Participant's Plan
Account shall be made no later than the April 1 of the calendar year
following the calendar year in which the Participant attains age 70-1/2
regardless of whether he terminates employment.
(g) If the amount of a distribution required to commence on the
date determined under this subsection cannot be ascertained by the
Committee, or if it is not possible to make such payment on such date
because the Committee has been unable to locate the Participant after
making reasonable efforts to do so, a payment retroactive to such date
may be made no later than sixty days after the earliest date on which
the amount of such payment can be ascertained and the Participant can
be located.
Section 8.11. Conditions for Distributions to Beneficiary,
Upon Death of a Participant. (a) Notwithstanding subsections (c) and
(d) of Section 8.10 or any other section of the Plan, if a Participant
dies prior to entire distribution of his Plan Account and after
attainment of age 70, his Plan Account shall be distributed to his
Beneficiary as rapidly as the method to the Participant.
(b) Notwithstanding Section 8.10 to the contrary, if the
Participant dies prior to entire distribution of his Plan Account and
prior to age 70, his Plan Account shall be distributed in a lump sum or
by the method selected by the Participant provided that distribution
shall begin not later than i) December 31 of the calendar year
following the calendar year of the Participant's death, or ii) the
calendar year in which the Participant would have attained age 70,
whichever is later.
(c) The Participant's Beneficiary shall receive the value of the
Participant's Plan Account as of the Valuation Date immediately
succeeding the date of the Participant's death.
Section 8.12. Direct Rollovers. This Section applies to
distributions made on or after January 1, 1993. Notwithstanding any
provision of the Plan to the contrary that would otherwise limit a
Distributee's election under this Article, a Distributee may elect, at
the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to
an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover.
ARTICLE 9
SPECIAL RULES RELATING TO RE-EMPLOYMENT
OF TERMINATED EMPLOYEES AND EMPLOYMENT
BY RELATED ENTITIES
Re-employment of a Terminated Participant. If a terminated
Participant who is entitled to receive payments pursuant to Sections
8.6(b) or 8.10 is reemployed prior to receipt of his deferred
distribution pursuant to Section 8.10 or is reemployed prior to total
distribution, such payments shall remain deferred or be suspended, as
applicable, until such Participant's subsequent termination of
employment or his attainment of age 70, whichever first occurs.
ARTICLE 10
ADMINISTRATION
Section 10.1. The Committee. (a) The Board of Directors of
the Company shall appoint a Committee consisting of certain members
responsible (except for duties specifically vested in the Trustee and
the Investment Manager) for the administration of the provisions of the
Plan. The Company and the Committee shall be "named fiduciaries"
within the meaning of such term as used in ERISA. The Board of
Directors of the Company shall have the right at any time, with or
without cause, to remove any member of the Committee. A member of the
Committee may resign and his resignation shall be effective upon
delivery of his written resignation to the Company. Upon the
resignation, removal or failure or inability for any reason of any
member of the Committee to act hereunder, the Board of Directors of the
Company may appoint a successor member. All successor members of the
Committee shall have all the rights, privileges and duties of their
predecessors, but shall not be held accountable for the acts of their
predecessors.
(b) Any member of the Committee may, but need not, be an employee
or director, officer or shareholder of any of the Employers, and such
status shall not disqualify him from taking any action hereunder or
render him accountable for any distribution or other material advantage
received by him under the Plan, provided that no member of the
Committee who is a Participant shall take part in any action of the
Committee or any matter involving solely his rights under the Plan.
(c) The Committee shall have the duty and authority to interpret
and construe the Plan in regard to all questions of eligibility and the
status and rights of Participants, Distributees and other persons under
the Plan. Each Employer shall, from time to time, upon request of the
Committee, furnish to the Committee such data and information as the
Committee shall require in the performance of its duties.
(d) The Committee shall supervise the collection of Participants'
contributions and the delivery of such contributions and Employer
Contributions to the Trustee from time to time. Notwithstanding any
other provision of the Plan to the contrary the Committee has the right
to lower the Salary Reduction or Employee contributions (on a
prospective basis) of any Participant who is a Highly Compensated
Employee at any time during the Plan Year where the Committee deems
such action to be necessary to insure that the Plan complies with the
rules set forth in Sections 4.6(a) and 4.10(b)(i) and (ii).
(e) The members of the Committee may allocate their
responsibilities among themselves and may designate any person,
partnership or corporation to carry out any of their responsibilities.
Any such allocation or designation should be reduced to writing and
such writing shall be kept with the records of the meetings of the
Committee.
(f) The Committee may act at a meeting, or by writing without a
meeting, by the vote or written assent of a majority of its members.
The Committee may select a chairman and shall keep the Trustee advised
of the identity of the member holding such office. The Committee shall
appoint one of its members to act as the Plan's agent for service of
legal process. The Committee shall select a secretary, who need not be
a member of the Committee, and shall keep the Trustee advised of the
identity of the person holding such office. The secretary shall keep
records of all meetings of the Committee and forward all necessary
communications to the Trustee. The Committee may adopt such rules and
procedures as it deems desirable for the conduct of its affairs and the
administration of the Plan, provided that any such rules and procedures
shall be consistent with the provisions of the Plan and ERISA.
(g) The members of the Committee, and each of them, shall
discharge their duties with respect to the Plan (i) solely in the
interest of the Participants and Beneficiaries, (ii) for the exclusive
purpose of providing benefits to Employees participating in the Plan
and their Beneficiaries and of defraying reasonable expenses of
administering the Plan, and (iii) with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent man
acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like aims.
The Company shall indemnify the members of the Committee, and each of
them, from the effects and consequences of their acts, omissions and
conduct in their official capacity as members of the Committee. Such
indemnification shall extend to any action, suit or proceeding to which
the members shall be made or threatened to be made a party, whether
civil, criminal, administrative or investigative, and whether or not
terminated by judgment, settlement, conviction or upon a plea of nolo
contendere or its equivalent; provided, however, such indemnification
shall not extend to any action, suit, or proceeding in which it shall
be finally adjudicated that (1) a member did not act in good faith, and
(2) with respect to any criminal action or proceeding, the member did
not have reasonable cause to believe his conduct was lawful.
(h) No member of the Committee shall receive any compensation or
fee for his services, unless otherwise agreed between such member of
the Committee and the Employers, but the Employers shall reimburse the
Committee members for any necessary expenditures incurred in the
discharge of their duties as Committee members.
(i) The Committee may employ such counsel (who may be of counsel
for any Employer) and agents and may arrange for such clerical and
other services as it may require in carrying out the provisions of the
Plan.
Section 10.2. Plan Administrator. (a) The Company shall
appoint a Plan Administrator (as such term is used in ERISA) who may
but need not be a Participant or shareholder of the Company and such
status shall not disqualify him from taking any action hereunder or
render him accountable for any distribution or other material advantage
received by him under the Plan, provided that he shall not take part in
any matter involving solely his rights under the Plan.
(b) The Plan Administrator shall be responsible for the operation
of the Plan within the policies, interpretations, rules and procedures
of the Committee. The Plan Administrator shall also perform such
ministerial functions with respect to the Plan as the Committee shall
from time to time designate.
Section 10.3. Claims Procedure. If any Participant or
Distributee believes he is entitled to benefits in an amount greater
than those which he is receiving or has received, he may file a claim
with the Administrator. Such a claim shall be in writing and state the
nature of the claim, the facts supporting the claim, the amount
claimed, and the address of the claimant. The Plan Administrator shall
review the claim and, within 90 days after receipt of the claim, give
written notice by registered or certified mail to the claimant of his
decision with respect to the claim. If special circumstances require
an extension of time, the claimant shall be so advised in writing
within the initial 90-day period and in no event shall such an
extension exceed 90 days. Such notice shall be written in a manner
calculated to be understood by the claimant and, if the claim is wholly
or partially denied, set forth the specific reasons for the denial,
specific references to the pertinent Plan provisions on which the
denial is based, a description of any additional material or
information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary, and an
explanation of the claim review procedure under the Plan. The Plan
Administrator shall also advise the claimant that he or his duly
authorized representative may request a review by the Committee of the
denial by filing with the Plan Administrator, within 65 days after
notice of the denial has been received by the claimant, a written
request for such review. The claimant shall be informed that he may
have reasonable access to pertinent documents and submit comments in
writing to the Committee within the same 65-day period. If a request
is so filed, review of the denial shall be made by the Committee within
60 days after receipt of such request, and the claimant shall be given
written notice of the resulting final decision. Such notice shall
include specific reasons for the decision and specific references to
the pertinent Plan provisions on which the decision is based and shall
be written in a manner calculated to be understood by the claimant.
Section 10.4. Notices to Participants and Distributees. All
notices, reports and statements given, made, delivered or transmitted
to a Participant or Distributee shall be deemed to have been duly
given, made, delivered or transmitted when mailed by first class mail
with postage prepaid and addressed to such person at the address last
appearing on the records of the Committee. A Participant or
Distributee may record any change of his address from time to time by
written notice filed with the Committee.
Section 10.5. Notices to Committee or Employers. Written
authorizations, directions, notices and other communications to the
Employers or the Committee shall be deemed to have been duly given,
made or transmitted either when delivered to such location as shall be
specified upon the forms prescribed by the Committee for the giving of
such authorizations, directions, notices and other communications, or
when mailed by first class mail with postage prepaid and addressed to
the addressees at the address specified upon such forms.
Section 10.6. Records. The Committee shall keep a record of
all of its proceedings and shall keep or cause to be kept all books of
account, records and other data as may be necessary or advisable in its
judgment for the administration of the Plan.
Section 10.7. Reports of Trust Fund. The Committee shall
keep on file, in such form as it shall deem convenient and proper, all
reports concerning the Trust Fund received by it from the Trustee.
ARTICLE 11
PARTICIPATION BY OTHER EMPLOYERS
Section 11.1. Adoption of Plan. With the consent of the
Company, any corporation may become a participating Employer under the
Plan by (a) taking such action as shall be necessary to adopt the Plan,
(b) filing with the Committee a duly certified copy of the Plan as
adopted by such corporation, (c) becoming a party to the Trust
agreement establishing the Trust Fund, and (d) executing and delivering
such instruments and taking such other action as may be necessary or
desirable to put the Plan into effect with respect to such corporation.
Section 11.2. Withdrawal from Plan. Any Employer may
withdraw from participation in the Plan at any time by filing with the
Committee a duly certified copy of a resolution of its board of
directors to that effect and giving notice of its intended withdrawal
to the Committee, the other Employers and the Trustee prior to the
effective date of withdrawal.
Section 11.3. Company as Agent for Employers. Each
corporation which shall become a participating Employer pursuant to
Section 11.1 or Article 12 by so doing shall be deemed to have
appointed the Company its agent to exercise on its behalf all of the
powers and authorities hereby conferred upon the Company by the terms
of the Plan, including, but not by way of limitation, the power to
amend and terminate the Plan. The authority of the Company to act as
such agent shall continue unless and until the portion of the Trust
Fund held for the benefit of Employees of the particular Employer and
their Beneficiaries is set aside in a separate trust as provided in
Section 14.2.
ARTICLE 12
CONTINUANCE BY A SUCCESSOR
In the event that any Employer shall be reorganized by way of
merger, consolidation, transfer of assets or otherwise, so that another
corporation other than an Employer shall succeed to all or
substantially all of such Employer's business, such successor
corporation may be substituted for such Employer under the Plan by
adopting the Plan and becoming a party to the Trust agreement.
Contributions by such Employer and by its employees shall be
automatically suspended from the effective date of any such
reorganization until the date upon which the substitution of such
successor corporation for the Employer under the Plan becomes
effective. If, within 90 days from the effective date of any such
reorganization, such successor corporation shall not have elected to
become a party to the Plan, or if the Employer shall adopt a plan of
complete liquidation other than in connection with a reorganization,
the Plan shall be automatically terminated with respect to employees of
such Employer as of the close of business on the 90th day following the
effective date of such reorganization or as of the close of business on
the date of adoption of such plan of complete liquidation, as the case
may be, and the Committee shall direct the Trustee to distribute the
portion of the Trust applicable to such Employer in the manner provided
in Section 14.3.
ARTICLE 13
DOMESTIC RELATIONS ORDER AND LOANS
Section 13.1. The restrictions imposed by Section 14.2 shall
not apply to a "qualified domestic relations order" defined in Code
Section 414(p), and those other domestic relations orders permitted to
be so treated by the Administrator under the provisions of the
Retirement Equity Act of 1984. The Administrator shall establish a
written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such qualified
orders. Further, to the extent provided under a "qualified domestic
relations order", a former spouse of a Participant shall be treated as
the spouse or surviving spouse for all purposes under the Plan.
Notwithstanding anything else in the Plan to the contrary,
effective January 1, 1989 distribution from a Participant's Account may
be made to an Alternate Payee (as defined in Code Section 414(p)),
pursuant to a "qualified domestic relations order" prior to attainment
of age 50 or separation from service by the Participant if the
"qualified domestic relations order" provides that the Plan and the
Alternate Payee may agree in writing to an earlier distribution and
distribution is made pursuant to such written agreement.
Section 13.2. The restrictions imposed by Section 14.2 shall
not apply to the extent a Participant is indebted to the Plan, for any
reason, under the terms of the Plan. At the time a distribution is to
be made to a Participant or Beneficiary, such proportion of the amount
distributed as shall equal such indebtedness shall be paid by the
Trustee to the Administrator, at the direction of the Administrator or
the Committee, to apply against or discharge such indebtedness. Prior
to making a payment, however, the Participant or Beneficiary must be
given written notice by the Administrator that such indebtedness is to
be paid in whole or part from the Participant's Plan Account. If the
Participant or the Beneficiary does not agree that the indebtedness is
a valid claim against his Plan Account, he shall be entitled to a
review of the validity of the claim in accordance with Section 10.3.
ARTICLE 14
MISCELLANEOUS
Section 14.1. Expenses. Except as otherwise provided in
Section 6.4 and elsewhere in the Plan, all costs and expenses incurred
in administering the Plan and the Trust Fund, including the fees of
counsel and any agents for the Committee, the expenses of the
Committee, the fees, charges and costs of, and incurred by, the
Investment Manager, the fees and expenses of the Trustee, the fees of
counsel for the Trustee and other administrative expenses, shall be
borne by the several Employers in such proportions as the Committee
shall determine to be equitable and proper.
Section 14.2. Non-Assignability. It is a condition of the
Plan, and all rights of each Participant and Distributee shall be
subject thereto, that no right or interest of any Participant or
Distributee in the Plan shall be assignable or transferable in whole or
in part, either directly or by operation of law or otherwise,
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge or bankruptcy, but excluding devolution by death or
mental incompetency, and no right or interest of any Participant or
Distributee in the Plan shall be liable for, or subject to, any
obligation or liability of such Participant or Distributee, including
claims for alimony or the support of any spouse.
Section 14.3. Employment Non-Contractual. The Plan confers
no right upon any Employee to continue in employment.
Section 14.4. Limitation of Rights. A Participant or
Distributee shall have no right, title or claim in or to any specific
asset of the Trust, but shall have the right only to distributions from
the Trust Fund on the terms and conditions herein provided.
Section 14.5. Merger or Consolidation with Another Plan. A
merger or consolidation with, or transfer of assets or liabilities to,
any other plan shall not be effected unless the terms of such merger,
consolidation or transfer are such that each Participant, Distributee,
Beneficiary or other person entitled to receive benefits from the Plan
would, if the Plan were to terminate immediately after the merger,
consolidation or transfer, receive a benefit equal to or greater than
the benefit such person would be entitled to receive if the Plan were
to terminate immediately before the merger, consolidation, or transfer.
Section 14.6. Reversion of Employer Contributions. No part
of the Trust Fund shall revert or be repaid to an Employer either
directly or indirectly. However, any contribution made by the Company
by reason of a good faith mistake of fact, or the portion of any
contribution made by the Company which exceeds the maximum amount for
which a deduction is allowable to the Company for federal income tax
purposes by reason of a good faith mistake in determining the maximum
allowable deduction, shall upon the request of the Company be returned
by the Trustee to the Company. The Company's request and the return of
any such contribution must be made within one year after such
contribution was mistakenly made or after the deduction of such excess
portion of such contribution was disallowed, as the case may be. The
amount to be returned to the Company pursuant to this paragraph shall
be the excess of (i) the amount contributed over (ii) the amount that
would have been contributed had there not been a mistake of fact or a
mistake in determining the maximum allowable deduction. Earnings
attributable to the amount contributed by mistake shall not be returned
to the Company, but losses attributable thereto shall reduce the amount
so returned. If return to the Company of the amount contributed by
mistake would cause the balance of any Participant's account as of the
date such amount is to be returned to be reduced to less than what
would have been the balance of such account as of such date had such
amount not been contributed, the amount to be returned to the Company
shall be limited so as to avoid such reduction.
ARTICLE 15
AMENDMENT, WITHDRAWAL AND TERMINATION
Section 15.1. Amendment. The Company may at any time and
from time to time amend or modify the Plan by written instrument duly
adopted by the Board of Directors of the Company. Any such amendment
or modification shall become effective on such date as the Company
shall determine and may apply to Participants in the Plan at the time
thereof as well as to future Participants.
Section 15.2. Withdrawal. If an Employer shall withdraw
from the Plan under Section 11.2, the Committee shall determine the
portion of the Trust Fund held by the Trustee which is applicable to
the Participants and former Participants of such Employer, and shall
direct the Trustee to segregate such portion in a separate trust. Such
separate trust shall thereafter be held and administered as a part of
the separate plan of such Employer.
The portion of the Trust Fund applicable to the Participants and
former Participants of a particular Employer shall be the sum of:
(a) the total amount credited to all interest and special
accounts which are applicable to the Participants and former
Participants of such Employer, and
(b) an amount which bears the same ratio to the excess, if any,
of
(i) the total value of the Trust Fund over
(ii) the total amount credited to all interest and
special accounts
as the total amount credited to the accounts (other than interest and
special accounts) which are applicable to the Participants and former
Participants of such Employer bears to the total amount credited to
such accounts of all Participants and former Participants.
Section 15.3. Termination. Any Employer may at any time
terminate its participation in the Plan by resolution of its board of
directors to that effect. In the event of any such termination, the
Committee shall determine the portion of the Trust Fund held by the
Trustee which is applicable to the Participants and former Participants
of such Employer and direct the Trustee to distribute such portion as
follows:
(a) The balance in any interest account shall be distributed to
the Distributee entitled to receive such account.
(b) The remaining assets of such portion of the Trust Fund shall
be distributed to Participants ratably in proportion to the balances of
their respective accounts.
A complete discontinuance of contributions by an Employer shall be
deemed a termination of such Employer's participation in the Plan for
purposes of this Section.
If the Internal Revenue Service shall refuse to issue an initial
favorable determination letter that the Plan and Trust as adopted by an
Employer meet the requirements of Section 401(a) of the Code and that
the Trust is exempt from tax under Section 501(a) of the Code, the
Employer may terminate its participation in the Plan and the Committee
shall direct the Trustee to pay and deliver the portion of the Trust
Fund applicable to the Participants and former Participants of such
Employer, determined pursuant to Section 15.2, to such Employer and
such Employer shall pay to Participants or their Beneficiaries the part
of such Employer's portion of the Trust Fund as is attributable to
contributions made by Participants.
Section 15.4. Trust to be Applied Exclusively for
Participants and Their Beneficiaries. Subject only to the provisions
of the second paragraph of Section 15.3 and any other provision of the
Plan to the contrary notwithstanding, it shall be impossible for any
part of the Trust to be used for or diverted to any purpose not for the
exclusive benefit of Participants and their Beneficiaries either by
operation or termination of the Plan, by power of amendment or by other
means.
Section 15.5. Distribution Upon Sale of Assets. All
contributions and income attributable thereto under the Plan shall be
distributed to Participants, as soon as administratively feasible after
the sale, to an entity that is not an Affiliated Employer, of
substantially all of the assets used by the Employer in the trade or
business in which the Participant is employed.
Section 15.6. Distributions Upon Sale of Subsidiary. All
contributions and income attributable thereto under the Plan, shall be
distributed, as soon as administratively feasible after the sale, to an
entity that is not an Affiliated Employer, of an incorporated
Affiliated Employer's interest in a subsidiary to Participants employed
by such subsidiary.
ARTICLE 16
TOP-HEAVY PLAN YEARS
Section 16.1. For purposes of this Article 16:
(a) (1) "Key Employee" means any Participant who, at any
time during the Plan Year or any of the four (4) preceding
Plan Years, is
(i) one of the ten (10) Employees owning the
largest interests in all Employers and Affiliates
considered as a unit;
(ii) an owner of more than five percent (5%)
of the outstanding stock, or of stock possessing more
than five percent (5%) of the total combined voting
power, of any Employer or Affiliate;
(iii) an owner of more than one percent (1%) of
the outstanding stock or of stock possessing more than
one percent (1%) of the total combined voting power of
any Employer or Affiliate, whose Section 415
Compensation from all Employers and Affiliates combined
exceeds $150,000; or
(iv) an officer of an Employer or Affiliate
as determined under the applicable provisions of
Paragraphs (2) through (4) of this Subsection (a).
(2) No Employee shall be considered a Key Employee
pursuant to Subparagraph (1)i) if such Employee's
Compensation is less than the amount determined under Section
415(c)(1)(A) of the Code (as adjusted pursuant to Section
415(d)(1)(B) of the Code) for the calendar year in which
falls the Determination Date.
(3) For purposes of Subparagraphs (1)(i)-(iii), an
Employee shall be considered as owning all interests in an
Employer which he owns directly or would be considered as
owning under the rules contained in Section 318 of the Code,
except that Subparagraph (C) of Section 318(a)(2) shall be
applied by substituting "5%" for "50%".
(4) No more than the greater of three (3) Employees or
ten percent (10%) of all Employees (up to a maximum of 50) of
all Employers and Affiliates considered as a unit shall be
considered officers for purposes of Subparagraph (1)(iv).
Where the actual number of such officers exceeds the limits
imposed by the preceding sentence, those considered officers
for purposes of Subparagraph (1)(iv) shall be the officers
having the highest annual Compensation during the five-year
period consisting of the Plan Year and the four (4) preceding
Plan Years.
(b) "Determination Date" means June 30, 1988 and with respect to
any Plan Year commencing after 1988, the last day of the immediately
preceding Plan Year.
(c) "Aggregation Group" means
(1) two or more plans of an Employer or Affiliate, each
of which:
(i) has one or more Participants who are Key
Employees, and/or
(ii) enables any plan described in Sub-
paragraph (i) to meet the requirements of Section
401(a)(4) or Section 410 of the Code, plus, at the
Company's election,
(2) any other plan or plans which, when considered
together with the plan or plans described in Paragraph (1)
satisfy the requirements of Section 401(a)(4) and/or Section
410 of the Code.
(d) "Employee" and "Key Employee" include their beneficiaries.
(e) "Top-Heavy Plan Year" means any Plan Year for which the Plan
is a Top-Heavy Plan described in Section 16.3, such Section 16.3 to be
read as incorporating the definitions supplied by Section 416 of the
Code and the regulations promulgated thereunder, and those of any
successor statute thereto.
(f) "Section 415 Compensation" means, for any period, an
individual's current Compensation from an Employer or an Affiliate for
such period, including those items listed in Paragraph (1) of Treas.
Reg. Section 1.415-2(d), but excluding those items listed in Paragraph
(2) thereof.
Section 16.2. For any Top-Heavy Plan Year, the provisions of
Section 4.1(d), 5.1 and Article 9 shall apply only to the extent not
inconsistent with Sections 16.3 through 16.7 of the Plan.
Section 16.3. (a) Except as provided in Subsection (3), the
Plan is a Top-Heavy Plan for the Plan Year, if, as of the Determination
Date of such Plan Year:
(1) The aggregate of the Accrued benefits of Key
Employees under the Plan exceeds sixty percent (60%) of the
Aggregate of the Accrued Benefits of all Employees under the
Plan unless the Plan is a member of an Aggregation Group
which is not an Aggregation Group described in Subparagraph
(2)(B); or
(2) The Plan is a member of an Aggregation Group:
(A) which is described in Section 16.1(c)(1),
and
(B) with respect to which the sum of:
(i) the present value of the cumulative
accrued benefits, of all Key Employees under all defined
benefit plans within the Aggregation Group, and
(ii) the aggregate of the account balances of
all Key Employees under all defined contribution plans
in the Aggregation Group --
exceeds sixty percent (60%) of the sum of:
(i) the present value of the cumulative
accrued benefits of all Employees under all defined
benefit plans included in the Aggregation Group, and
(ii) the aggregate of the accounts of all
Employees under all defined contribution plans in the
Aggregation Group.
(3) This Section 16.3 shall not apply if the Plan is a
member of an Aggregation Group other than an Aggregation
Group described in Subparagraph (2)(B) of this Subsection
(a).
(b) For purposes of this Section 16.3:
(1) the accrued benefit and/or account balance of any
Employee who is not a Key Employee during the Plan Year but
who was a Key Employee during the immediately preceding Plan
Year shall be disregarded;
(2) the present value of the accrued benefit of an
Employee in a defined benefit plan or the account balance of
an Employee in a defined contribution plan includes any
amount distributed with respect to the Employee under the
plan within the five (5) year period ending on the
Determination Date;
(3) the account balance of a Participant under this
Plan as of any Determination Date shall equal the
Participant's account balance determined under Article 7 as
of the Valuation Date coinciding with such Determination
Date.
Section 16.4. (a) Except as provided in Subsection (b), the
amount of the Employer Contribution made on behalf of each Participant
who is not a Key Employee for any Plan Year for which the Plan is a Top-
Heavy Plan shall be at least equal to the lesser of:
(1) three percent (3%) of such Participant's Section
415 Compensation; or
(2) the percentage of Section 415 Compensation
represented by the Employer Contributions (inclusive of
Salary Reduction Contributions) made on behalf of the Key
Employee for whom such percentage is the highest for such
Plan Year, determined by dividing the contribution made on
behalf of each such Key Employee by so much of his Section
415 Compensation as does not exceed $200,000 (or $150,000,
effective January 1, 1994), provided such non-Key Employee
has not separated from service at the end of the Plan Year.
Such contributions remain fully nonforfeitable under any circumstances.
(b) Where the inclusion of this Plan in an Aggregation Group
pursuant to Section 16.1(c)(1) enables a defined benefit plan described
in Section 16.1(c)(1) to meet the requirements of Section 401(a)(4) or
Section 410 of the Code, the minimum Employer Contribution required
under this Section 16.4 shall be the amount specified in Paragraph
(a)(1) hereof.
(c) For purposes of this Section 16.4, the amount of Employer
Contributions deemed made on behalf of any Participant shall be equal
to the total Employer Contributions made pursuant to Section 5.1 and
allocated to his Account for the Plan Year.
Section 16.5. (a) Except as provided in Subsection (b), the
Compensation of a Key Employee which is taken into account for purposes
of Section 5.1 and 4.6 of the Plan for any Top-Heavy Plan Year shall
not exceed $200,000.
(b) The amount specified in Subsection (a) shall be adjusted in
accordance with applicable cost-of-living adjustments prescribed by the
Secretary of the Treasury pursuant to Section 416(d)(2) of the Code.
Section 16.6. For any Top-Heavy Plan Year, the entire
interest of each Key Employee shall be distributed to him either:
(a) not later than the end of the taxable year in which he
attains age seventy and one-half (70-1/2) or
(b) commencing within the time specified in Subsection (a) and
continuing over the life of the Participant or the life of the
Participant and his spouse or over a certain period not extending
beyond the life expectancy of such Key Employee or the joint and last
survivor life expectancy of such Key Employee and his spouse.
ARTICLE 17
TERMINATED INVESTMENT AND SAVINGS PLAN
FOR HOURLY EMPLOYEES AT STERLINGTON, LOUISIANA
Effective April 16, 1992 the Investment and Savings Plan for
Hourly Employees at Sterlington, Louisiana ("Savings Plan") is
terminated. Assets from the trust for the Savings Plan shall be
distributed in accordance with the Savings Plan's procedure for final
valuation of Participants' Plan Accounts. Those Participants having
account balances of less than $3,500 and those Participants with
account balances in excess of $3,500 who have consented to distribution
shall receive distributions in accordance with Savings Plan provisions.
After such distributions have been completed the remaining account
balances shall be transferred from the terminated Savings Plan and
merged into the trust for this Plan. Participants still having account
balances shall be given a one time election to have their Accounts
invested in the Fixed Income Fund or the Money Market Fund or 50% in
each. Thereafter, distributions of Plan Accounts shall be made in
accordance with Section 8 of the Savings Plan. Participants shall have
no right of contribution via employee pre-tax or after tax
contributions to employer matching contributions.
IN WITNESS WHEREOF, IMC Global Operations Inc. has caused its
corporate seal to be hereunto affixed by its officers thereunto duly
authorized this 31st day of December, 1994.
IMC GLOBAL OPERATIONS INC.
By: Allen C. Miller
---------------------------
(Corporate Seal)
ATTEST:
Marschall I. Smith
---------------------------
EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS AGREEMENT between IMC Global Inc., a Delaware corporation (the
"Company"), and -------------------("Executive"), is made as of the 1st
day of September, 1995, to become effective as provided below; and
WITNESSETH THAT:
A. The Company wishes to attract and retain well-qualified executive
and key personnel and to assure itself of the continuity of its
management.
B. Executive is an officer or other key executive of the Company with
significant management responsibilities in the conduct of its business.
C. The Company recognizes that Executive is a valuable resource of
the Company and the Company desires to be assured of the continued
services of Executive.
D. The Company is concerned that in the event of a possible or
threatened change in control of the Company, uncertainties necessarily
arise and Executive may have concerns about the continuation of his
employment status and responsibilities and may be approached by others
offering competing employment opportunities, and the Company therefore
desires to provide Executive assurance as to the continuation of his
employment status and responsibilities in such event.
E. The Company further desires to assure that, if a possible or
threatened change in control should arise and Executive should be
involved in deliberations or negotiations in connection therewith,
Executive would be in a secure position to consider and participate in
such transaction as objectively as possible in the best interests of
the Company and to this end desires to protect Executive from any
direct or implied threat to his financial well being.
F. Executive is willing to continue to serve as such but desires
assurance that in the event of such a change in control he will
continue to have the employment status and responsibilities he could
reasonably expect absent such event and that in the event this turns
out not to be the case he will have fair and reasonable severance
protection on the basis of his service to the Company to that time.
NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:
1. Operation of Agreement. The "effective date of this Agreement"
shall be the date on which a change in control of the Company (as
described in Section 2) occurs. This Agreement shall not become
effective, and the Company shall have no obligation hereunder, if the
employment of Executive with the Company shall terminate prior to a
change in control of the Company. Executive shall have no right on
account of this Agreement to be retained in the employ of the Company
or to be retained in any particular position in the Company, unless and
until a change in control has occurred.
2. Change in Control. The term "Change in Control" shall mean,
and be deemed to have occured as of the first day that any one or more
of the following conditions have been satisfied.
(a) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13
(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange
Act, of 15% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock") or, (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition
resulting from the exercise of an exercise, conversion or exchange
privilege unless the security being so exercised, converted or
exchanged was acquired directly from the Company); (B) any
acquisition by the Company, (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of
this definition;
(b) individuals who, as of the date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided that any
individual who becomes a director of the Company subsequent to the
date hereof whose election, or nomination for election by the
Company's stockholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board
shall be deemed a member of the Incumbent Board; and provided
further, that any individual who was initially elected as a
director of the Company as a result of an actual or threatened
election contest,
as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of
any Person other than the Board shall not be deemed a member of
the Incumbent Board;
(c) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which (i) all or substantially
all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares
of common stock, and the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's
assets either directly or indirectly) in substantially the same
proportions relative to each other as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than: the Company; the
corporation resulting from such Corporate Transaction; and any
Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Company Common Stock of the corporation resulting from
such Corporate Transaction or the combined voting power of the
outstanding securities of such corporation entitled to vote
generally in the election of directors, and (iii) individuals who
were members of the Incumbent Board will constitute at least a
majority of the members of the Board of Directors of the
corporation resulting from such Corporate Transaction; or
(d) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company.
3. Employment. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in
the employ of the Company, for the period commencing on the effective
date of this Agreement and ending on the earlier to occur of (a) the
last day of the month in which occurs the third anniversary of the
effective date of this Agreement or (b) the last day of the month in
which the Executive attains mandatory retirement age pursuant to the
terms of a mandatory retirement plan of the Company as such were in
effect and applicable to the Executive immediately prior to the
effective date of this Agreement (the "Employment Period"). During the
Employment Period, Executive shall exercise such position and authority
and perform such responsibilities as are commensurate with the position
and authority being exercised and duties being performed by the
Executive immediately prior to the effective date of this Agreement,
which services shall be performed at the location where the Executive
was employed immediately prior to the effective date of this Agreement
or at such other location as the Company may reasonably require;
provided that the Executive shall not be required to accept any such
other location that he deems unreasonable in the light of his personal
circumstances.
4. Compensation and Benefits. During the Employment Period, the
Executive shall receive the following compensation and benefits:
(a) He shall receive an annual base salary which is not less
than his annual base salary immediately prior to the effective
date of this Agreement, with the opportunity for increases, from
time to time thereafter which are in accordance with the
Company's regular executive compensation practices.
(b) He shall be eligible to participate on a reasonable basis,
and to continue his existing participation, in annual incentive,
stock option, restricted stock, long-term incentive performance,
and any other incentive compensation plan which provides
opportunities to receive compensation in addition to his annual
base salary which are the greater of (i) the opportunities
provided by the Company for executives with comparable duties or
(ii) the opportunities under any such plans in which he was
participating immediately prior to the effective date of this
Agreement.
(c) He shall be entitled to receive and participate in
salaried employee benefits (including, but not limited to, medical,
life and accident insurance, investment, stock ownership, and
disability benefits) and perquisites which are the greater of (i)
the employee benefits and perquisites provided by the Company to
executives with comparable duties or (ii) the employee benefits and
perquisites to which he was entitled or in which he participated
immediately prior to the effective date of this Agreement.
(d) He shall be entitled to continue to accrue credited service
for retirement benefits and to be entitled to receive retirement
benefits under and pursuant to the terms of the Company's
qualified retirement plan for salaried employees, the Company's
supplemental executive retirement plan, and any successor or
other retirement plan or agreement in effect on the effective
date of this Agreement in respect of his retirement, whether or
not a qualified plan or agreement, so that his aggregate monthly
retirement benefit from all such plans and agreements (regardless
when he begins to receive such benefit) will be not less than it
would be had all such plans and agreements in effect immediately
prior to the effective date of this Agreement continued to be in
effect without change until and after he begins to receive such
benefit.
5. Termination. The term "Termination" shall mean termination,
prior to the expiration of the Employment Period, of the employment of
the Executive with the Company for any reason other than death,
disability (as described below), cause (as described below), or
voluntary resignation (as described below).
(a) The term "disability" means physical or mental incapacity
qualifying the Executive for long-term disability under the
Company's long-term disability plan.
(b) The term "cause" means (i) the willful and continued
failure of the Executive substantially to perform his duties with
the Company (other than any failure due to physical or mental
incapacity) after a demand for substantial performance is delivered
to him by the Board of Directors which specifically identifies the
manner in which the Board believes he has not substantially
performed his duties or (ii) willful misconduct materially and
demonstrably injurious to the Company. No act or failure to act by
the Executive shall be considered "willful" unless done or omitted
to be done by him not in good faith and without reasonable belief
that his action or omission was in the best interest of the
Company. The unwillingness of the Executive to accept any or all
of a change in the nature or scope of his position, authorities or
duties, a reduction in his total compensation or benefits, a
relocation that he deems unreasonable in light of his personal
circumstances, or other action by or request of the Company in
respect of his position, authority, or responsibility that he
reasonably deems to be contrary to this Agreement, may not be
considered by the Board of Directors to be a failure to perform or
misconduct by the Executive. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for cause for
purposes of this Agreement unless and until there shall have been
delivered to him a copy of a resolution, duly adopted by a vote of
three-quarters of the entire Board of Directors of the Company at a
meeting of the Board called and held (after reasonable notice to
the Executive and an opportunity for the Executive and his counsel
to be heard before the Board) for the purpose of considering
whether the Executive has been guilty of such a willful failure to
perform or such willful misconduct as justifies termination for
cause hereunder, finding that in the good faith opinion of the
Board the Executive has been guilty thereof and specifying the
particulars thereof.
(c) The resignation of the Executive shall be deemed
"voluntary" if it is for any reason other than one or more
of the following:
(i) The Executive's resignation or retirement (other
than mandatory retirement, as aforesaid) is requested by
the Company other than for cause;
(ii) Any other significant change in the nature or
scope of the Executive's position, authorities or duties
from those described in Section 3;
(iii) Any other reduction in his total
compensation or benefits from that provided in Section 4;
(iv) The breach by the Company of any other provision
of this Agreement; or
(v) The reasonable determination by the
Executive that, as a result of a change in control of the
Company and a change in circumstances thereafter
significantly affecting his position, he is unable to
exercise the authorities and responsibilities attached to
his position and contemplated by Section 3.
(d) Termination that entitles the Executive to the payments and
benefits provided in Section 6 shall not be deemed or treated by
the Company as the termination of the Executive's employment or
the forfeiture of his participation, award, or eligibility for
the purpose of any plan, practice or agreement of the Company
referred to in Section 4.
6. Termination Payments and Benefits. In the event of and
within 30 days following Termination, the Company shall pay to the
Executive:
(a) His base salary and all other benefits due him as if he had
remained an employee pursuant to this Agreement through the
remainder of the month in which Termination occurs less
applicable withholding taxes and other authorized payroll
deductions;
(b) The amount equal to the target award for the Executive under
the Company's annual incentive compensation plan for the fiscal
year in which Termination occurs, reduced pro rata for that
portion of the fiscal year not completed as of the end of the
month in which Termination occurs, provided that if the Executive
has deferred his award for such year under the plan, the payment
due the Executive under this Paragraph (b) shall be paid in
accordance with the terms of the deferral; and
(c) A lump sum severance allowance in an amount which
is equal to the sum of the amounts determined in
accordance with the following subparagraphs (i) and
(ii):
(i) an amount equivalent to three times his annual
base salary at the rate in effect immediately prior to
Termination; and
(ii) an amount equivalent to three times the average
of the annual incentive compensation received or deferred
by the Executive for the three fiscal years immediately
prior to the fiscal year in which Termination occurs.
7. Non-Competition and Confidentiality. The Executive agrees that:
(a) there shall be no obligation on the part of the Company to
provide any further payments or benefits (other than payments or
benefits already earned or accrued) described in Section 6 if,
when, and so long as the Executive shall be employed by or
otherwise engage in any business which is competitive with any
business of the Company or of any of its subsidiaries, as such
business existed as of the effective date of this Agreement, in
which the Executive was engaged during his employment, and if
such employment or activity is likely to cause or causes serious
damage to the Company or any of its subsidiaries; and
(b) during and after the Employment Period, he will not divulge
or appropriate to his own use or the use of others any secret or
confidential information pertaining to the business of the
Company or any of its subsidiaries obtained during his employment
by the Company, it being understood that this obligation shall
not apply when and to the extent any of such information becomes
publicly known or available other than because of his act or
omission.
8. Arrangements Not Exclusive or Limiting. The specific
arrangements referred to herein are not intended to exclude or limit
Executive's participation in other benefits available to executive
personnel generally, or to preclude or limit other compensation or
benefits as may be authorized by the Board of Directors of the Company
at any time, or to limit or reduce any compensation or benefit to which
Executive would be entitled but for this Agreement.
9. Enforcement Costs. The Company is aware that upon the
occurrence of a change in control, the Board of Directors or a
stockholder of the Company may then cause or attempt to cause the
Company to refuse to comply with its obligations under this Agreement,
or may cause or attempt to cause the Company to institute, or may
institute, litigation seeking to have this Agreement declared
unenforceable, or may take, or attempt to take, other action to deny
Executive the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It
is the intent of the parties that Executive not be required to incur
the legal fees and expenses associated with the protection or
enforcement of his rights under this Agreement by litigation or other
legal action because such costs would substantially detract from the
benefits intended to be extended to Executive hereunder, nor be bound
to negotiate any settlement of his rights hereunder under threat of
incurring such costs. Accordingly, if at any time after the effective
date of this Agreement, it should appear to Executive that the Company
is or has acted contrary to or is failing or has failed to comply with
any of its obligations under this Agreement for the reason that it
regards this Agreement to be void or unenforceable or for any other
reason, or that the Company has purported to terminate his employment
for cause or is in the course of doing so in either case contrary to
this Agreement, or in the event that the Company or any other person
takes any action to declare this Agreement void or unenforceable, or
institutes any litigation or other legal action designed to deny,
diminish or to recover from Executive the benefits provided or intended
to be provided to him hereunder, and the Executive has acted in good
faith to perform his obligations under this Agreement, the Company
irrevocably authorizes Executive from time to time to retain counsel of
his choice at the expense of the Company to represent him in connection
with the protection and enforcement of his rights hereunder, including
without limitation representation in connection with termination of his
employment contrary to this Agreement or with the initiation or defense
of any litigation or other legal action, whether by or against the
Executive or the Company or any director, officer, stockholder or other
person affiliated with the Company, in any jurisdiction. The
reasonable fees and expenses of counsel selected from time to time by
Executive as hereinabove provided shall be paid or reimbursed to
Executive by the Company on a regular, periodic basis upon presentation
by Executive of a statement or statements prepared by such counsel in
accordance with its customary practices, up to a maximum aggregate
amount of $200,000. Counsel so retained by Executive may be counsel
representing other officers or key executives of the Company in
connection with the protection and enforcement of their rights under
similar agreements between them and the Company, and, unless in his
sole judgment use of common counsel could be prejudicial to him or
would not be likely to reduce the fees and expenses chargeable
hereunder to the Company, the Executive agrees to use his best efforts
to agree with such other officers or executives to retain common
counsel.
10. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be in writing and
personally delivered by hand or sent by registered or certified mail,
if to the Executive, to him at the last address he has filed in writing
with the Company or, if to the Company, to its corporate secretary at
its principal executive office.
11. Non-Alienation. The Executive shall not have any right to
pledge, hypothecate, anticipate, or in any way create a lien upon any
amounts provided under this Agreement, and no payments or benefits due
hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts or by operation of law. So long as the
Executive lives, no person, other than the parties hereto, shall have
any rights under or interest in this Agreement or the subject matter
hereof.
12. Entire Agreement; Amendment. This Agreement constitutes the
entire agreement superseding any prior agreement of the parties in
respect of the subject matter hereof. No provision of this Agreement
may be amended, waived, or discharged except by the mutual written
agreement of the parties. The consent of any other person to any such
amendment, waiver or discharge shall not be required.
13. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Company, its successors or assigns, by
operation of law or otherwise, including without limitation any
corporation or other entity or person which shall succeed (whether
direct or indirect, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business and/or assets of the
Company, and the Company will require any successor, by agreement in
form and substance satisfactory to Executive, expressly to assume and
agree to perform this Agreement. Except as otherwise provided herein
this Agreement shall be binding upon and inure to the benefit of
Executive and his legal representatives, heirs, and assigns, provided,
however, that in the event of Executive's death prior to payment or
distribution of all amounts, distributions, and benefits due him
hereunder, each such unpaid amount and distribution shall be paid in
accordance with this Agreement to the person or persons designated by
Executive to the Company to receive such payment or distribution and in
the event Executive has made no applicable designation, to the person
or persons designated by Executive as the beneficiary or beneficiaries
of proceeds of life insurance payable in the event of Executive's death
under the Company's group life insurance plan.
14. Governing Law. Except to the extent required to be governed
by the law of the State of Delaware because the Company is incorporated
under the laws of that state, the validity, interpretation, and
enforcement of this Agreement shall be governed by the law of whichever
of the State of Illinois or the State of Delaware that to the greater
extent permits or does not prevent the enforcement of this Agreement in
accordance with its terms.
15. Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for
any reason, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together constitute one and the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, and its
corporate seal to be hereunto affixed and attested by its Secretary or
Assistant Secretary, all as of the day and year first shown above written.
------------------------
Executive
IMC GLOBAL INC.
(seal) By:
------------------------------------
Chairman and Chief Executive Officer
ATTEST
By:
---------------------------
Secretary
EXHIBIT 10.20
September 1, 1995
Dear ---------------------:
This Agreement is to assure you that in the event you become entitled
to payments by operation of the Employment Agreement dated September 1,
1995 ("Employment Agreement") between you and IMC Global Inc.
("Global") due to a "Change in Control" (as that term is defined in
Attachment A to this Agreement) of Global, and if any of the payments
to be made under the Employment Agreement or any payments which are
construed as being made under the Employment Agreement, ("Agreement
Payments") will be subject to the tax ("Excise Tax") imposed by Section
4999 of the Internal Revenue Code of 1986, as amended ("Code") (or any
similar tax that may hereafter be imposed), Global shall pay to you at
the time specified in Paragraph (c) below an additional amount ("Gross-
up Payment") such that the net amount retained by you, after deduction
of any Excise Tax on the Total Payments (as hereinafter defined) and
any federal, state and local income tax and Excise Tax upon the Gross-
up payment provided for by this paragraph, but before deduction for any
federal, state or local income tax on the Agreement Payments, shall be
equal to the Total Payments.
a) For purposes of determining whether any of the Agreement
Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) any other payments or benefits received or to be
received by you in connection with a change in control (as that term
is defined in Attachment A) of Global or your termination of
employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with Global, any person whose
actions result in a change of control of Global or any person
affiliated with Global or such person) (which, together with the
Agreement Payments, shall constitute the "Total Payments") shall be
treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within
the meaning of Section 280G(b)(1) of the Code shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel
selected by Global's independent auditors such other payments or
benefits (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the base
amount within the meaning of Section 280G(b)(3) of the Code or are
otherwise not subject to the Excise Tax, (ii) the amount of the
September 1, 1995
Page 2
Total Payments which shall be treated as subject to the Excise Tax
shall be equal to the lesser of (a) the total amount of the Total
Payments or (b) the amount of excess parachute payments within the
meaning of, Section 280G(b)(1) of the Code (after applying clause
(i), above), and (iii) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by Global's
independent auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code.
b) For purpose of determining the amount of the Gross-up
Payment, you shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation for the calendar
year in which the Gross-up Payment is to be made and the applicable
state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-up Payment is to
be made, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time the Gross-
up Payment is made, you shall repay to Global at the time that the
amount of such reduction in Excise Tax is finally determined the
portion of the Gross-up Payment attributable to such reduction (plus
the portion of the Gross-up Payment attributable to the Excise Tax
and federal and state and local income tax imposed on the portion of
the Gross-up Payment being repaid by you if such repayment results
in a reduction in Excise Tax and/or a federal and state and local
income tax deduction), plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time the Gross-up Payment is made
(including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-up Payment), Global
shall make an additional Gross-up Payment in respect of such excess
(plus any interest payable with respect of such excess) at the time
that the amount of such excess is finally determined.
c) The Gross-up Payment or portion thereof provided for in
Paragraphs (a) and (b) above shall be paid not later than the
thirtieth day following payment of any amounts under your Employment
Agreement, provided, however, that if the amount of such Gross-up
Payment or portion thereof cannot be finally determined on or before
such day, Global shall pay to you on such day an estimate, as
determined in good faith by Global, of the minimum amount of such
payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code)
as soon as the amount thereof can be determined, but in no event
September 1, 1995
Page 3
later than the forty-fifth day after payment of any amounts under
the Employment Agreement.
In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall
constitute a loan by Global to you, payable on the fifth day after
demand by Global (together with interest at the rate provided in
Section 1274 (b)(2)(B) of the Code).
All Gross-up Payments will be paid to you from the Trust Agreement
between IMC Fertilizer, Inc. and Wachovia Bank Trust Company, N.A.
which has been established to protect payment obligations of Global
under this Agreement. Any repayment due Global from you as a result
of the circumstances described in the last sentence of the preceding
paragraph shall be made by you after you have received such excess
amounts from the Trust.
This Agreement supersedes all previous agreements entered into
between you and Global concerning Gross-up Payments.
Global is pleased to be able to provide you with this additional
assurance of economic protection in the event of a change in
control.
Please sign, date and return one original of this letter.
Sincerely yours,
Wendell F. Bueche
Chairman and Chief Executive Officer
I have read this Agreement and
understand and accept its terms.
Executive
Date-------------------------
September 1, 1995
Page 4
ATTACHMENT A
DEFINITION OF A CHANGE IN CONTROL
"Change in Control" shall mean, and be deemed to have occurred as of
the first day that any one or more of the following conditions have
been satisfied.
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13
(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange
Act, of 15% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock") or, (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition
resulting from the exercise of an exercise, conversion or exchange
privilege unless the security being so exercised, converted or
exchanged was acquired directly from the Company); (B) any
acquisition by the Company, (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of
this definition;
(2) individuals who, as of the date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided that any
individual who becomes a director of the Company subsequent to the
date hereof whose election, or nomination for election by the
Company's stockholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board
shall be deemed a member of the Incumbent Board; and provided
further, that any individual who was initially elected as a
director of the Company as a result of an actual or threatened
election contest,
as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of
any Person other than the Board shall not be deemed a member of
the Incumbent Board;
September 1, 1995
Page 5
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which (i) all or substantially
all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares
of common stock, and the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's
assets either directly or indirectly) in substantially the same
proportions relative to each other as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than: the Company; the
corporation resulting from such Corporation Transaction; and any
Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Company Common Stock of the corporation resulting from
such Corporate Transaction or the combined voting power of the
outstanding securities of such corporation entitled to vote
generally in the election of directors, and (iii) individuals who
were members of the Incumbent Board will constitute at least a
majority of the members of the Board of Directors of the
corporation resulting from such Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company.
EXHIBIT 10.29
EXECUTION COPY
AMENDED AND RESTATED
PARTNERSHIP AGREEMENT
among
IMC-Agrico GP Company
Agrico, Limited Partnership
and
IMC-Agrico MP, Inc.
Dated as of July 1, 1993
(as further amended and restated as of
May 26, 1995)
TABLE OF CONTENTS
Page
ARTICLE I.
Definitions 7
ARTICLE II.
Partnership, Name, Purposes, Powers, Authority to
Bind Partnership, Partnership Property,
Other and/or Competing Businesses,
Principal Place of Business; Registered Office and Agent 8
2.01 Partnership 8
2.02 Name 9
2.03 Purposes 10
2.04 Powers of the Partnership 13
2.05 Partner's Authority 13
2.06 Managing Partner; Operating Partner; Change in
Operating Partner; Authority to Bind Partnership 14
2.07 Partnership Property 16
2.08 Other and/or Competing Businesses 16
2.09 Principal Place of Business; Registered Office
and Agent 24
ARTICLE III.
Contributions to the Partnership 24
3.01 Initial Contributions 24
3.02 Additional Contributions 25
3.03 Failure to Contribute 26
3.04 Assumption of Liabilities Under Contribution
Agreement 29
3.05 Subsequent Capital Contribution 29
ARTICLE IV.
Interests of Partners 30
4.01 Interests of Partners 30
4.02 Capital Accounts 31
4.03 Interest on Capital Accounts 33
4.04 Loans from Partners 34
4.05 Transferred Capital Accounts 34
TABLE OF CONTENTS
(continued
Page
ARTICLE V.
Profit and Loss Sharing;
Allocations for Federal, State and
Local Income Tax Purposes; Cash Distributions;
Suspended Distributions; Reimbursement for Transaction Costs 35
5.01 Allocation of Profits and Losses 35
5.02 Special Allocations 35
5.03 Tax Allocations 37
5.04 Interim Closing of the Books on Transfer 39
5.05 Disagreement Between Partners 39
5.06 Obligations with Respect to Distributable Cash 40
5.07 Distribution of Distributable Cash; Suspended
Distributions 40
5.08 Payment of Transaction Costs 44
ARTICLE VI.
Management 45
6.01 Operation 45
6.02 General Powers of the Managing Partner 46
6.03 Limitations on the Partners; Relations Among
Partners 48
6.04 Policy Committee 49
6.05 Rules of Procedure 56
6.06 Further Management Limitations 56
6.07 Major Decisions 56
6.08 Management of Certain Environmental Liabilities 64
ARTICLE VII.
Encumbrance or Transfer of Partnership Interest 65
7.01 Transfer of Partnership Interest Generally 65
7.02 Transfers of Partnership Interests 66
7.03 Liens 70
7.04 Transfers Upon Triggering Events 71
7.05 Interests in Managing Partner 75
7.06 Certain Conditions of Certain Transfers 75
ARTICLE VIII.
Other Rights of, Duties and Restrictions on the Partners 76
8.01 Indemnification 76
8.02 Contribution 77
TABLE OF CONTENTS
(continued
Page
8.03 Continuing Liability of Withdrawn Partner 78
8.04 Breach of Parent Agreement 79
ARTICLE IX.
Certain Operational Provisions 79
9.01 Financial, Accounting, and Banking Matters 79
9.02 Budget and Approval Authorities 80
9.03 Insurance 82
9.04 Financial and Other Information 83
9.05 Qualifying Income 87
9.06 Work Force; Employee Benefits 89
9.07 Emergency Expenditures; Compliance with Law 93
9.08 No Action Contrary to Contracts or Applicable
Law 94
9.09 Licenses and Permits 96
9.10 Litigation 97
9.11 Payment and Reimbursement of Expenses; Handling
of Partnership Bank Accounts and Funds 97
9.12 Transactions with Affiliates 101
9.13 No Shifting of Cash Flow 103
ARTICLE X.
Accounting Records; Tax Matters 104
10.01 Books and Records 104
10.02 Inspection of Books and Records 105
10.03 Accounting and Taxable Year 106
10.04 Partnership Tax Returns 107
10.05 Partnership Taxes 107
10.06 Tax Matters Partner 108
10.07 Duties of the Tax Matters Partner 108
10.08 Partnership Status; Elections 109
10.09 Tax Reporting 110
10.10 Tax Oversight 112
ARTICLE XI.
Term 114
11.01 Term 114
11.02 Purchase Option Upon Scheduled Expiration of
the Term 114
TABLE OF CONTENTS
(continued
Page
ARTICLE XII.
Dissolution and Winding-Up 116
12.01 Dissolution 116
12.02 Winding-Up 120
12.03 Accounting on Dissolution 120
12.04 Accounting; Allocations of Residual Net Profits
and Residual Net Loss After Dissolutions 121
12.05 Application of Article V in Year of Dissolution 121
12.06 Conversion of Assets to Cash 122
12.07 Distributions in Liquidation 123
12.08 Compliance with Treasury Regulations 124
12.09 Deficit Capital Account Restoration Obligation 125
12.10 Section 708 Termination 125
12.11 Continuation of the Partnership 126
12.12 Waiver of Certain Rights 127
ARTICLE XIII.
Miscellaneous Provisions 127
13.01 Force Majeure 127
13.02 Limitation of Liability of Partners 129
13.03 Assignment 130
13.04 Notices 131
13.05 Governing Law 133
13.06 Choice of Forum 133
13.07 Consent to Jurisdiction 133
13.08 Waiver of Jury Trial 135
13.09 Entire Agreement 135
13.10 Execution in Counterparts 136
13.11 Remedies and Waiver 136
13.12 Headings 137
13.13 Third Party Beneficiaries 137
13.14 Further Assurances 137
13.15 Power of Attorney 137
13.16 Public Announcements 138
AMENDED AND RESTATED PARTNERSHIP AGREEMENT
THIS AMENDED AND RESTATED PARTNERSHIP AGREEMENT (this "Agreement")
was made as of 12:01 a.m. (CDT) on the 1st day of July, 1993 and
further amended and restated as of the 26th day of May, 1995 by and
among (i) IMC-Agrico GP Company ("IMC GPCo"), a Delaware corporation
and a subsidiary of IMC GLOBAL OPERATIONS INC. (formerly IMC
Fertilizer, Inc.), a Delaware corporation ("Operations"), (ii) Agrico,
Limited Partnership (the "FRP Partner"), a Delaware limited partnership
of which FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP, a
Delaware limited partnership ("FRP"), owns a 99.8% limited partnership
interest and Agrico, Inc., a Delaware corporation ("FRP GPCo"), owns a
0.2% general partnership interest, (iii) IMC-Agrico MP, Inc. (the
"Managing Partner"), a Delaware corporation, and (iv) Operations.
R E C I T A L S:
WHEREAS, IMC GPCo, the FRP Partner and the Managing Partner
entered into and formed a general partnership under the Act to engage
in the Phosphate Chemicals Business pursuant to a Partnership Agreement
dated as of June 29, 1993 (the "Original Agreement"); and
WHEREAS, IMC GPCo, the FRP Partner and the Managing Partner
amended and restated the Original Agreement as of July 1, 1993;
WHEREAS, the parties hereto have approved and consented to (i) (a)
the voluntary complete liquidation and dissolution of IMC GPCo, in
accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), (b) the admission of Operations as a Partner in the
Partnership in accordance with the terms of this Agreement, (c) the
assumption by Operations (A) as of the date hereof, of 80% of all
obligations of IMC GPCo incurred by IMC GPCo (x) as a general partner
of the Partnership and (y) pursuant to the terms of the Partnership
Agreement, and (B) upon the completion of such liquidation and
dissolution of IMC GPCo, of all remaining obligations of IMC GPCo, (d)
the transfer to Operations of the assets, properties, rights and
interests of IMC GPCo and (e) the repurchase by IMC GPCo of the
preferred stock of IMC GPCo owned by the Managing Partner at its
liquidation value, in each case in accordance with the Agreement and
Plan of Complete Liquidation and Dissolution dated as of May 26, 1995
(the "IMC GPCo Plan of Liquidation") and (ii) (a) the liquidation of
FRP GPCo or the merger of FRP GPCo with and into Freeport Chemical
Company, a Delaware corporation ("FCC"), and the liquidation of FCC or
the merger of FCC with and into Freeport-McMoRan Inc., a Delaware
corporation ("FTX"), in each case in accordance with the FRP
GPCo/FCC/FTX Merger Documents (the "FRP GPCo/FCC/FTX Mergers"), with
the result that FTX shall become the owner of the 0.2% general
partnership interest in the FRP Partner owned by FRP GPCo immediately
prior to the FRP GPCo/FCC/FTX Mergers and shall have assumed as of the
date of the completion of such mergers all obligations of FRP GPCo and
FCC, (b) the repurchase by FRP GPCo of the preferred stock of FRP GPCo
owned by the Managing Partner at its liquidation value and (c) at the
option of FTX and FRP, the merger, liquidation or dissolution of the
FRP Partner under Delaware Law in the future (or the transfer by the
FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP)
and the admission of FRP or an Affiliate of FRP as a Partner in the
Partnership, in each case in accordance with this Agreement, the
Amended and Restated Parent Agreement dated as of May 26, 1995 among
Operations, FRP, FTX and IMC-Agrico Company, a Delaware general
partnership (the "Parent Agreement"), and the Amendment, Waiver and
Consent Agreement dated as of May 26, 1995 among IMC Global Inc., a
Delaware corporation ("Global"), Operations, IMC GPCo, the Managing
Partner, IMC-Agrico Company, FTX, FRP and the FRP Partner (the
"Amendment, Waiver and Consent Agreement");
WHEREAS, the above described transactions are to be accomplished
in the following manner:
(i) with respect to the liquidation and dissolution of IMC GPCo,
80% of the interests of IMC GPCo shall be transferred to Operations
effective as of May 26, 1995 (except that 100% of IMC GPCo's 50% common
stock interest in the Managing Partner shall be transferred to
Operations as of May 26, 1995 and the preferred stock of IMC GPCo owned
by the Managing Partner shall be repurchased by IMC GPCo at its
liquidation value as of May 26, 1995 (the "Initial IMC GPCo Liquidating
Distribution"), with the remaining 20% of such interests (other than
IMC GPCo's common stock interest in the Managing Partner) to be
transferred to Operations (the "Final IMC GPCo Liquidating
Distribution") in accordance with the following time schedule and the
terms of the IMC GPCo Plan of Liquidation:
(A) if (x) FTX and FRP elect by written notice to the Partners and
the Partnership, after November 30, 1995 and on or prior to June
4, 1996, to cause the merger, liquidation or dissolution of the
FRP Partner (or the transfer by the FRP Partner of its Partnership
Interests to FRP or an Affiliate of FRP) as contemplated by the
Amendment, Waiver and Consent Agreement and (y) such merger,
liquidation or dissolution of the FRP Partner (or such transfer of
its Partnership Interests) is completed not earlier than June 5,
1996 and not later than June 15, 1996, the Final IMC GPCo
Liquidating Distribution shall be undertaken promptly after
June 22, 1997;
(B) if (x) FTX and FRP elect by written notice to the Partners
and the Partnership, after November 30, 1995 and on or prior to
June 4, 1996, to cause the merger, liquidation or dissolution of
the FRP Partner (or the transfer by the FRP Partner of its
Partnership Interests to FRP or an Affiliate of FRP) as
contemplated by the Amendment, Waiver and Consent Agreement, but
(y) such merger, liquidation or dissolution of the FRP Partner (or
such transfer of its Partnership Interests) is not completed by
June 15, 1996, the Final IMC GPCo Liquidating Distribution shall
be undertaken after June 15, 1996 and shall be completed no later
than June 30, 1996; and
(C) if FTX and FRP do not elect, after November 30, 1995 and on
or prior to June 4, 1996, to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP Partner
of its Partnership Interests to FRP or an Affiliate of FRP) as
contemplated by the Amendment, Waiver and Consent Agreement, the
Final IMC GPCo Liquidating Distribution shall be undertaken after
June 4, 1996 and shall be completed by June 30, 1996; and
(ii) with respect to the optional merger, liquidation or
dissolution of the FRP Partner (or the transfer of its Partnership
Interests), such option may be exercised in accordance with the terms
of this Agreement and the Amendment Waiver and Consent Agreement at any
time after November 30, 1995 and on or prior to June 4, 1996; provided
that if FTX and FRP exercise such option on or prior to June 4, 1996,
their right to cause such merger, liquidation or dissolution of the FRP
Partner (or such transfer of its Partnership Interests) at that time
will be forfeited unless such merger, liquidation or dissolution of the
FRP Partner (or such transfer of its Partnership Interests) is
completed not earlier than June 5, 1996 and not later than June 15,
1996; provided, further, that if after November 30, 1995 and on or
prior to June 4, 1996 FTX and FRP exercise such option, but such
merger, liquidation or dissolution of the FRP Partner (or such transfer
of its Partnership Interests) is not completed on or prior to June 15,
1996, FTX and FRP will have an additional option to cause such merger,
liquidation or dissolution of the FRP Partner (or such transfer of its
Partnership Interests) at any time after July 15, 1997; and provided,
further, that if after November 30, 1995 and on or prior to June 4,
1996, FTX and FRP do not exercise their option to cause such merger,
liquidation or dissolution of the FRP Partner (or such transfer of its
Partnership Interests), FTX and FRP will have the right to exercise
such option at any time after July 15, 1997;
provided, however that, notwithstanding the provisions of this
paragraph (ii), FTX and FRP may merge, liquidate or dissolve the FRP
Partner (or transfer its Partnership Interests to FRP or an Affiliate
of FRP) in accordance with the terms of the Amendment, Waiver and
Consent Agreement at any time so long as FTX and FRP bear, and assume
liability for, any expense, cost or loss (including any increase in
taxes, other than any increase in income taxes which arises solely from
the timing of the reporting of income, deductions and credits
attributable to the normal business activities of the Partnership)
suffered by the Partnership, any other Partner or any of their Related
Persons (as defined below) resulting therefrom;
WHEREAS, the IMC GPCo Liquidation, the FRP GPCo/FCC/FTX Mergers
and such optional merger, liquidation or dissolution of the FRP Partner
(or such transfer of its Partnership Interests) make it necessary and
desirable to amend and restate certain provisions of the Partnership
Agreement as originally entered into, and as previously amended and
restated, by the parties in order to, among other things, admit
Operations as a new Partner; and
WHEREAS, the Partners (as hereinafter defined) believe that
through the combination of the Contributed Businesses of IMC and FRP as
contemplated by the Contribution Agreement and the management of the
business and affairs of the Partnership in accordance with the terms
hereof, they can create certain synergies.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements herein set forth and of other good
and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I.
Definitions
Capitalized terms used in this Agreement which are not otherwise
defined herein shall have the meanings given to such terms in Exhibit A
hereto. During the period subsequent to the Initial IMC GPCo
Liquidating Distribution and prior to the Final IMC GPCo Liquidating
Distribution (the "IMC GPCo Liquidation Period"), the term "IMC
Partner" (and correlative terms, such as "Non-Managing Partner",
relating to the "IMC Partner") as used herein, shall refer to IMC GPCo
and Operations, collectively and, unless otherwise provided herein,
actions to be taken by the IMC Partner during the IMC GPCo Liquidation
Period shall be taken by Operations and IMC GPCo acting jointly;
subsequent to the Final IMC GPCo Liquidating Distribution, the term
"IMC Partner" (and such correlative terms) as used herein shall refer
to Operations, and Operations shall take any such actions acting alone;
and at all such times, the term "IMC Partner" (and such correlative
terms) as used herein shall refer to any other Affiliate of Operations
which succeeds to the Partnership Interests of IMC GPCo or Operations
by means of the purchase, transfer, assignment or other conveyance or
succession of such Partnership Interests in accordance with the terms
of this Agreement. The IMC Partner, as so defined, the FRP Partner and
the Managing Partner are sometimes hereinafter referred to individually
as a "Partner" and collectively as the "Partners."
ARTICLE II.
Partnership, Name, Purposes, Powers, Authority to
Bind Partnership, Partnership Property,
Other and/or Competing Businesses.
2.01 Partnership. The Partners have hereby formed a general
partnership under the Act on the terms and for the purposes set forth
in this Agreement and, pursuant to this Amended and Restated
Partnership Agreement, as further amended and restated as of May 26,
1995, IMC GPCo, the FRP Partner and the Managing Partner, as Partners,
hereby agree: (i) in accordance with the terms of Section 13.09
herein, to admit Operations as a Partner of the Partnership, upon the
completion of the Initial IMC GPCo Liquidating Distribution; (ii) upon
the completion of the Final IMC GPCo Liquidating Distribution, to the
withdrawal of IMC GPCo as a Partner in the Partnership, without, in
accordance with Section 12.11 herein, such withdrawal constituting a
Dissolution Event, unless such dissolution is required by applicable
law; (iii) if FTX and FRP choose to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP Partner of
its Partnership Interests to FRP or an Affiliate of FRP) and in
accordance with the terms of the Amendment, Waiver and Consent
Agreement, upon the completion of such merger, liquidation or
dissolution (or such transfer of the Partnership Interests), to admit
FRP or an Affiliate of FRP as a Partner of the Partnership in
accordance with the terms of Section 13.09 herein and to the withdrawal
of the FRP Partner as a Partner in the Partnership, without, in
accordance with Section 12.11 herein, such withdrawal constituting a
Dissolution Event, unless such dissolution is required by applicable
law.
2.02 Name. The Partnership is to be known as "IMC-Agrico
Company" or such other name as the Partners shall unanimously select.
The Partners shall execute and file and/or publish all assumed name
statements and certificates required by law to be filed and/or
published in connection with the operation of the Partnership.
2.03 Purposes. The purposes of the Partnership shall be to
engage for profit in the Phosphate Chemicals Business and to engage for
profit in any and all other activities reasonably related to or
incidental to the Phosphate Chemicals Business, and, subject to Section
9.05, to engage for profit in any other business, whether or not
related or incidental thereto, as determined by the Policy Committee
from time to time. Without limiting the generality of the foregoing,
the Partnership may, among other things:
(a) acquire, develop, construct, own, manage and operate
phosphate rock mining operations and production facilities,
phosphate chemical facilities, ammonia and urea fertilizer
facilities and uranium oxide facilities;
(b) acquire, by purchase, lease, sublease, license,
royalty agreement or otherwise, land and phosphate mineral rights
to the extent related to the Phosphate Chemicals Business;
(c) develop mines and conduct mining operations in and on
phosphate rock reserves and deposits, and construct, own, manage
and operate phosphate rock, chemical, ammonia, urea and uranium
extraction plants related thereto;
(d) acquire by purchase, lease, sublease, license or
otherwise, such machinery, equipment, vehicles and other
facilities as may be necessary or advisable to own, manage,
operate or otherwise engage for profit in the Phosphate Chemicals
Business or any other business of the Partnership at the time
permitted hereunder;
(e) subject to Section 9.12, enter into such construction,
engineering, operating, management, mining, marketing, selling,
supply or distributorship agreements, arrangements or
understandings with third parties as may be necessary or advisable
to own, manage, operate or otherwise engage for profit in the
Phosphate Chemicals Business or any other business of the
Partnership at the time permitted hereunder (and such agreements,
arrangements or understandings may be (i) with Affiliates of any
Partner so long as they comply with the terms of Section 9.12 and
(ii) with or through trade associations, including, without
limitation, the Phosphate Chemicals Export Association, a Webb-
Pomerene Act organization ("PhosChem"), and the Phosphate Rock
Export Association, a Webb-Pomerene Act organization
("PhosRock"));
(f) own, lease, rent and/or operate and/or make use of
railcars, railway lines and dock loading facilities and vessels
and otherwise arrange for the transportation of the Partnership's
inventory, supplies, materials, equipment, phosphate rock,
phosphate chemicals, uranium oxide, ammonia, urea and uranium
products and any other products produced from, or used in, the
operation of the Phosphate Chemicals Business by such means as may
be necessary or advisable;
(g) sell (in domestic or foreign markets) such phosphate
rock, phosphate chemicals, uranium oxide, ammonia, urea and
uranium products and related products and engage in marketing
activities incidental thereto (either directly or through third
parties, including, without limitation, trade associations, such
as PhosChem and PhosRock);
(h) form, organize, join and participate in trade
associations related to the Phosphate Chemicals Business,
including, without limitation, PhosChem and PhosRock;
(i) manage and operate agricultural, farming and livestock
businesses as an incidental activity relating to holding lands
originally acquired or leased by the Partnership or one of the
Partners' Affiliates as phosphate rock reserves;
(j) subject to Section 9.12, perform all other activities,
including the borrowing of money and the mortgaging of real or
personal property of the Partnership in connection therewith, as
are necessary or incidental to the business or operations of the
Partnership; and
(k) subject to Sections 9.05 and 9.12, engage in such
other businesses and activities, whether or not related to or
incidental to the Phosphate Chemicals Business, as determined by
the Policy Committee from time to time.
2.04 Powers of the Partnership. Subject to the restrictions set
forth in this Agreement, the Partnership shall have the power to
exercise all the powers and privileges granted by this Agreement and by
law, together with any powers incidental thereto, so far as such powers
and privileges are necessary or appropriate for the conduct, promotion
or attainment of the purposes of the Partnership. Except as otherwise
expressly provided in this Agreement, the rights and obligations of the
Partners and the administration and termination of the Partnership
shall be governed by the Act.
2.05 Partner's Authority. Except as otherwise provided in this
Agreement, no Partner shall have any authority to act for, or to assume
any obligations or responsibilities on behalf of, any other Partner or
the Partnership.
2.06 Managing Partner; Operating Partner; Change in Operating
Partner; Authority to Bind Partnership.
(a) IMC-Agrico MP, Inc. is hereby designated as the
managing partner of the Partnership (the "Managing Partner"). The
Managing Partner shall, subject to the provisions of this
Agreement, have exclusive authority and responsibility to manage
the business and affairs of the Partnership and to make all
decisions regarding the business and affairs of the Partnership.
The Managing Partner is a special purpose corporation formed
solely for the purpose of acting as Managing Partner of the
Partnership. Accordingly, the Managing Partner shall not, without
the consent of both the IMC Partner and the FRP Partner, engage in
any business other than acting as the Managing Partner hereunder.
(b) As used herein, the term "Operating Partner" shall
mean the Non-Managing Partner, initially the IMC Partner (which,
for purposes of identifying the Operating Partner, shall mean
Operations), which is entitled to elect a majority of the
directors of the Managing Partner at any given time and "Non-
Operating Partner" shall mean the other Non-Managing Partner at
that time. If a Material Breach Event shall have occurred and not
been cured prior to the delivery of the notice of exercise
described below, then (if none of the Non-Operating Partner or any
of its direct or indirect parent entities is Bankrupt) the Non-
Operating Partner shall have the right, upon written notice of the
exercise of such right, to become the Operating Partner and, if
such written notice is delivered exercising that right, the
Operating Partner shall become the Non-Operating Partner. In the
event of a Material Breach Event arising out of a Bankruptcy of
the Operating Partner or any of its direct or indirect parent
entities, prior to exercising its right to become the Operating
Partner, the Non-Operating Partner will reasonably evaluate the
circumstances surrounding such Bankruptcy, giving consideration to
the effect of the Bankruptcy on the Partnership and on the
Managing Partner and its ability to perform its obligations as
Managing Partner, but will have the right in its sole discretion
to elect to become the Operating Partner in accordance with the
terms of this Section 2.06(b). The terms of this Section 2.06(b)
shall similarly apply to any subsequent Material Breach Event or
Events.
(c) As between the Partnership and any other Person (other
than a Partner or its Affiliates), any action taken by the
Managing Partner on behalf of the Partnership shall constitute the
act of and serve to bind the Partnership. In dealing with the
Managing Partner acting on behalf of the Partnership, no Person
(other than the Non-Managing Partners and their respective
Affiliates) shall be required to inquire into the authority of the
Managing Partner to bind the Partnership. Without in any way
limiting the rights of the Partners hereunder as between each
other, Persons dealing with the Managing Partner are entitled to
rely conclusively upon the power and authority of the Managing
Partner as set forth in this Section 2.06.
2.07 Partnership Property. All real and personal property,
whether tangible or intangible (including, without limitation, all
permits and licenses), owned by or granted to or held by the
Partnership shall be deemed to be owned by or granted to or held by the
Partnership as an entity, and no Partner, individually, shall have any
ownership or right to use any such property.
2.08 Other and/or Competing Businesses.
(a) Except as otherwise provided herein, nothing contained
in this Agreement shall be deemed to restrict in any way the
freedom of any Partner or of any Affiliate of any Partner to
conduct, independently of the Partnership, any business or
activity whatsoever without any accountability to the Partnership
or to the other Partners.
(b) Except as set forth in this Section 2.08(b) and in
Section 2.0 of the Parent Agreement, each Partner agrees that
neither it nor any of its Affiliates will, directly or indirectly,
anywhere in the world, own, manage, operate, control or invest in
any business that is engaged in the Phosphate Chemicals Business
without first complying with the provisions of this Section
2.08(b), it being understood that (i) purchases and resales of
phosphate chemicals in Canada by Affiliates of the IMC Partner in
volumes not materially greater than the amounts indicated on
Schedule 9.12 hereof and (ii) the conduct of the business of the
Rainbow Division of Operations substantially as currently
conducted, shall not constitute a breach or violation of this
Section 2.08. Notwithstanding the foregoing, any Person that
acquires or succeeds to (or whose Affiliate acquires or succeeds
to) the Partnership Interest (or any portion thereof) of any
Partner shall not be subject to the provisions of this Section
2.08(b) with respect to any business conducted by such Person or
its Affiliates that is conducted thereafter substantially as
conducted on the date of such acquisition or succession. If any
Affiliate of either Non-Managing Partner desires to accept an
opportunity to own, manage, operate, control or invest in any
business that is engaged, in whole or in part, in the Phosphate
Chemicals Business, the Non-Managing Partner affiliated with such
Person (the "Presenting Partner") will first offer such
opportunity to the Partnership, it being understood that two (2)
Policy Committee Representatives or Alternates (or any combination
thereof) of the Non-Managing Partner other than the Presenting
Partner (the "Exercising Partner") may elect, on behalf of the
Partnership, to pursue such opportunity within thirty (30) days
following the presentation of such opportunity to the Partnership.
The Representatives or Alternates (or any combination thereof) of
the Exercising Partner shall notify the Presenting Partner in
writing of such election, on behalf of the Partnership, to pursue
or not to pursue such opportunity before the expiration of such
thirty (30) day period. If the Exercising Partner fails to give
the Presenting Partner notice of such election within such thirty
(30) day period, the Exercising Partner shall be deemed to have
elected, on behalf of the Partnership, not to pursue such
opportunity. If the Partnership so elects to pursue such
opportunity, the Partnership shall reimburse the Presenting
Partner or its Affiliates in an amount equal to the direct costs
incurred by the Presenting Partner or its Affiliates in connection
with developing such opportunity prior to the date of the
Partnership's election to pursue such opportunity and the
opportunity will be considered a Capital Project. If the
Partnership does not so elect (or is so deemed not to have
elected) to pursue such opportunity or, if at any time the
Partnership ceases to pursue the opportunity in good faith, one or
more Affiliates of the Presenting Partner may then elect to pursue
such opportunity. If FRP desires to expand its existing
operations (or pursue other business opportunities which are part
of or related to the Phosphate Chemicals Business) in Sri Lanka or
to pursue the opportunities described in a memorandum of
understanding between FTX and Ercros, S.A. relating to FESA and
ENFERSA, it shall first offer such opportunities to the
Partnership in accordance with the preceding provisions of this
Section 2.08(b); provided that if the Partnership elects to pursue
any of such opportunities, the Partnership shall reimburse FRP in
an amount equal to the direct costs incurred by FRP in connection
with developing such opportunity prior to the date of the
Partnership's election to pursue such opportunity.
Notwithstanding the foregoing, nothing contained in this Section
2.08(b) shall prevent one or more Affiliates of any Partner from
(A) owning, directly or indirectly, an aggregate of less than five
percent (5%) of the common stock of, or other ownership interest
in, any Person engaged in the Phosphate Chemicals Business or (B)
acquiring (by stock purchase, asset purchase, merger,
consolidation or otherwise) any Person engaged in the Phosphate
Chemicals Business so long as (I) the revenues derived by such
Person from its Phosphate Chemicals Business represent (and can
reasonably be expected to continue to represent) less than ten
percent (10%) of the total revenues of such Person and (II) the
Person acquiring such Person (the "Acquiring Person") either
offers to sell such Person's Phosphate Chemicals Business to the
Partnership at its fair market value or sells such Person's
Phosphate Chemicals Business to an independent third Person, it
being understood that, in the case of this clause (B), the
Acquiring Person may continue to own and operate, directly or
indirectly, such acquired Person's Phosphate Chemicals Business if
it has offered to sell such Phosphate Chemicals Business to the
Partnership in accordance with this sentence and (x) if any
Affiliate of the FRP Partner is the Acquiring Person, two (2)
Policy Committee Representatives or Alternates of the IMC Partner
(or any combination thereof) fail, on behalf of the Partnership,
to accept such offer within thirty (30) days of such offer to
sell, or (y) if any Affiliate of the IMC Partner is the Acquiring
Person, two (2) Policy Committee Representatives or Alternates of
the FRP Partner (or any combination thereof) fail, on behalf of
the Partnership to accept such offer within thirty (30) days of
such offer to sell. Each Partner acknowledges and agrees that the
covenants contained in this Section 2.08(b) have been negotiated
in good faith by the parties hereto, and are reasonable and are
not more restrictive or broader than necessary to protect the
interests of the Partners hereto, and would not achieve their
intended purpose if they were on different terms or for periods of
time shorter than the periods of time provided herein or were
applied in more restrictive geographical areas than are provided
herein. Each Partner further acknowledges and agrees that the
business of the Partnership is highly competitive, that no Partner
hereto would enter into this Agreement but for the covenants
contained in this Section 2.08(b) and that such covenants are
essential to protect the value of the business of the Partnership.
If any provision of this Section 2.08(b) is held to be
unenforceable because of the scope or area of its applicability,
the court making such determination shall have the power to modify
such scope and area or either of them, and such provision shall
then be applicable in such modified form. Each Partner and its
Affiliates shall be relieved of all obligations under this Section
2.08(b) on and after the second anniversary of the date that such
Partner and its Affiliates cease to own an interest in the
Partnership.
(c) If either Non-Managing Partner (the "Developing
Partner") desires to pursue, or to cause the Partnership to
pursue, a Real Estate Development Project, it shall present such
Real Estate Development Project to the Partnership, it being
understood that two (2) Representatives or Alternates (or any
combination thereof) of the Non-Managing Partner other than the
Developing Partner (the "Electing Partner") may elect, on behalf
of the Partnership, to pursue such Real Estate Development Project
within sixty (60) days following the completion of such
presentation. The Electing Partner shall notify the Developing
Partner in writing of such election, on behalf of the Partnership,
to pursue or not to pursue such Real Estate Development Project
before the expiration of such sixty (60) day period. If the
Electing Partner fails to give the Developing Partner notice of
such election within such sixty (60) day period, the Electing
Partner shall be deemed to have elected, on behalf of the
Partnership, not to pursue such Real Estate Development Project.
If the Partnership so elects to pursue such Real Estate
Development Project, the Electing Partner shall promptly reimburse
the Developing Partner for an aggregate of seventy-five percent
(75%) of the direct costs incurred by the Developing Partner or
its Affiliates in connection with developing such Real Estate
Development Project prior to the date of such election. If the
Partnership does not so elect (or is so deemed not to have
elected) to pursue such Real Estate Development Project, then the
Developing Partner shall have the option, for a period of sixty
(60) days, to deliver a written notice to each other Partner of
its election to either (i) purchase the real property which is to
be the subject of the Real Estate Development Project from the
Partnership at its fair market value or (ii) cause the Partnership
to make a distribution in kind to the Developing Partner of the
real property which will be the subject of the Real Estate
Development Project. If the Developing Partner elects the
purchase option set forth in clause (i) of the preceding sentence,
then (A) the Partners shall negotiate in good faith to determine
the fair market value of such real property (and if they cannot
agree on such value within sixty (60) days following the notice
referred to in the preceding sentence, the fair market value shall
be determined in accordance with the Real Estate Appraisal
Procedure, the cost of which shall be paid by the Developing
Partner) and (B) the Partnership shall, within thirty (30) days of
the date such fair market value is finally determined, sell such
real property to the Developing Partner for a purchase price,
payable at the closing of such sale in immediately available
funds, equal to its fair market value. If the Developing Partner
elects to cause the Partnership to make a distribution in kind
pursuant to clause (ii) of the second preceding sentence the
Partnership shall make, on or before the thirtieth (30th) day
following the date of such election, (1) a distribution in kind to
the Developing Partner, of the real property which is the subject
of the Real Estate Development Project, (2) a distribution in kind
to the Electing Partner of a Comparable Property and (3) a
proportional distribution in cash to the Managing Partner. For
purposes of this Section 2.08(c), "Comparable Property" shall mean
similarly situated real property as determined by the Managing
Partner, reasonably acceptable to the Policy Committee, having a
fair market value such that the ratio of the fair market value of
such real property compared to the fair market value of the real
property being distributed to the Developing Partner is equal to
the ratio of (x) the Capital Interest of the Partner receiving the
distribution in kind pursuant to clause (2) of the preceding
sentence to (y) the Capital Interest of the Developing Partner, in
each case at the time of such distribution. Each Partner and its
Affiliates shall be relieved of all obligations under this Section
2.09(c) on and after the date that such Partner and its Affiliates
cease to own an interest in the Partnership.
2.09 Principal Place of Business; Registered Office and Agent.
The principal place of business of the Partnership shall be located at
2100 Sanders Road, Northbrook, Illinois 60062 or at such other place or
places as the Policy Committee may from time to time determine. The
registered office of the Partnership shall be 2100 Sanders Road,
Northbrook, Illinois 60062 and the registered agent of the Partnership
at such address shall be the Managing Partner; provided that the
Managing Partner may designate such other address or agent as it
determines appropriate from time to time.
ARTICLE III.
Contributions to the Partnership
3.01 Initial Contributions. On the Closing Date, the
contributions are being made to the Partnership by or on behalf of, and
the Partnership will assume certain liabilities of, the Partners and
their Affiliates, all as provided in the Contribution Agreement.
Immediately after such contribution, the agreed value of each Partner's
Capital Account shall be as follows (it being understood that such
agreed values shall not reflect, and shall not be adjusted to reflect,
any adjustments or payments contemplated by the Contribution
Agreement):
IMC Partner $748,993,000
FRP Partner $650,993,000
Managing Partner $
14,000
3.02 Additional Contributions. As and when the Policy Committee
(or, if not the Policy Committee, the CEOs but not the Managing
Partner) determines, in accordance with the terms of Section 6.07(a) or
(b), that the Partnership requires cash from time to time, each of the
IMC Partner (or, during the IMC GPCo Liquidation Period, each of
Operations and IMC GPCo) and the FRP Partner hereby agrees that it
shall make cash contributions to the Partnership in an amount equal to
the product of (i) the amount of the Partnership's cash requirement as
determined by the Policy Committee or the CEOs, but not the Managing
Partner, in accordance with the terms of Section 6.07(a) or (b), by the
Policy Committee (or, if not by the Policy Committee, by the CEOs),
multiplied by (ii) a fraction, the numerator of which is such Partner's
Current Interest and the denominator of which is the aggregate Current
Interests of the Non-Managing Partners; provided that if the Policy
Committee (or, if not the Policy Committee, the CEOs) determines, in
accordance with the terms of Section 6.07(a) or (b), that the cash
required by the Partnership is to be used for a Capital Project, each
of the IMC Partner (or, during the IMC GPCo Liquidation Period, each of
Operations and IMC GPCo) and the FRP Partner shall make cash
contributions to the Partnership either (x) in an amount equal to the
product of (1) the cash required by the Partnership for such Capital
Project as determined, in accordance with the terms of Section 6.07(a)
or (b), by the Policy Committee (or, if not by the Policy Committee, by
the CEOs), multiplied by (2) a fraction, the numerator of which is the
Capital Interest of such Partner at such time as the Capital Project
will be placed in service and the denominator of which is the aggregate
Capital Interests of the Non-Managing Partners at such time as the
Capital Project will be placed in service, or (y) in such other amount
as the Policy Committee (or, if not the Policy Committee, the CEOs) may
determine in accordance with the terms of Section 6.07(a) or (b). Once
the Policy Committee (or, if not the Policy Committee, the CEOs)
approves, in accordance with the terms of Section 6.07(a) or (b), an
additional cash contribution, the Managing Partner shall have, subject
to any terms or conditions specified by the Policy Committee (or, if
not by the Policy Committee, by the CEOs) at the time it so approves
such additional cash contribution, the reasonable discretion to
determine the timing of such cash contribution giving due consideration
to the Partnership's cash needs as determined by the Managing Partner.
The Managing Partner shall notify the IMC Partner (or, during the IMC
GPCo Liquidation Period, each of Operations and IMC GPCo) and the FRP
Partner at least ten (10) days in advance of the time each such cash
contribution is required to be made to the Partnership.
3.03 Failure to Contribute. If either the IMC Partner (or,
during the IMC GPCo Liquidation Period, either of Operations or IMC
GPCo) or the FRP Partner (in any such case, the "Non-Contributing
Partner") fails, in whole or in part, to make any cash contribution or
defaults, in whole or in part, in any other obligation to pay money
under this Agreement within fifteen (15) days of giving of a due notice
by either of the other Partners to the Non-Contributing Partner that
such cash contribution is due or that the Non-Contributing Partner has
defaulted in any other such obligation hereunder, the IMC Partner (with
respect to circumstances in which the FRP Partner is the Non-
Contributing Partner) or the FRP Partner (with respect to circumstances
in which the IMC Partner (or, during the IMC GPCo Liquidation Period,
either of Operations or IMC GPCo) is the Non-Contributing Partner), as
the case may be (in either such case, the "Contributing Partner"),
shall have the right to advance directly to the Partnership such
additional cash contribution, or portion thereof, or such other payment
of money, or portion thereof, as the Non-Contributing Partner has
failed to make or defaulted on (the "Non-Contributing Partner's
Share"), and such advance, together with a proportionate amount of the
corresponding cash contribution or other payment, if any, made by such
Contributing Partner, shall be deemed a loan by the Contributing
Partner to the Partnership (the "Partner Loan"). A Partner Loan shall
bear interest at the rate equal to the lower of: (i) the maximum rate
allowed by law; or (ii) five (5) percentage points over the Prime Rate.
The Partner Loan shall be recouped and otherwise repaid from all funds
which would otherwise have been available to make distributions which
the Partners would otherwise be entitled to receive from the
Partnership but for this Section 3.03, all of which shall instead be
paid by the Partnership to the Contributing Partner and applied to the
payment of the Partner Loan and all interest thereon, until the same
shall have been paid in full. It is understood, however, that to the
extent the principal and interest of a Partner Loan are not repaid in
full by the Partnership from all funds which would otherwise have been
available to make distributions (including any distributions pursuant
to Section 12.07(b)) to the Partners, the Non-Contributing Partner
shall be obligated to repay an amount equal to the Non-Contributing
Partner's Share of the outstanding balance of the principal and
interest of such Partner Loan upon commencement of the winding up of
the Partnership in accordance with Section 12.02. Any amount which
would otherwise have been available to make distributions from the
Partnership that is applied to any Partner Loan shall be credited first
to any interest then due on such Partner Loan, and the balance of the
distribution shall be credited against the outstanding principal
balance of such Partner Loan.
The exercise of the right to make a Partner Loan shall be in
addition to any other rights or remedies that the Contributing Partner
may have under this Agreement or at law or in equity arising from the
Non-Contributing Partner's (i) failure to make the required cash
contribution or (ii) default in any other obligation to pay money.
3.04 Assumption of Liabilities Under Contribution Agreement. In
accordance with the terms of this Agreement, the IMC Partner has
assumed all of the liabilities and obligations of Operations, and the
FRP Partner has assumed all of the liabilities and obligations of FRP,
in each case under and pursuant to the Contribution Agreement and each
such Partner hereby confirms its agreement to perform such assumed
liabilities and obligations as if it were a party to such agreement.
Any amounts payable by either Non-Managing Partner under the
Contribution Agreement shall be deemed amounts payable by such Non-
Managing Partner hereunder. The Partners agree that (i) any payment by
the IMC Partner or the FRP Partner pursuant to the terms of this
Section 3.04 shall satisfy such amounts payable by Operations or FRP,
as the case may be, or their Affiliates under the Contribution
Agreement and (ii) any payment by Operations or FRP, as the case may
be, or their Affiliates under the Contribution Agreement shall satisfy
such amounts payable by the IMC Partner or the FRP Partner under this
Section 3.04. Nothing herein shall be deemed to release Operations or
FRP (or any of their Affiliates) from any obligations they may have
under the Contribution Agreement.
3.05 Subsequent Capital Contribution. The IMC Partner and the
FRP Partner each may, after the Closing Date, contribute to the
Partnership their respective organizational costs, as defined in
Section 709 of the Code, incurred in forming the Partnership.
ARTICLE IV.
Interests of Partners
4.01 Interests of Partners.
(a) The "Current Interests" of the Partners shall be as
follows:
Fiscal Year Ending IMC FRP Managing
June 30 Partner Partner Partner
1994 41.3995% 58.5995% 0.001%
1995 44.9995% 54.9995% 0.001%
1996 46.8995% 53.0995% 0.001%
1997 46.4995% 53.4995% 0.001%
1998 and 59.3995% 40.5995% 0.001%
thereafter
During the IMC GPCo Liquidation Period, the "Current Interests" of
Operations and IMC GPCo shall be equal to eighty percent (80%) and
twenty percent (20%), respectively, of the "Current Interests" of the
IMC Partner set forth above.
(b) The "Capital Interests" of the Partners shall be as
follows:
Fiscal Year Ending IMC FRP Managing
June 30 Partner Partner Partner
1994 53.4995% 46.4995% 0.001%
1995 54.8995% 45.0995% 0.001%
1996 56.3995% 43.5995% 0.001%
1997 57.7995% 42.1995% 0.001%
1998 and 59.3995% 40.5995% 0.001%
thereafter
During the IMC GPCo Liquidation Period, the "Capital Interests" of
Operations and IMC GPCo shall be equal to eighty percent (80%) and
twenty percent (20%), respectively, of the "Capital Interests" of the
IMC Partner set forth above.
4.02 Capital Accounts.
(a) A separate Capital Account shall be established and
maintained in respect of each Partner.
(b) The Capital Accounts of the Partners shall be credited
with (i) the amount of cash and the fair market value of other
property (net of liabilities that the Partnership is considered to
assume or take subject to under Section 752 of the Code)
contributed by such Partner to the capital of the Partnership and
(ii) allocations to such Partner pursuant to Sections 5.01 and
5.02 of income (or items thereof) including tax-exempt income and
gain. The Capital Accounts of each of the Partners shall be
debited with (i) the amount of cash and the fair market value of
other property distributed to such Partner (net of liabilities
that such Partner is considered to assume or take subject to under
Section 752 of the Code); (ii) allocations to such Partner of
expenditures of the Partnership described in Section 705(a)(2)(B)
of the Code; and (iii) allocations to such Partner pursuant to
Sections 5.01 and 5.02 of deduction or loss (or items thereof).
If any property other than cash is distributed to any Partner, the
Capital Accounts of the Partners shall be adjusted as if the
property had instead been sold by the Partnership for a price
equal to its fair market value, with the resulting gain or loss
allocated among the Partners pursuant to Sections 5.01 and 5.02
and the proceeds thereof distributed.
(c) For purposes of computing the amount of any item of
income, gain, deduction or loss to be reflected in the Capital
Accounts of the Partners, the determination, recognition and
classification of such items shall be the same as its
determination, recognition and classification for Federal income
tax purposes; except that:
(i) Any deductions for depreciation, depletion, cost
recovery or amortization attributable to property
contributed by the Partners to the Partnership or
attributable to Partnership property adjusted pursuant to
Section 4.02(d) shall be determined as if the adjusted
basis of such property on the date it was contributed or
adjusted was equal to the fair market value of the
property; and
(ii) Any income, gain or loss attributable to the
taxable disposition of any property contributed by the
Partners or attributable to Partnership property adjusted
pursuant to Section 4.02(d) shall be determined as if the
adjusted basis of the property as of the date of
disposition was equal to the fair market value of the
property at the time of contribution or adjustment reduced
by all depreciation, cost recovery and amortization
deductions charged to the Partners' Capital Accounts with
respect to such property.
(d) Upon the issuance of additional Partnership interests
for cash or property, the Capital Accounts of the Partners and the
value of all Partnership assets for purposes of Section 4.02(c)
shall be adjusted upwards or downwards to reflect any unrealized
gain or unrealized loss attributable to each asset as if such
assets had been sold immediately prior to such issuance and such
gain or loss had been allocated to the Partners, at such time,
pursuant to Sections 5.01 and 5.02.
4.03 Interest on Capital Accounts. Except as specifically
provided herein, no Partner shall be entitled to any interest on its
Capital Account or its contributions to the capital of the Partnership,
nor shall any Partner have the right to demand or receive the return of
all or any part of its Capital Account or its contributions to the
capital of the Partnership.
4.04 Loans from Partners. Loans by a Partner to the Partnership
(including, without limitation, any Partner Loan) shall not be
considered capital contributions.
4.05 Transferred Capital Accounts. In the event that any Partner
transfers all or a portion of its Partnership Interest in accordance
with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor Partner to the extent such Capital
Account relates to the transferred Partnership Interest or portion
thereof. In accordance with the terms of the preceding sentence,
Operations shall succeed to 80% of the Capital Account of IMC GPCo as
of the date of the Initial IMC GPCo Liquidating Distribution and
Operations shall succeed to the remaining 20% of the Capital Account of
IMC GPCo as of the date of the Final IMC GPCo Liquidating Distribution.
If FTX and FRP elect to merge, liquidate or dissolve the FRP Partner
(or transfer its Partnership Interests) in accordance with the terms of
the Amendment, Waiver and Consent Agreement, the successor to the FRP
Partner, as a Partner to the Partnership, shall succeed to the Capital
Account of the FRP Partner, as provided in the first sentence of this
Section.
ARTICLE V.
Profit and Loss Sharing;
Allocations for Federal, State and
Local Income Tax Purposes; Cash Distributions;
Suspended Distributions; Reimbursement for Transaction Costs
5.01 Allocation of Profits and Losses. Except as provided in
Section 5.02, 5.03 or 12.05, for purposes of maintaining the Capital
Accounts and in determining the rights of the Partners among
themselves, each item of income, gain, loss and deduction (computed in
accordance with Section 4.02(c)) shall be allocated to the Partners'
Capital Accounts as a part of the Residual Net Profit or Residual Net
Loss for the year in accordance with the Partners' Capital Interests
for the following year.
5.02 Special Allocations.
(a) Transaction Costs attributable to the transactions
contemplated by the Contribution Agreement shall be allocated
fifty percent (50%) to IMC GPCo and fifty percent (50%) to the FRP
Partner.
(b) Any gain or loss attributable to a Capital Transaction
shall be allocated to the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations and IMC GPCo) and the FRP Partner
in accordance with their respective Capital Interests for the
fiscal quarter of the Partnership in which the effective date of
the Capital Transaction occurs.
(c) If the IMC Partner's (or, during the IMC GPCo
Liquidation Period, Operations' and IMC GPCo's) or the FRP
Partner's share of Current Interest Cash for any year exceeds that
Partner's share of Target Cash for that year, such Partner shall
be allocated an amount of gross income equal to the excess.
(d) If the IMC Partner's (or, during the IMC GPCo
Liquidation Period, Operations' and IMC GPCo's) or the FRP
Partner's share of Current Interest Cash for any year is less than
that Partner's share of Target Cash for that year, such Partner
shall be allocated an amount of gross loss equal to the
difference.
(e) The gross income or loss allocated to any Partner
under Section 5.02(c) or 5.02(d) shall be considered to consist of
each item of Partnership income or loss (except depreciation,
depletion and amortization), as the case may be, in the same
proportion that such items bear to total Partnership income or
loss.
(f) For purposes of Sections 5.02(c) and 5.02(d), the IMC
Partner's (or, during the IMC GPCo Liquidation Period, Operations'
and IMC GPCo's) or the FRP Partner's percentage of Target Cash for
any year shall be equal to such Partner's Current Interest for
such year. For purposes of Sections 5.02(c) and 5.02(d), the IMC
Partner's (or, during the IMC GPCo Liquidation Period, Operations'
and IMC GPCo's) or the FRP Partner's "share of Target Cash" for
any year shall be equal to (i) such Partner's percentage of Target
Cash for such year, as determined pursuant to the preceding
sentence multiplied by (ii) Target Cash for such year.
(g) All losses and deductions associated with the
Partners' organizational costs shall be allocated proportionally
to the Partners based on their contribution of such costs pursuant
to Section 3.05.
5.03 Tax Allocations.
(a) Except as otherwise provided in this Agreement, for
Federal income tax purposes, all items of Partnership income,
gain, loss and deduction (and the character and source of such
items) shall be allocated among the Partners in the same manner as
the corresponding item of income, gain, loss or deduction is
allocated to Capital Accounts pursuant to Sections 5.01 and 5.02.
(b) If, as a result of contributions of property by a
Partner to the Partnership or as a result of the revaluation of
Partnership assets pursuant to Section 4.02(d), Section 704(c) of
the Code (or the principles of Section 704(c) of the Code)
requires allocations of income, gain, loss and deduction of the
Partnership in a manner different from that set forth in
Sections 5.01 and 5.02, the Partnership shall adopt mutually
acceptable methods and conventions consistent with the provisions
of Section 704(c) of the Code and the Regulations thereunder which
are acceptable to both the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations and IMC GPCo) and the FRP Partner
and such methods and conventions shall control, solely for Federal
income tax purposes, allocations of items of Partnership income,
gain, loss and deduction. The method and conventions adopted by
the Partnership shall be designed, in general, (i) to allocate the
"built-in" gain or loss on the sale of a contributed property to
the contributor; (ii) to allocate the deductions from contributed
properties in a manner that reflects the Partners' respective
contributions of basis giving rise to such deductions (other than
special basis adjustments pursuant to Section 743 of the Code);
(iii) to preserve to the FRP Partner, for the benefit of FRP and
its partners, deductions attributable to special basis adjustments
pursuant to Section 754 of the Code resulting from the purchase of
interests in FRP; (iv) to adjust the allocations, to the extent
necessary, to reflect the sale of an asset contributed by a
Partner; (v) to eliminate the difference between the value at
which the property is shown on the books of the Partnership and
the property's adjusted tax basis; and (vi) to assist the FRP
Partner in integrating the allocations of the Partnership with
allocations to FRP and its partners in a reasonable manner.
5.04 Interim Closing of the Books on Transfer. In the event that
a Partner sells or exchanges all or a portion of its Partnership
Interest or a Partner's Partnership Interest is reduced, the Partners'
distributive share of items allocated to them pursuant to Sections 5.01
and 5.02 shall be determined as if the Partnership's books of account
were closed on the date on which such sale, exchange or reduction of
the Partnership Interest occurred; provided, that, to the extent such
determination relates to transactions contemplated by the IMC GPCo Plan
of Liquidation and the optional merger, liquidation or dissolution of
Agrico LP (or the transfer of its Partnership Interests to FRP or an
Affiliate of FRP) as contemplated by the Amendment, Waiver and Consent
Agreement, such determination shall be based upon any permissible
method elected by the Tax Matters Partner.
5.05 Disagreement Between Partners. In the event of a
disagreement between the IMC Partner and the FRP Partner concerning the
correct calculation of the allocations pursuant to this Article V, the
correct calculation of such allocations shall be treated as a Major
Decision and shall be determined by the Policy Committee, the CEOs or
the Managing Partner, as the case may be, pursuant to Section 6.07(a)
and Section 6.07(b).
5.06 Obligations with Respect to Distributable Cash.
Notwithstanding any other provision of this Agreement other than
Sections 3.03 and 5.07(d), but subject to the terms of any agreement or
instrument to which the Partnership is a party, the Partnership shall
distribute quarterly all Distributable Cash to the Partners.
5.07 Distribution of Distributable Cash; Suspended Distributions.
(a) Subject to the terms of any agreement or instrument to
which the Partnership is a party, as soon as available, but in any
event (i) not later than sixteen (16) days (or, in the case of a
quarter ending on June 30, not later than thirty (30) days)
following the end of each quarter of each Fiscal Year, commencing
with the end of the first quarter following the Closing, the
Partnership shall advise each Partner in writing of the amount of
Distributable Cash, if any, which will be distributed to each
Partner in respect of the previous quarter of the Fiscal Year,
(ii) in the case of a quarter ending June 30, not later than
sixteen (16) days following the end of such quarter, commencing
with the first such quarter following the Closing, the Partnership
shall advise each Partner in writing of its good faith estimate of
the amount of Distributable Cash, if any, which will be
distributed to each Partner in respect of the previous quarter of
the Fiscal Year and (iii) not later than 40 days following the end
of each quarter of each Fiscal Year, commencing with the first
quarter following the Closing, the Partnership shall distribute to
each Partner such Partner's Distributable Cash in respect of the
preceding quarter (adjusted, if required, as provided in Section
5.07(b) and Section 5.07(c) below); provided, however, that if the
Accounting Referee has not provided its report in accordance with
the terms of the Contribution Agreement prior to any such
distribution of Distributable Cash, the Managing Partner shall
consider the items or amounts that are the subject of dispute in
establishing any cash reserves of the Partnership, including,
without limitation, as such reserves relate to the calculation of
Current Interest Cash.
(b) Notwithstanding the foregoing, the allocation of
Distributable Cash to IMC GPCo and the FRP Partner for quarters
ending on or prior to June 30, 1994 shall be adjusted as follows:
(i) first, Distributable Cash shall be computed and
allocated to IMC GPCo and the FRP Partner for such quarter,
as if any Transaction Costs incurred by the Partnership in
such quarter had not been incurred;
(ii) second, an amount equal to 50% of any
expenditures for Transaction Costs incurred by the
Partnership during such quarter shall be subtracted from
the amounts calculated under clause (i) above; and
(iii) third, the amount so calculated pursuant to
clauses (i) and (ii) above shall be distributed to IMC GPCo
and the FRP Partner.
(c) Capital Proceeds in respect of a Material Asset Sale
shall be distributed, reinvested or retained by the Partnership as
determined by the Policy Committee or the CEOs, as the case may
be, at the time of approval of such Material Asset Sale in
accordance with the terms of Section 6.07. Capital Proceeds in
respect of all other Capital Transactions shall be distributed to
the Partners pursuant to Section 5.07(a) unless the Managing
Partner elects to use such Capital Proceeds to replace the capital
asset in respect of which such Capital Proceeds were generated or
otherwise to maintain (but not for the Expansion of) the business
of the Partnership.
(d) Notwithstanding the foregoing provisions of Sections
5.06, 5.07(a), 5.07(b) and 5.07(c), and in addition to the
suspension and repayment that is to occur under the circumstances
set forth in Section 3.03 hereof, if either Operations or FRP, or
either of their Affiliates, fails to pay any claim (a
"Contribution Agreement Claim") by the Partnership or another
Partner or any of its respective Affiliates (the "Non-Defaulting
Partner") under the Contribution Agreement and there is no good
faith dispute between Operations, or any of its Affiliates, and
FRP, or any of its Affiliates, as to the existence of such claim
or if either the IMC Partner (or, during the IMC GPCo Liquidation
Period, Operations or IMC GPCo) or the FRP Partner fails to make
any payment due hereunder (including, without limitation, any cash
contribution pursuant to Section 3.02) and there is no good faith
dispute among the Partners over the existence of such default,
then the Partnership shall suspend all payments and distributions
otherwise due hereunder to the Partner that has so defaulted or
whose parent entity has so defaulted (the "Defaulting Partner").
If a good faith dispute exists (i) between Operations, or any of
its Affiliates, and FRP, or any of its Affiliates, as to the
existence of a Contribution Agreement Claim or (ii) between the
IMC Partner (or, during the IMC GPCo Liquidation Period,
Operations or IMC GPCo) and the FRP Partner over the existence of
a default with respect to a payment due hereunder, then in each
such case, the parties to such dispute shall proceed to resolve
such dispute as soon as practicable pursuant to the Dispute
Resolution Mechanism. All payments and distributions otherwise
due to the Defaulting Partner hereunder, including, without
limitation, amounts determined by the Dispute Resolution Mechanism
to be a valid Contribution Agreement Claim or a defaulted payment
hereunder, shall instead be recouped and applied to what would
otherwise have been distributed to such Defaulting Partner to
reduce the claim of the Partnership or Partner or of their
Affiliate, as the case may be, until such time as the Contribution
Agreement Claim or such defaulted payment, as the case may be,
together with interest on the unpaid amount thereof at the rate
per annum equal to the lower of: (i) the maximum rate allowed by
law and (ii) the Prime Rate plus five percent (5%) has been paid
in full. The parties agree that with respect to a Contribution
Agreement Claim all amounts so recouped and paid to a Non-
Defaulting Partner shall satisfy such amounts owed by Operations
or FRP, as the case may be, or their Affiliates under the
Contribution Agreement. Upon payment in full of the Contribution
Agreement Claim or such defaulted payment, as the case may be
(together with such interest accrued thereon), the Partnership
shall resume payments and distributions to the Partners in
accordance with the provisions of Sections 5.07(a), 5.07(b) and
5.07(c).
5.08 Payment of Transaction Costs. The Partnership shall
promptly reimburse any Partner for any Transaction Costs incurred and
actually paid by such Partner. Any such Transaction Costs incurred
prior to the date of this Agreement, and not previously reimbursed by
the Partnership, will be promptly reimbursed by the Partnership
following such date.
ARTICLE VI.Management
6.01 Operation. The business and affairs of the Partnership
shall be managed and conducted by the Managing Partner, who shall have
full control over and responsibility for such business and affairs, in
all cases subject to the provisions of this Agreement. The Managing
Partner shall perform its duties and obligations hereunder as an
ordinary prudent and reasonable manager would under similar
circumstances.
It is understood and agreed that regardless of the fact that the
Managing Partner may enter into transactions, agreements, arrangements
and understanding with the Operating Partner or its Affiliates,
including, without limitation, the Marketing and Administrative
Services Agreement and the Leasing Agreement, in order for the
Operating Partner or such Affiliates to provide certain services to the
Managing Partner, the Managing Partner shall not be relieved of its
duties and obligations to provide services hereunder nor shall such
duties and obligations be altered by such transactions, agreements,
arrangements or understandings.
6.02 General Powers of the Managing Partner. Subject to the
terms, restrictions and limitations set forth elsewhere herein,
including, without limitation, those set forth in this Article VI, the
Managing Partner, on behalf of the Partnership, shall have full
authority and responsibility to do all things it deems necessary or
appropriate in the conduct of the business and affairs of the
Partnership, including, without limitation, (i) the determination of
the operations in which the Partnership will participate and the level
or rate of activity of such operations; (ii) the obtaining and
maintaining of all governmental licenses and permits necessary or
appropriate for the conduct of the activities of the Partnership; (iii)
the execution of normal banking transactions such as accepting
deposits, drawing of checks and otherwise making payments on behalf of
the Partnership; (iv) the maintaining or incurring of Debt, the making
of expenditures and the incurring of any other obligations it deems
necessary or appropriate for the conduct of the activities of the
Partnership; (v) the evaluation of confidential information furnished
to the Partnership by others in connection with the operation of the
Partnership's business or the evaluation by the Partnership of a
potential transaction; (vi) the acquisition, lease, disposition,
mortgage, pledge, encumbrance, hypothecation or exchange of any or all
of the assets of the Partnership; (vii) the use of the assets of the
Partnership (including, without limitation, cash on hand) in any manner
it deems necessary or appropriate in order to achieve the purposes of
the Partnership, including, without limitation, the financing of the
conduct of the activities of the Phosphate Chemicals Business and any
other operations of the Partnership, the extension of credit in the
ordinary course of business to Persons other than Affiliates of the
Managing Partner (except that the Managing Partner may cause the
Partnership to advance funds to it or its Affiliates in order to meet
payroll or other similar obligations with respect to its employees or
employees of its Affiliates who provide services to the Partnership, as
contemplated in Sections 9.06 and 9.11), the repayment of obligations
of the Partnership, the conduct of additional Partnership operations
and the purchase of assets; (viii) the negotiation and execution on any
terms it deems necessary or appropriate, and the performance of, any
contracts, conveyances or other instruments that it considers necessary
or appropriate to the conduct of the Partnership operations or the
implementation of its powers under this Agreement; (ix) the calculation
and distribution of Distributable Cash; (x) subject to Section 5.07(c)
and Section 5.07(d), the calculation and reinvestment, or distribution,
of Capital Proceeds; (xi) the selection, appointment and dismissal of
officers, employees, outside attorneys, accountants, consultants,
engineers and contractors to perform services for the Partnership, and
the determination of their compensation and other terms of employment
or hiring; (xii) the maintenance of such insurance (including self-
insurance) for the benefit of the Partnership as the Managing Partner
deems necessary or appropriate; (xiii) the formation of any further
limited or general partnerships, joint ventures or other relationships
that the Managing Partner deems necessary or appropriate, except that
the Managing Partner shall not, without the consent of the FRP Partner,
cause the Partnership to create, invest in, or become an equity owner
or partner in an entity which is subject to Federal income taxes; (xiv)
the control of any matters affecting the rights and obligations of the
Partnership, including the conduct of litigation and the incurring of
legal expenses and the settlement of claims and litigation; (xv) the
preparation of the Partnership's tax returns; (xvi) subject to Section
9.12, the hiring or engagement of its Affiliates (subject to the
supervision and control of the Managing Partner) to carry out the
obligations of the Managing Partner hereunder; (xvii) subject to
Section 9.07, the taking of all actions necessary or appropriate to
preserve life or property in the case of an emergency or necessary or
appropriate to comply with applicable law; and (xviii) the payment of
all taxes which may be levied or assessed against the Partnership or
its properties.
6.03 Limitations on the Partners; Relations Among Partners.
(a) Except as set forth in Section 6.02 with respect to
the Managing Partner, but in all cases subject to Section 6.07, no
Partner shall, in the name of, or on behalf of the Partnership,
act without the prior consent of the Policy Committee or the
approval of the two CEOs or the Managing Partner contemplated by
Section 6.07(b), as the case may be.
(b) No Partner shall be liable to third Persons for
Partnership losses, deficits, liabilities or obligations except as
specifically otherwise provided herein or expressly agreed to in
writing by such Partner, unless the assets of the Partnership
shall first be exhausted.
(c) In any matter between the Partnership on the one hand
and any of the Partners on the other hand or in any matter between
the Partners, neither the Partnership nor any Partner shall be
bound by the act of a Partner unless such Partner is acting in
accordance with the limitations and provisions set forth in this
Agreement or with the consent of each other Partner.
6.04 Policy Committee.
(a) The responsibility and authority for establishing
policies relating to the strategic direction of the Partnership
and assuring that such policies are implemented shall be vested in
a policy committee (the "Policy Committee"). All decisions
concerning the management and control of the Partnership that are
approved by the Policy Committee shall be binding on the
Partnership and the Partners. Except as otherwise stated herein,
the Managing Partner shall use all commercially reasonable efforts
to act in accordance with the budgets and policies established by,
and other determinations made by, the Policy Committee or the two
CEOs or the Managing Partner, as the case may be, in accordance
with Section 6.07.
(b) The Policy Committee shall consist of four (4)
members, two (2) of whom shall be representatives of the IMC
Partner selected by the IMC Partner (each an "IMC Representative"
and, collectively, the "IMC Representatives") and two (2) of whom
shall be representatives of the FRP Partner selected by the FRP
Partner (each an "FRP Representative" and, collectively, the "FRP
Representatives" and, together with the IMC Representatives, the
"Representatives"). A Representative of the Operating Partner
shall serve as Chairman of the Policy Committee. The IMC Partner
and the FRP Partner shall, within ten (10) days of the date
hereof, notify each other in writing of the identity of the IMC
Representatives and the FRP Representatives, respectively. The
IMC Partner, within (10) days of the date hereof, shall notify the
other Partners in writing as to which of its Representatives is to
initially serve as Chairman of the Policy Committee. Any person
selected by the IMC Partner or the FRP Partner to serve as an IMC
Representative or an FRP Representative shall continue to serve in
such capacity until such Partner shall have notified the other
Partners in writing of his or her replacement. The IMC Partner
and the FRP Partner may, by written notice to the other, designate
a person to serve as an alternate for each IMC Representative and
each FRP Representative, respectively (each alternate to an IMC
Representative being referred to herein as an "IMC Alternate" and,
collectively, as the "IMC Alternates"; each alternate to an FRP
Representative being referred to herein as an "FRP Alternate" and,
collectively, as the "FRP Alternates"; and the IMC Alternates and
the FRP Alternates being collectively referred to herein as the
"Alternates"), and such IMC Alternate or FRP Alternate, as the
case may be, shall be entitled, in the absence of such IMC
Representative or FRP Representative, to vote on behalf of such
IMC Representative or FRP Representative at any meeting of the
Policy Committee. Each Partner and its Affiliates, in dealing
with IMC Representatives or Alternates or the FRP Representatives
or Alternates, as the case may be, shall be entitled to rely
conclusively upon the power and authority of such Representatives
or Alternates to bind the IMC Partner or the FRP Partner, as the
case may be, with respect to all matters unless and until it
receives notice to the contrary in writing from the IMC Partner or
the FRP Partner, as the case may be. To the fullest extent
permitted by law, each Representative and Alternate shall be
deemed the agent of the Partner which appointed such Person a
Representative and Alternate, and such Representative or Alternate
shall not be deemed an agent or a sub-agent of the Partnership or
the other Partners and shall have no duty (fiduciary or otherwise)
to the Partnership or the other Partners. Each Partner, by
execution of this Agreement, agrees to, consents to, and
acknowledges the delegation of powers and authority to such
Representative and Alternatives, and to the actions and decisions
of such Representative and Alternates within the scope of their
respective authority as provided herein.
(c) The Policy Committee shall hold regular meetings at
least once during each quarter of each Fiscal Year on dates
specified by the Policy Committee and may meet for special
meetings at the call of any Partner on at least twenty (20) days'
notice to the other Partners (or such shorter periods as may be
necessary in an emergency). Attendance by any IMC Representative
or FRP Representative or any IMC Alternate or FRP Alternate at any
meeting of the Policy Committee shall constitute an effective
waiver of any required prior notice to the IMC Partner or the FRP
Partner, as the case may be, of such meeting. The Chairman of the
Policy Committee shall, (i) with reasonable advance notice (which
in the case of regular quarterly meetings shall not be less than
fourteen (14) days), prepare and distribute an agenda for each
meeting of the Policy Committee, (ii) organize and conduct such
meeting and (iii) prepare and distribute minutes of such meeting.
Any Partner may propose in advance topics for the agenda or raise
topics which are not on the agenda for such meeting. In addition
to the Representatives and Alternates of the Partners serving on
the Policy Committee each Representative or Alternate of each of
the IMC Partner and the FRP Partner may bring one or more other
advisors to any meeting; provided that such advisors shall not
have the right to vote on any matter brought before the Policy
Committee; and provided, further that the Representatives or
Alternates of either of the IMC Partner or the FRP Partner shall
have the right to call executive sessions of the Policy Committee
and to exclude any Person not a Representative or Alternate from
such executive session unless such Person is an employee of a
Partner or its parent entity.
(d) Meetings of the Policy Committee may only be held when
a quorum is present. Except as set forth in the last sentence of
this Section 6.04(d), a quorum of the Policy Committee shall be
comprised of four (4) Representatives or Alternates (or any
combination thereof), which quorum shall be comprised of two (2)
IMC Representatives or IMC Alternates (or any combination thereof)
and two (2) FRP Representatives or FRP Alternates (or any
combination thereof). The affirmative vote of a majority of the
Policy Committee at a meeting at which a quorum is present (two
(2) IMC Representatives or IMC Alternates (or any combination
thereof) and two (2) FRP Representatives or FRP Alternates (or any
combination thereof) being entitled to vote at any such meeting,
except as set forth in the final two (2) sentences of this Section
6.04(d)) must be obtained in connection with the decision of any
matter being considered by the Policy Committee; provided, that in
the case of a business opportunity presented to the Partnership by
a Presenting Partner pursuant to Section 2.08(b) or pursuant to
Section 3.0 of the Parent Agreement or a Real Estate Development
Project presented to the Partnership by a Developing Partner
pursuant to Section 2.08(c), the election as to whether to pursue
or not to pursue such business opportunity or Real Estate
Development Project, as the case may be, shall be made by the
affirmative vote of two (2) Representatives or Alternates (or any
combination thereof) of the Exercising Partner or the Electing
Partner, as the case may be. Representatives or Alternates (or
any combination thereof) constituting a quorum may, upon their
unanimous consent, participate in a meeting of the Policy
Committee by means of conference telephone or similar
communications equipment which makes it possible for all persons
participating in the meeting to hear each other. Representatives
or Alternates (or any combination thereof) may consent to any
action without a meeting through a consent in writing of two (2)
IMC Representatives or IMC Alternates (or any combination
thereof), and two (2) FRP Representatives or FRP Alternates (or
any combination thereof) or, in the circumstances described in the
proviso to the second preceding sentence above, of two
Representatives or Alternates (or any combination thereof) of the
Exercising Partner or the Electing Partner, as the case may be.
Notwithstanding any provision of this Agreement to the contrary,
if either the IMC Partner (or, during the IMC GPCo Liquidation
Period, Operations or IMC GPCo) or the FRP Partner defaults in any
obligation to pay money (including, without limitation, any cash
contribution pursuant to Section 3.02 and any amounts payable
under the Contribution Agreement) as and when due hereunder and
such default remains uncured after the expiration of thirty (30)
days from and after notice thereof to such Partner by any other
Partner and there is no good faith dispute among the Partners or
their Affiliates over the existence of such default (with any such
good faith disputes among the Partners or their Affiliates to be
resolved as soon as practicable pursuant to the Dispute Resolution
Mechanism), neither the defaulting Partner's Representatives nor
Alternates (which, during the IMC GPCo Liquidation Period, with
respect to either Operations or IMC GPCo shall mean neither the
IMC Representatives nor the IMC Alternates) shall be entitled to
vote on, or consent to, any matter before the Policy Committee
until such time as the default has been cured by the defaulting
Partner (but they shall continue to receive notice of and to be
able to attend meetings of the Policy Committee), and during such
period the Policy Committee shall be entitled to exercise all of
its power and authority as set forth in this Partnership Agreement
upon the vote at a meeting (or by telephone or other similar
communications equipment as set forth above) or by written consent
of two (2) of the Representatives or Alternates (or any
combination thereof) of the non-defaulting Partner. In any such
event, the presence at a meeting in person (or by telephone or
other similar communications equipment as set forth above) of two
(2) Representatives or Alternates (or any combination thereof) of
the non-defaulting Partner shall constitute a quorum for the
transaction of business.
6.05 Rules of Procedure. The Policy Committee may from time to
time adopt detailed rules and procedures not inconsistent with this
Agreement for the management of the business of the Partnership.
6.06 Further Management Limitations. Under no circumstances
shall the Policy Committee have the power to alter or modify in any
manner the terms of this Agreement.
6.07 Major Decisions.
(a) Except as provided in Section 6.07(b) below, no act
shall be taken or sum expended or obligation incurred by the
Partnership, the Policy Committee or any Partner concerning a
matter within the scope of any of the Major Decisions set forth
below (each a "Major Decision"), unless and until the Major
Decision (A) shall be approved by the Policy Committee or the CEOs
or (B) is permitted to be taken by the Managing Partner pursuant
to Section 6.07(b). The Major Decisions shall consist of:
(i) creating any Debt of the Partnership in an
aggregate amount at any time outstanding exceeding the Base
Obligation Amount applicable at the time when such Debt is
incurred; provided that no approval by the Policy Committee
or the CEOs will be required for borrowings by the
Partnership for working capital purposes pursuant to a
credit facility (or a working capital contribution
facility) previously approved by the Policy Committee (or,
if not by the Policy Committee, by the CEOs); and provided,
further that the Partners shall have the right to make
Partner Loans to the Partnership in accordance with Section
3.03 without the approval of the Policy Committee or the
CEOs;
(ii) making, or committing to make, any capital
expenditures for Expansion in an annual aggregate amount in
any Fiscal Year in excess of the Base Obligation Amount for
such Fiscal Year;
(iii) making, or committing to make, any Material
Asset Sale;
(iv) approving annual operating and capital
expenditure budgets, quarterly updates of such budgets and
any increase in excess of 15% in any previously approved
capital budget item having a dollar amount in any Fiscal
Year in excess of the Base Budget Amount for such Fiscal
Year, it being understood that if any quarterly update of a
previously approved annual operating or capital expenditure
budget is not approved by the Policy Committee, or the CEOs
pursuant to Section 6.07(b), as the case may be, the
Managing Partner shall have the authority to continue to
operate and manage the business and affairs of the
Partnership in accordance with the most recently approved
annual operating or capital expenditure budget, as the case
may be, as such budget has been updated by any previously
approved quarterly budget update;
(v) calculating Distributable Cash and making
distributions of Distributable Cash in accordance with
Section 5.07;
(vi) entering into, or modifying or amending in any
material respect, any agreement which expressly restricts
the Partnership's right to distribute Distributable Cash to
the Partners;
(vii) incurring a Material Obligation (other than
Debt permitted to be incurred pursuant to
Section 6.07(a)(i));
(viii) (A) shutting down any Material Facilities of
the Partnership if, in the good faith judgment of the
Managing Partner, such shut down is expected to last more
than three (3) months or (B) continuing to keep any
Material Facilities of the Partnership shut down (other
than a shut down covered by clause (A) above which was
properly approved by the Policy Committee or, if not by the
Policy Committee, by the CEOs) for a period in excess of
three (3) months;
(ix) approving and determining the amount of any cash
contributions by the Partners to be made pursuant to
Section 3.02;
(x) entering into, or modifying or amending in any
material respect, any transactions, agreements,
arrangements or understandings between or on behalf of the
Partnership, on the one hand, and the Operating Partner or
any Affiliate of the Operating Partner, on the other hand,
in an aggregate amount in any Fiscal Year in excess of the
Base Affiliate Transaction Amount for such Fiscal Year,
other than the transactions, agreements, arrangements or
understandings referenced in Section 9.12;
(xi) entering into any settlement agreement with
respect to any suit, claim, action or proceeding involving
payment by the Partnership of an amount in excess of one
million dollars ($1,000,000); or
(xii) calculating the allocations pursuant to Article
V, in the event of a disagreement between the IMC Partner
(or, during the IMC GPCo Liquidation Period, Operations or
IMC GPCo) and the FRP Partner relating thereto.
(b) Notwithstanding the foregoing, if the Policy Committee
fails to approve any matter before it in accordance with the terms
of Sections 6.04 and 6.05, after discussion in good faith,
resolution of such matter shall be referred to the respective
Chief Executive Officers ("CEOs") of the Non-Managing Partners at
the time such matter is presented for resolution. Except as
provided in Section 6.07(c) below, if such CEOs fail to agree on
any matter within fourteen (14) days of the date the matter was
submitted to them, pending final resolution of the dispute, the
Managing Partner shall have the authority to operate the business
and affairs of the Partnership in such a manner as it reasonably
determines to be necessary in order to maintain the value of the
assets of the Partnership or as required to assure compliance with
applicable law, including without limitation taking the following
actions:
(i) establishing annual operating and capital
expenditure budgets (including maintenance capital and
capital expenditures for Expansion in an aggregate amount
in any Fiscal Year not exceeding the Base Obligation Amount
for such Fiscal Year);
(ii) calculating Distributable Cash and distributing
Distributable Cash in accordance with Section 5.07;
(iii) (A) shutting down any Material Facilities of
the Partnership if, in the good faith judgment of the
Managing Partner, such shut down is expected to last more
than three (3) months or (B) continuing to keep any
Material Facilities of the Partnership shut down (other
than a shut down covered by clause (A) above which was
properly approved by the Policy Committee or, if not by the
Policy Committee, by the CEOs or properly undertaken by the
Managing Partner) for a period in excess of three (3)
months; or
(iv) calculating the allocations pursuant to Article
V, in the event of a disagreement between the IMC Partner
(or, during the IMC GPCo Liquidation Period, Operations or
IMC GPCo) and the FRP Partner relating thereto.
(c) Notwithstanding the foregoing Section 6.07(b), in no
event shall the Managing Partner take any of the following actions
without the prior approval of either the Policy Committee or the
CEOs in accordance with Section 6.07(a) or Section 6.07(b), as the
case may be:
(i) creating any Debt of the Partnership in an
aggregate amount at any time outstanding exceeding the Base
Obligation Amount applicable at the time when such Debt is
incurred; provided that no approval by the Policy Committee
or the CEOs will be required for borrowings by the
Partnership for working capital purposes pursuant to a
credit facility (or a working capital contribution
facility) previously approved by the Policy Committee (or,
if not by the Policy Committee, by the CEOs); and provided,
further that the Partners shall have the right to make
Partner Loans to the Partnership in accordance with Section
3.03 without approval of the Policy Committee or the CEOs;
(ii) making, or committing to make, any capital
expenditures for Expansion in an aggregate amount in any
Fiscal Year in excess of the Base Obligation Amount for
such Fiscal Year;
(iii) making, or committing to make, any Material
Asset Sale;
(iv) entering into, or modifying or amending in any
material respect, any agreement which expressly restricts
the Partnership's right to distribute Distributable Cash to
the Partners;
(v) incurring a Material Obligation (other than Debt
permitted to be incurred pursuant to Section 6.07(a)(i));
(vi) approving and determining the amount of any cash
contributions by the Partners to be made pursuant to
Section 3.02;
(vii) entering into, or modifying or amending in any
material respect, any transactions, agreements,
arrangements or understandings between or on behalf of the
Partnership, on the one hand, and the Operating Partner or
any Affiliate of the Operating Partner, on the other hand,
in an aggregate amount in any Fiscal Year in excess of the
Base Affiliate Transaction Amount for such Fiscal Year,
other than the transactions, agreements, arrangements or
understandings referenced in Section 9.12;
(viii) entering into any settlement agreement with
respect to any suit, claim, action or proceeding involving
payment by the Partnership of an amount in excess of one
million dollars ($1,000,000); or
(ix) engaging in any activity prohibited by Section
9.05.
6.08 Management of Certain Environmental Liabilities. The
Partners agree that after the Closing Date the IMC Partner and the FRP
Partner will consult with each other concerning negotiation,
remediation and expenditures to be made by the Partnership or the
Partners, as the case may be, for the Environmental Liabilities listed
on Part I and Part II of Schedule 2.05(iv) to the Contribution
Agreement (each a "Retained Environmental Liability"). The Partnership
and the Partners agree to provide to the Partner whose Affiliate
contributed the Assets to which such Retained Environmental Liability
relates (or, in a case in which Operations contributed such Assets, to
Operations) (the "Retaining Partner") access to all relevant
information on an ongoing basis relating to such Environmental
Liability and to enter into discussions in good faith to determine the
most efficient use of money by the Partnership or the Retaining
Partner, as the case may be, in an effort to ensure the Partnership's
continued use of (or other appropriate action agreed to by the Partners
with respect to) the Assets to which such Environmental Liability
relates. The Partners further agree to permit the Retaining Partner,
upon written notification to the other Partners, to directly manage and
oversee all negotiations, agreements to remediate and remediation
activities relating to any Retained Environmental Liability to the
extent the management of such negotiation and remediation will not
unreasonably interfere with the day-to-day use of such Assets or result
in an unreasonable increase in costs to the Partnership (such cost
increases to be reimbursed to the Partnership by such Retaining Partner
managing such negotiation and remediation). With respect to any
Environmental Liability listed on such Schedule 2.05(iv) that shall be
an Assumed Liability, each Partner shall cause the Partnership to act
as quickly as is commercially reasonable to complete all required
remedial activity.
ARTICLE VII.
Encumbrance or Transfer of Partnership Interest
7.01 Transfer of Partnership Interest Generally. No Partner may
assign, transfer or otherwise dispose of all or any portion of its
Partnership Interest except in accordance with the terms of this
Article VII. Any attempt by any Partner to assign, transfer or
otherwise dispose of all or any portion of its Partnership Interest
other than in accordance with this Article VII shall be null, void ab
initio and of no force and effect. Notwithstanding any other provision
of this Article VII, the transfers of the Partnership Interest of IMC
GPCo to Operations executed in connection with the IMC GPCo Liquidation
and, in the event that FTX and FRP choose to cause the merger,
liquidation or dissolution of the FRP Partner (or the transfer by the
FRP Partner of its Partnership Interests to FRP or an Affiliate of FRP)
in accordance with the terms of the Amendment, Waiver and Consent
Agreement, transfers of the Partnership Interest of the FRP Partner to
FRP or an Affiliate of FRP executed in connection with such merger,
liquidation or dissolution of the FRP Partner (or such transfer of the
Partnership Interests), shall be deemed to have been made in accordance
with the terms of this Article VII.
7.02 Transfers of Partnership Interests. (a) Except as
otherwise consented to in writing by each of the other Partners, no
Partner may sell, transfer or otherwise dispose of all or any portion
of its Partnership Interest (collectively "Transfer") unless (i) such
Transfer is pursuant to a written agreement pursuant to which the
transferee agrees to be bound by all of the terms of this Agreement as
if it were originally a party hereto, (ii) such Transfer does not cause
a termination of the Partnership for Federal income tax purposes, (iii)
the transferring Partner shall have transferred a proportionate amount
of its capital stock of the Managing Partner to the transferee of all
or a portion of the Partnership Interest as required by Section 7.05
and (iv) such Transfer is in compliance with Section 7.02(b) and
Section 7.04.
(b) If either the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations or IMC GPCo) or the FRP Partner (in any
such case, the "Soliciting Partner") desires to sell or otherwise
dispose of to any third party (other than an Affiliate of such
Soliciting Partner), or to solicit bids from any third party (other
than an Affiliate of such Soliciting Partner) to purchase or otherwise
acquire, all or any part of its Partnership Interest (the "Subject
Partnership Interest"), such Soliciting Partner shall (i) if the
Soliciting Partner is the IMC Partner (or, during the IMC Liquidation
Period, Operations or IMC GPCo), notify the FRP Partner in writing of
the IMC Partner's desire to sell its Subject Partnership Interest or
(ii) if the Soliciting Partner is the FRP Partner, notify the IMC
Partner (or, during the IMC GPCo Liquidation Period, Operations and IMC
GPCo) in writing of its desire to sell its Subject Partnership
Interest. The notice referred to in the preceding sentence is
hereinafter referred to as the "Notice of Intent to Sell", and the
Partner receiving the Notice of Intent to Sell is hereinafter referred
to as the "Notified Partner". For a period (the "No-Shop Period") of
thirty (30) days following the date it gives Notice of Intent to Sell,
and during the duration of any Negotiation Period (as defined below),
neither the Soliciting Partner nor any of its Affiliates, officers,
directors, employees, representatives or agents will, without the prior
written consent of the Notified Partner, commence or continue any
discussions, negotiations or exchanges of information with any Person
other than the Notified Partner with respect to the sale of the Subject
Partnership Interest. During the No-Shop Period, both the Soliciting
Partner and the Notified Partner shall cooperate with each other in
exchanging all due diligence materials they deem to be reasonably
necessary to determine the price and terms of any potential offer. If
the Notified Partner makes a bona fide offer to purchase the Subject
Partnership Interest prior to the end of the No-Shop Period, then the
Soliciting Partner and the Notified Partner shall negotiate in good
faith for the purchase and sale of the Subject Partnership Interest and
the No-Shop Period shall be extended for fifteen (15) days (the
"Negotiation Period"); provided that a decision to accept or reject
shall be in the sole discretion of the Soliciting Partner. If the
Notified Partner fails to make a bona fide offer to purchase the
Subject Partnership Interest (the making or failure to make such offer
being in its sole discretion) prior to the expiration of the No-Shop
Period or if the Soliciting Partner and the Notified Partner fail to
execute a letter of intent relating to the purchase and sale of the
Subject Partnership Interest or terminate negotiations prior to the
expiration of the Negotiation Period, then the Soliciting Partner may,
but shall not be obligated to, immediately commence discussions,
negotiations or exchanges of information with, and/or sell its Subject
Partnership Interest to, any third party; provided that if the Notified
Partner made a bona fide offer during the No-Shop Period, the
Soliciting Partner shall not so sell the Subject Partnership Interest
to a third party unless (i) definitive, binding agreements relating to
such sale are executed within two hundred twenty (220) days of the
expiration of the Negotiation Period, (ii) the cash value of the
consideration received in connection with such sale is at least equal
to 95% of the cash value of such offer made by the Notified Partner and
(iii) the transferee of such Subject Partnership Interest agrees in
writing to be bound by the terms of this Agreement as if it had
originally been a party hereto. The cash value of such sale and the
cash value of such offer by the Notified Partner, respectively, shall
be determined by agreement among the Soliciting Partner and the
Notified Partner (i) in the case of the cash value of such sale, within
ten (10) days following the execution of definitive, binding agreements
by the parties relating thereto and (ii) in the case of the cash value
of such offer by the Notified Partner, within ten (10) days following
the earliest to occur of (A) the termination of negotiations between
the Soliciting Partner and the Notified Partner and (B) the expiration
of the Negotiation Period, provided that if such agreement is not
reached during either of such ten (10) day periods, then, in either
such case, such cash value shall be determined by means of the
Appraisal Procedure, with the expense thereof to be paid fifty percent
(50%) by the Soliciting Partner and fifty percent (50%) by the Notified
Partner and with the determination made thereby being final,
unappealable, binding on both the Soliciting Partner and the Notified
Partner and enforceable in a court of law or equity. After the
expiration of such two hundred twenty (220) day period, such Subject
Partnership Interest shall again be subject to the terms of this
Section 7.02(b). The failure of either the Soliciting Partner or the
Notified Partner to exercise its rights under this Section 7.02(b)
shall not be deemed to be a waiver of its respective rights under this
Section 7.02(b) with respect to subsequent Subject Partnership
Interests.
7.03 Liens. None of IMC GPCo (prior to the completion of the
Final IMC GPCo Liquidating Distribution), Operations (subsequent to the
completion of the Initial IMC GPCo Liquidating Distribution), the FRP
Partner (prior to or subsequent to the merger, liquidation or
dissolution of the FRP Partner (or the transfer of its Partnership
Interests) contemplated by the terms of the Amendment, Waiver and
Consent Agreement) or the Managing Partner may, except with the consent
of the other Partners (which consent may be granted or withheld in such
Partners' sole discretion), create or permit to exist any Lien on its
Partnership Interest or any portion thereof or any of the capital stock
of the Managing Partner (except (i) Liens for current taxes not
delinquent or taxes being contested in good faith and by appropriate
proceedings or (ii) Liens arising in the ordinary course of business
for sums not due or sums being contested in good faith and by
appropriate proceedings). Any attempt by any such Partner to create or
permit to exist any Lien (other than the excepted Liens described in
this Section 7.03) on its Partnership Interest or any portion thereof
shall be null, void ab initio and of no force and effect.
Notwithstanding anything to the contrary contained herein, if any
Person obtains a Lien on the Partnership Interest of IMC GPCo,
Operations, the FRP Partner or the Managing Partner or any portion
thereof (during a period during which such a Lien could not be granted
to such Person in accordance with the terms of this Section 7.03) and
forecloses on such Lien, (i) the Partnership shall continue, (ii) the
Person foreclosing on the Lien shall succeed to the economic interests
of the Partnership Interest, or portion thereof, upon which it
foreclosed but not the voting or other interests which comprise such
Partnership Interest, or portion thereof, (iii) the Person foreclosing
on such Lien shall not be admitted as a "Partner" without the approval
of the Policy Committee or the other Partners, and (iv) any sale or
other disposition of the Partnership Interest, or portion thereof, upon
which such Person foreclosed shall be subject to the terms of Article
VII hereof.
7.04 Transfers Upon Triggering Events.
(a) Upon the occurrence of a Triggering Event, the
Triggering Partner shall give the other Partners prompt written notice
of such Triggering Event (the "Triggering Event Notice"), which notice
shall describe the terms and conditions of the transaction giving rise
to the Triggering Event. For a period of thirty (30) days following
the receipt of the Triggering Event Notice (or, if no Triggering Event
Notice is received, at any time after a Triggering Event has occurred),
the Non-Triggering Partner (which, during the IMC GPCo Liquidation
Period, shall mean both Operations and IMC GPCo, for purposes of this
Section 7.04, if the IMC Partner is the Non-Triggering Partner) shall
have the right to sell, and, upon the receipt of notice (the "Exercise
Notice") of the exercise of such right from the Non-Triggering Partner,
the Triggering Partner shall have the obligation to purchase, all but
not less than all of the Non-Triggering Partner's Partnership Interest
at the Transfer Price applicable to such Triggering Event; provided,
however, that (i) if the transaction that gave rise to the Triggering
Event involved the sale of all or a portion of the Partnership Interest
of the Triggering Partner, the Non-Triggering Partner shall instead
have the right to sell all, but not less than all of its Partnership
Interest to the purchaser (the "Purchasing Partner") of the Triggering
Partner's Partnership Interest and the Purchasing Partner, by its
execution and delivery of a counterpart hereof on the closing date with
respect to the purchase and sale of the Triggering Partner's
Partnership Interest, agrees to purchase the Non-Triggering Partner's
Partnership Interest at the Transfer Price applicable to such
Triggering Event, (ii) if the Exercise Notice was delivered to the
Triggering Partner and the Triggering Partner fails to purchase the Non-
Triggering Partner's Partnership Interest within the period specified
above, then, without limiting its rights against such party, the Non-
Triggering Partner shall then have the right to sell all, but not less
than all, of its Partnership Interest to either the Purchasing Partner
or the Partnership, and upon receipt of an Exercise Notice, the
Purchasing Partner or the Partnership, as the case may be, shall be
obligated to purchase the Non-Triggering Partner's Partnership Interest
for cash at the Transfer Price applicable to such Triggering Event; and
(iii) if the Exercise Notice was delivered to the Purchasing Partner
and the Purchasing Partner fails to purchase the Non-Triggering
Partner's Partnership Interest within the period specified above, then,
without limiting its rights against such party, the Non-Triggering
Partner shall then have the right to sell all, but not less than all,
of its Partnership Interest to either the Triggering Partner or the
Partnership, and upon receipt of an Exercise Notice, the Triggering
Partner or the Partnership, as the case may be, shall be obligated to
purchase the Non-Triggering Partner's Partnership Interest for cash at
the Transfer Price applicable to such Triggering Event. The closing of
the sale of the Non-Triggering Partner's Partnership Interest shall
occur on or before the sixtieth (60th) day following the receipt of the
Exercise Notice by the Triggering Partner, the Purchasing Partner or
the Partnership, as the case may be; provided that if the Appraisal
Procedure is invoked to determine the Transfer Price, the time periods
in this sentence shall be extended to the date which is thirty (30)
days following the final determination of the Transfer Price. If a
Triggering Event Notice has been delivered and the Non-Triggering
Partner does not deliver an Exercise Notice within the thirty (30) day
period specified above, the Non-Triggering Partner shall be deemed to
have elected not to sell its Partnership Interest.
(b) The terms and conditions (other than the method of payment of
the Transfer Price) of any sale pursuant to this Section 7.04 shall be
customary for transactions of such type; provided that if the event
giving rise to this Triggering Event involves a sale of a Partnership
Interest, such terms and conditions shall be substantially similar to
the terms and conditions of the sale giving rise to the Triggering
Event, adjusted as appropriate to reflect differences in the structure
of the transactions. The Transfer Price payable in connection with any
sale of a Partnership Interest by a Non-Triggering Partner pursuant to
this Section 7.04 shall be payable in cash on the date of closing of
such sale. If the Transfer Price is determined in accordance with the
Appraisal Procedure, the expense thereof is to be paid fifty percent
(50%) by the Triggering Partner and fifty percent (50%) by the Non-
Triggering Partner.
(c) Any sale of a Partnership Interest by a Non-Triggering
Partner pursuant to this Section 7.04 shall be accompanied by a
corresponding sale of all of the issued and outstanding stock of the
Managing Partner then held by such Non-Triggering Partner in accordance
with Section 7.05.
7.05 Interests in Managing Partner. Except as provided in this
Section 7.05, neither the IMC Partner nor the FRP Partner shall sell,
transfer or otherwise dispose of all or any portion of the capital
stock of the Managing Partner. If either the IMC Partner or the FRP
Partner sells, transfers or otherwise disposes of all or a portion of
its Partnership Interest to any Person in accordance with the terms of
Section 7.02, then, simultaneously therewith, the Non-Managing Partner
making such a transfer shall so sell, transfer or otherwise dispose of
a proportionate amount of capital stock of the Managing Partner to such
Person.
7.06 Certain Conditions of Certain Transfers. As a condition to
the effectiveness of (i) the Initial IMC GPCo Liquidating Distribution,
(ii) the Final IMC GPCo Liquidating Distribution, (iii) the FRP
GPCo/FCC/FTX Mergers, (iv) the merger, liquidation or dissolution of
the FRP Partner (or the transfer of its Partnership Interests) in
accordance with the terms of the Amendment, Waiver and Consent
Agreement and (v) any related transactions, each Partner hereby agrees
to bear, and assume liability for, any expense, cost or loss (including
any increase in taxes, other than any increase in income taxes which
arises solely from the timing of the reporting of income, deductions
and credits attributable to the normal business activities of the
Partnership) suffered by the Partnership, any other Partner or any of
their Related Persons (as defined below) arising from consummation of
the transactions described in (i) to (v) above in violation of the
provisions of this Agreement, the Parent Agreement, the Amendment,
Consent and Waiver Agreement and the IMC GPCo Plan of Liquidation.
ARTICLE VIII.
Other Rights of, Duties and Restrictions on the Partners
8.01 Indemnification. All costs, expenses, liabilities,
obligations, losses, damages, penalties, proceedings, actions, suits or
claims of whatever kind or nature which may be imposed on, incurred by,
suffered by, or asserted against the Partnership, any Partner (which
term, for purposes of this Article VIII, shall, with respect to the IMC
Liquidation Period (and all other periods during which Operations or
IMC GPCo is a Partner) refer to each of Operations and IMC GPCo,
severally and not jointly) or any Partner's respective Affiliates,
directors, officers and employees, in connection with the ownership or
management or operation of the business and affairs of the Partnership
shall be referred to as "Claims". The Partnership shall indemnify and
hold harmless each Partner and their respective Affiliates, directors,
officers and employees ("Related Persons") for all Claims other than
those caused by such Partner's or such other Related Person's gross
negligence, wilful misconduct, wilful breach of this Agreement or
failure to follow a specific instruction from the Policy Committee
adopted in accordance with the terms of this Agreement; provided that
in no event shall the Partnership be required to indemnify any Partner
or any of its Related Persons for any Claim arising out of or relating
to any Excluded Liability for which such Partner or Related Person is
responsible pursuant to the terms of the Contribution Agreement. For
purposes of this Agreement, an ignoring of the terms of this Agreement
shall be deemed a wilful breach; provided that the Managing Partner
shall not be liable for ignoring the term of this Agreement requiring
the Managing Partner to act as an ordinary prudent and reasonable
manager if the Managing Partner acted in good faith and in the belief
(which was reasonable) that its actions were in accordance with all of
the terms of this Agreement. In addition to, and not in contravention
of, the foregoing, the Partnership shall indemnify and hold harmless
each Partner and their respective Related Persons from all Assumed
Liabilities and any and all costs, expenses, liabilities, obligations,
losses, damages, penalties, proceedings, actions, suits or claims of
whatever kind or nature which may be imposed on, incurred by, suffered
by, or asserted against any Partner or its respective Related Persons
arising out of or in connection with any Assumed Liability. The
Leasing Agreement and the Marketing and Administrative Services
Agreement shall contain provisions consistent with this Section 8.01.
8.02 Contribution. In the event that any Partner shall pay in
good faith or become obligated to pay any proper obligation of the
Partnership, such Partner shall be entitled to contributions from the
other Partners to the extent necessary so that, after giving effect to
such contributions, each Partner shall bear no more than that part of
such obligation which corresponds to its respective Capital Interest at
the time of the occurrence, circumstances, events or conditions giving
rise to the obligation.
8.03 Continuing Liability of Withdrawn Partner. In the event of
the withdrawal of a Partner from the Partnership by reason of the
transfer of its entire Partnership Interest in accordance with the
provisions of this Agreement, or in violation of this Agreement, such
withdrawn Partner shall remain liable as a general partner with respect
to all obligations of the Partnership incurred or accrued on or prior
to the date of withdrawal (but shall not have liability for obligations
of the Partnership incurred or which accrue subsequent to the date of
withdrawal). If the Partnership is continued without dissolution, or
reconstituted and continued, following the withdrawal of any Partner,
in either case in accordance with the terms of this Agreement, the
withdrawn Partner shall be entitled only to the payments expressly
provided for in this Agreement and shall not be entitled to any other
or further payments from the Partnership or any other Partner.
Further, in such circumstances, the withdrawn Partner shall have no
right to cause the winding up or liquidation of the business or assets
of the Partnership, and neither the Partnership nor any Partner shall,
as a condition to the continuation or reconstitution of the
Partnership, be required to post any bond in favor of, or indemnify,
the withdrawn Partner as regards past, present or future liabilities or
otherwise.
8.04 Breach of Parent Agreement. For purposes of this Agreement,
(i) a breach by FTX or FRP of the terms of the Parent Agreement shall
constitute a breach of this Agreement by the FRP Partner and (ii) a
breach by Global or Operations of the terms of the Parent Agreement
shall constitute a breach of this Agreement by the IMC Partner.
ARTICLE IX.
Certain Operational Provisions
9.01 Financial, Accounting, and Banking Matters.
(a) The Fiscal Year of the Partnership shall begin on July
1 and end on June 30 of each year of the Partnership.
(b) The auditors of the Partnership shall be Ernst & Young
or such other independent certified public accounting firm of
recognized national standing selected by the Policy Committee in
accordance with the terms of Sections 6.04 and 6.05, or if the
Policy Committee fails to so approve such a selection, then by the
CEOs or the Managing Partner, as the case may be, in accordance
with the terms of Section 6.07(b).
(c) The Partnership shall establish bank accounts at such
banks as may from time to time be designated by the Managing
Partner. The Partnership's funds shall be invested in such manner
as the Managing Partner deems appropriate. All bank and other
accounts shall be maintained in the Partnership's name. None of
the Partnership's funds shall be commingled with the funds of any
Partner unless previously approved in writing by the other
Partners.
9.02 Budget and Approval Authorities.
(a) The Managing Partner shall have the sole and exclusive
authority and responsibility to present annual operating and
capital budgets and quarterly updates of such budgets to the
Policy Committee for its approval, such quarterly updates to
present information on a month-by-month basis. As soon as
available, but not later than forty (40) days prior to the end of
each Fiscal Year, the Managing Partner shall, at a special meeting
of the Policy Committee called for such purpose, present to the
Policy Committee the operating and capital expenditure budgets for
the succeeding Fiscal Year. The Policy Committee shall review
such proposed budgets and shall either approve the proposed
budgets or negotiate in good faith with the Managing Partner to
adopt mutually acceptable budgets for such succeeding Fiscal Year.
As soon as available, but not later than sixty (60) days after the
end of a Fiscal Year and each quarter of the succeeding Fiscal
Year, the Managing Partner shall, at a special meeting of the
Policy Committee called for such purpose, present to the Policy
Committee the operating and capital expenditure budget updates for
the remaining portion of the then current Fiscal Year. The Policy
Committee shall review such proposed budget updates and shall
either approve the proposed budget updates or negotiate in good
faith with the Managing Partner to adopt mutually acceptable
budget updates for the remaining portion of the then current
Fiscal Year. If the Policy Committee adopts budgets for a Fiscal
Year or any portion thereof, the Managing Partner shall use all
commercially reasonable efforts to operate and manage the business
and affairs of the Partnership in accordance with such budgets
(or, if the Policy Committee fails to so adopt such budgets in
accordance with the terms of Sections 6.04 and 6.05 and if such
budgets are instead adopted by the CEOs or the Managing Partner,
as the case may be, in each case in accordance with the terms of
Section 6.07(b), then in accordance with such budgets).
(b) The Managing Partner shall have the sole and exclusive
authority and responsibility to present five (5) year operating
and financial forecasts for the Partnership to the Policy
Committee; provided that if the Managing Partner has not presented
such a five (5) year operating and financial forecast to the
Policy Committee on or before the sixtieth (60th) day of any
Fiscal Year for the succeeding five (5) years, the Managing
Partner shall provide the Non-Operating Partner with access to the
Managing Partner's operating and financial personnel and shall
cause such operating and financial personnel to assist the Non-
Operating Partner in preparing a five (5) year operating and
financial forecast for the Partnership.
9.03 Insurance. The Managing Partner shall have the authority
and responsibility to take whatever action (not inconsistent with the
terms hereof) it determines in good faith to be necessary or
appropriate to preserve and protect the assets of the Partnership,
including, without limitation, by procuring, for the account of the
Partnership, such insurance against such hazards and liabilities as the
Managing Partner deems appropriate in light of prudent industry
practice. All such insurance, whether maintained by the Managing
Partner, Operations or FRP for the benefit of the Partnership, may be
in the name of any Partner, Operations, FRP or the Partnership so long
as each insurance policy names the Partnership and each Partner as
either the "insured party" or an "additional insured party" and waives
subrogation in favor of each such party. Such insurance coverage may
be subject to such self-insurance, deductibles and limits as the
Managing Partner deems appropriate. If requested by the Managing
Partner, either of the Non-Managing Partners or their respective parent
entities shall cooperate with the Managing Partner in designing and
maintaining a risk management program which insures the Partnership
against such hazards and liabilities as the Managing Partner deems
appropriate, provided that if the Managing Partner requests either of
the Non-Managing Partners or their Affiliates to maintain insurance in
the name of the Partnership, the Partnership shall reimburse such Non-
Managing Partner or such Affiliates for all of the direct costs and
expenses incurred in connection with the maintenance of such insurance.
In addition to the insurance provided for the benefit of the
Partnership under this Section 9.03, each Partner and its Affiliates
shall have the right to purchase such other insurance as it deems
prudent to cover its respective interest in the Partnership; provided
that all costs and expenses incurred in connection with the maintenance
of such insurance shall be paid by such Partner and provided that such
insurance shall not have the effect of restricting the amount or
availability of insurance maintained by the Partnership. Should any
Partner or their Affiliates with respect to the Partnership purchase
such other insurance, such other insurance shall waive rights of
subrogation against the other Partners, the Partnership and their
Affiliates.
9.04 Financial and Other Information. The Managing Partner shall
deliver or cause to be delivered to each Partner:
(a) as soon as available, but not more than twenty (20)
days (or, in the case of June, forty-five (45) days) after the end
of each month during the term of the Partnership, (i) a statement
of the Distributable Cash and Capital Proceeds of the Partnership
for the preceding month and (ii) an estimate of the Distributable
Cash and Capital Proceeds of the Partnership for the remaining
months of the current quarter and for the entire succeeding
quarter of the Partnership;
(b) as soon as available, but not more than twenty (20)
days (or, in the case of June, forty-five (45) days) after the end
of each month in each Fiscal Year during the term of the
Partnership, the following reports of the Partnership: (i) a
Partnership consolidation (i.e. trial balance) for the preceding
month, (ii) a plant operating statement showing expenditures by
cost center and cost element compared with the budget for the
preceding month and year-to-date, (iii) a capital spending status
report;
(c) as soon as available, but not more than twenty (20)
days (or, in the case of June, forty-five (45) days) after the end
of each month in each Fiscal Year during the term of the
Partnership, (i) an unaudited Balance Sheet of the Partnership as
at the end of the preceding month, (ii) the unaudited related
Statement of Income of the Partnership, which shall include sales
volumes, revenues and margins by product, for the preceding month
and for the Fiscal Year-to-date and (iii) the unaudited related
Statement of Cash Flow of the Partnership for the preceding month
and for the Fiscal Year-to-date, it being understood that in the
case of clauses (ii) and (iii) such statements are to be presented
setting forth in each case in comparative form the corresponding
figures for the corresponding period of the previous Fiscal Year
and the plan for the current Fiscal Year, all in reasonable detail
and in accordance with generally accepted accounting principles
applied on a basis consistent with such prior fiscal periods
(except as otherwise specified in such report);
(d) as soon as available, but not more than twenty (20)
days (or, in the case of June, forty-five (45) days) after the end
of each month in each Fiscal Year during the term of the
Partnership, an analysis of the performance of the Partnership;
(e) as soon as available, but in any event within thirty
(30) days after the end of each quarter of each Fiscal Year during
the term of the Partnership a report providing the financial and
operating data for inclusion in the Partners' Affiliates'
respective reports on Form 10-K or Form 10-Q (or any successor
reports or forms thereof) required to be filed with the SEC as of
the end of such quarter;
(f) as soon as available, but in any event within ninety
(90) days after the end of each Fiscal Year during the term of the
Partnership, an audited Balance Sheet as at the end of such Fiscal
Year and the related Statements of Income and Cash Flow of the
Partnership for such Fiscal Year, setting forth in each case in
comparative form, the figures for the previous Fiscal Year of the
Partnership, all in reasonable detail, with applicable footnotes
and accompanied by a report thereon of Ernst & Young or such other
independent public accountants of recognized national standing
selected by the Partnership in accordance with the terms of
Section 9.01(b), which report shall state whether in its opinion,
such financial statements present fairly in all material respects
the financial position of the Partnership as at the dates
indicated and the results of its operations and cash flows for the
periods indicated, in conformity with generally accepted
accounting principles;
(g) promptly upon obtaining knowledge of any audit item
involving disclosure or any material accounting issue, written
notification of such disclosure or accounting issue;
(h) within sixty (60) days after the end of each Fiscal
Year during the term of the Partnership, a certificate of an
officer of the Managing Partner describing the material terms of
all transactions between the Partnership and Affiliates of the
Operating Partner during the preceding Fiscal Year;
(i) within twenty (20) days of the end of each calendar
year, the information that FRP and FTX reasonably request in order
for FRP and FTX to comply with the provisions of FASB 109; and
(j) promptly, any other financial reports delivered to the
Operating Partner's parent entity.
9.05 Qualifying Income.
(a) The Partnership shall not, without the written consent
of the FRP Partner, generate income other than Qualifying Income.
The Managing Partner shall take any action required to operate the
Partnership in a manner consistent with the requirement of this
Section 9.05(a).
(b) The Managing Partner shall provide the FRP Partner, on
a monthly basis, with the information and data reasonably
necessary for the FRP Partner to determine whether the requirement
of Section 9.05(a) will be met for the Partnership's taxable year.
The Managing Partner shall also provide the FRP Partner, on a
timely basis, with the information and data reasonably necessary
to determine whether any Major Decision defined in Section
6.07(a)(ii) or Section 6.07(a)(iv) will result in the failure of
the Partnership to meet the requirement of Section 9.05(a) for any
taxable year of the Partnership. Upon providing the FRP Partner
with information and data with respect to any current or proposed
source of Partnership income reasonably sufficient for FRP to
determine whether such income is or will be Qualifying Income, the
Managing Partner may request that the FRP Partner consent to the
Partnership's generation of such income. The FRP Partner shall
respond in writing to any such request in a timely manner and any
consent so expressed shall constitute consent by the FRP Partner
to the generation of such income for purposes of Section 9.05(a),
subject to any limitation on the amount or timing thereof stated
in such consent. If the FRP Partner does not respond in writing
to the Managing Partner's request within twenty-five (25) days of
the receipt of such request, the FRP Partner shall be deemed to
have consented to the Partnership's generation of such income for
purposes of Section 9.05(a).
(c) In the event that (i) the Partnership fails (or based
on all available information, the FRP Partner reasonably believes
the Partnership may fail) to meet the requirement of Section
9.05(a) for any taxable year or (ii) there is an amendment to
Section 7704 of the Code, the issuance of a Treasury Regulation
pursuant to Section 7704 of the Code, the amendment of any other
Code Section, or the issuance of any other Treasury Regulation or
pronouncement that, in the reasonable belief of the FRP Partner,
may affect the partnership status of the FRP Partner or FRP for
Federal income tax purposes, the Policy Committee shall meet to
determine what actions would be required to preserve the
partnership status of the FRP Partner and FRP for Federal income
tax purposes. If the Policy Committee determines (or, if the
Policy Committee fails to agree, if either the IMC Partner or the
FRP Partner reasonably and in good faith determines) that the
Partnership cannot be operated in a manner that is consistent with
achieving the Partnership's business purpose other than in a
manner that is inconsistent with preserving the partnership status
of the FRP Partner and FRP for Federal income tax purposes, the
Partners agree to negotiate in good faith to determine the
appropriate action to be taken. In the event that the IMC Partner
and the FRP Partner are unable to agree on the action to be taken
after negotiating in good faith, each of the IMC Partner and the
FRP Partner shall have the right to elect to dissolve the
Partnership. It is acknowledged that none of the Partners is
obligated to take any action, and the Partnership is not obligated
to take action, that is harmful to any Partner or its Affiliates,
other than the dissolution of the Partnership.
9.06 Work Force; Employee Benefits.
(a) The Managing Partner shall supply, for the account of
the Partnership, the necessary work force for the conduct of the
business and affairs of the Partnership. The work force to be
provided shall include but shall not be limited to qualified
miners, engineers, metallurgists, geologists, assayers, equipment
operators, helpers, mechanics, accountants, attorneys, purchasing
agents, sales personnel and support staff, together with necessary
supervisory and management personnel, and shall include, as
necessary, the services of the Leased IMC Employees. Consistent
with approved budgets, all members of the work force employed by
the Managing Partner for the purpose of providing services to the
Partnership shall be paid such salaries, hourly wages and benefits
and shall be subject to such other terms and conditions of
employment as the Managing Partner deems appropriate subject to
the following sentence of this Section 9.06. The Managing Partner
shall be reimbursed (in accordance with Section 9.11) for the cash
costs (i) incurred under the Leasing Agreement in connection with
the Leased IMC Employees including, but not limited to, salaries
and wages; social security taxes and payroll taxes; contributions
to the IMC Salaried Pension Plan and the Retirement Plan for Non-
Union Hourly Employees of IMC Fertilizer, Inc. and contributions
to the IMC Salaried Contribution Plan and the Savings Plan for
Hourly Employees of IMC Fertilizer, Inc.; any employee benefits
other than those described above, including, but not limited to,
benefits under any employee benefit plan (as defined in section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended) or any retirement or deferred compensation plan, stock
plan, unemployment compensation plan, vacation pay, severance pay,
bonus or benefit arrangement, insurance or hospitalization program
or any other fringe benefit arrangement which does not constitute
an employee benefit plan, or any employment agreement, post-
retirement benefits, severance benefits or other employee benefits
for former Leased IMC Employees; and other governmental charges
relating to such employment; and (ii) of hiring and employing,
including, without limitation, (A) the cost of all social security
taxes, payroll taxes, post-retirement benefits of former Managing
Partner employees, other employee benefits and other governmental
charges related to such employment to the extent that the cost
thereof is associated with personnel employed or formerly employed
at production facilities as reflected, consistent with Operations'
historic practices, in the cost of goods sold income statement
caption and (B) the costs attributable to employees providing
management information services, public relations and internal
audit services provided directly to production facilities and
limited to those amounts reflected, consistent with Operations'
historic practices, in the cost of goods sold income statement
caption. To the extent that such personnel costs described at
clause (ii) above are included, consistent with Operations'
historic practices, in the selling and administrative expense
income statement caption for financial reporting purposes, such
costs shall be covered by the Administrative Fee described in
Section 9.11 and shall not be separately reimbursed or paid by the
Partnership.
(b) Subject to the terms and conditions of the
Contribution Agreement and to the extent permitted by applicable
law, the Managing Partner shall maintain employee benefit plans
(as defined in section 3(3) of ERISA) and retirement or deferred
compensation plans, unemployment compensation plans, vacation pay,
severance pay, bonus and benefit arrangements, insurance and
hospitalization programs and any other fringe benefit arrangements
for current and former employees, consultants and agents (whether
pursuant to contract, arrangement, custom or informal
understanding) which do not constitute employee benefit plans
(collectively, "Employee Benefit Plans") which are substantially
similar in all material respects to such plans, arrangements and
programs maintained from time to time by Operations, and shall
modify the provisions of the MP Pension Plans, MP Contribution
Plans and MP Benefit Plans to the extent changes are made to the
corresponding plan, contract or arrangement maintained by
Operations (the "IMC Plans") to the extent such changes to the IMC
Plans are commercially reasonable; provided, however, that nothing
in this Section 9.06(b) shall require the Managing Partner to
maintain any plan, arrangement or program for any employee who is
covered by a collective bargaining agreement, except to the extent
provided by such collective bargaining agreement.
9.07 Emergency Expenditures; Compliance with Law.
(a) If at any time as a result of any event there arises
an emergency where the Managing Partner determines that failure to
take prompt action may result in loss of life or material personal
injury or property damage, the Managing Partner shall have the
authority and responsibility to take such action and make such
immediate expenditures as the Managing Partner may deem necessary
to protect against loss of life, personal injury or damage to or
destruction of property, to safeguard lives and/or prudently
preserve and protect the optimum economic value of the assets of
the Partnership; provided that as soon as reasonably practicable
following the occurrence of such an emergency, the Managing
Partner shall notify the other Partners of the nature of the
emergency and the actions taken in response to such emergency.
(b) The Managing Partner shall have the authority and
responsibility to take such action and make such immediate
expenditures as it may deem necessary to manage and operate the
business and affairs of the Partnership in compliance with
applicable law; provided that if time permits, the Managing
Partner shall seek the approval of the Policy Committee prior to
making any expenditure pursuant to this Section 9.07(b) which
would otherwise have required such approval, and, if time does not
so permit, will promptly report such action or expenditures to the
Policy Committee.
(c) Any expenditure made pursuant to this Section 9.07
shall be deemed to constitute an approved expenditure without the
need or necessity for any action or approval by the Policy
Committee and shall not be included in determining whether the
Managing Partner is managing the business and affairs of the
Partnership within the operating and capital expenditure budgets
approved or adopted as described in Section 9.02 hereof.
9.08 No Action Contrary to Contracts or Applicable Law. The
Managing Partner agrees to use all commercially reasonable efforts not
to do or fail to do any act if it in good faith believes not doing or
failing to do such act is likely to result, or with the giving of
notice and/or the passage of time is likely to result, in (a) a default
under the terms of any mortgage, bond, indenture, agreement, lease or
other instrument or obligation to which the Partnership is a party or
by which its properties or assets may be bound; or (b) the violation of
any law, rule, regulation or ordinance or any judgment, order,
injunction, decree or award of any court, administrative agency or
governmental body against, or binding upon, the Partnership or its
properties or assets; provided, that, in the case of clause (a) above,
the covenant of the Managing Partner shall not apply if compliance
therewith would require the Managing Partner to make any capital or
other expenditures which are not provided for in an operating or
capital expenditure budget adopted by the Policy Committee (or by the
CEOs or the Managing Partner, as the case may be, pursuant to Section
6.07(b)), or otherwise approved by the Policy Committee or by the CEOs
or the Managing Partner in accordance with the terms of this Agreement
and, in the case of clause (b) above, any action or failure to act by
the Managing Partner taken to comply with the covenant shall be deemed
to be within its authority set forth in Section 9.07(b) and (c) hereof.
The Managing Partner shall promptly notify the Policy Committee in
writing of (i) the occurrence of any material default of which it has
knowledge under the terms of any mortgage, bond, indenture, agreement,
lease or other instrument or obligation to which the Partnership is a
party or by which its properties or assets may be bound, (ii) any
material violation of which it has knowledge of any law, rule,
regulation or ordinance or any judgment, order, injunction, decree or
award of any court, administrative agency or governmental authority
insofar as such violation relates to the Managing Partner, any Partner
or the Partnership, and (iii) any event which, with the delivery of
notice or the passage of time, or both, in the good faith belief of the
Managing Partner is likely to result in an event described in clause
(i) or (ii). The Managing Partner shall cause the Partnership to use
all commercially reasonable efforts to promptly cure or remedy any such
event within its control and for which it is responsible hereunder;
provided, that in the case of a cure or remedy relating to a default
described in clause (a) of the first sentence of this Section 9.08, the
covenant of the Managing Partner shall not apply if compliance
therewith would require the Partnership to make any capital or other
expenditures which are not provided for in an operating or capital
expenditure budget adopted by the Policy Committee (or adopted by the
CEOs or the Managing Partner, as the case may be, pursuant to Section
6.07(b)), or otherwise approved by the Policy Committee or by the CEOs
or the Managing Partner in accordance with the terms of this Agreement
and, in the case of a cure or remedy relating to a violation described
in clause (b) of the first sentence of this Section 9.08, any such cure
or remedy shall be deemed to be within the Managing Partner's authority
set forth in Section 9.07(b) and (c) hereof. The Managing Partner
shall represent the Partnership in any proceeding (whether formal or
informal) relating to any such event. At all times the Managing
Partner shall keep the Non-Managing Partners informed of the current
status and all significant developments in all such proceedings or
matters.
9.09 Licenses and Permits. The Managing Partner shall use all
commercially reasonable efforts to procure and maintain, for the
account of the Partnership, all licenses, permits and other
governmental authorizations necessary or appropriate to operate the
Partnership. The Managing Partner shall notify the Non-Managing
Partners promptly of any denial, suspension or revocation of any
material permit, license or governmental authorization and of any other
action or failure to act by any governmental authority which relates to
permits or licenses for the Partnership or significantly affects the
operations of the Partnership.
9.10 Litigation. The Managing Partner may, in its commercially
reasonable discretion, bring suit in the name or on behalf of the
Partnership without the approval of the Policy Committee. The Managing
Partner shall at all times keep the Non-Managing Partners informed of
the current status and all significant developments in any such suit.
9.11 Payment and Reimbursement of Expenses; Handling of
Partnership Bank Accounts and Funds.
(a) The Partnership shall establish bank accounts at such
banks as may from time to time be designated by the Managing
Partner. The Partnership's funds shall be invested in such manner
as the Managing Partner deems appropriate with interest accruing
to the Partnership. All bank and other accounts shall be
maintained in the Partnership's name. None of the Partnership's
funds shall be commingled with the funds of any Partner unless
previously approved in writing by all of the other Partners. The
Partnership shall designate a representative of the Managing
Partner as a signatory on its bank accounts to accomplish more
effectively the purposes of this Section 9.11.
(b) During the regular course of business, the Managing
Partner will invoice customers on behalf of the Partnership for
all sales of the business of the Partnership. The customers for
such sales will be instructed to direct their cash remittance
directly to a Partnership bank account designated by the Managing
Partner.
(c) The Partnership shall pay all costs, expenses,
liabilities, losses, damages, penalties and other obligations of
the Partnership. In furtherance thereof, the Managing Partner
will maintain in the name of the Partnership one or more
Partnership cash disbursement accounts for the purpose of paying
all such obligations of the Partnership. These disbursements
include all payments to third parties, payments to the Partners
for expenses incurred on behalf of the Partnership as well as
payments to the Partners of their share of Distributable Cash.
The disbursements shall cover all capital as well as operating
outlays of the Partnership.
(d) The Partnership shall pay to the Managing Partner, out
of Partnership funds, an annual fee (the "Administrative Fee")
intended to compensate the Managing Partner for selling and
administrative expenses (determined on a basis consistent with
Operations' historic practice with respect to its Contributed
Business) incurred by the Managing Partner in connection with the
operation and management of the business and affairs of the
Partnership or the performance of the Managing Partner's
obligations hereunder. One-twelfth of the Administrative Fee
shall be payable monthly in advance on the first day of each month
during the term of the Partnership. The Administrative Fee shall
initially be thirty-four million, three hundred thousand dollars
($34,300,000) and (i) shall be adjusted on June 30, 1994 and each
June 30 thereafter during the term of the Partnership in
accordance with the following sentence, and (ii) may be adjusted
by the Policy Committee upon the request of any Partner if the
manner in which the Managing Partner manages and operates the
business and affairs of the Partnership changes in such a way that
the Administrative Fee (as adjusted in accordance with the
following sentence) no longer accurately reflects the selling and
administrative practices employed by the Managing Partner in
connection with the operation and management of the business and
affairs of the Partnership and the performance of its obligations
hereunder. The Administrative Fee for any Fiscal Year commencing
with the Fiscal Year commencing July 1, 1994 shall be equal to
either (x) the sum of (i) the Administrative Fee in effect for the
immediately preceding Fiscal Year, plus (ii) the product of (A)
the percentage change in the GNP Deflator Index for the
immediately preceding Fiscal Year, multiplied by (B) the
Administrative Fee for the immediately preceding Fiscal Year or
(y) an amount determined by the Policy Committee pursuant to
clause (ii) of the immediately preceding sentence. It is agreed
among the Partners that all expenses and costs relating to FRP
Transferred Sales Employees are included in the Administrative Fee
and that no additional payment or reimbursement shall be made from
the Partnership to the Managing Partner on account of such
employees.
(e) The Partnership shall reimburse the Managing Partner
for all cash personnel costs, as set forth in Section 9.06.
Additionally, any other expenditures incurred by the Managing
Partner in connection with the business and affairs of the
Partnership or the performance by the Managing Partner of its
obligations hereunder in accordance with the terms of this
Agreement, as generally described in the operating budget of the
Partnership, and which constitute part of cost of goods sold and
not paid directly from Partnership funds will be reimbursed by the
Partnership.
(f) To the extent the Managing Partner determines that an
advance of monies from the Partners to the Partnership is
necessary (other than under the Working Capital Contribution
Arrangement), the Managing Partner shall request that the Policy
Committee call for cash contributions from the Partners in
accordance with Section 3.02(a).
(g) The Managing Partner shall be entitled to access, as
needed, the funds of the Partnership in order to pay expenses,
including, but not limited to, payroll expenses of the Managing
Partner, for which the Managing Partner is entitled to
reimbursement pursuant to Section 9.11(e).
(h) Notwithstanding anything herein to the contrary, the
Partnership shall not be obligated to pay, advance to or reimburse
the Managing Partner for, any costs or expenses pursuant to this
Section 9.11 if such cost or expense was incurred by the Managing
Partner otherwise than in compliance with this Agreement.
(i) All payments provided for in this Section 9.11 shall
be made on or before the due date, and if not paid, the unpaid
balance shall bear interest from and after the due date at the
rate equal to the lower of: (i) the maximum rate allowed by law
and (ii) the Prime Rate.
9.12 Transactions with Affiliates. Except with respect to items
(i)(B) and (ii) referred to in the parenthetical phrase in the
following sentence, any transaction, agreement, arrangement or
understanding between or on behalf of the Partnership, on the one hand,
and the Operating Partner or any Affiliate of the Operating Partner, on
the other hand, must be on terms no less favorable to the Partnership
than those which could be obtained from an independent third party
providing similar goods or services of like quality. All such
transactions, agreements, arrangements and understandings in an
aggregate amount in any Fiscal Year in excess of the Base Affiliate
Transaction Amount for such Fiscal Year (other than (i) during any
period during which the IMC Partner is Operating Partner, (A) any
transactions, agreements, arrangements or understandings with
Operations' railcar repair business located at Fitzgerald, Georgia on
terms no less favorable to the Partnership than those which could be
obtained from an independent third party providing similar goods or
services of like quality and (B) any transactions, agreements,
arrangements and understandings with the Rainbow Division of Operations
and International Minerals & Chemical (Canada) Global Limited
("IMC Canada Ltd."; formerly International Minerals & Chemical
Corporation (Canada) Limited) on the terms set forth on Schedule 9.12
and (ii) (A) the Marketing and Administrative Services Agreement, (B)
the Leasing Agreement, (C) the Materials Purchase and Cost Sharing
Agreement, (D) the Employee Cost Sharing Agreement and (E) the
Limestone Cost Sharing Agreement) shall be subject to the approval of
the Policy Committee or the CEOs, as the case may be, in accordance
with Section 6.07(a) or (b). Nothing in this Section 9.12 shall in any
way restrict or affect the right of the Partnership to enter into
transactions with Affiliates of the Non-Operating Partner.
The Operating Partner will, and will cause its Affiliates to (i)
give the Non-Operating Partner and its auditors and other authorized
representatives such access to the offices, properties, books and
records of such party, (ii) furnish to the Non-Operating Partner and
its auditors and other authorized representatives such financial and
operating data and other information as such Persons may reasonably
request and (iii) instruct its employees and auditors to cooperate with
the Non-Operating Partner and its auditors and other authorized
representatives, in each case as may be reasonably requested by the Non-
Operating Partner to evaluate any transactions, agreements,
arrangements or understandings between the Partnership or the Managing
Partner on the one hand, and the Operating Partner and its Affiliates,
on the other hand; provided that any investigation pursuant to this
Section shall be conducted in such a manner as not to interfere
unreasonably with the conduct of business of the Operating Partner and
its Affiliates.
9.13 No Shifting of Cash Flow. The Partners acknowledge that due
to the changes in the Partners' Current Interests and Capital Interests
over time, either the IMC Partner or the FRP Partner could be
disproportionately benefited or adversely affected by actions designed
to defer or accelerate Partnership revenues, defer or accelerate
Partnership expenses or capital expenditures or defer or accelerate
Partnership cash flow. The Managing Partner agrees that it will not
operate the Partnership with the intention of deferring or accelerating
cash flows from one period to another; provided that nothing in this
Section 9.13 shall prevent the Managing Partner from managing the
business and affairs of the Partnership in accordance with the then
current operating and capital expenditure budgets or taking actions to
serve the interests of the Partnership without regard to changes in the
Current Interests and Capital Interests of the Partners.
ARTICLE X.
Accounting Records; Tax Matters
10.01 Books and Records. The Managing Partner shall cause the
Partnership to prepare and maintain proper and complete records and
books of account, separate from the books and records of the Managing
Partner maintained for activities unrelated to the Partnership, in
which shall be entered all transactions and other matters relative to
the Partnership and the operation and management of the Partnership and
its business as are usually entered into records and books of account
maintained by Persons engaged in businesses of like character. The
books and records of the Partnership shall be maintained at its
principal place of business. The books of the Partnership shall be
maintained for financial reporting requirements in accordance with
generally accepted accounting principles. The Partnership shall also
maintain such tax basis books as are required for the Partnership and
the Partners to comply with the provisions of FASB 109. The
Partnership shall provide such financial and other statements,
including plans, forecasts and projections, as each Partner may
reasonably require for purposes of estimating taxes or projecting the
amount and source of future taxable income or loss.
10.02 Inspection of Books and Records. Each of the IMC Partner
(and, during the IMC GPCo Liquidation Period, each of Operations and
IMC GPCo) and the FRP Partner, at its own expense, shall have
reasonable access to the auditors of the Partnership and shall have the
right to inspect such books and records and the physical properties of
the Partnership during normal business hours and to cause an audit
thereof; provided that if either of the IMC Partner (or, during the IMC
GPCo liquidation Period, Operations or IMC GPCo) or the FRP Partner
requests access to the Partnership's auditors, desires to inspect the
books, records and physical properties of the Partnership or desires to
cause an audit of the Partnership's books, records and physical
properties, such Partner shall provide prior written notice to the
Managing Partner; and provided, further, that, unless required by
applicable law or unless such Partner reasonably believes that it needs
some or all of the information which would be obtained in an audit in
order to satisfy its duties and obligations to its shareholders or
partners or to the shareholders or to the partners or unitholders of
Global or FRP, as the case may be, no more than one such audit may be
requested during any twelve (12) month period and each such audit shall
be made, if at all, within twenty-four (24) months of the end of the
fiscal period to which it relates. All meetings with the Partnership's
auditors and inspections of the Partnership's books, records and
physical properties shall be conducted in a manner and at a time
designed not to cause undue inconvenience to the Managing Partner. The
Managing Partner, however, shall (i) not unreasonably delay such audit,
(ii) make all books and records of the Partnership available to the
auditors in connection with such audit and (iii) use all commercially
reasonable efforts to cause its personnel to cooperate with the
auditors in a commercially reasonable manner and to provide any
assistance reasonably necessary in connection with such audit. Any
Partner shall be permitted to make financial and other information
relating to the business and affairs of the Partnership available to
third parties in connection with any proposed sale or other disposition
of all or a portion of its Partnership Interest in accordance with the
terms of this Agreement, provided such third parties have signed
appropriate confidentiality agreements with such Partner and the
Partnership.
10.03 Accounting and Taxable Year. Subject to Section 448 of the
Code and the provisions of this Agreement, the books of the Partnership
(and the classification, realization and recognition of income, gain,
losses, deductions and other items for Federal income tax purposes)
shall be kept and determined on such method of accounting for tax and
financial reporting purposes as may be determined by the Managing
Partner. The taxable year of the Partnership shall end on such date
permitted under the Code as the Partners shall determine.
10.04 Partnership Tax Returns. The Managing Partner shall use
its best efforts to cause the Partnership to timely file all necessary
federal, state, and local Partnership income tax returns and
information returns. Each Partner shall provide such information, if
any, as may be required by the Partnership for purposes of preparing
such tax and information returns. The Partnership's income tax returns
shall be provided to the Non-Operating Partner in sufficient time for
the Non-Operating Partner to confer with the Managing Partner before
the time at which such Partnership return must be filed. The
Partnership shall deliver to each Partner, within twenty-five (25) days
after the end of the Partnership taxable year any additional
information in the possession of the Partnership that the Partners may
reasonably require for the preparation of their own income tax returns.
10.05 Partnership Taxes. The Managing Partner shall cause the
Partnership to timely pay all taxes and assessments levied or assessed
against the Partnership or its assets. However, the Managing Partner
may cause the Partnership to either (i) contest in good faith the
validity of any such taxes or assessments or (ii) pay such taxes and
assessments under protest. In the event that the Managing Partner
causes the Partnership to contest in good faith such taxes and
assessments, the Managing Partner shall not be obligated to cause the
Partnership to pay the same until a final determination is reached that
such taxes or assessments are valid and constitute an obligation of the
Partnership.
10.06 Tax Matters Partner. The Managing Partner shall be the
"tax matters partner," as that term is defined in Code Section
6231(a)(7) (the "Tax Matters Partner") with all of the rights, duties,
and powers provided for in Code Sections 6221 through 6232 inclusive;
provided, however, that, in the exercise of such powers, the Tax
Matters Partner shall be subject to the overall direction of the
Partners and the provisions of Sections 10.05, 10.06 and 10.07. The
Tax Matters Partner, as an authorized representative of the
Partnership, shall have the right to retain and to pay the fees and
expenses of counsel and other advisors selected by the Tax Matters
Partner. All reasonable expenses of the Tax Matters Partner and other
reasonable fees and expenses of the Partnership incurred in connection
with the defense of any claims made by the Internal Revenue Service
shall be borne by the Partnership.
10.07 Duties of the Tax Matters Partner. The Tax Matters Partner
shall cooperate with the other Partners and, for other than routine
correspondence and communications, shall promptly provide the other
Partners with copies of notices or other materials from, and inform the
other Partners of discussions engaged in with, the Internal Revenue
Service and shall provide the other Partners with notice of all
scheduled administrative proceedings, including meetings with Internal
Revenue Service agents, technical advice conferences and appellate
hearings, as soon as reasonably possible after receiving notice of the
scheduling of such proceedings. The Tax Matters Partner shall not
agree to extend the period of limitations for assessments, file a
petition or complaint in any court, file a request for an
administrative adjustment of Partnership items after any return has
been filed, or enter into any settlement agreement with the Internal
Revenue Service or Department of Treasury with respect to Partnership
items of income, gain, loss, deduction or credit except with the
consent of the IMC Partner (or, with respect to the IMC GPCo
Liquidation Period, Operations and IMC GPCo) and the FRP Partner, which
consent shall not be unreasonably withheld. The Tax Matters Partner
may request extensions to file any tax return or statement without the
consent of, but shall so inform, the IMC Partner (or, with respect to
the IMC GPCo Liquidation Period, Operations and IMC GPCo) and the FRP
Partner. The provisions of this Agreement regarding the Partnership's
tax returns shall survive the termination of the Partnership and the
transfer of any Partner's Partnership Interest and shall remain in
effect for the period of time necessary to resolve any and all matters
regarding the Federal, state and local income taxation of the
Partnership and the items of Partnership income, gain, loss, deduction
and credit.
10.08. Partnership Status; Elections.
(a) The Partners acknowledge that this Agreement creates a
partnership for Federal and state income tax purposes and hereby
agree not to elect to be excluded from the application of
Subchapter K of Chapter 1 of Subtitle A of the Code or any similar
state statute.
(b) The Managing Partner shall cause the Partnership to
file an election under Section 754 of the Code and the Treasury
Regulations thereunder to adjust the basis of the Partnership
assets under Sections 734(b) or 743(b) of the Code and shall file
a corresponding election under the applicable sections of state
and local law. The Managing Partner shall also cause the
Partnership to take or to elect to take deductions under the most
accelerated method available to the Partnership, unless both the
IMC Partner (or, with respect to the IMC GPCo Liquidation Period,
Operations and IMC GPCo) and the FRP Partner agree otherwise. The
Partnership shall make any other elections under the United States
income tax laws and regulations and any similar state statutes as
determined to be appropriate by the Managing Partner.
10.09. Tax Reporting.
(a) The Managing Partner shall provide the Non-Operating
Partner with any tax information and data reasonably requested by
the Non-Operating Partner, including information and data
requested for the purpose of allowing the Non-Operating Partner to
(i) allocate its Partnership tax items on a property-by-property
basis; and (ii) allocate FRP's portion of Partnership tax items to
any partner of FRP that purchases or sells its interest in FRP
during the year, pursuant to Section 706 of the Code and FRP's
accounting conventions for sales and purchases of FRP interests.
For purposes of this Section 10.09, the term "property" shall
mean, with respect to depletable assets, property as defined in
Section 613 of the Code and the Treasury Regulations thereunder.
(b) Except as otherwise provided in this Agreement, the
information and data requested pursuant to this Section 10.09
shall be provided to Non-Operating Partner on the following
schedule:
Period in Which Item Accrued Reporting Deadline
Fiscal Year ending June 30 October 25
Six Months ending December 31 January 25
(c) The information and data provided under this Section
10.09 shall be prepared with the same degree of completion and
accuracy as is required for information and data filed with a
Federal income tax return, shall be prepared on an accrual basis
and shall include any and all items of Partnership income, gain,
losses, deductions and any other items or information as may be
reasonably needed by the Non-Operating Partner or any of its
Affiliates. Such information and data shall include, but shall
not be limited to, the total amount of each of the tax items
listed in the attached Schedule Y and each Partner's allocable
share of each item.
(d) In the event of any amendment to the Code or the
issuance of any Treasury Regulation or pronouncement that affects
any of the Non-Operating Partner's Affiliate's reporting
requirements with respect to the partners, if applicable, of any
of the Affiliates of the Non-Operating Partner, the Partnership
shall furnish to the Non-Operating Partner any additional
information and data that is reasonably necessary for any of the
Non-Operating Partner's Affiliates to comply with such reporting
requirements.
(e) In the event that any information is needed from the
Non-Operating Partner in order for the Tax Matters Partner to
complete the required federal and state tax return, such
information will be provided by the Non-Operating Partner by
September 15.
10.10. Tax Oversight.
(a) The Non-Operating Partner shall have the right to
request any and all information and data from the Managing Partner
regarding the calculation of the allocations pursuant to Article V
and regarding the tax matters of the Partnership, including the
classification, realization and recognition of income, gain,
losses, deductions and other Partnership items, and the Operating
Partner shall provide such information and data as soon as
practicable. Each of the IMC Partner (or, with respect to the IMC
GPCo Liquidation Period, Operations and IMC GPCo) and the FRP
Partner, at its sole cost, shall also have the right to inspect
and copy any and all books and records of the Partnership relating
to the calculation and allocation of Partnership tax items,
including the original source documents and tax work papers of the
Partnership, at such times as the IMC Partner (or, with respect to
the IMC GPCo Liquidation Period, Operations or IMC GPCo) or the
FRP Partner, as the case may be, may reasonably request.
(b) The Managing Partner shall notify the Non-Operating
Partner as promptly as practicable of the tax treatment of any
significant tax item of the Partnership. The Non-Operating
Partner shall have the right to confer with the Managing Partner
regarding the tax matters of the Partnership and the calculation
of the allocations pursuant to Article V on a yearly basis or on a
more frequent basis as requested by the Non-Operating Partner.
(c) In the event of a disagreement between the Partners
regarding the treatment of a Partnership tax item (other than
items as to which the Partners approve a treatment), the
Partnership shall not take any position for Federal or state
income tax purposes that is not supported by substantial
authority, as that term is defined for purposes of Code Section
6662(d)(2)(B)(i). The Partners reserve the right to file their
separate income tax returns in a manner inconsistent with the
Partnership's Federal income tax return.
ARTICLE XI.
Term
11.01 Term. The term of the Partnership commenced on July 1,
1993 and shall continue in existence until June 30, 2076, unless
extended by written agreement of each Partner or unless earlier
terminated pursuant to the terms of this Agreement.
11.02 Purchase Option Upon Scheduled Expiration of the
Term. Either the IMC Partner or the FRP Partner may give the other
irrevocable written notice not less than one hundred eighty (180) days
prior to the scheduled expiration of the term of the Partnership
pursuant to Section 11.01 of its election to exercise the purchase
option set forth in this Section 11.02. If only one of the IMC Partner
or the FRP Partner gives the notice referred to in the preceding
sentence (the "Buying Partner"), the Buying Partner shall have the
right and the obligation to purchase all, but not less than all, of
such other Non-Managing Partner's Partnership Interest and the Managing
Partner's Partnership Interest at the aggregate Transfer Price
therefor. If the Buying Partner and such other Non-Managing Partner
cannot agree upon a Transfer Price within sixty (60) days after the
notice referred to in the first sentence of this Section 11.02, either
the IMC Partner or the FRP Partner may, by notice to the other, invoke
the Appraisal Procedure. If the Appraisal Procedure is required to
determine the Transfer Price, the fees and expenses of such Appraisal
Procedure shall be shared equally by the IMC Partner and the FRP
Partner. The closing of such sale shall take place upon the date the
term of the Partnership is scheduled to expire pursuant to Section
11.01. If both the IMC Partner and the FRP Partner give the notice
referred to in the first sentence of this Section 11.02, then the term
of the Partnership under Section 11.01 shall automatically be extended
for an additional period of twenty (20) years (or such other time
period as the IMC Partner and the FRP Partner may mutually agree) on
the terms and conditions set forth herein (or on such other terms and
conditions as the IMC Partner and the FRP Partner may mutually agree).
If neither the IMC Partner nor the FRP Partner give the notice referred
to in the first sentence of this Section 11.02, then, upon the
expiration of the term of the Partnership, the affairs of the
Partnership shall be wound up in accordance with the provisions of
Article XII hereof.
ARTICLE XII.
Dissolution and Winding-Up
12.01 Dissolution. The Partnership shall be dissolved upon the first
to occur of the following events (each, a "Dissolution Event"):
(a) The Bankruptcy of any Partner, provided, however, that
to the fullest extent permitted by applicable law, the Partnership
shall be reconstituted and continued if all of the Partners (other
than a Bankrupt Partner or Partners) elect to so reconstitute and
continue the Partnership, in which event the Partnership shall
continue as so reconstituted with all of the Partners (including
the Bankrupt Partner or Partners) remaining as partners in the
Partnership;
(b) The election by all Partners to dissolve the
Partnership;
(c) The expiration of the term of the Partnership (as such
term may be adjusted pursuant to Section 11.01 or 11.02), except
if one Partner acquires directly or indirectly the Partnership
Interest of the other Partners pursuant to the provisions of
Section 11.02;
(d) The occurrence of any event that makes it unlawful for
the business of the Partnership to be carried on or for the
Partners to carry it on in partnership;
(e) The entry of a decree of judicial dissolution;
(f) The written determination by the Policy Committee (or
if the Policy Committee fails to agree, if either the IMC Partner
or the FRP Partner reasonably and in good faith determines) that
the Partnership cannot be operated in a manner that is consistent
with achieving the Partnership's business purpose other than in a
manner that is inconsistent with preserving the partnership status
of the FRP Partner and FRP for Federal income tax purposes and the
election by either the IMC Partner or the FRP Partner to dissolve
the Partnership, after negotiating in good faith with the other
Partners, in accordance with Section 9.05(c); or
(g) Subject to Section 12.11, the occurrence of any other
event that, absent an agreement to the contrary, causes a
dissolution of the Partnership under the Act;
provided that, to the fullest extent permitted by law, if a dissolution
of the Partnership is caused by any event described in Section
12.01(g), unless one of the Partners is Bankrupt, (i) the Partners
(other than any Partner whose act has resulted in such dissolution) may
elect to reconstitute the Partnership within four (4) months of the
date of the event giving rise to the dissolution hereunder and if the
Partners do so elect, the Partnership shall continue as if no
dissolution had occurred, in which event the Partnership shall continue
as so reconstituted with all of the Partners (including any Partner the
act of which has resulted in such dissolution) remaining as partners in
the Partnership, or (ii) if the Partnership is not reconstituted as
provided above, and such dissolution is caused by the act of any
Partner (the "Withdrawing Partner"), then the IMC Partner, if it is not
the Withdrawing Partner or the FRP Partner, if it is not the
Withdrawing Partner (in either such case, the "Non-Withdrawing
Partner") may, by written notice to the Withdrawing Partner, elect (A)
to purchase the Partnership Interest of the Withdrawing Partner, or (B)
to admit one or more new partners (the "New Partners") to the
Partnership, who shall purchase the Partnership Interest of the
Withdrawing Partner or (C) to cause the Partnership's affairs to be
wound up in accordance with Section 12.02. The Withdrawing Partner (1)
shall have only those rights and receive only those payments that are
expressly provided for herein, (2) shall be liable to the Partnership,
the Non-Withdrawing Partner, the Managing Partner and any New Partners
for all losses, costs, fees, expenses and damages suffered by the
Partnership, such Non-Withdrawing Partner, the Managing Partner or any
New Partners as a result of such dissolution, (3) shall remain liable
to the Partnership, such Non-Withdrawing Partner, the Managing Partner
and any New Partners for any debts, liabilities or other obligations of
the Withdrawing Partner to the Partnership, such Non-Withdrawing
Partner, the Managing Partner or any New Partners, and (4) shall remain
liable to the Partnership, such Non-Withdrawing Partner, the Managing
Partner and any New Partners for its contribution obligation pursuant
to Section 8.02. The purchase price to be paid to the Withdrawing
Partner (by the Non-Withdrawing Partner or any New Partners) in any
sale and purchase of the Withdrawing Partner's Partnership Interest
pursuant to this Section 12.01, shall be (x) the Transfer Price,
determined (unless otherwise agreed) in accordance with the Appraisal
Procedure (which Appraisal Procedure shall be at the expense of the
Withdrawing Partner), reduced by (y) the amount of any losses, costs,
fees, expenses or damages suffered by the Partnership, the Non-
Withdrawing Partner, the Managing Partner or any New Partners as a
result of such dissolution, and shall be payable to the Withdrawing
Partner in five equal annual installments, without interest, commencing
on the date of the transfer of the Partnership Interest of the
Withdrawing Partner (which shall be the tenth (10th) business day
following the determination of the Transfer Price). In any winding up
pursuant to clause (ii)(C) above, the amount otherwise distributable to
the Withdrawing Partner pursuant to the following provisions of Article
XII shall be reduced by the amount of any losses, costs, fees, expenses
or damages suffered by the Partnership, the Non-Withdrawing Partner,
the Managing Partner or any New Partners as a result of such
dissolution.
12.02 Winding-Up. Upon dissolution of the Partnership, and the
failure by one or more of the Partners or any Affiliate or Affiliates
of the Partners, to reconstitute and continue the Partnership (pursuant
to Section 11.02 or otherwise) within four (4) months after such
dissolution and if the Non-Withdrawing Partner has not made any
election pursuant to Section 12.01, the Managing Partner shall (unless
the event giving rise to the dissolution was the Bankruptcy of the
Managing Partner, in which case the Non-Managing Partner with the
largest Capital Interest at the time of such dissolution shall) wind up
the affairs of the Partnership in accordance with the Act and, to the
extent permitted by applicable law, shall settle accounts between the
Partners as specified in this Article XII. The Partner charged with
winding up the affairs of the Partnership and settling accounts among
the Partners hereunder shall be referred to as the "Liquidating
Partner".
12.03 Accounting on Dissolution. If the Partnership is not
reconstituted or continued in accordance with the terms hereof
following a dissolution, then on the date (the "Accounting Date") which
is four (4) months following the date of dissolution, a proper
accounting shall be made of the Partnership assets, liabilities and
operations, from the date of the last previous accounting to the
Accounting Date. Any items of income, gain, credit, loss, expense and
other deductions which are realized subsequent to the date of the last
previous accounting to the Accounting Date shall be allocated in
accordance with Article V and proper adjustments shall be made to the
Capital Account of each Partner.
12.04 Accounting; Allocations of Residual Net Profits and
Residual Net Loss After Dissolutions.
(a) Any items of gain or loss that are realized from
Partnership operations or from sales of Partnership assets
subsequent to the Accounting Date and before the date of
liquidation shall be allocated as provided in Article V.
(b) In addition to the adjustments to the Partner's
Capital Accounts described above, if any of the Partnership's
properties are to be distributed in kind rather than sold, such
properties that are to be distributed in kind shall be valued by
the Partners and a simulated aggregate gain (if any) or loss (if
any) for those properties shall be allocated to the Partners'
Capital Accounts as that simulated aggregate gain (or loss) would
have been allocated under Article V if such properties had been
sold for a cash price equal to each asset's fair market value on
the Accounting Date.
12.05 Application of Article V in Year of Dissolution. In the
year in which the Partnership dissolves, Article V shall be applied
with regard to the Capital Interests in effect for the year of the
dissolution, rather than the Capital Interests in effect for the
following year.
12.06 Conversion of Assets to Cash.
(a) If the Partnership is not reconstituted, or the
Partnership Interest of the Withdrawing Partner is not purchased
in accordance with the terms hereof, then commencing with the date
that is four (4) months after the date of dissolution, unless
arrangements satisfactory to all Partners are otherwise made,
sufficient assets of the Partnership will be converted into cash
to permit the Partnership to pay all its liabilities other than
long-term debts which (i) are secured by Partnership assets from
which the projected net income is sufficient to pay installments
of principal and interest on such debts as they become due and
(ii) contain terms specifying that neither the dissolution of the
Partnership nor the distribution of such property that is subject
to and secured by such debts constitutes a default or causes the
acceleration of the maturity of such indebtedness ("Approved
Debts").
(b) Notwithstanding the provisions of Sections 12.07 and
12.08 regarding the method and timing of the liquidation of the
assets of the Partnership, but subject to the order of priorities
set forth therein, if on commencement of the winding up process in
accordance with Section 12.02, the Partners determine that an
immediate sale of part or all of the Partnership's assets would be
impractical or would cause undue loss to the Partners, the
Partners may defer for a reasonable time the liquidation of any
assets except those necessary to satisfy the liabilities of the
Partnership.
(c) In the event that Partnership assets are distributed
in kind pursuant to Section 12.06(b), the Partners shall be
consulted to determine the most tax-efficient manner to make such
distribution, consistent with the liquidation priorities of
Section 12.07.
12.07 Distributions in Liquidation. As soon as the actions
required by Sections 12.03, 12.04, 12.05 and 12.06 have been completed,
the Liquidating Partner shall cause the cash and assets of the
Partnership to be distributed in the following order:
(a) To creditors of the Partnership (other than Partners)
in payment of all liabilities of the Partnership (other than
Approved Debts) in the order of priority as provided by law. If
any liability is contingent or uncertain in amount, a reserve
equal to the maximum amount to which the Partnership could
reasonably be held liable will be established. Upon the payment
or other discharge of such liability, the amount remaining in such
reserve not needed, if any, will be distributed in accordance with
the remaining provisions of this Section 12.07.
(b) To the Partners in payment of all loans (including,
without limitation, any Partner Loans) and any interest thereon in
accordance with the amount owing to each Partner.
(c) To each Partner in accordance with the positive
balance in its Capital Account.
(d) To the Partners in accordance with their respective
Capital Interests in effect for the year of the liquidation.
(e) Notwithstanding the foregoing provisions of this
Section 12.07, any distribution which, but for this Section
12.07(e) would be payable to a Partner whose actions in violation
of this Agreement (other than any breach of Section 9.05(a))
caused the dissolution of the Partnership shall be reduced by the
amount of losses, costs, fees, expenses and damages suffered by
the Partnership or any Partner (other than the Partner whose
actions caused a dissolution) as a result of such dissolution.
12.08 Compliance with Treasury Regulations. In the event that
the Partnership or any Partner's Partnership Interest is "liquidated"
within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g),
liquidating distributions shall be made, pursuant to this Agreement, in
accordance with the Partners' positive Capital Account balances, as
required by Treasury Regulation Section 1.704(b)(2)(b)(2), by the end
of the taxable year or, if later, within ninety (90) days after the
date of such liquidation. In determining any Partner's Capital Account
balance pursuant to this Section 12.08, any item of gain, loss,
deduction, and credit that has not previously been allocated pursuant
to Article V shall be so allocated.
12.09 Deficit Capital Account Restoration Obligation. At the end
of the period described in Sections 12.06 and 12.08 (and after
allocation of all Partnership items pursuant to this Article XII), if
any Partner has a negative balance in its Capital Account, such
negative balance shall be a debt from that Partner to the Partnership,
and that Partner shall be obligated to make additional contributions to
the Partnership to restore that Partner's Capital Account for income
tax purposes to zero (0) at such time. Any amount contributed to the
Partnership pursuant to this Section 12.09 shall be distributed
according to Section 12.07.
12.10 Section 708 Termination. Notwithstanding any other
provision of this Article XII, in the event that the Partnership is
liquidated within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Treasury Regulations, but no Dissolution Event has occurred, the assets
of the Partnership shall not be liquidated, the Partnership's
liabilities shall not be paid or discharged, and the Partnership's
affairs shall not be wound up.
12.11 Continuation of the Partnership. Unless required by
applicable law, no sale, transfer, assignment or other disposition by
either Partner of all or any part of its Partnership Interest in
accordance with the terms hereof (including, without limitation, the
transfers of the Partnership Interest of IMC GPCo to Operations in
connection with the IMC GPCo Liquidation and, in the event that FTX and
FRP choose to cause the merger, liquidation or dissolution of the FRP
Partner (or the transfer by the FRP Partner of its Partnership
Interests to FRP or an Affiliate of FRP) in accordance with the terms
of the Amendment, Waiver and Consent Agreement, transfers of the
Partnership Interest of the FRP Partner to FRP or an Affiliate of FRP
in connection with such merger, liquidation or dissolution of the FRP
Partner) shall cause a dissolution of the Partnership, and, if such a
dissolution is required under applicable law (including, without
limitation, as a result of the transfers of the Partnership Interest of
IMC GPCo to Operations in connection with the IMC GPCo Liquidation or,
in the event that FTX and FRP choose to cause the merger, liquidation
or dissolution of the FRP Partner (or the transfer by the FRP Partner
of its Partnership Interests to FRP or an Affiliate of FRP) in
accordance with the terms of the Amendment, Waiver and Consent
Agreement, as a result of the transfers of the Partnership Interest of
the FRP Partner to FRP or an Affiliate of FRP in connection with such
merger, liquidation or dissolution of the FRP Partner), immediately
upon such sale, transfer, assignment or other disposition by either
Partner, the Partnership shall be reconstituted as a general
partnership, governed by this Partnership Agreement, among the
transferee, purchaser or assignee and the remaining Partner or
Partners.
12.12 Waiver of Certain Rights. Unless otherwise agreed in
writing by the Partners, to the extent permitted by Delaware law, each
Partner hereby waives (i) all rights it may have under Delaware law to
cause the dissolution of the Partnership (other than dissolution by
operation of law as a result of a transfer of its Partnership Interest
as expressly permitted hereby), (ii) to the extent a dissolution occurs
by operation of law, the right to cause the Partnership to wind up its
affairs and make distributions to the Partners pursuant to Article XII
upon the occurrence of such dissolution and (iii) all rights to
partition with respect to real and personal property, provided that
this clause shall not apply to assets that have previously been
distributed by the Partnership to the Partners.
ARTICLE XIII.
Miscellaneous Provisions
13.01 Force Majeure. If the Managing Partner is rendered unable,
wholly or in part, by force majeure to carry out its obligations
hereunder such obligations insofar as they are affected by the force
majeure shall be suspended during but no longer than the continuance of
the force majeure. In such event, the Managing Partner shall use all
commercially reasonable efforts to remove the force majeure as promptly
as practicable. The term "force majeure" shall mean but shall not be
limited to: acts of God or the public enemy; expropriation or
confiscation of facilities; compliance with any order or request of any
governmental authority or person purporting to act therefor; acts of
declared or undeclared war; public disorders, rebellion, or sabotage;
revolution; earthquake; fire; flood; riot; labor difficulties or
shortages; labor strikes whether direct or indirect; action or inaction
of any governmental agencies; delays in or shortages of transportation;
inability to obtain necessary materials or equipment; inability to
obtain necessary permits or approvals due to existing or future laws,
rules or regulations of any governmental authority; or any cause
whether or not of the same class or kind as those specifically above
named not within the control of the Managing Partner and which, by the
exercise of all commercially reasonable efforts the Managing Partner is
unable to prevent. The requirement that the Managing Partner use all
commercially reasonable efforts to remedy any force majeure as promptly
as practicable shall not require the settlement of strikes, lockouts,
or other labor difficulties by the Managing Partner contrary to its
wishes or the challenging of the validity of any governmental law,
regulation, order or request. In the event of any occurrence of force
majeure, the Managing Partner immediately shall notify the Policy
Committee of such occurrence.
13.02 Limitation of Liability of Partners.
(a) Notwithstanding anything to the contrary set forth in
this Agreement, except as provided in Section 7.06 or Section
13.02(b), no Partner (which term, for purposes of this Section
13.02(a), shall, with respect to the IMC GPCo Liquidation Period
(and all other periods during which Operations or IMC GPCo is a
Partner), refer to each of Operations and IMC GPCo, severally and
not jointly) shall be liable to the Partnership, any other Partner
or any of their respective Related Persons for any loss or damage
of any nature incurred or suffered by the Partnership, any other
Partner or any of their respective Related Persons except loss or
damage to the Partnership, any other Partner or any of their
respective Related Persons caused by such Partner's gross
negligence or wilful misconduct hereunder.
(b) The Managing Partner shall be liable to the
Partnership and the other Partners, solely as a result of such
Partners' status as Partners, only for all damages, including lost
profits, which are proximately caused by the Managing Partner's
gross negligence, wilful misconduct, wilful breach of this
Agreement or failure to follow a specific instruction from the
Policy Committee adopted in accordance with the terms of this
Agreement, but shall not be so liable for any further lost profits
or other damages which are the further consequences of such lost
profits or other damages that were proximately caused. For
purposes of this Agreement, an ignoring of the terms of this
Agreement shall be deemed a wilful breach; provided that the
Managing Partner shall not be liable for ignoring the term of this
Agreement requiring the Managing Partner to act as an ordinary
prudent and reasonable manager if the Managing Partner acted in
good faith and in the belief (which belief was reasonable) that
its actions were in accordance with all of the terms of this
Agreement.
13.03 Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors
and assigns; provided that no assignment of any Partnership Interest,
or portion thereof, shall be effective unless made in accordance with
the terms of this Agreement. The transfers of the Partnership Interest
of IMC GPCo to Operations in connection with the IMC GPCo Liquidation,
the FRP GPCo/FCC/FTX Mergers and, in the event that FTX and FRP choose
to cause the merger, liquidation or dissolution of the FRP Partner (or
the transfer by the FRP Partner of its Partnership Interests to FRP or
an Affiliate of FRP) in accordance with the terms of the Amendment,
Waiver and Consent Agreement, transfers of the Partnership Interest of
the FRP Partner to FRP or an Affiliate of FRP in connection with such
merger, liquidation or dissolution of the FRP Partner shall each be
deemed to be made in accordance with the terms of this Agreement. The
sale, transfer or assignment of a Partnership Interest, or portion
thereof, in accordance with the terms of this Agreement (including,
without limitation, the transfers of the Partnership Interest of IMC
GPCo to Operations in connection with the IMC GPCo Liquidation and, in
the event that FTX and FRP choose to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP Partner of
its Partnership Interests to FRP or an Affiliate of FRP) in accordance
with the terms of the Amendment, Waiver and Consent Agreement,
transfers of the Partnership Interest of the FRP Partner to FRP or an
Affiliate of FRP in connection with such merger, liquidation or
dissolution of the FRP Partner) shall result in the transfer to the
purchaser, transferee or assignee of a Partnership Interest, or portion
thereof, that is equal to the sold, transferred or assigned Partnership
Interest, or the sold, transferred or assigned portion thereof, of the
seller, transferor or assignor and shall cause the purchaser,
transferee or assignee to be subject to and to incur all obligations
pertaining to the sold, transferred or assigned Partnership Interest,
or the sold, transferred or assigned portion thereof.
13.04 Notices. All communications, notices and consents provided
for herein shall be in writing and be given in person (or air freight
delivery) or by means of telecopy (with request for assurance of
receipt in a manner typical with respect to communications of that
type) or by mail, and shall become effective (x) on delivery if given
in person or by air freight delivery, (y) on the date of transmission
if sent by telecopy or (z) three business days after being deposited in
the mails, with proper postage for first-class registered or certified
air mail prepaid. Notices shall be addressed as follows:
(i) if to the IMC Partner at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
(ii) if to Operations at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
(iii) if to IMC GPCo at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
(iv) if to the Managing Partner at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
and (v) if to the FRP Partner at:
1615 Poydras Street
New Orleans, Louisiana 70112
Facsimile: 504-585-3513
Attention: General Counsel
or at such other address as either party hereto may from time to time
designate by notice duly given in accordance with the provisions of
this Section to the other party hereto.
13.05 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
regard to the conflicts of law rules of such state.
13.06 Choice of Forum. All suits, actions or proceedings arising
out of or relating to this Agreement shall be brought in a state or
federal court located in the State of Delaware, which courts shall be
an appropriate forum for all such suits, actions or proceedings. Each
Partner hereby waives any objection which it may now or hereafter have
to the laying of venue in any such court of any such suit, action or
proceeding.
13.07 Consent to Jurisdiction. Each Partner hereby irrevocably
submits to the jurisdiction of any state or federal court located in
the State of Delaware in any such suit, action or proceeding referred
to in Section 13.06 above. IMC GPCo hereby designates and appoints The
Corporation Trust Company, with an office on the date hereof at 1209
Orange Street, Wilmington, Delaware 19801, or any successor thereof, as
its authorized agent to accept and acknowledge on its behalf service of
any and all process which may be served in any such suit, action or
proceeding in any state or federal court in the State of Delaware and
agrees that service of process upon The Corporation Trust Company, or
any successor thereof, shall be deemed in every respect effective
service of process upon IMC GPCo in any such suit, action or
proceeding. Operations hereby designates and appoints The Corporation
Trust Company, with an office on the date hereof at 1209 Orange Street,
Wilmington, Delaware 19801, or any successor thereof, as its authorized
agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such suit, action or proceeding in
any state or federal court in the State of Delaware and agrees that
service of process upon The Corporation Trust Company, or any successor
thereof, shall be deemed in every respect effective service of process
upon Operations in any such suit, action or proceeding. The FRP
Partner hereby designates and appoints The Corporation Trust Company,
with an office on the date hereof at 1209 Orange Street, Wilmington,
Delaware 19801, or any successor thereof, as its authorized agent to
accept and acknowledge on its behalf service of any and all process
which may be served in any such suit, action or proceeding in any state
or federal court in the State of Delaware and agrees that service of
process upon The Corporation Trust Company, or any successor thereof,
shall be deemed in every respect effective service of process upon the
FRP Partner in any such suit, action or proceeding. The Managing
Partner hereby designates and appoints The Corporation Trust Company,
with an office on the date hereof at 1209 Orange Street, Wilmington,
Delaware 19801, or any successor thereof, as its authorized agent to
accept and acknowledge on its behalf service of any and all process
which may be served in any such suit, action or proceeding in any state
or federal court in the State of Delaware and agrees that service of
process upon The Corporation Trust Company, or any successor thereof,
shall be deemed in every respect effective service of process upon the
Managing Partner in any such suit, action or proceeding. Said
designation and appointment by each of IMC GPCo, Operations, the FRP
Partner and the Managing Partner shall be irrevocable during the term
of this Agreement, and each party shall pay all costs and expenses of
its respective designation and appointment as and when due and payable.
13.08 Waiver of Jury Trial. EACH PARTNER HEREBY WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH SUIT, ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
13.09 Entire Agreement; Amendments. This Agreement (including
the exhibits hereto) together with the other Transaction Agreements
(including any exhibits or schedules thereto), the Amendment, Waiver
and Consent Agreement and a certain letter agreement dated as of July
1, 1993 relating to certain tax matters between Operations and FRP
embody the entire agreement and understanding between the parties with
respect to the subject matter hereof and thereof, and supersede any
agreements, representations, warranties or understandings, oral or
written, between the parties with respect to the subject matter of this
Agreement and the other Transaction Agreements entered into prior to
the respective dates hereof and thereof. This Agreement may be amended
or modified (including, without limitation, to admit a new "Partner" or
"Partners" (other than (i) any New Partners or any new "Partner"
admitted to the Partnership pursuant to a transfer of the Partnership
Interest (or a portion thereof) of a Partner pursuant to Section 7.02
or Section 7.04) or (ii) the admission of FRP or an Affiliate of FRP as
a new Partner as a result of the election of FTX and FRP to merge,
liquidate or dissolve the FRP Partner (or transfer its Partnership
Interests) in accordance with the terms of the Amendment, Waiver and
Consent Agreement) only by an instrument in writing executed by all of
the Partners.
13.10 Execution in Counterparts. This Agreement may be signed in
counterparts. Any single counterpart or set of counterparts signed, in
either case, by all the parties hereto shall constitute a full and
original agreement for all purposes.
13.11 Remedies and Waiver. No failure or delay in exercising any
right hereunder shall operate as a waiver of or impair any such right.
No single or partial exercise of any such right shall preclude any
other or further exercise thereof or the exercise of any other right.
Any waiver must be given in writing to be effective, and no waiver
shall be deemed a waiver of any other right.
13.12 Headings. The headings of Articles and Sections have been
included herein for convenience only and shall not constitute a part of
this Agreement for any other purpose.
13.13 Third Party Beneficiaries. This Partnership Agreement is
solely for the benefit of the parties hereto and the Partners'
respective Related Persons to the extent set forth in Section 8.01, and
no provision of this Agreement shall be deemed to confer upon third
parties, other than the Partners' respective Related Persons to the
extent set forth in Section 8.01, any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
13.14 Further Assurances. Each Partner agrees to execute and
deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the
transactions contemplated by the Transaction Agreements and to vest in
the Partnership good title to the Assets, subject only to Permitted
Liens.
13.15 Power of Attorney. Each Partner hereby constitutes and
reappoints, effective as of May 26, 1995, the Managing Partner and its
successors and assigns as the true and lawful attorney of such Partner
with full power of substitution in the name of the Partnership or in
the name of such Partner, but for the benefit of the Partnership (i) to
collect for the account of the Partnership any Asset and (ii) to
institute and prosecute all proceedings on behalf of the Partnership
which the Managing Partner may in its commercially reasonable
discretion deem necessary or appropriate in order to assert or enforce
any right, title or interest in, to or under the Assets, and to defend
or compromise any and all actions, suits or proceedings in respect of
such Assets. The Partnership shall be entitled to retain for its own
account any amounts collected pursuant to the foregoing powers,
including any amounts payable as interest in respect thereof.
13.16 Public Announcements. Except as may be required by
applicable law or any listing agreement with any national securities
exchange, neither the Partnership nor any Partner nor any Affiliate
thereof will issue any press release or make any public statement with
respect to the business of the Partnership or its financial performance
or condition without the prior written consent of the Partners unless
either (i) a draft of the proposed release has been provided to each
Partner at least twenty-four (24) hours prior to its proposed release
in order to permit the Partners to comment thereon or (ii) such press
release or other public statement contains factual information (or
discussion or analysis of or comment based upon such factual
information) previously provided to such Person by the Managing
Partner; provided that none of the Partners nor any of their Affiliates
will present projections or forward-looking information that is
attributed to the Partnership or any other Partner or its Affiliates
without the prior written consent of such other Partners.
* * * * *
IN WITNESS WHEREOF, the parties have signed this Amended and
Restated Partnership Agreement as of the 26th day of May, 1995.
IMC-Agrico GP Company
By: ROBERT C. BRAUNEKER
---------------------------------
Name Printed: Robert C. Brauneker
Title: Vice President
Agrico, Limited Partnership
By: Agrico, Inc., its
general partner
By:
-------------------------------------
Name Printed:
Title:
IMC-Agrico MP, Inc.
By: ROBERT C. BRAUNEKER
--------------------------------
Name Printed: Robert C. Brauneker
Title: Vice President
IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.)
By: PETER HONG
--------------------------------
Name Printed: Peter Hong
Title: Vice President
IN WITNESS WHEREOF, the parties have signed this Amended and
Restated Partnership Agreement as of the 26th day of May, 1995.
IMC-Agrico GP Company
By:
---------------------------------
Name Printed:
Title:
Agrico, Limited Partnership
By: Agrico, Inc., its
general partner
By: CHARLES W. GOODYEAR
-------------------------------------
Name Printed: Charles W. Goodyear
Title: Vice President
IMC-Agrico MP, Inc.
By:
--------------------------------
Name Printed:
Title:
IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.)
By:
--------------------------------
Name Printed:
Title:
Schedule X
B - (N x T)
---------------
Target Cash = C - N
B = The capital account balance of the respective
Partner at the beginning of the June 30 fiscal
year, adjusted for all adjustments to the
Partner's capital account for the current year
except for adjustments required as a result of
(i) allocations pursuant to Section 5.01; (ii)
the special allocations pursuant to Section
5.02(c) and 5.02(d); and (iii) all cash
distributions to the Partner for the current
fiscal year made pursuant to the Partner's
Current Interest for the year.
N = The Capital Interest for the following year
for the respective Partner. In determining
any allocations to be made pursuant to Article
V and Article XII for any period other than a
period ending on the last day of the
Partnership's fiscal year, however, the
Capital Interest for the current year for the
respective Partner shall be used.
T = The sum of the capital account balances of the
Partners at the beginning of the June 30
fiscal year, adjusted for all adjustments to
the Partners' capital accounts for the current
year except for adjustments required as a
result of (i) allocations pursuant to Section
5.01; (ii) the special allocations pursuant to
Section 5.02(c) and 5.02(d); and (iii) all
cash distributions to the Partners for the
current fiscal year made pursuant to the
Partners' Current Interest for the year.
C = The Current Interest of the respective Partner
for the applicable fiscal year.
<TABLE>
SCHEDULE Y
<CAPTION>
ITEM OF TAX INFORMATION PERIOD(S) DATE
<S> <C> <C>
1. Ordinary income excluding July 1 - December 31 January 25
depreciation and depletion (estimated July 1 - June 30 October 25
where appropriate), including (final)
workpapers supporting allocations
between partners
2. Depletable gross revenues, statutory July 1 - December 31 January 25
depletion expenses (excluding July 1 - June 30 October 25
depreciation) for purposes of Code (final)
Section 613, production volumes, and
remaining reserves by property (taking
into account special tax allocations)
3. Depreciation and amortization expense, July 1 - December 31 January 25
by tax property for mining assets and by July 1 - June 30 October 25
state for other assets, as follows: (final)
---Federal
---AMT
---ACE
4. Depreciable and amortizable asset July 1 - December 31 January 25
additions and retirements, by tax July 1 - June 30 October 25
property for mining assets and by state (final)
for other assets
5. Leasehold cost basis and related July 1 - December 31 January 25
additions, retirements, and abandonments July 1 - June 30 October 25
by tax property (final)
6. Outstanding balance of recourse and Monthly (as of each January 25
nonrecourse debt month end October 25
July 31 - December 31
January 31 - June 30
7. Interest and dividend income July 1 - December 31 January 25
July 1 - June 30 October 25
(final)
8. Code Section 1231 gains or losses, and July 1 - December 31 January 25
ordinary income recapture July 1 - June 30 October 25
(final)
9. Reconciliation of book to taxable income July 1 - December 31 January 25
July 1 - June 30 October 25
(final)
10. Partnership gross income consisting of July 1 - December 31 January 25
qualifying income under Code Section January 1 - June 30 October 25
7704 (d) as well as nonqualifying income
11. Fair market value evaluation by Calendar year January 25
property
ITEM OF TAX INFORMATION PERIOD(S) DATE
12. Additional state tax information July 1 - June 30 October 25
A. Sales by state based on the place (final)
of origin and place of shipping
destination
B. Inventory by state
C. Miscellaneous income (i.e.,
interest, dividends, gains and
losses, rental income and other
miscellaneous income) by state
D. Rent expense
E. Book original cost of depreciable
and depletable assets by state,
considering the effect of
additions and retirements
F. Book basis information for the
Louisiana corporation franchise
tax return
13. Tax basis of all assets and As of December 31 January 25
liabilities, by major category, for Code As of June 30 (final) October 25
Section 743 and FAS 109 purposes
14. Depreciation and amortization, by tax July 1 - June 30 November
property, for mining assets for the (final) 25
following:
--Earnings and Profits
--State (where appropriate)
15. Estimate of permanent differences July 1 - December 31 January 6
between book and taxable income
16. Estimate of taxable income for FAS 109 July 1 - December 31 January 6
purposes
17. Estimated regular and AMT taxable July 1 - June 30 January 25
income
18. Any other tax information and data
reasonably requested by the
Non-Operating Partner or its Affiliates
for purposes of complying with their
federal and state tax reporting
requirements
</TABLE>
Schedule 9.12
Sales to IMC Canada Ltd. of GTSP, DAP, GMAP 11-52-0, GMAP 10-50-0 and
PFS: the price shall be the average market price minus ten percent
(10%) for domestic sales of similar products so long as the aggregate
volume for the above-mentioned products does not exceed 57,619 P2O5
tons.
Sales to Operations' Rainbow Division of GTSP, DAP, RMAP, GMAP and PFS:
the price shall be the average market price minus ten percent (10%),
but not less than full production cost, for domestic sales of similar
products so long as the aggregate volume for the above-mentioned
products does not exceed 95,200 P205 tons.
EXHIBIT A
Schedule of Definitions
"Accounting Date" shall have the meaning given to such tern in
Section 12.03 of the Partnership Agreement.
Accounting Referee" shall have the meaning given to such term in
the Contribution Agreement.
"Acquiring Person shall have the meaning given to such term in
Section 2.08 (b) of the Partnership Agreement.
"Act" shall mean the Uniform Partnership Law as enacted in the
State of Delaware.
"Administrative Fee" shall have the meaning given to such term in
Section 9.11 of the Partnership Agreement.
"Affiliate" of any Person shall mean any corporation,
proprietorship, partnership or business entity which, directly of
indirectly, owns or controls, is under common ownership or control
with, or is owned or is controlled by, such Person.
"Affiliated Group" means a Person together with its affiliates and
all Persons who are members of a "group" with such Person within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
"Agrico LP" or "FRP Partner" (in the case of "FRP Partner", prior
to the merger, liquidation or dissolution of the FRP Partner (or the
transfer by the FRP Partner of its Partnership Interests to FRP or an
Affiliate of FRP) contemplated by the Amendment, Waiver and Consent
Agreement) shall mean Agrico, Limited Partnership, a Delaware limited
partnership.
"Alternates" shall have the meaning given to such term in Section
6.04 of the Partnership Agreement.
"Amendment, Waiver and Consent Agreement" shall mean the Amendment,
Waiver and Consent Agreement dated as of May 26, 1995 among Global,
Operations, IMC GPCo, the Managing Partner, IMC-Agrico Company, FTX,
FRP and the FRP Partner.
"Appraisal Procedure" shall mean the following: If any price,
value, amount or determination to be determined under the Partnership
Agreement cannot timely be established by agreement, then either the
IMC Partner (or, as set forth in the Partnership Agreement, during the
IMC GPCo Liquidation Period, Operations or IMC GPCo) or the FRP
Partner, by written notice to the other, may invoke the Appraisal
Procedure. Each of the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations or IMC GPCo) and the FRP Partner shall
appoint its Qualified Investment Banking Firm to conduct an appropriate
valuation and shall give notice of such appointment to the other
Non-Managing Partner(s) within fifteen (15) days after delivery of the
notice invoking such procedure. If the IMC Partner (or, during the IMC
GPCo Liquidation Period, Operations or IMC GPCo) or the FRP Partner
does not appoint its Qualified Investment Banking Firm within such
fifteen (15) day period, the valuation made by the Qualified Investment
Banking Firm appointed by the other Non-Managing Partner shall be
conclusive and binding on the Partners. If within thirty (30) days
after appointment of the Qualified Investment Banking Firms, such
Qualified Investment Banking Firms are unable to agree upon an
appropriate valuation but the higher valuation is not greater than 110%
of the lower valuation, then the valuation which shall be binding on
the Partners shall be the average of the two (2) valuations given by
the Qualified Investment Banking Firms. If the higher valuation is
greater than 110% of the lower valuation, the two (2) Qualified
Investment Banking Firms jointly shall appoint a third Qualified
Investment Banking Firm within fifteen (15) days thereafter, or, if
they do not do so, either the IMC Partner (or, in such cases,
Operations or IMC GPCo) or the FRP Partner may request the American
Arbitration Association, or any organization successor thereto, to
appoint the third Qualified Investment Banking Firm. The decision of
the third Qualified Investment Banking Firm shall be given within sixty
(60) days after its appointment, shall be at least equal to the lower
valuation, shall not exceed the higher valuation and shall be binding
on the Partners.
"Approved Debts" shall have the meaning given to such term in
Section 12.06(a) of the Partnership Agreement.
"Asset Sale Amount" shall mean, with respect to any sale of any
Partnership asset other than in the ordinary course of business, an
amount equal to the greater of (a) the net book value of such asset as
shown on the most recent audited balance sheet of the Partnership and
(b) the net proceeds (including cash and the value of property
received) realized by the Partnership upon the sale or other
disposition of such asset.
"Assets" shall have the meaning given to such term in the
Contribution Agreement.
"Assumed Liabilities" and "Assumed Liability" shall have the
meanings given to such terms in the Contribution Agreement.
"Bankrupt" shall mean any Person with respect to which a Bankruptcy
shall have occurred.
"Bankruptcy" shall mean with respect to any Person the occurrence
of either of the following events"
(i) the Person shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part
of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing; or
(ii) an involuntary case or other proceeding shall be
commenced against the Person seeking liquidation, reorganization
or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered against
the Person under the federal bankruptcy laws as now or hereafter
in effect.
"Base Affiliate Transaction Amount" shall mean (i) for the Fiscal
Year ended June 30, 1994, five hundred thousand dollars ($500,000) and
(ii) for each subsequent Fiscal Year, an amount equal to the sum of (x)
the Base affiliate Transaction Amount in effect for the immediately
preceding Fiscal Year, plus (y) the product of (A) the percentage
increase in the GNP Deflator Index for the immediately preceding Fiscal
Year, multiplied by (B) the Base Affiliate Transaction Amount for the
immediately preceding Fiscal Year.
"Base Budget Amount" shall mean (i) for the Fiscal Year ended June
30, 1994, two hundred fifty thousand dollars ($250,000), and (ii) for
each subsequent Fiscal Year, an amount equal to the sum of (x) the Base
Budget Amount in effect for the immediately preceding Fiscal Year, plus
(y) the product of (A) the percentage increase in the GNP Deflator
Index for the immediately preceding Fiscal Year, multiplied by (B) the
Base Budget Amount for the immediately preceding Fiscal Year.
"Base Obligation Amount" shall mean (i) for the Fiscal Year ended
June 30, 1994, five million dollars ($5,000,000), and (ii) for each
subsequent Fiscal Year, an amount equal to the sum of (x) the Base
Obligation Amount in effect for the immediately preceding Fiscal Year,
plus (y) the product of (A) the percentage increase in the GNP Deflator
Index for the immediately preceding Fiscal Year, multiplied by (B) the
Base Obligation Amount for the immediately preceding Fiscal Year.
"Base Sale Amount" shall mean (i) for the Fiscal Year ended June
30, 1994, twenty-five million dollars ($25,000,000), and (ii) for each
subsequent Fiscal Year, an amount equal to the sum of (x) the Base Sale
Amount in effect for the immediately preceding Fiscal Year, plus (y)
the product of (A) the percentage increase in the GNP Deflator Index
for the immediately preceding Fiscal Year, multiplied by (B) the Base
Sale Amount for the immediately preceding Fiscal Year.
"Beneficial Interest" means with respect to either Ultimate Parent,
its beneficial ownership interest in the Partnership (determined upon
the basis of the Capital Interest of the Partner or Partners controlled
by such Ultimate Parent) proportionately reduced by any minority
ownership interest of any Person other than such Ultimate Parent or any
if its Intervening Persons in the Partner or Partners controlled by
such Ultimate Parent or any Intervening Person of such Ultimate Parent;
provided that in calculating the Beneficial Interest of FTX or any
subsequent Ultimate Parent of the FRP Partner, the beneficial ownership
interest of FTX or any subsequent Ultimate Parent of the FRP Partner in
the Partnership shall only be reduced on account of Non-Affiliated
Unitholders to the extent such Non-Affiliated Unitholders hold in
excess of 49% of the limited partnership interests of FRP.
"Capital Account" means, with respect to any Partner, the capital
account maintained for such Partner pursuant to Section 4.02 of the
Partnership Agreement.
"Capital Advance" shall have the meaning given to such term in
Section 3.02(b) of the Partnership Agreement.
"Capital Interest" shall have the meaning given to such term in
Section 4.01 of the Partnership Agreement.
"Capital Interest Cash" means, for any period any Capital Proceeds
received during such period less the sum of (A) Capital Proceeds
reinvested in a Capital Project during such period in accordance with
Section 5.07 of the Partnership Agreement plus (B) (i) expenditures for
Capital Projects during such period and (ii) capital expenditures in
any year for projects identified on Annex VII to the Contribution
Agreement, or alternative projects of a substantially similar nature
substituted by agreement of the parties, to the extent that the
aggregate amount of all such capital expenditures exceed 110% of the
aggregate amount shown on such Annex VII as being spent for such
projects in that year, which in both cases are either specifically
approved by the Policy Committee (or, if not by the Policy Committee,
by the CEOs or the Managing Partner in accordance with Section 6.07 of
the Partnership Agreement) or in a budget approved by the Policy
Committee(or, if not by the Policy Committee, by the CEOs or the
Managing Partner in accordance with Section 6.07 of the Partnership
Agreement). Furthermore, any expenditure that would otherwise be
subtracted pursuant to clause (B) of this definition of Capital
Interest Cash shall not be so subtracted to the extent that such
expenditure is funded by either the incurrence of indebtedness by the
Partnership or cash contributions by the Partners.
"Capital Proceeds" shall mean the cash proceeds of a Capital
Transaction received, whether the Capital Transaction occurred in the
current period or in a prior period.
"Capital Project" shall mean any project having an anticipated
useful life in excess of one year, with an anticipated cost (including
capitalized interest in connection with any Debt incurred to fund such
project) in excess of the Base Budget Amount and involving the
purchase, lease, license, acquisition, manufacture, maintenance or
construction of an asset, other than those items set forth on Annex VII
to the Contribution Agreement. A Capital Project shall be deemed
implemented or attributable to the Fiscal Year in which the relevant
asset is placed in service.
"Capital Transaction" shall mean the sale or disposition of any
asset of the Partnership having an anticipated useful life in excess of
one year other than in the ordinary course of business. A Capital
Transaction shall be deemed to have occurred in the Fiscal Year in
which the sale or disposition of the relevant asset becomes effective.
The sale of Big Bend or Port Sutton terminal is not a Capital
Transaction.
"CEOs" shall have the meaning given to such term in Section 6.07(b)
of the Partnership Agreement.
"Claims" shall have the meaning given to such term in Section 8.01
of the Partnership Agreement.
"Closing" shall mean the consummation of the transactions
contemplated by the Contribution Agreement in accordance with Section
2.08 thereof.
"Closing Date" shall have the meaning given to such term in the
Contribution Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended and
the regulations promulgated thereunder.
"Comparable Property" shall have the meaning given to such term in
Section 2.08(c) of the Partnership Agreement.
"Confidentiality Agreement" shall mean the Letter Agreement dated
November 18, 1992 among FRP, FTX and Group.
"Contributed Business" shall, with respect to Operations or FRP,
have the meaning given to such term in the Contribution Agreement.
"Contributing Partner" shall have the meaning given to such term in
Section 3.03 of the Partnership Agreement.
"Contribution Agreement" shall mean that certain Contribution
Agreement dated as of April 5, 1993 IMC and FRP
"Contribution Agreement Claim" shall have the meaning given to such
term in Section 5.07(d) of the Partnership Agreement.
"Cure Period" shall mean the period ending sixty (60) days after
the earlier to occur of (i) the agreement between the Non-Managing
Partners that a Material Breach has occurred and (ii) if a dispute
exists between the Non-Managing Partners as to whether a Material
Breach has occurred, a determination through the Dispute Resolution
Mechanism that a Material Breach has occurred; provided, that if during
the sixty (60) day period, the Operating Partner has promptly presented
to the Non-Operating Partner a remedy to cure such Material Breach and
has promptly begun and continuously pursued good faith efforts in
attempting to cure such Material Breach, then the Cure Period shall be
extended for so long as the Operating Partner is continuously pursuing
good faith efforts to cure such Material Breach, but in no event shall
the Cure Period be extended for more than a reasonable period of time,
taking into account the nature of the cure.
"Current Interest" shall have the meaning given to such term in
Section 4.01 of the Partnership Agreement.
"Current Interest Cash" shall mean, for any period the sum of
(i) the consolidated net income (or loss) of the
Partnership for such period;
plus (ii) the depreciation, depletion, amortization and all
other non-cash expenses of the Partnership, including the
amount of net book value eliminated as a result of any
asset sales made by the Partnership during such period;
plus (iii) the net cash proceeds with respect to any prior
period asset sales or liquidation of other non-current
assets of the Partnership received during the period to
the extent such proceeds are not already included in the
consolidated net income of the Partnership for such
period;
minus (iv) the non-cash proceeds of any asset sales made by
the Partnership during such period to the extent such
non-cash proceeds are included in the consolidated net
income of the Partnership for such period;
minus (v) the Partnership's earnings from non-consolidated
investees during such period;
plus (vi) the Partnership's share of losses in
non-consolidated investees during such period;
plus (vii) dividends and distributions of cash and cash
equivalents received by the Partnership from
non-consolidated investees during such period;
minus (viii) investments of cash and cash equivalents made by
the Partnership in non-consolidated investees during such
period;
minus (ix) capital expenditures (a) excluding expenditures for
Capital Projects but (b) including capital expenditures
for projects identified in Annex VII to the Contribution
Agreement but only to the extend that the aggregate among
of such expenditures in any year for projects identified
in Annex VII, or alternative projects of a substantially
similar nature substituted by agreement of the parties,
does not exceed 110% of the aggregate amount shown on
such Annex VII as being spent for such projects in that
year;
minus (x) t the extent not previously deducted in computing
the consolidated net income (or loss) of the Partnership,
expenditures of the Partnership relating to the shut down
of facilities and reclamation of land during such period
and other payments in respect of previously accrued
liabilities;
minus (xi) principal repayments of Partnership indebtedness;
minus (xii) Capital Proceeds of the Partnership during such
period;
minus (xiii) increases in cash reserves of the Partnership;
plus (xiv) decreases in cash reserves of the Partnership;
plus (xv) after consideration of noncash accruals and related
expenditures identified in (ii) and (x) above, decreases
in working capital loans from third parties at the end of
the period.
In calculating Current Interest Cash, to the extend applicable, each
item involved in the calculation shall be determined using the
financial statements of the Partnership prepared in accordance with
generally accepted accounting principles. Furthermore, any expenditure
that would otherwise be deducted pursuant to this definition of Current
Interest Cash shall not be deducted from consolidated net income to the
extent that such expenditure is funded by either the incurrence of
indebtedness by the Partnership or cash contributions by the Partners.
"Debt" shall mean, as to any Person: (a) indebtedness created,
issued or incurred by such Person for borrowed money (whether by loan
or the issuance and sale of debt securities; (b) obligations of such
Person to pay the deferred purchase or acquisition price of property or
services, other than trade or other accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the ordinary
course of business so long as such trade or other accounts payable are
payable within ninety (90) days of the date the respective goods are
delivered or respective services rendered; )c) Debt of others secured
by a Lien on the property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial
institutions for the account of such Person; (e) capital lease
obligations of such Person required to be reported as such in
accordance with generally accepted accounting principles from time to
time in effect; and (f) Debt of others guaranteed by such Person.
"Delaware Law" shall have the meaning given to such term in the
Partnership Agreement and in the Parent Agreement.
"Developing Partner" shall have the meaning given to such term in
Section 2.08(c) of the Partnership Agreement.
"Dispute Resolution Mechanism" shall mean a proceeding for
resolution of disputes, submitted to Endispute Incorporated
("Endispute:) in San Francisco, California, with the Non-Managing
Partner whose position is substantially upheld by Endispute in such
proceeding being entitled to recover its attorneys' fees and expenses
from the other Non-Managing Partner. If at the time that the dispute
occurs Endispute is not in the business of resolving disputes in San
Francisco, California, the Non-Managing Partners shall ask the Chief
Judge of the United States Court of Appeals for the Ninth Circuit to
select a similar firm located in San Francisco, California.
"Dissolution Event" shall have the meaning given to such term in
Section 12.01 of the Partnership Agreement.
"Distributable Cash" shall mean, with respect to any Partner for
any period, the sum of (i) Current Interest Cash for such period
multiplied by such Partner's Current Interest as of the last day of
such period, plus (ii) Capital Interest Cash for such period multiplied
by such Partner's Capital Interest as of the last day of such period,
except that the Capital Proceeds from a Capital Transaction occurring
in a prior period will be calculated using the Capital Interest in
effect as of the last day of the period in which the Capital
Transaction which generated such Capital Proceeds was deemed to have
occurred.
"Electing Partner" shall have the meaning given to such term in
Section 2.08(c) of the Partnership Agreement.
"Employee Cost Sharing Agreement" shall mean that certain Employee
Cost Sharing Agreement dated as of July 1, 1993 between IMC and the
Managing Partner.
"Environmental Liabilities" shall have the meaning given to such
term in the Contribution Agreement.
"Equivalent Sale Price" means the Triggering Event Partnership
Value, multiplied by the Capital Interest of the Non-Triggering Partner
immediately prior to the Triggering Event.
"Excluded Liability" shall have the meaning given to such term in
the Contribution Agreement.
"Exercise Notice" has the meaning given to such term in Section
7.04 of the Partnership Agreement.
"Exercising Partner" shall have the meaning given to such term in
Section 2.08(b) of the Partnership Agreement.
"Expansion" shall mean: (i) the construction or development of a
new mine, plant, building, structure or other facility for the purpose
of developing a new source of production capacity; (ii) any
construction, development, process improvement or other improvement
primarily designed to increase the production capacity or decrease the
cost structure of any existing mine, plant or facility; or (iii) any
purchases of materials related to the items in (i) or (ii).
"FASB 109" shall mean the Financial Accounting Standards Board
Statement of Financial Accounting Standard No. 109.
"FCC" shall mean Freeport Chemical Company, a Delaware corporation.
"Final IMC GPCo Liquidating Distribution" shall have the meaning
given to such term in the Partnership Agreement and in the Parent
Agreement.
"Fiscal Year" shall mean the twelve month period ending June 30th
for each year during the life of the Partnership or such other month
period as may be defined as the Fiscal Year of the Partnership pursuant
to Section 9.01 of the Partnership Agreement.
"FRP" shall mean Freeport-McMoRan Resource partners, Limited
Partnership, a Delaware limited partnership and its successors.
"FRP Alternate" and "FRP Alternates" shall have the meanings given
to such terms in Section 6.04 of the Partnership Agreement.
"FRP GPCo" shall have the meaning given to such term in the Parent
Agreement.
"FRP GPCo/FCC/FTX Merger Documents" shall have the meaning given to
such term in the Amendment, Consent Waiver Agreement.
"FRP GPCo/FCC/FTX Mergers" shall have the meaning given to such
term in the Partnership Agreement and in the Parent Agreement.
"FRP Partner" shall mean (i) Agrico, Limited Partnership, a
Delaware limited partnership, or (ii) FRP or the Affiliate of FRP that
succeeds to the obligations, assets, properties, rights and interests
of Agrico, Limited Partnership, as a result of the merger, liquidation
or dissolution of Agrico, Limited Partnership (or to which the
Partnership Interests of Agrico, Limited Partnership is transferred) as
contemplated by the Amendment, Waiver and Consent Agreement or (iii)
any other Affiliate of FRP which succeeds to the Partnership Interests
of the entity identified in (i) or (ii) above by means of the purchase,
transfer, assignment or other conveyance or succession of such
Partnership Interests in accordance with the terms of the Partnership
Agreement.
"FRP Representative" and FRP Representatives" shall have the
meanings given to such terms in Section 6.04 of the Partnership
Agreement.
"FRP Transferred Sales Employee" shall have the meaning given to
such term in the Contribution Agreement.
"FTX" shall mean Freeport-McMoRan Inc., a Delaware corporation and
its successors.
"FTX Common Shares" shall have the meaning given to such term in
the Parent Agreement.
"GNP Deflator Index" shall mean the GNP deflator index (final) as
published by the U.S. Department of Commerce (commencing with the index
as of June 30, 1993).
"Global" or "Group" shall mean IMC Global Inc. (formerly IMC
Fertilizer Group, Inc.), a Delaware corporation and its successors.
"Group Structure" shall have the meaning given to such term in the
Parent Agreement.
"IMC" or "Operations" shall mean IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.), a Delaware corporation and its
successors.
"IMC Alternate" and "IMC Alternates" shall have the meanings given
to such terms in Section 6.04 of the Partnership Agreement.
"IMC Common Shares" shall have the meaning given to such term in
the Parent Agreement.
"IMC GPCo" shall mean IMC-Agrico GP Company, a Delaware
corporation.
"IMC GPCo Liquidation" shall have the meaning given to such term in
the Parent Agreement.
"IMC GPCo Liquidation Period" shall have the meaning given to that
term in Article I of the Partnership Agreement.
"IMC GPCo Plan of Liquidation" shall mean the Agreement and Plan of
Complete Liquidation and Dissolution among Operations, IMC GPCo and
MPCo.
"IMC Partner" shall, with respect to each such Agreement, have the
meaning given to such term in the Parent Agreement and the Partnership
Agreement, respectively.
"IMC Plans" shall have the meaning given to such term in Section
9.06 of the Partnership Agreement.
"IMC Representative" and "IMC Representatives" shall have the
meanings given to such terms in Section 6.04 of the Partnership
Agreement.
"Initial IMC GPCo Liquidating Distribution" shall have the meaning
given to such term in the Partnership Agreement and the Parent
Agreement.
"Intervening Person" of either Ultimate Parent means a Person that
is controlled by such Ultimate Parent and which has an ownership
interest in either the IMC Partner or the FRP Partner, as the case may
be, or in another Intervening Person of such Ultimate Parent.
"Leased IMC Employees" shall have the meaning given to such term in
the Contribution Agreement.
"Leasing Agreement" shall have the meaning given to such term in
the Contribution Agreement.
"Lien" shall mean, with respect to any asset, and mortgage, lien,
pledge, charge, security interest, easement, right of way, title defect
or encumbrance of any kind with respect to such asset.
"Limestone Cost Sharing Agreement" shall mean that certain
Limestone Cost Sharing Agreement dated as of July 1, 1993, among IMC,
the Managing Partner and the Partnership.
"Liquidating Partner" shall have the meaning given to such term in
Section 12.02 of the Partnership Agreement.
"Major Decision" shall have the meaning given to such term in
Section 6.07 of the Partnership Agreement.
"Managing Partner" shall mean MPCo in its capacity as Managing
Partner under the Partnership Agreement.
"Marketing and Administrative Services Agreement" shall have the
meaning given to such term in the Contribution Agreement.
"Material Asset Sale" shall mean the sale or other disposition of
any asset of the Partnership other than in the ordinary course of
business, if, as a result of such sale, the aggregate Asset Sale Amount
for all such sales other than in the ordinary course of business
consummated in the Fiscal Year of such sale would exceed the Base Sale
Amount for such Fiscal Year.
"Material Breach" shall mean the occurrence of either of the
following events" (i) a material failure by the Managing Partner to
perform its duties or responsibilities as Managing Partner under this
Agreement of (ii) the Bankruptcy of the Operating Partner or any of its
direct or indirect parent entities.
"Material Breach Event" shall mean either:
(a) (i) the occurrence of a Material Breach referred to in
clause (i) of the definition of "Material Breach", (ii) the giving
of written notice of such Material Breach by the Non-Operating
Partner to the Operating Partner and (iii) the failure to cure
such Material Breach during the Cure Period;
(b) the occurrence of a Material Breach referred to in clause
(ii) of the definition of "Material Breach" and, if such Material
Breach results from a Bankruptcy referred to in clause (i) of the
definition of "Bankruptcy", the continuance of such Material
Breach for sixty (60) days; or
(c) the occurrence of an event that would have constituted a
Triggering Event but for the proviso in the definition of
"Triggering Event."
A "cure" of a Material Breach referred to in clause (i) of the
definition of "Material Breach" includes, without limitation,
reimbursement of the Partnership for any costs, expenses, liabilities,
obligations, losses, damages or penalties caused by such Material
Breach.
"Material Facility" shall mean any facility of the Partnership
having a book value, as shown on the latest quarterly balance sheet of
the Partnership, in excess of five percent (5%) of the net property,
plant and equipment of the Partnership, as shown on the latest
quarterly balance sheet of the Partnership, at the time of such
determination.
"Material Obligation" shall mean any liability or obligation
(known to the Managing Partner at the time of incurrence or assumption)
incurred or assumed by or on behalf of the Partnership for Expansion
and other than in the ordinary course of business in an aggregate
amount, based on the knowledge of the Managing Partner at the time of
such incurrence or assumption, in excess of the Base Obligation Amount
in effect at the time such liability or obligation is incurred or
assumed.
"Material Purchase and Cost Sharing Agreement" shall mean that
certain Material Purchase and Cost Sharing Agreement dated as of July
1, 1993 between IMC and the Partnership.
"MP Benefit Plans" shall have the meaning given to such term in
the Contribution Agreement.
"MB Contribution Plans" shall have the meaning given to such term
in the Contribution Agreement.
"MB Pension Plans" shall have the meaning given to such term in
the Contribution Agreement.
"MPCo" shall mean IMC-Agrico MP, Inc., a Delaware corporation and
its successors.
"Negotiating Interval" shall have the meaning given to such term
in the Parent Agreement.
"Negotiation period" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"New Partners" shall have the meaning given to such term in
Section 12.01 of the Partnership Agreement.
"Non-Affiliated Unitholders" means limited partners of FRP other
than FTX and its Affiliates.
"Non-Contributing Partner" shall have the meaning given to such
term in Section 3.03 of the Partnership Agreement.
"Non-Contributing Partner's Share" shall have the meaning given to
such term in Section 3.03 of the Partnership Agreement.
"Non-Defaulting Partner" shall have the meaning given to such term
in Section 5.07(d) of the Partnership Agreement.
"Non-Developing partner" shall have the meaning given to such term
in Section 2.08(c) of the Partnership Agreement.
"Non-Managing Partner shall mean any Partner other than the
Managing Partner.
"Non-Operating Partner" shall have the meaning given to such term
in Section 2.06 of the Partnership Agreement.
"Non-Presenting Partner" shall have the meaning given to such term
in Section 2.08(b) of the Partnership Agreement.
"Non-Qualifying Income" shall mean any income other than
Qualifying Income.
"Non-Triggering Partner" means (i) if the IMC Partner is the
Triggering Partner, the FRP Partner and (ii) if the FRP Partner is the
Triggering Partner, the IMC Partner (which, during the IMC GPCo
Liquidation period, shall mean both Operations and IMC GPCo).
"Non-Withdrawing Partner" shall have the meaning given to such
term in Section 12.01 of the Partnership Agreement.
"No-Shop Period" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"No-Shop Interval" shall have the meaning given to such term in
Section 3.0(d) of the Parent Agreement.
"Notice of Intent to Sell" shall have the meaning given to such
term in Section 7.02(b) of the Partnership Agreement.
"Notice of Intent to Transfer" shall have the meaning given to
such term in Section 3.0(d) of the Parent Agreement.
"Notified Partner" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"Notified Person" shall have the meaning given to such term in
Section 3.0(d) of the Parent Agreement.
"Operating Partner" shall have the meaning given to such term in
Section 2.06 of the Partnership Agreement.
"Operations" or "IMC" shall mean IMC Global Operations Inc.
(formerly IMC Fertilizer, Inc.), a Delaware corporation and its
successors.
"Parent Agreement" shall mean the Parent Agreement among IMC, FRP
and the Partnership, as amended and restated as of May 26, 1995, and as
thereafter amended, modified or supplemented from time to time.
"Partner" or "Partners" shall have the meanings given to such
terms in Article I to the Partnership Agreement.
"Partner Loan" shall have the meaning given to such term in
Section 3.03 of the Partnership Agreement.
"Partnership" shall mean IMC-Agrico Company, a Delaware general
partnership formed pursuant to the Partnership Agreement.
"Partnership Agreement" shall mean the Partnership Agreement
between Operations, IMC GPCo, FRP and the Managing Partner, as amended
and restated as of July 1, 1993 and as further amended and restated as
of May 26, 1995 and as thereafter amended, modified or supplemented
from time to time.
"Partnership Interests" shall mean all right, title and interest
of a Partner in the Partnership, including, without limitation, its
Current Interest and Capital Interest.
"Partnership Units" shall have the meaning given to such term in
the Parent Agreement.
"Partnership Working Capital Facility" shall have the meaning
given to such term in Section 3.02(b) of the Partnership Agreement.
"Permitted Liens" shall have the meaning given to such term in the
Contribution Agreement.
"Person" shall mean an individual, a partnership, a corporation, a
trust, an unincorporated organization, a governmental authority and any
other entity.
"PhosChem" shall have the meaning given to such term in Section
2.03 of the Partnership Agreement.
"Phosphate Chemicals Business" means and includes (i) the
exploration for, and the acquisition, leasing, development, mining and
disposition of, phosphate rock reserves, (ii) engaging in contract
mining, tolling, processing, management and other activities regarding
the phosphate-related reserves, properties, facilities or materials of
third parties, (iii) the processing, manufacture, purchase, exchange
and sale of phosphate fertilizers and other phosphate chemicals
(including, without limitation, monoammonium phosphate, diammonium
phosphate, triple superphosphate and phosphoric acid) and related raw
materials and by-products (including, without limitation, the purchase
and use of sulphur, but excluding the manufacture, production, exchange
or sale of sulphur), (iv) the processing, manufacture, purchase,
exchange and sale of nitrogen chemicals (including anhydrous ammonia
and urea), (v) the extraction and recovery from phosphate rock and the
exchange and sale of uranium oxide, (vi) the management and operation
of agricultural, farming and livestock businesses as an incidental
activity relating to holding lands originally acquired or leased by the
Partnership or one of the Partners as phosphate rock reserves; (vii)
the acquisition, construction, ownership, leasing, operation,
management, alteration and disposition of real property (and interests
therein) and mining, manufacturing, mixing, granulation, processing,
refining, shipping and other equipment and facilities (including,
without limitation, motor vehicles, railroads, railcars, pipelines,
storage facilities, ports and vessels) related to any of the foregoing,
(viii) developing, subdividing, construction roads, sewers, utility,
water, sewage and water treatment and other facilities on, constructing
and selling, leasing or managing residential, commercial and other
improvements on, and otherwise dealing with, reclaimed and other land
originally acquired or leased as phosphate rock reserves, and (ix) all
other business and activities related or incidental thereto.
Notwithstanding the foregoing, "Phosphate Chemicals Business" shall not
include (i) the animal feeds business or (ii) the mixed fertilizer
business.
"PhosRock" shall have the meaning given to such term in Section
2.03 of the Partnership Agreement.
"Policy Committee" shall have the meaning given to such term in
Section 6.04 of the Partnership Agreement.
"Presenting Partner" shall have the meaning given to such term in
Section 2.08(b) of the Partnership Agreement.
"Prime Rate" shall mean the rate publicly announced from time to
time by Citibank, N.A. in New York City as its prime rate.
"Purchasing Partner" shall have the meaning given to such term in
Section 7.04 of the Partnership Agreement.
"Qualified Appraiser" shall mean an MIA appraiser which has been
appraising property in the county in which the real property to be
valued is located for at least the preceding five (5) years.
"Qualified Investment Banking Firm" shall mean in investment
banking firm of national and international reputation.
"Qualifying Income" shall have the same meaning as the term
"qualifying income" defined in Section 7704(d) of the Code and any
successor provision.
"Real Estate Appraisal Procedure" shall mean the following: If
the value of any real property to be determined under the Partnership
Agreement cannot timely be established by agreement, then either the
IMC Partner or the FRP Partner, by written notice to the other, may
invoke the process described below. Each of the IMC Partner and the
FRP Partner shall appoint its Qualified Appraiser to conduct an
appropriate valuation and shall give notice of such appointment to the
other Non-Managing Partner within fifteen (15) days after delivery of
the notice invoking such procedure. If either the IMC Partner or the
FRP Partner does not appoint its Qualified Appraiser within such
fifteen (15) day period, the valuation made by the Qualified Appraiser
appointed by the other Non-Managing Partner shall be conclusive and
binding on the Partners. If within thirty (30) days after appointment
of the Qualified Appraisers, such Qualified Appraisers are unable to
agree upon an appropriate valuation but the higher valuation is not
greater than 110% of the lower valuation, then the valuation which
shall be binding on the Partners shall be the average of the two (2)
valuations given by the Qualified Appraisers. If the higher valuation
is greater than 110% of the lower valuation, the two (2) Qualified
Appraisers jointly shall appoint a third Qualified Appraiser within
fifteen (15) days thereafter, or, if they do not do so, either the IMC
partner or the FRP Partner may request MIA, or any organization
successor thereto, to appoint the third Qualified Appraiser. The
decision of the third Qualified Appraiser shall be given within sixty
(60) days after its appointment, shall be at least equal to the lower
valuation, shall not exceed the higher valuation and shall be binding
on the Partners.
"Real Estate Development Project" shall mean any project involving
the developing, subdividing, construction roads, sewers, utility,
water, sewage and water treatment and other facilities on, construction
and selling, leasing or managing residential, commercial and other
improvements on, and otherwise dealing with, the land of the
Partnership.
"Related Persons" shall have the meaning given to such term in
Section 8.01 of the Partnership Agreement.
"Representatives" shall have the meaning given to such term in
Section 6.04 of the Partnership Agreement.
"Residual Net Loss" for any period, means the excess of all items
of expense over all items of income determined in accordance with the
principles set forth in Section 4.02(c) of the Partnership Agreement,
as computed and adjusted for allocations pursuant to Section 5.02 of
the Partnership Agreement.
"Retained Environmental Liability" shall have the meaning given to
such term in Section 6.08 of the Partnership Agreement.
"Retaining Partner" shall have the meaning given to such term in
Section 6.08 of the Partnership Agreement.
"SEC" shall mean the Securities and Exchange Commission of the
United States of America or any successor agency.
"Soliciting Partner" shall have the meaning given to such term in
Section 7.02(b) of the Partnership Agreement.
"Soliciting Person" shall have the meaning given to such term in
the Parent Agreement.
"Special Purpose Partner" shall mean any IMC Partner or FRP
Partner (i) the principal business purpose of which is the ownership of
its Partnership Interests in the Partnership and (ii) in respect of
which its Partnership Interests in the Partnership constitute
substantially all of its assets; provided, however, that (a) neither
Operations nor FRP shall constitute a "Special Purpose Partner" unless
Operations or FRP (x) acquires a Partnership Interest (or portion
thereof) and (y) its ownership interest in all of its other business
assets or operations constitutes a less than 5% portion of its total
assets or operations, and (b) each of IMC GPCo and Agrico, Limited
Partnership, as constituted as of May 26, 1995, would have constituted
a "Special Purpose Partner" as of such date. Notwithstanding the
foregoing, no entity that, as of the date such entity would have become
a Special Purpose Partner pursuant to the foregoing definition, has
outstanding securities registered under Section 12 of the Securities
Exchange Act of 1934, as amended (or any similar or successor provision
or statute), shall be a Special Purpose Partner.
"Subject Interest" shall have the meaning given to such term in
the Parent Agreement.
"Subject Partnership Interest" shall have the meaning given to
such term in Section 7.02(b) of the Partnership Agreement.
"Target Cash" for any year means the aggregate amount of Current
Interest Cash that would have been required for that year, when
distributed in accordance with the provisions of Sections 5.06 and 5.07
of the Partnership Agreement, to cause the ending balances in the
Partners' Capital Accounts, immediately prior to the allocations
provided in Sections 5.01, 5.02(c) and 5.02(d) of the Partnership
Agreement, to be in the same ratio as the Capital Interest percentages
for the following year. The calculation of Target Cash is illustrated
by the formula attached to the Partnership Agreement as Schedule X.
"Tax Matters Partner" shall have the meaning given to such term in
Section 10.06 of the Partnership Agreement.
"Transaction Agreements" shall mean collectively, the Contribution
Agreement, the Partnership Agreement, the Parent Agreement and the
Confidentiality Agreement.
"Transaction Costs" shall mean, collectively, (i) all documentary
stamp taxes, transfer taxes excise taxes and other similar taxes
imposed in connection with the transactions contemplated by the
Transaction Agreements by any state or other jurisdiction, including,
without limitation, the State of Florida or the State of Louisiana,
(ii) severance costs relating to the termination of employment of
FRP's, FTX's and IMC's operating personnel to the extent such
termination is directly attributable to the transactions contemplated
by the Transaction Agreements, (iii) severance costs, not to exceed an
aggregate of $12,600,000, relating to the termination of FRP's and
FTX's marketing and administrative personnel to the extent such
termination is directly attributable to the transactions contemplated
by the Transaction Agreements and (iv) severance costs, not to exceed
an aggregate of $1,000,000, relating to the termination of IMC's
marketing and administrative personnel to the extent such termination
is directly attributable to the transactions contemplated by the
Transaction Agreements.
"Transfer" shall have the meaning given to such term in Section
7.02(a) of the Partnership Agreement.
"Transfer Price" means (A) in the case of a sale resulting from a
Triggering Event described in clauses (ii) or (iv) of the definition
thereof, the fair market value of the Partnership Interest that is the
subject of such sale, as mutually determined by the IMC Partner and the
FRP Partner or, if no such fair market value is agreed upon within
thirty (30) days of the receipt by the Triggering Partner of the
Exercise Notice by the Non-Triggering Partner, by the Appraisal
Procedure; (b) in the case of a sale resulting from a Triggering Event
described in clauses (i) or (iii) of the definition thereof, (I) if the
transaction giving rise to the Triggering Event involved the sale of
all or a portion of the Partnership Interest of the Triggering Partner,
the Equivalent Sale Price and (II) if the transaction giving rise to
the Triggering Event was the sale of an ownership interest in the IMC
Partner or the FRP Partner or a Person controlling or under common
control with the IMC Partner or the FRP Partner, the fair market value
of the Non-Triggering Partner's Partnership Interest taking into
account the structure of the transaction which gave rise to the
Triggering Event, as mutually determined by the IMC Partner and the FRP
Partner or, if no such fair market value is agreed upon within thirty
(30) days of the receipt by the Triggering Partner of the Exercise
Notice, by the Appraisal Procedure; and(C) in all other cases, the fair
market value of the Partnership Interest (or portion thereof) to be
sold or transferred in accordance with the terms of the Partnership
Agreement as determined by the mutual agreement of the Partners, or, if
the Partners fail to agree upon such fair market value within the time
period set forth in the Partnership Agreement, determined in accordance
with the Appraisal Procedure.
"Triggering Event" means any of the following events:
(i) at any time that the IMC Partner is the Operating
Partner, the occurrence of a transaction which, after giving
effect thereto, results in the Ultimate Parent of the IMC Partner
owning less than a 35% Beneficial Interest in the Partnership;
(ii) at any time that the IMC Partner is the Operating
Partner, the occurrence of a transaction which, after giving
effect thereto, results in 65% or more of the issued and
outstanding voting stock of the Ultimate Parent of the IMC Partner
being owned by an Affiliated Group;
(iii) at any time that the FRP Partner is the Operating
Partner, the occurrence of a transaction which results in the
Ultimate Parent of the FRP Partner owning less than a 35%
Beneficial Interest in the Partnership; or
(iv) at any time that the FRP Partner is the Operating
Partner, the occurrence of a transaction which results in 65% or
more of the issued and outstanding stock of the Ultimate Parent of
the FRP Partner being owned by an Affiliated Group;
provided that none of the circumstances described in clauses (i)
through (iv) above arising out of the foreclosure of a Lien covering
the Partnership Interest of the IMC Partner (or, during the IMC GPCo
Liquidation Period, Operations or IMC GPCo) or the FRP Partner, the
capital stock or partnership interests, as the case may be, of the IMC
partner (or, during the IMC GPCo Liquidation Period, Operations or IMC
GPCo) or the FRP Partner of the capital stock or partnership interests
of any Intervening Person shall constitute a "Triggering Event."
"Triggering Event Notice" shall have the meaning given to such
term in Section 7.04 of the Partnership Agreement.
"Triggering Event Partnership Value" means an amount equal to the
purchase price paid to the Triggering Partner by the Purchasing Partner
in the transaction giving rise to the Triggering Event, divided by the
portion of the Capital Interest of the Triggering Partner sold in such
transaction.
"Triggering Partner" means (A) in the case of a Triggering Event
described in clauses (i) or (ii) of the definition thereof, the IMC
Partner and (B) in the case of a Triggering Event described in clauses
(iii) or (iv) or the definition thereof, the FRP Partner.
"Ultimate Parent" means (i) with respect to the IMC Partner, (A)
initially, Global, and (B) if at any time a Triggering Event occurred
without a Triggering Event Notice having been delivered, the Affiliated
Group that acquired 65% or more of the stock of Group or the Person
that is then the Ultimate Parent of the IMC Partner and (ii) with
respect to the FRP Partner, (A) initially, FTX and (B) if at any time a
Triggering Event referred to in clause (iv) of the definition thereof
shall have occurred without a Triggering Event Notice having been
delivered, the Affiliated Group that acquired 65% or more of the stock
of FTX or the Person that is then the Ultimate Parent of the FRP
Partner.
"Withdrawing Partner" shall have the meaning given to such term in
Section 12.01 of the Partnership Agreement.
"Working Capital Contribution Arrangement" shall have the meaning
given to such term in Section 3.02(b) of the Partnership Agreement.
EXHIBIT 10.30
EXECUTION COPY
AMENDED AND RESTATED
PARENT AGREEMENT
THIS AMENDED AND RESTATED PARENT AGREEMENT (this "Agreement"),
made as of the 1st day of July, 1993 and amended and restated as of the
26th day of May, 1995 among IMC GLOBAL OPERATIONS INC. (formerly IMC
Fertilizer, Inc.), a Delaware corporation ("Operations"), FREEPORT-
McMoRan RESOURCE PARTNERS LIMITED PARTNERSHIP, a Delaware limited
partnership ("FRP"), FREEPORT-McMoRan INC., a Delaware corporation
("FTX"), and IMC-AGRICO COMPANY, a Delaware general partnership (the
"Partnership").
W I T N E S S E T H
WHEREAS, pursuant to a Contribution Agreement dated as of April 5,
1993, as amended (as so amended, the "Contribution Agreement") between
Operations and FRP, Operations and FRP agreed to cause the formation of
the Partnership to engage in the Phosphate Chemicals Business, and
Operations agreed to form IMC-Agrico GP Company, a subsidiary of
Operations ("IMC GPCo"), and FRP agreed to form Agrico, Limited
Partnership, a Delaware limited partnership, to be non-managing general
partners of the Partnership;
WHEREAS, it was a condition precedent to the obligations of
Operations and FRP under the Contribution Agreement that each of
Operations, IMC Global Inc. (formerly IMC Fertilizer Group, Inc.), a
Delaware corporation ("Global"), FTX, FRP and the Partnership shall
have entered into the Parent Agreement, as originally entered into as
of July 1, 1993;
WHEREAS, the parties hereto have approved and consented to (i) (a)
the voluntary complete liquidation and dissolution of IMC GPCo, in
accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), (b) the admission of Operations as a Partner in the
Partnership in accordance with the terms of the Partnership Agreement
(as defined below), (c) the assumption by Operations (A) as of the date
hereof, of 80% of all obligations of IMC GPCo incurred by IMC GPCo (x)
as a general partner of the Partnership and (y) pursuant to the terms
of the Partnership Agreement, and (B) upon the completion of the
liquidation and dissolution of IMC GPCo, of all remaining obligations
of IMC GPCo, (d) the transfer to Operations of the assets, properties,
rights and interests of IMC GPCo, and (e) the repurchase by IMC GPCo of
the preferred stock of IMC GPCo owned by IMC-Agrico MP, Inc., a
Delaware corporation ("MPCo") at its liquidation value (collectively,
the "IMC GPCo Liquidation"), in each case in accordance with the
Agreement and Plan of Complete Liquidation and Dissolution dated as of
May 26, 1995 among Operations, IMC GPCo and MPCo (the "IMC GPCo Plan of
Liquidation") and (ii) (a) liquidation of Agrico, Inc. ("FRP GPCo"), a
Delaware corporation and the owner of a 0.2% general partnership
interest in the FRP Partner, or the merger of FRP GPCo with and into
Freeport Chemical Company, a Delaware corporation ("FCC"), and the
liquidation of FCC or the merger of FCC with and into FTX, in each case
in accordance with the FRP GPCo/FCC/FTX Merger Documents (the "FRP
GPCo/FCC/FTX Mergers"), with the result that FTX shall become the owner
of such 0.2% general partnership interest in the FRP Partner and shall
have assumed as of the date of completion of such FRP GPCo/FCC/FTX
Mergers all obligations of FRP GPCo and FCC, (b) the repurchase by FRP
GPCo of the preferred Stock of FRP GPCo owned by MPCo at its
liquidation value, and (c) at the option of FTX AND FRP, the merger,
liquidation or dissolution of the FRP Partner under Delaware Law at
some time in the future (or the transfer by the FRP Partner of its
Partnership Interests to FRP or an Affiliate of FRP) and the admission
of FRP or an Affiliate of FRP as a Partner in the Partnership, in each
case, in accordance with this Agreement, the Amended and Restated
Partnership Agreement dated as of July 1, 1993, and further amended and
restated as of May 26, 1995, among IMC GPCo, the FRP Partner and MPCo
(the "Partnership Agreement"), and the Amendment, Waiver and Consent
Agreement dated as of May 26, 1995 among Global, Operations, IMC GPCo,
MPCo, IMC-Agrico Company, a Delaware general partnership, FTX, FRP and
the FRP Partner (the "Amendment, Waiver and Consent Agreement");
WHEREAS, the above described transactions are to be accomplished
in the following manner:
(i) with respect to the liquidation and dissolution of IMC GPCo,
80% of the interests of IMC GPCo shall be transferred to Operations
effective as of May 26, 1995 (except that 100% of IMC GPCo's 50% common
stock interest in MPCo shall be transferred to Operations as of May 26,
1995) and the preferred stock of IMC GPCo owned by MPCo shall be
repurchased by IMC GPCo at its liquidation value as of May 26, 1995
(the "Initial IMC GPCo Liquidating Distribution"), with the remaining
20% of such interests (other than IMC GPCo's common stock interest in
MPCo) to be transferred to Operations (the "Final IMC GPCo Liquidating
Distribution") in accordance with the following time schedule and the
terms of the IMC GPCo Plan of Liquidation:
(A) if (x) FTX and FRP elect by written notice to the
Partners and the Partnership, after November 30, 1995 and on or
prior to June 4, 1996, to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP Partner
of its Partnership Interests to FRP or an Affiliate of FRP) as
contemplated by this Agreement, the Partnership Agreement and the
Amendment, Waiver and Consent Agreement and (y) such merger,
liquidation or dissolution of the FRP Partner (or such transfer of
its Partnership Interests) is completed not earlier than June 5,
1996 and not later than June 15, 1996, the Final IMC GPCo
Liquidating Distribution shall be undertaken promptly after
June 22, 1997;
(B) if (x) FTX and FRP elect by written notice to the
Partners and the Partnership, after November 30, 1995 and on or
prior to June 4, 1996, to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP Partner
of its Partnership Interests to FRP or an Affiliate of FRP) as
contemplated by this Agreement, the Partnership Agreement and the
Amendment, Waiver and Consent Agreement, but (y) such merger,
liquidation or dissolution of the FRP Partner (or such transfer of
its Partnership Interests) is not completed by June 15, 1996, the
Final IMC GPCo Liquidating Distribution shall be undertaken after
June 15, 1996 and shall be completed no later than June 30, 1996;
and
(C) if FTX and FRP do not elect, after November 30, 1995 and
on or prior to June 4, 1996, to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP Partner
of its Partnership Interests to FRP or an Affiliate of FRP) as
contemplated by the Amendment, Waiver and Consent Agreement, the
Final IMC GPCo Liquidating Distribution shall be undertaken after
June 4, 1996 and shall be completed by June 30, 1996; and
(ii) with respect to such optional merger, liquidation or
dissolution of the FRP Partner (or such transfer of its Partnership
Interests), such option may be exercised in accordance with the terms
of the Partnership Agreement and the Amendment, Waiver and Consent
Agreement: at any time after November 30, 1995 and on or prior to June
4, 1996; provided that if FTX and FRP exercise such option on or prior
to June 4, 1996, their right to cause such merger, liquidation or
dissolution of the FRP Partner (or such transfer of its Partnership
Interests) at that time will be forfeited unless such merger,
liquidation or dissolution of the FRP Partner (or such transfer of its
Partnership Interests) is completed not earlier than June 5, 1996 and
not later than June 15, 1996; provided further that if after November
30, 1995 and on or prior to June 4, 1996 FTX and FRP exercise such
option, but such merger, liquidation or dissolution of the FRP Partner
(or such transfer of its Partnership Interests) is not completed on or
prior to June 15, 1996, FTX and FRP will have an additional option to
cause such merger, liquidation or dissolution of the FRP Partner (or
such transfer of its Partnership Interests) at any time after July 15,
1997; and provided further that if after November 30, 1995 and on or
prior to June 4, 1996, FTX and FRP do not exercise their option to
cause the merger, liquidation or dissolution of the FRP Partner (or the
transfer of its Partnership Interests), FTX and FRP will have the right
to exercise such option at any time after July 15, 1997;
provided however that, notwithstanding the provisions of this
paragraph (ii), FTX and FRP may merge, liquidate or dissolve the FRP
Partner (or transfer its Partnership Interests) in accordance with the
terms of the Amendment, Waiver and Consent Agreement at any time so
long as FTX and FRP bear, and assume liability for, any expense, cost
or loss (including any increase in taxes, other than any increase in
income taxes which arises solely from the timing of the reporting of
income, deductions and credits attributable to the normal business
activities of the Partnership) suffered by the Partnership, any other
Partner or any of their Related Persons resulting therefrom; and
WHEREAS, the IMC GPCo Liquidation, the FRP GPCo/FCC/FTX Mergers
and such optional merger, liquidation or dissolution of the FRP Partner
(or such transfer of its Partnership Interests) make it necessary and
desirable to amend and restate certain provisions of the Parent
Agreement as originally entered into by the parties.
NOW, THEREFORE, in consideration of the foregoing and the mutual
obligations contained herein, the parties hereto agree as follows:
1.0 Defined Terms. Except as otherwise defined herein,
capitalized terms used in this Agreement shall have the meaning
ascribed to such terms in Exhibit A to the Amended and Restated
Partnership Agreement, dated as of July 1, 1993 and further amended and
restated as of May 26, 1995 among IMC GPCo, Operations, the FRP Partner
and MPCo, as managing partner (the "Managing Partner"). During the
period subsequent to the Initial IMC GPCo Liquidating Distribution and
prior to the Final IMC GPCo Liquidating Distribution, the term "IMC
Partner," as used herein, shall (except as otherwise indicated in this
Agreement) refer to IMC GPCo and Operations, collectively; subsequent
to the Final IMC GPCo Liquidating Distribution, such term shall refer
to Operations; and at all such times, such term shall refer to any
other Affiliate of Operations which succeeds to the Partnership
Interests of IMC GPCo or Operations by means of the purchase, transfer,
assignment or other conveyance or succession of such Partnership
Interests in accordance with the terms of the Partnership Agreement.
2.0 Other and/or Competing Businesses. Each of FTX, FRP, Global
and Operations agrees that neither it nor any of its Affiliates
will, directly or indirectly, anywhere in the world, own, manage,
operate, control or invest in any business that is engaged in the
Phosphate Chemicals Business without first complying with the
provisions of Section 2.08(b) of the Partnership Agreement, it
being understood that (i) purchases and resales of phosphate
chemicals in Canada by Affiliates of Operations in volumes not
materially greater than the amounts indicated on Schedule 9.12 to
the Partnership Agreement and (ii) the conduct of the business of
the Rainbow Division of Operations, substantially as currently
conducted shall not constitute a breach or violation of this
Section 2.0. If FRP desires to expand its existing operations (or
pursue other business opportunities which are part of or related
to the Phosphate Chemicals Business) in Sri Lanka or to pursue the
opportunities described in the memorandum of understanding between
FTX and Ercros, S.A. relating to FESA and ENFERSA, it shall first
offer such opportunities to the Partnership in accordance with the
provisions of Section 2.08(b) of the Partnership Agreement;
provided that if the Partnership elects to pursue any of such
opportunities, the Partnership shall reimburse FRP in an amount equal
to the direct costs incurred by FRP in connection with developing
such opportunity prior to the date of the Partnership's election
to pursue such opportunity. Notwithstanding the foregoing, any
Person that acquires or succeeds to (or whose Affiliate acquires
or succeeds to) any of the Partnership Interest in which
Affiliates of FTX, FRP or Operations currently have an interest
(or any Person that directly or indirectly has or acquires an
interest in such Partnership Interest) shall not be subject to the
provisions of this Section 2.0 with respect to any business
conducted by such Person or its Affiliates that is conducted
substantially as conducted on the date of such acquisition or
succession. Notwithstanding the foregoing, nothing contained in
this Section 2.0 shall prevent FTX, FRP, Global, Operations or any
of their respective Affiliates from (A) owning, directly or
indirectly, an aggregate of less than five percent (5%) of the
common stock of, or other ownership interest in, any Person
engaged in the Phosphate Chemicals Business or (B) acquiring (by
stock purchase, asset purchase, merger, consolidation or
otherwise) any Person engaged in the Phosphate Chemicals Business
so long as (I) the revenues derived by such Person from its
Phosphate Chemicals Business represent (and can reasonably be
expected to continue to represent) less than ten percent (10%) of
the total revenues of such Person and (II) the Person acquiring
such Person (the "Acquiring Person") either offers to sell such
Person's Phosphate Chemicals Business to the
Partnership at its fair market value or sells such Person's Phosphate
Chemicals Business to an independent third Person, it being
understood that, in the case of this clause (B), the Acquiring
Person may continue to own and operate, directly or indirectly,
such acquired Person's Phosphate Chemicals Business if it has
offered to sell such Phosphate Chemicals Business to the
Partnership in accordance with this sentence and (x) if any
Affiliate of the FRP Partner is the Acquiring Person, two (2)
Policy Committee Representatives or Alternates of the IMC Partner
(or any combination thereof) fail, on behalf of the Partnership,
to accept such offer within thirty (30) days of such offer to
sell, or (y) if any Affiliate of IMC GPCo or Operations is the
Acquiring Person, two (2) Policy Committee Representatives or
Alternates of the FRP Partner (or any combination thereof) fail,
on behalf of the Partnership to accept such offer within thirty
(30) days of such offer to sell. Each party acknowledges and
agrees that the covenants contained in this Section 2.0 have been
negotiated in good faith by the parties hereto, and are reasonable
and are not more restrictive or broader than necessary to protect
the interests of the parties hereto, and would not achieve their
intended purpose if they were on different terms or for periods of
time shorter than the periods of time provided herein or were
applied in more restrictive geographical areas than are provided
herein. Each party further acknowledges and agrees that the
business of the Partnership is highly competitive, that no party
hereto would enter into this Agreement but for the covenants
contained in this Section 2.0 and that such covenants are essential to
protect the interests of the parties hereunder. If any provision
of this Section 2.0 is held to be unenforceable because of the
scope or area of its applicability, the court making such
determination shall have the power to modify such scope and area
or either of them, and such provision shall then be applicable in
such modified form.
3.0 Interests in IMC GPCo, FRP GPCo and the FRP Partner;
Appointment of CEOs.
(a) At any time that the IMC Partner (which for purposes of
this Section 3.0 and Section 4.0 of this Agreement shall mean,
during the IMC GPCo Liquidation Period, either of IMC GPCo or
Operations) is a Special Purpose Partner, neither Global nor
Operations shall, without the prior written consent of FRP, cause
or permit such IMC Partner to issue to any Person other than
Global or Operations or their respective Affiliates any capital
stock or other equity interests other than its capital stock or
other equity interests issued and outstanding on the date such IMC
Partner became a Special Purpose Partner (which, in the case of
IMC GPCo, shall be July 1, 1993); and Provided, in each case, that
FRP's written consent shall not be unreasonably withheld, but the
granting of such consent may be conditioned upon, among other
things (I) such IMC Partner's compliance with the applicable
provisions of this Section 3.0 with respect to the issuance of such
capital stock and (ii) FRP's being satisfied, in its reasonable
discretion, that the issuance of such capital stock is being
undertaken in a transaction and under circumstances that will not
result in any material liability of such IMC Partner.
(b) (i) Without the prior written consent of Operations,
neither FRP nor FTX shall cause or permit FRP GPCo, prior to the
completion of the FRP GPCo/FCC/FTX Mergers, to issue to any party
other than FTX or its Affiliates (other than FRP) any capital
stock of FRP GPCo other than its capital stock issued and
outstanding on July 1, 1993, and (ii) at any time that the FRP
Partner is a Special Purpose Partner, neither FRP nor FTX shall,
without the prior written consent of Operations, cause or permit
the FRP Partner to issue to any Person other than FRP or FTX or
their respective Affiliates any partnership interests or other
equity interests in the FRP Partner other than the partnership
interests or other equity interests issued and outstanding on the
date such FRP Partner became a Special Purpose Partner (which in
the case of Agrico, Limited Partnership, shall be July 1, 1993);
provided, in each case, that Operations' written consent shall not
be unreasonably withheld, but the granting of such consent may be
conditioned upon, among other things (i) FRP GPCo's or the FRP
Partner's, as the case may be, compliance with the applicable
provisions of this Section 3.0 with respect to the issuance of
such capital stock or partnership or other equity interests and
(ii) Operations' being satisfied, in its reasonable discretion,
that the issuance of such capital stock or partnership or other
equity interests is being undertaken in a transaction and under
circumstances that will not result in any material liability of
FRP GPCo or the FRP Partner, as the case may be.
(c) Global and Operations will, and will cause their
Affiliates to, use all commercially reasonable efforts to assure
that the Chief Executive Officer from time to time of their
Ultimate Parent is appointed to serve as the CEO of the IMC
Partner. FTX will, and will cause its Affiliates to, use all
commercially reasonable efforts to assure that the Chief Executive
Officer of its Ultimate Parent is appointed to serve as the CEO of
FRP GPCo (until completion of the FRP GPCo/FCC/FTX Mergers) and
any future general partner (or controlling stockholder) of the FRP
Partner other than FTX. Such efforts will in each case include
without limitation voting, and causing its Affiliates to vote, all
capital stock of IMC GPCo and/or Operations or of FRP GPCo or such
other future general partner (or controlling stockholder) of the
FRP Partner other than FTX, as the case may be, in favor of such
appointment.
(d) Except in compliance with this Section 3.0(d):
(i) at any time that the IMC Partner is a Special
Purpose Partner, neither Global nor Operations shall sell,
transfer or otherwise dispose of any capital stock of or
other equity interest in such IMC Partner to any Person other
than an Affiliate of Operations or Global, as the case may
be;
(ii) prior to the completion of the FRP
GPCo/FCC/FTX Mergers, FTX shall not sell, transfer or
otherwise dispose of any capital stock of FRP GPCo to any
Person other than an Affiliate of FTX (other than FRP); and
(iii) at any time that the FRP Partner is a
Special Purpose Partner, neither FTX nor FRP shall sell,
transfer or otherwise dispose of any partnership interest or
other equity interest in the FRP Partner to any Person other
than an Affiliate of FRP or FTX, as the case may be.
If (with respect to actions relating to (i) the capital stock of
or other equity interests in the IMC Partner, at any time that
such IMC Partner is a Special Purpose Partner, (ii) the capital
stock of or other equity interests in FRP GPCo, prior to the
completion of the FRP GPCo/FCC/FTX Mergers, (iii) the partnership
interest or other equity interests in the FRP Partner, at any time
that the FRP Partner is a Special Purpose Partner, Global,
Operations, such IMC Partner, FRP, FRP GPCo, the FRP Partner or
FTX or any of their respective Affiliates (in any case, the
"Soliciting Person") desires to sell or otherwise dispose of to
any third party (other than an Affiliate of such Soliciting
Person), or to solicit bids from any third party (other than an
Affiliate of such Soliciting Person) to purchase or otherwise
acquire, directly or indirectly, all or any portion of the capital
stock of or other equity interests in such IMC Partner or FRP
GPCo, or any partnership interest or other equity interests in the
FRP Partner, or to issue (other than to an Affiliate of such
Soliciting Person) any capital stock of or other equity interests
in such IMC Partner or FRP GPCo or any partnership interest or
other equity interests in the FRP Partner (the "Subject
Interest"), such Soliciting Person shall (i) if the Soliciting
Person is Global, Operations, such IMC Partner or their
Affiliates, notify FRP in writing of its desire to sell (or the
desire of such IMC Partner to issue) such Subject Interest or (ii)
if the Soliciting Person is FTX, FRP, FRP GPCo, the FRP Partner or
their Affiliates, notify Operations in writing of its desire to
sell (or the desire of the FRP Partner or FRP GPCo to issue) such
Subject Interest. The notice referred to in the preceding
sentence is hereinafter referred to as the "Notice of Intent to
Transfer", and the Person receiving the Notice of Intent to
Transfer is hereinafter referred to as the "Notified Person". For
a period (the "No-Shop Interval") of thirty (30) days following
the date it gives Notice of Intent to Transfer, and during the
duration of any Negotiation Interval (as defined below), neither
the Soliciting Person nor any of its Affiliates, officers,
directors, employees, representatives or agents will, without the
prior written consent of the Notified Person, commence or continue
any discussions, negotiations or exchanges of information with any
Person other than the Notified Person with respect to the issuance
or sale of the Subject Interest. During the No-Shop Interval,
both the Soliciting Person and the Notified Person shall co-
operate with each other by exchanging all due diligence materials
they deem to be reasonably necessary to determine the price and
terms of any potential offer. If the Notified Person makes a bona
fide offer to purchase the Subject Interest prior to the end of
the No-Shop Interval, then the Soliciting Person and the Notified
Person shall negotiate in good faith for the purchase and sale of
the Subject Interest and the No-Shop Interval shall be extended for
fifteen (15) days (the "Negotiation Interval"); provided that a
decision to accept or reject shall be in the sole discretion of
the Soliciting Person. If the Notified Person fails to make a
bona fide offer to purchase the Subject Interest (the making or
failure to make such offer being in its sole discretion) prior to
the expiration of the No-Shop Interval, or if the Soliciting
Person and the Notified Person fail to execute a letter of intent
relating to the purchase and sale of the Subject Interest or
terminate negotiations prior to the expiration of the Negotiation
Interval, then the Soliciting Person may, but shall not be
obligated to, immediately commence discussions, negotiations or
exchanges of information with, and/or issue or sell its Subject
Interest to, any third party; provided that if the Notified Person
made a bona fide offer during the No-Shop Interval, the Soliciting
Person shall not so issue or sell the Subject Interest to a third
party unless (i) definitive, binding agreements relating to such
issuance or sale are executed within two hundred twenty (220) days
of the expiration of the Negotiation Interval, (ii) the cash value
of the consideration received in connection with such sale is at
least equal to 95% of the cash value of such offer made by the
Notified Person and (iii) the transferee (and, where appropriate
to create the same protections as existed prior to such transfer,
the ultimate parent entity and the direct parent of such transferee) of
such Subject Interest agrees in writing to be bound by the terms
of this Agreement as if it had originally been a party hereto.
The cash value of such issuance or sale and the cash value of such
offer by the Notified Person, respectively, shall be determined by
agreement between the Soliciting Person and the Notified Person
(i) in the case of the cash value of such issuance or sale, within
ten (10) days following the execution of definitive, binding
agreements by the parties relating thereto and (ii) in the case of
the cash value of such offer by the Notified Person, within ten
(10) days following the earliest to occur of (A) the termination
of negotiations between the Soliciting Person and the Notified
Person and (B) the expiration of the Negotiation Interval,
provided that if such agreement is not reached during either of
such ten (10) day periods, then, in either such case, such cash
value shall be determined by means of the Appraisal Procedure,
with the expense thereof to be paid fifty percent (50%) by the
Soliciting Person and fifty percent (50%) by the Notified Person
and with the determination made thereby being final, unappealable,
binding on both the Soliciting Person and the Notified Person and
enforceable in a court of law or equity. After the expiration of
such two hundred twenty (220) day period, such Subject Interest
shall again be subject to the terms of this Section 3.0. The
failure of either the Soliciting Person or the
Notified Person to exercise its rights under this Section 3.0 shall not
be deemed to be a waiver of its respective rights under this
Section 3.0 with respect to subsequent Subject Interests.
(e) The restrictions contained in this Section 3.0 shall not
apply to bona fide pledges or other transfers as security, which
shall be subject to Section 4.0 below.
(f) Notwithstanding any other provision of this Agreement,
no transfer described in this Section 3.0 (whether to an Affiliate
of the transferor or otherwise) may be made unless (i) such
transfer is pursuant to a written agreement pursuant to which the
transferee (and, where appropriate to create the same protections
as existed prior to such transfer, the ultimate parent entity and
the direct parent of such transferee) agrees to be bound by all of
the terms of this Agreement as if it were originally a party
hereto, and (ii) such transfer does not cause a termination of the
Partnership for Federal income tax purposes.
4.0 Liens. None of Operations, Global, FRP or FTX may (i) with
respect to interests in the capital stock of or other equity interest
in the IMC Partner, at any time that such IMC Partner is a Special
Purpose Partner, (ii) with respect to interests in the capital stock of
or other equity interests in FRP GPCo, prior to the completion of the
FRP GPCo/FCC/FTX Mergers), and (iii) with respect to partnership
interests or other equity interests in the FRP Partner, at any time
that the FRP Partner is a Special Purpose Partner, except with the
consent of the others (which consent may be granted or withheld in such
Person's sole discretion), create or permit to exist, directly or
indirectly, any Lien on its partnership interest or other equity
interests in the FRP Partner or any portion thereof, or in its capital
stock of or other equity interests in such IMC Partner or FRP GPCo or
any portion thereof (except (i) Liens for current taxes not delinquent
or taxes being contested in good faith and by appropriate proceedings,
(ii) Liens arising in the ordinary course of business for sums not due
or sums being contested in good faith and by appropriate proceedings
and (iii) Liens pursuant to bona fide credit arrangements provided that
a Person providing credit pursuant to such arrangements shall
acknowledge that, if such Person acquires ownership of any such
interest or capital stock, such interest or capital stock shall
nevertheless be subject to all of the terms hereof). Any attempt by
any of Global, Operations, FRP or FTX so to create or permit to exist,
directly or indirectly, any Lien (other than the excepted Liens
described in this Section 4.0 above) on its partnership interest or
other equity interests in the FRP Partner or any portion thereof or in
its capital stock of or other equity interests in such IMC Partner or
FRP GPCo, or any portion thereof shall be null, void ab initio and of
no force and effect. Notwithstanding anything to the contrary
contained herein, if any Person obtains a Lien on a partnership
interest or other equity interests in the FRP Partner or the capital
stock of or other equity interests in such IMC Partner or FRP GPCo
during a period during which such a Lien could not be granted to such
Person in accordance with the terms of this Section 4.0 and forecloses
on such Lien, any sale or other disposition to any Person other than
the holder of such Lien in conjunction with or following such
foreclosure of the partnership interest or other equity interests in
the FRP Partner or the capital stock of or other equity interests in
such IMC Partner or FRP GPCo upon which such Person foreclosed shall be
subject to the terms of Section 3.0 hereof (including, without
limitation, that the Person shall have the obligations of FTX, FRP,
Global and Operations under such Section 3.0 and such Person shall
perform such obligations in the context of a transfer to any other
Person in conjunction with or following a foreclosure as if such was a
transfer to which Section 3.0 applied).
5.0 Standstill With Respect to Operations and Global. Until the
date that is five years following the earlier of (a) the date the
Partnership ceases to exist or (b) the earliest date upon which neither
FRP nor any of its Affiliates is a Partner, none of FRP, FTX, any
successor to FTX as Administrative Managing General Partner of FRP, the
chief executive officer of FTX as of July 1, 1993 nor any Person
controlled by any of them shall, directly or indirectly, without the
prior written consent of Operations and Global, (i) acquire, or offer
or agree to acquire, any shares of common stock of Operations or
Global, or securities convertible or exchangeable into, or rights to
acquire, such common stock (collectively, the "IMC Common Shares")
(provided that this clause (i) shall not restrict the chief executive
officer of FTX as of July 1, 1993, or any benefit or similar plan (with
respect to assets that are under independent management) that is
maintained for employees of FRP, of FTX or any successor to FTX as the
Administrative Managing General Partner of FRP or of any Person
controlled by either of them from acquiring up to 2% of the outstanding
common stock of either of Operations or Global solely for investment),
(ii) solicit proxies or consents with respect to the common stock of
Operations or Global, become a participant in any election contest
relating to the election of directors of Operations or Global or
initiate, propose or otherwise solicit holders of the common stock of
Operations or Global with respect to any proposal, (iii) form, join or
participate in a group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, with respect to the common
stock of Operations or Global, (iv) arrange or participate in the
arranging of financing for the purchase of shares of the common stock
of Operations or Global, (v) propose, disclose any intent to propose or
contact any officers, employees, directors, stockholders or agents of
Operations or Global or any other Person or entity with respect to any
acquisition of shares of the common stock of Operations or Global or
acquisition, business combination, recapitalization or similar
transaction with respect to Operations or Global or their respective
Affiliates or any material amount of their assets, or request any
waiver, amendment or termination of the provisions of this Section 5.0
or (vi) attempt in any way to control Operations or Global; provided
that, notwithstanding clauses (i) through (vi) of this Section 5.0,
FRP, FTX, any successor to FTX as the Administrative Managing General
Partner of FRP or representatives of any either of them may make any
proposals or communications to Operations or Global or their respective
senior officers or to representatives of Operations or Global which do
not require public disclosure to be made.
6.0 Standstill With Respect to FRP and FTX. Until the date that
is five years following the earlier of (a) the date the Partnership
ceases to exist or (b) the earliest date upon which neither Operations
nor any of its Affiliates is a Partner, none of Operations, Global nor
their respective chief executive officers as of July 1, 1993 nor any
Person controlled by either of them shall, directly or indirectly,
without the prior written consent of the Administrative Managing
General Partner of FRP, (i) (A) acquire, or offer or agree to acquire,
any partnership interests or depositary units representing partnership
interests of FRP, or securities convertible or exchangeable into, or
rights to acquire, such partnership interests or depositary units
representing partnership interests (collectively, the "Partnership
Units") or (B) acquire, or offer or agree to acquire, any shares of
common stock of FTX, or securities convertible or exchangeable into, or
rights to acquire, such common stock (collectively, the "FTX Common
Shares") (provided that this clause (i) shall not restrict the chief
executive officer of Global or Operations as of July 1, 1993, or any
benefit or similar plan (with respect to assets that are under
independent management) that is maintained for employees of Operations
or of Global or of any Person controlled by either of them from
acquiring up to 2% of either of the outstanding Partnership Units or
FTX Common Shares solely for investment), (ii) solicit proxies or
consents with respect to the Partnership Units or the FTX Common
Shares, become a participant in any election contest relating to the
removal or election of a general partner of FRP or the election of
directors of FTX or initiate, propose or otherwise solicit holders of
the Partnership Units or the FTX Common Shares with respect to any
proposal, (iii) form, join or participate in a group within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended,
with respect to the Partnership Units or the FTX Common Shares, (iv)
arrange or participate in the arranging of financing for the purchase
of Partnership Units or FTX Common Shares, (v) propose, disclose any
intent to propose or contact any officers, employees, directors,
stockholders or agents of FRP or FTX or any other Person or entity with
respect to any acquisition of Partnership Units or FTX Common Shares or
acquisition, business combination, recapitalization or similar
transaction with respect to FRP or FTX or their respective Affiliates
or any material amount of their respective assets, or request any
waiver, amendment or termination of this Section 6.0 or (vi) attempt in
any way to control FRP or FTX; provided that, notwithstanding clauses
(i) through (vi) of this Section 6.0, Operations, Global or
representatives of either of them may make any proposals or
communications to FRP or FTX or the Administrative Managing General
Partner of FRP or their respective senior officers or to
representatives of FRP or FTX or the Administrative Managing General
Partner of FRP which do not require public disclosure to be made.
7.0 Access. On and after the Closing Date, Operations and FRP
will give each other and their respective agents reasonable access to
its and its Affiliates' properties, books, records, employees and
auditors to the extent necessary to permit Operations or FRP, as the
case may be, to determine any matter relating to its rights and
obligations under the Contribution Agreement or to any period ending on
or before the Closing Date; provided that any such access by Operations
or FRP shall not unreasonably interfere with the conduct of the
business of the Person granting such access. The Person granted such
access will hold, and will use all commercially reasonable efforts to
cause its respective officers, directors, partners, employees,
accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning the Person granting such access or its
Contributed Business provided to it pursuant to this Section 7.0.
8.0 Release of Guaranties. As promptly as practical after the
Closing Date, each of Operations and FRP shall use all commercially
reasonable efforts to cause the Partnership to have each of Operations
and FRP and their respective Affiliates released from its financial
obligations under any letters of credit, surety bonds or guaranties
outstanding as of July 1, 1993 pursuant to which Operations or FRP, as
the case may be, has guaranteed the obligations of its Contributed
Business to third parties.
9.0 Tax Information and Other Reports.
(a) Each of Operations and FRP shall provide to the
Partnership such information, if any, as may be required by the
Partnership for purposes of preparing all necessary federal, state
and local Partnership income tax returns and information returns.
(b) Operations and FRP shall cause the Managing Partner to
provide to each of the shareholders of the Managing Partner (A)
unaudited financial statements of the Managing Partner within 30
days after the end of each of the first three quarters of its
fiscal year, and (B) audited financial statements, including
notes, of the Managing Partner within 90 days after the end of its
fiscal year.
10.0 Certain Actions.
(a) The parties hereto shall not take any action with respect to
(i) the Initial IMC GPCo Liquidating Distribution, (ii) the Final IMC
GPCo Liquidating Distribution, (iii) the FRP GPCo/FCC/FTX Mergers, (iv)
the optional merger, liquidation or dissolution of the FRP Partner (or
the transfer of its Partnership Interests) contemplated by the
Amendment, Waiver and Consent Agreement or (v) any related transactions
in violation of the provisions of this Agreement, the Partnership
Agreement, the Amendment, Waiver and Consent Agreement or the IMC GPCo
Plan of Liquidation (in each case, taking into account the consent,
waiver and other provisions of the Amendment Waiver and Consent
Agreement).
(b) As a condition to the effectiveness of the transactions
described in Section 10.0(a) of this Agreement, each Partner hereby
agrees to bear, and assume liability for, any expense, cost or loss
(including any increase in taxes, other than any increase in income
taxes which arises solely from the timing of the reporting of income,
deductions and credits attributable to the normal business activities
of the Partnership) suffered by the Partnership, any other Partner or
any of their Related Persons arising from violation of Section 10.0(a)
of this Agreement.
11.0 Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors
and assigns. Except as set forth below:
(i) Each of Operations and Global shall be relieved of all
obligations under this Agreement on and after the date that
such Person and its Affiliates cease to own a direct or
indirect interest in the Partnership or (prior to the
completion of the Final IMC GPCo Liquidating Distribution)
IMC GPCo; and
(ii) FRP and FTX shall be relieved of all obligations under
this Agreement on and after the date that such Person and its
Affiliates cease to own a direct or indirect interest in the
FRP Partner or the Partnership;
provided, that (x) the provisions of Sections 2.0, 7.0 and 9.0 shall
continue to apply to each such Person for a period of two years after
it ceases to own such an interest, (y) the provisions of Sections 5.0
and 6.0 shall continue to apply for the periods set forth therein and
(z) the provisions of Sections 14.0, 15.0, 16.0 and 22.0 shall continue
to apply.
12.0 Notices. All communications, notices and consents provided
for herein shall be in writing and be given in person (or air freight
delivery) or by means of telecopy (with request for assurance of
receipt in a manner typical with respect to communications of that
type) or by mail, and shall become effective (x) on delivery if given
in person or by air freight delivery, (y) on the date of transmission
if sent by telecopy or (z) three business days after being deposited in
the mails, with proper postage for first-class registered or certified
air mail prepaid. Notices shall be addressed as follows:
(i) if to Operations at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
(ii) If to IMC GPCo at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
(iii) if to the Partnership at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
(iv) if to FRP at:
1615 Poydras Street
New Orleasn, Louisiana 70112
Facsimile: 504-585-3513
Attention: General Counsel
(v) if to Global at:
2100 Sanders Road
Northbrook, Illinois 60062
Facsimile: 708-205-4805
Attention: Corporate Secretary
and (vi) if to FTX at:
1615 Poydras Street
New Orleasn, Louisiana 70112
Facsimile: 504-585-3513
Attention: General Counsel
or at such other address as any party hereto may from time to time
designate by notice duly given in accordance with the provisions of
this Section to the other parties hereto.
13.0 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without
regard to the conflicts of law rules of such state.
14.0 Choice of Forum. All suits, actions or proceedings arising
out of or relating to this Agreement shall be brought in a state or
federal court located in the State of Delaware, which courts shall be
an appropriate forum for all such suits, actions or proceedings. Each
party hereby waives any objection which it may now or hereafter have to
the laying of venue in any such court of any such suit, action or
proceeding.
15.0 Consent to Jurisdiction. Each party hereby irrevocably
submits to the jurisdiction of any state or federal court located in
the State of Delaware in any such suit, action or proceeding referred
to in Section 14.0 above. Operations hereby designates and appoints
The Corporation Trust Company, with an office on the date hereof at
1209 Orange Street, Wilmington, Delaware 19801, or any successor
thereof, as its authorized agent to accept and acknowledge on its
behalf service of any and all process which may be served in any such
suit, action or proceeding in any state or federal court in the State
of Delaware and agrees that service of process upon The Corporation
Trust Company, or any successor thereof, shall be deemed in every
respect effective service of process upon Operations in any such suit,
action or proceeding. FRP hereby designates and appoints The
Corporation Trust Company, with an office on the date hereof at 1209
Orange Street, Wilmington, Delaware 19801, or any successor thereof, as
its authorized agent to accept and acknowledge on its behalf service of
any and all process which may be served in any such suit, action or
proceeding in any state or federal court in the State of Delaware and
agrees that service of process upon The Corporation Trust Company, or
any successor thereof, shall be deemed in every respect effective
service of process upon FRP in any such suit, action or proceeding.
The Partnership hereby designates and appoints The Corporation Trust
Company, with an office on the date hereof at 1209 Orange Street,
Wilmington, Delaware 19801, or any successor thereof, as its authorized
agent to accept and acknowledge on its behalf service of any and all
process which may be served in any such suit, action or proceeding in
any state or federal court in the State of Delaware and agrees that
service of process upon The Corporation Trust Company, or any successor
thereof, shall be deemed in every respect effective service of process
upon the Partnership in any such suit, action or proceeding. FTX
hereby designates and appoints The Corporation Trust Company, with an
office on the date hereof at 1209 Orange Street, Wilmington, Delaware
19801, or any successor thereof, as its authorized agent to accept and
acknowledge on its behalf service of any and all process which may be
served in any such suit, action or proceeding in any state or federal
court in the State of Delaware and agrees that service of process upon
The Corporation Trust Company, or any successor thereof, shall be
deemed in every respect effective service of process upon FTX in any
such suit, action or proceeding. Global hereby designates and appoints
The Corporation Trust Company, with an office on the date hereof at
1209 Orange Street, Wilmington, Delaware 19801, or any successor
thereof, as its authorized agent to accept and acknowledge on its
behalf service of any and all process which may be served in any such
suit, action or proceeding in any state or federal court in the State
of Delaware and agrees that service of process upon The Corporation
Trust Company, or any successor thereof, shall be deemed in every
respect effective service of process upon Global in any such suit,
action or proceeding. Said designation and appointment by each of
Global, Operations, FTX, FRP and the Partnership shall be irrevocable
during the term of this Agreement, and each party shall pay all costs
and expenses of its respective designation and appointment as and when
due and payable.
16.0 Waiver of Jury Trial. EACH OF GLOBAL, OPERATIONS, FTX, FRP
AND THE PARTNERSHIP HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
AND AGREES THAT ANY SUCH SUIT, ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
17.0 Entire Agreement; Amendments. This Agreement (including the
exhibits hereto) together with the other Transaction Agreements
(including any exhibits or schedules thereto) and the Amendment, Waiver
and Consent Agreement embody the entire agreement and understanding
between the parties with respect to the subject matter hereof and
thereof, and supersede any agreements, representations, warranties or
understandings, oral or written, between the parties with respect to
the subject matter of this Agreement, the other Transaction Agreements
entered into prior to the date hereof and the Amendment, Waiver and
Consent Agreement. This Agreement may be amended or modified only by
an instrument in writing executed by all of the parties hereto.
18.0 Execution in Counterparts. This Agreement may be signed in
counterparts. Any single counterpart or set of counterparts signed, in
either case, by all the parties hereto shall constitute a full and
original agreement for all purposes.
19.0 Remedies and Waiver. No failure or delay in exercising any
right hereunder shall operate as a waiver of or impair any such right.
No single or partial exercise of any such right shall preclude any
other or further exercise thereof or the exercise of any other right.
Any waiver must be given in writing to be effective, and no waiver
shall be deemed a waiver of any other right.
20.0 Headings. The headings of Articles and Sections have been
included herein for convenience only and shall not constitute a part of
this Agreement for any other purpose.
21.0 Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and their respective Affiliates, and no
provision of this Agreement shall be deemed to confer upon third
parties, other than such respective Affiliates, any remedy, claim,
liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
22.0 Further Assurances. Each of Operations and FRP agrees to,
and to cause IMC GPCo and the FRP Partner, respectively, to, execute
and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the
transactions contemplated by the Transaction Agreements and to vest in
the Partnership good title to the Assets, subject only to Permitted
Liens.
23.0 Public Announcements. Except as may be required by
applicable law or any listing agreement with any national securities
exchange, none of Global, Operations, FTX or FRP nor any Affiliate of
any thereof will issue any press release or make any public statement
with respect to the business of the Partnership or its financial
performance or condition without the prior written consent of the other
parties unless either (i) a draft of the proposed press release has
been provided to each party hereto at least twenty-four (24) hours
prior to its proposed release in order to permit such party to comment
thereon or (ii) such press release or other public statement contains
factual information (or discussion or analysis of or comment based upon
such factual information) previously provided to such Person by the
Managing Partner; provided that none of Global, Operations, FTX or FRP
nor any of their Affiliates will present projections or forward-looking
information that is attributed to any of the other parties hereto, the
Partners, or any of their Affiliates without the prior written consent
of the parties hereto and the Partners.
24.0 Partnership Agreement. Each of Operations and FRP agrees to
be bound by Sections 5.07(d) and 9.03 of the Partnership Agreement.
* * * * *
IN WITNESS WHEREOF, the parties have signed this Agreement on the
date first written above.
IMC GLOBAL OPERATIONS INC. (formerly IMC
Fertilizer, Inc.)
By: PETER HONG
--------------------------------
Name Printed: Peter Hong
Title: Vice President
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED
PARTNERSHIP
By: Freeport McMoRan Inc., its
general partner
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
IMC-AGRICO COMPANY
By: IMC-AGRICO MP, INC., its
general partner
By: ROBERT C. BRAUNEKER
--------------------------
Name Printed: Robert C. Brauneker
Title: Vice President
By: IMC-AGRICO GP, COMPANY, its
general partner
By: ROBERT C. BRAUNEKER
--------------------------
Name Printed: Robert C. Brauneker
Title: Vice President
IN WITNESS WHEREOF, the parties have signed this Agreement on the
date first written above.
IMC GLOBAL OPERATIONS INC. (formerly IMC
Fertilizer, Inc.)
By:
--------------------------------
Name Printed:
----------------------
Title:
----------------------
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED
PARTNERSHIP
By: Freeport McMoRan Inc., its
general partner
By: CHARLES W. GOODYEAR
-------------------------------
Name Printed: Charles w. Goodyear
Title: Senior Vice President
IMC-AGRICO COMPANY
By: IMC-AGRICO MP, INC., its
general partner
By:
--------------------------
Name Printed:
----------------
Title:
-----------------------
By: IMC-AGRICO GP, COMPANY, its
general partner
By:
--------------------------
Name Printed:
----------------
Title:
-----------------------
By: AGRICO, LIMITED PARTNERSHIP,
its general partner
By: Agrico, Inc., its general
partner
By: CHARLES W. GOODYEAR
---------------------
Name Printed: Charles W. Goodyear
Title: Vice President
FREEPORT-McMoRan INC.
By: CHARLES W. GOODYEAR
-------------------------------
Name Printed: Charles W. Goodyear
Title: Senior Vice President
IMC GLOBAL INC. (formerly IMC Fertilizer
Group, Inc.) (solely for the purposes of
Sections 2.0, 3.0(a), (c), (d), (e) and (f),
4.0 and 6.0)
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
By: AGRICO, LIMITED PARTNERSHIP,
its general partner
By: Agrico, Inc., its general
partner
By:
---------------------
Name Printed:
Title:
FREEPORT-McMoRan INC.
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
IMC GLOBAL INC. (formerly IMC Fertilizer
Group, Inc.) (solely for the purposes of
Sections 2.0, 3.0(a), (c), (d), (e) and (f),
4.0 and 6.0)
By: PETER HONG
-------------------------------
Name Printed: Peter Hong
---------------------
Title: Vice President
----------------------------
EXHIBIT 10.31
EXECUTION COPY
AMENDMENT, WAIVER AND CONSENT
AMENDMENT, WAIVER, AND CONSENT (this "Agreement") dated as of May
26, 1995 among IMC Global Inc., a Delaware corporation ("Global"), IMC
Global Operations Inc., a Delaware corporation ("Operations"), IMC-
Agrico GP Company, a Delaware corporation ("IMC GPCo"), IMC-Agrico MP,
Inc., a Delaware corporation ("MPCo"), IMC-Agrico Company, a Delaware
general partnership ("IMC-Agrico"), Freeport-McMoRan Inc., a Delaware
corporation ("FTX"), Freeport-McMoRan Resource Partners Limited
Partnership, a Delaware limited partnership ("FRP"), and Agrico,
Limited Partnership, a Delaware limited partnership ("Agrico LP").
Capitalized terms used in this Agreement, and not otherwise defined
herein, shall have the meaning given to such terms in the Schedule of
Definitions constituting Exhibit A to the Amended and Restated
Partnership Agreement dated as of July 1, 1993, and further amended and
restated as of May 26, 1995 among IMC GPCo, Agrico LP and MPCo.
W I T N E S S E T H:
WHEREAS, certain of the parties hereto have entered into, among
others, an Amended and Restated Partnership Agreement (the "Partnership
Agreement") dated as of July 1, 1993 among IMC GPCo, Agrico LP and MPCo
and a Parent Agreement (the "Parent Agreement") dated as of July 1,
1993 among Operations (formerly IMC Fertilizer, Inc.), FRP, IMC-Agrico,
FTX and Global (formerly IMC Fertilizer Group, Inc.) with respect to
the formation of IMC-Agrico and to certain matters related thereto;
WHEREAS, Operations owns 500 shares of the Common Stock of
IMC GPCo and MPCo owns 100 shares of the preferred stock of IMC GPCo,
which shares constitute all of the issued and outstanding shares of
capital stock of IMC GPCo;
WHEREAS, Operations, IMC GPCo and MPCo wish to accomplish (i) the
voluntary complete liquidation and dissolution of IMC GPCo, in
accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), (ii) the admission of Operations as a Partner in the
Partnership in accordance with the terms of the Partnership Agreement,
(iii) the assumption by Operations (a) as of the date hereof, of 80% of
all obligations of IMC GPCo incurred by IMC GPCo (x) as a General
Partner of Partnership and (y) pursuant to the terms of the Partnership
Agreement and (b) upon the completion of such liquidation and
dissolution, of all remaining obligations of IMC GPCo, (iv) the
transfer to Operations of the assets, properties, rights and interests
of IMC GPCo, including, but not limited to, its Current Interest and
Capital Interest (both as defined in the Partnership Agreement) in IMC-
Agrico, and its 50% common stock interest in MPCo, after all debts,
obligations and liabilities of IMC GPCo are satisfied and (v) the
repurchase by IMC GPCo of the preferred stock of IMC GPCo owned by MPCo
at its liquidation value;
WHEREAS, Operations and IMC GPCo wish to accomplish the above
described voluntary complete liquidation and dissolution of IMC GPCo in
two phases, as provided in this Agreement and the IMC GPCo Plan of
Liquidation (defined below);
WHEREAS, the parties hereto wish to approve and consent to the
above described voluntary complete liquidation and dissolution of IMC
GPCo as further described in the Agreement and Plan of Complete
Liquidation and Dissolution (the "IMC GPCo Plan of Liquidation")
attached hereto as Exhibit A and to amend or waive certain provisions
of the Partnership Agreement and Parent Agreement, as necessary, to
accomplish and reflect the transactions described in, or related to,
the IMC GPCo Plan of Liquidation;
WHEREAS, FTX and FRP wish to accomplish (i) the liquidation of
Agrico, Inc., a Delaware corporation ("FRP GPCo") and owner of a 0.2%
general partnership interest in Agrico LP, or the merger of FRP GPCo
with and into Freeport Chemical Company, a Delaware corporation
("FCC"), and the liquidation of FCC or the merger of FCC with and into
FTX (the "FRP GPCo/FCC/FTX Mergers") and (ii) the repurchase by FRP
GPCo of the preferred stock of FRP GPCo owned by MPCo at its
liquidation value;
WHEREAS, the FRP GPCo/FCC/FTX Mergers are to be accomplished as
promptly as reasonably practicable pursuant to a certificate of
ownership and merger and board resolutions adopted by FRP GPCo, FCC and
FTX in the forms attached hereto as Exhibit B (the "FRP GPCo/FCC/FTX
Merger Documents"), with the result that, thereafter, FTX (i) shall be
the owner of such 0.2% general partnership interest in Agrico LP and
(ii) shall have assumed as of the date of the completion of such
mergers, all obligations of FRP GPCo and FCC;
WHEREAS, the parties hereto wish to approve and consent to the
FRP GPCo/FCC/FTX Mergers and to amend or waive certain provisions of
the Partnership Agreement and Parent Agreement, as necessary, to
accomplish and reflect the FRP GPCo/FCC/FTX Mergers;
WHEREAS, FTX and FRP wish to have the option of merging or
voluntarily liquidating or dissolving Agrico LP (or transferring the
Partnership Interests of Agrico LP to FRP or an Affiliate of FRP), in
accordance with Delaware Law, at some time in the future as provided in
this Agreement and thereupon transferring the obligations, assets,
properties, rights and interests of Agrico LP to FRP or to an Affiliate
of FRP and admitting FRP or such Affiliate of FRP as a Partner in the
Partnership; and
WHEREAS, the parties hereto wish to approve and consent to the
above described merger, liquidation or dissolution of Agrico LP (or
transfer of its Partnership Interests), when and if it occurs.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Partnership and Parent Agreements.
a. Effective as of the date hereof, the Partnership Agreement
shall be amended and restated in its entirety in the form attached
hereto as Exhibit C.
b.Effective as of the date hereof, the Parent Agreement shall
be amended and restated in its entirety in the form attached
hereto as Exhibit D.
SECTION 2. Waiver. a. Only with respect to (i) the transactions
described in, or contemplated by, the IMC GPCo Plan of Liquidation,
(ii) the FRP GPCo/FCC/FTX Mergers in accordance with the terms of the
FRP GPCo/FCC/FTX Merger Documents and (iii) the potential merger,
liquidation or dissolution of Agrico LP (or the transfer by Agrico LP
of its Partnership Interests to FRP or an Affiliate of FRP)
contemplated by Section 3c of this Agreement, the parties hereto hereby
waive the operation and effect of:
A. Section 3.0 of the Parent Agreement, as amended and
restated as of May 26, 1995;
B. with respect to the transactions described in or
contemplated by the IMC GPCo Plan of Liquidation, Sections 7.01,
7.02 and 7.05 of the Partnership Agreement, as amended and
restated as of May 26, 1995;
C. any other provisions or terms of the Transaction
Agreements (as defined in the Partnership Agreement), as amended
and restated as of May 26, 1995, inconsistent with (i) the IMC
GPCo Plan of Liquidation, (ii) the FRP GPCo/FCC/FTX Mergers, (iii)
the merger, liquidation or dissolution of Agrico LP (or the
transfer of its Partnership Interests to FRP or an Affiliate of
FRP) contemplated by Section 3c of this Agreement or (iv) this
Agreement; and
agree that none of (i) the transactions described in, or contemplated
by, the IMC GPCo Plan of Liquidation, (ii) the FRP GPCo/FCC/FTX Mergers
in accordance with the terms of the FRP GPCo/FCC/FTX Merger Documents
or (iii) the potential merger, liquidation or dissolution of Agrico LP
(or the transfer by Agrico LP of its Partnership Interests to FRP or an
Affiliate of FRP) contemplated by Section 3c of this Agreement shall be
deemed to be (i) Triggering Events, as such term is defined in the
Partnership Agreement, as amended, or (ii) transactions, agreements,
arrangements or understandings with Affiliates, as such terms are used
in Sections 6.07 and 9.12 of the Partnership Agreement, as amended and
restated as of May 26, 1995.
b. Each of the parties waives any non-compliance occurring prior
to May 26, 1995 with the terms of Section 9.0(b) of the Parent
Agreement by any of the parties thereto.
SECTION 3. Consent. a. The parties hereto hereby consent to the
voluntary complete liquidation and dissolution of IMC GPCo, such
liquidation and dissolution to be effected in accordance with the plan
of liquidation and dissolution set forth in the IMC GPCo Plan of
Liquidation, and as further set forth below:
(1) Effective as of May 26, 1995 (i) 80% of all
obligations of IMC GPCo incurred by IMC GPCo (x) as a General
Partner of Partnership and (y) pursuant to the terms of the
Partnership Agreement, shall be assumed by Operations and (ii)
(A) 100% of IMC GPCo's 50% common stock interest in MPCo and
(B) 80% of all of the other assets, properties, rights and
interests of IMC GPCo (items (A) and (B) above collectively
being the "Interests"), including but not limited to, its
Current Interest and Capital Interest in IMC-Agrico, cash,
trademarks, tradenames, service marks, copyrights, patents,
indemnification rights and accounts receivable, shall be
transferred, assigned, conveyed and distributed to Operations,
as IMC GPCo's sole shareholder in cancellation of 80% of IMC
GPCo's issued and outstanding shares of common stock.
(2) Effective as of May 26, 1995, the one hundred (100)
shares of Preferred Stock, par value $.01 per share of
IMC GPCo (the "Preferred Stock"), owned by MPCo, shall be
repurchased by IMC GPCo at the liquidation value per share of
$500.00.
(3) After June 4, 1996 and, to the extent practicable,
after identifying and satisfying the remaining debts,
obligations and liabilities, including but not limited to
taxes, license fees and franchise fees of IMC GPCo, and
winding up the business affairs of IMC GPCo, the remaining 20%
of the Interests, and any other remaining obligations, assets,
properties, rights and interests of IMC GPCo, shall be
transferred, assigned, conveyed and distributed to, and
assumed by, Operations, as IMC GPCo's sole shareholder, to
complete the cancellation of IMC GPCo's issued and outstanding
capital stock, and IMC GPCo shall be dissolved in accordance
with the laws of the State of Delaware. Such liquidation and
dissolution of IMC GPCo (the "Final IMC GPCo Liquidating
Distribution") shall be completed in accordance with the
following time schedule:
(A) if (x) FTX and FRP elect by written notice to the
Partners and the Partnership, at any time after November 30,
1995 and on or prior to June 4, 1996, to cause the merger,
liquidation or dissolution of Agrico LP (or the transfer by
Agrico LP of its Partnership Interests to FRP or an Affiliate
of FRP) as contemplated by Section 3c of this Agreement, and
(y) such merger, liquidation or dissolution of Agrico LP (or
such transfer of its Partnership Interests) is completed not
earlier than June 5, 1996 and not later than June 15, 1996,
the Final IMC GPCo Liquidating Distribution shall be
undertaken promptly after June 22, 1997;
(B) if (x) FTX and FRP elect by written notice to the
Partners and the Partnership, at any time after November 30,
1995 and on or prior to June 4, 1996, to cause the merger,
liquidation or dissolution of Agrico LP (or the transfer by
Agrico LP of its Partnership Interests to FRP or an Affiliate
of FRP) as contemplated by Section 3c of this Agreement, but
(y) such merger, liquidation or dissolution of Agrico LP (or
such transfer of its Partnership Interests) is not completed
by June 15, 1996, the Final IMC GPCo Liquidating Distribution
shall be undertaken after June 15, 1996 and shall be completed
no later than June 30, 1996; and
(C) if FTX and FRP do not elect, at any time after
November 30, 1995 and on or prior to June 4, 1996, to cause
the merger, liquidation or dissolution of Agrico LP (or the
transfer by Agrico LP of its Partnership Interests to FRP or
an Affiliate of FRP) as contemplated by Section 3c of this
Agreement, the Final IMC GPCo Liquidating Distribution shall
be undertaken after June 4, 1996 and shall be completed by
June 30, 1996.
b. The parties hereto hereby also consent to (i) the
FRP GPCo/FCC/FTX Mergers to be accomplished as soon as reasonably
practicable on the terms set forth in the FRP GPCo/FCC/FTX Merger
Documents and (ii) the repurchase by FRP GPCo of the preferred
stock of FRP GPCo owned by MPCo at its liquidation value, with the
result that FTX, as a result of such FRP GPCo/FCC/FTX Mergers and
redemption of the FRP GPCo preferred stock (i) becomes the general
partner of Agrico LP and (ii) assumes all outstanding obligations
of FRP GPCo and FCC.
c. The parties hereto hereby also acknowledge and agree that
FTX and FRP will have the option to (i) cause the merger,
liquidation or dissolution of Agrico LP (or the transfer of its
Partnership Interests to FRP or an Affiliate of FRP) under
Delaware Law, provided that such merger, liquidation or
distribution (or such transfer of its Partnership Interests)
results in a transfer of the assets, properties, rights, interests
and all obligations of Agrico LP to FRP or an Affiliate of FRP and
(ii) admit FRP or such Affiliate of FRP as a Partner in the
Partnership. This option may be exercised:
At any time after November 30, 1995 and on or prior to
June 4, 1996 by giving notice of such exercise to the Partners
and the Partnership on or prior to June 4, 1996; provided that
if FTX and FRP exercise such option after November 30, 1995
and on or prior to June 4, 1996, their right to cause such
merger, liquidation or dissolution of Agrico LP (or such
transfer of its Partnership Interests) at that time will be
forfeited unless such merger, liquidation or dissolution of
Agrico LP (or such transfer of its Partnership Interests) is
completed not earlier than June 5, 1996 and not later than
June 15, 1996; provided further that if after November 30,
1995 and on or prior to June 4, 1996 FTX and FRP so exercise
such option, but such merger, liquidation or dissolution of
Agrico LP (or such transfer of its Partnership Interests) is
not completed on or prior to June 15, 1996, FTX and FRP will
have an additional option to cause such merger, liquidation or
dissolution of Agrico LP (or such transfer of its Partnership
Interests) at any time after July 15, 1997; and, provided
further that if after November 30, 1995 and on or prior to
June 4, 1996, FTX and FRP do not so exercise their option to
cause such merger, liquidation or dissolution of Agrico LP (or
such transfer of its Partnership Interests), FTX and FRP will
have the right to exercise such option at any time after
July 15, 1997;
provided however that, notwithstanding the provisions of this paragraph
(c), FTX and FRP may merge, liquidate or dissolve Agrico LP (or
transfer its Partnership Interests) pursuant to this Agreement at any
time so long as FTX and FRP bear, and assume liability for, any
expense, cost or loss (including any increase in taxes, other than any
increase in income taxes which arises solely from the timing of the
reporting of income, deductions and credits attributable to the normal
business activities of the Partnership) suffered by the Partnership,
any other Partner or any of their Related Persons resulting therefrom.
SECTION 4. Miscellaneous. The parties hereto hereby agree that
(i) they shall bear, and assume liability for, any expense, cost or
loss (including any increase in taxes, other than any increase in
income taxes which arises solely from the timing of the reporting of
income, deductions and credits attributable to the normal business
activities of the Partnership) suffered by the Partnership, any other
Partner or any of their Related Persons arising out of transactions
accomplished in violation of the provisions of this Agreement;
(ii) notwithstanding the terms of any provision of the Transaction
Agreements or any other agreement between the parties hereto or their
affiliates, they shall not have any liability to any other party
hereto, nor to any of their Related Persons, shareholders, unitholders,
successors or assigns for any tax consequences of this Agreement, its
execution or the consummation of the transactions contemplated by
Section 3 of this Agreement (except as set forth in Section 4(i) and
the final proviso of Section 3c of this Agreement); and (iii)
notwithstanding any action taken in amending the Partnership Agreement
as contemplated by Section 1a hereof, the current members of the Policy
Committee, any alternates thereto and the Chairman of the Policy
Committee shall not change as a result of the transactions contemplated
hereby.
SECTION 5. Representations and Warranties. Each of the parties
hereto hereby represents and warrants as follows:
a. It is duly organized, validly existing and in good
standing under the laws of its state of formation.
b. The execution and delivery of this Agreement by such party
and the execution and delivery of the IMC GPCo Plan of
Liquidation, the FRP GPCo/FCC/FTX Merger Documents, the
Partnership Agreement, as amended and restated as of May 26, 1995
and the Parent Agreement, as amended and restated as of May 26,
1995 (collectively, the "Other Agreements") by each party thereto
and the performance by each party of their respective obligations
hereunder and under such of the Other Agreements to which it, or
any affiliate thereof, is a party, are within their (and such
affiliates') respective organizational powers, have been duly
authorized by all necessary organizational action by such party
(and such affiliates), have received all necessary governmental
approvals (if any shall be required), and do not and will not
contravene or conflict with any provision of law or of the
organizational instruments of such party (or any affiliate thereof
that is a party thereto), respectively.
c. This Agreement and such of the Other Agreements to which
it, or any affiliate thereof, is a party, is the legal, valid and
binding obligation of each party hereto and thereto (or any
affiliate thereof that is a party hereto or thereto),
respectively, enforceable against them in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect affecting the enforcement of creditors'
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
SECTION 6. Effect of Amendment, Waiver and Consent.
a. Except as specifically amended above, the Transaction
Agreements, as amended, are and shall continue to be in full force
and effect and are hereby in all respects ratified and confirmed.
b. The execution, delivery and effectiveness of this
Agreement shall not, except as expressly provided herein, operate
as a waiver of any right, power or remedy of any party hereto
under any of the Transaction Agreements, as amended, nor
constitute a waiver of any provision of any of the Transaction
Agreements, as amended.
SECTION 7. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same agreement.
SECTION 8. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware
without regard to the conflicts of law rules of such state.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment,
Waiver and Consent to be executed as of the date first above written.
IMC GLOBAL INC.
By: PETER HONG
--------------------------------
Name Printed: Peter Hong
Title: Vice President
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
By: Freeport McMoRan Inc., its
general partner
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
IMC-AGRICO GP COMPANY
By: ROBERT C. BRAUNEKER
-------------------------------
Name Printed: Robert C. Brauneker
Title: Vice President
FREEPORT-McMoRan INC.
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Amendment,
Waiver and Consent to be executed as of the date first above written.
IMC GLOBAL INC.
By:
--------------------------------
Name Printed:
-----------------------
Title:
-------------------------------
FREEPORT-McMoRan RESOURCE PARTNERS, LIMITED PARTNERSHIP
By: Freeport McMoRan Inc., its
general partner
By: CHARLES W. GOODYEAR
-------------------------------
Name Printed: Charles W. Goodyear
Title: Senior Vice President
IMC-AGRICO GP COMPANY
By:
-------------------------------
Name Printed:
-----------------------
Title:
------------------------------
FREEPORT-McMoRan INC.
By: CHARLES W. GOODYEAR
-------------------------------
Name Printed: Charles W. Goodyear
Title: Senior Vice President
IMC GLOBAL OPERATIONS INC.
By: PETER HONG
-------------------------------
Name Printed: Peter Hong
Title: Vice President
IMC-AGRICO MP, INC.
By: ROBERT C. BRAUNEKER
-------------------------------
Name Printed: Robert C. Brauneker
Title: Vice President
AGRICO, LIMITED PARTNERSHIP
By: Agrico, Inc., its
general partner
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
IMC-AGRICO COMPANY
By: IMC-Agrico-MP, Inc.,
its general partner
By: ROBERT C. BRAUNEKER
Name Printed: Robert C. Brauneker
Title: Vice President
----------------------------
IMC GLOBAL OPERATIONS INC.
By:
-------------------------------
Name Printed:
-----------------------
Title:
------------------------------
IMC-AGRICO MP, INC.
By:
-------------------------------
Name Printed:
---------------------
Title:
----------------------------
AGRICO, LIMITED PARTNERSHIP
By: Agrico, Inc., its
general partner
By: CHARLES W. GOODYEAR
-------------------------------
Name Printed: Charles W. Goodyear
Title: Vice President
IMC-AGRICO COMPANY
By: IMC-Agrico-MP, Inc.,
its general partner
By: ROBERT C. BRAUNEKER
Name Printed: Robert C. Brauneker
Title: Vice President
----------------------------
EXHIBIT 10.32
EXECUTION COPY
AGREEMENT AND PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION
AGREEMENT AND PLAN OF COMPLETE LIQUIDATION AND DISSOLUTION (this
"Agreement") made as of this 26th day of May, 1995 among IMC Global
Operations Inc., a Delaware corporation ("Operations"), IMC-Agrico GP
Company, a Delaware corporation ("IMC GPCo") and IMC-Agrico MP, Inc., a
Delaware corporation ("MPCo"). Capitalized terms used in this
Agreement, and not otherwise defined herein, shall have the meaning
given to such terms in the Schedule of Definitions constituting Exhibit
A to the Amended and Restated Partnership Agreement dated as of July 1,
1993, and further amended and restated as of May 26, 1995 among
IMC GPCo, Agrico, Limited Partnership, a Delaware limited partnership
(the "FRP Partner") and MPCo (the "Partnership Agreement").
W I T N E S S E T H:
WHEREAS, Operations owns 500 shares of the common stock of
IMC GPCo and MPCo owns 100 shares of the preferred stock of IMC GPCo,
which shares constitute all of the issued and outstanding shares of
capital stock of IMC GPCo;
WHEREAS, the parties hereto wish to approve, authorize and consent
to (i) the voluntary complete liquidation and dissolution of IMC GPCo,
in accordance with the General Corporation Law of the State of Delaware
("Delaware Law"), (ii) the admission of Operations as a Partner in the
Partnership in accordance with the terms of the Partnership Agreements,
(iii) the assumption by Operations (a) as of the date hereof, of 80% of
all obligations of IMC GPCo incurred by IMC GPCo (x) as a General
Partner of the Partnership and (y) pursuant to the terms of the
Partnership Agreement and (b) upon completion of such liquidation and
dissolution, of all remaining obligations of IMC GPCO, (iv) the
transfer to Operations of the assets, properties, rights and interests
of IMC GPCo, including, but not limited to, its Current Interest and
Capital Interest in IMC-Agrico Company, a Delaware general partnership
("IMC-Agrico"), cash, trademarks, tradenames, service marks,
copyrights, patents, indemnification rights, accounts receivable and
its 50% common stock interest in MPCo, after all debts, obligations and
liabilities, including but not limited to taxes, license fees and
franchise fees, are satisfied and (v) the repurchase by IMC GPCo of the
preferred stock owned by MPCo at its liquidation value; and
WHEREAS, the parties hereto wish to accomplish the above described
complete liquidation and dissolution of IMC GPCO in two phases as
provided in this Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. The parties hereto hereby approve, authorize and consent to
the voluntary complete liquidation and dissolution of IMC GPCo, such
liquidation and dissolution to be effected in accordance with the plan
of liquidation set forth in this Agreement.
2. Effective as of May 26, 1995, (i) 80% of all obligations of
IMC GPCo incurred by IMC GPCo (x) as a General Partner of the
Partnership and (y) pursuant to the terms of the Partnership Agreement,
shall be assumed by Operations and (ii) (A) 100% of IMC GPCo's 50%
common stock interest in MPCo and (B) 80% of all of the other assets,
properties, rights and interests of IMC GPCo (items (A) and (B) above
collectively being the "Interests"), including, but not limited to, its
Current Interest and Capital Interest in IMC-Agrico, cash, trademarks,
tradenames, service marks, copyrights, patents, indemnification rights
and accounts receivable, shall be transferred, assigned, conveyed and
distributed to Operations, as IMC GPCo's sole shareholder in
cancellation of 80% of IMC GPCo's issued and outstanding shares of
common stock (the "Initial IMC GPCo Liquidating Distribution").
3. In connection with the transactions described herein, and
effective as of May 26, 1995, the one hundred (100) shares of Preferred
Stock, par value $.01 per share of IMC GPCo (the "Preferred Stock"),
owned by MPCo shall be repurchased by IMC GPCo at the liquidation value
per share of $500.00.
4. After, to the extent practicable, identifying and satisfying
the remaining debts, obligations and liabilities, including but not
limited to taxes, license fees and franchise fees of IMC GPCo, and
winding up of the business affairs of IMC GPCo, the remaining 20% of
the Interests, and any other remaining obligations, assets, properties,
rights and interests of IMC GPCo, shall be transferred, assigned,
conveyed and distributed to, and assumed by, Operations, as IMC GPCo's
sole shareholder, to complete the cancellation of IMC GPCo's issued and
outstanding capital stock, and IMC GPCo shall be dissolved in
accordance with Delaware Law. Such liquidation and dissolution of IMC
GPCo (the "Final IMC GPCo Liquidating Distribution") shall be completed
in accordance with the following time schedule:
(A)if (x) Freeport-McMoRan Inc., a Delaware corporation ("FTX")
and Freeport-McMoRan Resource Partners Limited Partnership, a
Delaware limited partnership ("FRP"), elect by written notice
to the Partners and the Partnership, after November 30, 1995
and on or prior to June 4, 1996, to cause the merger,
liquidation or dissolution of the FRP Partner (or the
transfer by the FRP Partner of its Partnership Interests to
FRP or an affiliate of FRP) as contemplated by the Amendment,
Waiver and Consent Agreement, and (y) such merger, liquidation
or dissolution of the FRP Partner (or such transfer of its
Partnership Interests) is completed not earlier than June 5,
1996 and not later than June 15, 1996, the Final IMC GPCo
Liquidating Distribution shall be undertaken promptly after
June 22, 1997;
(B)if (x) FTX and FRP elect by written notice to the Partners
and the Partnership, after November 30, 1995 and on or prior
to June 4, 1996, to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP
Partner of its Partnership Interests to FRP or an affiliate
of FRP) as contemplated by the Amendment, Waiver and Consent
Agreement, but (y) such merger, liquidation or dissolution of
the FRP Partner (or such transfer of its Partnership
Interests) is not completed by June 15, 1996, the Final IMC
GPCo Liquidating Distribution shall be undertaken after
June 15, 1996 and shall be completed no later than June 30,
1996; and
(C)if FTX and FRP do not elect, after November 30, 1995 and on
or prior to June 4, 1996, to cause the merger, liquidation or
dissolution of the FRP Partner (or the transfer by the FRP
Partner of its Partnership Interests to FRP or an affiliate
of FRP) as contemplated by the Amendment, Waiver and Consent
Agreement, the Final IMC GPCo Liquidating Distribution shall
be undertaken after June 4, 1996 and shall be completed by
June 30, 1996.
5. The parties hereto hereby authorize and direct the proper
officers of IMC GPCo and Operations to take all such further actions as
they shall deem necessary or appropriate to effect the dissolution of
IMC GPCo and to wind up and liquidate its business and affairs or
otherwise to implement this Agreement, including, without limitation,
(i) the execution and delivery of the Amendment, Waiver and Consent
Agreement substantially in the form of Exhibit A hereto, except for
such changes, additions and deletions as to any or all of the terms and
provisions thereof as the officer executing the same may approve and
(ii) promptly upon completion of the Final IMC GPCo Liquidating
Distribution, the preparation, execution and filing of a certificate of
dissolution with the Secretary of State of the State of Delaware.
6. This Agreement constitutes a Plan of Complete Liquidation and
Dissolution for the purposes of Section 332 and 337 of the Internal
Revenue Code of 1986, as amended.
7. Anything to the contrary contained herein notwithstanding, all
distributions in respect of this Agreement shall be completed within
three years from the close of the taxable year of IMC GPCo in which the
first such distribution is made.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective duly authorized officers as of the
day and year first above written.
IMC GLOBAL OPERATIONS INC.
By PETER HONG
--------------------------
Its: Vice President
IMC-AGRICO GP COMPANY
By ROBERT C. BRAUNEKER
---------------------------
Its: Vice President
IMC-AGRICO MP, INC.
By ROBERT C. BRAUNEKER
---------------------------
Its: Vice President
EXHIBIT 10.49
AMENDMENT AND EXTENSION AGREEMENT
This Extension Agreement is entered into this 15th day of June,
l995, between IMC Global Inc., a Delaware corporation (the "Company"),
and Wendell F. Bueche of Northbrook, Illinois ("Bueche"):
WHEREAS, there presently exists an Employment Agreement (the
"Agreement") between Bueche and the Company dated April l5, l993,
providing for his employment in an executive capacity, and expiring on
February 29, 1996, and there also exists an Agreement (the "Letter
Agreement") between Bueche and the Company dated July 19, 1993,
regarding his consultancy after his retirement from the Company; and
WHEREAS, the Board of Directors has concluded that because of
Bueche's capabilities and his contributions to the success of the
Company and his performance of the responsibilities of Chairman and
Chief Executive Officer of the Company, it is in the interests of the
Company to extend the duration of the Agreement;
Now, therefore, it is mutually agreed as follows:
l. Extended Term. The Agreement, as amended aforesaid, shall be
extended and continue in full force and effect until June 30,
1997.
- 2 -
2. Term in Position. Bueche shall serve as Chairman and Chief
Executive Officer through June 30, 1996, and as Chairman from
July 1, 1996, through June 30, 1997.
3. Salary. A) Bueche's salary as Chairman and Chief Executive
Officer shall never be less than $530,040 per year; B)
Bueche's salary as Chairman shall be $250,020 per year.
4. Retirement and Consultancy. Bueche will retire from
employment on July 1, 1997, and commence to render consulting
services to the Company for the period July 2, 1997, through
June 30, 1999, at a rate of $20,835 per month. Payment of the
proceeding fee is guaranteed to Bueche for the entire period
regardless of whether the Company avails itself of Bueche's
services.
5. Other Terms. All the terms and provisions of the Agreement
and the Letter Agreement, respectively, shall remain in full
force and effect, except as modified hereby.
- 3 -
IN WITNESS WHEREOF, the Company has caused these presents to be
signed on its behalf, and Bueche, to evidence his acceptance hereof,
has hereunto set his hand and seal as of the day first above written.
IMC GLOBAL, INC.
By R. A. Lenon
------------------------
W. F. Bueche
------------------------
Wendell F. Bueche
Attest:
By Marschall Smith
-----------------------------
EXHIBIT 10.53
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of June 24, 1994
(the "First Amendment") is to that Credit Agreement as further amended
and modified from time to time hereafter, the "Credit Agreement;" terms
used but not otherwise defined herein shall have the meanings assigned
in the Credit Agreement), by and among IMC-AGRICO COMPANY, a Delaware
general partnership (the "Borrower"), the Banks identified therein, and
NATIONSBANK OF NORTH CAROLINA, N.A., as Agent (the Agent").
W I T N E S S E T H:
WHEREAS, the Banks have, pursuant to the terms of the Credit
Agreement, made available to the Borrower a $75,000,000 credit
facility;
WHEREAS, the Borrower has requested modification of the financial
covenant relating to Minimum Partners' Capital contained therein; and
WHEREAS, the Required Banks have agreed to the requested changes
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. The financial covenant relating to Minimum Partners' Capital
contained in Section 5.11(a) is amended and modified to read as
follows:
(a) Minimum Partners' Capital. The Borrower will not permit
Partners' Capital at any time to be less than:
Minimum Partners' Capital
Closing Date through June 29, 1994 $1,450,000,000
June 30, 1994 and thereafter 1,350,000,000
2. In connection with this First Amendment, the Borrower hereby
represents and warrants that as of the date hereof (a) the
representations and warranties set forth in Section 4 of the Credit
Agreement are true and correct in all material respects (except for
those which expressly relate to an earlier date), and (b) no Default or
Event of Default presently exists under the Credit Agreement.
3. Except as expressly modified hereby, all of the terms and
provisions of the Credit Agreement remain in full force and effect.
4. The Borrower agrees to pay all reasonable costs and expenses
in connection with the preparation, execution and delivery of this
First Amendment, including the reasonable fees and expenses of the
Agent's legal counsel.
5. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
First Amendment to produce or account for more than one such
counterpart.
6. This First Amendment, as the Credit Agreement, shall be
deemed to be a contract under, and shall for all purposes be construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By: JOHN E. GALVIN
----------------------------
JOHN E. GALVIN
Title: Treasurer
BANKS: NATIONSBANK OF NORTH CAROLINA, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent
By
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By
-----------------------------------
Title
--------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.
By
-----------------------------------
Title
--------------------------------
ARAB BANKING CORPORATION
By
-----------------------------------
Title
--------------------------------
-2-
4. The Borrower agrees to pay all reasonable costs and expenses
in connection with the preparation, execution and delivery of this
First Amendment, including the reasonable fees and expenses of the
Agent's legal counsel.
5. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
First Amendment to produce or account for more than one such
counterpart.
6. This First Amendment, as the Credit Agreement, shall be
deemed to be a contract under, and shall for all purposes be construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By:
----------------------------
Title:
BANKS: NATIONSBANK OF NORTH CAROLINA, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent
By CHRISTOPHER B. TORIE
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By
-----------------------------------
Title
--------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.
By
-----------------------------------
Title
--------------------------------
ARAB BANKING CORPORATION
By
-----------------------------------
Title
--------------------------------
-2-
4. The Borrower agrees to pay all reasonable costs and expenses
in connection with the preparation, execution and delivery of this
First Amendment, including the reasonable fees and expenses of the
Agent's legal counsel.
5. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
First Amendment to produce or account for more than one such
counterpart.
6. This First Amendment, as the Credit Agreement, shall be
deemed to be a contract under, and shall for all purposes be construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By:
----------------------------
Title:
BANKS: NATIONSBANK OF NORTH CAROLINA, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent
By
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By MICHAEL MANDRACCHIO VP
-----------------------------------
MICHAEL MANDRACCHIO
Title Attorney-in-Fact
--------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.
By
-----------------------------------
Title
--------------------------------
ARAB BANKING CORPORATION
By
-----------------------------------
Title
--------------------------------
-2-
4. The Borrower agrees to pay all reasonable costs and expenses
in connection with the preparation, execution and delivery of this
First Amendment, including the reasonable fees and expenses of the
Agent's legal counsel.
5. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
First Amendment to produce or account for more than one such
counterpart.
6. This First Amendment, as the Credit Agreement, shall be
deemed to be a contract under, and shall for all purposes be construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By:
----------------------------
Title:
BANKS: NATIONSBANK OF NORTH CAROLINA, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent
By
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By
-----------------------------------
Title
--------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.
By JOANNA M. SOLOWSKI ROBERT B. BENOIT
-----------------------------------
JOANNA M. SOLOWSKI ROBERT B. BENOIT
Title Vice President Senior Vice President
--------------------------------
ARAB BANKING CORPORATION
By
-----------------------------------
Title
--------------------------------
-2-
4. The Borrower agrees to pay all reasonable costs and expenses
in connection with the preparation, execution and delivery of this
First Amendment, including the reasonable fees and expenses of the
Agent's legal counsel.
5. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
First Amendment to produce or account for more than one such
counterpart.
6. This First Amendment, as the Credit Agreement, shall be
deemed to be a contract under, and shall for all purposes be construed
in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this First Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By:
----------------------------
Title:
BANKS: NATIONSBANK OF NORTH CAROLINA, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent
By
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By
-----------------------------------
Title
--------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.
By
-----------------------------------
Title
--------------------------------
ARAB BANKING CORPORATION
By SHELDON TILNEY
-----------------------------------
Title Deputy GM
--------------------------------
-2-
EXHIBIT 10.54
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT dated as of February 24,
1995 (the "Second Amendment") is to that Credit Agreement dated as of
February 9, 1994, as amended by that certain First Amendment to Credit
Agreement dated as of June 24, 1994 (the "First Amendment") (as amended
and modified hereby and as further amended and modified from time to
time hereafter, the "Credit Agreement"; terms used but not otherwise
defined herein among IMC -AGRICO COMPANY, a Delaware general
partnership (the "Borrower"), the Banks identified therein, and
NATIONSBANK, N.A. (CAROLINAS) (successor in interest to NationsBank of
North Carolina, N.A.), as Agent (the Agent").
W I T N E S S E T H:
WHEREAS, the Banks have, pursuant to the terms of the Credit
Agreement, made available to the Borrower a $75,000,000 credit
facility;
WHEREAS, the Borrower has requested modification of the financial
covenant relating to Minimum Partners' Capital contained therein; and
WHEREAS, the Required Banks have agreed to the requested changes
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. The financial covenant relating to Minimum Partners' Capital
contained in Section 5.11(a) is amended and modified to read as
follows:
(a) Minimum Partners' Capital. The Borrower will not permit
Partners' Capital at any time to be less than:
Minimum Partners' Capital
January 1, 1995 through March 31, 1995 $1,250,000,000
April 1, 1995 through June 30, 1995 $1,200,000,000
July 1, 1995 through September 30, 1995 $1,175,000,000
October 1, 1995 through December 31, 1995 $1,150,000,000
January 1, 1996 through March 31, 1996 $1,125,000,000
April 1, 1996 through June 30, 1996 $1,100,000,000
July 1, 1996 through September 30, 1996 $1,075,000,000
October 1, 1996 through December 31, 1996 $1,050,000,000
January 1, 1997 and thereafter $1,025,000,000
2. In connection with this Second Amendment, the Borrower hereby
represents and warrants that as of the date hereof (a) the
representations and warranties set forth in Section 4 of the
Credit Agreement are true and correct in all material respects (except
for those which expressly relate to an earlier date), and (b) no
Default or Event of Default presently exists under the Credit
Agreement.
3. Except as expressly modified hereby, all of the terms and
provisions of the Credit Agreement remain in full force and effect.
4. The Borrower agrees to pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Second
Amendment, including the reasonable fees and expenses of the Agent's
legal counsel.
5. This Second Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
Second Amendment to produce or account for more than one such
counterpart.
6. This Second Amendment, as the Credit Agreement, shall be deemed
to be a contract under, and shall for all purposes be construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Second Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By: PETER HONG
----------------------------
PETER HONG
Title: Vice President & Treasurer
---------------------------
BANKS: NATIONSBANK, N.A. (CAROLINAS)
individually in its capacity as a
Bank and in its capacity as Agent
By
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By
-----------------------------------
Title
--------------------------------
-2-
Credit Agreement are true and correct in all material respects (except
for those which expressly relate to an earlier date), and (b) no
Default or Event of Default presently exists under the Credit
Agreement.
3. Except as expressly modified hereby, all of the terms and
provisions of the Credit Agreement remain in full force and effect.
4. The Borrower agrees to pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Second
Amendment, including the reasonable fees and expenses of the Agent's
legal counsel.
5. This Second Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
Second Amendment to produce or account for more than one such
counterpart.
6. This Second Amendment, as the Credit Agreement, shall be deemed
to be a contract under, and shall for all purposes be construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Second Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By:
----------------------------
Title:
---------------------------
BANKS: NATIONSBANK, N.A. (CAROLINAS)
individually in its capacity as a
Bank and in its capacity as Agent
By CHRISTOPHER B. TORIE
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By
-----------------------------------
Title
--------------------------------
-2-
Credit Agreement are true and correct in all material respects (except
for those which expressly relate to an earlier date), and (b) no
Default or Event of Default presently exists under the Credit
Agreement.
3. Except as expressly modified hereby, all of the terms and
provisions of the Credit Agreement remain in full force and effect.
4. The Borrower agrees to pay all reasonable costs and expenses in
connection with the preparation, execution and delivery of this Second
Amendment, including the reasonable fees and expenses of the Agent's
legal counsel.
5. This Second Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original. It shall not be necessary in making proof of this
Second Amendment to produce or account for more than one such
counterpart.
6. This Second Amendment, as the Credit Agreement, shall be deemed
to be a contract under, and shall for all purposes be construed in
accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Second Amendment to be duly executed and delivered
as of the date first above written.
BORROWER: IMC-AGRICO COMPANY, a Delaware
general partnership by its Managing
Partner
By: IMC-AGRICO MP, INC., a Delaware
corporation, as Managing Partner
By:
----------------------------
Title:
--------------------------
BANKS: NATIONSBANK, N.A. (CAROLINAS)
individually in its capacity as a
Bank and in its capacity as Agent
By
-----------------------------------
Christopher B. Torie
Senior Vice President
CITIBANK, N.A.
By JAMES N. SIMPSON
-----------------------------------
JAMES N. SIMPSON
Title Attorney-In-Fact
--------------------------------
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.
By JOANNA M. SOLOWSKI AUGUST BRAAKSMA
-----------------------------------
Title Vice President Vice President
--------------------------------
ARAB BANKING CORPORATION
By
-----------------------------------
Title
--------------------------------
-3-
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.
By
-----------------------------------
Title
--------------------------------
ARAB BANKING CORPORATION
By GRANT E. MCDONALD
-----------------------------------
GRANT E. MCDONALD
Title Vice President
--------------------------------
-3-
EXHIBIT 10.60
_______________________________________________________________
TRANSFER AND ADMINISTRATION AGREEMENT
between
ENTERPRISE FUNDING CORPORATION,
as Company
and
IMC-AGRICO COMPANY
as Transferor and Collection Agent
Dated as of October 31, 1994
_______________________________________________________________
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms 1
SECTION 1.2. Other Terms 23
SECTION 1.3. Computation of Time Periods 23
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Facility 24
SECTION 2.2. Transfers; Company Certificate;
Eligible Receivables 24
SECTION 2.3. Selection of Tranche Periods and
Tranche Rates 27
SECTION 2.4. Discount, Fees and Other Costs and
Expenses 28
SECTION 2.5. Non-Liquidation Settlement and
Reinvestment Procedures 28
SECTION 2.6. Liquidation Settlement Procedures 29
SECTION 2.7. Fees 30
SECTION 2.8. Protection of Ownership Interest of the
Company 30
SECTION 2.9. Deemed Collections; Application of
Payments 32
SECTION 2.10. Payments and Computations, Etc. 33
SECTION 2.11. Reports 34
SECTION 2.12. Collection Account 34
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Transferor 35
SECTION 3.2. Reaffirmation of Representations and
Warranties of the Transferor 38
i
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. 40
ARTICLE V
COVENANTS
SECTION 5.1. Affirmative Covenants of Transferor 43
SECTION 5.2. Negative Covenants of Transferor 47
SECTION 5.3. Financial Covenants 48
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent 50
SECTION 6.2. Duties of Collection Agent 50
SECTION 6.3. Rights After Designation of New
Collection Agent 52
SECTION 6.4. Responsibilities of the Transferor 53
ARTICLE VII
TERMINATION EVENTS
SECTION 7.1. Termination Events 54
SECTION 7.2. Termination 56
ARTICLE VIII
INDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor 57
SECTION 8.2. Indemnity for Taxes, Reserves and
Expenses 59
SECTION 8.3. Other Costs, Expenses and Related
Matters 62
SECTION 8.4. Reconveyance Under Certain
Circumstances 62
ii
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Term of Agreement 63
SECTION 9.2. Waivers; Amendments 63
SECTION 9.3. Notices 63
SECTION 9.4. Governing Law; Submission to
Jurisdiction; Integration 65
SECTION 9.5. Severability; Counterparts 66
SECTION 9.6. Successors and Assigns 66
SECTION 9.7. Waiver of Confidentiality 66
SECTION 9.8. Confidentiality Agreement 67
SECTION 9.9. No Bankruptcy Petition Against the
Company 67
SECTION 9.10. No Recourse Against Stockholders,
Officers and Directors 68
SECTION 9.11. Characterization of the Transactions
Contemplated by the Agreement 68
EXHIBITS
EXHIBIT A Form of Contract
EXHIBIT B Credit and Collection Policies and
Practices
EXHIBIT C List of Lock-Box Banks
EXHIBIT D Form of Lock-Box Agreement
EXHIBIT E Form of Investor Report
EXHIBIT F Form of Transfer Certificate
EXHIBIT G Certain Definitions
EXHIBIT H List of Actions and Suits
EXHIBIT I [Reserved]
EXHIBIT J [Reserved]
EXHIBIT K Form of Opinion of Counsel for the
Transferor
iii
EXHIBIT L Form of Responsible Officer's Certificate
EXHIBIT M Form of Company Certificate
iv
TRANSFER AND ADMINISTRATION AGREEMENT
TRANSFER AND ADMINISTRATION AGREEMENT (this "Agreement"),
dated as of October 31, 1994, between IMC-AGRICO COMPANY, a general
partnership formed under the laws of the State of Delaware, as
transferor (in such capacity, the "Transferor") and as collection agent
(in such capacity, the "Collection Agent"), and ENTERPRISE FUNDING
CORPORATION, a Delaware corporation (the "Company").
PRELIMINARY STATEMENTS
WHEREAS, the Transferor may desire to convey, transfer and
assign, from time to time, undivided percentage interests in certain
accounts receivable, and the Company may desire to accept such
conveyance, transfer and assignment of such undivided percentage
interests, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Defined Terms. As used in this
agreement, the following terms shall have the following meanings:
"Adverse Claim" means a lien, security interest, charge or
encumbrance, or other right or claim in, of or on any Person's assets
or properties in favor of any other Person.
"Administrative Agent" means NationsBank of North Carolina,
N.A., as administrative agent.
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through
ownership of voting stock, by contract or otherwise.
"Affiliated Obligor" means any Obligor which is an Affiliate
of another Obligor.
"Aggregate Unpaids" means, at any time, an amount equal to
the sum of (i) the aggregate accrued and unpaid Discount with respect
to all Tranche Periods at such time, (ii) the Net Investment at such
time, and (iii) all other amounts owed (whether due or accrued)
hereunder by Transferor to the Company at such time.
"Arrangement Fee" means the fee payable by the Transferor to
the Administrative Agent pursuant to Section 2.7 hereof, the terms of
which are set forth in the Fee Letter.
"Base Rate" or "BR" means, a rate per annum equal to the
greater of (i) the prime rate of interest announced by the Liquidity
Provider from time to time, changing when and as said prime rate
changes (such rate not necessarily being the lowest or best rate
charged by the Liquidity Provider) and (ii) the rate equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Liquidity Provider from three Federal
funds brokers of recognized standing selected by it plus 2%.
"Business Day" means any day excluding Saturday, Sunday and
any day on which banks in New York, New York, Charlotte, North
Carolina, Dallas, Texas or Chicago, Illinois are authorized or required
by law to close, and, when used with respect to the determination of
any Eurodollar Rate or any notice with respect thereto, any such day
which is also a day for trading by and between banks in United States
dollar deposits in the London interbank market.
"BR Tranche" means a Tranche as to which Discount is
calculated at the Base Rate.
"BR Tranche Period" means, with respect to a BR Tranche,
prior to the Termination Date, a period of up to 30 days requested by
the Transferor and agreed to by the Company or the Liquidity Provider
, as the case may be, commencing on a Business Day requested by the
Transferor and agreed to by the Company or the Liquidity Provider , as
the case may be, and after the Termination Date, a period of one day.
If such BR Tranche Period would end on a day which is not a Business
Day, such BR Tranche Period shall end on the next succeeding Business
Day.
"Capitalized Lease" of a Person means any lease of property
by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with generally accepted
accounting principles.
"CD Rate" shall mean, with respect to any CD Tranche Period,
a rate which is .75% in excess of a rate per annum equal to the sum
(rounded upward to the nearest 1/100 of 1%) of (A) the rate obtained by
dividing (x) the Certificate of Deposit Rate for such CD Tranche Period
by (y) a percentage equal to 100% minus the stated maximum rate for all
reserve requirements as specified in Regulation D (including without
limitation any marginal, emergency, supplemental, special or other
reserves) that would be applicable during such Tranche Period to a
negotiable certificate of deposit in excess of $100,000, with a
maturity approximately equal to such Tranche Period, of any member bank
of the Federal Reserve System plus (B) the then daily net annual
assessment rate (rounded upward, if necessary, to the nearest 1/100 of
1%) as estimated by the Liquidity Provider for determining the current
annual assessment payable by the Liquidity Provider to the Federal
Deposit Insurance Corporation for insuring such certificates of
deposit.
"CD Tranche" means a Tranche as to which Discount is
calculated at the CD Rate.
"CD Tranche Period" means, with respect to a CD Tranche,
prior to the Termination Date, a period of up to one month requested by
the Transferor and agreed to by the Company or the Liquidity Provider,
as the case may be, commencing on a Business Day requested by the
Transferor and agreed to by the Company or the Liquidity Provider, as
the case may be, and after the Termination Date, a period of one day.
If such CD Tranche Period would end on a day which is not a Business
Day, such CD Tranche Period shall end on the next succeeding Business
Day.
"Certificate of Deposit Rate" means, with respect to any CD
Tranche Period, the average of the bid rates determined by the
Liquidity Provider to be bid rates per annum, at approximately 10:00
a.m. (New York City time) on the Business Day before the first day of
the CD Tranche Period for which such CD Rate is to be applicable, of
two or more New York certificate of deposit dealers of recognized
standing selected by the Liquidity Provider for the purchase in New
York from the Liquidity Provider at face value of certificates of
deposit of the Liquidity Provider in an aggregate amount approximately
comparable to the amount of the CD Tranche to which such CD Rate is to
be applicable and with a maturity approximately equal to the applicable
CD Tranche Period.
"Closing Date" means October 31, 1994.
"Collateral Agent" means NationsBank of North Carolina, N.A.,
as collateral agent for any Liquidity Provider, any Credit Support
Provider, the holders of Commercial Paper and certain other parties.
"Collections" means, with respect to any Receivable, all cash
collections and other cash proceeds of such Receivable, including,
without limitation, all Finance Charges, if any, and cash proceeds of
Related Security with respect to such Receivable.
"Collection Account" means the account, established by the
Collateral Agent, for the benefit of the Company, pursuant to Section
2.12.
"Collection Agent" means at any time the Person then
authorized pursuant to Section 6.1 to service, administer and collect
Receivables.
"Collection Delay" means 30 days, or upon written notice to
the Collection Agent, such higher number of days as the Administrative
Agent may estimate to be necessary for the collection of a Receivable.
"Collection Period" means at any time a period of days
(rounded up to the next whole day) equal to the product of (i) a
fraction the numerator of which shall be the amount set forth in the
most recent Investor Report as the "Beginning Balance" of the
Receivables and the denominator of which shall be the Collections as
set forth in the most recent Investor Report and (ii) thirty (30).
"Commercial Paper" means the promissory notes of the Company
issued by the Company in the commercial paper market.
"Company Certificate" means the certificate issued to the
Company pursuant to Section 2.2 hereof.
"Concentration Factor" means for any Designated Obligor (a)
3% of the Outstanding Balance of all Eligible Receivables at such time;
provided however, that with respect to any Designated Obligor and its
affiliates whose long term unsecured debt obligations are rated at
least "A1" by Moody's and at least "A+" by Standard & Poor's and with
respect to which rating neither Moody's nor Standard & Poor's shall
have made a public announcement anticipating a downgrading of such
Designated Obligor's long term unsecured debt obligations to a rating
less than the aforementioned ratings ("A1/A+ Rated Obligors") 5% of the
Outstanding Balance of all Eligible Receivables at such time; provided
further, however, that with respect to Phosphate Chemicals Export
Association, Inc. (a "Special Obligor"), 30% of the Outstanding Balance
of all Eligible Receivables at such time, provided that such amount
shall not exceed $25,000,000 and the Company shall have full recourse
to the Transferor for all Receivables payable by Phosphate Chemicals
Export Association, Inc., or (b) such other amount determined by the
Company in the reasonable exercise of its good faith judgment and
disclosed in a written notice delivered to the Transferor.
"Contract" means an agreement or invoice in substantially the
form of one of the forms set forth in Exhibit A or otherwise approved
by the Company, pursuant to or under which an Obligor shall be
obligated to pay for merchandise purchased or services rendered.
"CP Rate" means, with respect to any CP Tranche Period, the
rate equivalent to the rate (or if more than one rate, the weighted
average of the rates) at which Commercial Paper having a term equal to
such CP Tranche Period may be sold by any placement agent or commercial
paper dealer selected by the Company, provided, however, that if the
rate (or rates) as agreed between any such agent or dealer and the
Company is a discount rate, then the rate (or if more than one rate,
the weighted average of the rates) resulting from the Company's
converting such discount rate (or rates) to an interest-bearing
equivalent rate per annum.
"CP Tranche" means a Tranche as to which Discount is
calculated at a CP Rate.
"CP Tranche Period" means, with respect to a CP Tranche, a
period of days not to exceed 120 days commencing on a Business Day
requested by the Transferor and agreed to by the Company pursuant to
Section 2.3. If such CP Tranche Period would end on a day which is not
a Business Day, such CP Tranche Period shall end on the next succeeding
Business Day.
"Credit and Collection Policy" shall mean the Transferor's
credit and collection policy or policies and practices, relating to
Contracts and Receivables existing on the date hereof and referred to
in Exhibit B attached hereto, as modified from time to time in
compliance with Section 5.2(c).
"Credit Support Agreement" means the agreement between the
Company and the Credit Support Provider evidencing the obligation of
the Credit Support Provider to provide credit support to the Company in
connection with the issuance by the Company of Commercial Paper.
"Credit Support Provider" means the Person or Persons who
will provide credit support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Dealer Fee" means the fee payable by the Transferor to the
Collateral Agent, pursuant to Section 2.4 hereof, the terms of which
are set forth in the Fee Letter.
"Deemed Collections" means any Collections on any Receivable
deemed to have been received pursuant to Section 2.9(a) or (b).
"Defaulted Receivable" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for 90 days or more from
the original due date for such Receivable; (ii) as to which an Event of
Bankruptcy has occurred with respect to the Obligor thereof; (iii)
which has been identified by the Collection Agent as uncollectible; or
(iv) which, consistent with the Credit and Collection Policy, should be
written off the Transferor's books as uncollectible.
"Delinquency Ratio" means, the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Delinquent
Receivables as of such date by (ii) the aggregate Outstanding Balance
of all Receivables as of such date less Defaulted Receivables as of
such date.
"Delinquent Receivable" means a Receivable: (i) as to which
any payment, or part thereof, remains unpaid for more than 30 days from
the original due date for such Receivable and (ii) which is not a
Defaulted Receivable.
"Designated Obligor" means, at any time, each Obligor;
provided, however, that any Obligor shall cease to be a Designated
Obligor upon notice to the Transferor from the Company, delivered at
any time.
"Dilution Ratio" means the ratio (expressed as a percentage)
computed as of the last day of each calendar month by dividing (i) the
aggregate amount of credits, rebates, discounts, disputes, warranty
claims, repossessed or returned goods, charge back allowances and other
dilutive factors, and any other billing or other adjustment by the
Transferor or the Collection Agent, provided to Obligors in respect of
Receivables during such calendar month by (ii) the aggregate
Outstanding Balance of all Receivables which arose during the
immediately preceding calendar month.
"Discount" means, with respect to any Tranche Period:
(TR x TNI x AD)
---
360
Where:
TR = the Tranche Rate applicable to such Tranche Period.
TNI = the portion of the Net Investment allocated to such Tranche
Period.
AD = the actual number of days during such Tranche Period.
provided, however, that no provision of this Agreement shall require
the payment or permit the collection of Discount in excess of the
maximum permitted by applicable law; and provided, further, that
Discount shall not be considered paid by any distribution if at any
time such distribution is rescinded or must be returned for any reason.
"Discount Reserve" means, at any time, an amount equal to:
TD + LY
Where:
TD = the sum of the unpaid Discount for all Tranche Periods.
LY = the Liquidation Yield
"Early Collection Fee" means, for any Tranche Period (such
Tranche Period to be determined without regard to the last sentence in
Section 2.3(a)) during which the portion of the Net Investment that was
allocated to such Tranche Period is reduced, the excess, if any, of (i)
the additional Discount that would have accrued during such Tranche
Period if such reductions had not occurred, minus (ii) the income, if
any, received by the Company from investing the proceeds of such
reductions.
"Eligible Investments" shall mean (a) negotiable instruments
or securities represented by instruments in bearer or registered or in
book-entry form which evidence (i) obligations fully guaranteed by the
United States of America; (ii) time deposits in, or bankers acceptances
issued by, any depositary institution or trust company incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by Federal or state banking or
depositary institution authorities; provided, however, that at the time
of investment or contractual commitment to invest therein, the
certificates of deposit or short-term deposits, if any, or long-term
unsecured debt obligations (other than such obligation whose rating is
based on collateral or on the credit of a Person other than such
institution or trust company) of such depositary institution or trust
company shall have a credit rating from Moody's and S&P of at least "P-
1" and "A-1", respectively, in the case of the certificates of deposit
or short-term deposits, or a rating not lower than one of the two
highest investment categories granted by Moody's and by S&P; (iii)
certificates of deposit having, at the time of investment or
contractual commitment to invest therein, a rating from Moody's and S&P
of at least "P-1" and "A-1", respectively; (iv) investments in money
market funds rated in the highest investment category or otherwise
approved in writing by the applicable rating agencies, (b) demand
deposits in any depositary institution or trust company referred to in
(a)(ii) above, (c) commercial paper (having original or remaining
maturities of no more than 30 days) having, at the time of investment
or contractual commitment to invest therein, a credit rating from
Moody's and S&P of at least "P-1" and "A-1", respectively, (d)
Eurodollar time deposits having a credit rating from Moody's and S&P of
at least "P-1" and "A-1", respectively, and (e) repurchase agreements
involving any of the Eligible Investments described in clauses (a)(i),
(a)(iii) and (d) hereof so long as the other party to the repurchase
agreement has at the time of investment therein, a rating from Moody's
and S&P of at least "P-1" and "A-1", respectively.
"Eligible Receivable" means, at any time, any Receivable:
(i) which has been originated by the
Transferor and to which the Transferor has good title
thereto, free and clear of all Adverse Claims;
(ii) the Obligor of which is a United States
resident, is a Designated Obligor at the time of the initial
creation of an interest therein hereunder, is not an
Affiliate of any of the parties hereto, and is not a
government or a governmental subdivision or agency;
(iii) which is not a Defaulted Receivable at
the time of the initial creation of an interest of the
Company therein;
(iv) which is not a Delinquent Receivable at
the time of the initial creation of an interest of the
Company therein;
(v) which, according to the Contract related
thereto, is required to be paid in full within 30 days of the
original billing date therefor; provided that not more than
5.0% of the Receivables (determined by reference to the
Outstanding Balance of such Receivables and the aggregate
Outstanding Balance of all Receivables) may be required to be
paid in full in greater than 30 days but within 90 days of
the original billing date therefor;
(vi) which is an "eligible asset" as defined
in Rule 3a-7 under the Investment Company Act of 1940, as
amended;
(vii) a purchase of which with the proceeds
of Commercial Paper would constitute a "current transaction"
within the meaning of Section 3(a)(3) of the Securities Act
of 1933, as amended;
(viii) which is an "account" or "chattel
paper" within the meaning of Article 9 of the UCC of all
applicable jurisdictions;
(ix) which is denominated and payable only in
United States dollars in the United States;
(x) which, arises under a Contract that
together with the Receivable related thereto, is in full
force and effect and constitutes the legal, valid and binding
obligation of the related Obligor enforceable against such
Obligor in accordance with its terms and is not subject to
any offset, counterclaim or other defense at such time;
(xi) which, together with the Contract
related thereto, does not contravene in any material respect
any laws, rules or regulations applicable thereto (including,
without limitation, laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting,
equal credit opportunity, fair debt collection practices and
privacy) and with respect to which no part of the Contract
related thereto is in violation of any such law, rule or
regulation in any material respect;
(xii) which (A) satisfies all applicable
requirements of the Credit and Collection Policy and (B)
arises pursuant to a Contract with respect to which the
Transferor has performed all obligations required to be
performed by it thereunder, including without limitation
shipment of the merchandise purchased thereunder;
(xiii) which was generated in the ordinary
course of the Transferor's business;
(xiv) the Obligor of which has been directed
to make all payments to a specified account of the Collection
Agent with respect to which there shall be a Lock-Box
Agreement in effect; and
(xv) as to which the Company has not notified
the Transferor that the Company has determined that such
Receivable or class of Receivables is not acceptable for
purchase hereunder because of the nature of the business of
the Obligor or because of a potential conflict of interest
between the interests of the Transferor and the Company, any
Liquidity Provider, any Credit Support Provider or any of
their affiliates.
"Estimated Maturity Period" means, at any time, the period,
rounded upward to the nearest whole number of days, equal to the
weighted average days until due of the Receivables as calculated by the
Collection Agent in good faith and set forth in the most recent
Investor Report, such calculation to be based on the assumptions that
(a) each Receivable within a particular aging category, (as set forth
in the Investor Report) will be paid on the last day of such aging
category and (b) the last day of the last such aging category coincides
with the last date on which any Outstanding Balance of any Receivables
would be written off as uncollectible or charged against any applicable
reserve or similar account in accordance with the objective
requirements of the Credit and Collection Policy and the Transferor's
normal accounting practices applied on a basis consistent with those
reflected in the Transferor's financial statements, provided, however,
that if the Company shall reasonably disagree with any such
calculation, the Company may recalculate the Estimated Maturity Period,
and such recalculation, in the absence of manifest error, shall be
conclusive.
"Eurodollar Rate" means, with respect to any Eurodollar
Tranche Period, a rate which is .625% in excess of a rate per annum
equal to the sum (rounded upwards, if necessary, to the next higher
1/100 of 1%) of (A) the rate obtained by dividing (i) the applicable
LIBOR Rate by (ii) a percentage equal to 100% minus the reserve
percentage used for determining the maximum reserve requirement as
specified in Regulation D (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) that is applicable
to the Liquidity Provider during such Eurodollar Tranche Period in
respect of eurocurrency or eurodollar funding, lending or liabilities
(or, if more than one percentage shall be so applicable, the daily
average of such percentage for those days in such Eurodollar Tranche
Period during which any such percentage shall be applicable) plus (B)
the then daily net annual assessment rate (rounded upwards, if
necessary, to the nearest 1/100 of 1%) as estimated by the Liquidity
Provider for determining the current annual assessment payable by the
Liquidity Provider to the Federal Deposit Insurance Corporation in
respect of eurocurrency or eurodollar funding, lending or liabilities.
"Eurodollar Tranche" means a Tranche as to which Discount is
calculated at the Eurodollar Rate.
"Eurodollar Tranche Period" means, with respect to a
Eurodollar Tranche, prior to the Termination Date, a period of up to
one month requested by the Transferor and agreed to by the Company or
the Liquidity Provider, as the case may be, commencing on a Business
Day requested by the Transferor and agreed to by the Company; provided,
however, that if such Eurodollar Tranche Period would expire on a day
which is not a Business Day, such Eurodollar Tranche Period shall
expire on the next succeeding Business Day; provided, further, that if
such Eurodollar Tranche Period would expire on (a) a day which is not a
Business Day but is a day of the month after which no further Business
Day occurs in such month, such Eurodollar Tranche Period shall expire
on the next preceding Business Day or (b) a Business Day for which
there is no numerically corresponding day in the applicable subsequent
calendar month, such Eurodollar Tranche Period shall expire on the last
Business Day of such month.
"Event of Bankruptcy", with respect to any Person, shall mean
(i) that such Person shall generally not pay its debts as such debts
become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against such
Person seeking to adjudicate it as bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment
of a receiver, trustee or other similar official for it or any
substantial part of its property provided that in the case of any such
proceeding instituted against such Person, either such proceeding shall
remain undismissed or unstayed for a period of thirty (30) days or any
action sought in such proceeding shall occur or (ii) if such Person is
a corporation, such Person or any Subsidiary shall take any corporate
action to authorize any of the actions set forth in the preceding
clause (i).
"Fee Letter" means the letter agreement dated the date hereof
between the Transferor and the Company, as amended, modified or
supplemented from time to time.
"Finance Charges" means, with respect to a Contract, any
finance, interest, late or similar charges owing by an Obligor pursuant
to such Contract.
"Guaranty" of a Person means any agreement by which such
Person assumes, guarantees, endorses, contingently agrees to purchase
or provide funds for the payment of, or otherwise becomes liable upon,
the obligation of any other Person, or agrees to maintain the net worth
or working capital or other financial condition of any other Person or
otherwise assures any other creditor of such other Person against loss,
including, without limitation, any comfort letter, operating agreement
or take-or-pay contract and shall include, without limitation, the
contingent liability of such Person in connection with any application
for a letter of credit.
"Incremental Transfer" means a Transfer which is made
pursuant to Section 2.2(a).
"Indebtedness" of a Person means such Person's (i)
obligations for borrowed money, (ii) obligations representing the
deferred purchase price of property other than accounts payable arising
in the ordinary course of such Person's business on terms customary in
the trade, (iii) obligations, whether or not assumed, secured by liens
or payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person, (iv) obligations which are
evidenced by notes, acceptances, or other instruments, (v) Capitalized
Lease obligations and (vi) obligations for which such Person is
obligated pursuant to a Guaranty.
"Indemnified Amounts" has the meaning specified in Section
8.1.
"Indemnified Parties" has the meaning specified in Section
8.1.
"Investor Report" means a report, in substantially the form
of Exhibit E or in such other form as is mutually agreed to by the
Transferor and the Company, furnished by the Collection Agent to the
Company and the Administrative Agent pursuant to Section 2.11.
"Law" shall mean any law (including common law),
constitution, statute, treaty, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Official Body.
"LIBOR Rate" shall mean, with respect to any Eurodollar
Tranche Period, the rate at which deposits in dollars are offered to
the Liquidity Provider in the London interbank market at approximately
11:00 a.m. (London time) two Business Days before the first day of such
Eurodollar Tranche Period in an amount approximately equal to the
Eurodollar Tranche to which the Eurodollar Rate is to apply and for a
period of time approximately equal to the applicable Eurodollar Tranche
Period.
"Liquidation Yield" means, at any time, an amount equal
to:
(RVF x LBR x NI) x (EM + CD)
-------
360
Where:
RVF = the Rate Variance Factor.
LBR = the Base Rate which is applicable to the liquidation
period of the Net Investment at such time.
NI = the Net Investment.
EM = the Estimated Maturity Period of the Receivables.
CD = the Collection Delay.
"Liquidity Provider Agreement" means the agreement between
the Company and the Liquidity Provider evidencing the obligation of the
Liquidity Provider to provide liquidity support to the Company in
connection with the issuance by the Company of Commercial Paper.
"Liquidity Provider" means the Person or Persons who will
provide liquidity support to the Company in connection with the
issuance by the Company of Commercial Paper.
"Lock-Box Account" means an account maintained by the
Collection Agent at a Lock-Box Bank for the purpose of receiving
Collections from Receivables.
"Lock-Box Agreement" means an agreement among the Collateral
Agent, the Collection Agent and a Lock-Box Bank in substantially the
form of Exhibit D hereto.
"Lock-Box Bank" means each of the banks set forth in Exhibit
C hereto and such banks as may be added thereto or deleted therefrom
pursuant to Section 2.8.
"Loss Percentage" means on any day the greater of (i) five
(5) times the highest Loss-to-Liquidation Ratio as of the last day of
the 12 calendar months preceding the then current calendar month, (ii)
three (3) times the highest Concentration Factor of all Designated
Obligors (exclusive of A1/A+ Rated Obligors and Special Obligors) and
(iii) 10%.
"Loss Reserve" means, on any day, an amount equal to:
LP x (NI + DR + SFR)
Where:
LP = the Loss Percentage at the close of business of the
Collection Agent on such day.
NI = the Net Investment at the close of business of the
Collection Agent on such day.
DR = the Discount Reserve at the close of business of the
Collection Agent on such day.
SFR = the Servicing Fee Reserve at the close of business of
the Collection Agent on such day.
Notwithstanding the foregoing, the Loss Reserve shall at all times be
at least equal to $7,500,000.
"Loss-to-Liquidation Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by
dividing (i) the aggregate Outstanding Balance of all Receivables which
became Defaulted Receivables during such calendar month, by (ii) the
aggregate amount of Collections received by the Collection Agent during
such calendar month.
"Maximum Net Investment" means $75,000,000.
"Maximum Percentage Factor" means 95%.
"Moody's" means Moody's Investors Service, Inc.
"Net Investment" means the sum of the amounts paid to the
Transferor for each Incremental Transfer less the aggregate amount of
Collections received and applied by the Company to reduce such Net
Investment pursuant to Section 2.6 or Section 2.9; provided that the
Net Investment shall be restored in the amount of any Collections so
received and applied if at any time the distribution of such
Collections is rescinded or must otherwise be returned for any reason.
"Net Receivables Balance" means at any time the Outstanding
Balance of the Eligible Receivables at such time reduced by the sum of
(i) the aggregate amount by which the Outstanding Balance of all
Eligible Receivables of each Designated Obligor exceeds the
Concentration Factor for such Designated Obligor, plus (ii) the
aggregate Outstanding Balance of all Eligible Receivables which are
Defaulted Receivables, plus (iii) the aggregate Outstanding Balance of
all Eligible Receivables of each Obligor with respect to which 50% or
more of such Obligor's Receivables are Delinquent Receivables, plus
(iv) at any time from and after May 1, 1995, an amount equal to the
amount of Collections paid by Obligors to any account or location other
than a Lock-Box Account during the immediately preceding calendar month
and not deposited in a Lock-Box Account as required pursuant to Section
5.1(i).
"Obligor" means a Person obligated to make payments for the
provision of goods and services pursuant to a Contract.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand
jury or arbitrator, in each case whether foreign or domestic.
"Other Transferor" means any Person other than the Transferor
that has entered into a receivables purchase agreement or transfer and
administration agreement with the Company.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal amount thereof including any accrued and
outstanding Finance Charges related thereto.
"Percentage Factor" means the percentage computed at any time
of determination as follows:
NI + LR + DR + SFR
------------------
NRB
Where:
NI = the Net Investment at the time of such computation.
LR = the Loss Reserve at the time of such computation.
DR = the Discount Reserve at the time of such computation.
SFR = the Servicing Fee Reserve at the time of such
computation.
NRB = the Net Receivables Balance at the time of such
computation.
Notwithstanding the foregoing computation, the Percentage
Factor shall not exceed one hundred percent (100%). The Percentage
Factor shall be calculated by the Collection Agent on the day of the
initial Incremental Transfer hereunder. Thereafter, until the
Termination Date, the Collection Agent shall daily recompute the
Percentage Factor and report such recomputations to the Company monthly
in the Investor Report or as requested by the Company. The Percentage
Factor shall remain constant from the time as of which any such
computation or recomputation is made until the time as of which the
next such recomputation shall be made, notwithstanding any additional
Receivables arising, any Incremental Transfer made pursuant to Section
2.2(a) or any reinvestment Transfer made pursuant to Section 2.2(b) and
2.5 during any period between computations of the Percentage Factor.
The Percentage Factor, as calculated at the close of business on the
Business Day immediately preceding the Termination Date, shall remain
constant at all times thereafter until such time as the Company shall
have received the Aggregate Unpaids, at which time the Percentage
Factor shall be recomputed in accordance with Section 2.6.
"Person" means any corporation, natural person, firm, joint
venture, partnership, trust, unincorporated organization, enterprise,
government or any department or agency of any government.
"Potential Termination Event" means an event which but for
the lapse of time or the giving of notice, or both, would constitute a
Termination Event.
"Proceeds" means "proceeds" as defined in Section 9-306(1) of
the UCC.
"Program Fee" means the fee payable by the Transferor to the
Company pursuant to Section 2.7 hereof, the terms of which are set
forth in the Fee Letter.
"Purchased Interest" means the interest in the Receivables
acquired by the Liquidity Provider through purchase pursuant to the
terms of the Liquidity Provider Agreement.
"Rate Variance Factor" means the number, computed from time
to time in good faith by the Company, that reflects the largest
potential variance (from minimum to maximum) in selected interest rates
over a period of time selected by the Company from time to time, set
forth in a written notice by the Company to the Transferor and the
Collection Agent.
"Receivable" means the indebtedness owed to the Transferor by
any Obligor (without giving effect to any purchase hereunder by the
Company at any time) under a Contract whether constituting an account,
chattel paper, instrument or general intangible, arising in connection
with the sale of merchandise or services by the Transferor, and
includes the right to payment of any Finance Charges and other
obligations of such Obligor with respect thereto. Notwithstanding the
foregoing, once a Receivable has been deemed collected pursuant to
Section 2.9 hereof, it shall no longer constitute a Receivable
hereunder.
"Records" means all Contracts and other documents, books,
records and other information (including, without limitation, computer
programs, tapes, discs, punch cards, data processing software and
related property and rights) maintained with respect to Receivables and
the related Obligors.
"Related Security" means with respect to any Receivable:
(xvi) all of the Transferor's interest, if any, in
the merchandise (including returned merchandise), if any, the sale
of which by the Transferor gave rise to such Receivable;
(xvii) all other security interests or liens and
property subject thereto from time to time, if any, purporting to
secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together with
all financing statements signed by an Obligor describing any
collateral securing such Receivable;
(xviii) all guarantees, insurance or other
agreements or arrangements of any kind from time to time
supporting or securing payment of such Receivable whether pursuant
to the Contract related to such Receivable or otherwise; and
(xix) all Records.
"Section 8.2 Costs" has the meaning specified in Section
8.2(d).
"Servicing Fee" shall mean the fee payable by the Company to
the Collection Agent, with respect to a Tranche, in an amount equal to
0.75% per annum on the amount of the Net Investment allocated to such
Tranche pursuant to Section 2.3. Such fee shall accrue from the date
of the initial purchase of an ownership interest in the Receivables to
the later of the Termination Date or the date on which the Net
Investment is reduced to zero. On or prior to the Termination Date
such fee shall be payable only from Collections pursuant to, and
subject to the priority of payments set forth in, Section 2.5. After
the Termination Date such fee shall be payable only from Collections
pursuant to, and subject to the priority of payments set forth in,
Section 2.6.
"Servicing Fee Reserve" means at any time the sum of (i) the
Servicing Fee for all outstanding Tranches and (ii) an amount equal to
the product of (A) the Net Investment at such time, and (B) the
Servicing Fee percentage and (C) a fraction having as the numerator,
the sum of the Estimated Maturity Period and the Collection Delay and
as the denominator, 360.
"Standard & Poor's" or "S&P" means Standard & Poor's Ratings
Group.
"Subsidiary" of a Person means any corporation more than 50%
of the outstanding voting securities of which shall at any time be
owned or controlled, directly or indirectly, by such Person or by one
or more Subsidiaries of such Person or any similar business
organization which is so owned or controlled.
"Termination Date" means the earliest of (i) that Business
Day designated by the Transferor to the Company as the Termination Date
at any time following 60 days' written notice to the Company, (ii) the
date of termination of the commitment of the Liquidity Provider under
the Liquidity Provider Agreement, (iii) the date of termination of the
commitment of the Credit Support Provider under the Credit Support
Agreement, (iv) the day on which a Termination Event occurs pursuant to
Section 7.1, or (v) October 30, 1995.
"Termination Event" means an event described in Section 7.1.
"Tranche" means a portion of the Net Investment allocated to
a Tranche Period pursuant to Section 2.3.
"Tranche Period" means a CP Tranche Period, a BR Tranche
Period, a CD Tranche Period or a Eurodollar Tranche Period.
"Tranche Rate" means the CP Rate, the Base Rate, the CD Rate
or the Eurodollar Rate.
"Transaction Costs" has the meaning specified in Section
8.3(a).
"Transfer" means a conveyance, transfer and assignment by the
Transferor to the Company of an undivided percentage ownership
interest in Receivables hereunder.
"Transfer Certificate" has the meaning given to it in Section
2.2(a).
"Transfer Date" means, with respect to each Transfer, the
Business Day on which such Transfer is made.
"Transfer Price" means with respect to any Incremental
Transfer, the amount paid to the Transferor by the Company as described
in the Transfer Certificate.
"Transferred Interest" means, at any time of determination,
an undivided percentage ownership interest in (i) each and every then
outstanding Receivable, (ii) all Related Security with respect to each
such Receivable, (iii) all Collections with respect thereto, and (iv)
other Proceeds of the foregoing, equal to the Percentage Factor at such
time, and only at such time (without regard to prior calculations).
The Transferred Interest in each Receivable, together with Related
Security and Collections with respect thereto, shall at all times be
equal to the Transferred Interest in each other Receivable, together
with Related Security and Collections. To the extent that the
Transferred Interest shall decrease as a result of a recalculation of
the Percentage Factor, the Company shall be considered to have
reconveyed to the Transferor an undivided percentage ownership interest
in each Receivable, together with Related Security and Collections, in
an amount equal to such decrease such that in each case the Transferred
Interest in each Receivable shall be equal to the Transferred Interest
in each other Receivable.
"UCC" means, with respect to any state, the Uniform
Commercial Code as from time to time in effect in such state.
"Unused Facility Fee" means the fee payable by the Transferor
to the Company pursuant to Section 2.7 hereof, the terms of which are
set forth in the Fee Letter.
SECTION 1.2. Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles. All terms used in Article 9
of the UCC in the State of New York, and not specifically defined
herein, are used herein as defined in such Article 9.
SECTION 1.3. Computation of Time Periods. Unless otherwise
stated in this Agreement, in the computation of a period of time from a
specified date to a later specified date, the word "from" means "from
and including" and the words "to" and "until" each means "to but
excluding."
ARTICLE II
PURCHASES AND SETTLEMENTS
SECTION 2.1. Upon the terms and subject to the conditions
herein set forth the Transferor may, at its option, convey, transfer
and assign to the Company, and the Company shall accept such
conveyance, transfer and assignment from the Transferor, without
recourse except as provided herein, undivided percentage ownership
interests in the Receivables, together with Related Security and
Collections with respect thereto, from time to time.
SECTION 2.2. Transfers; Company Certificate; Eligible
Receivables (a) Incremental Transfers. Upon the terms and subject to
the conditions herein set forth the Transferor may, at its option,
convey, transfer and assign to the Company, and the Company shall
accept such conveyance, transfer and assignment from the Transferor,
without recourse except as provided herein, undivided percentage
ownership interests in the Receivables, together with Related Security
and Collections with respect thereto (each, an "Incremental Transfer")
from time to time prior to the Termination Date for an aggregate
Transfer Price not to exceed the Maximum Net Investment. The
Transferor shall by notice given by telefax offer to convey, transfer
and assign to the Company undivided percentage ownership interests in
the Receivables at least three (3) Business Days prior to the proposed
date of transfer. Each such notice shall specify the desired Transfer
Price (which shall be at least $5,000,000 or integral multiples of
$1,000,000 in excess thereof) and the desired date of such Incremental
Transfer, together with the desired Tranche Period (or range) related
thereto as required by Section 2.3. The Company shall accept such
offer to convey, transfer and assign undivided percentage ownership
interests by notice given to the Transferor by telephone or telefax.
Each notice of proposed Transfer shall be irrevocable and binding on
the Transferor and the Transferor shall indemnify the Company against
any loss or expense incurred by the Company, either directly or through
the Liquidity Provider Agreement as a result of any failure by the
Transferor to complete such Incremental Transfer including, without
limitation, any loss (including loss of anticipated profits) or expense
incurred by the Company, either directly or pursuant to the Liquidity
Provider Agreement, by reason of the liquidation or reemployment of
funds acquired by the Company or the Liquidity Provider (including,
without limitation, funds obtained by issuing commercial paper or
promissory notes or obtaining deposits or loans from third parties) for
the Company to fund such Incremental Transfer. Notwithstanding any
other provision hereof, the Company shall have no obligation to accept
any Transfer if it is unable to obtain funds therefor in the commercial
paper market or under the Liquidity Provider Agreement.
On the date of the initial Incremental Transfer, the Company
shall deliver written confirmation to the Transferor of the Transfer
Price, the Tranche Period(s) and the Tranche Rate(s) relating to such
Transfer and the Transferor shall deliver to the Company the Transfer
Certificate in the form of Exhibit F hereto (the "Transfer
Certificate"). The Company shall indicate the amount of the initial
Incremental Transfer together with the date thereof on the grid
attached to the Transfer Certificate. On the date of each subsequent
Incremental Transfer, the Company shall send written confirmation to
the Transferor of the Transfer Price, the Tranche Period(s), the
Transfer Date and the Tranche Rate(s) applicable to such Incremental
Transfer. The Company shall indicate the amount of the Incremental
Transfer together with the date thereof as well as any decrease in the
Net Investment on the grid attached to the Transfer Certificate. The
Transfer Certificate shall evidence the Incremental Transfers.
Following each Incremental Transfer, the Company shall deposit to the
Transferor's account at the location indicated in Section 9.3, in
immediately available funds, an amount equal to the Transfer Price for
such Incremental Transfer.
(b) Reinvestment Transfers. On each Business Day
occurring after the initial Incremental Transfer hereunder and prior to
the Termination Date, the Transferor hereby agrees to convey, transfer
and assign to the Company, and in consideration of Transferor's
agreement to maintain at all times prior to the Termination Date a Net
Receivables Balance in an amount at least sufficient to maintain the
Percentage Factor at an amount not greater than the Maximum Percentage
Factor, the Company hereby agrees to purchase from the Transferor
undivided percentage ownership interests in each and every Receivable,
together with Related Security and Collections with respect thereto, to
the extent that Collections are available for such Transfer in
accordance with Section 2.5, such that after giving effect to such
Transfer, (i) the amount of the Company's Net Investment at the close
of the Company's business on such Business Day shall be equal to the
amount of the Company's Net Investment at the close of the Company's
business on the Business Day immediately preceding such Business Day
plus the Transfer Price of any Incremental Transfer made on such day,
if any, and (ii) the Company's Transferred Interest in each Receivable,
together with Related Security and Collections with respect thereto,
shall be equal to its Transferred Interest in each other Receivable,
together with Related Security and Collections with respect thereto.
(c) All Transfers. Each Transfer shall constitute a
purchase of undivided percentage ownership interests in each and every
Receivable, together with Related Security and Collections with respect
thereto, then existing, as well as in each and every Receivable,
together with Related Security and Collections with respect thereto,
which arises at any time after the date of such Transfer but prior to
the date on which the Net Investment shall become zero and all amounts
due hereunder from the Transferor shall be paid in full. The Company's
aggregate undivided percentage ownership interest in the Receivables,
together with Related Security and Collections with respect thereto,
shall equal the Percentage Factor in effect from time to time.
(d) Company Certificate. The Transferor shall issue to
the Company the Company Certificate, in the form of Exhibit M, on or
prior to the date hereof.
(e) Percentage Factor. The Percentage Factor shall be
initially computed as of the opening of business of the Collection
Agent on the date of the initial Incremental Transfer hereunder.
Thereafter until the Termination Date, the Percentage Factor shall be
automatically recomputed as of the close of business of the Collection
Agent on each day (other than a day after the Termination Date). The
Percentage Factor shall remain constant from the time as of which any
such computation or recomputation is made until the time as of which
the next such recomputation, if any, shall be made. The Percentage
Factor, as computed as of the day immediately preceding the Termination
Date, shall remain constant at all times on and after such Termination
Date until the date on which the Net Investment shall become zero.
SECTION 2.3. Selection of Tranche Periods and Tranche Rates.
(a) At all times hereafter, but prior to the occurrence
of a Termination Event, the Transferor shall, subject to the Company's
approval and the limitations described below, request Tranche Periods
and allocate a portion of the Net Investment to each selected Tranche
Period, so that the aggregate amounts allocated to outstanding Tranche
Periods at all times shall equal the Net Investment. The Transferor
shall give the Company irrevocable notice by telephone of the new
requested Tranche Period(s) at least three (3) Business Days prior to
the expiration of any then existing Tranche Period; provided, however,
that the Company may select, in its sole discretion, any such new
Tranche Period if (i) the Transferor fails to provide such notice on a
timely basis or (ii) the Company determines, in its sole discretion,
that the Tranche Period requested by the Transferor is unavailable or
for any reason commercially undesirable. The Company confirms that it
is its intention to allocate all or substantially all of the Net
Investment to one or more CP Tranche Periods; provided that the Company
may determine, from time to time, in its sole discretion, that funding
such Net Investment by means of one or more CP Tranche Periods is not
desirable for any reason. If the Liquidity Provider acquires a
Purchased Interest with respect to the Receivables pursuant to the
terms of the Liquidity Provider Agreement, the Liquidity Provider may
exercise the right of selection granted to the Company hereby. The
Tranche Rate applicable to any such Purchased Interest shall be
selected by the Liquidity Provider and shall be any of the BR Rate, the
CD Rate or the Eurodollar Rate (in each case as defined herein). In
the case of any Tranche Period outstanding upon the occurrence of a
Termination Event, such Tranche Period shall end on the date of such
occurrence.
(b) At all times on and after the occurrence of a
Termination Event, the Company or the Liquidity Provider, as
applicable, shall select all Tranche Periods and Tranche Rates
applicable thereto.
SECTION 2.4. Discount, Fees and Other Costs and Expenses.
Notwithstanding the limitation on recourse under Section 2.1, the
Transferor shall pay, as and when due in accordance with this
Agreement, all fees hereunder, Discount, all amounts payable pursuant
to Article VIII hereof, if any, and the Servicing Fee. On the last day
of each Tranche Period the Transferor shall pay to the Company an
amount equal to the discount accrued on the Company's Commercial Paper
notes to the extent such notes were issued in order to fund the
Transferred Interest in an amount in excess of the Transfer Price of an
Incremental Transfer. The Transferor shall pay to the Company, on each
day on which Commercial Paper is issued by the Company, the Dealer Fee.
Discount shall accrue with respect to each Tranche on each day
occurring during the Tranche Period related thereto. Nothing in this
Agreement shall limit in any way the obligations of the Transferor to
pay the amounts set forth in this Section 2.4.
SECTION 2.5. Non-Liquidation Settlement and Reinvestment
Procedures. On each day after the date of any Incremental Transfer but
prior to the Termination Date and provided that no Potential
Termination Event shall have occurred and be continuing, the Collection
Agent shall out of the Percentage Factor of Collections received on or
prior to such day and not previously applied or accounted for: (i) set
aside and hold in trust for the Company (or deposit into the Collection
Account if so required pursuant to Section 2.12) an amount equal to all
Discount and the Servicing Fee accrued through such day and not so
previously set aside or paid and (ii) apply the balance of such
Percentage Factor of Collections remaining after application of
Collections as provided in clause (i) of this Section 2.5 to the
Transferor, for the benefit of the Company to the purchase of
additional undivided percentage interests in each Receivable pursuant
to Section 2.2(b). On the last day of each Tranche Period, from the
amounts set aside as described in clause (i) of the first sentence of
this Section 2.5, the Collection Agent shall deposit to the Company's
account, an amount equal to the accrued and unpaid Discount for such
Tranche Period and shall deposit to its account an amount equal to the
accrued and unpaid Servicing Fee for such Tranche Period. As provided
in Section 6.2(b), the Collection Agent shall remit to the Transferor,
as soon as practicable after receipt, such portion of Collections not
allocated to the Company.
SECTION 2.6. Liquidation Settlement Procedures. If on the
Termination Date, the Percentage Factor is greater than the Maximum
Percentage Factor, then the Transferor shall immediately pay to the
Company from previously received Collections, an amount equal to the
amount such that, when applied in reduction of the Net Investment, will
result in a Percentage Factor less than or equal to the Maximum
Percentage Factor. Such amount shall be applied by the Company to the
reduction of the Net Investment of Tranche Periods selected by the
Company. On the Termination Date and on each day thereafter, and on
each day on which a Potential Termination Event has occurred and is
continuing, the Collection Agent shall set aside and hold in trust for
the Company (or deposit into the Collection Account if so required
pursuant to Section 2.12) the Percentage Factor of all Collections
received on such day. On the Termination Date or the day on which a
Potential Termination Event occurs, the Collection Agent shall deposit
to the Company's account any remaining amounts set aside pursuant to
Section 2.5(i) above. On the last day of each Tranche Period to occur
on or after the Termination Date or during the continuance of a
Potential Termination Event, the Collection Agent shall deposit to the
Company's account, the amounts set aside pursuant to the preceding
sentence, together with any remaining amounts set aside pursuant to
Section 2.5(i) prior to the Termination Date or the day on which a
Potential Termination Event occurs but not to exceed the sum of (i) the
accrued Discount for such Tranche Period, (ii) the portion of the Net
Investment allocated to such Tranche Period, and (iii) the aggregate of
all other amounts then owed (whether due or accrued) hereunder by
Transferor to the Company. On such day, the Collection Agent shall
deposit to its account, from the amounts set aside pursuant to the
preceding sentence which remain after payment in full of the
aforementioned amounts, the accrued Servicing Fee for such Tranche
Period. If there shall be insufficient funds on deposit for the
Collection Agent to distribute funds in payment in full of the
aforementioned amounts, the Collection Agent shall distribute funds
first, in payment of the accrued Discount, second, in payment of all
fees and expenses payable to the Company hereunder, third, if the
Transferor is not the Collection Agent, to the Collection Agent's
account, in payment of the Servicing Fee payable to the Collection
Agent, fourth, in reduction of the Net Investment allocated to such
Tranche Period, fifth, in payment of all other amounts payable to the
Company and sixth, if the Transferor is the Collection Agent, to its
account as Collection Agent, in payment of the Servicing Fee payable to
the Transferor as Collection Agent. Following the date on which the
Net Investment has been reduced to zero, all accrued Discount and
Servicing Fees have been paid in full and all other Aggregate Unpaids
have been paid in full, (i) the Collection Agent shall recompute the
Percentage Factor, (ii) the Company shall be considered to have
reconveyed to the Transferor any interest in the Receivables (including
the Transferred Interest), (iii) the Collection Agent shall pay to
Transferor any remaining Collections set aside and held by the
Collection Agent pursuant to the second sentence of this Section 2.6
and (iv) the Company shall execute and deliver to the Transferor, at
the Transferor's expense, such documents or instruments as are
necessary to terminate the Company's interest in the Receivables. Any
such documents shall be prepared by or on behalf of the Transferor.
SECTION 2.7. Fees. Notwithstanding any limitation on
recourse contained in this Agreement, the Transferor shall pay the
following non-refundable fees:
(a) On the last day of each calendar month, to the
Company, the Program Fee and the Unused Facility Fee.
(b) On the date of execution hereof, to the
Administrative Agent, the Arrangement Fee.
SECTION 2.8. Protection of Ownership Interest of the
Company. (a) The Transferor agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and
documents and take all actions as may be necessary or as the Company
may reasonably request in order to perfect or protect the Transferred
Interest or as are necessary to enable the Company to exercise or
enforce any of its rights hereunder. Without limiting the foregoing,
the Transferor will, upon the request of the Company, in order to
accurately reflect this purchase and sale transaction, execute and file
such financing or continuation statements or amendments thereto or
assignments thereof (as permitted pursuant to Section 9.6 hereof) as
may be requested by the Company and mark its master data processing
records and other documents with a legend describing the purchase by
the Company of the Transferred Interest. The Transferor shall, upon
request of the Company, obtain such additional search reports as the
Company shall request. To the fullest extent permitted by applicable
law, the Company shall be permitted to sign and file continuation
statements and amendments thereto and assignments thereof without the
Transferor's signature. Carbon, photographic or other reproduction of
this Agreement or any financing statement shall be sufficient as a
financing statement. The Transferor shall neither change its name,
identity or corporate structure (within the meaning of Section 9-402(7)
of the UCC as in effect in the States of New York and Illinois) nor
relocate its chief executive office or any office where Records are
kept unless it shall have: (i) given the Company at least thirty (30)
days prior notice thereof and (ii) prepared at Transferor's expense and
delivered to the Company all financing statements, instruments and
other documents necessary to preserve and protect the Transferred
Interest or requested by the Company in connection with such change or
relocation. Any filings under the UCC or otherwise that are occasioned
by such change in name or location shall be made at the expense of
Transferor.
(b) The Collection Agent shall instruct all Obligors to
cause all Collections to be deposited directly with a Lock-Box Bank.
Any Lock-Box Account maintained by a Lock-Box Bank pursuant to the
related Lock-Box Agreement shall be under the ownership and control of
the Collateral Agent. The Collection Agent shall be permitted to give
instructions to the Lock-Box Banks for so long as either a Collection
Agent default or any other Termination Event has not occurred
hereunder. The Collection Agent shall not add any bank as a Lock-Box
Bank to those listed on Exhibit C unless such bank has entered into a
Lock-Box Agreement. The Collection Agent shall not terminate any bank
as a Lock-Box Bank unless the Administrative Agent shall have received
fifteen (15) days' prior notice of such termination. If the Transferor
or the Collection Agent receives any Collections or the Transferor is
deemed to receive any Collections pursuant to Section 2.9, the
Transferor or the Collection Agent, as applicable, shall immediately,
but in any event within forty-eight (48) hours of receipt, remit such
Collections to a Lock-Box Account. Notwithstanding anything in this
Agreement to the contrary, until November 15, 1994 The Northern Trust
Company shall be considered a Lock-Box Bank and the lock-box account
maintained by the Transferor at such bank shall be considered a Lock-
Box Account, in each case notwithstanding that no Lock-Box Agreement
shall be in effect with respect to the lock-box account maintained at
such bank, provided that after such date The Northern Trust Company
shall not be considered a Lock-Box Bank and the lock-box account
maintained by the Transferor at such bank shall not be considered a
Lock-Box Account unless on or prior to November 15, 1994, the
Transferor shall have delivered to the Collateral Agent a Lock-Box
Agreement with respect to the lock-box account maintained by the
Transferor at such bank.
SECTION 2.9. Deemed Collections; Application of Payments.
(a) If on any day the Outstanding Balance of a Receivable is either (x)
reduced as a result of any defective, rejected or returned goods or
services, any cash discount, credit, rebate, allowance or other
dilution factor, any billing adjustment or other adjustment, or (y)
reduced or canceled as a result of a setoff or offset in respect of any
claim by any Person (whether such claim arises out of the same or a
related transaction or an unrelated transaction), the Transferor shall
be deemed to have received on such day a collection of such Receivable
in the amount of such reduction or cancellation and the Transferor
shall pay to the Collection Agent an amount equal to such reduction or
cancellation and such amount shall be applied by the Collection Agent
as a Collection in accordance with Section 2.5 or 2.6, as applicable.
The Net Investment shall be reduced by the amount of such payment
actually received by the Company.
(b) If on any day any of the representations or
warranties in Article III is no longer true with respect to a
Receivable, the Transferor shall be deemed to have received on such day
a Collection of such Receivable in full and the Transferor shall on
such day pay to the Collection Agent an amount equal to the aggregate
Percentage Factor of the Outstanding Balance of such Receivable and
such amount shall be allocated to the Company and applied by the
Collection Agent as a Collection allocable to the Transferred Interest
in accordance with Section 2.5 or 2.6, as applicable. The Net
Investment shall be reduced by the amount of such payment actually
received by the Company.
(c) Any payment by an Obligor in respect of any
indebtedness owed by it to the Transferor shall, except as otherwise
specified by such Obligor or otherwise required by contract or law and
unless otherwise instructed by the Company, be applied as a Collection
of any Receivable of such Obligor included in the Transferred Interest
(starting with the oldest such Receivable) to the extent of any amounts
then due and payable thereunder before being applied to any other
receivable or other indebtedness of such Obligor.
(d) If on any day any Receivable owed by Phosphate
Chemicals Export Association, Inc. is determined to be either a
Delinquent Receivable or a Defaulted Receivable, the Transferor shall
within two (2) Business Days thereafter pay to the Collection Agent an
amount equal to the aggregate Percentage Factor of the Outstanding
Balance of such Receivable and such amount shall be allocated to the
Company and applied by the Collection Agent as a Collection allocable
to the Transferred Interest in accordance with Section 2.5 or 2.6, as
applicable. The Net Investment shall be reduced by the amount of such
payment actually received by the Company.
SECTION 2.10. Payments and Computations, Etc. All amounts
to be paid or deposited by the Transferor or the Collection Agent
hereunder shall be paid or deposited in accordance with the terms
hereof no later than 1:00 p.m. (New York City time) on the day when due
in immediately available funds; if such amounts are payable to the
Company they shall be paid or deposited in the account indicated on the
signature page hereof, until otherwise notified by the Company. The
Transferor shall, to the extent permitted by law, pay to the Company
upon demand, interest on all amounts not paid or deposited when due to
the Company hereunder at a rate equal to 2% per annum plus the Base
Rate. All computations of discount, interest and all per annum fees
hereunder shall be made on the basis of a year of 360 days for the
actual number of days (including the first but excluding the last day)
elapsed. Any computations of amounts payable by the Transferor
hereunder to the Company, the Liquidity Provider or the Credit Support
Provider shall be binding absent manifest error.
SECTION 2.11. Reports. Prior to the fifteenth day of each
month, the Collection Agent shall prepare and forward to the
Administrative Agent (i) an Investor Report as of the end of the last
day of the immediately preceding month, (ii) if requested by the
Company or the Administrative Agent, a listing by Obligor of all
Receivables together with an aging of such Receivables and (iii) such
other information as the Company or the Administrative Agent may
reasonably request.
SECTION 2.12. Collection Account. There shall be
established on the day of the initial Incremental Transfer hereunder
and maintained, for the benefit of the Company, with the Collateral
Agent, a segregated account (the "Collection Account"), bearing a
designation clearly indicating that the funds deposited therein are
held for the benefit of the Company. The Collection Agent shall remit
daily within forty-eight hours of receipt to the Collection Account all
Collections received with respect to any Receivables; provided,
however, the Collection Agent shall be permitted to make payments to
the Company on the last day of each Tranche Period instead of
depositing funds into the Collection Account on a daily basis for so
long as, and only for so long as no Collection Agent default and no
other Termination Event has occurred hereunder. Funds on deposit in
the Collection Account (other than investment earnings) shall be
invested by the Collateral Agent in Eligible Investments that will
mature so that such funds will be available prior to the last day of
each successive Tranche Period following such investment. On the last
day of each calendar month, all interest and earnings (net of losses
and investment expenses) on funds on deposit in the Collection Account
shall be retained in the Collection Account and be available to make
any payments required to be made hereunder (including Discount) to the
Company. On the date on which the Net Investment is zero and all
amounts payable hereunder have been paid to the Company, any funds
remaining on deposit in the Collection Account shall be paid to the
Transferor.
ARTICLE IIIREPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties of the
Transferor. The Transferor represents and warrants to the Company
that:
(a) Existence and Power. The Transferor is a general
partnership formed and validly existing under the laws of the State of
Delaware and has all power and all material governmental licenses,
authorizations, consents and approvals required to carry on its
business in each jurisdiction in which its business is now conducted
where the failure to have such governmental licenses, authorizations,
consents and approvals would have a material adverse effect on (i) the
Transferor's business or properties, (ii) the Transferor's ability to
perform its obligations hereunder or (iii) the Company's interest in
the Receivables.
(b) Authorization; Contravention. The execution,
delivery and performance by the Transferor of this Agreement, the Fee
Letter, the Company Certificate and the Transfer Certificate are within
the Transferor's partnership powers, have been duly authorized by all
necessary action, require no action by or in respect of, or filing
with, any governmental body, agency or official (except as contemplated
by Section 2.8), and do not contravene, or constitute a default under,
any provision of applicable law or regulation or of the partnership
agreement of the Transferor or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Transferor or result
in the creation or imposition of any lien on assets of the Transferor
or any of its Subsidiaries (except as contemplated by Section 2.8).
(c) Binding Effect. Each of this Agreement, the Fee
Letter and the Company Certificate constitutes and the Transfer
Certificate upon payment by the Company of the Transfer Price set forth
therein will constitute the legal, valid and binding obligation of the
Transferor, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the rights of creditors.
(d) Perfection. Immediately preceding each Transfer
hereunder, the Transferor shall be the owner of all of the Receivables,
free and clear of all liens, encumbrances, security interests,
preferences or other security arrangement of any kind or nature
whatsoever. On or prior to each Transfer and each recomputation of the
Transferred Interest, all financing statements and other documents
required to be recorded or filed in order to perfect and protect the
Transferred Interest against all creditors of and purchasers from the
Transferor will have been duly filed in each filing office necessary
for such purpose and all filing fees and taxes, if any, payable in
connection with such filings shall have been paid in full.
(e) Accuracy of Information. All information
heretofore furnished by the Transferor (including without limitation,
the Investor Reports, any reports delivered pursuant to Section 2.11
and the Transferor's financial statements) to the Company or the
Administrative Agent for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Transferor to the Company or the
Administrative Agent will be, true and accurate in every material
respect, on the date such information is stated or certified.
(f) Tax Status. The Transferor has filed all tax
returns (federal, state and local) required to be filed and has paid or
made adequate provision for the payment of all taxes, assessments and
other governmental charges.
(g) Action, Suits. Except as set forth in Exhibit H,
there are no actions, suits or proceedings pending or, to the knowledge
of the Transferor, threatened, against or affecting the Transferor or
any Affiliate of the Transferor or their respective properties, in or
before any court, arbitrator or other body, which may materially
adversely affect the financial condition of the Transferor and its
Subsidiaries taken as a whole or materially adversely affect the
ability of Transferor to perform its obligations under this Agreement.
(h) Place of Business. The chief place of business and
chief executive office of the Transferor and the offices where the
Transferor keeps all its Records relating to the Receivables are
located at the address of the Transferor indicated in Section 9.3
hereof or such other locations notified to the Company in accordance
with Section 2.8 in jurisdictions where all action required by Section
2.8 has been taken and completed.
(i) Good Title. Upon each Transfer and each
recomputation of the Transferred Interest, the Company shall acquire a
valid and perfected first priority undivided percentage ownership
interest to the extent of the Transferred Interest or a first priority
perfected security interest in each Receivable that exists on the date
of such Transfer and recomputation and in the Related Security and
Collections with respect thereto free and clear of any Adverse Claim.
(j) Tradenames, Etc. As of the date hereof: (i) the
Transferor has no subsidiaries or divisions; and (ii) the Transferor
has, since formation, not operated under any tradenames, and, since
formation, has not changed its name, merged with or into or
consolidated with any other corporation or been the subject of any
proceeding under Title 11, United States Code (Bankruptcy).
(k) Nature of Receivables. Each Receivable is an
Eligible Receivable and an "eligible asset" as defined in Rule 3a-7
under the Investment Company Act, of 1940, as amended.
(l) Coverage Requirement; Amount of Receivables. The
Percentage Factor does not exceed the Maximum Percentage Factor. As of
October 28, 1994, the aggregate Outstanding Balance of the Receivables
in existence was $75,755,807 and the Net Receivable Balance was
$54,379,444.
(m) Credit and Collection Policy. Since September 1,
1994, there have been no material changes in the Credit and Collection
Policy; since such date, the Collection Period of the Receivables has
not been greater than 35 days.
(n) Collections and Servicing. Since June 30, 1994,
there has been no material adverse change in the ability of the
Transferor to service and collect the Receivables.
(o) No Termination Event. No event has occurred and is
continuing and no condition exists which constitutes a Termination
Event or a Potential Termination Event.
(p) Not an Investment Company. The Transferor is not
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, or is exempt from all provisions of such Act.
(q) ERISA. The Transferor is in compliance in all
material respects with ERISA and no lien in favor of the Pension
Benefit Guaranty Corporation on any of the Receivables shall exist.
(r) Lock-Box Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the Lock-Box
Accounts at such Lock-Box Banks, are specified in Exhibit C hereto (or
at such other Lock-Box Banks and/or with such other Lock-Box Accounts
as have been notified to the Collateral Agent and for which Lock-Box
Agreements have been executed in accordance with Section 2.8(b) and
delivered to the Collection Agent). All Obligors have been instructed
to make payment to a Lock-Box Account and only Collections are
deposited into the Lock-Box Accounts.
Any document, instrument, certificate or notice delivered to
the Company hereunder shall be deemed a representation and warranty by
the Transferor.
SECTION 3.2. Reaffirmation of Representations and Warranties
by the Transferor. On each day that a Transfer is made hereunder, the
Transferor, by accepting the proceeds of such Transfer, whether
delivered to the Transferor pursuant to Section 2.2(a) or Section 2.5,
shall be deemed to have certified that all representations and
warranties described in Section 3.1 are correct on and as of such day
as though made on and as of such day. Each Incremental Transfer shall
be subject to the further condition precedent that prior to the date of
such Transfer, the Collection Agent shall have delivered to the
Collateral Agent, in form and substance satisfactory to the
Administrative Agent, a completed Investor Report dated within fourteen
(14) days prior to the date of such Incremental Transfer, together with
a listing by Obligor, if requested, and such additional information as
may be reasonably requested by the Administrative Agent; and the
Transferor shall be deemed to have represented and warranted that such
conditions precedent have been satisfied.
ARTICLE IVCONDITIONS PRECEDENT
SECTION 4.1. Conditions to Closing. On or prior to the date
of execution hereof, the Transferor shall deliver to the Company the
following documents, instruments and fees all of which shall be in a
form and substance acceptable to the Company:
(a) A copy of the Resolutions of the Board of Directors
of IMC-Agrico MP, Inc., a Delaware corporation, the managing general
partner of the Transferor (the "Managing Partner") certified by its
Secretary approving the Agreement and the other documents to be
delivered by the Transferor hereunder.
(b) The partnership agreement of the Transferor, the
Registration of Tradenames Partnerships and Associations of the
Transferor, the Certificate of Incorporation of the Managing Partner
certified by the Secretary of State or other similar official of
Delaware and the By-laws of the Managing Partner certified by the
secretary of the Managing Partner.
(c) A Good Standing Certificate for the Managing
Partner issued by the Secretary of State or a similar official of
Delaware and certificates of qualification as a foreign corporation
issued by the Secretaries of State or other similar officials of each
jurisdiction when such qualification is material to the transactions
contemplated by this Agreement.
(d) A Certificate of the Secretary of the Managing
Partner certifying the names and signatures of the officers authorized
on its behalf to execute this Agreement, the Company Certificate, the
Transfer Certificate, the Fee Letter and any other documents to be
delivered by it hereunder (on which certificates the Company may
conclusively rely until such time as the Company shall receive from the
Transferor a revised certificate meeting the requirements of this
clause (d)(i)).
(e) Copies of proper financing statements (Form UCC-1),
dated a date reasonably near to the date of the initial Incremental
Transfer naming the Transferor as the debtor in favor of the Company
and showing the Collateral Agent as assignee of the secured party or
other similar instruments or documents as may be necessary or in the
reasonable opinion of the Company desirable under the UCC of all
appropriate jurisdictions or any comparable law to perfect the
Company's ownership interest in all Receivables.
(f) Copies of proper financing statements (Form UCC-3),
if any, necessary to terminate all security interests and other rights
of any person in Receivables previously granted by Transferor.
(g) Certified copies of requests for information or
copies (Form UCC-11) (or a similar search report certified by parties
acceptable to the Company) dated a date reasonably near the date of the
initial Incremental Transfer listing all effective financing statements
which name the Transferor (under its present name and any previous
name) as debtor and which are filed in jurisdictions in which the
filings were made pursuant to item (e) above together with copies of
such financing statements (none of which shall cover any Receivables or
Contracts).
(h) Executed copies of the Lock-Box Agreements.
(i) Opinions of (i) Kaye, Scholer, Fierman, Hays and
Handler, special counsel to the Transferor, covering certain of the
matters set forth in Exhibit K hereto and certain bankruptcy matters,
in each case in form and substance acceptable to the Administrative
Agent and (ii) Marschall I. Smith, Esq., Vice President and General
Counsel of IMC Global Inc., as to certain of the matters set forth in
Exhibit K hereto, in form and substance acceptable to the
Administrative Agent.
(j) A computer tape setting forth all Receivables and
the Outstanding Balances thereon and such other information as the
Company may reasonably request.
(k) An executed copy of the Fee Letter.
(l) The Transfer Certificate, duly executed by the
Transferor.
(m) The Company Certificate, duly executed by the
Transferor and appropriately completed.
(n) The Arrangement Fee in accordance with Section
2.7(b).
(o) An Investor Report dated September 30, 1994.
(p) Such other documents as the Company shall
reasonably request.
ARTICLE VCOVENANTS
SECTION 5.1. Affirmative Covenants of Transferor. At all
times from the date hereof to the later to occur of (i) the Termination
Date or (ii) the date on which the Company's Transferred Interest shall
be equal to zero, unless the Company shall otherwise consent in
writing:
(a) Financial Reporting. The Transferor will maintain,
for itself and each Subsidiary, a system of accounting established and
administered in accordance with generally accepted accounting
principles, and furnish to the Administrative Agent:
(i) Annual Reporting. Within ninety (90) days
after the close of each of its fiscal years, audited financial
statements, prepared in accordance with generally accepted
accounting principles on a consolidated and consolidating basis
(consolidating statements need not be audited by such
accountants) for itself and its Subsidiaries (if any), including
balance sheets as of the end of such period, related statements
of operations, partner's equity and cash flows, accompanied by
an unqualified audit report certified by independent certified
public accountants, acceptable to the Administrative Agent,
prepared in accordance with generally accepted auditing
principles and any management letter prepared by said
accountants.
(ii) Quarterly Reporting. Within forty-five
(45) days after the close of the first three quarterly periods
of each of its fiscal years, for itself and its Subsidiaries (if
any), consolidated and consolidating unaudited balance sheets as
at the close of each such period and consolidated and
consolidating related statements of operations, partner's equity
and cash flows for the period from the beginning of such fiscal
year to the end of such quarter, all certified by its chief
financial officer.
(iii) Compliance Certificate. Together with
the financial statements required hereunder, a compliance
certificate signed by its chief financial officer stating that
no Termination Event or Potential Termination Event exists, or
if any Termination Event or Potential Termination Event exists,
stating the nature and status thereof and showing the
computation of, and showing compliance with, each of the
financial ratios and restrictions set forth in Section 5.3.
(iv) Partners Statements. Promptly upon the
furnishing thereof to the partners of the Transferor, copies of
all financial statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing
thereof, copies of all registration statements and annual,
quarterly, monthly or other regular reports which the Transferor
or any subsidiary files with the Securities and Exchange
Commission.
(vi) Notice of Termination Events or Potential
Termination Events. As soon as possible and in any event within
three (3) days after the occurrence of each Termination Event or
each Potential Termination Event, a statement of the chief
financial officer, chief accounting officer or treasurer of the
Transferor setting forth details of such Termination Event or
Potential Termination Event and the action which the Transferor
proposes to take with respect thereto.
(vii) Change in Credit and Collection Policy.
Within ten (10) days after the date any material change in or
amendment to the Credit and Collection Policy is made, a copy of
the Credit and Collection Policy then in effect indicating such
change or amendment.
(viii) Credit and Collection Policy. Upon
request of the Administrative Agent, a complete copy of the
Credit and Collection Policy then in effect.
(ix) Other Information. Such other
information including non-financial information) as the
Administrative Agent may from time to time reasonably request.
(b) Conduct of Business. The Transferor will, and will
cause each of its Subsidiaries to, (x) carry on and conduct its
business in substantially the same manner and in substantially the same
fields of enterprise as it is presently conducted and (y) do all things
necessary to remain validly existing as a domestic partnership in the
State of Delaware and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted where
the failure to maintain such authority would have a material adverse
effect on (i) the Transferor's business or properties, (ii) the
Transferor's ability to perform its obligations hereunder or (iii) the
Company's interest in the Receivables.
(c) Compliance with Laws. The Transferor will, and
will cause each of its Subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards
to which it may be subject.
(d) Furnishing of Information and Inspection of
Records. The Transferor will furnish to the Company from time to time
such information with respect to the Receivables as the Company may
reasonably request, including, without limitation, listings identifying
the Obligor and the Outstanding Balance for each Receivable. The
Transferor will at any time and from time to time during regular
business hours permit the Company, or its agents or representatives,
(i) to examine and make copies of and abstracts from all Records and
(ii) to visit the offices and properties of the Transferor for the
purpose of examining such Records, and to discuss matters relating to
Receivables or the Transferor's performance hereunder with any of the
officers, directors, employees or independent public accountants of the
Transferor having knowledge of such matters.
(e) Keeping of Records and Books of Account. The
Transferor will maintain and implement administrative and operating
procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the
originals thereof), and keep and maintain, all documents, books,
records and other information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation, records
adequate to permit the daily identification of each new Receivable and
all Collections of and adjustments to each existing Receivable). The
Transferor will give the Company notice of any material change in the
administrative and operating procedures referred to in the previous
sentence.
(f) Performance and Compliance with Receivables and
Contracts. The Transferor, at its expense, will timely and fully
perform and comply with all material provisions, covenants and other
promises required to be observed by it under the Contracts related to
the Receivables.
(g) Credit and Collection Policies. The Transferor
will comply in all material respects with the Credit and Collection
Policy in regard to each Receivable and the related Contract.
(h) Collections. The Transferor shall instruct all
Obligors to cause all Collections to be deposited directly to a Lock-
Box Account.
(i) Collections Received. The Transferor shall hold in
trust, and deposit or mail for deposit, immediately, but in any event
not later than forty-eight (48) hours of its receipt thereof, to a Lock-
Box Account all Collections received from time to time by the
Transferor (including without limitation all Collections deemed to have
been received by the Transferor under Section 2.9).
(j) Sale Treatment. The Transferor shall report the
transactions contemplated by the Agreement on its financial statements
as a sale of the Transferred Interest to the Company.
(k) Certain Actions. The Transferor shall conduct its
business and its relationships with its Affiliates in such a manner so
as to comply with the facts and assumptions set forth in paragraphs 6
through 19, inclusive, of the opinion of Kaye, Scholer, Fierman, Hays
and Handler, special counsel to the Transferor, dated the date hereof
and addressed to the Company and the Collateral Agent, covering certain
bankruptcy matters.
SECTION 5.2. Negative Covenants of Transferor. During the
term of this Agreement, unless the Company shall otherwise consent in
writing:
(a) No Sales, Liens, Etc. Except as otherwise provided
herein, the Transferor will not sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon (or the filing of any financing statement) or with
respect to, any inventory or goods, the sale of which will give rise to
a Receivable, or any Receivable or related Contract, or upon or with
respect to any account which concentrates in a Lock-Box Bank to which
any Collections of any Receivable are sent, or assign any right to
receive income in respect thereof.
(b) No Extension or Amendment of Receivables. Except
as otherwise permitted in Section 6.2, the Transferor will not extend,
amend or otherwise modify the terms of any Receivable, or amend, modify
or waive any term or condition of any Contract related thereto.
(c) No Change in Business or Credit and Collection
Policy. The Transferor will not make any material change in the
character of its business or in the Credit and Collection Policy, which
change would, in either case, impair the collectibility of any
Receivable.
(d) No Mergers, Etc. The Transferor will not (i)
consolidate or merge with or into any other Person, or (ii) sell, lease
or transfer all or substantially all of its assets to any other person.
(e) Change in Payment Instructions to Obligors. The
Transferor will not add or terminate any bank as a Lock-Box Bank or any
account as a Lock-Box Account to or from those listed in Exhibit C
hereto or make any change in its instructions to Obligors regarding
payments to be made to any Lock-Box Account, unless (i) such
instructions are to deposit such payments to another existing Lock-Box
Account or (ii) the Administrative Agent shall have received written
notice of such addition, termination or change at least 30 days prior
thereto and the Administrative Agent shall have received a Lock-Box
Agreement executed by each new Lock-Box Bank or an existing Lock-Box
Bank with respect to each new Lock-Box Account, as applicable.
(f) Deposits to Lock-Box Accounts. The Transferor will
not deposit or otherwise credit, or cause or permit to be so deposited
or credited, to any Lock-Box Account cash or cash proceeds other than
Collections of Receivables.
(g) Change of Name, Etc. The Transferor will not
change its name, identity or structure or its chief executive office,
unless at least 10 days prior to the effective date of any such change
the Transferor delivers to the Collateral Agent (i) UCC financing
statements, executed by the Transferor, necessary to reflect such
change and to continue the perfection of the Company's ownership
interests or security interests in the Receivables and (ii) the Lock-
Box Agreements and, in the case of the Lock-Box Agreements, the Lock-
Box Banks necessary to reflect such change and to continue to enable
the Collateral Agent to exercise its rights contained in Section 2.8.
(h) Changes to Partnership Agreement. The Transferor
will not amend or otherwise modify the definition of "Distributable
Cash" or the provisions relating thereto in its partnership agreement
(including, without limitation, Section 5.07 thereof) without the prior
written consent of the Company.
SECTION 5.3. Financial Covenants of Transferor. During the
term of this Agreement, unless the Company shall otherwise consent in
writing:
(a) The Transferor shall not permit Partners' Capital at any
time to be less than $1,350,000,000;
(b) The Transferor shall maintain, for a period of four
consecutive fiscal quarters ending as of each fiscal quarter, a ratio
of (x) EBITDA minus Capital Expenditures to (y) the sum of (i) cash
interest payable on, and amortization of debt discount in respect of,
all Indebtedness during such period plus (ii) regularly scheduled
principal amounts of all Indebtedness (including current obligations
owing under Capitalized Leases) payable during the period of the next
four consecutive fiscal quarters beginning on the day after such date
of determination, of 5.0 to 1.0 or greater; and
(c) The Transferor shall maintain a ratio of Current Assets
to Current Liabilities of 1.5 to 1.0 or greater.
(d) Capitalized terms used in this Section 5.3 (other than
"Agreement" and "Transferor") are used as defined in Exhibit G hereto.
ARTICLE VI
ADMINISTRATION AND COLLECTIONS
SECTION 6.1. Appointment of Collection Agent. The
servicing, administering and collection of the Receivables shall be
conducted by such Person (the "Collection Agent") so designated from
time to time in accordance with this Section 6.1. Until the Company
gives notice to IMC-AGRICO COMPANY of the designation of a new
Collection Agent pursuant to the succeeding sentence, IMC-AGRICO
COMPANY is hereby designated as, and hereby agrees to perform the
duties and obligations of, the Collection Agent pursuant to the terms
hereof. The Company may, upon the occurrence of a Collection Agent
default or any Termination Event designate as Collection Agent any
Person (including itself) to succeed IMC-AGRICO COMPANY or any
successor Collection Agent, on the condition in each case that any such
Person so designated shall agree to perform the duties and obligations
of the Collection Agent pursuant to the terms hereof. The Company may
notify any Obligor of the Transferred Interest.
SECTION 6.2. Duties of Collection Agent.
(a) The Collection Agent shall take or cause to be
taken all such action as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws,
rules and regulations, with reasonable care and diligence, and in
accordance with the Credit and Collection Policy. Each of the
Transferor and the Company hereby appoints as its agent the Collection
Agent, from time to time designated pursuant to Section 6.1, to enforce
its respective rights and interests in and under the Receivables, the
Related Security and the Contracts. The Collection Agent shall set
aside for the account of the Transferor and the Company their
respective allocable shares of the Collections of Receivables in
accordance with Sections 2.5 and 2.6. The Collection Agent shall
segregate and deposit to the Company's account the Company's allocable
share of Collections of Receivables when required pursuant to Article
II hereof. The Transferor may not extend the maturity of Receivables.
So long as no Termination Event shall have occurred and be continuing,
the Transferor may, in accordance with the Credit and Collection
Policy, adjust the Outstanding Balance of Receivables as the Transferor
may determine to be appropriate to maximize Collections thereof;
provided, however, that such adjustment shall not alter the amount of
such Receivable considered as a Delinquent Receivable or a Defaulted
Receivable. The Transferor shall deliver to the Collection Agent and
the Collection Agent shall hold in trust for the Transferor and the
Company in accordance with their respective interests, all Records
which evidence or relate to Receivables or Related Security.
Notwithstanding anything to the contrary contained herein, the Company
shall have the absolute and unlimited right to direct the Collection
Agent (whether the Collection Agent is the Transferor or any other
Person) to commence or settle any legal action to enforce collection of
any Receivable or to foreclose upon or repossess any Related Security.
(b) The Collection Agent shall hold for the benefit of
the Transferor Collections received minus the Percentage Factor of such
Collections. On the last day of each Tranche Period, the Collection
Agent shall deduct from such Collections and pay to the Company in
reduction of the Net Investment any amounts due under Section 2.9
hereof and unpaid from the Transferor and turn the remainder of such
Collections over to the Transferor. In addition, the Collection Agent
shall, as soon as practicable following receipt thereof, turn over to
the Transferor any collections of any indebtedness of any Obligor which
is not a Receivable. If the Transferor is not the Collection Agent,
the Collection Agent, by giving three Business Days' prior written
notice to the Company, may revise the percentage used to calculate the
Servicing Fee so long as the revised percentage will not result in a
Servicing Fee that exceeds 110% of the reasonable and appropriate out-
of-pocket costs and expenses of such Collection Agent incurred in
connection with the performance of its obligations hereunder as
documented to the reasonable satisfaction of the Company. The
Collection Agent, if other than the Transferor, shall as soon as
practicable upon demand, deliver to the Transferor all Records in its
possession which evidence or relate to indebtedness of an Obligor which
is not a Receivable.
(c) On or before 90 days after the end of each fiscal
year of the Collection Agent, beginning with the fiscal year ending
June 30, 1995, the Collection Agent shall cause a firm of independent
public accountants (who may also render other services to the
Collection Agent or the Transferor) to furnish a report to the Company
to the effect that they have (i) compared the information contained in
the Investor Reports delivered during such fiscal year with the
information contained in the Contracts and the Collection Agent's
records and computer systems for such period, and that, on the basis of
such examination and comparison, such firm is of the opinion that the
information contained in the Investor Reports reconciles with the
information contained in the Contracts and the Collection Agent's
records and computer system and that the servicing of the Receivables
has been conducted in compliance with this Agreement, and (ii) verified
that the Receivables treated by the Collection Agent as Eligible
Receivables in fact satisfied the requirements of the definition
thereof contained herein, except, in each case for (a) such exceptions
as such firm shall believe to be immaterial (which exceptions need not
be enumerated) and (b) such other exceptions as shall be set forth in
such statement.
(d) Notwithstanding anything to the contrary contained
in this Article VI, the Collection Agent, if not the Transferor, shall
have no obligation to collect, enforce or take any other action
described in this Article VI with respect to any Receivable that is not
included in the Transferred Interest other than to deliver to the
Transferor the Collections and documents with respect to any such
Receivable as described in Section 6.2(b).
SECTION 6.3. Rights After Designation of New Collection
Agent. At any time following the designation of a Collection Agent
(other than the Transferor) pursuant to Section 6.1:
(i) The Company may direct that payment of all
amounts payable under any Receivable be made directly to the
Company or its designee.
(ii) The Transferor shall, at the Company's
request and at the Transferor's expense, give notice of the
Company's ownership of Receivables to each Obligor and direct
that payments be made directly to the Company or its designee.
(iii) The Transferor shall, at the Company's
request, (A) assemble all of the Records, and shall make the
same available to the Company at a place selected by the Company
or its designee, and (B) segregate all cash, checks and other
instruments received by it from time to time constituting
Collections of Receivables in a manner acceptable to the Company
and shall, promptly upon receipt, remit all such cash, checks
and instruments, duly endorsed or with duly executed instruments
of transfer, to the Company or its designee.
(iv) The Transferor hereby authorizes the
Company to take any and all steps in the Transferor's name and
on behalf of the Transferor necessary or desirable, in the
determination of the Company, to collect all amounts due under
any and all Receivables, including, without limitation,
endorsing the Transferor's name on checks and other instruments
representing Collections and enforcing such Receivables and the
related Contracts.
SECTION 6.4. Responsibilities of the Transferor. Anything
herein to the contrary notwithstanding, the Transferor shall (i)
perform all of its obligations under the Contracts related to the
Receivables to the same extent as if interests in such Receivables had
not been sold hereunder and the exercise by the Company of its rights
hereunder shall not relieve the Transferor from such obligations and
(ii) pay when due any taxes, including without limitation, any sales
taxes payable in connection with the Receivables and their creation and
satisfaction. The Company shall not have any obligation or liability
with respect to any Receivable or related Contracts, nor shall it be
obligated to perform any of the obligations of the Transferor
thereunder.
ARTICLE VIITERMINATION EVENTS
SECTION 7.1. Termination Events. The occurrence of any one
or more of the following events shall constitute a Termination Event:
(a) (i) the Collection Agent shall fail to perform or
observe any term, covenant or agreement hereunder (other than as
referred to in clause (ii) of this Section 7.1(a)) and such failure
shall remain unremedied for ten (10) days after the earlier of (x) the
date on which the Company notifies the Collection Agent thereof and (y)
the date the Collection Agent knew of any such breach, or (ii) either
the Collection Agent or the Transferor shall fail to make any payment
or deposit to be made by it hereunder when due or the Collection Agent
shall fail to observe or perform any term, covenant or agreement on the
Collection Agent's part to be performed under Section 2.8(b) hereof; or
(b) any representation, warranty, certification or
statement made by the Transferor in this Agreement or in any other
document delivered pursuant hereto shall prove to have been incorrect
in any material respect when made or deemed made; or
(c) the Transferor shall default in the performance of
any payment or undertaking (other than those covered by clause (a)
above) (i) to be performed or observed under Sections 5.1(a)(vi),
5.1(a)(vii), 5.1(b)(x), 5.1(f), 5.1(g), 5.1(h), 5.1(k), 5.2(a), (c),
(d), (e), (g)(ii) or (h) or Section 5.3 or (ii) to be performed or
observed under any other provision hereof and such default in the case
of this clause (ii) shall continue for ten (10) days after the earlier
of (x) the date on which the Company notifies the Transferor thereof
and (y) the date the Transferor knew of any such default; or
(d) with respect to any Indebtedness in excess of
$10,000,000 in the aggregate for the Transferor or any of its
Subsidiaries, (i) the Borrower or any such Subsidiary shall (A) default
in any payment (beyond the applicable grace period with respect
thereto, if any) with respect to any such Indebtedness, or (B) default
in the observance or performance relating to such Indebtedness or
contained in any agreement or instrument evidencing, securing or
relating thereto, or any other event or condition shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(e) any Event of Bankruptcy shall occur with respect to
(i) the Transferor or the Collection Agent, (ii) any Subsidiary of
either the Transferor or the Collection Agent, (iii) any general
partner of the Transferor or (iv) any of Freeport McMoRan, Inc., FRP GP
Co., Freeport McMoRan Resource Partners, IMC Global Inc. or IMC
Fertilizer, Inc. or any of their successors; or
(f) the Company shall, for any reason, fail to have a
valid and perfected first priority security interest in the
Receivables; or
(g) the Transferor shall enter into any transaction or
merger whereby it is not the surviving entity; or
(h) there shall have occurred any material adverse
change in the operations of the Transferor or the Collection Agent
since June 30, 1994 or any other event shall have occurred which
materially affects the Transferor's or the Collection Agent's ability
to either collect the Receivables or to perform under this Agreement;
or
(i) the Liquidity Provider or the Credit Support
Provider shall have given notice that an event of default has occurred
and is continuing under its agreements with the Company; or
(j) the Commercial Paper issued by the Company shall
not be rated at least "A-2" by Standard & Poor's and at least "P-2" by
Moody's, unless such downgrading is the result of the Credit Support
Provider being downgraded; or
(k) the Percentage Factor exceeds the Maximum
Percentage Factor unless the Transferor reduces the Net Investment
within three Business Days, bringing the Percentage Factor to less than
or equal to 95% or the Percentage Factor equals or exceeds 100% at any
time; or
(l) the Dilution Ratio averaged for any three
consecutive months exceeds 3.50%; or
(m) the Loss to Liquidation Ratio averaged for any
three consecutive months exceeds 1.25%; or
(n) the Delinquency Ratio averaged for any three
consecutive months exceeds 5.0%.
SECTION 7.2. Termination. (a) If a Termination Event
occurs, the Company may, by notice to the Transferor, declare all
outstanding Tranche Periods to be ended and designate the Base Rate
plus 2% to be applicable to the Net Investment.
(b) In addition, if any Termination Event occurs the
Company and the Collateral Agent shall have all of the rights and
remedies provided to a secured creditor or a purchaser of accounts
under the UCC by applicable law in respect thereto.
ARTICLE VIIIINDEMNIFICATION; EXPENSES; RELATED MATTERS
SECTION 8.1. Indemnities by the Transferor. Without
limiting any other rights which the Company may have hereunder or under
applicable law, the Transferor hereby agrees to indemnify the Company,
the Liquidity Provider and the Credit Support Provider and any
permitted assigns and their respective officers, directors and
employees (collectively, "Indemnified Parties") from and against any
and all damages, losses, claims, liabilities, costs and expenses,
including reasonable attorneys' fees (which such attorneys may be
employees of the Liquidity Provider, the Credit Support Provider or the
Company) and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts") awarded against or incurred by
any of them arising out of or as a result of this Agreement or the
ownership, either directly or indirectly, by the Company of the
Transferred Interest excluding, however, (i) Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the
part of an Indemnified Party or (ii) recourse (except as otherwise
specifically provided in this Agreement) for uncollectible Receivables
or (iii) income or franchise taxes payable by any Indemnified Party on
amounts received under this Agreement. Without limiting the generality
of the foregoing, the Transferor shall indemnify each Indemnified Party
for Indemnified Amounts relating to or resulting from:
(i) reliance on any representation or warranty
made by the Transferor (or any officers of the Transferor) under
or in connection with this Agreement, any Investor Report or any
other information or report delivered by the Transferor pursuant
hereto, which shall have been false or incorrect in any material
respect when made or deemed made;
(ii) the failure by the Transferor to comply
with any applicable law, rule or regulation with respect to any
Receivable or the related Contract, or the nonconformity of any
Receivable or the related Contract with any such applicable law,
rule or regulation;
(iii) the failure to vest and maintain vested
in the Company an undivided percentage ownership interest, to
the extent of the Transferred Interest, in the Receivables
included in the Transferred Interest, free and clear of any
Adverse Claim;
(iv) the failure to file, or any delay in
filing, financing statements, continuation statements, or other
similar instruments or documents under the UCC of any applicable
jurisdiction or other applicable laws with respect to any
Receivable included in the Transferred Interest;
(v) any dispute, claim, offset or defense
(other than discharge in bankruptcy) of the Obligor to the
payment of any Receivable included in the Transferred Interest
(including, without limitation, a defense based on such
Receivable or the related Contract not being legal, valid and
binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from
the sale of merchandise or services related to such Receivable
or the furnishing or failure to furnish such merchandise or
services;
(vi) any failure of the Transferor, as
Collection Agent or otherwise, to perform its duties or
obligations in accordance with the provisions of Article VI; or
(vii) any products liability claim or personal
injury or property damage suit or other similar or related claim
or action of whatever sort arising out of or in connection with
merchandise or services which are the subject of any Receivable;
provided, however, that if the Company enters into agreements
for the purchase of interests in receivables from one or more
Other Transferors, the Company shall allocate such Indemnified
Amounts which are in connection with the Liquidity Provider
Agreement, the Credit Support Agreement or the credit support
furnished by the Credit Support Provider to the Transferor and
each Other Transferor; and provided, further, that if such
Indemnified Amounts are attributable to the Transferor and not
attributable to any Other Transferor, the Transferor shall be
solely liable for such Indemnified Amounts or if such
Indemnified Amounts are attributable to Other Transferors and
not attributable to the Transferor, such Other Transferors shall
be solely liable for such Indemnified Amounts.
SECTION 8.2. Indemnity for Taxes, Reserves and Expenses.
(a) If after the date hereof, the adoption of any Law or bank
regulatory guideline or any amendment or change in the interpretation
of any existing or future Law or bank regulatory guideline by any
Official Body charged with the administration, interpretation or
application thereof (and, in the case of a change in the interpretation
of any such Law or regulatory guideline, such change has been generally
accepted by institutions to which such Law or regulatory guideline is
applicable), or the compliance with any directive of any Official Body
(in the case of any bank regulatory guideline, whether or not having
the force of Law):
(i) shall subject any Indemnified Party to any
tax, duty or other charge with respect to this Agreement, the
Transferred Interest, the Receivables or payments of amounts due
hereunder, or shall change the basis of taxation of payments to
any Indemnified Party of amounts payable in respect of this
Agreement, the Transferred Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
under the Liquidity Provider Agreement or the credit support
furnished by the Credit Support Provider or otherwise in
respect of this Agreement, the Transferred Interest or the
Receivables (except for income or franchise taxes payable by any
Indemnified Party on amounts received under this Agreement);
(ii) shall impose, modify or deem applicable
any reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System) against assets of,
deposits with or for the account of, or credit extended by, any
Indemnified Party or shall impose on any Indemnified Party or on
the United States market for certificates of deposit or the
London interbank market any other condition affecting this
Agreement, the Transferred Interest, the Receivables or payments
of amounts due hereunder or its obligation to advance funds
under the Liquidity Provider Agreement or the credit support
provided by the Credit Support Provider or otherwise in respect
of this Agreement, the Transferred Interest or the Receivables;
or
(iii) imposes upon any Indemnified Party any
other expense (including, without limitation, reasonable
attorneys' fees and expenses, and expenses of litigation or
preparation therefor in contesting any of the foregoing) with
respect to this Agreement, the Transferred Interest, the
Receivables or payments of amounts due hereunder or its
obligation to advance funds under the Liquidity Provider
Agreement or the credit support furnished by the Credit Support
Provider or otherwise in respect of this Agreement, the
Transferred Interests or the Receivables,
and the result of any of the foregoing is to increase the cost to such
Indemnified Party with respect to this Agreement, the Transferred
Interest, the Receivables, the obligations hereunder, the funding of
any purchases hereunder, the Liquidity Provider Agreement or the Credit
Support Agreement, by an amount deemed by such Indemnified Party to be
material, then, within ten (10) days after demand by the Company, the
Transferor shall pay to the Company such additional amount or amounts
as will compensate such Indemnified Party for such increased cost or
reduction; provided, however, that such demand shall not seek
additional amounts incurred earlier than the ninetieth day immediately
succeeding the date of such demand.
(b) If any Indemnified Party shall have determined that
after the date hereof, the adoption of any applicable Law or bank
regulatory guideline regarding capital adequacy, or any change therein,
or any change in the interpretation thereof by any Official Body (which
change has been generally accepted by institutions to which such Law or
regulatory guideline is applicable), or any directive regarding capital
adequacy (in the case of any bank regulatory guideline, whether or not
having the force of law) of any such Official Body, has or would have
the effect of reducing the rate of return on capital of such
Indemnified Party (or its parent) as a consequence of such Indemnified
Party's obligations hereunder or with respect hereto to a level below
that which such Indemnified Party (or its parent) could have achieved
but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an
amount deemed by such Indemnified Party to be material, then from time
to time, within ten (10) days after demand by the Company, the
Transferor shall pay to the Company such additional amount or amounts
as will compensate such Indemnified Party (or its parent) for such
reduction; provided, however, that such demand shall not seek
additional amounts incurred earlier than the ninetieth day immediately
succeeding the date of such demand.
(c) The Company will promptly notify the Transferor of
any event of which it has knowledge, occurring after the date hereof,
which will entitle an Indemnified Party to compensation pursuant to
this Section. A notice by the Company claiming compensation under this
Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive in the absence of manifest error.
In determining such amount, the Company may use any reasonable
averaging and attributing methods.
(d) Anything in this Section 8.2 to the contrary
notwithstanding, if the Company enters into agreements for the
acquisition of interests in receivables from one or more Other
Transferors, the Company shall allocate the liability for any amounts
under this Section 8.2 ("Section 8.2 Costs") to the Transferor and each
Other Transferor; and provided, further, that if such Section 8.2 Costs
are attributable to the Transferor and not attributable to any Other
Transferor, the Transferor shall be solely liable for such Section 8.2
Costs or if such Section 8.2 Costs are attributable to Other
Transferors and not attributable to the Transferor, such Other
Transferors shall be solely liable for such Section 8.2 Costs.
SECTION 8.3. Other Costs Expenses and Related Matters. (a)
The Transferor agrees, upon receipt of a written invoice, to pay or
cause to be paid, and to save the Company and the Administrative Agent
harmless against liability for the payment of, all reasonable out-of-
pocket expenses (including, without limitation, reasonable attorneys',
accountant's and other third parties' fees and expenses, any filing
fees and expenses incurred by officers or employees of the Company)
incurred by or on behalf of the Company and the Administrative Agent
(i) in connection with the negotiation, execution, delivery and
preparation of this Agreement and any documents or instruments
delivered pursuant hereto and the transactions contemplated hereby
(including, without limitation, the perfection or protection of the
Transferred Interest) and (ii) from time to time (a) relating to any
amendments, waivers or consents under this Agreement, (b) arising in
connection with the Company's or its agent's enforcement or
preservation of rights (including, without limitation, the perfection
and protection of the Transferred Interest under this Agreement), or
(c) arising in connection with any audit, dispute, disagreement,
litigation or preparation for litigation involving this Agreement (all
of such amounts, collectively, "Transaction Costs").
(b) Transferor shall pay the Company on demand any
Early Collection Fee due on account of the reduction of a Tranche on a
day prior to the last day of its Tranche Period.
SECTION 8.4. Reconveyance Under Certain Circumstances.
Transferor agrees to accept the reconveyance from the Company of the
Transferred Interest if the Company notifies Transferor of a material
breach of any representation or warranty made or deemed made pursuant
to Article III of this Agreement and Transferor shall fail to cure such
breach within 15 days (or, in the case of the representations and
warranties in Sections 3.1(d) and 3.1(j), 3 days) of such notice. The
reconveyance price shall be paid by the Transferor to the Company in
immediately available funds on such 15th day (or 3rd day, if
applicable) in an amount equal to the Aggregate Unpaids.
ARTICLE IXMISCELLANEOUS
SECTION 9.1. Term of Agreement. This Agreement shall
terminate following the Termination Date when the Net Investment has
been reduced to zero, all accrued Discount has been paid in full and
all other Aggregate Unpaids have been paid in full; provided, however,
that (i) the rights and remedies of the Company with respect to any
representation and warranty made or deemed to be made by Transferor
pursuant to this Agreement, (ii) the indemnification and payment
provisions of Article VIII, and (iii) the agreement set forth in
Section 9.9, shall be continuing and shall survive any termination of
this Agreement.
SECTION 9.2. Waivers; Amendments. No failure or delay on
the part of the Company in exercising any power, right or remedy under
this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or remedy preclude any
other further exercise thereof or the exercise of any other power,
right or remedy. The rights and remedies herein provided shall be
cumulative and nonexclusive of any rights or remedies provided by law.
Any provision of this Agreement may be amended if, but only if, such
amendment is in writing and is signed by the Transferor and the
Company.
SECTION 9.3. Notices. Except as provided below, all
communications and notices provided for hereunder shall be in writing
(including bank wire, telex, telecopy or electronic facsimile
transmission or similar writing) and shall be given to the other party
at its address or telecopy number set forth below or at such other
address or telecopy number as such party may hereafter specify for the
purposes of notice to such party. Each such notice or other
communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this
Section and confirmation is received, (ii) if given by mail 3 Business
Days following such posting, or (iii) if given by any other means, when
received at the address specified in this Section. However, anything
in this Agreement to the contrary notwithstanding, the Transferor
hereby authorizes the Company to effect Transfers, Tranche Period and
Tranche Rate selections based on telephonic notices made by any Person
which the Company in good faith believes to be acting on behalf of the
Transferor. The Transferor agrees to deliver promptly to the Company a
written confirmation of each telephonic notice signed by an authorized
officer of Transferor. However, the absence of such confirmation shall
not affect the validity of such notice. If the written confirmation
differs in any material respect from the action taken by the Company,
the records of the Company shall govern absent manifest error.
If to the Company:
Enterprise Funding Corporation
c/o Merrill Lynch Money Markets Inc.
World Financial Center--South Tower
225 Liberty Street
New York, New York 10218
Telephone: (212) 236-7200
Telecopy: (212) 236-7584
(with a copy to the Administrative Agent)
If to the Transferor:
IMC-AGRICO COMPANY
2100 Sanders Road
Northbrook, Illinois 60042
Telephone: (708) 205-4814
Telecopy: (708) 205-4803
Attention: Treasurer
Payment Information:
NationsBank of North Carolina, N.A.
ABA 053000196
Account 000279224
Reference IMC-Agrico Company
If to the Collateral Agent:
NationsBank of North Carolina, N.A.
NationsBank Corporate Center--7th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--
Investment Banking
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
If to the Administrative Agent:
NationsBank of North Carolina, N.A.
NationsBank Corporate Center--7th Floor
Charlotte, North Carolina 28255
Attention: Michelle M. Heath--
Investment Banking
Telephone: (704) 386-7922
Telecopy: (704) 388-9169
SECTION 9.4. Governing Law; Submission to Jurisdiction;
Integration.
(a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT
TO CONFLICTS OF LAWS PRINCIPLES AND THE PERFECTION AND THE EFFECT OF
PERFECTION OR NONPERFECTION OF ANY "SECURITY INTEREST" (AS DEFINED IN
THE UCC AS IN EFFECT IN THE STATE OF NEW YORK) GRANTED HEREUNDER SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS. THE TRANSFEROR
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY. The Transferor hereby irrevocably
waives, to the fullest extent it may effectively do so, any objection
which it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient
forum. Nothing in this Section 9.4 shall affect the right of the
Company to bring any action or proceeding against the Transferor or its
property in the courts of other jurisdictions.
(b) This Agreement contains the final and complete
integration of all prior expressions by the parties hereto with respect
to the subject matter hereof and shall constitute the entire Agreement
among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings.
SECTION 9.5. Severability; Counterparts. This Agreement may
be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which when taken together shall
constitute one and the same Agreement. Any provisions of this
Agreement which are prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
SECTION 9.6. Successors and Assigns. (a) This Agreement
shall be binding on the parties hereto and their respective successors
and assigns; provided, however, that the Transferor may not assign any
of its rights or delegate any of its duties hereunder without the prior
written consent of the Company. No provision of this Agreement shall
in any manner restrict the ability of the Company to assign,
participate, grant security interests in, or otherwise transfer any
portion of the Transferred Interest.
(b) The Transferor hereby agrees and consents to the
assignment by the Company from time to time of all or any part of its
rights under, interest in and title to this Agreement and the
Transferred Interest to any Liquidity Provider. In addition, the
Transferor hereby agrees and consents to the complete assignment by the
Company of all of its rights under, interest in and title to this
Agreement and the Transferred Interest to the Collateral Agent.
SECTION 9.7. Waiver of Confidentiality. The Transferor
hereby consents to the disclosure of any non-public information with
respect to it received by the Company or the Administrative Agent (i)
to any nationally recognized rating agency rating the Company's
commercial paper provided such rating agencies are informed of the
highly confidential nature of such information, (ii) to any of the
Company, the Administrative Agent, the Liquidity Provider, the Credit
Support Provider or any placement agent for the Company's Commercial
Paper in relation to this Agreement, provided any such Person agrees to
hold such information confidential, or any of such Person's auditors,
attorneys or financial advisors provided such parties are informed of
the highly confidential nature of such information, (iii) as otherwise
required by applicable law or order of a court of competent
jurisdiction or as requested by any regulatory authority having
jurisdiction over the Company or the Administrative Agent or (iv) as
requested by the Liquidity Provider, the Credit Support Provider or any
placement agent for the Company's Commercial Paper solely as a result
of a requirement of applicable law or order of a court of competent
jurisdiction or solely as a result of a request by any regulatory
authority having jurisdiction over any such Person. Notwithstanding
the foregoing, the Company shall be permitted to disclose portfolio
data regarding the Receivables to holders (and prospective holders) of
its Commercial Paper provided that such information does not contain
the name of the Transferor.
SECTION 9.8. Confidentiality Agreement. The Transferor
hereby agrees that it will not disclose the contents of this Agreement
or any other proprietary or confidential information of the Company,
the Collateral Agent, the Administrative Agent, the Liquidity Provider
or the Credit Support Provider to any other Person except (i) its
auditors and attorneys or financial advisors (other than any commercial
bank) and any nationally recognized rating agency, provided such
auditors, attorneys, financial advisors or rating agencies are informed
of the highly confidential nature of such information or (ii) as
otherwise required by applicable law or order of a court of competent
jurisdiction or as requested by any regulatory authority having
jurisdiction over the Transferor.
SECTION 9.9. No Bankruptcy Petition Against the Company.
The Transferor hereby covenants and agrees that, prior to the date
which is one year and one day after the payment in full of all
outstanding Commercial Paper or other indebtedness of the Company, it
will not institute against, or join any other Person in instituting
against, the Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceeding under
the laws of the United States or any state of the United States.
SECTION 9.10. No Recourse Against Stockholders, Officers or
Directors. No recourse under any obligation, covenant or agreement of
the Company contained in this Agreement shall be had against Merrill
Lynch Money Markets Inc. (or any affiliate thereof), or any
stockholder, officer or director of the Company, as such, by the
enforcement of any assessment or by any legal or equitable proceeding,
by virtue of any statute or otherwise; it being expressly agreed and
understood that this Agreement is solely a corporate obligation of the
Company, and that no personal liability whatever shall attach to or be
incurred by Merrill Lynch Money Markets Inc. (or any affiliate
thereof), or the stockholders, officers or directors of the Company, as
such, or any of them, under or by reason of any of the obligations,
covenants or agreements of the Company contained in this Agreement, or
implied therefrom, and that any and all personal liability for breaches
by the Company of any of such obligations, covenants or agreements,
either at common law or at equity, or by statute or constitution, of
Merrill Lynch Money Markets Inc. (or any affiliate thereof) and every
such stockholder, officer or director is hereby expressly waived as a
condition of and consideration for the execution of this Agreement.
SECTION 9.11. Characterization of the Transactions
Contemplated by the Agreement. It is the intention of the parties that
the transactions contemplated hereby constitute the sale of the
Transferred Interest, conveying good title thereto free and clear of
any Adverse Claims to the Company and that the Transferred Interest not
be part of the Transferor's estate in the event of an insolvency. If,
notwithstanding the foregoing, the transactions contemplated hereby
should be deemed a financing, the parties intend that the Transferor
shall be deemed to have granted to the Company, and the Transferor
hereby grants to the Company, a first priority perfected security
interest in all of the Transferor's right, title and interest in, to
and under the Receivables, together with Related Security and
Collections with respect thereto, and that this Agreement shall
constitute a security agreement under applicable law.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Transfer and Administration Agreement as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By: Thomas S. Dunstan
----------------
Name: THOMAS S. DUNSTAN
Title: VICE PRESIDENT
IMC-AGRICO COMPANY,
as Transferor and
Collection Agent
BY: IMC-AGRICO MP, INC., a
general partner
By:
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Transfer and Administration Agreement as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By:
----------------
Name:
Title:
IMC-AGRICO COMPANY,
as Transferor and
Collection Agent
BY: IMC-AGRICO MP, INC., a
general partner
By: James D. Speir
Name: JAMES D. SPEIR
Title:
EXHIBIT 10.61
EXECUTION COPY
$150,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 31, 1995
Among
IMC GLOBAL OPERATIONS INC.
as Borrower
and
IMC GLOBAL INC.
as Guarantor
and
THE BANKS NAMED HEREIN
as Banks
and
CITIBANK, N.A.
as Administrative Agent, Co-Agent, and Swing Line Bank
and
NATIONSBANK OF NORTH CAROLINA, N.A.
as Co-Agent
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
as Co-Agent
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 1
1.02. Computation of Time Periods 23
1.03. Accounting Terms 23
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances 23
2.02. Making the Advances 24
2.03. Repayment 27
2.04. Optional Reduction of the Commitments 27
2.05. Prepayments 27
2.06. Interest 29
2.07. Fees 29
2.08. Conversion of Advances 30
2.09. Increased Costs, Etc. 31
2.10. Payments and Computations 33
2.11. Taxes 34
2.12. Sharing of Payments, Etc. 36
2.13. Letters of Credit 37
2.14. Use of Proceeds 41
2.15. Defaulting Lenders 42
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.13. 44
3.02. Conditions Precedent to Each Borrowing and
Issuance, Etc. 48
3.03. Determinations Under Section 3.01 49
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower
and the Guarantor 50
ARTICLE V
COVENANTS OF THE BORROWER AND THE GUARANTOR
5.01. Affirmative Covenants 56
5.02. Negative Covenants 61
5.03. Reporting Requirements 68
5.04. Financial Covenants 72
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default 73
6.02. Actions in Respect of the Letters of Credit Upon
Default 76
ARTICLE VII
GUARANTY
7.01. Guaranty 77
7.02. Guaranty Absolute 77
7.03. Waiver 78
7.04. Payments Free and Clear of Taxes, Etc. 79
7.05. Continuing Guaranty; Assignments 79
7.06. Subrogation 80
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE CO-AGENTS
8.01. Authorization and Action 81
8.02. Administrative Agent's and Co-Agent's Reliance,
Etc. 81
8.03. Citibank, NationsBank, Rabobank and Affiliates 82
8.04. Lender Credit Decision 82
8.05. Indemnification 82
8.06. Successor Administrative Agents and Co-Agents 83
ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc. 84
9.02. Notices, Etc. 84
9.03. No Waiver; Remedies 85
9.04. Costs and Expenses 85
9.05. Right of Set-off 87
9.06. Binding Effect 87
9.07. Assignments and Participations 87
9.08. Governing Law 90
9.09. Execution in Counterparts 90
9.10. No Liability of the Issuing Banks 90
9.11. Confidentiality 91
9.12. Effective Date Assignments; Etc. 91
9.13. Waiver of Jury Trial 93
Schedules
Schedule I - Commitments and Applicable Lending
Offices
Schedule 2.13(f) - Existing Letters of Credit
Schedule 3.01(c) - Disclosed Litigation
Schedule 4.01(b) - List of Subsidiaries
Schedule 4.01(m) - Plans, Multiemployer Plans and Welfare
Plans
Schedule 4.01(t) - Environmental Laws Disclosure
Schedule 4.01(u) - Environmental Investigation and
Cleanup Properties
Schedule 4.01(v) - Hazardous Materials Properties
Schedule 4.01(z) - JV Existing Debt and Existing Debt
Schedule 4.01(aa) - Material Contracts
Schedule 4.01(bb) - Existing Investments
Schedule 4.01(cc) - Existing Leases
Schedule 5.02(a) - Existing Liens
Schedule 5.02(e) - Specified Assets for Sale
Schedule 9.12 - Existing Lenders, Existing Issuing
Banks, Existing Commitments and Existing Advances
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Opinion of New York Counsel
for the Borrower and the Guarantor
Exhibit E - Form of Opinion of General Counsel of the
Borrower and the
Guarantor
Exhibit F - Subordination Agreement
Exhibit G-1 - Subordinated Intercompany Note
($215,000,000)
Exhibit G-2 - Subordinated Intercompany Note
($260,000,000)
Exhibit G-3 - Subordinated Intercompany Note
($160,000,000)
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 31,
1995 among IMC GLOBAL OPERATIONS INC., a Delaware corporation formerly
known as IMC Fertilizer, Inc. (the "Borrower"), IMC GLOBAL INC., a
Delaware corporation formerly known as IMC Fertilizer Group, Inc. (the
"Guarantor"), the banks (the "Banks") listed on the signature pages
hereof, and CITIBANK, N.A. ("Citibank"), as administrative agent
(together with any successor appointed pursuant to Article VIII, the
"Administrative Agent"), co-agent and Swing Line Bank (as hereinafter
defined) and NATIONSBANK OF NORTH CAROLINA, N.A. ("NationsBank"), as
co-agent, and COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.
("Rabobank"), as co-agent (together with Citibank and NationsBank and
any successors appointed pursuant to Article VIII, the "Co-Agents") for
the Lenders hereunder.
PRELIMINARY STATEMENTS. The Borrower and the Guarantor
entered into a Credit Agreement dated as of June 29, 1993 (as amended
through the date hereof, the "Existing Credit Agreement") with certain
lenders parties thereto (the "Existing Lenders"), Citibank, as
administrative agent for the Existing Lenders, and Citibank,
NationsBank and Rabobank, as co-agents. The Borrower and the Guarantor
have requested that the Lenders, the Co-Agents and the Administrative
Agent amend and restate the Existing Credit Agreement as hereinafter
set forth, and the Lenders, the Co-Agents and the Administrative Agent
have agreed to do so. The Guarantor has agreed to guarantee the due
and punctual payment and performance by the Borrower of its Obligations
(as hereinafter defined) to the Administrative Agent, the Co-Agents and
the Lenders pursuant hereto. The Lenders have indicated their
willingness to agree to lend to the Borrower an aggregate principal
amount of up to $150,000,000 on the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, the parties hereto
hereby agree that as of the Effective Date, the Existing Credit
Agreement is hereby amended and restated as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms
of the terms defined):
"Administrative Agent" has the meaning specified in the
recital of parties to this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent with
Citibank at its office at 399 Park Avenue, New York, New York
10043, Account No. 40548046, Account Name: WCG Loan Payment
Account, Attention: Stephanie James.
"Advance" means a Working Capital Advance, a Swing Line
Advance or a Letter of Credit Advance.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under
common control with such Person or is a director or officer of
such Person. For purposes of this definition, the term "control"
(including the terms "controlling," "controlled by" and "under
common control with") of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Stock of
such Person or to direct or cause the direction of the management
and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Base Rate Advance and such Lender's Eurodollar Lending Office in
the case of a Eurodollar Rate Advance.
"Applicable Margin" means, in the case of Base Rate Advances
and Eurodollar Rate Advances, at any time a rate equal to the rate
per annum set forth in the table below under the heading
"Applicable Margin for Base Rate Advances" or "Applicable Margin
for Eurodollar Rate Advances", as the case may be, opposite the
leverage ratio (calculated as set forth in Section 5.04(c) (the
"Leverage Ratio")) set forth below as calculated based on the most
recent financial statements required to be delivered by the
Borrower and the Guarantor pursuant to Section 5.03(b) or (c).
Level Leverage Ratio Applicab Applicable
le Margin for
Margin Eurodollar
for Advances
Base
Rate
Advances
Level 1 Less than or equal 0.00% 0.625%
to 0.4000
Level 2 Greater than 0.4000 0.00% 0.750%
and less than or
equal to 0.4725
Level 3 Greater than 0.4725 0.00% 1.00%
and less than or
equal to 0.4897
Level 4 Greater than 0.4897 0.50% 1.50%
and less than or
equal to 0.5068
Level 5 Greater than 0.5068 1.00% 2.00%
The Applicable Margin for Swing Line Advances shall be a
percentage per annum equal to the Applicable Margin in effect from
time to time for Working Capital Advances that are Base Rate
Advances less the Unused Commitment Fee Rate in effect at such
time.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and
accepted by the Administrative Agent, in accordance with Section
9.07 and in substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any
time, the maximum amount available to be drawn under such Letter
of Credit at such time (assuming compliance at such time with all
conditions to drawing).
"Bank" has the meaning specified in the recital of parties to
this Agreement.
"Base Rate" means a fluctuating interest rate per annum in
effect from time to time, which rate per annum shall at all times
be equal to the highest of:
(a) the rate of interest announced publicly by
Citibank in New York, New York, from time to time, as
Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or,
if there is no nearest 1/4 of 1%, to the next higher 1/4 of
1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained
by dividing (A) the latest three-week moving average of
secondary market morning offering rates in the United States
for three-month certificates of deposit of major United
States money market banks, such three-week moving average
(adjusted to the basis of a year of 360 days) being
determined weekly on each Monday (or, if such day is not a
Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank
on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New
York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates
received by Citibank from three New York certificate of
deposit dealers of recognized standing selected by Citibank,
by (B) a percentage equal to 100% minus the average of the
daily percentages specified during such three-week period by
the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental
or other marginal reserve requirement) for Citibank with
respect to liabilities consisting of or including (among
other liabilities) three-month U.S. dollar non-personal time
deposits in the United States, plus (iii) the average during
such three-week period of the annual assessment rates
estimated by Citibank for determining the then current annual
assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of Citibank in the United States; and
(c) 1/2 of 1% per annum above the Federal Funds
Rate.
"Base Rate Advance" means an Advance that bears interest as
provided in Section 2.06(a)(i).
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower's Account" means the account of the Borrower
maintained by the Borrower with Citibank at its office at 399 Park
Avenue, New York, New York 10043, Account No. 40508677.
"Borrowing" means a Working Capital Borrowing or a Swing Line
Borrowing.
"Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances,
on which dealings are carried on in the London interbank market.
"Capital Stock" means any and all shares or other equivalents
(however designated) of corporate stock.
"Capitalization" means the sum of Consolidated net worth
(calculated as set forth in Section 5.04(a)) plus Consolidated
Funded Debt.
"Capitalized Leases" has the meaning specified in clause (e)
of the definition of Debt.
"Cash Equivalents" means any of the following, to the extent
owned by the Borrower, the Guarantor, or any of their respective
Subsidiaries free and clear of all Liens and having a maturity of
not greater than 90 days from the date of issuance thereof: (a)
readily marketable direct obligations of the Government of the
United States or any agency or instrumentality thereof or
obligations unconditionally guaranteed by the full faith and
credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial
bank that (i) is a Lender or a member of the Federal Reserve
System, (ii) issues (or the parent of which issues) commercial
paper rated as described in clause (c), (iii) is organized under
the laws of the United States or any State thereof and (iv) has
combined capital and surplus of at least $1 billion, (c)
commercial paper in an aggregate amount of no more than $5,000,000
per issuer outstanding at any time, issued by any corporation
organized under the laws of any State of the United States and
rated at least "Prime-1" (or the then equivalent grade) by Moody's
or "A-1" (or the then equivalent grade) by S&P or (d) investments
in money market or mutual funds that invest primarily in Cash
Equivalents of the types described in clauses (a), (b) and (c)
above.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
"Citibank" has the meaning specified in the recital of
parties to this Agreement.
"Co-Agents" has the meaning specified in the recital of
parties to this Agreement.
"Commitment" means a Working Capital Commitment or a Letter
of Credit Commitment.
"Confidential Information" means information that the
Borrower or the Guarantor furnishes to the Administrative Agent,
any Co-Agent or any Lender in a writing designated as
confidential, but does not include any such information that is or
becomes generally available to the public other than as a result
of a breach by the Administrative Agent, any Co-Agent or any
Lender of its obligations hereunder or that is or becomes
available to the Administrative Agent, such Co-Agent or such
Lender from a source other than the Borrower or the Guarantor.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Consolidated Funded Debt" as of any date means the aggregate
amount of the Funded Debt of the Guarantor and its Subsidiaries
outstanding on that date.
"Conversion", "Convert" and "Converted" each refer to a
conversion of Advances of one Type into Advances of the other Type
pursuant to Section 2.08 or 2.09.
"Current Interest" has the meaning specified in the Section
4.01 of the Partnership Agreement.
"Debt" of any Person means, without duplication (a) all
indebtedness of such Person for borrowed money, (b) all
Obligations of such Person for the deferred purchase price of
property or services (other than trade payables not overdue by
more than 60 days incurred in the ordinary course of such Person's
business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all
Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect
to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property),
(e) all Obligations of such Person as lessee under leases that
have been or should be, in accordance with GAAP, recorded as
capital leases ("Capitalized Leases"), (f) all Obligations,
contingent or otherwise, of such Person under acceptance, letter
of credit or similar facilities, (g) all Obligations of such
Person to purchase, redeem, retire, defease or otherwise make any
payment in respect of any capital stock of or other ownership or
profit interest in such Person or any of its Affiliates or any
warrants, rights or options to acquire such capital stock, valued,
in the case of Redeemable Preferred Stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and
unpaid dividends, (h) all Obligations of such Person for
production payments from property operated by or on behalf of such
Person and other similar arrangements with respect to natural
resources, (i) all Debt of others referred to in clauses (a)
through (h) above guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by
such Person through an agreement (i) to pay or purchase such Debt
or to advance or supply funds for the payment or purchase of such
Debt, (ii) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Debt or to
assure the holder of such Debt against loss, (iii) to supply funds
to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether
such property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss, and (j) all Debt
referred to in clauses (a) through (h) above secured by (or for
which the holder of such Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice
be given or time elapse or both.
"Defaulted Advance" means, with respect to any Lender at any
time, the amount of any Advance required to be made by such Lender
to the Borrower pursuant to Section 2.01 at or prior to such time
which has not been so made as of such time; provided, however, any
Advance made by the Administrative Agent for the account of such
Lender pursuant to Section 2.02(e) shall not be considered a
Defaulted Advance even if, at such time, such Lender shall not
have reimbursed the Administrative Agent therefor as provided in
Section 2.02(e). In the event that a portion of a Defaulted
Advance shall be deemed made pursuant to Section 2.15(a), the
remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to
Section 2.01 on the same date as the Defaulted Advance so deemed
made in part.
"Defaulted Amount" means, with respect to any Lender at any
time, any amount required to be paid by such Lender to the
Administrative Agent or any other Lender hereunder or under any
other Loan Document at or prior to such time which has not been so
paid as of such time, including, without limitation, any amount
required to be paid by such Lender to (a) the Swing Line Bank
pursuant to Section 2.02(b) to purchase a portion of a Swing Line
Advance made by the Swing Line Bank, (b) any Issuing Bank pursuant
to Section 2.13(c) to purchase a portion of a Letter of Credit
Advance made by such Issuing Bank, (c) the Administrative Agent
pursuant to Section 2.02(e) to reimburse the Administrative Agent
for the amount of any Advance made by the Administrative Agent for
the account of such Lender, (d) any other Lender pursuant to
Section 2.12 to purchase any participation in Advances owing to
such other Lender and (e) the Administrative Agent or any Co-Agent
pursuant to Section 8.05 to reimburse the Administrative Agent or
such Co-Agent, as the case may be, for such Lender's ratable share
of any amount required to be paid by the Lenders to the
Administrative Agent or such Co-Agent, as the case may be as
provided therein. In the event that a portion of a Defaulted
Amount shall be deemed paid pursuant to Section 2.15(b), the
remaining portion of such Defaulted Amount shall be considered a
Defaulted Amount originally required to be made hereunder or under
any other Loan Document on the same date as the Defaulted Amount
so deemed paid in part.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (a) owes a Defaulted Advance or a Defaulted Amount or
(b) shall take or be the subject of any action or proceeding of a
type described in Section 6.01(f).
"Disclosed Litigation" has the meaning specified in Section
3.01(c).
"Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending
Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender, or
such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Administrative Agent.
"EBITDA" means, for any period, net income (or net loss) plus
the sum of (a) interest expense, (b) income tax expense, (c) the
"JV Consolidation Adjustment" (calculated on the same basis as in
the pro forma financial statements furnished to the Lenders
pursuant to Section 3.01(i)(vii)), if any, and (d) depreciation,
amortization and depletion expense (including, without limitation,
depreciation, amortization and depletion expense relating to oil
and gas-producing properties but excluding depreciation,
amortization and depletion expense included in the "JV
Consolidation Adjustment" referred to in clause (c) above), but
excluding in any event any income, loss or expense of the Joint
Venture Company attributable to Freeport (calculated based on the
Current Interest then held by it in the Joint Venture Company), in
each case determined in accordance with GAAP for such period.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (a) with respect to the Working
Capital Facility, (i) a commercial bank organized under the laws
of the United States, or any State thereof, and having a combined
capital and surplus of at least $250,000,000; (ii) a savings and
loan association or savings bank organized under the laws of the
United States, or any state thereof, and having a combined capital
and surplus of at least $250,000,000; (iii) a commercial bank
organized under the laws of any other country that is a member of
the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General
Arrangements to Borrow, or a political subdivision of any such
country, and having a combined capital and surplus of at least
$250,000,000, so long as such bank is acting through a branch or
agency located in the United States; and (iv) a finance company,
insurance company or other financial institution or fund (whether
a corporation, partnership, trust or other entity) that is engaged
in making, purchasing or otherwise investing in commercial loans
in the ordinary course of its business and having a combined
capital and surplus of at least $250,000,000 and (b) with respect
to the Letter of Credit Facility, a Person that is an Eligible
Assignee under subclause (i) or (iii) of clause (a) of this
definition and is approved by the Co-Agents and the Borrower, such
approval not to be unreasonably withheld; provided, however, that
an Affiliate of the Borrower shall not qualify as an Eligible
Assignee under clause (a) or (b) of this definition; provided
further, however, that the long-term debt of any Eligible Assignee
or its parent shall be rated at least "A3" (or the equivalent
grade) by Moody's or "A-" (or the equivalent grade) by S&P.
"Environmental Action" means any administrative, regulatory
or judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, investigation, proceeding, consent
order or consent agreement relating in any way to any
Environmental Law or any Environmental Permit including, without
limitation, (a) any claim by any governmental or regulatory
authority for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any Environmental Law and (b)
any claim by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury
or threat of injury to health, safety or the environment.
"Environmental Law" means any federal, state or local law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award relating to the environment, health, safety
or Hazardous Materials, including, without limitation, CERCLA, the
Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act, the Clean Water Act, the Toxic Substances
Control Act, the Clean Air Act, the Safe Drinking Water Act, the
Atomic Energy Act, the Federal Insecticide, Fungicide and
Rodenticide Act and the Occupational Safety and Health Act.
"Environmental Permit" means any permit, approval,
identification number, license or other authorization required
under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"ERISA Affiliate" of any Person means any other Person that
for purposes of Title IV of ERISA is a member of such Person's
controlled group, or under common control with such Person, within
the meaning of Section 414 of the Internal Revenue Code.
"ERISA Event" with respect to any Person means (a) (i) the
occurrence of a reportable event, within the meaning of Section
4043 of ERISA, with respect to any Plan of such Person or any of
its ERISA Affiliates unless the 30-day notice requirement with
respect to such event has been waived by the PBGC or (ii) the
requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with
respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of
ERISA is reasonably expected to occur with respect to such Plan
within the following 30 days; (b) the provision by the
administrator of any Plan of such Person or any of its ERISA
Affiliates of a notice of intent to terminate such Plan, pursuant
to Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of
ERISA); (c) the cessation of operations at a facility of such
Person or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (d) the withdrawal by such
Person or any of its ERISA Affiliates from a Multiple Employer
Plan during a plan year for which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; (e) the failure by such
Person or any of its ERISA Affiliates to make a payment to a Plan
required under Section 302(f)(1) of ERISA; (f) the adoption of an
amendment to a Plan of such Person or any of its ERISA Affiliates
requiring the provision of security to such Plan, pursuant to
Section 307 of ERISA; or (g) the institution by the PBGC of
proceedings to terminate a Plan of such Person or any of its ERISA
Affiliates, pursuant to Section 4042 of ERISA, or the occurrence
of any event or condition described in Section 4042 of ERISA that
could constitute grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender
(or, if no such office is specified, its Domestic Lending Office),
or such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained by
dividing (a) the rate per annum at which deposits in U.S. dollars
are offered by the principal office of Citibank in London, England
to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such
Interest Period in an amount substantially equal to Citibank's
Eurodollar Rate Advance comprising part of such Borrowing to be
outstanding during such Interest Period and for a period equal to
such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period
for all Eurodollar Rate Advances comprising part of the same
Borrowing means the reserve percentage applicable two Business
Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for
a member bank of the Federal Reserve System in New York City with
respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a
term equal to such Interest Period.
"Events of Default" has the meaning specified in Section
6.01.
"Existing Advance" means, for each Existing Lender, all of
such Existing Lender's rights in and to, and all of its
obligations under, the Advances (as defined in the Existing Credit
Agreement) owing to it under the Existing Credit Agreement, the
aggregate amount of which for each Existing Lender is set forth
opposite its name on Schedule 9.12 hereto.
"Existing Commitments" means the Existing Working Capital
Commitments and the Existing Letter of Credit Commitments.
"Existing Credit Agreement" has the meaning specified in the
Preliminary Statements.
"Existing Issuing Banks" means the Issuing Banks under and as
defined in the Existing Credit Agreement.
"Existing Lenders" has the meaning specified in the
Preliminary Statements.
"Existing Letter of Credit Commitment" means, for each
Existing Issuing Bank, all of such Existing Issuing Bank's rights
in and to, and all of its obligations under, the Letter of Credit
Commitment (as defined in the Existing Credit Agreement) held by
it under the Existing Credit Agreement, the aggregate amount of
which for each Existing Issuing Bank is set forth opposite its
name on Schedule 9.12 hereto.
"Existing Letters of Credit" has the meaning specified in
Section 2.13(f).
"Existing Working Capital Commitment" means, for each
Existing Lender, all of such Existing Lender's rights in and to,
and all of its obligations under, the Working Capital Commitment
(as defined in the Existing Credit Agreement) held by it under the
Existing Credit Agreement, the aggregate amount of which for each
Existing Lender is set forth opposite its name on Schedule 9.12
hereto.
"Facility" means the Working Capital Facility, the Swing Line
Facility or the Letter of Credit Facility.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the
quotations for such day for such transactions received by the
Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
"Freeport" means Freeport-McMoRan Resource Partners, Limited
Partnership, a Delaware limited partnership.
"Funded Debt" means, with respect to any Person, all Debt of
such Person which by its terms or by the terms of any instrument
or agreement relating thereto matures, or which is otherwise
payable or unpaid, more than one year from, or is directly or
indirectly renewable or extendible at the option of the debtor to
a date more than one year (including an option of the debtor under
a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year)
from, the date of the creation thereof.
"GAAP" has the meaning specified in Section 1.03.
"Guarantor" has the meaning specified in the recital of
parties to this Agreement.
"Guaranty" means the Guaranty set forth in Article VII.
"Hazardous Materials" means (a) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is
or could become friable, urea formaldehyde foam insulation and
radon gas, (b) any substances defined as or included in the
definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under
any Environmental Law and (c) any other substance exposure to
which is regulated under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency
swap agreements, currency future or option contracts and other
similar agreements.
"IMC-Canada" means International Minerals & Chemical
Corporation (Canada) Global Limited, a corporation incorporated
under the laws of Canada.
"IMC Partner" means IMC-Agrico GP Company, a Delaware
corporation or any successor corporation otherwise permitted
hereunder.
"Indemnified Party" has the meaning specified in Section
9.04(b).
"Insufficiency" means, with respect to any Plan, the amount,
if any, of its unfunded benefit liabilities, as defined in Section
4001(a)(18) of ERISA.
"Interest Period" means, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on
the date of such Eurodollar Rate Advance or the date of the
Conversion of any Base Rate Advance into such Eurodollar Rate
Advance, and ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter, each
subsequent period commencing on the last day of the immediately
preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two or three
months, as the Borrower may, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the first day of such
Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest
Period that ends after any principal repayment installment
date unless, after giving effect to such selection, the
aggregate principal amount of Base Rate Advances and of
Eurodollar Rate Advances having Interest Periods that end on
or prior to such principal repayment installment date shall
be at least equal to the aggregate principal amount of
Advances due and payable on or prior to such date;
(b) Interest Periods commencing on the same date
for Eurodollar Rate Advances comprising part of the same
Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the
last day of such Interest Period shall be extended to occur
on the next succeeding Business Day, provided, however, that,
if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the next
preceding Business Day; and
(d) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which there
is no numerically corresponding day in the calendar month
that succeeds such initial calendar month by the number of
months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of
such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder.
"Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of such
Person, any capital contribution to such Person or any other
investment in such Person, including, without limitation, any
arrangement pursuant to which the investor incurs Debt of the
types referred to in clauses (i) and (j) of the definition of
"Debt" in respect of such Person.
"Issuing Bank" means any of Citibank, NationsBank or
Rabobank, as issuer of a Letter of Credit.
"Joint Venture Agreement" means the Contribution Agreement
dated as of April 5, 1993 between Freeport and the Borrower,
together with all schedules and exhibits thereto, as in effect on
the date hereof.
"Joint Venture Company" means IMC-Agrico Company, a Delaware
general partnership established pursuant to the terms of the Joint
Venture Agreement.
"Lenders" means the Banks listed on the signature pages
hereof and each Eligible Assignee that shall become a party hereto
pursuant to Section 9.07.
"L/C Cash Collateral Account" means the interest-bearing cash
collateral account maintained by the Borrower with Citibank at its
office at 399 Park Avenue, New York, New York 10043, Account No.
40604773, in the name of the Borrower but under the sole control
and dominion of the Administrative Agent and subject to the terms
of this Agreement.
"L/C Related Documents" has the meaning specified in Section
2.13(d)(i).
"Letter of Credit" has the meaning specified in Section
2.13(a).
"Letter of Credit Advance" means an advance made by any
Issuing Bank or any Lender pursuant to Section 2.13(c).
"Letter of Credit Agreement" has the meaning specified in
Section 2.13(b).
"Letter of Credit Commitment" means, with respect to any
Issuing Bank at any time, the amount set forth opposite such
Issuing Bank's name on Schedule I hereto under the caption "Letter
of Credit Commitment" or, if such Issuing Bank has entered into
one or more Assignments and Acceptances, set forth for such
Issuing Bank in the Register maintained by the Administrative
Agent pursuant to Section 9.07(c) as such Issuing Bank's "Letter
of Credit Commitment", as such amount may be reduced at or prior
to such time pursuant to Section 2.04.
"Letter of Credit Facility" means, at any time, an amount
equal to the lesser of (a) the aggregate amount of the Letter of
Credit Commitments of the Issuing Banks at such time and
(b) $40,000,000, as such amount may be reduced at or prior to such
time pursuant to Section 2.04.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential
arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of
way or other encumbrance on title to real property.
"Loan Documents" means this Agreement, the Notes, the
Subordination Agreement and each Letter of Credit Agreement.
"Loan Parties" means the Borrower and the Guarantor.
"Managing Partner" means IMC-Agrico MP, Inc., a Delaware
corporation.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change
in the business, condition (financial or otherwise), operations,
performance, properties or prospects of either Loan Party and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of either Loan Party and its
Subsidiaries taken as a whole, (b) the rights and remedies of the
Administrative Agent, any Co-Agent or any Lender under any Loan
Document or (c) the ability of either Loan Party to perform its
Obligations under any Loan Document or Related Document to which
it is or is to be a party.
"Material Contract" means the Joint Venture Agreement.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" of any Person means a multiemployer
plan, as defined in Section 4001(a)(3) of ERISA, to which such
Person or any of its ERISA Affiliates is making or accruing an
obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" of any Person means a single
employer plan, as defined in Section 4001(a)(15) of ERISA, that
(a) is maintained for employees of such Person or any of its ERISA
Affiliates and at least one Person other than such Person and its
ERISA Affiliates or (b) was so maintained and in respect of which
such Person or any of its ERISA Affiliates could have liability
under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"NationsBank" has the meaning specified in the recital of
parties to this Agreement.
"Net Cash Proceeds" means, with respect to any sale, lease,
transfer or other disposition of any asset or the sale or issuance
of any Debt or capital stock, any securities convertible into or
exchangeable for capital stock or any warrants, rights or options
to acquire capital stock by any Person, the aggregate amount of
cash received from time to time by or on behalf of such Person in
connection with such transaction after deducting therefrom only
(a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees and other similar
fees and commissions, to the extent, but only to the extent, that
the amounts so deducted are, at the time of receipt of such cash,
actually paid to a Person that is not an Affiliate and (b) the
amount of taxes paid or reasonably estimated to be payable in
connection with or as a result of such transaction, in each case
to the extent, but only to the extent, that the amounts so
deducted are properly attributable to such transaction or to the
asset that is the subject thereof.
"Note" means a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit A
hereto, evidencing the aggregate indebtedness of the Borrower to
such Lender resulting from the Working Capital Advances made by
such Lender.
"Notice of Borrowing" has the meaning specified in Section
2.02(a).
"Notice of Issuance" has the meaning specified in Section
2.13(b)(i).
"Notice of Swing Line Borrowing" has the meaning specified in
Section 2.02(b).
"Obligation" means, with respect to any Person, any
obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim
is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, disputed, undisputed, legal, equitable,
secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest,
Letter of Credit commissions, charges, expenses, fees, reasonable
attorneys' fees and disbursements, indemnities and other amounts
payable by either Loan Party under any Loan Document and (b) the
obligation to reimburse any amount in respect of any of the
foregoing that any Lender, in its reasonable discretion, may elect
to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and
Development.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Partnership Agreement" means the Amended and Restated
Partnership Agreement dated as of July 1, 1993 (as further amended
and restated as of May 26, 1995) among IMC Partner, Agrico,
Limited Partnership, the Managing Partner and the Borrower,
together with all schedules and exhibits thereto, as in effect on
the date hereof.
"Payment Block" means either of the following:
(a) an Event of Default pursuant to Section
6.01(a) shall occur; or
(b) an Event of Default pursuant to Section
6.01(f) shall occur.
"Payment Block Period" means: (i) with respect to the Event
of Default described in clause (a) of the definition of "Payment
Block", the period from the time such Event of Default occurs
until such Event of Default has been cured or waived in writing;
and (ii) with respect to the Event of Default described in clause
(b) of the definition of "Payment Block", the period from the time
such Event of Default occurs until the Advances, all interest
thereon and all other amounts payable under this Agreement and the
other Loan Documents shall be paid in full to the Administrative
Agent, the Co-Agents and the Lenders in cash, including the
deposit of funds in an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding in the L/C Cash
Collateral Account pursuant to the provisions of Section 6.02 and
all other amounts specified therein.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Peril" means, collectively, fire, lightning, flood,
windstorm, hail, explosion, riot and civil commotion, vandalism
and malicious mischief, damage from aircraft, vehicles and smoke
and all other perils covered by the "all-risk" endorsement then in
effect in the jurisdiction where insurance required pursuant to
Section 5.01(d) is purchased.
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced or as to which such enforcement,
collection, execution, levy or foreclosure proceeding is being
contested in good faith in a proper proceeding, and is not
reasonably likely to have a Material Adverse Effect: (a) Liens
for taxes, assessments and governmental charges or levies to the
extent not required to be paid by Section 5.01(b); (b) Liens
imposed by law, such as materialmen's, mechanics', carriers',
workmen's and repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations in an amount
not to exceed $500,000 and that are not overdue for a period of
more than 30 days; (c) pledges or deposits to secure obligations
under workers' compensation laws or similar legislation or to
secure public or statutory obligations; and (d) easements, rights
of way and other encumbrances on title to real property that do
not render title to the property encumbered thereby unmarketable
or materially adversely affect the use of such property for its
present purposes.
"Person" means an individual, partnership, corporation
(including a business trust), limited liability company, joint
stock company, trust, unincorporated association, joint venture or
other entity, or a government or any political subdivision or
agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer
Plan.
"Potash" means IMC Potash Corporation, a Delaware corporation
and a wholly-owned Subsidiary of the Borrower.
"Pre-Commitment Information" has the meaning specified in
Section 3.01(e).
"Preferred Stock" means, with respect to any corporation,
capital stock issued by such corporation that is entitled to a
preference or priority over any other capital stock issued by such
corporation upon any distribution of such corporation's assets,
whether by dividend or upon liquidation.
"Prepayment Account" means the account of the Borrower
maintained by the Borrower with Citibank at its office at 399 Park
Avenue, New York, New York 10043, Account No. 40608694, Account
Name: IMCF Prepayment Account, in the name of the Borrower but
under the sole control and dominion of the Administrative Agent
and subject to the terms of this Agreement.
"Pro Rata Share" of any amount means, with respect to any
Lender at any time, the product of such amount times a fraction
the numerator of which is the amount of such Lender's Working
Capital Commitment at such time and the denominator of which is
the Working Capital Facility at such time.
"Rabobank" has the meaning specified in the recital of
parties to this Agreement.
"Redeemable" means, with respect to any capital stock, Debt
or other right or Obligation, any such right or Obligation that
(a) the issuer has undertaken to redeem at a fixed or determinable
date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within
the control of the issuer or (b) is redeemable at the option of
the holder.
"Register" has the meaning specified in Section 9.07(c).
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"Related Documents" means the Subordinated Intercompany
Notes.
"Relevant Subsidiary" of any Person means a Subsidiary (i)
the stockholders' equity of which is $10,000,000 or more on, or at
any time after, the first date on which all of the conditions in
Article III have been satisfied or (ii) the annual revenues of
which are $10,000,000 or more for the year ended June 30, 1994, or
any fiscal year of the Guarantor thereafter, in each case as shown
in a certificate of the chief financial officer of such
Subsidiary.
"Required Lenders" means at any time Lenders owed or holding
at least 66-2/3% of the sum of (a) the aggregate principal amount
of the Advances outstanding at such time and (b) the aggregate
Available Amount of all Letters of Credit outstanding at such
time, or, if no such principal amount and no Letters of Credit are
outstanding at such time, Lenders holding at least 66-2/3% of the
aggregate Working Capital Commitments at such time; provided,
however, if any Lender shall be a Defaulting Lender at such time,
there shall be excluded from the determination of Required Lenders
at such time (i) the aggregate principal amount of the Advances
owing to such Lender (in its capacity as a Lender) and outstanding
at such time, (ii) such Lender's Pro Rata Share of the aggregate
Available Amount of all Letters of Credit outstanding at such time
and (iii) if no Advances and no Letters of Credit are outstanding
at such time, the Working Capital Commitment of such Lender at
such time. For purposes of this definition, the aggregate
principal amount of Swing Line Advances owing to the Swing Line
Bank and of Letter of Credit Advances owing to any Issuing Bank
and the Available Amount of each Letter of Credit shall be
considered to be owed to the Lenders ratably in accordance with
their respective Working Capital Commitments.
"Responsible Officer" means the chief executive officer,
chief operating officer, chief financial officer or chief
accounting officer of the Guarantor or the Borrower or any other
officer of the Guarantor or the Borrower involved principally in
its financial administration or its controllership function.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"Single Employer Plan" of any Person means a single employer
plan, as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of such Person or any of its ERISA
Affiliates and no Person other than such Person and its ERISA
Affiliates or (b) was so maintained and in respect of which such
Person or any of its ERISA Affiliates could have liability under
Section 4069 of ERISA in the event such plan has been or were to
be terminated.
"Subordinated Intercompany Notes" means the subordinated
intercompany promissory notes made by the Borrower to the order of
the Guarantor, copies of which are attached hereto as Exhibits G-
1, G-2 and G-3.
"Subordination Agreement" means the Subordination Agreement
dated as of June 29, 1993 made by the Guarantor in favor of the
Existing Lenders and certain other creditors of the Borrower, as
amended or otherwise modified from time to time in accordance with
its terms, to the extent permitted hereunder, a copy of which is
attached hereto as Exhibit F.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or
estate of which (or in which) more than 50% of (a) the issued and
outstanding capital stock having ordinary voting power to elect a
majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in
the capital or profits of such limited liability company,
partnership or joint venture or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned
or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other
Subsidiaries; provided that in any event, the Joint Venture
Company shall be deemed to be a Subsidiary of the Borrower and the
Guarantor.
"Swing Line Advance" means an advance made by (a) the Swing
Line Bank pursuant to Section 2.01(b) or (b) any Lender pursuant
to Section 2.02(b).
"Swing Line Bank" means Citibank.
"Swing Line Facility" has the meaning specified in Section
2.01(b).
"Tax Certificate" has the meaning specified in Section
5.03(n).
"Taxes" has the meaning specified in Section 2.11(a).
"Termination Date" means the earlier of July 31, 2000 and the
date of termination in whole of the Commitments pursuant to
Section 2.04 or 6.01.
"Type" refers to the distinction between Advances bearing
interest at the Base Rate and Advances bearing interest at the
Eurodollar Rate.
"Unused Commitment Fee Rate" has the meaning specified in
Section 2.07.
"Unused Working Capital Commitment" means, with respect to
any Lender at any time, (a) such Lender's Working Capital
Commitment at such time minus (b) the sum of (i) the aggregate
principal amount of all Working Capital Advances, Swing Line
Advances and Letter of Credit Advances made by such Lender and
outstanding at such time, plus (ii) such Lender's Pro Rata Share
of (A) the aggregate Available Amount of all Letters of Credit
outstanding at such time, (B) the aggregate principal amount of
all Letter of Credit Advances made by the Issuing Banks pursuant
to Section 2.13(c) and outstanding at such time other than any
such Letter of Credit Advance which, at or prior to such time, has
been assigned in part to such Lender pursuant to Section 2.13(c)
and (C) the aggregate principal amount of all Swing Line Advances
made by the Swing Line Bank pursuant to Section 2.01(b) and
outstanding at such time.
"Voting Stock" means capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which
are ordinarily, in the absence of contingencies, entitled to vote
for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been
suspended by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section
3(1) of ERISA.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
"Working Capital Advance" has the meaning specified in
Section 2.01(a).
"Working Capital Borrowing" means a borrowing consisting of
simultaneous Working Capital Advances of the same Type made by the
Lenders.
"Working Capital Commitment" means, with respect to any
Lender at any time, the amount set forth opposite such Lender's
name on Schedule I hereto under the caption "Working Capital
Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to
Section 9.07(c) as such Lender's "Working Capital Commitment", as
such amount may be reduced at or prior to such time pursuant to
Section 2.04.
"Working Capital Facility" means, at any time, the aggregate
amount of the Lenders' Working Capital Commitments at such time.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including"
and the words "to" and "until" each mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with
generally accepted accounting principles consistent with those applied
in the preparation of the financial statements referred to in Section
4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Working Capital
Advances. (i) Effective as of the Effective Date, each Existing
Lender hereby sells and assigns all of its rights in and to, and all of
its obligations under, each Existing Advance owing to it and the
Existing Working Capital Commitment held by it, the amounts of which
are set forth opposite its name on Schedule 9.12 hereto, to the Lenders
and each Lender hereby purchases and assumes, based on such Lender's
Pro Rata Share of the Working Capital Facility, all of the Existing
Lenders' rights in and to, and obligations under, the Existing Advances
and the Existing Working Capital Commitments.
(ii) Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a "Working
Capital Advance") to the Borrower from time to time on any Business Day
during the period from the Effective Date until the Termination Date in
an amount for each such Advance not to exceed such Lender's Unused
Working Capital Commitment on such Business Day. Each Working Capital
Borrowing shall be in an aggregate amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof and shall consist of Working
Capital Advances made by the Lenders ratably according to their Working
Capital Commitments. Within the limits of each Lender's Unused Working
Capital Commitment in effect from time to time, the Borrower may borrow
under this Section 2.01(a), prepay pursuant to Section 2.05(a) and
reborrow under this Section 2.01(a).
(b) The Swing Line Advances. The Borrower may request the
Swing Line Bank to make, and the Swing Line Bank may, if in its sole
discretion it elects to do so, make, on the terms and conditions
hereinafter set forth, Swing Line Advances to the Borrower from time to
time on any Business Day during the period from the Effective Date
until the Termination Date (i) in an aggregate amount not to exceed at
any time outstanding $10,000,000 (the "Swing Line Facility") and
(ii) in an amount for each such Swing Line Borrowing not to exceed the
aggregate of the Unused Working Capital Commitments of the Lenders at
such time. No Swing Line Advance shall be used for the purpose of
funding the payment of principal of any other Swing Line Advance. Each
Swing Line Borrowing shall be in an amount of $500,000 or an integral
multiple of $250,000 in excess thereof and shall be made as a Base Rate
Advance. Within the limits of the Swing Line Facility and within the
limits referred to in clause (ii) above, so long as the Swing Line
Bank, in its sole discretion, elects to make Swing Line Advances, the
Borrower may borrow under this Section 2.01(b), repay pursuant to
Section 2.03(c) or prepay pursuant to Section 2.05(a) and reborrow
under this Section 2.01(b).
SECTION 2.02. Making the Advances. (a) Except as otherwise
provided in Section 2.02(b) or 2.13, each Borrowing shall be made on
notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Borrowing, in the
case of a Borrowing consisting of Eurodollar Rate Advances, and the
Business Day prior to the date of the proposed Borrowing, in the case
of a Borrowing consisting of Base Rate Advances, by the Borrower to the
Administrative Agent, which shall give to each Lender prompt notice
thereof by telex, telecopier or cable. Each such notice of a Borrowing
(a "Notice of Borrowing") shall be by telex, telecopier or cable,
confirmed immediately in writing, in substantially the form of Exhibit
B hereto, specifying therein the requested (i) date of such Borrowing,
(ii) Type of Advances comprising such Borrowing, (iii) aggregate amount
of such Borrowing and (iv) in the case of a Borrowing consisting of
Eurodollar Rate Advances, initial Interest Period for each such
Advance. In the case of a proposed Borrowing comprised of Eurodollar
Rate Advances, the Administrative Agent shall promptly notify each
Lender of the applicable interest rate under Section 2.06(a)(ii). Each
Lender shall, before 11:00 A.M. (New York City time) on the date of
such Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at the Administrative
Agent's Account, in same day funds, such Lender's ratable portion of
such Borrowing in accordance with the respective Commitments of such
Lender and the other Lenders. After the Administrative Agent's receipt
of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds
available to the Borrower by crediting the Borrower's Account;
provided, however, that the Administrative Agent shall first make a
portion of such funds equal to the aggregate principal amount of any
Swing Line Advances and Letter of Credit Advances made by the Swing
Line Bank or any Issuing Bank, as the case may be, and by any other
Lender and outstanding on the date of such Borrowing, plus interest
accrued and unpaid thereon to and as of such date, available to the
Swing Line Bank or such Issuing Bank, as the case may be, and such
other Lenders for repayment of such Swing Line Advances and Letter of
Credit Advances.
(b) Each Swing Line Borrowing shall be made on notice, given
not later than 11:00 A.M. (New York City time) on the date of the
proposed Swing Line Borrowing, by the Borrower to the Swing Line Bank
and the Administrative Agent. Each such notice of a Swing Line
Borrowing (a "Notice of Swing Line Borrowing") shall be by telephone,
confirmed immediately in writing, or telex or telecopier, specifying
therein the requested (i) date of such Borrowing, (ii) amount of such
Borrowing and (iii) maturity of such Borrowing (which maturity shall be
no later than the 14th day after the requested date of such Borrowing).
If, in its sole discretion, it elects to make the requested Swing Line
Advance, the Swing Line Bank will make the amount thereof available to
the Administrative Agent at the Administrative Agent's Account, in same
day funds. After the Administrative Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III,
the Administrative Agent will make such funds available to the Borrower
by crediting the Borrower's Account. Upon written demand by the Swing
Line Bank, with a copy of such demand to the Administrative Agent, each
other Lender shall purchase from the Swing Line Bank, and the Swing
Line Bank shall sell and assign to each such other Lender, such other
Lender's Pro Rata Share of such outstanding Swing Line Advance as of
the date of such demand, by making available for the account of its
Applicable Lending Office to the Administrative Agent for the account
of the Swing Line Bank, by deposit to the Administrative Agent's
Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Swing Line Advance to be purchased
by such Lender. The Borrower hereby agrees to each such sale and
assignment. Each Lender agrees to purchase its Pro Rata Share of an
outstanding Swing Line Advance on (i) the Business Day on which demand
therefor is made by the Swing Line Bank, provided that notice of such
demand is given not later than 11:00 A.M. (New York City time) on such
Business Day or (ii) the first Business Day next succeeding such demand
if notice of such demand is given after such time. Upon any such
assignment by the Swing Line Bank to any other Lender of a portion of a
Swing Line Advance, the Swing Line Bank represents and warrants to such
other Lender that the Swing Line Bank is the legal and beneficial owner
of such interest being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect
to such Swing Line Advance, the Loan Documents or any Loan Party. If
and to the extent that any Lender shall not have so made the amount of
such Swing Line Advance available to the Administrative Agent, such
Lender agrees to pay to the Administrative Agent forthwith on demand
such amount together with interest thereon, for each day from the date
of demand by Swing Line Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate. If such Lender shall
pay to the Administrative Agent such amount for the account of the
Swing Line Bank on any Business Day, such amount so paid in respect of
principal shall constitute a Swing Line Advance made by such Lender on
such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Swing Line Advance made by the Swing Line Bank
shall be reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate
Advances for the initial Borrowing hereunder or for any Borrowing if
the aggregate amount of such Borrowing is less than $5,000,000 or if
the obligation of the Lenders to make Eurodollar Rate Advances shall
then be suspended pursuant to Section 2.09 and (ii) the Working Capital
Advances may not be outstanding as part of more than 5 separate
Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line
Borrowing shall be irrevocable and binding on the Borrower. In the
case of any Borrowing that the related Notice of Borrowing specifies is
to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender
as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such
Lender will not make available to the Administrative Agent such
Lender's ratable portion of such Borrowing, the Administrative Agent
may assume that such Lender has made such portion available to the
Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to
repay or pay to the Administrative Agent forthwith on demand such
corresponding amount and to pay interest thereon, for each day from the
date such amount is made available to the Borrower until the date such
amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under
Section 2.06 to Advances comprising such Borrowing and (ii) in the case
of such Lender, the Federal Funds Rate. If such Lender shall pay to
the Administrative Agent such corresponding amount, such amount so paid
shall constitute such Lender's Advance as part of such Borrowing for
purposes of this Agreement.
(f) The failure of any Lender to make the Advance to be made
by it as part of any Borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Advance on the date of
such Borrowing, but no Lender shall be responsible for the failure of
any other Lender to make the Advance to be made by such other Lender on
the date of any Borrowing.
SECTION 2.03. Repayment. (a) Working Capital Advances.
The Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders the aggregate outstanding principal amount of
the Working Capital Advances on the Termination Date.
(b) Letter of Credit Advances. The Borrower shall repay to
the Administrative Agent for the account of each Issuing Bank and each
other Lender that has made a Letter of Credit Advance the outstanding
principal amount of each Letter of Credit Advance made by each of them
on demand and in any event, on the Termination Date.
(c) Swing Line Advances. The Borrower shall repay to the
Administrative Agent for the account of the Swing Line Bank and each
other Lender that has made a Swing Line Advance the outstanding
principal amount of each Swing Line Advance made by each of them on the
earlier of the maturity date specified in the applicable Notice of
Swing Line Borrowing (which maturity shall be no later than the
fourteenth day after the requested date of such Borrowing) and the
Termination Date.
SECTION 2.04. Optional Reduction of the Commitments. The
Borrower may, upon at least three Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the Unused
Working Capital Commitments or the unused portion of the Letter of
Credit Commitments; provided, however, that each partial reduction of
the Working Capital Facility or the Letter of Credit Facility (i) shall
be in an aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and (ii) shall be made ratably among the
Lenders or the Issuing Banks, as the case may be, in accordance with
their Commitments with respect to the Working Capital Facility or the
Letter of Credit Facility, as the case may be.
SECTION 2.05. Prepayments. (a) Optional. The Borrower
may, upon at least three Business Days' notice to the Administrative
Agent stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal amount of the Advances comprising part
of the same Borrowing in whole or ratably in part, together with
accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; provided, however, that (x) each partial
prepayment shall be in an aggregate principal amount of $1,000,000 or
an integral multiple of $1,000,000 in excess thereof or such lesser
amount as may then be outstanding and (y) if any prepayment of a
Eurodollar Rate Advance is made on a date other than the last day of an
Interest Period for such Advance the Borrower shall also pay any
amounts owing pursuant to Section 9.04(c).
(b) Mandatory. (i) If the Managing Partner determines, in
its reasonable business judgment and otherwise in accordance with the
terms of the Joint Venture Agreement, to distribute the Net Cash
Proceeds from the sale, lease, transfer or other disposition of any
assets (other than sales of assets in the ordinary course of business
and other than sales of assets in an aggregate amount not to exceed
$10,000,000 from the date hereof) of the Joint Venture Company to the
equity holders of the Joint Venture Company, the Borrower shall, on the
date of receipt of its portion (which shall be determined in accordance
with the terms of the Joint Venture Agreement) of the Net Cash
Proceeds, prepay an aggregate principal amount of the Advances
comprising part of the same Borrowings equal to the amount of such Net
Cash Proceeds received by it (subject to clause (v) below).
(ii) The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Working Capital Advances comprising
part of the same Borrowings, the Letter of Credit Advances and the
Swing Line Advances equal to the amount by which (A) the sum of the
aggregate principal amount of (x) the Working Capital Advances, (y) the
Letter of Credit Advances and (z) the Swing Line Advances then
outstanding plus the aggregate Available Amount of all Letters of
Credit then outstanding exceeds (B) the Working Capital Facility on
such Business Day.
(iii) The Borrower shall, on each Business Day, pay to
the Administrative Agent for deposit in the L/C Cash Collateral Account
an amount sufficient to cause the aggregate amount on deposit in such
Account to equal the amount by which the aggregate Available Amount of
all Letters of Credit then outstanding exceeds the Letter of Credit
Facility on such Business Day.
(iv) All prepayments under this subsection (b) shall be made
together with accrued interest to the date of such prepayment on the
principal amount prepaid, but without penalty or premium.
(v) So long as no Default has occurred and is continuing, to
the extent that the provisions of Section 2.05(b)(i) would otherwise
require the application of any prepayment to Eurodollar Rate Advances
on a date that is not the last day of the then existing Interest Period
therefor, the Borrower shall have the right, in lieu of making such
prepayment on such date, to deposit the amount of such prepayment in
the Prepayment Account for disbursement and application in accordance
with the foregoing provisions of this Section 2.05 on the last day of
the then existing Interest Period for such Eurodollar Rate Advances.
SECTION 2.06. Interest. (a) Ordinary Interest. The
Borrower shall pay interest on the unpaid principal amount of each
Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per
annum:
(i) Base Rate Advances. During such periods as such Advance
is a Base Rate Advance, a rate per annum equal at all times to the
sum of (i) the Base Rate in effect from time to time plus (ii) the
Applicable Margin in effect from time to time, payable in arrears
monthly on the last day of each month during such periods and on
the date such Base Rate Advance shall be Converted or paid in
full.
(ii) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum equal at
all times during each Interest Period for such Advance to the sum
of (i) the Eurodollar Rate for such Interest Period for such
Advance plus (ii) the Applicable Margin in effect on the first day
of such Interest Period, payable in arrears on the last day of
such Interest Period.
(b) Default Interest. Upon the occurrence and during the
continuance of a Default, the Borrower shall pay interest on (i) the
unpaid principal amount of each Advance owing to each Lender, payable
in arrears on the dates referred to in clause (a)(i) or (a)(ii) above,
at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (a)(i)
or (a)(ii) above and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable hereunder which is
not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be
paid on Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.07. Fees. (a) Commitment Fee. The Borrower
shall pay to the Administrative Agent for the account of the Lenders a
commitment fee on the average daily Unused Working Capital Commitment
of such Lender plus its Pro Rata Share of the average daily outstanding
Swing Line Advances during the quarter for which such commitment fee is
payable, from the date hereof in the case of each Bank and from the
effective date specified in the Assignment and Acceptance pursuant to
which it became a Lender in the case of each other Lender until the
Termination Date at a rate per annum (the "Unused Commitment Fee Rate")
determined by reference to the Leverage Ratio in effect from time to
time as set forth below:
Level Leverage Ratio Unused
Commitment Fee Ra
te
Level 1 Less than or equal to 0.4000 0.250%
Level 2 Greater than 0.4000 and less 0.250%
than or equal to 0.4725
Level 3 Greater than 0.4725 and less 0.250%
than or equal to 0.4897
Level 4 Greater than 0.4897 and less 0.375%
than or equal to 0.5068
Level 5 Greater than 0.5068 0.500%
Such commitment fee shall in all cases be payable in arrears quarterly
on the last Business Day of each March, June, September and December,
commencing on September 30, 1995 and on the Termination Date; provided,
however, that any commitment fee accrued with respect to any of the
Commitments of a Defaulting Lender during the period prior to the time
such Lender became a Defaulting Lender and unpaid at such time shall
not be payable by the Borrower so long as such Lender shall be a
Defaulting Lender except to the extent that such commitment fee shall
otherwise have been due and payable by the Borrower prior to such time;
and provided further that no commitment fee shall accrue on any of the
Commitments of a Defaulting Lender so long as such Lender shall be a
Defaulting Lender.
(b) Administrative Agent's Fees. The Borrower shall pay to
the Administrative Agent for its own account such fees as may from time
to time be agreed between the Borrower and the Administrative Agent.
SECTION 2.08. Conversion of Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the
Administrative Agent not later than 11:00 A.M. (New York City time) on
the third Business Day prior to the date of the proposed Conversion and
subject to the provisions of Section 2.09, Convert all or any portion
of the Advances of one Type comprising the same Working Capital
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be
made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(c) and no Conversion of any Advances shall
result in more separate Working Capital Borrowings than permitted under
Section 2.02(c). Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion,
(ii) the Advances to be Converted and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest Period
for such Advances. Each notice of Conversion shall be irrevocable and
binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate
unpaid principal amount of Eurodollar Rate Advances comprising any
Borrowing shall be reduced, by payment or prepayment or otherwise, to
less than $5,000,000, such Advances shall automatically Convert into
Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent will forthwith so notify the Borrower
and the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance.
SECTION 2.09. Increased Costs, Etc. (a) If, due to either
(i) the introduction of or any change in or in the interpretation of
any law or regulation or (ii) the compliance with any guideline or
request from any central bank or other governmental authority (whether
or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or of making, funding or
maintaining Eurodollar Rate Advances (excluding for purposes of this
Section 2.09 any such increased costs resulting from Taxes or Other
Taxes (as to which Section 2.11 shall govern)) or of agreeing to issue
or of issuing or maintaining Letters of Credit or of agreeing to make
or of making or maintaining Letter of Credit Advances, then the
Borrower shall from time to time, upon demand by such Lender (with a
copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; provided,
however, that before making any such demand, each Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable Lending
Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost and would not, in the sole
judgment of such Lender, be otherwise disadvantageous to such Lender.
A certificate as to the amount of such increased cost, submitted to the
Borrower by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects
or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender
and that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend hereunder and other
commitments of such type or the issuance or maintenance of the Letters
of Credit (or similar contingent obligations), then, upon demand by
such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to the Administrative Agent for the account of
such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines
such increase in capital to be allocable to the existence of such
Lender's commitment to lend hereunder or to the issuance or maintenance
of any Letters of Credit. A certificate as to such amounts submitted
to the Borrower by such Lender shall be conclusive and binding for all
purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar
Rate for any Interest Period for such Advances will not adequately
reflect the cost to such Lenders of making, funding or maintaining
their Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the
Lenders, whereupon (i) each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance and (ii) the obligation of
the Lenders to make, or to Convert Advances into, Eurodollar Rate
Advances shall be suspended until the Administrative Agent shall notify
the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist; provided, however, that before
making any such demand, each Lender agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the
making of such a designation would allow such Lender or its Eurodollar
Lending Office to continue to perform its obligations to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar
Rate Advances and would not, in the sole judgment of such Lender, be
otherwise disadvantageous to such Lender.
(d) Notwithstanding any other provision of this Agreement,
if the introduction of or any change in or in the interpretation of any
law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any Lender
or its Eurodollar Lending Office to perform its obligations hereunder
to make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrower through the Administrative
Agent, (i) each Eurodollar Rate Advance will automatically, upon such
demand, Convert into a Base Rate Advance and (ii) the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances
shall be suspended until the Administrative Agent shall notify the
Borrower that such Lender has determined that the circumstances causing
such suspension no longer exist.
(e) Upon the occurrence and during the continuance of any
Default, (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a
Base Rate Advance and (ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Payments and Computations. (a) The Borrower
shall make each payment hereunder and under the Notes not later than
11:00 A.M. (New York City time) on the day when due in U.S. dollars to
the Administrative Agent at the Administrative Agent's Account in same
day funds. The Administrative Agent will promptly thereafter cause
like funds to be distributed (i) if such payment by the Borrower is in
respect of principal, interest, commitment fees or any other Obligation
then payable hereunder and under the Notes to more than one Lender, to
such Lenders for the account of their respective Applicable Lending
Offices ratably in accordance with the amounts of such respective
Obligations then payable to such Lenders and (ii) if such payment by
the Borrower is in respect of any Obligation then payable hereunder to
one Lender, to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant
to Section 9.07(d), from and after the effective date of such
Assignment and Acceptance, the Administrative Agent shall make all
payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments
in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to
the extent payment owed to such Lender is not made when due hereunder
or under the Note held by such Lender, to charge from time to time
against any or all of the Borrower's accounts with such Lender any
amount so due.
(c) All computations of interest based on the Base Rate
shall be made by the Administrative Agent on the basis of a year of 365
or 366 days, as the case may be, and all computations of interest based
on the Eurodollar Rate or the Federal Funds Rate and of all fees and
Letter of Credit commissions shall be made by the Administrative Agent
on the basis of a year of 360 days, in each case for the actual number
of days (including the first day but excluding the last day) occurring
in the period for which such interest, fees or commissions are payable.
Each determination by the Administrative Agent of an interest rate, fee
or commission hereunder shall be conclusive and binding for all
purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall
be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension
of time shall in such case be included in the computation of payment of
interest or commitment fee, as the case may be; provided, however,
that, if such extension would cause payment of interest on or principal
of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due
to any Lender hereunder that the Borrower will not make such payment in
full, the Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender on such due date an amount equal to the
amount then due such Lender. If and to the extent the Borrower shall
not have so made such payment in full to the Administrative Agent, each
such Lender shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Lender together with interest thereon,
for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.
SECTION 2.11. Taxes. (a) Any and all payments by the
Borrower hereunder or under the Notes shall be made, in accordance with
Section 2.10, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender, each Co-Agent and the Administrative Agent,
net income taxes that are imposed by the United States and franchise
taxes and net income taxes that are imposed on such Lender, such
Co-Agent or the Administrative Agent by the state or foreign
jurisdiction under the laws of which such Lender, such Co-Agent or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof and, in the case of each Lender, franchise taxes
and net income taxes that are imposed on such Lender by the state or
foreign jurisdiction of such Lender's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required
by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender, any Co-Agent or the
Administrative Agent, (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
2.11) such Lender, such Co-Agent or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges
or levies that arise from any payment made hereunder or under the Notes
or from the execution, delivery or registration of, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as
"Other Taxes").
(c) The Borrower shall indemnify each Lender, each Co-Agent
and the Administrative Agent for the full amount of Taxes and Other
Taxes, and for the full amount of taxes imposed by any jurisdiction on
amounts payable under this Section 2.11, paid by such Lender, such
Co-Agent or the Administrative Agent (as the case may be) and any
liability (including penalties, additions to tax, interest and
expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender,
such Co-Agent or the Administrative Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrower shall furnish to the Administrative Agent, at its address
referred to in Section 9.02, the original receipt of payment thereof or
a certified copy of such receipt. In the case of any payment hereunder
or under the Notes by the Borrower through an account or branch outside
the United States or on behalf of the Borrower by a payor that is not a
United States person, if the Borrower determines that no Taxes are
payable in respect thereof, the Borrower shall furnish, or shall cause
such payor to furnish, to the Administrative Agent, at such address, an
opinion of counsel acceptable to the Administrative Agent stating that
such payment is exempt from Taxes. For purposes of this subsection (d)
and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its
execution and delivery of this Agreement in the case of each Bank, and
on the date of the Assignment and Acceptance pursuant to which it
became a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the
Administrative Agent (but only so long thereafter as such Lender
remains lawfully able to do so), provide the Administrative Agent and
the Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party that reduces
the rate of withholding tax on payments under this Agreement or the
Notes or certifying that the income receivable pursuant to this
Agreement or the Notes is effectively connected with the conduct of a
trade or business in the United States. If the form provided by a
Lender at the time such Lender first becomes a party to this Agreement
indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at
such lesser rate only shall be considered excluded from Taxes for
periods governed by such form; provided, however, that, if at the date
of the Assignment and Acceptance pursuant to which a Lender assignee
becomes a party to this Agreement, the Lender assignor was entitled to
payments under subsection (a) in respect of United States withholding
tax with respect to interest paid at such date, then, to such extent,
the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect
to the Lender assignee on such date. If any form or document referred
to in this subsection (e) requires the disclosure of information, other
than information necessary to compute the tax payable and information
required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender reasonably considers to be confidential, the
Lender shall give notice thereof to the Borrower and shall not be
obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in
subsection (e) (other than if such failure is due to a change in law
occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under subsection
(e)), such Lender shall not be entitled to indemnification under
subsection (a) or (c) with respect to Taxes imposed by the United
States; provided, however, that should a Lender become subject to Taxes
because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as such Lender shall reasonably request
to assist such Lender to recover such Taxes.
(g) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.11 shall survive the payment in
full of principal and interest hereunder and under the Notes.
(h) Any Lender claiming any additional amounts payable
pursuant to this Section 2.11 agrees to use reasonable efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Eurodollar Lending
Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the sole judgment of such Lender, be otherwise
disadvantageous to such Lender.
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall
obtain at any time any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) (a) on account of
Obligations due and payable to such Lender hereunder and under the
Notes at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to
such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the
Notes at such time) of payments on account of the Obligations due and
payable to all Lenders hereunder and under the Notes at such time
obtained by all the Lenders at such time or (b) on account of
Obligations owing (but not due and payable) to such Lender hereunder
and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations
owing to such Lender at such time to (ii) the aggregate amount of the
Obligations owing (but not due and payable) to all Lenders hereunder
and under the Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lenders hereunder
and under the Notes at such time obtained by all the Lenders at such
time, such Lender shall forthwith purchase from the other Lenders such
participations in the Obligations due and payable or owing to them, as
the case may be, as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from
each other Lender shall be rescinded and such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such other
Lender's ratable share (according to the proportion of (i) the purchase
price paid to such Lender to (ii) the aggregate purchase price paid to
all Lenders) of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount
of such other Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount
paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.12 may, to
the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the
amount of such participation.
SECTION 2.13. Letters of Credit. (a) The Letter of Credit
Facility. Each Issuing Bank severally agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (together
with the Existing Letters of Credit referred to in Section 2.13(f), the
"Letters of Credit") for the account of the Borrower from time to time
on any Business Day during the period from the Effective Date until 60
days before the Termination Date (i) in an aggregate Available Amount
for all Letters of Credit issued by such Issuing Bank not to exceed at
any time such Issuing Bank's Letter of Credit Commitment and (ii) in an
Available Amount for each such Letter of Credit not to exceed the
lesser of (x) the Letter of Credit Facility at such time and (y) the
Unused Working Capital Commitments of the Lenders at such time. No
Letter of Credit shall have an expiration date (including all rights of
the Borrower or the beneficiary to require renewal) later than the
earlier of 30 days before the Termination Date and one year after the
date of issuance thereof. Within the limits of the Letter of Credit
Facility, and subject to the limits referred to above, the Borrower may
request the issuance of Letters of Credit under this Section 2.13(a),
repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.13(c) and request the issuance of additional
Letters of Credit under this Section 2.13(a).
(b) Request for Issuance. (i) Each Letter of Credit shall
be issued upon notice, given not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed
issuance of such Letter of Credit, by the Borrower to any Issuing Bank,
which shall give to the Administrative Agent and each Lender prompt
notice thereof by telex, telecopier or cable. Each such notice of
issuance of a Letter of Credit (a "Notice of Issuance") shall be by
telex, telecopier or cable, confirmed immediately in writing,
specifying therein the requested (A) date of such issuance (which shall
be a Business Day), (B) Available Amount of such Letter of Credit, (C)
expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit and (E) form of such Letter of
Credit, and shall be accompanied by such application and agreement for
letter of credit (a "Letter of Credit Agreement") as such Issuing Bank
may specify to the Borrower for use in connection with such requested
Letter of Credit. If (x) the requested form of such Letter of Credit
is acceptable to such Issuing Bank in its sole discretion and (y) it
has not received notice of objection to such issuance from the Required
Lenders, such Issuing Bank will, upon fulfillment of the applicable
conditions set forth in Article III, make such Letter of Credit
available to the Borrower at its office referred to in Section 9.02 or
as otherwise agreed with the Borrower in connection with such issuance.
In the event and to the extent that the provisions of any Letter of
Credit Agreement shall conflict with this Agreement, the provisions of
this Agreement shall govern.
(ii) Each Issuing Bank shall furnish (A) to the
Administrative Agent on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit
issued by such Issuing Bank during the previous month and drawings
during such month under all Letters of Credit issued by such Issuing
Bank, (B) to each Lender on the first Business Day of each month a
written report summarizing issuance and expiration dates of Letters of
Credit issued by such Issuing Bank during the preceding month and
drawings during such month under all Letters of Credit issued by such
Issuing Bank and (C) to the Administrative Agent and each Lender on the
first Business Day of each calendar quarter a written report setting
forth the average daily aggregate Available Amount during the preceding
calendar quarter of all Letters of Credit issued by such Issuing Bank.
(c) Drawing and Reimbursement. The payment by any Issuing
Bank of a draft drawn under any Letter of Credit shall constitute for
all purposes of this Agreement the making by such Issuing Bank of a
Letter of Credit Advance, which shall be a Base Rate Advance, in the
amount of such draft. Upon written demand by such Issuing Bank, with a
copy of such demand to the Administrative Agent, each other Lender
shall purchase from such Issuing Bank, and such Issuing Bank shall sell
and assign to each such other Lender, such other Lender's Pro Rata
Share of such outstanding Letter of Credit Advance as of the date of
such purchase, by making available for the account of its Applicable
Lending Office to the Administrative Agent for the account of such
Issuing Bank, by deposit to the Administrative Agent's Account, in same
day funds, an amount equal to the portion of the outstanding principal
amount of such Letter of Credit Advance to be purchased by such Lender.
The Borrower hereby agrees to each such sale and assignment. Each
Lender agrees to purchase its Pro Rata Share of an outstanding Letter
of Credit Advance on (i) the Business Day on which demand therefor is
made by the Issuing Bank which made such Advance, provided notice of
such demand is given not later than 11:00 A.M. (New York City time) on
such Business Day or (ii) the first Business Day next succeeding such
demand if notice of such demand is given after such time. Upon any
such assignment by an Issuing Bank to any other Lender of a portion of
a Letter of Credit Advance, such Issuing Bank represents and warrants
to such other Lender that such Issuing Bank is the legal and beneficial
owner of such interest being assigned by it, but makes no other
representation or warranty and assumes no responsibility with respect
to such Letter of Credit Advance, the Loan Documents or either Loan
Party. If and to the extent that any Lender shall not have so made the
amount of such Working Capital Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith
on demand such amount together with interest thereon, for each day from
the date of demand by such Issuing Bank until the date such amount is
paid to the Administrative Agent, at the Federal Funds Rate. If such
Lender shall pay to the Administrative Agent such amount for the
account of such Issuing Bank on any Business Day, such amount so paid
in respect of principal shall constitute a Letter of Credit Advance
made by such Lender on such Business Day for purposes of this
Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by such Issuing Bank shall be reduced by such amount on
such Business Day.
(d) Obligations Absolute. The Obligations of the Borrower
under this Agreement, any Letter of Credit Agreement and any other
agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances, including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, any Letter of Credit Agreement, any Letter of Credit or
any other agreement or instrument relating thereto (this Agreement
and all of the other foregoing being, collectively, the "L/C
Related Documents");
(ii) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Obligations of the
Borrower in respect of any L/C Related Document or any other
amendment or waiver of or any consent to departure from all or any
of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Borrower may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may
be acting), any Issuing Bank or any other Person, whether in
connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(v) payment by any Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from the Guaranty or any other guarantee, for all or any
of the Obligations of the Borrower in respect of the L/C Related
Documents; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including, without
limitation, any other circumstance that might otherwise constitute
a defense available to, or a discharge of, the Borrower, the
Guarantor or any other guarantor.
(e) Compensation. (i) The Borrower shall pay to the
Administrative Agent for the account of each Lender a commission on
such Lender's Pro Rata Share of the average daily aggregate Available
Amount of all Letters of Credit outstanding from time to time at the
rate per annum determined by reference to the Leverage Ratio in effect
from time to time as set forth below, payable in arrears quarterly on
the last Business Day of each March, June, September and December
commencing September 30, 1995 and on the Termination Date:
Level Leverage Ratio Letter of Credit
Fee Rate
Level 1 Less than or equal to 0.625%
0.4000
Level 2 Greater than 0.4000 and 0.750%
less than or equal to
0.4725
Level 3 Greater than 0.4725 and 1.00%
less than or equal to
0.4897
Level 4 Greater than 0.4897 and 1.50%
less than or equal to
0.5068
Level 5 Greater than 0.5068 2.00%
(ii) The Borrower shall pay to each Issuing Bank, for its own
account, such commissions, issuance fees, transfer fees and other fees
and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and such Issuing Bank shall agree.
(f) Existing Letters of Credit. Effective as of the
Effective Date, (i) the "Letters of Credit" issued for the account of
the Borrower by any Existing Issuing Bank pursuant to the Existing
Credit Agreement (such "Letters of Credit" as are outstanding
thereunder on the date hereof and set forth on Schedule 2.13(f) hereto
being the "Existing Letters of Credit"), will be deemed to be Letters
of Credit hereunder, (ii) the Existing Letters of Credit will no longer
be Obligations outstanding under the Existing Credit Agreement and
(iii) each such Existing Issuing Bank (x) hereby sells and assigns all
of its rights in and to, and all of its obligations under, the Existing
Letter of Credit Commitment held by it, the amount of which is set
forth opposite its name on Schedule 9.12 hereto, to the Issuing Banks,
and each Issuing Bank hereby purchases and assumes, based on its pro
rata share of the Letter of Credit Commitments, all of the Existing
Issuing Banks' rights in and to, and obligations under, the Existing
Letter of Credit Commitments and (y) will be deemed to have sold and
transferred an undivided interest and participation in respect of the
Existing Letters of Credit issued by it and each Lender hereunder will
be deemed to have purchased and received, without further action on the
part of any party, an undivided interest and participation in such
Existing Letters of Credit, based on such Lender's Pro Rata Share of
the Working Capital Facility.
SECTION 2.14. Use of Proceeds. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use such
proceeds) solely (i) to refinance Debt of the Borrower under the
Existing Credit Agreement, (ii) to provide working capital for the
Borrower and its Subsidiaries and (iii) for other general corporate
purposes.
SECTION 2.15. Defaulting Lenders. (a) In the event that,
at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to the Borrower and
(iii) the Borrower shall be required to make any payment hereunder or
under any other Loan Document to or for the account of such Defaulting
Lender, then the Borrower may, so long as no Default shall occur or be
continuing at such time and to the fullest extent permitted by
applicable law, set off and otherwise apply the Obligation of the
Borrower to make such payment to or for the account of such Defaulting
Lender against the Obligation of such Defaulting Lender to make such
Defaulted Advance. In the event that the Borrower shall so set off and
otherwise apply the Obligation of the Borrower to make any such payment
against the Obligation of such Defaulting Lender to make any such
Defaulted Advance on any date, the amount so set off and otherwise
applied by the Borrower shall constitute for all purposes of this
Agreement and the other Loan Documents an Advance by such Defaulting
Lender made on such date under the Facility pursuant to which such
Defaulted Advance was originally required to have been made pursuant to
Section 2.01. Such Advance shall be a Base Rate Advance and shall be
considered, for all purposes of this Agreement, to comprise part of the
Borrowing in connection with which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01, even if
the other Advances comprising such Borrowing shall be Eurodollar
Advances on the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Administrative Agent at
any time the Borrower reduces the amount of the Obligation of the
Borrower to make any payment otherwise required to be made by it
hereunder or under any other Loan Document as a result of the exercise
by the Borrower of its right set forth in this subsection (a) and shall
set forth in such notice (A) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and
(B) the amount set off and otherwise applied in respect of such
Defaulted Advance pursuant to this subsection (a). Any portion of such
payment otherwise required to be made by the Borrower to or for the
account of such Defaulting Lender which is paid by the Borrower, after
giving effect to the amount set off and otherwise applied by the
Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this
Section 2.15.
(b) In the event that, at any one time, (i) any Lender shall
be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to the Administrative Agent or any of the other
Lenders and (iii) the Borrower shall make any payment hereunder or
under any other Loan Document to the Administrative Agent for the
account of such Defaulting Lender, then the Administrative Agent may,
on its behalf or on behalf of such other Lenders and to the fullest
extent permitted by applicable law, apply at such time the amount so
paid by the Borrower to or for the account of such Defaulting Lender to
the payment of each such Defaulted Amount to the extent required to pay
such Defaulted Amount. In the event that the Administrative Agent
shall so apply any such amount to the payment of any such Defaulted
Amount on any date, the amount so applied by the Administrative Agent
shall constitute for all purposes of this Agreement and the other Loan
Documents payment, to such extent, of such Defaulted Amount on such
date. Any such amount so applied by the Administrative Agent shall be
retained by the Administrative Agent or distributed by the
Administrative Agent to such other Lenders, ratably in accordance with
the respective portions of such Defaulted Amounts payable at such time
to the Administrative Agent and such other Lenders and, if the amount
of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative
Agent and the other Lenders, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted
Amount then owing to the Administrative Agent (in its capacity as
Administrative Agent); and
(ii) second, to any other Lenders for any Defaulted Amounts
then owing to such other Lenders, ratably in accordance with such
respective Defaulted Amounts then owing to such other Lenders.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied
by the Administrative Agent pursuant to this subsection (b), shall be
applied by the Administrative Agent as specified in subsection (c) of
this Section 2.15.
(c) In the event that, at any one time, (i) any Lender shall
be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) the Borrower, the
Administrative Agent or any other Lender shall be required to pay or
distribute any amount hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then the Borrower or such
other Lender shall pay such amount to the Administrative Agent to be
held by the Administrative Agent, to the fullest extent permitted by
applicable law, in escrow or the Administrative Agent shall, to the
fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in
escrow under this subsection (c) shall be deposited by the
Administrative Agent in an account with Citibank, in the name and under
the control of the Administrative Agent, but subject to the provisions
of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Citibank's standard
terms applicable to escrow accounts maintained with it. Any interest
credited to such account from time to time shall be held by the
Administrative Agent in escrow under, and applied by the Administrative
Agent from time to time in accordance with the provisions of, this
subsection (c). The Administrative Agent shall, to the fullest extent
permitted by applicable law, apply all funds so held in escrow from
time to time to the extent necessary to make any Advances required to
be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in
escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the
following order of priority:
(i) first, to the Administrative Agent for any amount then
due and payable by such Defaulting Lender to the Administrative
Agent (in its capacity as Administrative Agent) hereunder;
(ii) second, to the Co-Agents for any amount then due and
payable by such Defaulting Lender to the Co-Agents hereunder,
ratably in accordance with such respective amounts then due and
payable to the Co-Agents (in their capacity as Co-Agents);
(iii) third, to any other Lenders for any amount then due
and payable by such Defaulting Lender to such other Lenders
hereunder, ratably in accordance with such respective amounts then
due and payable to such other Lenders; and
(iv) fourth, to the Borrower for any Advance then required to
be made by such Defaulting Lender pursuant to a Commitment of such
Defaulting Lender.
In the event that such Defaulting Lender shall, at any time, cease to
be a Defaulting Lender, any funds held by the Administrative Agent in
escrow at such time with respect to such Defaulting Lender shall be
distributed by the Administrative Agent to such Defaulting Lender and
applied by such Defaulting Lender to the Obligations owing to such
Lender at such time under this Agreement and the other Loan Documents
ratably in accordance with the respective amounts of such Obligations
outstanding at such time.
(d) The rights and remedies against a Defaulting Lender
under this Section 2.15 are in addition to other rights and remedies
that the Borrower may have against such Defaulting Lender with respect
to any Defaulted Advance and that the Administrative Agent, any
Co-Agent or any Lender may have against such Defaulting Lender with
respect to any Defaulted Amount.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.13. Sections 2.01 and 2.13 of this Agreement shall
become effective on and as of the first date (the "Effective Date") on
which the following conditions precedent have been satisfied:
(a) The Lenders shall be satisfied with the corporate and
legal structure and capitalization of each Loan Party and the
Joint Venture Company, including the terms and conditions of the
charter, bylaws and each class of capital stock of each Loan Party
and of each agreement or instrument relating to such structure or
capitalization.
(b) There shall have occurred no Material Adverse Change
since June 30, 1994.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting either Loan Party or any of
their Subsidiaries pending or threatened before any court,
governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect other than the matters
described on Schedule 3.01(c) (the "Disclosed Litigation") or (ii)
purports to affect the legality, validity or enforceability of
this Agreement, any Note, any other Loan Document, any Related
Document or the consummation of the transactions contemplated
hereby, and there shall have been no adverse change in the status,
or financial effect on either Loan Party or any of their
Subsidiaries, of the Disclosed Litigation from that described in
the Pre-Commitment Information.
(d) All Capital Stock or other ownership interests of the
Borrower and the Borrower's Subsidiaries shall be owned by the
Guarantor or the Borrower or one or more of the Borrower's
Subsidiaries, in each case free and clear of any Lien.
(e) The Lenders shall have completed a due diligence
investigation of the Loan Parties and their Subsidiaries in scope,
and with results, satisfactory to the Lenders, and nothing shall
have come to the attention of the Lenders during the course of
such due diligence investigation to lead them to believe that the
information provided by or on behalf of the Guarantor or the
Borrower to the Lenders prior to the date hereof (the "Pre-Com
mitment Information") was or has become misleading, incorrect or
incomplete in any material respect; without limiting the
generality of the foregoing, the Lenders shall have been given
such access to the management, records, books of account,
contracts and properties of the Guarantor, the Borrower and their
Subsidiaries as they shall have requested.
(f) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby
shall have been obtained (without the imposition of any conditions
that are not acceptable to the Lenders) and shall remain in
effect, and no law or regulation shall be applicable that
restrains, prevents or imposes materially adverse conditions upon
the transactions contemplated hereby.
(g) The Lenders shall be reasonably satisfied with the
amount, parties, terms and conditions of all insurance policies of
the Borrower and the Guarantor.
(h) The Borrower shall have paid all accrued fees and
expenses of the Administrative Agent, the Co-Agents and the
Lenders (including the accrued fees and expenses of Shearman &
Sterling, counsel to the Administrative Agent and the Co-Agents).
(i) The Administrative Agent shall have received on or
before the Effective Date the following, each dated such day
(unless otherwise specified), in form and substance satisfactory
to the Lenders (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender:
(i) The Notes to the order of the Lenders.
(ii) Certified copies of the resolutions of the
Board of Directors of the Borrower and the Guarantor
approving this Agreement, the Notes and each other Loan
Document to which it is or is to be a party, and of all
documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this
Agreement, the Notes and each other Loan Document.
(iii) A copy of a certificate of the Secretary
of State of the State of Delaware, dated reasonably near the
Effective Date, listing the charter of the Borrower and the
Guarantor and each amendment thereto on file in his office
and certifying that (A) such amendments are the only
amendments to the Borrower's or the Guarantor's charter on
file in his office, (B) the Borrower and the Guarantor have
paid all franchise taxes to the date of such certificate and
(C) the Borrower and the Guarantor are duly incorporated and
in good standing under the laws of the State of Delaware.
(iv) A certificate of the Borrower and the
Guarantor, signed on behalf of the Borrower and the Guarantor
by its President or a Vice President and its Secretary or any
Assistant Secretary, dated the Effective Date (the statements
made in which certificate shall be true on and as of the
Effective Date), certifying as to (A) the absence of any
amendments to the charter of the Borrower or the Guarantor
since the date of the Secretary of State's certificate
referred to in Section 3.01(i)(iii), (B) a true and correct
copy of the bylaws of the Borrower and the Guarantor as in
effect on the Effective Date, (C) the due incorporation and
good standing of the Borrower and the Guarantor as a
corporation organized under the laws of the State of
Delaware, and the absence of any proceeding for the
dissolution or liquidation of the Borrower or the Guarantor,
(D) the truth of the representations and warranties contained
in the Loan Documents as though made on and as of the
Effective Date and (E) the absence of any event occurring and
continuing that constitutes a Default.
(v) A certificate of the Secretary or an Assistant
Secretary of the Borrower and the Guarantor certifying the
names and true signatures of the officers of the Borrower and
the Guarantor authorized to sign this Agreement, the Notes
and each other Loan Document to which they are or are to be
parties and the other documents to be delivered hereunder and
thereunder.
(vi) Certified copies of each of the Related
Documents, duly executed by the parties thereto and in form
and substance satisfactory to the Lenders, together with all
agreements, instruments and other documents delivered in
connection therewith.
(vii) Such financial, business and other
information regarding each Loan Party and their respective
Subsidiaries as the Lenders shall have requested, including,
without limitation, information as to possible contingent
liabilities, tax matters, environmental matters, obligations
under ERISA and Welfare Plans, collective bargaining
agreements and other arrangements with employees, annual
financial statements dated June 30, 1994, interim financial
statements dated the end of the most recent fiscal quarter
for which financial statements are available (or, in the
event the Lenders' due diligence review reveals material
changes since such financial statements, as of a later date
within 45 days of the Effective Date), pro forma financial
statements as to the Guarantor and forecasts prepared by
management of the Guarantor, in form and substance
satisfactory to the Lenders, of balance sheets, income
statements and cash flow statements on a monthly basis for
the first year following the Effective Date and on an annual
basis for each year thereafter until the Termination Date.
(viii) A letter, in form and substance
satisfactory to the Co-Agents, from the Guarantor to Ernst &
Young, its independent certified public accountants, advising
such accountants that the Co-Agents, the Administrative Agent
and the Lenders have been authorized to exercise all rights
of the Guarantor to require such accountants to disclose any
and all financial statements and any other information of any
kind that they may have with respect to the business,
condition (financial or otherwise), operations, performance,
properties or prospects of the Guarantor and its Subsidiaries
and directing such accountants to comply with any reasonable
request of the Administrative Agent or any Lender for such
information.
(ix) Certified copies of all Material Contracts of
the Borrower, the Guarantor and their respective
Subsidiaries.
(x) A favorable opinion of Kaye, Scholer, Fierman,
Hays & Handler, special counsel for the Borrower and the
Guarantor, in substantially the form of Exhibit D hereto and
as to such other matters as any Lender through the
Administrative Agent may reasonably request.
(xi) A favorable opinion of Marschall I. Smith,
Esq., General Counsel of the Borrower and the Guarantor, in
substantially the form of Exhibit E hereto and as to such
other matters as any Lender through the Administrative Agent
may reasonably request.
(xii) A favorable opinion of Shearman &
Sterling, counsel for the Co-Agents, in form and substance
satisfactory to the Co-Agents.
(j) On the Effective Date, the following statements shall be
true and the Administrative Agent shall have received for the
account of each Lender a certificate signed by a duly authorized
officer of the Borrower, dated the Effective Date, stating that:
(i) the representations and warranties contained
in each Loan Document are correct on and as of the Effective
Date, as though made on and as of such date other than any
such representations or warranties that, by their terms,
refer to a date other than the date of such Borrowing or
issuance; and
(ii) no event has occurred and is continuing that
constitutes a Default.
(k) All accrued interest, fees and other amounts owing to
the Existing Lenders, the Existing Issuing Banks, the Co-Agents
and the Administrative Agent in connection with the Existing
Credit Agreement shall have been paid in full.
(l) The Borrower shall have notified each Lender and the
Administrative Agent in writing as to the proposed Effective Date.
SECTION 3.02. Conditions Precedent to Each Borrowing and
Issuance, Etc. The obligation of each Lender to make an Advance (other
than a Letter of Credit Advance made by an Issuing Bank or a Lender
pursuant to Section 2.13(c) and a Swing Line Advance made by a Lender
pursuant to Section 2.02(b)) on the occasion of each Borrowing
(including the initial Borrowing), and the right of the Borrower to
request the issuance of Letters of Credit (including the initial
issuance of Letters of Credit) and Swing Line Borrowings, shall be
subject to the conditions precedent that the Effective Date shall have
occurred and on the date of such Borrowing or issuance (a) the
following statements shall be true (and each of the giving of the
applicable Notice of Borrowing, Notice of Swing Line Borrowing or
Notice of Issuance and the acceptance by the Borrower of the proceeds
of such Borrowing or of such Letter of Credit shall constitute a
representation and warranty by the Borrower that on the date of such
Borrowing or issuance such statements are true):
(i) the representations and warranties contained in each
Loan Document are correct on and as of the date of such Borrowing
or issuance, before and after giving effect to such Borrowing or
issuance and to the application of the proceeds therefrom, as
though made on and as of such date other than any such
representations or warranties that, by their terms, refer to a
date other than the date of such Borrowing or issuance; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or from the application of the
proceeds therefrom, that constitutes a Default;
and (b) the Administrative Agent shall have received such other
approvals, opinions or documents as any Lender or any Issuing Bank
through the Administrative Agent may reasonably request in order to
confirm (i) the accuracy of the Borrower's and the Guarantor's
representations and warranties in the Loan Documents, (ii) the
Borrower's and the Guarantor's timely compliance with the terms,
covenants and agreements set forth in the Loan Documents and (iii) the
absence of any Default.
SECTION 3.03. Determinations Under Section 3.01. For
purposes of determining compliance with the conditions specified in
Section 3.01, each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other
matter required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lenders unless an officer of the
Administrative Agent responsible for the transactions contemplated by
the Loan Documents shall have received notice from such Lender prior to
the date that the Borrower, by notice to the Lenders, designates as the
proposed Effective Date, specifying its objection thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower
and the Guarantor. Each of the Borrower and the Guarantor represents
and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized,
validly existing and good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in
good standing as a foreign corporation in each other jurisdiction
in which it owns or leases property or in which the conduct of its
business requires it to so qualify or be licensed except where the
failure to so qualify or be licensed could not be reasonably
likely to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own or lease and
operate its properties and to carry on its business as now
conducted and as proposed to be conducted. All of the outstanding
capital stock of the Borrower has been validly issued, is fully
paid and non-assessable and is owned by the Guarantor free and
clear of all Liens.
(b) Set forth on Schedule 4.01(b) hereto is a complete and
accurate list of all Subsidiaries of each Loan Party, showing as
of the date hereof (as to each such Subsidiary) the jurisdiction
of its incorporation, the number of shares of each class of
capital stock authorized, and the number outstanding, on the date
hereof and the percentage of the outstanding shares of each such
class owned (directly or indirectly) by such Loan Party and the
number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding capital stock of all of such
Subsidiaries has been validly issued, is fully paid and
non-assessable and is owned by such Loan Party or one or more of
its Subsidiaries free and clear of all Liens. Each such
Subsidiary (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a
foreign corporation in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires
it to so qualify or be licensed except where the failure to so
qualify or be licensed could not be reasonably likely to have a
Material Adverse Effect and (iii) has all requisite corporate
power and authority to own or lease and operate its properties and
to carry on its business as now conducted and as proposed to be
conducted.
(c) The execution, delivery and performance by each Loan
Party of this Agreement, the Notes, each other Loan Document and
each Related Document to which it is or is to be a party, and the
consummation of transactions contemplated hereby, are within such
Loan Party's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene such Loan
Party's charter or by-laws, (ii) violate any law (including,
without limitation, the Securities Exchange Act of 1934 and the
Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970), rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (iii) conflict with or result in
the breach of, or constitute a default under, any material
contract, loan agreement, indenture, mortgage, deed of trust,
material lease or other instrument binding on or affecting either
Loan Party, any of its Subsidiaries or any of their properties or
(iv) result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of either Loan Party
or any of its Subsidiaries. No Loan Party or any of its
Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award
or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation
or breach of which could be reasonably likely to have a Material
Adverse Effect.
(d) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory
body or any other third party is required for (i) the due
execution, delivery, recordation, filing or performance by either
Loan Party of this Agreement, the Notes, any other Loan Document
or any Related Document to which it is or is to be a party, or for
the consummation of the transactions contemplated hereby or
(ii) the exercise by the Administrative Agent, any Co-Agent or any
Lender of its rights under the Loan Documents. All applicable
waiting periods in connection with the transactions contemplated
hereby have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially
adverse conditions upon the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired
by any of them.
(e) This Agreement has been, and each of the Notes, each
other Loan Document and each Related Document when delivered
hereunder will have been, duly executed and delivered by each Loan
Party party thereto. This Agreement is, and each of the Notes,
each other Loan Document and each Related Document when delivered
hereunder will be, the legal, valid and binding obligation of each
Loan Party party thereto, enforceable against such Loan Party in
accordance with its terms.
(f) The Consolidated balance sheets of the Guarantor and its
Subsidiaries as at June 30, 1994, and the related Consolidated
statements of income and cash flows of the Guarantor and its
Subsidiaries for the fiscal year then ended, accompanied by an
opinion of Ernst & Young, independent public accountants, and the
Consolidated balance sheets of the Guarantor and its Subsidiaries
as at March 31, 1995, and the related Consolidated statements of
income and cash flows of the Guarantor and its Subsidiaries for
the nine months then ended, duly certified by the chief financial
officer of the Guarantor, copies of which have been furnished to
each Lender, fairly present, subject, in the case of said balance
sheets as at March 31, 1995, and said statements of income and
cash flows for the nine months then ended, to year-end audit
adjustments, the Consolidated financial condition of the Guarantor
and its Subsidiaries as at such dates and the Consolidated results
of the operations of the Guarantor and its Subsidiaries for the
periods ended on such dates, all in accordance with generally
accepted accounting principles applied on a consistent basis, and
since June 30, 1994, there has been no Material Adverse Change.
(g) The Consolidated pro forma statements of income and cash
flows of the Guarantor and its Subsidiaries for the five-year
period ending June 30, 2000, certified by the chief financial
officer of the Guarantor, copies of which have been furnished to
each Lender, fairly present the Consolidated pro forma results of
operations of the Guarantor and its Subsidiaries for the five-year
period ended on such date, in each case giving effect to the
transactions contemplated hereby, all in accordance with GAAP.
(h) The Consolidated forecasted balance sheets, income
statements and cash flows statements of the Guarantor and its
Subsidiaries delivered to the Lenders pursuant to
Section 3.01(i)(vii) or 5.03(d) were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were
fair in the light of conditions existing at the time of delivery
of such forecasts, and represented, at the time of delivery, the
Guarantor's best estimate of its future financial performance.
(i) Neither the Pre-Commitment Information nor any other
information, exhibit or report furnished by either Loan Party to
the Co-Agents or any Lender in connection with the negotiation of
the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made
therein not misleading at the time and under the circumstances
when given.
(j) There is no action, suit, investigation, litigation or
proceeding affecting either Loan Party or any of their
Subsidiaries, including any Environmental Action, pending or
threatened before any court, governmental agency or arbitrator
that (i) could reasonably be expected to have a Material Adverse
Effect (other than the Disclosed Litigation) or (ii) purports to
affect the legality, validity or enforceability of this Agreement,
any Note, any other Loan Document or any Related Document or the
consummation of the transactions contemplated hereby, and there
has been no material adverse change in the status, or financial
effect on either Loan Party or any of their Subsidiaries, of the
Disclosed Litigation from that described on Schedule 3.01(c).
(k) No proceeds of any Advance will be used to acquire, in
connection with a hostile or contested bid, any equity security of
a class that is registered pursuant to Section 12 of the
Securities Exchange Act of 1934.
(l) (A) The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying, and no
proceeds of any Advance will be used to extend credit to others
for the purpose of purchasing or carrying, Margin Stock, and (B)
no proceeds of any Advance will be used to purchase or carry any
Margin Stock in connection with a hostile or contested bid.
(m) Set forth on Schedule 4.01(m) hereto is a complete and
accurate list of all Plans, Multiemployer Plans and Welfare Plans
with respect to any employees of either Loan Party or any of their
Subsidiaries.
(n) No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan of either Loan Party or any of its
ERISA Affiliates.
(o) Schedule B (Actuarial Information) to the 1994 annual
report (Form 5500 Series) for each Plan of either Loan Party or
any of its ERISA Affiliates, copies of which have been filed with
the Internal Revenue Service and furnished to the Lenders, is
complete and accurate and fairly presents the funding status of
such Plan, and since the date of such Schedule B there has been no
material adverse change in such funding status.
(p) Neither Loan Party nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal
Liability to any Multiemployer Plan.
(q) Neither Loan Party nor any of its ERISA Affiliates has
been notified by the sponsor of a Multiemployer Plan of either
Loan Party or any of its ERISA Affiliates that such Multiemployer
Plan is in reorganization or has been terminated, within the
meaning of Title IV of ERISA, and no such Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated,
within the meaning of Title IV of ERISA.
(r) As of the Effective Date, the present value of retiree
medical benefits, utilizing reasonable actuarial assumptions, for
which the Loan Parties and their Subsidiaries are liable does not
exceed $110,000,000.
(s) Except as described on Schedule 3.01(c), neither the
business nor the properties of either Loan Party or any of its
Subsidiaries are affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance) that could
reasonably be expected to have a Material Adverse Effect.
(t) Except as set forth on Schedule 4.01(t), the operations
and properties of each Loan Party and each of its Subsidiaries
comply in all material respects with all Environmental Laws, all
necessary Environmental Permits have been obtained and are in
effect for the operations and properties of each Loan Party and
its Subsidiaries, each Loan Party and its Subsidiaries are in
compliance in all material respects with all such Environmental
Permits, and no circumstances exist that could reasonably be
expected to (i) form the basis of an Environmental Action against
either Loan Party or any of its Subsidiaries or any of their
properties that could reasonably be expected to have a Material
Adverse Effect or (ii) cause any such property to be subject to
any restrictions on ownership, occupancy, use or transferability
under any Environmental Law.
(u) Except as set forth on Schedule 4.01(u), none of the
properties of either Loan Party or any of its Subsidiaries is
listed or proposed for listing on the National Priorities List
under CERCLA or on the Comprehensive Environmental Response,
Compensation and Liability Information System maintained by the
Environmental Protection Agency or, to the best of the knowledge
of either Loan Party or any of its Subsidiaries, any analogous
state list of sites requiring investigation or cleanup or is
adjacent to any such property.
(v) Except as set forth on Schedule 4.01(v), to the best
knowledge of either Loan Party or any of its Subsidiaries (i)
neither Loan Party nor any of its Subsidiaries has transported or
arranged for the transportation of any Hazardous Materials to any
location that is listed or proposed for listing on the National
Priorities List under CERCLA or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained
by the Environmental Protection Agency or any analogous state list
and (ii) Hazardous Materials have not been generated, used,
treated, handled, stored or disposed of on, or released or
transported to or from, any property of either Loan Party or any
of its Subsidiaries except in material compliance with all
Environmental Laws and Environmental Permits, and neither Loan
Party nor any of its Subsidiaries has any knowledge that any other
wastes generated at any such properties have been disposed of
other than in compliance with all Environmental Laws and
Environmental Permits.
(w) Neither Loan Party nor any of its Subsidiaries is a
party to any indenture, loan or credit agreement or any lease or
other agreement or instrument or subject to any charter or
corporate restriction that could reasonably be expected to have a
Material Adverse Effect.
(x) Each Loan Party and each of its Subsidiaries has filed,
has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has
paid all taxes shown thereon to be due, together with applicable
interest and penalties.
(y) Neither Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as
amended. Neither the making of any Advances, nor the issuance of
any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of the
other transactions contemplated hereby, will violate any provision
of such Act or any rule, regulation or order of the Securities and
Exchange Commission thereunder.
(z) Set forth on Schedule 4.01(z) hereto is a complete and
accurate list of all outstanding Debt of $500,000 or more of each
Loan Party and their Subsidiaries, showing as of the date hereof
the principal amount outstanding thereunder; there exists no
default as of such date under the provisions of any instrument
evidencing such Debt or any agreement relating thereto.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and
accurate list of all Material Contracts of each Loan Party and
their Subsidiaries, showing as of the date hereof the parties,
subject matter and term thereof. Each such Material Contract has
been duly authorized, executed and delivered by all parties
thereto, has not been amended or otherwise modified (except as
permitted by Section 5.02(l)), is in full force and effect and is
binding upon and enforceable against all parties thereto in
accordance with its terms, and there exists no default under any
Material Contract by any party thereto.
(bb) Set forth on Schedule 4.01(bb) hereto is a complete and
accurate list of all Investments held by each Loan Party or any of
their Subsidiaries, showing as of the date hereof the amount,
obligor or issuer and maturity, if any, thereof.
(cc) Set forth on Schedule 4.01(cc) hereto is a complete and
accurate list of all leases with lease payments exceeding $25,000
in any year during the term thereof, and under which each Loan
Party or any of their Subsidiaries is the lessee, showing as of
the date hereof the subject matter, expiration date and annual
rental cost thereof. Each such lease is the legal, valid and
binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(dd) Following application of the proceeds of each Advance,
not more than 25% of the value of the assets (of either Loan Party
individually or with its Subsidiaries taken as a whole) subject to
the provisions of Section 5.02(a), 5.02(e) or 5.20(n) or subject
to any restriction contained in any agreement or instrument
between either Loan Party and any Lender or any Affiliate of any
Lender relating to Debt and within the scope of Section 6.01(e)
will be Margin Stock.
(ee) This Agreement, as an amendment and restatement of the
Existing Credit Agreement, constitutes the Credit Agreement
referred to in the Subordination Agreement and the Administrative
Agent, the Co-Agents and the Lenders hereunder are fully entitled
to the benefits of, and have all rights and remedies of the
Administrative Agent, the Co-Agents and the Lenders under and as
defined in, the Subordination Agreement.
ARTICLE V
COVENANTS OF THE BORROWER AND THE GUARANTOR
SECTION 5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any
Lender shall have any Commitment hereunder, each of the Borrower and
the Guarantor will, unless the Required Lenders shall otherwise consent
in writing:
(a) Compliance with Laws, Etc. Comply, and cause each of
its Subsidiaries to comply, in all material respects, with all
applicable laws, rules, regulations and orders, such compliance to
include, without limitation, compliance with ERISA and the
Racketeer Influenced and Corrupt Organizations Chapter of the
Organized Crime Control Act of 1970.
(b) Payment of Taxes, Etc. Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its
property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property; provided, however, that neither
the Borrower, the Guarantor nor any of their Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge,
levy or claim that is being contested in good faith and by proper
proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches
to its property and becomes enforceable against its other
creditors.
(c) Compliance with Environmental Laws. Comply, and cause
each of its Subsidiaries and all lessees and other Persons
occupying its properties to comply, in all material respects, with
all Environmental Laws and Environmental Permits applicable to its
operations and properties; obtain and renew all Environmental
Permits necessary for its operations and properties; establish,
maintain and follow procedures designed to prevent any release or
other disposal by the Guarantor, the Borrower or any of their
respective Subsidiaries of any solid or hazardous waste, hazardous
or toxic substance or material, pollutant, contaminant or other
such substance, as those terms are used or defined in any
applicable federal, state or local statute, regulation or
ordinance, on, beneath or near any property or facility owned or
operated by the Guarantor, the Borrower or their respective
Subsidiaries, except to the extent such release or other disposal
is in compliance in all material respects with applicable law or
regulation or with the terms of a valid permit granted to the
Guarantor, the Borrower or their respective Subsidiaries by
applicable authorities; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other
action necessary to remove and clean up all Hazardous Materials
from any of its properties, in accordance with the requirements of
all Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to
undertake any such cleanup, removal, remedial or other action to
the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(d) Maintenance of Insurance. Maintain, and cause each of
its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same
general areas in which the Borrower, the Guarantor or such
Subsidiary operates, and advise the Administrative Agent promptly
of any cancellation of a material policy or material reduction or
amendment, provided that in any event the Guarantor shall
maintain:
(i) insurance against loss or damage covering all
of the tangible real and personal property and improvements
owned or operated by the Guarantor or any of its
Subsidiaries, by reason of any Peril in amounts as shall be
reasonable and customary;
(ii) automobile liability insurance for bodily
injury and property damage in respect of all vehicles
(whether owned, hired or rented by the Guarantor or any of
its Subsidiaries) in such amounts as are reasonable and
customary;
(iii) comprehensive general liability insurance
against claims for bodily injury, death or property damage
occurring on, in or about such properties and adjoining
streets and sidewalks, in such amounts as are then customary
for property similar in use and location;
(iv) workers' compensation insurance and/or
permitted self-insurance (including employers' liability
insurance) to the extent required by applicable law;
(v) product liability insurance against claims for
bodily injury, death or property damage resulting from the
use of products sold by the Guarantor in such amounts as are
reasonable and customary;
(vi) business interruption insurance against loss
of operating income earned from the operation of any
production facility or the principal offices of the Guarantor
and its Subsidiaries by reason of any Peril affecting the
operation thereof, and insurance against any other insurable
loss of operating income by reason of any business
interruption affecting the Guarantor to the extent covered by
standard business interruption policies in the States in
which such production facilities or offices are located,
which insurance shall in each case cover gross earnings by
reason of the particular Peril or other insurable business
interruption; and
(vii) such other insurance in each case as
generally carried by owners of similar properties in the
States in which such properties are located in such amounts
and against such risks as are reasonable and customary.
(e) Preservation of Corporate Existence, Etc. Preserve and
maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Borrower and its
Subsidiaries may consummate any merger or consolidation permitted
under Section 5.02(d) and provided further that neither Loan Party
nor any of their Subsidiaries shall be required to preserve any
right or franchise if the Board of Directors of such Loan Party or
such Subsidiary shall determine that the preservation thereof is
no longer desirable in the conduct of the business of such Loan
Party or such Subsidiary, as the case may be, and that the loss
thereof is not disadvantageous in any material respect to such
Loan Party or such Subsidiary, as the case may be, or to the
Lenders.
(f) Visitation Rights. At any reasonable time and from time
to time, upon reasonable prior notice, permit the Administrative
Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the
Borrower, the Guarantor and any of their Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower, the
Guarantor and any of their Subsidiaries with any of their officers
or directors and with their independent certified public
accountants.
(g) Preparation of Environmental Reports. At the request of
the Administrative Agent at the following times: (i) upon the
occurrence and during the continuance of a Default, (ii) upon the
reasonable belief of the Required Lenders or the Administrative
Agent that Hazardous Materials contamination may be present on a
property of a Loan Party or any of its Subsidiaries and (iii) in
addition to the times referred to in clauses (i) and (ii) above,
once a year during the term of this Agreement, provide to the
Lenders within 120 days after such request, at the expense of the
Borrower, an environmental site assessment report for all of the
Borrower's, the Guarantor's and their Subsidiaries' properties
described in such request, prepared by an environmental consulting
firm reasonably acceptable to the Administrative Agent indicating
the presence or absence of Hazardous Materials and the estimated
cost of any compliance, removal or remedial action in connection
with any Hazardous Materials on such properties; without limiting
the generality of the foregoing, if the Administrative Agent
reasonably determines at any time that a material risk exists that
any such report will not be provided within the time referred to
above, the Administrative Agent may retain an environmental
consulting firm to prepare such report at the expense of the
Borrower, and each of the Borrower and the Guarantor hereby grants
and agrees to cause any Subsidiary which owns any property
described in the request to grant at the time of such request, to
the Administrative Agent, the Co-Agents, the Lenders, such firm
and any agents or representatives thereof an irrevocable
non-exclusive license, subject to the rights of tenants, to enter
onto their respective properties to undertake such an assessment
at reasonable times and in such a manner as will not materially
interfere with the use of any such property by the owner and
tenant.
(h) Keeping of Books. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial
transactions and the assets and business of the Borrower, the
Guarantor and each such Subsidiary in accordance with generally
accepted accounting principles in effect from time to time.
(i) Maintenance of Properties, Etc. Maintain and preserve,
and cause each of its Subsidiaries to maintain and preserve, all
of its properties that are used or are, in the reasonable judgment
of the Borrower, useful in the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(j) Compliance with Terms of Leaseholds. Make all payments
and otherwise perform all obligations in respect of all leases of
real property, keep such leases in full force and effect and not
allow such leases to lapse or be terminated or any rights to renew
such leases to be forfeited or cancelled, notify the
Administrative Agent of any default by any party with respect to
such leases and cooperate with the Administrative Agent in all
respects to cure any such default, and cause each of its
Subsidiaries to do so, in each case except to the extent that the
failure to do so could not have a Material Adverse Effect.
(k) Performance of Related Documents. Perform and observe
all of the terms and provisions of each Related Document to be
performed or observed by it, maintain each such Related Document
in full force and effect, enforce such Related Document in
accordance with its terms, take all such action to such end as may
be from time to time reasonably requested by the Administrative
Agent and, upon the reasonable request of the Administrative
Agent, make to each other party to each such Related Document such
demands and requests for information and reports or for action as
the Guarantor or the Borrower is entitled to make under such
Related Document, in each case except to the extent that the
failure to do so could not materially impair the value of the
interests or rights of the Guarantor, the Borrower or any of their
Subsidiaries and could not materially impair the interests or
rights of the Administrative Agent, any Co-Agent or any Lender.
(l) Performance of Material Contracts. Perform and observe
all the terms and provisions of each Material Contract to be
performed or observed by it, maintain each such Material Contract
in full force and effect, enforce each such Material Contract in
accordance with its terms, take all such action to such end as may
be from time to time reasonably requested by the Administrative
Agent and, upon the reasonable request of the Administrative
Agent, make to each other party to each such Material Contract
such demands and requests for information and reports or for
action as the Guarantor or the Borrower is entitled to make under
such Material Contract, and cause each of its Subsidiaries to do
so, in each case except to the extent that the failure to do so
could not materially impair the value of the interests or rights
of the Guarantor, the Borrower or any of their Subsidiaries and
could not materially impair the interests or rights of the
Administrative Agent, any Co-Agent or any Lender.
(m) Transactions with Affiliates. Conduct, and cause each
of its Subsidiaries to conduct, all transactions otherwise
permitted under the Loan Documents with any of their Affiliates on
terms that are fair and reasonable and no less favorable to the
Borrower, the Guarantor or such Subsidiary than it would obtain in
a comparable arm's-length transaction with a Person not an
Affiliate, other than: (i) the marketing and administrative
services agreement between the Borrower and the Managing Partner,
(ii) the employee leasing agreement between the Borrower and the
Managing Partner and (iii) transactions between the Joint Venture
Company and (a) the Borrower's railcar repair business located at
Fitzgerald, Georgia, (b) the Borrower's "Rainbow" Division and (c)
IMC-Canada, in each case on terms and conditions acceptable to the
Required Lenders.
SECTION 5.02. Negative Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any
Lender shall have any Commitment hereunder, neither the Borrower nor
the Guarantor will, at any time, without the written consent of the
Required Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Lien on or with respect to any of its
properties of any character (including, without limitation,
accounts) whether now owned or hereafter acquired, or sign or
file, or permit any of its Subsidiaries to sign or file, under the
Uniform Commercial Code of any jurisdiction, a financing statement
that names the Borrower, the Guarantor or any of their
Subsidiaries as debtor, or sign, or permit any of its Subsidiaries
to sign, any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or permit
any of its Subsidiaries to assign, any accounts or other right to
receive income, excluding, however, from the operation of the
foregoing restrictions the following:
(i) Permitted Liens;
(ii) the Liens described on Schedule 5.02(a);
(iii) Liens on accounts receivable and other
related assets arising solely in connection with the sale or
other disposition of such accounts receivable pursuant to
Section 5.02(e)(vi); and
(iv) other Liens incurred in the ordinary course of
business on property of the Borrower or the Guarantor, the
aggregate fair value of such property not to exceed
$10,000,000.
(b) Debt. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any Debt other than:
(i) in the case of the Borrower,
(A) Debt under the Loan Documents,
(B) Debt under the Subordinated
Intercompany Notes, provided that the Borrower may pay
interest thereon and principal thereof when due (subject
to the terms of the Subordination Agreement) solely to
the extent necessary to pay interest and principal on
Debt of the Guarantor permitted under Section
5.02(b)(ii)(C) or 5.02(b)(v)(A) and solely to the extent
that the Borrower has not declared or paid cash
dividends in an amount sufficient to pay interest and
principal on the such Debt of the Guarantor, provided,
however, that the Borrower may not pay interest thereon
or principal thereof during the applicable Payment Block
Period if a Payment Block has occurred and is
continuing,
(C) Debt of the Borrower owed to
IMC-Canada, and
(D) Debt incurred in connection with the
limited recourse sale or other disposition of accounts
receivable in an aggregate amount not to exceed
$50,000,000 outstanding at any time;
(ii) in the case of the Guarantor,
(A) Debt under the Loan Documents,
(B) Debt owed to IMC-Canada, and
(C) unsecured Debt not to exceed
$50,000,000 at any time outstanding;
(iii) in the case of any of the Subsidiaries of
the Borrower (other than IMC Partner, Managing Partner or the
Joint Venture Company) or the Guarantor (other than the
Borrower, IMC Partner, Managing Partner or the Joint Venture
Company), Debt owed to the Borrower or the Guarantor or to a
wholly-owned Subsidiary of the Borrower or the Guarantor,
provided that in the case of Debt of IMC-Canada owed to the
Borrower or the Guarantor or to a wholly-owned Subsidiary of
the Borrower or the Guarantor, such Debt shall not exceed
$50,000,000 in an aggregate amount for all such Subsidiaries
at any time outstanding;
(iv) in the case of the Joint Venture Company,
(A) Debt existing on the date hereof, as
set forth on Part I of Schedule 4.01(z) (the "JV
Existing Debt"), and any Debt extending the maturity of,
or refunding or refinancing, in whole or in part, any JV
Existing Debt, provided that the terms of any such
extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in
connection therewith, are no more restrictive than the
terms of the JV Existing Debt being extended, refunded
or refinanced thereby and provided further that the
principal amount of such JV Existing Debt shall not be
increased above the principal amount thereof outstanding
immediately prior to such extension, refunding or
refinancing, and the direct and contingent obligors
therefor shall not be changed, as a result of or in
connection with such extension, refunding or
refinancing,
(B) unsecured Debt which, together with
Debt of IMC-Canada under Section 5.02(b)(v)(B), shall
not exceed $50,000,000 at any time outstanding, and
(C) Debt incurred in connection with the
limited recourse sale of accounts receivable in an
aggregate amount not to exceed $75,000,000 outstanding
at any time; and
(v) in the case of the Borrower, the Guarantor and
any of their Subsidiaries (other than the Joint Venture
Company),
(A) Debt existing on the date hereof, as
set forth on Part II of Schedule 4.01(z) (the "Existing
Debt"), and any Debt extending the maturity of, or
refunding or refinancing, in whole or in part, any
Existing Debt, provided that the terms of any such
extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in
connection therewith, are no more restrictive than the
terms of the Existing Debt being extended, refunded or
refinanced thereby and provided further that the
principal amount of such Existing Debt shall not be
increased above the principal amount thereof outstanding
immediately prior to such extension, refunding or
refinancing, and the direct and contingent obligors
therefor shall not be changed, as a result of or in
connection with such extension, refunding or
refinancing,
(B) unsecured Debt of IMC-Canada which,
together with Debt of the Joint Venture Company under
Section 5.02(b)(iv)(B), shall not exceed $50,000,000 at
any time outstanding, and
(C) indorsement of negotiable
instruments for deposit or collection or similar
transactions in the ordinary course of business.
(c) Lease Obligations. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume
or suffer to exist, any obligations as lessee for the rental or
hire of real or personal property of any kind under leases or
agreements to lease having an original term of one year or more
that would cause the direct and contingent liabilities of the
Guarantor and its Subsidiaries, on a Consolidated basis, in
respect of all such obligations to exceed $38,000,000 payable in
any period of 12 consecutive months.
(d) Mergers, Etc. Merge into or consolidate with any Person
or permit any Person to merge into it, or permit any of its
Subsidiaries to do so, except that (i) any wholly-owned Subsidiary
of the Borrower may merge into or consolidate with any other
Subsidiary of the Borrower provided that, in the case of any such
consolidation, the Person formed by such consolidation shall be a
wholly-owned Subsidiary of the Borrower and (ii) any of the
Borrower's wholly-owned Subsidiaries may merge into the Borrower;
provided, however, that in each case, immediately after giving
effect thereto, no event shall occur and be continuing that
constitutes a Default and, in the case of any such merger to which
the Borrower is a party, the Borrower is the surviving
corporation.
(e) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell,
lease, transfer or otherwise dispose of, any assets, including,
without limitation, any manufacturing plant or substantially all
assets constituting the business of a division, branch or other
unit operation, or grant any option or other right to purchase,
lease or otherwise acquire any assets other than inventory to be
sold in the ordinary course of its business, except:
(i) sales of assets in the ordinary course of its
business;
(ii) in a transaction authorized by subsection (d)
of this Section;
(iii) sales of assets for cash and for fair
value in an aggregate amount not to exceed $50,000,000 from
the date hereof;
(iv) sales of assets identified on Schedule 5.02(e)
for cash and for fair value;
(v) the limited recourse sale of accounts
receivable of the Borrower and the Joint Venture Company; and
(vi) the transfer by IMC Partner to the
Borrower of IMC Partner's interest as a general partner in
the Joint Venture Company.
(f) Investments in Other Persons. Make or hold, or permit
any of its Subsidiaries to make or hold, any Investment in any
Person other than:
(i) Investments by the Guarantor, the Borrower and
their respective Subsidiaries in their Subsidiaries
outstanding on the date hereof or otherwise permitted under
Section 5.02(b)(iii);
(ii) Investments by the Borrower in IMC Partner,
the Managing Partner and the Joint Venture Company, in each
case, pursuant to and in accordance with the terms of the
Joint Venture Agreement or as otherwise permitted under
Section 5.02(b)(iv)(A);
(iii) Investments by the Guarantor, the
Borrower and their respective Subsidiaries in Cash
Equivalents and in Hedge Agreements in an aggregate notional
amount not to exceed $100,000,000 at any time outstanding;
(iv) Investments by the Borrower in Potash in an
aggregate amount not to exceed $5,000,000;
(v) Investments by Potash of an aggregate amount
not to exceed $5,000,000 of senior subordinated preferred
stock of Ashta Chemicals, Inc; and
(vi) Investments by the Borrower in the Joint
Venture Company in accordance with the terms of the
Partnership Agreement.
(g) Dividends, Etc. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its
capital stock or any warrants, rights or options to acquire such
capital stock, now or hereafter outstanding, return any capital to
its stockholders as such, make any distribution of assets, capital
stock, warrants, rights, options, obligations or securities to its
stockholders as such or issue or sell any capital stock of the
Borrower or any warrants, rights or options to acquire such
capital stock of the Borrower, or permit the Joint Venture Company
to do any of the foregoing, or permit any of the Subsidiaries of
the Borrower or the Guarantor to purchase, redeem, retire, defease
or otherwise acquire for value any capital stock of the Borrower
or the Guarantor or any warrants, rights or options to acquire
such capital stock or to issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock, except
that:
(i) the Borrower may declare and pay cash
dividends to the Guarantor and purchase, redeem, retire or
otherwise acquire shares of its own outstanding capital stock
for cash solely out of Consolidated net income and retained
earnings of the Borrower solely (A) to the extent necessary
to pay principal of and interest on Debt of the Guarantor
permitted under Section 5.02(b)(v)(A), to the extent that the
Borrower has not paid principal of and interest on the
Subordinated Intercompany Notes in an amount sufficient to
pay principal of and interest on such Debt of the Guarantor,
(B) to the extent necessary for the Guarantor to pay cash
dividends declared in accordance with Section 5.02(g)(ii) and
(C) to the extent necessary for the Guarantor to pay taxes
due and payable by it; provided, however, that the Borrower
may not declare or pay cash dividends to the Guarantor during
the applicable Payment Block Period if a Payment Block has
occurred and is continuing;
(ii) so long as no Default shall have occurred and
be continuing, the Guarantor may pay taxes due and payable by
it and declare and pay cash dividends to its stockholders and
purchase, redeem, retire or otherwise acquire shares of its
own outstanding capital stock for cash solely out of
Consolidated net income of the Guarantor and its Subsidiaries
arising after December 31, 1994 in an aggregate amount not to
exceed the sum of (x) $35,000,000 plus (y) 50% of
Consolidated net income of the Guarantor and its Subsidiaries
arising after December 31, 1994 and computed on a cumulative
basis in accordance with GAAP (but excluding extraordinary
non-cash expenses required by the Financial Accounting
Standards Board to the extent deducted in calculating net
income); provided that in any event, the Guarantor may pay
taxes due and payable by it; and
(iii) so long as all loans or advances made by
the Guarantor, the Borrower or any of their respective
Subsidiaries to the Joint Venture Company shall have been
paid in full, the Joint Venture Company may declare and pay
cash distributions to its equity holders and purchase,
redeem, retire or otherwise acquire the interests of its
equity holders in it for cash solely out of net income of the
Joint Venture Company arising after the consummation of the
Joint Venture Agreement and computed on a cumulative basis in
accordance with GAAP.
(h) Change in Nature of Business. Make, or permit any of
its Subsidiaries to make, any material change in the nature of its
business as carried on at the date hereof.
(i) Charter Amendments. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws
in any manner that could have a Material Adverse Effect.
(j) Accounting Changes. Make or permit, or permit any of
its Subsidiaries to make or permit, any change in accounting
policies or reporting practices, except as required by generally
accepted accounting principles or make any change in its fiscal
year.
(k) Amendment, Etc. of Related Documents. Permit the terms
of any Subordinated Intercompany Note to be changed except as and
to the extent permitted by the Subordination Agreement, or permit
any of its Subsidiaries to do any of the foregoing.
(l) Amendment, Etc. of Material Contracts. Cancel or
terminate any Material Contract or consent to or accept any
cancellation or termination thereof, amend or otherwise modify any
Material Contract or give any consent, waiver or approval
thereunder, waive any default under or breach of any Material
Contract, agree in any manner to any other amendment, modification
or change of any term or condition of any Material Contract or
take any other action in connection with any Material Contract, in
each case, that would materially impair or reduce the value of the
interests or rights of the Guarantor or the Borrower thereunder or
that would materially impair the interests or rights of the
Administrative Agent, any Co-Agent or any Lender, or permit any of
its Subsidiaries to do any of the foregoing.
(m) Negative Pledge. Enter into or suffer to exist, or
permit any of its Subsidiaries to enter into or suffer to exist,
any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets other
than in favor of the Administrative Agent, the Co-Agents and the
Lenders other than (i) agreements to which either Loan Party or
any of their respective Subsidiaries is a party on the date hereof
that, as of the date hereof, contain such a prohibition or
condition and (ii) any agreement or indenture evidencing the Debt
permitted under Section 5.02(b)(ii)(C).
(n) Partnerships. Become a general partner in any general
or limited partnership, or permit any of its Subsidiaries to do
so, other than (i) any Subsidiary the sole assets of which consist
of its interest in such partnership and (ii) as contemplated by,
and in accordance with the terms of, the Partnership Agreement.
(o) Maintenance of Ownership of Subsidiaries. The Guarantor
covenants that it will not sell or otherwise dispose of any shares
of Capital Stock of any Relevant Subsidiary of the Guarantor or
any warrants, rights or options to acquire such Capital Stock or
permit any Relevant Subsidiary of the Guarantor to issue, sell or
otherwise dispose of any shares of its Capital Stock or the
Capital Stock of any other Relevant Subsidiary of the Guarantor or
any warrants, rights or options to acquire such Capital Stock.
SECTION 5.03. Reporting Requirements. So long as any
Advance shall remain unpaid, any Letter of Credit shall be outstanding
or any Lender shall have any Commitment hereunder, the Borrower or the
Guarantor will, unless the Required Lenders shall otherwise consent in
writing, furnish to the Lenders:
(a) Default Notice. As soon as possible and in any event
within two days after the Borrower or the Guarantor becomes of
aware that any Default has occurred and such Default is continuing
on the date of such statement, a statement of the chief financial
officer of the Borrower setting forth details of such Default and
the action that the Borrower has taken and proposes to take with
respect thereto.
(b) Quarterly Financials. As soon as available and in any
event within 30 days after the end of each of the first three
quarters of each fiscal year of the Guarantor, Consolidated
balance sheets of the Guarantor and its Subsidiaries as of the end
of such quarter and Consolidated statements of income and cash
flows of the Guarantor and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with
the end of such quarter, setting forth in each case in comparative
form the corresponding figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the chief financial
officer of the Guarantor as having been prepared in accordance
with GAAP, together with (i) a certificate of said officer stating
that no Default has occurred and is continuing or, if a Default
has occurred and is continuing, a statement as to the nature
thereof and the action that the Guarantor has taken and proposes
to take with respect thereto and (ii) a schedule in form
satisfactory to the Co-Agents of the computations used by the
Guarantor in determining compliance with the covenants contained
in Section 5.04.
(c) Annual Financials. As soon as available and in any
event within 90 days after the end of each fiscal year of the
Guarantor, (i) a copy of the annual audit report for such year for
the Guarantor and its Subsidiaries, including therein Consolidated
balance sheets of the Guarantor and its Subsidiaries as of the end
of such fiscal year and Consolidated statements of income and cash
flows of the Guarantor and its Subsidiaries for such fiscal year,
in each case accompanied by an opinion acceptable to the Required
Lenders of Ernst & Young LLP or other independent public
accountants of recognized standing acceptable to the Required
Lenders and (ii) a Consolidated unaudited balance sheet of the
Borrower and its Subsidiaries and of the Joint Venture Company as
of the end of such fiscal year and Consolidated unaudited
statements of income and cash flows of the Borrower and its
Subsidiaries and of the Joint Venture Company for such fiscal
year, together with (A) a certificate of such accounting firm to
the Lenders stating that in the course of the regular audit of the
business of the Guarantor and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has obtained no
knowledge that a Default has occurred and is continuing, or if, in
the opinion of such accounting firm, a Default has occurred and is
continuing, a statement as to the nature thereof, (B) a schedule
in form satisfactory to the Co-Agents of the computations used by
such accountants in determining, as of the end of such fiscal
year, compliance with the covenants contained in Section 5.04 and
(C) a certificate of the chief financial officer of the Guarantor
stating that no Default has occurred and is continuing or, if a
default has occurred and is continuing, a statement as to the
nature thereof and the action that the Guarantor has taken and
proposes to take with respect thereto.
(d) Annual Forecasts and Annual Business Plan. As soon as
available and in any event no later than the end of each fiscal
year of the Guarantor, forecasts prepared by management of the
Guarantor (including the annual business plan of the Guarantor and
its Subsidiaries for the fiscal year following such fiscal year
then ended), in form satisfactory to the Co-Agents, of balance
sheets, income statements and cash flow statements for the fiscal
year following such fiscal year then ended, as soon as available
and in any event no later than 90 days after the end of each
fiscal year of the Guarantor, forecasts prepared by management of
the Guarantor, in form satisfactory to the Co-Agents, of balance
sheets, income statements and cash flow statements on a monthly
basis for the current fiscal year; and as soon as available, five-
year forecasts prepared by management of the Guarantor, in form
satisfactory to the Co-Agents, of balance sheets, income
statements and cash flows on an annual basis; provided that
commencing two years prior to the Termination Date, management of
the Guarantor shall provide three-year forecasts instead of five-
year forecasts.
(e) ERISA Events. Promptly and in any event within 20 days
after either Loan Party or any of its ERISA Affiliates knows or
has reason to know that any ERISA Event with respect to either
Loan Party or any of its ERISA Affiliates has occurred, a
statement of the chief financial officer of the Guarantor
describing such ERISA Event and the action, if any, that such Loan
Party or such ERISA Affiliate has taken and proposes to take with
respect thereto.
(f) Plan Terminations. Promptly and in any event within 10
Business Days after receipt thereof by either Loan Party or any of
its ERISA Affiliates, copies of each notice from the PBGC stating
its intention to terminate any Plan of either Loan Party or any of
its ERISA Affiliates or to have a trustee appointed to administer
any such Plan.
(g) Plan Annual Reports. Promptly and in any event within
30 days after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each Plan of each
Loan Party or any of its ERISA Affiliates.
(h) Multiemployer Plan Notices. Promptly and in any event
within 10 Business Days after receipt thereof by either Loan Party
or any of its ERISA Affiliates from the sponsor of a Multiemployer
Plan of either Loan Party or any of its ERISA Affiliates, copies
of each notice concerning (i) the imposition of Withdrawal
Liability by any such Multiemployer Plan, (ii) the reorganization
or termination, within the meaning of Title IV of ERISA, of any
such Multiemployer Plan or (iii) the amount of liability incurred,
or that may be incurred, by such Loan Party or any of its ERISA
Affiliates in connection with any event described in clause (i) or
(ii).
(i) Litigation. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and
proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting either Loan Party or any of its Subsidiaries of
the type described in Section 4.01(j) that are reasonably likely
to have a Material Adverse Effect or in which the relief requested
(if successful) would require the payment by either Loan Party or
any of their Subsidiaries of $5,000,000 or more, and promptly
after the occurrence thereof, notice of any adverse change in the
status or the financial effect on either Loan Party or any of its
Subsidiaries of the Disclosed Litigation from that described on
Schedule 3.01(c).
(j) Securities Reports. Promptly after the sending or
filing thereof, copies of all proxy statements, financial
statements and reports that either Loan Party or any of its
Subsidiaries sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements,
that either Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority
that may be substituted therefor, or with any national securities
exchange.
(k) Creditor Reports. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other
holder of the securities of either Loan Party or of any of its
Subsidiaries pursuant to the terms of any indenture, loan or
credit or similar agreement relating to Debt in an aggregate
principal amount in excess of $1,000,000 and not otherwise
required to be furnished to the Lenders pursuant to any other
clause of this Section 5.03.
(l) Agreement Notices. Promptly upon receipt thereof,
copies of all notices of breach or default and any other notices
or requests, the substance of which could materially impair the
value of the interests or rights of the Guarantor, the Borrower or
any of their Subsidiaries or could materially impair the interests
or rights of the Administrative Agent, any Co-Agent or any Lender
received by either Loan Party or any of its Subsidiaries under or
pursuant to any Related Document and copies of all notices of
breach or default received by either Loan Party or any of its
Subsidiaries under or pursuant to any Material Contract and, from
time to time upon request by any Co-Agent, such information and
reports regarding the Related Documents and the Material Contracts
as such Co-Agent may reasonably request.
(m) Revenue Agent Reports. Within 10 days after receipt,
copies of all Revenue Agent Reports (Internal Revenue Service Form
886), or other written proposals of the Internal Revenue Service,
that propose, determine or otherwise set forth positive
adjustments to the Federal income tax liability of the affiliated
group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Guarantor is a member aggregating
$1,000,000 or more.
(n) Tax Certificates. Promptly, and in any event within
five Business Days after the due date (with extensions) for filing
the final Federal income tax return in respect of each taxable
year, a certificate (a "Tax Certificate"), signed by the President
or the chief financial officer of the Guarantor, stating that the
common parent of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which the
Guarantor is a member has paid to the Internal Revenue Service or
other taxing authority, the full amount that such affiliated group
is required to pay in compliance with Section 5.01(b) in respect
of federal income tax for such year.
(o) Environmental Conditions. Promptly after the occurrence
thereof, notice of any condition or occurrence on any property of
either Loan Party or any of its Subsidiaries that results in a
material noncompliance by either Loan Party or any of its
Subsidiaries with any Environmental Law or Environmental Permit or
could reasonably be expected to (i) form the basis of an
Environmental Action against either Loan Party or any of its
Subsidiaries or such property that could reasonably be expected to
have a Material Adverse Effect or (ii) cause any such property to
be subject to any material restrictions on ownership, occupancy,
use or transferability under any Environmental Law.
(p) Amendment, Etc. of Material Contracts. Promptly after
the execution or occurrence thereof, copies of any amendment,
modification or supplement of any Material Contract including,
without limitation, any waiver or consent given thereunder.
(q) Other Information. Such other information respecting
the business, condition (financial or otherwise), operations,
performance, properties or prospects of either Loan Party or any
of its Subsidiaries as any Lender may from time to time reasonably
request.
SECTION 5.04. Financial Covenants. So long as any Advance
shall remain unpaid, any Letter of Credit shall be outstanding or any
Lender shall have any Commitment hereunder, the Guarantor will, unless
the Required Lenders otherwise consent in writing:
(a) Tangible Net Worth. Maintain an excess of (i)
Consolidated total tangible assets of the Guarantor and its
Subsidiaries over (ii) the sum of (I) Consolidated total
liabilities of the Guarantor and its Subsidiaries and (II)
minority interests not held by the Guarantor or any of its
Subsidiaries in Subsidiaries of the Guarantor or any of its
Subsidiaries of not less than (x) $650,000,000 at the end of each
fiscal quarter of the Guarantor ending on September 30, 1995,
December 31, 1995 and March 31, 1996 and (y) $700,000,000 at the
end of each fiscal quarter of the Guarantor thereafter.
(b) Interest Coverage Ratio. Maintain a ratio of
Consolidated EBITDA of the Guarantor and its Subsidiaries to cash
interest payable on all Debt of the Guarantor and its Subsidiaries
of not less than 3.00:1 for each period of four consecutive fiscal
quarters of the Guarantor ending on September 30, December 31,
March 31 and June 30 of each year.
(c) Leverage Ratio. Not permit the ratio of Consolidated
Funded Debt to Capitalization to exceed 0.52 at any time.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Advance when the same becomes due and payable, (ii) the Borrower
shall fail to pay any interest on any Advance within five Business
Days of the date such interest becomes due and payable, or (iii)
either Loan Party shall fail to make any other payment under any
Loan Document within five Business Days of the date such payment
becomes due and payable; or
(b) any representation or warranty made by either Loan Party
(or any of its officers) under or in connection with any Loan
Document shall prove to have been incorrect in any material
respect when made; or
(c) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(e), 5.01(m), 5.02,
5.03(a) or 5.04; or
(d) either Loan Party shall fail to perform any other term,
covenant or agreement contained in any Loan Document on its part
to be performed or observed and (i) such failure shall remain
unremedied for 10 Business Days after written notice thereof shall
have been given to the Borrower by the Administrative Agent or any
Lender or (ii) any such failure shall not be remedied within 10
Business Days after any Responsible Officer of either Loan Party
obtains actual knowledge thereof; or
(e) either Loan Party or any of its Subsidiaries shall fail
to pay any principal of, premium or interest on or any other
amount payable in respect of any Debt that is outstanding in a
principal amount of at least $10,000,000 in the aggregate (but
excluding Debt outstanding hereunder) of such Loan Party or such
Subsidiary (as the case may be), when the same becomes due and
payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such
Debt or otherwise to cause, or to permit the holder thereof to
cause, such Debt to mature; or any such Debt shall be declared to
be due and payable or required to be prepaid or redeemed (other
than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(f) either Loan Party or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against either Loan Party
or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or
other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain
undismissed or unstayed for a period of 60 days or any of the
actions sought in such proceeding (including, without limitation,
the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or
any substantial part of its property) shall occur; or either Loan
Party or any of its Subsidiaries shall take any corporate action
to authorize any of the actions set forth above in this subsection
(f); or
(g) any judgment or order for the payment of money in excess
of $10,000,000 (calculated after deducting therefrom any amount
that will be paid by any insurer rated at least A+ by A.M. Best
Company to the extent such insurer has been notified of, and has
not disputed the claim made for payment of, the amount of such
judgment or order) shall be rendered against either Loan Party or
any of its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered
against either Loan Party or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document, the invalidity of
which could materially adversely affect the rights and remedies of
the Lenders, after delivery thereof pursuant to Section 3.01 shall
for any reason cease to be valid and binding on or enforceable
against either Loan Party party to it, or either such Loan Party
shall so state in writing; or
(j) (i) any Person or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934), directly or indirectly, of
Voting Stock of the Guarantor (or other securities convertible
into such Voting Stock) representing 20% or more of the combined
voting power of all Voting Stock of the Guarantor; or (ii) during
any period of up to 24 consecutive months, commencing after the
date of this Agreement, individuals who at the beginning of such
24-month period were directors of the Guarantor shall cease for
any reason (other than due to death or disability) to constitute a
majority of the board of directors of the Guarantor, except to the
extent that individuals who at the beginning of such 24-month
period were replaced by individuals (x) elected by 66-2/3% of the
remaining members of the board of directors of the Guarantor or
(y) nominated for election by a majority of the remaining members
of the board of directors of the Guarantor and thereafter elected
as directors by the shareholders of the Guarantor; or (iii) any
Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in
its or their acquisition of, control over Voting Stock of the
Guarantor (or other securities convertible into such securities)
representing 20% or more of the combined voting power of all
Voting Stock of the Guarantor; or
(k) any ERISA Event shall have occurred with respect to a
Plan of either Loan Party or any of its ERISA Affiliates and the
sum (determined as of the date of occurrence of such ERISA Event)
of the Insufficiency of such Plan and the Insufficiency of any and
all other Plans of the Loan Parties and their ERISA Affiliates
with respect to which an ERISA Event shall have occurred and then
exist (or the liability of the Loan Parties and their ERISA
Affiliates related to such ERISA Event) exceeds $5,000,000; or
(l) either Loan Party or any of its ERISA Affiliates shall
have been notified by the sponsor of a Multiemployer Plan of
either Loan Party or any of its ERISA Affiliates that it has
incurred Withdrawal Liability to such Multiemployer Plan in an
amount that, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Loan Parties and their ERISA
Affiliates as Withdrawal Liability (determined as of the date of
such notification), exceeds $5,000,000 or requires payments
exceeding $500,000 per annum; or
(m) either Loan Party or any of its ERISA Affiliates shall
have been notified by the sponsor of a Multiemployer Plan of
either Loan Party or any of its ERISA Affiliates that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions
of the Loan Parties and their ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being
terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding
$500,000;
then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to
the Borrower, declare the obligation of each Lender to make Advances
and of any Issuing Bank to issue Letters of Credit to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, (A) by
notice to the Borrower, declare the Notes, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents
to be forthwith due and payable, whereupon the Notes, all such interest
and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower and (B) by notice
to each party required under the terms of any agreement in support of
which a Letter of Credit is issued, request that all Obligations under
such agreement be declared to be due and payable; provided, however,
that in the event of an actual or deemed entry of an order for relief
with respect to either Loan Party under the Federal Bankruptcy Code,
(x) the obligation of each Lender to make Advances and of each Issuing
Bank to issue Letters of Credit shall automatically be terminated and
(y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit
Upon Default. If any Event of Default shall have occurred and be
continuing, the Administrative Agent may, irrespective of whether it is
taking any of the actions described in Section 6.01 or otherwise, make
demand upon the Borrower to, and forthwith upon such demand the
Borrower will, pay to the Administrative Agent on behalf of the Lenders
in same day funds at the Administrative Agent's office designated in
such demand, for deposit in the L/C Cash Collateral Account, an amount
equal to the aggregate Available Amount of all Letters of Credit then
outstanding. If at any time the Administrative Agent determines that
any funds held in the L/C Cash Collateral Account are subject to any
right or claim of any Person other than the Administrative Agent, the
Co-Agents and the Lenders or that the total amount of such funds is
less than the aggregate Available Amount of all Letters of Credit, the
Borrower will, forthwith upon demand by the Administrative Agent, pay
to the Administrative Agent, as additional funds to be deposited and
held in the L/C Cash Collateral Account, an amount equal to the excess
of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent determines to be free and clear of any such right
and claim.
ARTICLE VII
GUARANTY
SECTION 7.01. Guaranty. The Guarantor hereby
unconditionally and irrevocably guarantees the punctual payment when
due, whether at stated maturity, by acceleration or otherwise, of all
Obligations of the Borrower now or hereafter existing under the Loan
Documents, whether for principal, interest, fees, expenses or otherwise
(such Obligations being the "Guaranteed Obligations"), and agrees to
pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Administrative Agent, the Co-Agents or the
Lenders in enforcing any rights under this Guaranty. Without limiting
the generality of the foregoing, the Guarantor's liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and
would be owed by the Borrower to the Administrative Agent, the
Co-Agents or the Lenders under the Loan Documents but for the fact that
they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the
Borrower.
SECTION 7.02. Guaranty Absolute. The Guarantor guarantees
that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Administrative Agent, the Co-Agents
or the Lenders with respect thereto. The Obligations of the Guarantor
under this Guaranty are independent of the Guaranteed Obligations or
any other Obligations of any Loan Party under the Loan Documents, and a
separate action or actions may be brought and prosecuted against the
Guarantor to enforce this Guaranty, irrespective of whether any action
is brought against the Borrower or whether the Borrower is joined in
any such action or actions. The liability of the Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective
of, and the Guarantor hereby irrevocably waives any defenses it may now
or hereinafter have in any way relating to, any or all of the
following:
(a) any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations
or any other Obligations of any other Loan Party under the Loan
Documents, or any other amendment or waiver of or any consent to
departure from any Loan Document, including, without limitation,
any increase in the Guaranteed Obligations resulting from the
extension of additional credit to the Borrower or any of its
Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of
the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any
manner of sale or other disposition of any collateral for all or
any of the Guaranteed Obligations or any other Obligations of any
other Loan Party under the Loan Documents or any other assets of
the Borrower or any of its Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower or any of its
Subsidiaries; or
(f) any other circumstance (including, without limitation,
any statute of limitations) or any existence of or reliance on any
representation by the Administrative Agent, any Co-Agent or any
Lender that might otherwise constitute a defense available to, or
a discharge of, the Borrower, the Guarantor or any other guarantor
or surety.
This Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by the
Administrative Agent, any Co-Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as
though such payment had not been made.
SECTION 7.03. Waiver. The Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with
respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that the Administrative Agent, any Co-Agent or any Lender
protect, secure, perfect or insure any Lien or any property subject
thereto or exhaust any right or take any action against the Borrower or
any other Person or any collateral. The Guarantor acknowledges that it
will receive direct and indirect benefits from the financing
arrangements contemplated by the Loan Documents and that the waiver set
forth in this Section 7.03 is knowingly made in contemplation of such
benefits.
SECTION 7.04. Payments Free and Clear of Taxes, Etc. (a)
Any and all payments made by the Guarantor hereunder shall be made, in
accordance with Section 2.11, free and clear of and without deduction
for any and all present or future Taxes. If the Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender, any Co-Agent or the Administrative
Agent, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this Section) such Lender,
such Co-Agent or the Administrative Agent (as the case may be) receives
an amount equal to the sum it would have received had no such
deductions been made, (ii) the Guarantor shall make such deductions and
(iii) the Guarantor shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Guarantor agrees to pay any present or
future Other Taxes.
(c) The Guarantor will indemnify each Lender, each Co-Agent
and the Administrative Agent for the full amount of Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section) paid by such
Lender, such Co-Agent or the Administrative Agent (as the case may be)
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made
within 30 days from the date such Lender, such Co-Agent or the
Administrative Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Guarantor will furnish to the Administrative Agent, at its address
referred to in Section 9.02, appropriate evidence of payment thereof.
If no Taxes are payable in respect of any payment hereunder by the
Guarantor through an account or branch outside the United States or on
behalf of the Guarantor by a payor that is not a United States person,
the Guarantor will furnish, or will cause such payor to furnish, to the
Co-Agents a certificate from each appropriate taxing authority or
authorities, or an opinion of counsel acceptable to the Co-Agents, in
either case stating that such payment is exempt from or not subject to
Taxes.
(e) Without prejudice to the survival of any other agreement
of the Guarantor hereunder, the agreements and obligations of the
Guarantor contained in this Section 7.04 shall survive the payment in
full of the Guaranteed Obligations and all other amounts payable under
this Guaranty.
SECTION 7.05. Continuing Guaranty; Assignments. This
Guaranty is a continuing guaranty and shall (a) remain in full force
and effect until the later of the cash payment in full of the
Guaranteed Obligations and all other amounts payable under this
Guaranty and the Termination Date, (b) be binding upon the Guarantor,
its successors and assigns and (c) inure to the benefit of and be
enforceable by the Lenders, the Co-Agents, the Administrative Agent and
their successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or any portion of its rights and obligations
hereunder (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and the Note or Notes held by it)
to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender
herein or otherwise, in each case as provided in Section 9.07.
Section 7.06. Subrogation. The Guarantor will not exercise
any rights that it may now or hereafter acquire against the Borrower or
any other insider guarantor that arise from the existence, payment,
performance or enforcement of the Guarantor's Obligations under this
Agreement or any other Loan Document, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of
the Administrative Agent, any Co-Agent or any Lender against the
Borrower or any other insider guarantor or any collateral, whether or
not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take
or receive from the Borrower or any other insider guarantor, directly
or indirectly, in cash or other property or by set-off or in any other
manner, payment or security on account of such claim, remedy or right,
unless and until all of the Obligations and all other amounts payable
under this Guaranty shall have been paid in full in cash and the
Commitments shall have expired or terminated. If any amount shall be
paid to the Guarantor in violation of the preceding sentence at any
time prior to the later of the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this
Guaranty and the Termination Date, such amount shall be held in trust
for the benefit of the Administrative Agent, the Co-Agents and the
Lenders and shall forthwith be paid to the Administrative Agent to be
credited and applied to the Guaranteed Obligations and all other
amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Loan Documents, or to be held as
collateral for any Guaranteed Obligations or other amounts payable
under this Guaranty thereafter arising. If (i) the Guarantor shall
make payment to the Administrative Agent, any Co-Agent or any Lender of
all or any part of the Guaranteed Obligations, (ii) all of the
Guaranteed Obligations and all other amounts payable under this
Guaranty shall be paid in full in cash and (iii) the Termination Date
shall have occurred, the Administrative Agent, the Co-Agents and the
Lenders will, at the Guarantor's request and expense, execute and
deliver to the Guarantor appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer
by subrogation to the Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by the Guarantor.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE CO-AGENTS
SECTION 8.01. Authorization and Action. Each Lender (in its
capacity as a Lender, the Swing Line Bank (if applicable) and an
Issuing Bank (if applicable)) hereby appoints and authorizes the
Administrative Agent and the Co-Agents, respectively, to take such
action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are
delegated to the Administrative Agent and the Co-Agents, respectively,
by the terms hereof and thereof, together with such powers and
discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), neither the
Administrative Agent nor the Co-Agents shall be required to exercise
any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lenders and all holders
of Notes; provided, however, that neither the Administrative Agent nor
the Co-Agents shall be required to take any action that exposes any of
them to personal liability or that is contrary to this Agreement or
applicable law. Each of the Administrative Agent and each Co-Agent
agrees to give to each Lender prompt notice of each notice given to it
by the Borrower pursuant to the terms of this Agreement.
SECTION 8.02. Administrative Agent's and Co-Agent's
Reliance, Etc. Neither the Administrative Agent nor any Co-Agent nor
any of their respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them
under or in connection with the Loan Documents, except for its or their
own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Administrative Agent and the
Co-Agents: (i) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and
Acceptance entered into by the Lender that is the payee of such Note,
as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (ii) may consult with legal counsel (including counsel
for either Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice
of such counsel, accountants or experts; (iii) make no warranty or
representation to any Lender and shall not be responsible to any Lender
for any statements, warranties or representations made in or in
connection with the Loan Documents; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of any Loan Document on the part of
either Loan Party or to inspect the property (including the books and
records) of either Loan Party; (v) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of any Loan Document or any other
instrument or document furnished pursuant hereto; and (vi) shall incur
no liability under or in respect of any Loan Document by acting upon
any notice, consent, certificate or other instrument or writing (which
may be by telegram, telecopy, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
SECTION 8.03. Citibank, NationsBank, Rabobank and
Affiliates. With respect to its Commitments, the Advances made by it
and the Note issued to it, Citibank, NationsBank and Rabobank shall
have the same rights and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not a Co-Agent (or
the Administrative Agent, in the case of Citibank); and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Citibank, NationsBank and Rabobank in their respective
individual capacities. Citibank, NationsBank and Rabobank and their
respective affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, either Loan Party,
any of its Subsidiaries and any Person who may do business with or own
securities of either Loan Party or any such Subsidiary, all as if
Citibank, NationsBank and Rabobank were not Co-Agents (and the
Administrative Agent, in the case of Citibank) and without any duty to
account therefor to the Lenders.
SECTION 8.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent, any Co-Agent or any other Lender and based on the
financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon
the Administrative Agent, any Co-Agent or any other Lender and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
SECTION 8.05. Indemnification. Each Lender severally agrees
to indemnify the Administrative Agent and each Co-Agent (to the extent
not promptly reimbursed by the Borrower) from and against such Lender's
ratable share of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by,
or asserted against the Administrative Agent or such Co-Agent in any
way relating to or arising out of the Loan Documents or any action
taken or omitted by the Administrative Agent or such Co-Agent under the
Loan Documents; provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's or such Co-Agent's gross
negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent and each
Co-Agent promptly upon demand for its ratable share of any costs and
expenses payable by the Borrower under Section 9.04, to the extent that
the Administrative Agent or such Co-Agent is not promptly reimbursed
for such costs and expenses by the Borrower. For purposes of this
Section 8.05, the Lenders' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the
aggregate principal amount of the Advances outstanding at such time and
owing to the respective Lenders, (b) their respective Pro Rata Shares
of the aggregate Available Amount of all Letters of Credit outstanding
at such time and (c) their respective Unused Working Capital
Commitments at such time. In the event that any Defaulted Advance
shall be owing by any Defaulting Lender at any time, such Lender's
Commitment with respect to the Facility under which such Defaulted
Advance was required to have been made shall be considered to be unused
for purposes of this Section 8.05 to the extent of the amount of such
Defaulted Advance. The failure of any Lender to reimburse the
Administrative Agent or any Co-Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lenders to the
Administrative Agent or such Co-Agent as provided herein shall not
relieve any other Lender of its obligation hereunder to reimburse the
Administrative Agent or such Co-Agent for its ratable share of such
amount, but no Lender shall be responsible for the failure of any other
Lender to reimburse the Administrative Agent or such Co-Agent for such
other Lender's ratable share of such amount.
SECTION 8.06. Successor Administrative Agents and Co-Agents.
The Administrative Agent and any Co-Agent, as the case may be, may
resign at any time by giving written notice thereof to the Lenders and
the Borrower and may be removed as Administrative Agent or Co-Agent, as
the case may be, at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent or
Co-Agent, as the case may be. If no successor Administrative Agent or
Co-Agent, as the case may be, shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's or Co-Agent's giving of
notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent or Co-Agent, then the retiring Administrative
Agent or Co-Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent or Co-Agent, which shall be a commercial bank
organized under the laws of the United States or of any State thereof
and having a combined capital and surplus of at least $250,000,000.
Upon the acceptance of any appointment as Administrative Agent or
Co-Agent, as the case may be, hereunder by a successor Administrative
Agent or Co-Agent, such successor Administrative Agent or Co-Agent
shall succeed to and become vested with all the rights, powers,
discretion, privileges and duties of the retiring Administrative Agent
or Co-Agent, as the case may be, and the retiring Administrative Agent
or Co-Agent shall be discharged from its duties and obligations under
the Loan Documents. After any retiring Administrative Agent's or
Co-Agent's resignation or removal hereunder as Administrative Agent or
Co-Agent, the provisions of this Article VII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Administrative Agent or Co-Agent, as the case may be, under this
Agreement.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement or the Notes or the Subordination
Agreement, nor consent to any departure by the Borrower or the
Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all
the Lenders (other than any Lender which is, at such time, a Defaulting
Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the initial
Borrowing, Section 3.02, (ii) change the percentage of the Commitments
or of the aggregate unpaid principal amount of the Notes, or the number
of Lenders, that shall be required for the Lenders or any of them to
take any action hereunder, (iii) amend this Section 9.01, (iv) increase
the Commitments of the Lenders or subject the Lenders to any additional
obligations, (v) reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, (vi) postpone any date
fixed for any payment of principal of, or interest on, the Notes or any
fees or other amounts payable hereunder or (vii) release the Guarantor
from its obligations under the Guaranty; provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Swing Line Bank or each Issuing Bank, as the case may be, in addition
to the Lenders required above to take such action, affect the rights or
obligations of the Swing Line Bank or the Issuing Banks, as the case
may be, under this Agreement; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above to take
such action, affect the rights or duties of the Administrative Agent
under this Agreement or any Note; and provided further that no
amendment, waiver or consent shall, unless in writing and signed by the
Co-Agents in addition to the Lenders required above to take such
action, affect the rights or duties of the Co-Agents under this
Agreement or any Note.
SECTION 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telecopy, telex or cable communication) and mailed,
telegraphed, telecopied, telexed, cabled or delivered, if to the
Borrower or the Guarantor, at its address at 2100 Sanders Road,
Northbrook, Illinois 60062, Attention: Treasurer; if to any Co-Agent
or any Bank, at its Domestic Lending Office specified opposite its name
on Schedule I hereto; if to any other Lender, at its Domestic Lending
Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; and if to the Administrative Agent, at its address at
399 Park Avenue, New York, New York 10043, Attention: Mary Corkran;
or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices
and communications shall, when mailed, telegraphed, telecopied, telexed
or cabled, be effective when deposited in the mails, delivered to the
telegraph company, transmitted by telecopier, confirmed by telex
answerback or delivered to the cable company, respectively, except that
notices and communications to the Administrative Agent or any Co-Agent
pursuant to Article II, III or VIII shall not be effective until
received by the Administrative Agent or such Co-Agent.
SECTION 9.03. No Waiver; Remedies. No failure on the part
of any Lender or the Administrative Agent or any Co-Agent to exercise,
and no delay in exercising, any right hereunder or under any Note shall
operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. Costs and Expenses. (a) The Borrower agrees
to pay on demand (i) all costs and expenses of the Administrative Agent
and the Co-Agents in connection with the preparation, execution,
delivery, administration, modification and amendment of the Loan
Documents (including, without limitation, (A) all due diligence,
syndication, transportation, computer, duplication, appraisal, audit,
insurance, consultant, search, filing and recording fees and expenses
(provided that so long as no Default shall have occurred and be
continuing, no such appraisal, audit, insurance or consultant fees and
expenses shall be incurred without the consent of the Borrower) and (B)
the reasonable fees and expenses of Shearman & Sterling, counsel for
the Administrative Agent and the Co-Agents, with respect thereto, with
respect to advising the Administrative Agent and the Co-Agents as to
their respective rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan
Documents, with respect to negotiations with either Loan Party or with
other creditors of either Loan Party or any of its Subsidiaries arising
out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other
similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the
Administrative Agent, the Co-Agents and the Lenders in connection with
the enforcement of the Loan Documents, whether in any action, suit or
litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the reasonable fees and expenses of counsel for the
Administrative Agent, each Co-Agent and each Lender with respect
thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Co-Agent and each Lender and each of their
Affiliates and their officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of, or in
connection with the preparation for a defense of, any investigation,
litigation or proceeding arising out of, related to or in connection
with (i) the transactions contemplated hereby or (ii) the actual or
alleged presence of Hazardous Materials on any property of either Loan
Party or any of its Subsidiaries or any Environmental Action relating
in any way to either Loan Party or any of its Subsidiaries, in each
case whether or not such investigation, litigation or proceeding is
brought by either Loan Party, its directors, shareholders or creditors
or an Indemnified Party or any Indemnified Party is otherwise a party
thereto and whether or not the transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss, liability
or expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. The Borrower also agrees not
to assert any claim against the Administrative Agent, any Co-Agent, any
Lender, any of their affiliates, or any of their respective directors,
officers, employees, attorneys and agents, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of
or otherwise relating to any of the transactions contemplated herein or
in any other Loan Document or the actual or proposed use of the
proceeds of the Advances.
(c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance is made by the Borrower to or for the account
of a Lender other than on the last day of the Interest Period for such
Advance, as a result of a payment or Conversion pursuant to Section
2.08(b)(i) or 2.09(d), acceleration of the maturity of the Notes
pursuant to Section 6.01 or for any other reason, the Borrower shall,
upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account
of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a
result of such payment or Conversion, including, without limitation,
any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance.
(d) If either Loan Party fails to pay when due any costs,
expenses or other amounts payable by it under any Loan Document,
including, without limitation, fees and expenses of counsel and
indemnities, such amount may be paid on behalf of such Loan Party by
the Administrative Agent, any Co-Agent or any Lender, in its sole
discretion.
SECTION 9.05. Right of Set-off. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of
the request or the granting of the consent specified by Section 6.01 to
authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and otherwise apply any
and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by
such Lender or such Affiliate to or for the credit or the account of
the Borrower or the Guarantor against any and all of the Obligations of
the Borrower or the Guarantor now or hereafter existing under this
Agreement and the Note or Notes held by such Lender, irrespective of
whether such Lender shall have made any demand under this Agreement or
such Note or Notes and although such Obligations may be unmatured.
Each Lender agrees promptly to notify the Borrower or the Guarantor, as
the case may be, after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender
and its Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off)
that such Lender and its Affiliates may have.
SECTION 9.06. Binding Effect. This Agreement shall become
effective (other than Sections 2.01 and 2.13, which shall only become
effective upon satisfaction of the conditions precedent set forth in
Section 3.01) when it shall have been executed by the Borrower, the
Guarantor, the Administrative Agent and the Co-Agents and when the
Administrative Agent shall have been notified by each Bank that such
Bank has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Guarantor, the Administrative Agent,
each Co-Agent and each Lender and their respective successors and
assigns, except that neither the Borrower nor the Guarantor shall have
the right to assign its rights hereunder or any interest herein without
the prior written consent of the Lenders.
SECTION 9.07. Assignments and Participations. (a) Each
Lender may assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment or Commitments,
the Advances owing to it and the Note or Notes held by it); provided,
however, that (i) each such assignment shall be of a uniform, and not a
varying, percentage of all rights and obligations under and in respect
of one or more Facilities, (ii) except in the case of an assignment to
a Person that, immediately prior to such assignment, was a Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in
no event be less than $10,000,000 and shall be an integral multiple of
$1,000,000, (iii) each such assignment shall be to an Eligible Assignee
and (iv) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes
subject to such assignment and a processing and recordation fee of
$3,000. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor
thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance,
such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the Guarantor or the
performance or observance by the Borrower or the Guarantor of any of
its obligations under the Loan Documents or any other instrument or
document furnished pursuant thereto; (iii) such assignee confirms that
it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon the Administrative Agent, the Co-Agents, such assigning Lender or
any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee or an Affiliate of
the assignor; (vi) such assignee appoints and authorizes the
Administrative Agent and the Co-Agents to take such action as agent on
its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Administrative Agent and the
Co-Agents by the terms hereof, together with such powers and discretion
as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the
obligations that by the terms of this Agreement are required to be
performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address
referred to in Section 9.02 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment under each
Facility of, and principal amount of the Advances owing under each
Facility to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Guarantor, the
Administrative Agent, the Co-Agents and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Guarantor, any Co-Agent or any Lender
at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with any Note
or Notes subject to such assignment, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within
five Business Days after its receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Administrative Agent
in exchange for the surrendered Note or Notes a new Note to the order
of such Eligible Assignee in an amount equal to the Working Capital
Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained a Working Capital Commitment
hereunder, a new Note to the order of the assigning Lender in an amount
equal to the Working Capital Commitment retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit C hereto.
(e) Each Lender may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the Advances
owing to it and the Note or Notes held by it); provided, however, that
(i) such Lender's obligations under this Agreement (including, without
limitation, its Commitments) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the
holder of any such Note for all purposes of this Agreement, (iv) the
Borrower, the Guarantor, the Administrative Agent, the Co-Agents and
the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
this Agreement and (v) no participant under any such participation
shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by
either Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, in each case to
the extent subject to such participation, or postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees
or other amounts payable hereunder, in each case to the extent subject
to such participation.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.07, disclose to the assignee or participant or proposed
assignee or participant, any information relating to the Borrower or
the Guarantor furnished to such Lender by or on behalf of the Borrower
or the Guarantor; provided, however, that, prior to any such
disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any
Confidential Information received by it from such Lender.
(g) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all
or any portion of its rights under this Agreement (including, without
limitation, the Advances owing to it and the Note or Notes held by it)
in favor of any Federal Reserve Bank in accordance with Regulation A of
the Board of Governors of the Federal Reserve System.
SECTION 9.08. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 9.09. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed counterpart of this
Agreement.
SECTION 9.10. No Liability of the Issuing Banks. The
Borrower assumes all risks of the acts or omissions of any beneficiary
or transferee of any Letter of Credit with respect to its use of such
Letter of Credit. Neither any Issuing Bank nor any of its officers or
directors shall be liable or responsible for: (a) the use that may be
made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon,
even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such
Issuing Bank against presentation of documents that do not comply with
the terms of a Letter of Credit, including failure of any documents to
bear any reference or adequate reference to the Letter of Credit; or
(d) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit, except that the Borrower shall have
a claim against such Issuing Bank, and such Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not
consequential, damages suffered by the Borrower that the Borrower
proves were caused by (i) such Issuing Bank's willful misconduct or
gross negligence in determining whether documents presented under any
Letter of Credit comply with the terms of the Letter of Credit or
(ii) such Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the
Letter of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Bank may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
SECTION 9.11. Confidentiality. None of the Administrative
Agent, any Co-Agent or any Lender shall disclose any Confidential
Information to any Person without the consent of the Borrower or the
Guarantor, other than (a) to the Administrative Agent's, such
Co-Agent's or such Lender's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Eligible
Assignees and participants, and then only on a confidential basis, (b)
as required by any law, rule or regulation or judicial process and (c)
as requested or required by any state, federal or foreign authority or
examiner regulating banks or banking.
SECTION 9.12. Effective Date Assignments; Etc. (a) As of
the Effective Date, prior to giving effect to any assignment under this
Agreement as of such date, each Existing Lender and Existing Issuing
Bank represents and warrants, as to the assignment effected by such
Existing Lender or Existing Issuing Bank by this Agreement that as of
the Effective Date (i) its Existing Commitment is in the dollar amount
specified as its Existing Commitment on Schedule 9.12 hereto and the
aggregate outstanding principal amount of Existing Advances owing to it
is in the dollar amount specified as the aggregate outstanding
principal amount of Existing Advances owing to such Existing Lender on
Schedule 9.12 hereto; and (ii) that such Existing Lender or Existing
Issuing Bank, as the case may be, is the legal and beneficial owner of
such interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim created by such Existing Lender or
Existing Issuing Bank, as the case may be.
(b) Each Existing Lender, Existing Issuing Bank, Lender and
Issuing Bank confirms to, and agrees with, each of the other Lenders
and Issuing Banks as to the assignment effected by this Agreement by
such Existing Lender, Existing Issuing Bank, Lender or Issuing Bank, as
the case may be, as follows: (i) each such Existing Lender or Existing
Issuing Bank, as the case may be, makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Existing Credit Agreement or this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the
Existing Credit Agreement or this Agreement or any other instrument or
document furnished pursuant thereto or hereto; (ii) each such Existing
Lender or Existing Issuing Bank, as the case may be, makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of either Loan Party or any of its
Subsidiaries or the performance of observance by either Loan Party or
any of its Subsidiaries of any of its obligations under the Existing
Credit Agreement or this Agreement or any other instrument or document
furnished pursuant thereto or hereto; (iii) each Lender or Issuing
Bank, as the case may be, confirms that it has received such documents
and information as it has deemed appropriate to make its own credit
analysis and decision to execute and deliver this Agreement and agrees
that it shall have no recourse against the Administrative Agent, any Co-
Agent, any Existing Lender, any Existing Issuing Bank or any other
Lender or any other Issuing Bank with respect to any matters relating
to the Existing Credit Agreement or this Agreement; and (iv) each
Lender or Issuing Bank, as the case may be, will, independently and
without reliance upon the Administrative Agent, any Co-Agent, any
Existing Lender, any Existing Issuing Bank or any other Lender or any
other Issuing Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement, the Note
or Notes held by it and the other documents executed in connection
herewith.
(c) As of the Effective Date, (i) each Lender and each
Issuing Bank shall be a party to this Agreement and, to the extent
provided herein, have the rights and obligations of a Lender hereunder
and (ii) each Existing Lender and each Existing Issuing Bank shall, to
the extent provided herein, relinquish its rights and be released from
its obligations under this Agreement as to any assignment effected
herein.
(d) From and after the Effective Date, the Administrative
Agent shall make all payments under this Agreement in respect of the
interest assigned hereby (including, without limitation, all payments
of principal, interest and commitment fees with respect thereto) to the
Lenders and Issuing Banks hereunder.
(e) On or before the Effective Date, the Borrower shall have
paid all accrued interest, fees and other amounts payable and owing to
the Existing Lenders, the Existing Issuing Banks, the Co-Agents and the
Administrative Agent as of the Effective Date in connection with the
Existing Credit Agreement. Without prejudice to the survival of any
other agreement of the Borrower or the Guarantor under the Existing
Credit Agreement, all amounts that would be payable under
Sections 2.09, 2.11 and 9.04 of the Existing Credit Agreement shall be
payable under this Agreement to the extent that such amounts have not
been paid as of the Effective Date.
(f) As of the Effective Date, (i) the Existing Credit
Agreement is amended and restated in full as set forth in this
Agreement, (ii) the Existing Commitments are terminated, (iii) the
Notes (as defined in the Existing Credit Agreement) are cancelled and
replaced by the Notes and (iv) all obligations which, by the terms of
the Existing Credit Agreement, are evidenced by the Notes (as defined
in the Existing Credit Agreement) are evidenced by the Notes.
SECTION 9.13. Waiver of Jury Trial. Each of the Borrower,
the Guarantor, the Administrative Agent, the Co-Agents and the Lenders
hereby irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the
transactions contemplated thereby, the Advances or the actions of the
Administrative Agent, any Co-Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
IMC GLOBAL OPERATIONS INC., as
Borrower
By: Peter Hong
Title: Vice President & Treasurer
IMC GLOBAL INC.,
as Guarantor
By: Peter Hong
Title: Vice President & Treasurer
CITIBANK, N.A., as
Administrative Agent,
Co-Agent and Swing Line Bank
By: Michael Mandracchia
Title: Attorney-In-Fact
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., as Co-Agent
By: Stephen W. Phillips
Title: Vice President
By: Ian Reece
Title: Vice President & Manager
NATIONSBANK OF
NORTH CAROLINA, N.A.
as Co-Agent
By: Stephen K. Foutch
Title: Vice President
Banks
CITIBANK, N.A.
By: Michael Mandracchia
Title: Attorney-In-Fact
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A.
By: Stephen W. Phillips
Title: Vice President
NATIONSBANK OF
NORTH CAROLINA, N.A.
By: Stephen K. Foutch
Title: Vice President
ARAB BANKING CORPORATION
By: Grant E. McDonald
Title: Vice President
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: Charles H. King
Title: Vice President
THE FUJI BANK, LIMITED
By: Shigeo Akutsu
Title: Joint General Manager
THE NORTHERN TRUST COMPANY
By: Michelle M. Teteak
Title: Vice President
Exhibit 11.1
EARNINGS (LOSS) PER SHARE
FULLY DILUTED COMPUTATION
FOR THE YEARS ENDED JUNE 30, 1995, 1994 and 1993
(IN MILLIONS EXCEPT SHARE AND PER SHARE AMOUNTS)
At June 30,
-------------------------------------
1995 1994 1993
---- ---- ----
Basis for computation of fully
diluted earnings per share:
Earnings (loss) before extra-
ordinary item and cumulative
effect of accounting changes,
as reported $ 127.1 $ (3.6) $ (120.0)
Add interest charges on
convertible debt 7.2 7.2 7.2
Less provision for taxes (2.8) (2.8) (2.7)
---------- ---------- ----------
Earnings (loss) before extra-
ordinary item and cumulative
effect of accounting changes,
as adjusted 131.5 .8 (115.5)
Extraordinary loss - debt
retirement (6.5) (25.2)
Cumulative effect of
accounting changes (5.9) (47.1)
---------- ---------- ----------
Net earnings (loss) applicable
to common stock $ 119.1 $ (24.4) $ (162.6)
========== ========== ==========
Number of shares:
Weighted average shares
outstanding 29,703,259 25,256,999 22,082,053
Conversion of convertible
subordinated notes into
common stock 1,811,024 1,811,024 1,811,024
---------- ---------- -----------
Total common and common
equivalent shares assuming
full dilution 31,514,283 27,068,023 23,893,077
========== ========== ===========
Fully diluted earnings (loss)
per share:
Earnings (loss) before extra-
ordinary item and cumulative
effect of accounting changes $ 4.17 $ .03 $ (4.84)
Extraordinary loss - debt
retirement (.20) (.93)
Cumulative effect of
accounting changes (.19) (1.97)
---------- ---------- -----------
Net earnings (loss) $ 3.78 $ (.90) $ (6.81)
========== ========== ==========
This calculation is submitted in accordance with Regulation S-K item
601(b)(11). However, under APB Opinion No. 15, calculation of fully
diluted earnings (loss) per share would exclude the conversion of
convertible securities which would have an antidilutive effect on
earnings (loss) per share for each period.
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
Certain of IMC Global Inc.'s subsidiaries are listed below. These
subsidiaries are all included in the Company's consolidated financial
statements, and collectively, together with IMC Global Inc., account
for more than 90 percent of consolidated net sales, earnings (loss)
before income taxes, extraordinary items and cumulative effect of a
change in accounting principal, and total assets.
Jurisdiction of Percent
Incorporation Ownership
--------------- ----------
IMC Global Operations Inc. Delaware 100%
IMC-Agrico Company Delaware 53.5%
International Minerals & Chemical
Canada Global Limited Canada 100%
A number of subsidiaries are not shown, but even as a whole they
do not constitute a significant subsidiary.
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following
registration statements and related prospectuses filed by IMC Global
Inc. under the Securities Act of 1933 of our report dated July 26,
1995, with respect to the consolidated financial statements of IMC
Global Inc. included in this Annual Report (Form 10-K) for the year
ended June 30, 1995.
Commission File No.
--------------------
Form S-8, No. 33-22079
Form S-8, No. 33-22080
Form S-8, No. 33-38423
Form S-8, No. 33-42074
Form S-8, No. 33-56911
ERNST & YOUNG LLP
Ernst & Young LLP
Chicago, Illinois
September 21, 1995
Docket No. 110167
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> JUN-30-1995
<CASH> (4,100)
<SECURITIES> 200,200
<RECEIVABLES> 83,300
<ALLOWANCES> 2,700
<INVENTORY> 254,400
<CURRENT-ASSETS> 504,400
<PP&E> 3,455,200
<DEPRECIATION> 1,587,000
<TOTAL-ASSETS> 2,693,200
<CURRENT-LIABILITIES> 252,000
<BONDS> 515,500
<COMMON> 32,300
0
0
<OTHER-SE> 640,600
<TOTAL-LIABILITY-AND-EQUITY> 2,693,200
<SALES> 1,924,000
<TOTAL-REVENUES> 1,934,200
<CGS> 1,475,500
<TOTAL-COSTS> 1,552,400
<OTHER-EXPENSES> 122,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,200
<INCOME-PRETAX> 207,400
<INCOME-TAX> 80,300
<INCOME-CONTINUING> 127,100
<DISCONTINUED> 0
<EXTRAORDINARY> (6,500)
<CHANGES> (5,900)
<NET-INCOME> 114,700
<EPS-PRIMARY> 3.88
<EPS-DILUTED> 3.78
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