<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 20, 1996
REGISTRATION NO. 333-04831
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
IMC GLOBAL INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
DELAWARE 36-3492467
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
TELEPHONE: (847) 272-9200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------
MARSCHALL I. SMITH
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
IMC GLOBAL INC.
2100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
TELEPHONE: (847) 272-9200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
LARRY A. BARDEN NORMAN D. SLONAKER
SIDLEY & AUSTIN BROWN & WOOD
ONE FIRST NATIONAL PLAZA ONE WORLD TRADE CENTER
CHICAGO, ILLINOIS 60603 NEW YORK, NEW YORK 10048
(312) 853-7000 (212) 839-5300
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box: [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering: [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [X]
CALCULATION OF REGISTRATION FEE
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING PRICE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (2) (2) FEE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $1.00 per
share................................ 6,510,286 shares(3) $37.5625 $244,542,618 $84,326(5)
- ------------------------------------------------------------------------------------------------------
Preferred Stock Purchase Rights....... 6,510,286 rights (4) (4) (4)
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</TABLE>
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(1) Includes 849,167 shares which may be delivered in connection with the
exercise of an over-allotment option.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based
upon the average of the high and low prices for the Company's Common Stock
as reported on the New York Stock Exchange on May 29, 1996 ($37.5625).
(3) Such shares are the number of shares deliverable at maturity of the STRYPES
(the "STRYPES") of Merrill Lynch & Co., Inc. (plus such indeterminate
number of shares as may be deliverable as a result of certain antidilution
provisions of the STRYPES), which are being registered pursuant to a
separate registration statement on Form S-3 of Merrill Lynch & Co., Inc.
(4) The Preferred Stock Purchase Rights of the Company initially are attached
to and trade with shares of the Company's Common Stock being registered
hereby. Value attributable to such Preferred Stock Purchase Rights, if any,
is reflected in the market price of the Company's Common Stock.
(5) Previously Paid.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
The securities registered pursuant to this Registration Statement may be
offered pursuant to one of two forms of prospectus, one which would be used in
connection with an offering of STRYPES by Merrill Lynch & Co. (the "STRYPES
Prospectus") and one which would be used in connection with a customary resale
offering by GVI Holdings, Inc. (the "Resale Prospectus").
The two prospectuses will be identical in all respects except for the front
cover page, page two and the back cover page and the sections entitled
"Prospectus Summary--Plan of Distribution," "Concerning GVI," "Plan of
Distribution" and "Legal Matters." The form of the STRYPES Prospectus is
included herein in its entirety and is followed by the front cover page and
applicable replacement pages of the Resale Prospectus, each of which pages is
labeled "Alternate Page for Resale Prospectus."
A copy of the appropriate Prospectus in the exact form in which it is to be
used after this Registration Statement, as amended, has been declared
effective will be filed with the Securities and Exchange Commission pursuant
to Rule 424(b) under the Securities Act of 1933.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 20, 1996
PROSPECTUS
5,661,119 SHARES
IMC GLOBAL INC.
COMMON STOCK
-----------
This Prospectus relates to 5,661,119 shares of Common Stock, par value $1.00
per share (the "Common Stock"), of IMC Global Inc., a Delaware corporation
("IMC" or the "Company"), which may be delivered by Merrill Lynch & Co., Inc.
("ML & Co.") upon payment and discharge of the Structured Yield Product
Exchangeable for StockSM, % STRYPESSM Due , 2001 of ML & Co.
(each a "STRYPES") at maturity, subject to ML & Co.'s right to deliver an
amount in cash with an equal value. ML & Co. has granted the Underwriter of the
STRYPES an option for 30 days to purchase additional STRYPES, solely to cover
over-allotments, if any. Such additional STRYPES may be paid and discharged by
ML & Co. at their maturity by delivery of up to an additional 849,167 shares of
Common Stock to which this Prospectus also relates. Pursuant to a Rights
Agreement dated as of June 21, 1989, as amended, between the Company and The
First National Bank of Chicago, as Rights Agent, each share of Common Stock
covered hereby also includes a right to purchase (an "IMC Right") one two-
hundredth of a share of Junior Participating Preferred Stock, Series C, par
value $1.00 per share, of the Company (the "Series C Preferred Stock").
All of the shares of Common Stock covered hereby are beneficially owned by
GVI Holdings, Inc. ("GVI"), a wholly-owned subsidiary of Great American
Management and Investment, Inc. ("GAMI"), which may deliver such Common Stock
to Merrill Lynch Mortgage Capital Inc., a wholly owned subsidiary of ML & Co.
(the "ML & Co. Subsidiary"), pursuant to an agreement (the "Purchase
Agreement") among GVI, ML & Co. and the ML & Co. Subsidiary. The Company will
not receive any of the proceeds from the sale of the STRYPES or from the sale
of such Common Stock.
The STRYPES are offered by a separate prospectus of ML & Co. (the "STRYPES
Prospectus"). This Prospectus relates only to the Common Stock covered hereby
and does not relate to the STRYPES. THE COMPANY TAKES NO RESPONSIBILITY FOR ANY
INFORMATION INCLUDED IN OR OMITTED FROM THE STRYPES PROSPECTUS. THE STRYPES
PROSPECTUS DOES NOT CONSTITUTE A PART OF THIS PROSPECTUS, NOR IS IT
INCORPORATED BY REFERENCE HEREIN. Because the STRYPES are a separate security
issued by ML & Co., for which the Company has no responsibility, an investment
in the STRYPES may have materially different characteristics from an investment
in the Common Stock.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.
The Common Stock is traded on the New York Stock Exchange, Inc. ("NYSE")
under the symbol "IGL." On June 17, 1996, the last reported sale price of the
Common Stock on the NYSE was $39.25 per share. See "Price Range of Common Stock
and Dividends."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CON-
TRARY IS A CRIMINAL OFFENSE.
-----------
SMSERVICE MARK OF MERRILL LYNCH & CO., INC.
The date of this Prospectus is , 1996.
<PAGE>
IN CONNECTION WITH THE OFFERING, MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED (THE "UNDERWRITER OF THE STRYPES") MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NYSE, IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed by the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission; Midwest Regional Office, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and Northeast Regional Office, Seven
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports, proxy and
information statements and other information concerning the Company may also
be inspected at the offices of the NYSE. The Commission maintains a Web site
at http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company heretofore filed with the SEC
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended June 30,
1995;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1995, December 31, 1995 and March 31, 1996;
3. The Company's Current Reports on Form 8-K filed August 17, 1995,
October 17, 1995, March 15, 1996 (as amended by Form 8-K/A filed April 19,
1996) and May 17, 1996;
4. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A/A-1 filed January 12, 1996;
and
5. The description of the IMC Rights contained in the Company's
Registration Statement on Form 8-A filed June 23, 1989, as amended by Form
8-A/A filed September 18, 1995 and January 24, 1996.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Stock
shall be deemed to be incorporated by reference into this Prospectus and to be
a part hereof from the date of filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
other subsequently filed documents which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
(without exhibits other than exhibits specifically incorporated by reference)
of any or all documents incorporated by reference into this Prospectus.
Requests for such copies should be directed to Rose Marie Williams, Corporate
Secretary, IMC Global Inc., 2100 Sanders Road, Northbrook, Illinois 60062,
telephone number (847) 272-9200.
2
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements incorporated by reference herein. Unless
the context otherwise requires, when used herein the term "Company" or "IMC"
refers to IMC Global Inc. and all of its subsidiaries and affiliated
partnerships and joint ventures, including IMC-Agrico Company ("IMC-Agrico"), a
Delaware general partnership formed pursuant to an Amended and Restated
Partnership Agreement among a subsidiary of the Company and Freeport-McMoRan
Resources Partners, Limited Partnership ("FRP") and certain affiliates of each
(the "Partnership Agreement"). All information in this Prospectus or
incorporated by reference herein has been adjusted to reflect a 2-for-1 stock
split of the Common Stock effected in the form of a stock dividend distributed
in November 1995. In addition, all financial information in this Prospectus has
been restated to give effect to the Company's merger with The Vigoro
Corporation ("Vigoro"), which was completed on March 1, 1996 and accounted for
as a pooling-of-interests.
THE COMPANY
The Company is one of the world's leading producers of crop nutrients for the
international agricultural community and is one of the largest distributors in
the United States of crop nutrients and related products through its retail and
wholesale distribution networks. The Company mines, processes and distributes
potash in the United States and Canada, and is a joint venture partner in IMC-
Agrico, a leading producer, marketer and distributor of phosphate crop
nutrients and a leading producer and marketer of animal feed ingredients. The
Company believes that it is one of the lower-cost North American producers of
phosphate rock, concentrated phosphates and potash. The Company's retail
distribution network, which extends principally to corn and soybean farmers in
the Midwestern and Southeastern United States, is one of the largest
distributors of crop nutrients and related products in the United States. The
Company also manufactures nitrogen-based and other high-value crop nutrients
which are marketed on a wholesale basis principally in the Midwestern and
Southeastern United States. In addition, the Company sells specialty lawn and
garden, turf, and nursery products on a national basis and ice-melter products
in the Midwest and Eastern snow-belt states.
On March 1, 1996, the Company completed the merger with Vigoro (the
"Merger"), which resulted in Vigoro becoming a subsidiary of the Company. The
Merger enables the Company, among other things, to broaden its business mix and
to reduce the relative importance of generally more price-volatile phosphate-
based crop nutrients to the Company's consolidated results. In addition, the
Merger has expanded the Company's potash customer base to include industrial
customers, whereas previously shipments of potash were primarily made to
agricultural markets. Vigoro also has a significant retail distribution
network, giving it direct contact with farmers, the principal consumers of crop
nutrient products. Prior to the Merger, IMC sold a limited amount of products
directly to farmers. In connection with the Merger, which was accounted for as
a pooling-of-interests, the Company issued approximately 32.4 million shares of
Common Stock in exchange for all of the outstanding shares of common stock of
Vigoro. For additional information regarding Vigoro and the Merger, see the
Company's Current Report on Form 8-K filed March 15, 1996 (as amended by Form
8-K/A filed April 19, 1996), which is incorporated by reference herein.
The Company's principal executive offices are located at 2100 Sanders Road,
Northbrook, Illinois 60062 and its telephone number is (847) 272-9200.
PLAN OF DISTRIBUTION
This Prospectus relates to 5,661,119 shares of Common Stock which may be
delivered by ML & Co. upon payment and discharge of the STRYPES at maturity,
subject to ML & Co.'s right to deliver an amount in cash with an equal value.
Each share of Common Stock covered hereby also includes an associated IMC
Right. ML & Co. has granted the Underwriter of the STRYPES an option for 30
days to purchase additional STRYPES, solely to cover over-allotments, if any.
Such additional STRYPES may be paid and discharged by ML & Co. at their
maturity by delivery of up to an additional 849,167 shares of Common Stock to
which this Prospectus also relates.
3
<PAGE>
All of the shares of Common Stock covered hereby are beneficially owned by
GVI, a wholly-owned subsidiary of GAMI, which may deliver such Common Stock to
the ML & Co. Subsidiary pursuant to the Purchase Agreement. The Company will
not receive any of the proceeds from the sale of the STRYPES or from the sale
of such Common Stock.
The STRYPES are offered only by the STRYPES Prospectus. This Prospectus
relates only to the Common Stock covered hereby and does not relate to the
STRYPES. THE COMPANY TAKES NO RESPONSIBILITY FOR ANY INFORMATION INCLUDED IN OR
OMITTED FROM THE STRYPES PROSPECTUS. THE STRYPES PROSPECTUS DOES NOT CONSTITUTE
A PART OF THIS PROSPECTUS, NOR IS IT INCORPORATED BY REFERENCE HEREIN. Because
the STRYPES are a separate security issued by ML & Co., for which the Company
has no responsibility, an investment in the STRYPES may have materially
different characteristics from an investment in the Common Stock.
4
<PAGE>
SUMMARY SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial information for each fiscal
year in the three-year period ended June 30, 1995 and for the nine-month
periods ended March 31, 1996 and March 31, 1995, respectively, is derived from,
and should be read in conjunction with, the audited consolidated financial
statements and notes thereto and the unaudited condensed consolidated financial
statements and notes thereto incorporated by reference in this Prospectus. Such
consolidated financial statements have been restated to reflect the March 1,
1996 Merger with Vigoro, which was accounted for as a pooling-of-interests.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31, YEARS ENDED JUNE 30,
------------------- ----------------------------
1996(1)(2) 1995(1) 1995(1) 1994(1) 1993(1)
---------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales.................. $2,025.9 $1,834.6 $2,736.1 $2,125.3 $1,438.1
Gross margins.............. 532.2 473.9 690.0 382.7 280.8
Sterlington litigation
settlement, net(3)........ (169.1)
Operating earnings (loss).. 330.7 341.3 503.1 244.6 (62.1)
Interest earned and other
non-operating (income) and
expense, net.............. (5.4) (4.4) (6.3) 18.6 (0.7)
Interest charges........... 50.0 52.4 70.2 91.2 55.6
-------- -------- -------- -------- --------
Earnings (loss) before
minority interest and
items noted below......... 286.1 293.3 439.2 134.8 (117.0)
Minority interest.......... 148.6 101.7 130.4 55.6
-------- -------- -------- -------- --------
Earnings (loss) before
items noted below......... 137.5 191.6 308.8 79.2 (117.0)
Provision (credit) for
income taxes.............. 59.6 71.5 115.5 34.8 (39.1)
-------- -------- -------- -------- --------
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes........ 77.9 120.1 193.3 44.4 (77.9)
Extraordinary loss-debt
retirement................ (3.7) (6.5) (25.2) (2.0)
Cumulative effect on prior
years of changes in
accounting for
postemployment benefits
(net of taxes) in 1995 and
postretirement benefits
other than pensions (net
of taxes) in 1993......... (5.9) (5.9) (47.1)
-------- -------- -------- -------- --------
Net earnings (loss)........ $ 77.9 $ 110.5 $ 180.9 $ 19.2 $ (127.0)
======== ======== ======== ======== ========
EARNINGS (LOSS) PER SHARE:
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes........ $ 0.84 $ 1.32 $ 2.12 $ 0.54 $ (1.02)
Extraordinary loss-debt
retirement................ (0.04) (0.07) (0.31) (0.03)
Cumulative effect on prior
years of changes in
accounting................ (0.06) (0.06) (0.62)
-------- -------- -------- -------- --------
Net earnings (loss)........ $ 0.84 $ 1.22 $ 1.99 $ 0.23 $ (1.67)
======== ======== ======== ======== ========
Weighted average number of
shares and equivalent
shares outstanding......... 92.7 90.9 91.0 82.3 76.3
BALANCE SHEET DATA (AT END
OF PERIOD):
Working capital............ $ 415.4 $ 426.2 $ 461.5 $ 483.6 $ 311.4
Total assets............... 3,526.2 3,346.7 3,323.2 3,172.3 2,343.3
Long-term debt, less
current maturities........ 696.1 784.2 750.2 801.6 994.6
Total stockholders' equity. 1,084.2 939.0 1,007.8 856.3 602.3
OTHER FINANCIAL DATA:
Capital expenditures....... $ 129.3 $ 75.6 $ 114.9 $ 76.0 $ 137.1
Depreciation, depletion and
amortization.............. 124.5 122.7 166.4 147.1 85.6
</TABLE>
- --------
(1) See the footnotes to the IMC annual or interim financial statements
incorporated by reference herein for a description of non-recurring items
and accounting changes affecting the respective period's results. Beginning
in 1994, financial information reflects the consolidation of IMC-Agrico
which was formed on July 1, 1993.
(2) Results for the nine months ended March 31, 1996 include special one-time
charges of $98.6 million ($69.6 million after tax benefits, or $0.75 per
share) for costs related to the Merger, as well as costs associated with,
among other things, a corporate restructuring, other asset valuations and
environmental issues. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
(3) Represents a charge related to the settlement of litigation resulting from
the May 1991 explosion at a facility managed by the Company in Sterlington,
Louisiana.
5
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus or
incorporated by reference herein, the following factors shall be considered in
evaluating an investment in the shares of Common Stock to which this
Prospectus relates.
STERLINGTON LITIGATION
ANGUS Chemical Company ("ANGUS") and the Company are involved in various
litigation arising out of a May 1991 explosion at a nitroparaffins plant
located in Sterlington, Louisiana. ANGUS wants the Company to assume
responsibility for a class action lawsuit currently pending in Louisiana
against the Company, ANGUS and other defendants for injuries arising out of
the explosion, and to reimburse ANGUS for amounts that ANGUS has paid for
settled claims in connection with the Sterlington explosion. With respect to
the settled demands, ANGUS, in pleadings filed in Louisiana and Texas, states
that it is seeking approximately $9.5 million, plus interest, fees, and costs.
In addition, ANGUS is seeking direct payment from the Company's insurers, X.L.
Insurance Company, Ltd. ("XL") and A.C.E. Insurance Company, Ltd. ("ACE"), for
certain damages in an action pending in Louisiana state court. ANGUS has not
specified how much it is seeking from the Company's insurers. ANGUS may be
asserting claims against XL for the difference between the limits of the XL
policy of $75.0 million and the $45.7 million that XL has paid to the Company
under the policy. In addition, ANGUS may be asserting claims against ACE for
the difference between the limit of the ACE policy of $100.0 million and the
$15.0 million that ACE has previously paid to the Company. The Company may
have obligations to indemnify certain of the insurers if ANGUS is successful
in this case. The Company is unable to estimate the magnitude of its exposure
at this time.
The Company continues to vigorously litigate each of the matters arising out
of the Sterlington explosion. A jury trial is scheduled to commence in 1996 in
Texas state court with respect to ANGUS's 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 October 1996, and
all of the other lawsuits are in early stages. In addition, ANGUS has filed an
action in federal court in Louisiana seeking reimbursement for amounts
allegedly expended to remediate certain environmental sites at the Sterlington
plant. In its pleadings filed with the Louisiana federal court, ANGUS states
that it is seeking approximately $1.8 million for amounts expended, plus
interest, fees, costs, and reimbursement for any future expenses. A trial has
been scheduled in this action for the fall of 1996. The Company is unable to
estimate the magnitude of its exposure at this time.
ANTITRUST LITIGATION
A number of class action suits have been filed in United States federal
courts, two California state courts and an Illinois state court against most
of the North American potash producers, including the Company. The complaints
essentially allege that the North American potash producers acted together to
fix the price of potash sold in the United States. The complaints do not
specify the amount of damages sought by the plaintiffs. All of the complaints
seek treble damages and attorneys' fees and ask that the court find the
defendants jointly and severally liable.
Suits filed in federal courts in Minnesota, Illinois and Virginia have been
consolidated in Minnesota. All of the claims in these suits are asserted on
behalf of a purported group of direct purchasers of potash in the United
States, which class has been certified by the court. Discovery is now
concluded in the case and defendants' motions for summary judgment have been
filed.
In addition to the direct purchaser actions filed in the United States
District Courts, two complaints have been filed in California state courts on
behalf of indirect purchasers residing in California. The Company has answered
both of the California complaints and has denied all material allegations.
These cases are still in a preliminary stage and no discovery has been
conducted.
6
<PAGE>
The case filed in Illinois state court has been dismissed for failure to
state a claim. Plaintiffs have appealed the dismissal.
The Company is not able to estimate the amount of damages that could
ultimately be sought in the civil suits. Based upon available information,
management of the Company believes that the Company has not acted in concert
with others to fix prices in violation of the United States antitrust laws or
any other laws. There can be no assurance, however, that these cases will
ultimately be decided in a manner favorable to the Company. In connection with
the Company's Colonsay mine, affiliates of Noranda Inc. ("Noranda"), from whom
the Company purchased the mine on January 5, 1995, are also named as
defendants in the civil suits. The Company did not agree to assume any
liabilities of Noranda or such affiliates with respect to operations at
Colonsay prior to the January 5, 1995 closing of the purchase which may arise
out of such antitrust litigation, and the Company is entitled to be
indemnified by Noranda against such liabilities should they arise.
The Antitrust Division of the United States Department of Justice had been
conducting a grand jury investigation into allegations similar to those made
in the civil actions. The Company has been advised that the investigation has
concluded and a spokesperson for the Antitrust Division has stated that no
action will be taken.
FTC PHOSPHATE OPERATIONS INQUIRY
The Company was notified on October 2, 1995 by the FTC that the FTC is
conducting an investigation to determine whether manufacturers of concentrated
phosphates may have violated Section 5 of the Federal Trade Commission Act, as
amended, by agreeing to restrict output or raise prices. The FTC has requested
that the Company provide certain information and documents regarding the
Company's phosphate operations. The Company has submitted responsive
information and documents to the FTC. The FTC has stated that neither its
request for information and documents nor the fact that it has commenced an
investigation should be construed as indicating that a violation has occurred
or is occurring.
MINING RISKS
Since December 1985, the Company has experienced an inflow of water into one
of its two interconnected potash mines at Esterhazy, Saskatchewan, Canada. As
a result, the Company has suffered losses and has been forced to undertake
substantial efforts to control the flooding. 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 or remediation costs will not increase to a level which would
cause the Company to abandon the mines. The long-term outlook of the water
inflow has caused the Company to consider alternatives to its current mining
operations at Esterhazy. Any solution to the water inflow situation at the
mines is likely to result in substantial capital expenditures and/or charges
to operations.
Like other potash producers' shaft mines, the Company's Colonsay mine is
subject to the risks of inflow of water as a result of its shaft mining
operations.
The Saskatchewan potash mining industry generally has been unable to secure
insurance to cover other risks associated with underground operations.
Therefore, the Company's underground mine operations are not presently insured
against, and are not insurable against, business interruption or risk from
catastrophic perils, including collapse, floods and other water inflow.
FACTORS AFFECTING DEMAND
The Company's results of operations historically have reflected the effects
of several external factors which are beyond the Company's control and have in
the past produced significant downward and upward swings in the Company's
operating results. The Company's revenues, approximately 74% of which have
come from North American sales over the past five years, are highly dependent
upon conditions in the North American agriculture industry and can be affected
by crop failure, changes in agricultural production practices and agricultural
policies,
7
<PAGE>
and weather, all of which are beyond the Company's control. Furthermore,
because of the high percentage of its revenues coming from North American
sales, the Company's crop nutrients business is seasonal to the extent U.S.
farmers and agricultural enterprises purchase more crop nutrients products
during the spring and fall.
Approximately 26% of the Company's revenues have come from sales outside
North America over the past five years. The Company's foreign operations and
investments and any future international expansion by the Company are subject
to numerous risks, 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 and
Canada affecting foreign trade and investment. Internationally, the Company's
products are sold primarily through the Sulfate of Potash Magnesia Association
and the Phosphate Chemicals Export Association, Inc., both of which were
formed by the Company under the Webb-Pomerene Act, and Canpotex Limited, an
export association of Saskatchewan potash producers. Due to economic and
political factors, customer needs can change dramatically from year to year.
In 1995, sales to the People's Republic of China represented approximately 15%
of consolidated net sales. Other principal customer countries include India,
Thailand, Japan, Korea, Australia, New Zealand and several Latin American and
European countries.
ENVIRONMENTAL MATTERS
The Company is subject to numerous environmental laws and regulations in the
United States and Canada which regulate certain activities and operations of
each company and impose liability for the cleanup of environmental
contamination. The Company has incurred and will continue to incur,
substantial capital expenditures and operating costs on account of these laws
and regulations. The Company cannot predict the operational or financial
impact of new or amended laws or regulations or the future enforcement or
interpretation of existing laws and regulations. See "MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- Environmental
Matters."
FORWARD LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements concerning the
Company's operations, economic performance and financial condition. Such
statements are subject to various risks and uncertainties. Actual results
could differ materially from those currently anticipated due to a number of
factors, including those identified under "RISK FACTORS" and elsewhere in this
Prospectus.
8
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed and traded on the NYSE under the symbol "IGL."
The following table sets forth the high and low sale prices of the Common
Stock for the periods indicated, as reported on the NYSE Composite Tape, and
the cash dividends per share of Common Stock declared and paid during such
periods. Data reflected in the table for periods prior to the Company's 2-for-
1 stock split in November 1995 have been adjusted to reflect such stock split.
In April 1993, the Company's Board of Directors reduced cash dividend
payments on the Common Stock in light of financial demands of litigation
arising out of an explosion at a nitroparaffins plant operated by the Company
in Sterlington, Louisiana, and weakness in concentrated phosphate prices.
Although the Company has paid cash dividends in recent quarters, any future
payment of cash dividends is subject to the discretion of the Board of
Directors and will be dependent on the Company's results of operations,
financial condition, cash requirements and other relevant factors. Since
substantially all of the Company's operations are conducted through
subsidiaries, the Company's cash flow, and consequently its future ability to
pay dividends, will be dependent upon the earnings of its subsidiaries and the
payment of funds by those subsidiaries to the Company in the form of loans,
dividends or otherwise. Certain of the Company's debt agreements contain
restrictions on the payment of dividends by the Company's subsidiaries.
<TABLE>
<CAPTION>
DIVIDENDS
HIGH LOW PER SHARE
------- ------- ---------
<S> <C> <C> <C>
FISCAL YEAR 1995:
Quarter ended September 30.................... $22.313 $17.063 --
Quarter ended December 31..................... 22.375 18.125 $0.05
Quarter ended March 31........................ 26.250 20.625 0.05
Quarter ended June 30......................... 27.313 22.250 0.05
FISCAL YEAR 1996:
Quarter ended September 30.................... 33.313 27.000 0.05
Quarter ended December 31..................... 40.875 30.313 0.08
Quarter ended March 31........................ 43.250 33.625 0.08
Quarter ending June 30 (through June 17,
1996)........................................ 39.875 32.250 0.08(1)
</TABLE>
(1) The Company declared a quarterly dividend of $0.08 per share on April 18,
1996, payable on June 28, 1996 to stockholders of record at the close of
business on June 14, 1996.
For a recent closing price of the Common Stock, see the cover page of this
Prospectus.
9
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The consolidated financial information of the Company presented below for
each of the fiscal years ended June 30, 1995, 1994 and 1993 has been derived
from, and should be read in conjunction with, the Company's consolidated
financial statements and notes thereto, which have been audited by Ernst &
Young LLP, independent auditors (based in part on the report of Arthur
Andersen LLP, independent public accountants), and which are incorporated by
reference herein. The consolidated financial information of the Company
presented below for the nine month periods ended March 31, 1996 and March 31,
1995, respectively, are derived from the Company's unaudited condensed
consolidated financial statements and notes thereto which are incorporated by
reference herein. In the opinion of management of the Company, such unaudited
condensed consolidated financial statements include all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of such data. All of the aforementioned consolidated financial
statements have been restated for the Merger, which was accounted for as a
pooling-of-interests. The results for the nine month period ended March 31,
1996 are not necessarily indicative of the results that may be expected for
the full fiscal year. All of the consolidated financial information presented
below should be read in conjunction with "MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" and with the financial
statements and the notes thereto and other financial information appearing
elsewhere in this Prospectus or incorporated by reference herein.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
MARCH 31, YEARS ENDED JUNE 30,
-------------------- ----------------------------
1996(1)(2) 1995(1) 1995(1) 1994(1) 1993(1)
-------- -------- -------- -------- --------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE
AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales................. $2,025.9 $1,834.6 $2,736.1 $2,125.3 $1,438.1
Gross margins............. 532.2 473.9 690.0 382.7 280.8
Sterlington litigation
settlement, net(3)....... (169.1)
Operating earnings (loss). 330.7 341.3 503.1 244.6 (62.1)
Interest earned and other
non-operating (income)
and expense, net......... (5.4) (4.4) (6.3) 18.6 (0.7)
Interest charges.......... 50.0 52.4 70.2 91.2 55.6
-------- -------- -------- -------- --------
Earnings (loss) before
minority interest and
items noted below........ 286.1 293.3 439.2 134.8 (117.0)
Minority interest......... 148.6 101.7 130.4 55.6
-------- -------- -------- -------- --------
Earnings (loss) before
items noted below........ 137.5 191.6 308.8 79.2 (117.0)
Provision (credit) for
income taxes............. 59.6 71.5 115.5 34.8 (39.1)
-------- -------- -------- -------- --------
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes....... 77.9 120.1 193.3 44.4 (77.9)
Extraordinary loss-debt
retirement............... (3.7) (6.5) (25.2) (2.0)
Cumulative effect on prior
years of changes in
accounting for
postemployment benefits
(net of taxes) in 1995
and postretirement
benefits other than
pensions (net of taxes)
in 1993.................. (5.9) (5.9) (47.1)
-------- -------- -------- -------- --------
Net earnings (loss)....... $ 77.9 $ 110.5 $ 180.9 $ 19.2 $ (127.0)
======== ======== ======== ======== ========
EARNINGS (LOSS) PER SHARE:
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting changes....... $ 0.84 $ 1.32 $ 2.12 $ 0.54 $ (1.02)
Extraordinary loss-debt
retirement............... (0.04) (0.07) (0.31) (0.03)
Cumulative effect on prior
years of changes in
accounting............... (0.06) (0.06) (0.62)
-------- -------- -------- -------- --------
Net earnings (loss)....... $ 0.84 $ 1.22 $ 1.99 $ 0.23 $ (1.67)
======== ======== ======== ======== ========
Weighted average number of
shares and equivalent
shares outstanding........ 92.7 90.9 91.0 82.3 76.3
BALANCE SHEET DATA (AT END
OF PERIOD):
Working capital........... $ 415.4 $ 426.2 $ 461.5 $ 483.6 $ 311.4
Total assets.............. 3,526.2 3,346.7 3,323.2 3,172.3 2,343.3
Long-term debt, less
current maturities....... 696.1 784.2 750.2 801.6 994.6
Total stockholders'
equity................... 1,084.2 939.0 1,007.8 856.3 602.3
OTHER FINANCIAL DATA:
Capital expenditures...... $ 129.3 $ 75.6 $ 114.9 $ 76.0 $ 137.1
Depreciation, depletion
and amortization......... 124.5 122.7 166.4 147.1 85.6
</TABLE>
- -------
(1) See the footnotes to the IMC annual or interim financial statements
incorporated by reference herein for a description of non-recurring items
and accounting changes affecting the respective period's results.
Beginning in 1994, financial information reflects the consolidation of
IMC-Agrico which was formed on July 1, 1993.
(2) Results for the nine months ended March 31, 1996 include special one-time
charges of $98.6 million ($69.6 million after tax benefits, or $0.75 per
share) for costs related to the Merger, as well as costs associated with,
among other things, a corporate restructuring, other asset valuations and
environmental issues. See "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS."
(3) Represents a charge related to the settlement of litigation resulting from
the May 1991 explosion at a facility managed by the Company in
Sterlington, Louisiana.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of results of operations and capital
resources and liquidity should be read in conjunction with the Company's
audited consolidated financial statements and notes thereto and unaudited
condensed consolidated financial statements and notes thereto incorporated
herein by reference.
RESULTS OF CONSOLIDATED OPERATIONS
On March 1, 1996, the Company completed the Merger with Vigoro which
resulted in Vigoro becoming a subsidiary of the Company. In connection with
the Merger, the Company issued approximately 32.4 million shares of Common
Stock in exchange for all of the outstanding common stock of Vigoro. The
Merger has been accounted for as a pooling-of-interests. The Company's results
of operations for the nine month periods ended March 31, 1996 and 1995 and for
the fiscal years ended June 30, 1995, 1994 and 1993, respectively, have been
restated for the Merger. The following comparisons between the nine month
periods ended March 31, 1996 and 1995 and the fiscal years ended June 30, 1995
and 1994, respectively, reflect such restated results and assume that the
Merger had occurred on July 1, 1992.
In January 1995, the Company acquired substantially all of the assets of the
Central Canada Potash division of Noranda ("CCP") for $121.1 million, plus
$16.2 million for working capital. The Company used proceeds borrowed under a
credit facility to finance the purchase price, while using cash on hand to
acquire the working capital. In October 1995, the Company acquired the animal
feed ingredients business ("Feed Ingredients") of Mallinckrodt Group Inc. and
subsequently contributed the business to IMC-Agrico. The Company's portion of
the purchase price was $67.5 million.
NINE MONTHS ENDED MARCH 31, 1996 VS. NINE MONTHS ENDED MARCH 31, 1995
Net earnings for the nine months ended March 31, 1996, before special one-
time charges, totaled $147.5 million, or $1.59 per share, compared to the same
period in 1995 when the Company reported net earnings of $110.5 million, or
$1.22 per share. Special one-time charges of $69.6 million, or $.75 per share,
reduced earnings for the nine months ended March 31, 1996 to $77.9 million, or
$.84 per share. The charges, totaling $98.6 million before tax benefits,
covered costs related to the Merger, as well as costs associated with, among
other things, a corporate restructuring, other asset valuations and
environmental issues. For the nine months ended March 31, 1995, operating
results included a one-time charge of $5.9 million, or $.06 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 $3.7
million, or $.04 per share, related to the early extinguishment of debt.
The special one-time charges of $98.6 million consisted primarily of the
following: (a) $20.2 million primarily for consulting, legal and accounting
services in connection with the Merger, (b) $23.1 million as a result of the
Company's adoption of a plan, immediately following the Merger, to restructure
its business operations into a decentralized organizational structure with
five stand-alone business units, (consisting of $10.6 million for severance
and related benefits from staff reductions (primarily payable on June 30,
1996), $6.5 million for lease terminations resulting from office
consolidations and $6.0 million for other related actions), and (c) $58.3
million as a result of the Company's detailed review of its accounting records
and valuation of various assets and liabilities, in connection with the
restructuring plan identified in (b) above. The $58.3 million was comprised of
$26.3 million of charges to cost of goods sold, primarily related to the
write-off of certain idle plant facilities and other obsolete assets, $2.4
million of charges to general and administrative expenses for the write-off of
miscellaneous assets, $16.6 million of charges to other operating income and
expense to reduce certain long-term assets to net realizable value and other
provisions, and $13.0 million of charges to minority interest for the transfer
of 0.85 percent of IMC-Agrico Distributable Cash (as defined in the
Partnership Agreement) from the Company to FRP. See "Joint Venture
Partnership".
11
<PAGE>
Net sales for the nine months ended March 31, 1996 were $2,025.9 million, a
10 percent increase over the same period of 1995 when net sales were $1,834.6
million. The acquisitions of CCP and Feed Ingredients, as well as a
significant improvement in concentrated phosphate prices, contributed to this
increase.
Gross margins for the nine months ended March 31, 1996 totaled $532.2
million versus $473.9 million for the same period a year ago. Before the $26.3
million of special charges described above, gross margins increased $84.6
million, or 18 percent, when compared to the nine months ended March 31, 1995.
Higher margins for phosphates, a $75 million increase, the addition of Feed
Ingredients margins of $18 million, and agribusiness and nitrogen margins, a
$15 million increase, were partially offset by lower potash margins of $24
million.
Phosphate margins were significantly higher primarily due to higher prices
($179 million) as average diammonium phosphate ("DAP") prices increased 18
percent over the same period a year ago. Other phosphate products showed
similar price improvements. Partially offsetting the price and sales volume
increases were higher production costs ($106 million) primarily due to higher
raw material costs.
Agribusiness and nitrogen margins (which include crop nutrients and related
products sold through the Company's FARMARKET(R) and Rainbow(R) distribution
networks) increased primarily due to higher fall sales volume and prices ($26
million) due to favorable fall weather conditions and the anticipation of
increased acres being planted in the spring of 1996. Partially offsetting the
sales volume and price increases were higher production costs ($11 million)
primarily due to higher raw material costs.
Potash margins decreased from 1995 levels primarily as a result of higher
production costs ($24 million) due to lower production rates and the
settlement of a provincial tax matter from prior years. Reduced sales to China
during the third quarter of 1996 offset previous sales volume increases.
The following table summarizes the Company's sales (excluding captive
shipments) of crop nutrient products and average selling prices for the nine
months ended March 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
------- -------
(TONS IN
MILLIONS OF
SHORT TONS)
<S> <C> <C>
Concentrated phosphates
Total dry product sales tons (primarily DAP)........... 5.7 5.5
Average DAP price per ton*............................. $189.06 $160.19
Phosphate rock
Sales tons............................................. 6.1 8.3
Average price per ton (FOB mine)....................... $ 23.23 $ 20.07
Potash
Sales tons............................................. 4.8 5.0
Average price per ton*................................. $ 63.81 $ 64.30
</TABLE>
- --------
*Average prices represent sales made FOB mine and regional warehouses.
Selling, general and administrative expenses increased $20.8 million in the
nine months ended March 31, 1996 over the similar 1995 period primarily due to
the acquisition of several businesses, including CCP and Feed Ingredients,
restructuring charges described above and increased legal expenses. The nine
months ended March 31, 1995 included one-time charges related to shifting the
marketing and administrative functions of Phosphate Chemicals Export
Association, Inc. to its member companies.
Other operating income and expense, net, for the nine months ended March 31,
1996 included $16.6 million of restructuring charges described above, offset
by $12.4 million of gains from the sale of investments and properties. In the
similar 1995 period, other operating income and expense, net, included a gain
of $5.0 million from the sale of land in Florida.
Interest charges for the nine months ended March 31, 1996 were $2.4 million
lower than the same period a year ago as the Company reduced a portion of its
high-cost long-term indebtedness during the prior fiscal year. Partially
offsetting this decrease were higher interest charges resulting from long-term
debt increases used to fund the acquisition of CCP and other acquisitions of
the Company during the nine months ended March 31, 1995.
12
<PAGE>
YEAR ENDED JUNE 30, 1995 VS. YEAR ENDED JUNE 30, 1994
Earnings for the year ended June 30, 1995 totaled $180.9 million, or $1.99
per share, up significantly over 1994 when earnings totaled $19.2 million, or
$.23 per share. Included in 1995 operating results were an extraordinary
charge of $6.5 million, or $.07 per share, related to the early extinguishment
of debt; and a one-time charge of $5.9 million, or $.06 per share, for the
cumulative effect on prior years of a change in accounting for postemployment
benefits resulting from the adoption of SFAS No. 112 on July 1,1994. In 1994,
operating results included an extraordinary charge of $25.2 million, or $.31
per share, related to the early extinguishment of debt; a charge of $20.3
million, $12.4 million after taxes, or $.15 per share, related to the write-
down of the Company's investment in an oil and gas joint venture; and a charge
of $4.5 million, or $.05 per share, for an adjustment to the Company's net
deferred tax liability for the effect of changes in U.S. corporate tax rates.
Net sales for the year ended June 30, 1995 totaled $2,736.1 million, an
increase of $610.8 million, or 29 percent, over 1994 when net sales were
$2,125.3 million. Sales were higher primarily due to strong concentrated
phosphate and nitrogen based product demand, the inclusion of sales from the
acquisition of CCP and record purchases of potash and concentrated phosphates
by China.
Gross margins for the year ended June 30, 1995 increased $307.3 million or
80 percent over 1994, primarily due to higher margins for phosphates, a $200
million increase; potash, a $75 million increase; and agribusiness and
nitrogen, a $26 million increase. Gross margins as a percentage of net sales
increased to 25 percent in 1995 compared to 18 percent in 1994.
Phosphate margins increased significantly over 1994, due primarily to higher
prices stemming from increasing world demand ($225 million) as average
concentrated phosphate sales prices increased 20 percent over 1994 and higher
shipping volume ($53 million) which increased 18 percent over 1994.
Domestically, sales volume for concentrated phosphates was marginally lower,
due primarily to abnormally wet weather conditions in the spring which delayed
fieldwork, planting and, therefore, concentrated phosphate shipments. However,
record purchases by China resulted in a 38 percent increase in export volume
when compared to 1994. The increase in export volume contributed to increased
demand in the marketplace and resulted in higher sales realizations. In
addition, phosphate rock sales volume also increased, mostly due to the
addition to fiscal 1995 operating results of sales from a new long-term supply
contract. Partially offsetting the price and volume increases were higher
production costs ($78 million) primarily due to higher raw material costs and,
to a lesser degree, remediation costs associated with a sinkhole at IMC-
Agrico's New Wales concentrated phosphate production facility in Florida. See
"Environmental Matters" below.
Agribusiness and nitrogen margins increased 19 percent over 1994, and
reflected the impact of an 8 percent increase in overall average sales prices
($69 million) and a 7 percent increase in sales volume ($6 million). The
increase in sales prices and volume primarily reflected the impact of tight
supplies of nitrogen product in the U.S. due to agricultural demand exceeding
capacity. The increase in sales volume in 1995 was partially offset by the
sale of 17 FARMARKETs in August 1994. Partially offsetting the price and
volume increases were higher product costs ($49 million), primarily due to
higher purchased product and raw material costs.
Potash margins for 1995 increased 57 percent over 1994, due primarily to the
impact of a 30 percent increase in potash sales volume ($39 million), mostly
due to the acquisition of CCP in 1995 and increased potash export shipments,
reflecting record purchases by China. Production costs were also lower ($21
million) and reflected increased production rates and lower water inflow
control spending at the Company's Esterhazy, Saskatchewan potash mine. In
addition, potash sales prices increased 3 percent as producer inventory levels
were below normal which resulted in higher prices ($15 million).
Selling, general and administrative expenses increased $30.2 million over
1994 primarily due to the acquisition of CCP, higher volume-related expenses,
higher legal expenses and charges related to shifting the marketing and
administrative functions of Phosphate Chemicals Export Association, Inc. to
its member companies.
13
<PAGE>
Other operating income and expense, net, in 1995 included $5.0 million ($3.1
million net of minority interest) 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.
Other non-operating income and expense, net, in 1994, included a charge of
$20.3 million related to the write-down of the Company's investment in its oil
and gas joint venture.
Interest charges in 1995 were $21.0 million lower than in 1994 as the
Company purchased and retired a significant portion of its high-cost, long-
term indebtedness throughout the year. Partially offsetting this decrease was
higher interest charges resulting from long-term debt increases used to fund
the acquisition of CCP and other acquisitions of the Company.
Income taxes in 1994 included a charge of $4.5 million for an adjustment to
the Company's net deferred tax liability for the effect of changes in U.S.
corporate tax rates.
CAPITAL RESOURCES AND LIQUIDITY
Since June 30, 1995, cash and cash equivalents have decreased $154.5
million. Cash inflows of $270.0 million generated from operating activities
partially funded $168.8 million of cash sharing distributions to FRP, $129.3
million of capital expenditures, $67.5 million to purchase Feed Ingredients,
$62.1 million of long-term debt payments net of proceeds received and $28.1
million of common stock dividend payments.
The Company's working capital ratio at March 31, 1996 was 1.7:1 versus 2.0:1
at June 30, 1995. Debt to capitalization improved to 41.3 percent at March 31,
1996 compared to 48.3 percent a year ago and 45.0 percent at June 30, 1995.
The decrease was primarily due to a reduction in indebtedness resulting from
management's efforts to reduce a portion of its high-cost, long-term
indebtedness.
On February 28, 1996, the Company entered into an unsecured credit facility
(the "Credit Facility") with a group of banks. Under the terms of the Credit
Facility, the Company and certain of its subsidiaries may borrow up to $450
million under a revolving credit facility which matures on March 1, 1999 and
$50 million under a long-term credit facility which matures March 2, 2001. At
March 31, 1996, the Company and its subsidiaries had borrowed $66.5 million
under the revolving credit facility and $50 million under the long-term
facility. In addition, $37.9 million was drawn down under the Credit Facility
as letters of credit principally to support industrial revenue bonds and other
debt and credit risk guarantees.
Simultaneously with the execution of the Credit Facility, the Company and
one of its subsidiaries assumed and amended the terms of unsecured term loans
of Vigoro and one of its subsidiaries. The $120 million unsecured term loans
(the "Term Loans") bear interest at rates between 7.37 percent and 7.43
percent and mature at various times between 2000 and 2005.
IMC-Agrico also has an agreement with a group of banks to provide it with a
$75 million unsecured revolving credit facility (the "Initial Facility") until
February 1997. At May 10, 1996, the Initial Facility was fully utilized. In
addition, in May 1996 IMC-Agrico entered into two additional unsecured
revolving credit facilities under which it may borrow up to $75 million until
February 1997 (collectively with the Initial Facility, the "IMC-Agrico Working
Capital Facility"). On May 10, 1996, $25 million was borrowed under these
additional facilities.
The Credit Facility and Term Loans contain customary negative covenants and
financial ratios and other tests which must be met with respect to interest
coverage, tangible net worth and leverage. The IMC-Agrico Working Capital
Facility contains financial ratios and tests with respect to fixed charge
coverage, current ratio and minimum net partners' capital requirements. The
IMC-Agrico 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 in the Partnership Agreement). In
addition, pursuant to the Partnership
14
<PAGE>
Agreement, IMC-Agrico is required to obtain the approval of the Policy
Committee of IMC-Agrico (which consists of two representatives from each of
the Company and FRP) (the "Policy Committee") prior to incurring more than an
aggregate of $5 million (adjusted annually for inflation) in indebtedness
(excluding a total of $125 million of indebtedness under the IMC-Agrico
Working Capital Facility).
Under a current agreement with a financial institution, IMC-Agrico may sell,
on an ongoing basis, an undivided percentage interest in a designated pool of
receivables in an amount not to exceed $65 million. At March 31, 1996, IMC-
Agrico had sold $62.5 million of such receivable interests.
The Company periodically enters into DAP futures contracts and options to
purchase natural gas to manage its exposure to price fluctuations. The Company
also has periodically entered into forward exchange contracts to hedge the
effect of Canadian dollar exchange rate changes on a portion of identifiable
foreign currency exposures from operations. Net hedging gains and losses are
recognized as a part of the transactions hedged and were not significant
during the nine month period ended March 31, 1996. The Company monitors its
market risk on an ongoing basis and considers its risk to be minimal.
The Company estimates that its capital expenditures for 1996 will total
approximately $197 million (including $66 million by IMC-Agrico). The Company
expects to finance these expenditures (including its portion of IMC-Agrico's
capital expenditures) from operations. Pursuant to the Partnership Agreement,
IMC-Agrico is required to obtain the approval of the Policy Committee of IMC-
Agrico prior to making capital expenditures in any fiscal year in excess of $5
million (adjusted annually for inflation) for expansion of its business. In
the event that the Policy Committee fails to approve future capital
expenditures, IMC-Agrico's ability to expand its business could be adversely
affected. See "Environmental 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 located in Esterhazy, Saskatchewan. 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 $13 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.
As is common in the industry, the Company does not presently have in place,
nor can it reasonably obtain, any insurance to cover damage to its underground
potash operations.
IMC-Agrico makes cash distributions to each partner based on formulas and
sharing ratios as defined in the Partnership Agreement. For the nine months
ended March 31, 1996, the total amount of Distributable Cash generated by IMC-
Agrico was $358.6 million, of which $190.3 million was distributed to FRP,
including $73.2 million in May 1996.
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, the Company 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
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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 the Policy
Committee 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 the Company and FRP, respectively.
On January 23, 1996, the Company and FRP entered into certain amendments to
the Partnership Agreement in part to reflect possible changes in the nature of
the business of the Company resulting from the Vigoro Merger. These amendments
provide for (i) a shift of 0.85 percent of Distributable Cash interest of IMC-
Agrico from the Company to FRP beginning March 1, 1996, (ii) changes to
certain IMC-Agrico governance procedures, including the establishment of a new
office of President for IMC-Agrico, who is appointed by the Company subject to
the approval of the Policy Committee, and a related clarification of
management and reporting responsibilities, (iii) the modification of certain
product pricing and sourcing provisions with respect to transactions between
IMC-Agrico and affiliates of the Company, including the FARMARKET network of
Vigoro and (iv) the establishment of criteria under which certain acquisitions
by the Company's Rainbow Division or FARMARKET network would not be required
to be offered to IMC-Agrico.
Cash sharing percentages will be adjusted until July 1, 1997, when the
sharing ratios will be fixed at 58.5 percent and 41.5 percent to the Company
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.
ENVIRONMENTAL MATTERS
General
In the normal course of its business, the Company mines phosphate and
potash, manufactures and blends crop nutrients, and blends pesticides and
related products. These operations are subject to federal, state, provincial
and local environmental, health and safety laws in the United States and
Canada, including laws related to air and water quality, handling of hazardous
and solid wastes, chemical management and land reclamation. The Company has
expended substantial resources, both financial and managerial, to comply with
environmental regulations and permitting and reclamation requirements, and
anticipates that it will continue to do so in the future. Additionally,
although the Company believes that its operations generally are in compliance
with environmental standards, there can be no assurance that costs, penalties,
or liabilities will not be incurred. The Company does not believe that its
expenditures for environmental compliance have had a material adverse effect
on its operations or financial condition.
In fiscal year 1995, environmental capital expenditures totaled
approximately $8.8 million, and were primarily related to air emissions
control, wastewater treatment and control, and solid waste disposal.
Additional expenditures for land reclamation activities totaled $14.5 million.
For fiscal year 1996, the Company expects
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environmental capital expenditures to be approximately $22.0 million and
expenditures for land reclamation activities to be approximately $18.0
million. The increase in environmental capital expenditures from $8.8 million
in 1995 to an estimated $22.0 million in 1996 resulted primarily from
construction of clay settling areas associated with phosphate rock mining
activities and gypsum stack expansion projects associated with phosphoric acid
production. No assurance can be given (i) that greater environmental
expenditures will not be required for fiscal year 1996, or (ii) that
environmental expenditures in future years will not increase.
Environmental laws and regulations in the United States and Canada have
changed substantially and rapidly in recent years, and the Company anticipates
that these changes will continue. It is the Company's policy to comply with
all applicable environmental, health and safety laws and regulations. When
regulations implementing a statute have not been finalized or when final
regulations are subject to varying and conflicting interpretations, it is
difficult to estimate future compliance costs. Nevertheless, because new
environmental standards generally are more restrictive than current
requirements, the costs of complying with such regulations likely will
increase.
Permitting
The Company holds numerous environmental and other permits for operations at
each of its facilities. If a government agency were to deny a permit
application or permit renewal, or revoke or substantially modify an existing
permit, such agency action could have a material adverse effect on the
Company's ability to continue operations at the affected facility. Expansion
of Company operations also is predicated upon securing the necessary
environmental and other permits.
Air Quality
The 1990 Amendments to the Clean Air Act require certain sources to control
their emissions of hazardous air pollutants. By the year 2000, the United
States Environmental Protection Agency will have promulgated control standards
applicable to certain of the Company's operations, and capital expenditures
may be necessary to meet these standards. Because the regulatory requirements
have not been finalized, the Company cannot estimate the extent of these
expenditures.
Management of Residual Materials
The mining and processing of potash and phosphate produce tailings or other
residual materials that must be managed. Phosphate residuals consisting
primarily of phosphogypsum typically are stored in phosphogypsum stack
systems. Potash producers generally store tailings, which contain primarily
sodium chloride, iron and clay, in surface disposal sites. Recently, a process
was developed whereby the Company returns potash tailings, produced in its
solution mining process, to mined-out underground shafts, which minimizes
surface disposal sites. The Company has incurred and will continue to incur
significant costs to manage such residual materials in accordance with
environmental laws, regulations, and permit requirements. The magnitude of
future management costs is difficult to estimate and there can be no
assurances that such costs will not have a material adverse effect on the
Company.
In 1994, the Saskatchewan Department of Environmental and Resource
Management (the Department) published regulations requiring each potash mine
operator to submit a facility decommissioning and reclamation plan for
approval and to provide assurances that the plan will be carried out. The plan
and related assurances would cover all mining facilities including surface
disposal sites for potash tailings. The Company expects that the filing of the
plan will be required during 1996; however, implementation of the plan
probably will be deferred until an affected facility is closed (which is not
anticipated at any time in the foreseeable future). At the Company's Belle
Plaine mining operations, the solution mining process can be adapted to return
tailings now stored above ground to previously mined locations, at relatively
low cost. However, at the Company's Esterhazy and Colonsay mining operations,
shaft mining methods are utilized and, as a result, the cost to eliminate the
surface tailings and to comply with requirements such as those contained in
the regulations may be greater. The Company believes that until the plans have
been prepared and the responses received from the Department, the Company,
like all members of the Saskatchewan potash industry, will be unable to
predict with certainty the financial impact of the proposed regulation on the
Company.
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With regard to phosphate processing, Florida law may require IMC-Agrico to
close one or more of its unlined phosphogypsum stacks and/or associated
cooling ponds after March 25, 2001, if the stack system is causing a violation
of Florida's water quality standards. IMC-Agrico cannot predict at this time
whether Florida will require closure of any of its stack systems; however, the
cost of closure and replacement facilities could be significant.
In June 1994 during a routine inspection, IMC-Agrico discovered a deep,
cylindrical hole (caused by a sinkhole) in the north gypsum stack at its New
Wales, Florida concentrated phosphate production facility. The Florida
Department of Environmental Protection (FDEP) was notified and approved IMC-
Agrico's plan to plug the sinkhole by grouting, at a cost of $ 6.8 million.
After grouting, IMC-Agrico filled the hole with gypsum slurry. FDEP also
required IMC-Agrico to continue monitoring groundwater quality. Samples from
the plant production well confirm that the sinkhole has been plugged.
Monitoring data also confirm that all groundwater constituents attributable to
the sinkhole have been contained within IMC-Agrico's property. Based on
discussions with state officials, IMC-Agrico may be required to close this
gypsum stack, possibly beginning July 1, 1998. The estimated cost of closure
is $2.5 million, net of recorded accruals.
IMC-Agrico continues to address elevated sulfate levels in groundwater at
its New Wales, Florida facility. In 1992, elevated sulfate levels were
detected in groundwater beneath the cooling pond. In response, the Central
Florida Regional Planning Council required IMC-Agrico to plug former recharge
wells (believed to be the source of the elevated sulfate levels) and either to
show, by September 1997, that groundwater sulfate levels have returned to
acceptable levels or to line or relocate the cooling pond. Monitoring data
gathered between July 1993 and June 1994 evidenced a consistent downward trend
in the sulfate levels; however, when the hole in the gypsum stack, discussed
above, was discovered, sulfate levels increased sharply. After the hole was
grouted, sulfate levels again trended downward. If the downward trend
continues, IMC-Agrico likely will meet the 1997 deadline. If sulfate levels do
not reach acceptable levels, IMC-Agrico will request an extension of the 1997
deadline. The estimated cost to line or relocate the cooling pond would be
between $35 million and $68 million.
Water Management
Two earthen dams used to contain mining water from IMC-Agrico's phosphate
rock mining facilities in Florida were breached during calendar year 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 covered some of this amount. The
state issued a notice of violations to IMC-Agrico for each breach, and, based
on current negotiations, potential penalties are not expected to be material.
Remedial Activities
The historical use and handling of regulated chemical substances and crop
nutrient products in the normal course of the Company's business has resulted
in contamination at facilities presently or previously owned or operated by
the Company. Spills or other unintended releases of such substances have
occurred in the past, and potentially could occur in the future, possibly
requiring the Company to undertake or fund cleanup efforts. To date, the
Company has not been required to make material expenditures in connection with
the cleanup of contamination at any such facility, nor can the Company
estimate the level of expenditure that may be required in the future to clean
up contamination from the handling of regulated chemical substances or crop
nutrients.
Governmental regulatory agencies have identified several of the Company's
facilities for investigation or possible environmental cleanup pursuant to
applicable laws and regulations. At some locations, the Company has agreed,
pursuant to consent orders with the appropriate governmental agencies, to
undertake certain remedial actions based upon the results of investigations,
which currently are in progress. The cost of any remedial actions that
ultimately may be required at these sites currently cannot be determined.
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The Company believes that it is entitled to at least partial indemnification
for a portion of the costs that may be expended by the Company to remedy
environmental problems at certain facilities and operations pursuant to
indemnification agreements. These agreements address problems that resulted
from activities occurring prior to the Company's acquisition of facilities
from parties including PPG Industries, Inc., Kaiser Aluminum & Chemical
Corporation, Beatrice Companies, Inc., Estech, Inc. and certain private
parties. The Company has already received and anticipates receiving amounts
pursuant to the indemnification agreements for certain of its expenses
incurred to date.
Superfund
The Comprehensive Environmental Response Compensation 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 in or
concluding involvement at a number of Superfund sites. With possible
exceptions, discussed below, at none of these sites alone, nor in the
aggregate, is the Company's liability currently expected to be material. As
more information is obtained regarding the sites and the potentially
responsible parties (PRPs) involved, this expectation may change.
At the Old Marsh Aviation Site, Arizona, the lack of information regarding
the Company's level of involvement, if any, makes it very difficult to
estimate the Company's share of the investigative and cleanup costs. A third-
party plaintiff has brought a contribution action against approximately 60
PRPs, including the Company, to allocate among them the $11.5 million spent by
Goodyear to clean up the Old Marsh Site. In 1995, the Company received a vague
and ambiguous summons and third-party complaint in this case which was
dismissed. The plaintiff has recently served another complaint which alleges
that the Company "arranged for the aerial application of chemicals from the
site" and is, therefore, an owner/operator of the facility. The Company has
asked the court to dismiss the complaint on the basis that it fails adequately
to allege any liability on the Company's part.
IMC-Agrico is one of 70 PRPs participating in investigation of the Petroleum
Products Site. To date, the PRP group has spent approximately $2.7 million to
address waste oil remaining on site, and expects to spend up to $6.0 million
on these activities. Remedial cost estimates to clean up on-site soils and
structures range from $2.0 million to $40.0 million. Cost estimates have not
yet been developed for groundwater remediation. IMC-Agrico tentatively has
been allocated 20,774 gallons of waste oil based on ledger entries, which
places IMC-Agrico 27th on the list of 70 members within the PRP group. The
group also has identified approximately 1,000 additional PRPs. Because
investigation of the site is incomplete and the required remedy has not been
selected, a reliable estimate of cleanup costs, and IMC-Agrico's contribution
to those costs, cannot be made at this time.
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THE COMPANY
GENERAL
The Company is one of the world's leading producers of crop nutrients for
the international agricultural community and is one of the largest
distributors in the United States of crop nutrients and related products
through its retail and wholesale distribution networks. The Company mines,
processes and distributes potash in the United States and Canada, and is a
joint venture partner in IMC-Agrico, a leading producer, marketer and
distributor of phosphate crop nutrients and a leading producer and marketer of
animal feed ingredients. The Company believes that it is one of the lower-cost
North American producers of phosphate rock, concentrated phosphates and
potash. The Company's retail distribution network, which extends principally
to corn and soybean farmers in the Midwestern and Southeastern United States,
is one of the largest distributors of crop nutrients and related products in
the United States. The Company also manufactures nitrogen-based and other
high-value crop nutrients which are marketed on a wholesale basis principally
in the Midwestern and Southeastern United States. In addition, the Company
sells specialty lawn and garden, turf, and nursery products on a national
basis and ice-melter products in the Midwest and Eastern snow-belt states.
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 supplying
crop nutrient products worldwide at competitive prices by taking advantage of
economies of scale and state-of-the-art technology to reduce costs. The
Company intends to continue to expand its product distribution and marketing
throughout the world, including through export associations and through its
international sales force.
On March 1, 1996, the Company completed the Merger, which resulted in Vigoro
becoming a subsidiary of the Company. The Merger enables the Company, among
other things, to broaden its business mix and to reduce the relative
importance of generally more price-volatile phosphate-based crop nutrients to
the Company's consolidated results. In addition, the Merger has expanded the
Company's potash customer base to include industrial customers, whereas
previously shipments of potash were primarily made to agricultural markets.
Vigoro also has a significant retail distribution network, giving it direct
contact with farmers, the principal consumers of crop nutrient products. Prior
to the Merger, IMC sold a limited amount of products directly to farmers.
Following the Merger, the Company restructured its operations into five stand-
alone business units corresponding to its major product lines as follows:
Phosphates, Potash, Agribusiness and Nitrogen, Consumer and Professional
Products and Animal Feed Ingredients.
PHOSPHATES
IMC-Agrico is the leading United States miner of phosphate rock in terms of
capacity and output. IMC-Agrico's central Florida phosphate mining operations
and production plants produce phosphate rock, which is the primary raw
material used in the manufacture of concentrated phosphates. IMC-Agrico sells
phosphate rock principally to other crop nutrients manufacturers and
distributors throughout the world and uses it internally in the production of
concentrated phosphates. Currently, IMC-Agrico has 27 million tons of annual
phosphate rock capacity. Product shipments to customers in fiscal year 1995 by
IMC-Agrico phosphate rock operations totaled approximately 10.8 million tons.
For the nine months ended March 31, 1996, IMC-Agrico shipped approximately 5.9
million tons of phosphate rock to customers. IMC-Agrico has estimated reserves
of 308 million tons of phosphate rock in central Florida as of March 31, 1996
that are mineable from existing operations.
IMC-Agrico is also the largest United States producer of concentrated
phosphates with an annual capacity of 4 million tons of phosphoric acid
(P/2/0/5/ equivalent). P/2/O/5/ is an industry term indicating a product's
phosphate content measured chemically in units of phosphorous pentoxide.
Concentrated phosphates are produced by reacting phosphate rock with sulfuric
acid and other materials. IMC-Agrico's concentrated phosphates products are
marketed worldwide to crop nutrient manufacturers, distributors and retailers.
IMC-Agrico's New Wales concentrated phosphates complex in central Florida is
the largest concentrated phosphates plant in the world with an estimated
annual capacity of 1.76 million tons of phosphoric acid (P/2/O/5/ equivalent).
In fiscal year 1995, IMC-Agrico's concentrated phosphates operations shipped
approximately 4.0 million P/2/O/5/ equivalent tons of concentrated phosphates.
For the nine months ended March 31, 1996, IMC-Agrico shipped approximately 3.1
million P/2/O/5/ equivalent tons of concentrated phosphates.
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POTASH
The Company mines, processes and distributes potash in the United States and
Canada. The Company's potash products are marketed worldwide to crop nutrient
manufacturers, distributors and retailers and are also used internally in the
manufacture of mixed crop nutrients. The Company also sells white potash to
industrial customers. With an annual capacity of over 8.3 million tons per
year, the Company is one of the largest potash producers in the world. The
Company operates four potash mines in Canada and two potash mines in the
United States. The Company utilizes shaft mining technology at four of its
mines and solution mining technology at the other two mines. At March 31,
1996, the Company had reserves of 157 million tons of recoverable ore in the
United States and 2.4 billion tons of recoverable ore in Canada.
AGRIBUSINESS AND NITROGEN
Agribusiness and nitrogen consists of two nitrogen production facilities,
approximately 200 FARMARKET units and the wholesale distribution of high-value
crop nutrients which are marketed under the Rainbow brand name. The FARMARKET
network provides retail distribution of crop nutrients and related products
principally to corn and soybean farmers in the Midwestern and Southeastern
United States. In addition, the FARMARKET network provides a wide range of
services for farmers, including soil testing, custom crop nutrients blending
and crop nutrients application.
CONSUMER AND PROFESSIONAL PRODUCTS
The Company sells specialty crop nutrient products consisting of lawn and
garden products and turf and nursery products. The lawn and garden products
are sold throughout the United States primarily to major national retail
chains under private label brands, and the turf and nursery products are sold
to golf courses, nurseries, landscape contractors and institutions directly
and through independent distributors. The Company also sells environmentally-
sensitive ice-melters under various brands throughout the Midwest and Eastern
snow-belt states.
ANIMAL FEED INGREDIENTS
In October 1995, IMC-Agrico acquired the animal feed ingredients business of
Mallinckrodt Group Inc. The acquired business is one of the world's largest
producers of phosphate-based animal feed ingredients with an annual capacity
in excess of 700,000 tons. The principal facilities are located adjacent to
IMC-Agrico's concentrated phosphate complex at New Wales, Florida. IMC-Agrico
also markets potassium-based feed products produced at the Company's New
Mexico facilities.
CONCERNING GVI
GVI has advised the Company that, at the date of this Prospectus, GVI
beneficially owned 6,510,286 shares of Common Stock, which represented 7.1% of
the outstanding Common Stock at June 17, 1996. Assuming (i) the delivery to
the ML & Co. Subsidiary pursuant to the Purchase Agreement of a number of
shares of Common Stock equal to the maximum number required by ML & Co. to pay
and discharge all of the STRYPES and (ii) that the over-allotment option
granted to the Underwriter of the STRYPES is not exercised, GVI would own
849,167 shares or 0.9% of the outstanding Common Stock at June 17, 1996. GVI
is a wholly-owned subsidiary of GAMI. At the date of this Prospectus,
6,300,000 of the 6,510,286 shares owned by GVI are pledged pursuant to a
credit agreement. GVI intends to repay the loan under the credit agreement
with the consideration to be received from the ML & Co. Subsidiary pursuant to
the Purchase Agreement. See "PLAN OF DISTRIBUTION." Rod F. Dammeyer, Chief
Executive Officer and a director of GAMI, the parent company of GVI, and
President, Chief Executive Officer and a director of GVI, is a director of the
Company.
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DESCRIPTION OF CAPITAL STOCK
The following summary does not purport to be complete and is subject to, and
qualified in its entirety by the Restated Certificate of Incorporation of the
Company, the By-Laws of the Company, as amended (the "By-Laws") and the Rights
Agreement.
GENERAL
The total amount of the authorized capital stock of the Company consists of
(i) 250,000,000 shares of Common Stock, $1.00 par value per share, and (ii)
12,000,000 shares of Series Preferred Stock, par value $1.00 per share (the
"Series Preferred Stock"). As of June 17, 1996, 92,305,186 shares of Common
Stock were issued and outstanding and no shares of Series Preferred Stock were
issued and outstanding. Of the 12,000,000 shares of Series Preferred Stock
authorized, 3,000,000 shares have been reserved for issuance as Series C
Preferred Stock pursuant to the Rights Agreement.
CAPITAL STOCK
Under the Restated Certificate of Incorporation, the Company is authorized
to provide for the issuance of shares of the Series Preferred Stock in series,
and to establish from time to time the number of shares to be included in each
such series, to fix the designation, powers, preferences and rights of the
shares of each such series and the qualifications, limitations or restrictions
thereof.
Subject to the rights of the Company's Series Preferred Stock, the holders
of outstanding shares of Common Stock are entitled to receive dividends out of
assets legally available therefor at such times and in such amounts as the
Board of Directors may from time to time determine. The shares of Common Stock
are neither redeemable nor convertible, and the holders thereof have no
preemptive or subscription rights to purchase any securities of the Company.
Each outstanding share of Common Stock is entitled to one vote on all
matters submitted to a vote of stockholders. There is no cumulative voting.
The Board of Directors is expressly authorized to adopt, amend or repeal the
By-Laws of the Company, subject to the power of the stockholders to adopt,
amend or repeal the By-Laws.
Upon liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, and after the Company shall have paid or provided
for the payment to the holders of the Series Preferred Stock of the full
amounts to which they respectively shall be entitled, the remaining net assets
of the Company shall be distributed pro rata to the holders of the Common
Stock in accordance with their respective rights and interests to the
exclusion of the holders of such Series Preferred Stock.
The Company is able to merge or consolidate with other corporations, sell or
transfer all or substantially all of its assets or adopt a plan of
recapitalization, liquidation or dissolution ("Business Combinations") with
the approval of the holders of a majority of the outstanding shares of Common
Stock of the Company, subject to the "fair price" provision in the Company's
Restated Certificate of Incorporation.
In general, the fair price provision requires the approval of the holders of
80% of the voting power of the outstanding capital stock of the Company
entitled to vote generally in the election of directors as a condition for
Business Combinations involving any beneficial holder of more than 20% of such
voting power (an "Interested Stockholder") or one who as a result of such
Business Combination would become an affiliate of an Interested Stockholder,
unless the transaction is either approved by at least a majority of the
members of the Board of Directors who are unaffiliated with the Interested
Stockholder and were directors before the Interested Stockholder became an
Interested Stockholder (the "Disinterested Directors") or certain minimum
price and procedural requirements are met. The term Disinterested Directors
also includes certain successors to Disinterested Directors if unaffiliated
with the Interested Stockholder. The term "Interested Stockholder" also refers
to certain assignees of Interested Stockholders and to affiliates of the
Company who, within two years prior to the date in question, beneficially held
20% or more of the voting power of the outstanding stock of the Company
entitled to vote generally in the election of directors.
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The Company's Restated Certificate of Incorporation also provides that the
affirmative vote of not less than a majority of the voting power of the
outstanding capital stock of the Company entitled to vote generally in the
election of directors is required before the Company may purchase any
outstanding shares of Common Stock at a price known by the Company to be above
market price from a person known by the Company to be the beneficial owner of
3% or more of the outstanding shares of Common Stock, unless the purchase is
made by the Company on the same terms and as a result of a duly authorized
offer to purchase any and all of the outstanding shares of Common Stock.
Special meetings of stockholders may be called only by the Chairman of the
Board, the President of the Company or a majority of the Board of Directors.
The Restated Certificate of Incorporation provides that stockholders may act
only at an annual or special meeting and stockholders may not act by written
consent. In addition, a stockholder may properly bring business before a
stockholders' meeting only if the stockholder has complied with certain notice
procedures set forth in the Company's By-Laws.
Pursuant to the Restated Certificate of Incorporation, the Board of
Directors of the Company is divided into three classes serving staggered
three-year terms. Directors can be removed from office only for cause and only
by the affirmative vote of the holders of a majority of the voting power of
the then outstanding shares of stock of the Company entitled to vote generally
in the election of directors, voting together as a single class. Vacancies on
the Board of Directors may only be filled by the remaining directors and not
by the stockholders.
The Restated Certificate of Incorporation provides that the affirmative vote
of the holders of 80% of the total votes eligible to be cast in the election
of directors is required to amend or repeal, or adopt any provisions in the
Restated Certificate of Incorporation relating to the fair price provisions
discussed above.
The Company is subject to Section 203 of the Delaware General Corporation
Law (the "DGCL"). Section 203 of the DGCL prevents an "interested stockholder"
(defined in Section 203, generally, as a person owning 15% or more of a
corporation's outstanding voting stock) from engaging in a "business
combination" (as defined in Section 203) with a publicly-held Delaware
corporation for three years following the date such person became an
interested stockholder unless (i) before such person became an interested
stockholder, the board of directors of the corporation approved the
transaction in which the interested stockholder became an interested
stockholder or approved the business combination, (ii) upon consummation of
the transaction that resulted in the interested stockholder's becoming an
interested stockholder, the interested stockholder owns at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding stock held by directors who are also officers of the
corporation and by employee stock plans that do not provide employees with the
right to determine confidentially whether shares held subject to the plan will
be tendered in a tender or exchange offer), or (iii) at or subsequent to the
transaction in which such person became an interested stockholder, the
business combination is approved by the board of directors of the corporation
and authorized at a meeting of stockholders by the affirmative vote of the
holders of 66 2/3% of the outstanding voting stock of the corporation not
owned by the interested stockholder.
RIGHTS
On June 21, 1989, the Board of Directors of the Company declared a dividend
of one preferred share purchase right (a "Right") for each outstanding share
of Common Stock. The dividend was payable on July 12, 1989 (the "Record Date")
to the stockholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one two-hundredth of a share of Junior
Participating Preferred Stock, Series C, par value $1.00 per share (the
"Series C Preferred Shares"), of the Company, at a price of $75 per one two-
hundredth of a Preferred Share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement
dated as of June 21, 1989, as amended (the "Rights Agreement"), between the
Company and The First National Bank of Chicago, as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public announcement
that a person or group of affiliated or associated persons (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
shares of Common Stock or (ii) 10 business days (or such later date as may be
determined by action
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<PAGE>
of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 15% or more
of such outstanding shares of Common Stock (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced, with respect to
any of the Common Stock certificates outstanding as of the Record Date, by
such certificate with a notation incorporating the Rights Agreement by
reference. Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person" has become such inadvertently and such Person divests as
promptly as practicable a sufficient number of shares of Common Stock so that
such Person would no longer be an "Acquiring Person", then such Person shall
not be deemed to be an "Acquiring Person" for any purpose under the Rights
Agreement.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date, upon transfer or new
issuance of Common Stock, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Stock outstanding as of the Record Date, even without such notation
thereon, will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights (the "Right
Certificates") will be mailed to holders of record of Common Stock as of the
close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on June 21, 1999 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Series C Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Series C Preferred Shares, (ii) upon the grant to holders of the Series C
Preferred Shares of certain rights or warrants to subscribe for or purchase
Series C Preferred Shares at a price, or securities convertible into Series C
Preferred Shares with a conversion price, less than the then current market
price of the Series C Preferred Shares or (iii) upon the distribution to
holders of the Series C Preferred Shares of evidence of indebtedness or assets
(excluding regular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Series C Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one two-hundredths of a
Series C Preferred Share issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or
subdivisions, consolidations or combinations of the Common Stock occurring, in
any such case, prior to the Distribution Date.
Series C Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Series C Preferred Share will be entitled to a quarterly
dividend payment of 200 times the dividend declared per share of Common Stock.
In the event of liquidation, the holders of the Series C Preferred Shares will
be entitled to an aggregate payment of 200 times the aggregate payment made to
holders of Common Stock. Each Series C Preferred Share will have 200 votes,
voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is exchanged, each
Series C Preferred Share will be entitled to receive 200 times the amount
received per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Series C Preferred Shares' dividend,
liquidation and voting rights, the value of the one two-hundredth interest in
a Series C Preferred Share purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that, after a Distribution Date, the Company is acquired in a
merger or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold or otherwise
24
<PAGE>
transferred, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the event that any
person becomes an Acquiring Person, proper provision will be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring
Person and its affiliates and associates (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of shares of
Common Stock having a market value of two times the exercise price of the
Right. If the Company does not have sufficient shares of authorized Common
Stock, or if the Board of Directors so elects, the Company shall deliver upon
payment of the exercise price of a Right an amount of cash or securities
equivalent in value to the Common Stock issuable upon exercise of a Right;
provided, that if the Company fails to meet such obligation within 30 days
following the later of (x) the first occurrence of an event triggering the
right to purchase Common Stock and (y) the date on which the Company's right
to redeem the Rights expires, the Company must deliver, upon exercise of a
Right but without requiring payment of the exercise price then in effect,
Common Stock (to the extent available) and cash equal in value to the
difference between the value of the Common Stock otherwise issuable upon the
exercise of a Right and the Purchase Price. The Board of Directors may extend
the 30-day period described above for up to an additional 60 days to permit
the taking of action that may be necessary to authorize sufficient additional
Common Stock to permit the issuance of Common Stock upon the exercise in full
of the Rights.
At any time after the acquisition by an Acquiring Person of beneficial
ownership of 15% or more of the outstanding Common Stock and prior to the
acquisition by such person or group of 50% or more of the outstanding Common
Stock, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part for Common Stock at an exchange ratio of one-half of the number of
shares of Common Stock which each holder of a Right would have a right to
receive upon exercise of a Right after giving effect to the adjustment set
forth in Section 11(a) (ii) of the Rights Agreement or one two-hundredth of a
Series C Preferred Share (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Series C Preferred Shares will be issued
(other than fractions which are integral multiples of one two-hundredth of a
Series C Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Series C Preferred Shares on the
last trading day prior to the date of exercise.
At any time prior to the acquisition by an Acquiring Person of beneficial
ownership of 15% or more of the outstanding Common Stock, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.005 per Right adjusted to reflect any stock split, stock dividend
or similar transaction (the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, except that from and
after such time as any person becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights (other than
the Acquiring Person and its Affiliates and Associates).
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
The Rights Agreement, the provisions of Section 203 of the DGCL and certain
of the above-described provisions of the Restated Certificate of Incorporation
and By-Laws may have the effect of delaying, deferring or preventing a future
takeover or change in control of the Company unless such takeover or change of
control is approved by the Company's Board of Directors. Certain of such
provisions may also render the removal of the current Board of Directors and
management more difficult.
25
<PAGE>
PLAN OF DISTRIBUTION
The Company is advised that under the terms of the STRYPES, ML & Co. is
obligated to pay and discharge the STRYPES at maturity by delivering to the
holders thereof a specified number of shares of Common Stock (or cash with an
equal value). The Company is advised that pursuant to the terms of the
Purchase Agreement, GVI is obligated to deliver to the ML & Co. Subsidiary
immediately prior to maturity of the STRYPES that number of shares of Common
Stock equal to the number required by ML & Co. to pay and discharge all of the
STRYPES at maturity, subject to GVI's right to require that obligations under
the Purchase Agreement be satisfied by a cash payment or net cash settlement.
The Company is not a party to the Purchase Agreement and has no obligations
thereunder or with respect to the STRYPES, which are securities of ML & Co.
and are not securities of the Company.
The Company and its directors and certain officers have agreed not to offer,
sell, contract to sell or otherwise dispose of, directly or indirectly, or
file a registration statement under the Securities Act of 1933, as amended
(the "Securities Act") with respect to any shares of Common Stock, securities
convertible into, exchangeable for or repayable with such shares or rights or
warrants to acquire such shares, for a period of 90 days after the date of
this Prospectus without the prior written consent of the Underwriter of the
STRYPES, subject to certain exceptions. The Company is advised that GVI has
agreed not to offer, sell, contract to sell or otherwise dispose of, directly
or indirectly, or cause to be filed a registration statement under the
Securities Act with respect to, any shares of Common Stock, securities
convertible into, exchangeable for or repayable with such shares or rights or
warrants to acquire such shares, for a period of 90 days after the date of
this Prospectus without the prior written consent of the Underwriter of the
STRYPES.
The Company has agreed to indemnify the Underwriter of the STRYPES against
certain liabilities, including liabilities under the Securities Act, with
respect to the information in this Prospectus (including the documents
incorporated by reference herein) other than information furnished to the
Company in writing by GVI, ML & Co. or the Underwriter of the STRYPES
expressly for use herein. The Company is advised that GVI has agreed to
indemnify the Underwriter of the STRYPES against certain liabilities,
including liabilities under the Securities Act relating to information in this
Prospectus furnished to the Company in writing by GVI expressly for use
herein.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Sidley & Austin, Chicago, Illinois. From time to time, Sidley &
Austin has performed legal services for the Underwriter of the STRYPES.
EXPERTS
The consolidated financial statements of the Company at June 30, 1995 and
1994 and for each of the three years in the period ended June 30, 1995,
appearing in the Company's Current Report on Form 8-K filed March 15, 1996 (as
amended by Form 8-K/A filed April 19, 1996) which is incorporated by reference
in this Prospectus and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference elsewhere herein which is based in part on the
report of Arthur Andersen LLP, independent public accountants. The financial
statements referred to above are incorporated by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting
and auditing.
The Vigoro financial statements incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
are incorporated by reference herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
26
<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR OF ANY
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UN-
LAWFUL TO MAKE AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DE-
LIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM-
STANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
----------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 3
Risk Factors............................................................... 6
Price Range of Common Stock and Dividends.................................. 9
Selected Consolidated Financial Information................................ 10
Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................ 11
The Company................................................................ 20
Concerning GVI............................................................. 21
Description of Capital Stock............................................... 22
Plan of Distribution....................................................... 26
Legal Matters.............................................................. 26
Experts.................................................................... 26
</TABLE>
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5,661,119 SHARES
LOGO
COMMON STOCK
----------------
PROSPECTUS
----------------
, 1996
- --------------------------------------------------------------------------------
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<PAGE>
ALTERNATE PAGE FOR RESALE PROSPECTUS
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED JUNE 20, 1996
PROSPECTUS
6,510,286 SHARES
IMC GLOBAL INC.
COMMON STOCK
-----------
This Prospectus relates to 6,510,286 shares of Common Stock, par value $1.00
per share (the "Common Stock"), of IMC Global Inc., a Delaware corporation
("IMC" or the "Company"), which may be offered and sold from time to time by
GVI Holdings, Inc. ("GVI"), a wholly-owned subsidiary of Great American
Management and Investment, Inc. ("GAMI"). Pursuant to a Rights Agreement dated
as of June 21, 1989, as amended, between the Company and The First National
Bank of Chicago, as Rights Agent, each share of Common Stock covered hereby
also includes a right to purchase (an "IMC Right") one two-hundredth of a share
of Junior Participating Preferred Stock, Series C, par value $1.00 per share,
of the Company (the "Series C Preferred Stock"). The Company will not receive
any of the proceeds from the sale of such Common Stock.
The Common Stock may be sold by GVI in private transactions at privately
negotiated prices or in ordinary brokerage transactions on the exchanges on
which the Common Stock is listed at the prices prevailing at the time of such
sales, and the commission payable will be the regular commission a broker
receives for effecting such sales. GVI may also sell Common Stock through
agents designated from time to time or through underwriters or dealers. See
"Plan of Distribution." The names of any such agents or underwriters involved
in the sale of the Common Stock in respect of which this Prospectus is being
delivered and the applicable agent's commission, dealer's purchase price or
underwriter's discount will be set forth in an accompanying supplement to this
Prospectus (the "Prospectus Supplement").
GVI will receive all of the net proceeds from the sale of the Common Stock
offered hereby and will pay all underwriting discounts and selling commissions,
if any, applicable to the sale of the Common Stock. The Company is responsible
for payment of all other expenses incident to the offer and sale of the Common
Stock offered hereby.
GVI and any broker-dealers, agents or underwriters which participate in the
distribution of the Common Stock may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any commission received by them and purchase by them may be deemed to be
underwriting commissions or discounts under the Securities Act. See "Plan of
Distribution" for a description of indemnification arrangements.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 OF THIS PROSPECTUS FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.
The Common Stock is traded on the New York Stock Exchange, Inc. ("NYSE")
under the symbol "IGL." On June 17, 1996, the last reported sale price of the
Common Stock on the NYSE was $39.25 per share. See "Price Range of Common Stock
and Dividends."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CON-
TRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1996.
<PAGE>
ALTERNATE PAGE FOR RESALE PROSPECTUS
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed by the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission; Midwest Regional Office, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511 and Northeast Regional Office, Seven
World Trade Center, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Reports, proxy and
information statements and other information concerning the Company may also
be inspected at the offices of the NYSE. The Commission maintains a Web site
at http://www.sec.gov containing reports, proxy and information statements and
other information regarding registrants, including the Company, that file
electronically with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company heretofore filed with the SEC
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended June 30,
1995;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1995, December 31, 1995 and March 31, 1996;
3. The Company's Current Reports on Form 8-K filed August 17, 1995,
October 17, 1995, March 15, 1996 (as amended by Form 8-K/A filed April 19,
1996) and May 17, 1996;
4. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A/A-1 filed January 12, 1996;
and
5. The description of the IMC Rights contained in the Company's
Registration Statement on Form 8-A filed June 23, 1989, as amended by Form
8-A/A filed September 18, 1995 and January 24, 1996.
All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Common Stock
shall be deemed to be incorporated by reference into this Prospectus and to be
a part hereof from the date of filing of such reports and documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any
other subsequently filed documents which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
(without exhibits other than exhibits specifically incorporated by reference)
of any or all documents incorporated by reference into this Prospectus.
Requests for such copies should be directed to Rose Marie Williams, Corporate
Secretary, IMC Global Inc., 2100 Sanders Road, Northbrook, Illinois 60062,
telephone number (847) 272-9200.
2
<PAGE>
ALTERNATE PAGE FOR RESALE PROSPECTUS
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements incorporated by reference herein. Unless
the context otherwise requires, when used herein the term "Company" or "IMC"
refers to IMC Global Inc. and all of its subsidiaries and affiliated
partnerships and joint ventures, including IMC-Agrico Company ("IMC-Agrico"), a
Delaware general partnership formed pursuant to an Amended and Restated
Partnership Agreement among a subsidiary of the Company and Freeport-McMoRan
Resources Partners, Limited Partnership ("FRP") and certain affiliates of each
(the "Partnership Agreement"). All information in this Prospectus or
incorporated by reference herein has been adjusted to reflect a 2-for-1 stock
split of the Common Stock effected in the form of a stock dividend distributed
in November 1995. In addition, all financial information in this Prospectus has
been restated to give effect to the Company's merger with The Vigoro
Corporation ("Vigoro"), which was completed on March 1, 1996 and accounted for
as a pooling-of-interests.
THE COMPANY
The Company is one of the world's leading producers of crop nutrients for the
international agricultural community and is one of the largest distributors in
the United States of crop nutrients and related products through its retail and
wholesale distribution networks. The Company mines, processes and distributes
potash in the United States and Canada, and is a joint venture partner in IMC-
Agrico, a leading producer, marketer and distributor of phosphate crop
nutrients and a leading producer and marketer of animal feed ingredients. The
Company believes that it is one of the lower-cost North American producers of
phosphate rock, concentrated phosphates and potash. The Company's retail
distribution network, which extends principally to corn and soybean farmers in
the Midwestern and Southeastern United States, is one of the largest
distributors of crop nutrients and related products in the United States. The
Company also manufactures nitrogen-based and other high-value crop nutrients
which are marketed on a wholesale basis principally in the Midwestern and
Southeastern United States. In addition, the Company sells specialty lawn and
garden, turf, and nursery products on a national basis and ice-melter products
in the Midwest and Eastern snow-belt states.
On March 1, 1996, the Company completed the merger with Vigoro (the
"Merger"), which resulted in Vigoro becoming a subsidiary of the Company. The
Merger enables the Company, among other things, to broaden its business mix and
to reduce the relative importance of generally more price-volatile phosphate-
based crop nutrients to the Company's consolidated results. In addition, the
Merger has expanded the Company's potash customer base to include industrial
customers, whereas previously shipments of potash were primarily made to
agricultural markets. Vigoro also has a significant retail distribution
network, giving it direct contact with farmers, the principal consumers of crop
nutrient products. Prior to the Merger, IMC sold a limited amount of products
directly to farmers. In connection with the Merger, which was accounted for as
a pooling-of-interests, the Company issued approximately 32.4 million shares of
Common Stock in exchange for all of the outstanding shares of common stock of
Vigoro. For additional information regarding Vigoro and the Merger, see the
Company's Current Report on Form 8-K filed March 15, 1996 (as amended by Form
8-K/A filed April 19, 1996), which is incorporated by reference herein.
The Company's principal executive offices are located at 2100 Sanders Road,
Northbrook, Illinois 60062 and its telephone number is (847) 272-9200.
PLAN OF DISTRIBUTION
The Common Stock may be sold from time to time to purchasers directly by GVI.
The Common Stock also may be sold in ordinary brokerage transactions (including
block transactions) on the exchanges where such Common Stock is listed. The
commissions payable will be the regular commissions of brokers for effecting
such sales. Alternatively, GVI may from time to time offer the Common Stock to
or through underwriters, broker/dealers or agents, who may receive compensation
in the form of negotiated underwriting discounts,
3
<PAGE>
ALTERNATE PAGE FOR RESALE PROSPECTUS
concessions or commissions from GVI or the purchasers of the Common Stock for
whom they may act as agent. GVI and any underwriters, broker/dealers or agents
that participate in the distribution of the Common Stock offered hereby may be
deemed to be "underwriters" within the meaning of the Securities Act and any
profit on the sale of Common Stock by them and any discounts, commissions,
concessions or other compensation received by any such underwriter,
broker/dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.
The Common Stock may be sold from time to time in one or more transactions at
a fixed offering price, which may be changed, at varying prices determined at
the time of sale or at negotiated prices. Sales of the Common Stock effected on
exchanges where the Common Stock is listed will be made at market prices
prevailing at the time of such sales. At the time a particular offering of
Common Stock is made, a Prospectus Supplement, if required, will be distributed
which will set forth the aggregate amount of Common Stock being offered and the
terms of the offering, including the name or names of any underwriters,
broker/dealers or agents, any discounts, commissions and other terms
constituting compensation from GVI and any discounts, commissions or
concessions allowed or reallowed or paid to broker/dealers.
4
<PAGE>
ALTERNATE PAGE FOR RESALE PROSPECTUS
POTASH
The Company mines, processes and distributes potash in the United States and
Canada. The Company's potash products are marketed worldwide to crop nutrient
manufacturers, distributors and retailers and are also used internally in the
manufacture of mixed crop nutrients. The Company also sells white potash to
industrial customers. With an annual capacity of over 8.3 million tons per
year, the Company is one of the largest potash producers in the world. The
Company operates four potash mines in Canada and two potash mines in the
United States. The Company utilizes shaft mining technology at four of its
mines and solution mining technology at the other two mines. At March 31,
1996, the Company had reserves of 157 million tons of recoverable ore in the
United States and 2.4 billion tons of recoverable ore in Canada.
AGRIBUSINESS AND NITROGEN
Agribusiness and nitrogen consists of two nitrogen production facilities,
approximately 200 FARMARKET units and the wholesale distribution of high-value
crop nutrients which are marketed under the Rainbow brand name. The FARMARKET
network provides retail distribution of crop nutrients and related products
principally to corn and soybean farmers in the Midwestern and Southeastern
United States. In addition, the FARMARKET network provides a wide range of
services for farmers, including soil testing, custom crop nutrients blending
and crop nutrients application.
CONSUMER AND PROFESSIONAL PRODUCTS
The Company sells specialty crop nutrient products consisting of lawn and
garden products and turf and nursery products. The lawn and garden products
are sold throughout the United States primarily to major national retail
chains under private label brands, and the turf and nursery products are sold
to golf courses, nurseries, landscape contractors and institutions directly
and through independent distributors. The Company also sells environmentally-
sensitive ice-melters under various brands throughout the Midwest and Eastern
snow-belt states.
ANIMAL FEED INGREDIENTS
In October 1995, IMC-Agrico acquired the animal feed ingredients business of
Mallinckrodt Group Inc. The acquired business is one of the world's largest
producers of phosphate-based animal feed ingredients with an annual capacity
in excess of 700,000 tons. The principal facilities are located adjacent to
IMC-Agrico's concentrated phosphate complex at New Wales, Florida. IMC-Agrico
also markets potassium-based feed products produced at the Company's New
Mexico facilities.
CONCERNING GVI
GVI has advised the Company that, at the date of this Prospectus, GVI
beneficially owned 6,510,286 shares of Common Stock, which represented 7.1% of
the outstanding Common Stock at June 17, 1996. GVI is a wholly-owned
subsidiary of GAMI. At the date of this Prospectus, 6,300,000 of the 6,510,286
shares owned by GVI are pledged pursuant to a credit agreement. Rod F.
Dammeyer, Chief Executive Officer and a director of GAMI, the parent company
of GVI, and President, Chief Executive Officer and a director of GVI, is a
director of the Company.
21
<PAGE>
ALTERNATE PAGE FOR RESALE PROSPECTUS
PLAN OF DISTRIBUTION
The Common Stock may be sold from time to time to purchasers directly by
GVI. The Common Stock also may be sold in ordinary brokerage transactions
(including block transactions) on the exchanges where such Common Stock is
listed. The commissions payable will be the regular commissions of brokers for
effecting such sales. Alternatively, GVI may from time to time offer the
Common Stock to or through underwriters, broker/dealers or agents, who may
receive compensation in the form of negotiated underwriting discounts,
concessions or commissions from GVI or the purchasers of the Common Stock for
whom they may act as agent. GVI and any underwriters, broker/dealers or agents
that participate in the distribution of the Common Stock offered hereby may be
deemed to be "underwriters" within the meaning of the Securities Act and any
profit on the sale of Common Stock by them and any discounts, commissions,
concessions or other compensation received by any such underwriter,
broker/dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.
The Common Stock may be sold from time to time in one or more transactions
at a fixed offering price, which may be changed, at varying prices determined
at the time of sale or at negotiated prices. Sales of the Common Stock
effected on exchanges where the Common Stock is listed will be made at market
prices prevailing at the time of such sales. At the time a particular offering
of Common Stock is made, a Prospectus Supplement, if required, will be
distributed which will set forth the aggregate amount of Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, broker/dealers or agents, any discounts, commissions and other
terms constituting compensation from GVI and any discounts, commissions or
concessions allowed or reallowed or paid to broker/dealers. However, no
Prospectus Supplement will be distributed in connection with sales effected on
the exchanges where the Common Stock is listed through brokers at prevailing
market prices with customary commissions.
To comply with the securities laws of certain jurisdictions, if applicable,
the Common Stock will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain
jurisdictions the Common Stock may not be offered or sold unless it has been
registered or qualified for sale in such jurisdictions or an exemption from
registration or qualification is available and is complied with.
GVI will be subject to applicable provisions of the Exchange Act and the
rules and regulations thereunder, which provisions may limit the timing of
purchases and sales of any of the Common Stock by GVI. The foregoing may
affect the marketability of the Common Stock.
Pursuant to a Registration Rights Agreement among the Company and certain
holders of Common Stock, all expenses of the registration of the Common Stock
will be paid by the Company, including, without limitation, Commission filing
fees, and expenses of compliance with state securities or "blue sky" laws;
provided, however, that GVI will pay all underwriting discounts and selling
commissions. GVI and, if requested, any underwriter they may utilize, will be
indemnified by the Company against certain civil liabilities, including
certain liabilities under the Securities Act or will be entitled to
contribution in connection therewith.
The Company will supply GVI and all exchanges on which the Common Stock is
listed with reasonable quantities of copies of this Prospectus.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Sidley & Austin, Chicago, Illinois.
EXPERTS
The consolidated financial statements of the Company at June 30, 1995 and
1994 and for each of the three years in the period ended June 30, 1995,
appearing in the Company's Current Report on Form 8-K filed March 15, 1996 (as
amended by Form 8-K/A filed April 19, 1996) which is incorporated by reference
in this Prospectus and Registration Statement have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report thereon
incorporated by reference elsewhere herein which is based in part on the
report of Arthur Andersen LLP, independent public accountants. The financial
statements referred to above are incorporated by reference in reliance upon
such reports given upon the authority of such firms as experts in accounting
and auditing.
The Vigoro financial statements incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
are incorporated by reference herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
26
<PAGE>
ALTERNATE PAGE FOR RESALE PROSPECTUS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPO-
RATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING DESCRIBED
HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR OF ANY
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UN-
LAWFUL TO MAKE AN OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DE-
LIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUM-
STANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
---------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Prospectus Summary......................................................... 3
Risk Factors............................................................... 6
Price Range of Common Stock and Dividends.................................. 9
Selected Consolidated Financial Information................................ 10
Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................ 11
The Company................................................................ 20
Concerning GVI............................................................. 21
Description of Capital Stock............................................... 22
Plan of Distribution....................................................... 26
Legal Matters.............................................................. 26
Experts.................................................................... 26
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6,510,286 SHARES
LOGO
COMMON STOCK
---------------
PROSPECTUS
---------------
, 1996
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses (other than underwriting discounts and commissions) payable in
connection with the sale of the Common Stock offered hereby (including the
Common Stock which may be issued pursuant to an over-allotment option) are as
follows:
<TABLE>
<CAPTION>
AMOUNT*
--------
<S> <C>
SEC Registration fee............................................. $ 84,326
Printing expenses................................................ 80,000
NASD fee......................................................... 24,954
Legal fees and expenses.......................................... 70,000
Accounting fees and expenses..................................... 25,000
Blue sky fees and expenses (including legal fees and expenses)... 5,000
Transfer agent and registrar fees and expenses................... 10,000
Miscellaneous.................................................... 15,720
--------
Total........................................................ $315,000
========
</TABLE>
- --------
*All amounts are estimated, except the SEC Registration fee and the NASD
fee.
The Company will bear all expenses shown above.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law (the "DGCL") permits a corporation to
indemnify officers, Directors, employees and agents for actions taken in good
faith and in a manner they reasonably believed to be in, or not opposed to,
the best interests of the corporation, and with respect to any criminal
action, which they had no reasonable cause to believe was unlawful. The DGCL
provides that a corporation may pay expenses (including attorneys' fees)
incurred by an officer or Director in defending any civil, criminal,
administrative or investigative action (upon receipt of a written undertaking
to reimburse the corporation if indemnifications not appropriate), and must
reimburse a successful defendant for expenses, including attorney's fees,
actually and reasonably incurred, and permits a corporation to purchase and
maintain liability insurance for its directors and officers. The DGCL provides
that indemnification may be made for any claim, issue or matter as to which a
person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation, unless
and only to the extent a court determines that the person is entitled to
indemnity for such expenses as the court deems proper.
The Company's Restated Certificate of Incorporation provides that the
Company will indemnify each officer and Director of the Company to the fullest
extent permitted by applicable law. The Company's By-Laws provide that each
person who was or is made a party or is threatened to be made a party to or is
otherwise involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or she is or
was a director or officer, of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan, will be
indemnified by the corporation to the full extent permitted by the DGCL. The
indemnification rights conferred by the Company's Restated Certificate of
Incorporation are not exclusive of any other right to which persons seeking
indemnification may be entitled under any law, By-Law, agreement, vote of
stockholders or disinterested directors or otherwise. The Company is
authorized to purchase and maintain (and the Company maintains) insurance
behalf of its Directors and officers.
In connection with the issuance of the STRYPES, the Company and the
Underwriter of the STRYPES have entered into a Registration Agreement. The
Registration Agreement provides, among other things, that the Underwriter of
the STRYPES is obligated, under certain circumstances, to indemnify directors,
officers and
II-1
<PAGE>
controlling persons of the Company against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Act").
Reference is made to the form of Registration Agreement filed as Exhibit 1.1
hereto.
ITEM 16. EXHIBITS
Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
1.1+ Form of Registration Agreement.
5.1* Opinion of Sidley & Austin.
23.1* Consent of Ernst & Young LLP.
23.2* Consent of Arthur Andersen LLP.
23.3* Consent of Sidley & Austin (included in Exhibit 5.1).
24.1* Powers of Attorney.
</TABLE>
- --------
+Filed herewith.
*Previously filed.
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and
(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT NO. 1 TO THE REGISTRATION STATEMENT ON FORM S-3 (REGISTRATION NO.
333-04831) TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN NORTHBROOK, ILLINOIS ON JUNE 20, 1996.
IMC Global Inc.
/s/ Wendell F. Bueche
By___________________________________
Wendell F. Bueche
Chairman and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
Wendell F. Bueche Chairman and Chief Executive June 20, 1996
____________________________________ Officer (principal
Wendell F. Bueche executive officer) and
Director
James D. Speir President (principal June 20, 1996
____________________________________ operating officer) and
James D. Speir Director
Robert E. Fowler, Jr. President (principal June 20, 1996
____________________________________ operating officer) and
Robert E. Fowler, Jr. Director
Brian J. Smith Chief Financial Officer June 20, 1996
____________________________________ (principal financial
Brian J. Smith officer)
Anne M. Scavone Controller (principal June 20, 1996
____________________________________ accounting officer)
Anne M. Scavone
* Director June 20, 1996
____________________________________
Raymond F. Bentele
* Director June 20, 1996
____________________________________
Frank W. Considine
* Director June 20, 1996
____________________________________
Rod F. Dammeyer
* Director June 20, 1996
____________________________________
Dr. James M. Davidson
* Director June 20, 1996
____________________________________
Richard A. Lenon
* Director June 20, 1996
____________________________________
Harold H. MacKay
* Director June 20, 1996
____________________________________
David B. Mathis
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
* Director June 20, 1996
____________________________________
Thomas H. Roberts, Jr.
* Director June 20, 1996
____________________________________
Joseph P. Sullivan
* Director June 20, 1996
____________________________________
Billie B. Turner
</TABLE>
Marschall I. Smith
*By____________________________
Marschall I. Smith
Attorney in Fact
II-5
<PAGE>
EXHIBIT 1.1
DRAFT
6/13/96
______________________________________________________________________________
______________________________________________________________________________
IMC GLOBAL INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
Dated: __________, 1996
______________________________________________________________________________
______________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
REGISTRATION AGREEMENT......................................................... 1
SECTION 1. Representations and Warranties..................... 3
(a) Representations and Warranties by the Company...... 3
(i) Compliance with Registration Requirements.......... 3
(ii) Incorporated Documents............................. 4
(iii) Independent Accountants............................ 4
(iv) Financial Statements............................... 4
(v) No Material Adverse Change in Business............. 4
(vi) Good Standing of the Company....................... 5
(vii) Good Standing of Subsidiaries...................... 5
(viii) Capitalization..................................... 5
(ix) Description of Common Stock........................ 5
(x) Authorization of Agreement......................... 5
(xi) Absence of Defaults and Conflicts.................. 6
(xii) Absence of Labor Dispute........................... 6
(xiii) Absence of Proceedings............................. 6
(xiv) Accuracy of Exhibits............................... 7
(xv) Possession of Intellectual Property................ 7
(xvi) Absence of Further Requirements.................... 7
(xvii) Possession of Licenses and Permits................. 7
(xviii) Title to Property.................................. 7
(xix) Compliance with Cuba Act........................... 8
(xx) Investment Company Act............................. 8
(xxi) Environmental Laws................................. 8
(b) Officer's Certificates............................. 8
SECTION 2. Covenants of the Company........................... 9
(a) Compliance with Securities Regulations and
Commission Requests................................ 9
(b) Filing of Amendments............................... 9
(c) Delivery of IMC Registration Statements............ 9
(d) Delivery of IMC Prospectuses....................... 9
(e) Continued Compliance with Securities Laws.......... 10
(f) Blue Sky Qualifications............................ 10
(g) Rule 158........................................... 10
(h) Restriction on Sale of Securities.................. 11
(i) Reporting Requirements............................. 11
SECTION 3. Payment of Expenses................................ 11
(a) Expenses........................................... 11
SECTION 4. Indemnification.................................... 11
(a) Indemnification of Underwriter and ML&Co........... 11
(b) Indemnification of Company, Directors, Officers.... 12
(c) Actions against Parties; Notification.............. 12
(d) Settlement without Consent if Failure to Reimburse. 13
SECTION 5. Contribution....................................... 13
</TABLE>
i
<PAGE>
IMC GLOBAL INC.
(a Delaware corporation)
REGISTRATION AGREEMENT
----------------------
_________, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH & CO., INC.
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
IMC Global Inc., a Delaware corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Inc., a Delaware corporation ("ML&Co."), and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriter"), in connection with the proposed issue and sale by ML&Co. to the
Underwriter, pursuant to an underwriting agreement, dated the date hereof (the
"Underwriting Agreement"), among ML&Co., GVI Holdings, Inc., a Delaware
corporation ("GVI"), and the Underwriter, of an aggregate of 5,661,119 of
ML&Co.'s Structured Yield Product Exchangeable for Stock/SM/, ___% STRYPES/SM/
Due ________, 2001 (each, a "STRYPES"), payable at maturity by delivery of
shares of common stock, par value $1.00 per share (the "IMC Common Stock"), of
the Company, and, at the option of the Underwriter, all or any part of 849,167
additional STRYPES to cover over-allotments, if any.
_______________
/SM/ Service mark of Merrill Lynch & Co., Inc.
1
<PAGE>
The aforesaid 5,661,119 STRYPES (the "Initial Securities") to be purchased by
the Underwriter and all or any part of the 849,167 STRYPES subject to the option
described in Section 2(b) of the Underwriting Agreement (the "Option
Securities") are hereinafter called, collectively, the "Securities."
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Underwriting Agreement.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement and the Underwriting Agreement have been executed and delivered. The
Company acknowledges that the execution and delivery of this Agreement is a
condition to the execution and delivery of the Underwriting Agreement by the
Underwriter and ML&Co. and that, in consideration of the execution and delivery
of the Underwriting Agreement by the Underwriter and ML&Co., the Company is
willing to make the representations, warranties and covenants herein contained.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333- ) covering the
registration under the Securities Act of 1933, as amended (the "1933 Act"), of
the shares of IMC Common Stock deliverable upon payment and discharge of the
Securities, including the related preliminary prospectus or prospectuses. Each
prospectus used before such registration statement became effective is herein
called an "IMC preliminary prospectus." Such registration statement, including
the exhibits thereto, the schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective, is herein called the "IMC Registration
Statement." Any registration statement filed pursuant to Rule 462(b) of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") is herein referred to as the "IMC Rule 462(b) Registration
Statement," and after such filing the term "IMC Registration Statement" shall
include the IMC Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriter for
use in connection with the offering of the Securities is herein called the "IMC
Prospectus." For purposes of this Agreement, all references to the IMC
Registration Statement, any IMC preliminary prospectus, the IMC Prospectus or
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which are "contained," "included" or "stated" in the IMC
Registration Statement, any IMC preliminary prospectus or the IMC Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which are incorporated
by reference in the IMC Registration Statement, any IMC preliminary prospectus
or the IMC Prospectus, as the case may be; and all references in this Agreement
to amendments or supplements to the IMC Registration Statement, any IMC
preliminary prospectus or the IMC Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which is incorporated by reference in the IMC Registration
Statement, such IMC preliminary prospectus or the IMC Prospectus, as the case
may be.
2
<PAGE>
Prior to the closing under the Underwriting Agreement, ML&Co., Merrill
Lynch Mortgage Capital Inc., a wholly-owned subsidiary of ML&Co., and GVI will
enter into a contract, pursuant to which GVI will agree to sell and ML&Co. will
agree to purchase, immediately prior to the maturity date of the Securities, the
Maturity Consideration (as defined in the Supplemental Indenture) required by
ML&Co. to pay and discharge all of the Securities at maturity as described in
the ML&Co. Prospectus, subject to GVI's right to require that the obligations
thereunder be satisfied by a cash payment based on the value of such Maturity
Consideration.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to each of the Underwriter and to ML&Co. as of the date hereof, as
of the Closing Time referred to in Section 2(c) of the Underwriting Agreement,
and as of each Date of Delivery (if any) referred to in Section 2(b) of the
Underwriting Agreement, and agrees with each of the Underwriter and ML&Co. as
follows:
(i) Compliance with Registration Requirements. The Company meets the
-----------------------------------------
requirements for the use of Form S-3 under the 1933 Act. Each of the IMC
Registration Statement and any IMC Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the IMC Registration Statement or any IMC Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the IMC Registration Statement, any IMC Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the IMC Registration Statement, the
IMC Rule 462(b) Registration Statement and any amendments and supplements
thereto complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and did not and
will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the IMC Prospectus nor any
amendments or supplements thereto, at the time the IMC Prospectus or any
such amendment or supplement was issued and at the Closing Time (and, if
any Option Securities are purchased, at the Date of Delivery), included or
will include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The representations and warranties in this subsection shall
not apply to statements in or omissions from the IMC Registration Statement
or IMC Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Underwriter, ML&Co. or GVI
expressly for use in the IMC Registration Statement or IMC Prospectus.
Each IMC preliminary prospectus and the IMC Prospectus filed as part
of the IMC Registration Statement as originally filed or as part of any
amendment thereto, or filed
3
<PAGE>
pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable, each
IMC preliminary prospectus and the IMC Prospectus delivered to the
Underwriter for use in connection with the offering of the Securities was
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
----------------------
be incorporated by reference in the IMC Registration Statement and the IMC
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations"), and,
when read together with the other information in the IMC Prospectus, at the
time the IMC Registration Statement and any post-effective amendments
thereto became effective, at the time the IMC Prospectus was issued and at
the Closing Time (and if any Option Securities are purchased, at the Date
of Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules of the Company and its
subsidiaries, and of The Vigoro Corporation and its subsidiaries
("Vigoro"), included in the IMC Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(iv) Financial Statements. The financial statements of the Company
--------------------
(including the financial statements giving retroactive effect to the merger
of the Company and Vigoro) included in the IMC Registration Statement and
the IMC Prospectus, together with the related schedules and notes, present
fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
stockholders' equity and cash flows of the Company and its consolidated
subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved.
The financial statements of Vigoro included in the IMC Registration
Statement and the IMC Prospectus, together with the related notes, present
fairly the financial position of Vigoro and its consolidated subsidiaries
at the dates indicated and the statement of operations, stockholders'
equity and cash flows of Vigoro and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with GAAP applied on a consistent basis throughout the periods
involved. The supporting schedules, if any, included in the IMC
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected consolidated
financial information and the summary selected consolidated financial
information included in the IMC Prospectus present fairly the
information shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the IMC Registration
Statement. The pro forma financial statements and the other pro forma
financial information of the Company and its subsidiaries and the related
notes thereto included in the IMC Registration Statement
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and the IMC Prospectus present fairly in accordance with GAAP the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described therein,
and the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the IMC Registration Statement
and the IMC Prospectus, except as otherwise stated therein or contemplated
thereby, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, which are material with respect to the
Company and its subsidiaries considered as one enterprise, other than those
in the ordinary course of business, and (C) except for regular quarterly
dividends on its outstanding common stock, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class
of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the IMC Prospectus and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
-----------------------------
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the IMC Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; except as otherwise disclosed in the IMC
Registration Statement, all of the issued and outstanding capital stock of
each such Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such Subsidiary. The only
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subsidiaries of the Company are [(A)] the subsidiaries listed on Schedule A
hereto [and (B) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X].
(viii) Capitalization. The shares of outstanding capital stock of
--------------
the Company have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(ix) Description of Common Stock. The IMC Common Stock conforms in
---------------------------
all material respects to the description thereof contained in the IMC
Prospectus and such description conforms to the rights set forth in the
instruments defining the same.
(x) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any
---------------------------------
of its subsidiaries is in violation of its charter or bylaws or in default
in the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or bylaws of the Company
or any subsidiary or, to the best of the Company's knowledge, any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness of the Company or any
subsidiary (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees of
------------------------
the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees
6
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of any of its or any subsidiary's principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be expected
to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the IMC Registration
Statement (other than as disclosed therein), or which might, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Effect, or which might, individually or in the aggregate, reasonably be
expected to materially and adversely affect the properties or assets
thereof or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the IMC
Registration Statement, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents
--------------------
which are required to be described in the IMC Registration Statement, the
IMC Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described or filed as
required.
(xv) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, except such as has been already obtained or as may
be required under the 1933 Act or the 1933 Act Regulations or state
securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign
7
<PAGE>
regulatory agencies or bodies necessary to conduct the business now
operated by them; the Company and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
(xviii) Title to Property. The Company and its subsidiaries have
-----------------
good and marketable title to all material real property owned by the
Company and its subsidiaries and good title to all material personal
property owned by them, in each case, free and clear of all mortgages,
pledges, liens, security interests, claims, restrictions or encumbrances of
any kind except such as (a) are described in the IMC Prospectus or (b) do
not, singly or in the aggregate, materially affect the value of such
property and do not materially interfere with the use made and proposed to
be made of such property by the Company or any of its subsidiaries; and all
of the leases and subleases material to the business of the Company and its
subsidiaries, considered as one enterprise, and under which the Company or
any of its subsidiaries holds properties described in the IMC Prospectus,
are in full force and effect, and neither the Company nor any subsidiary
has any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xix) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulations thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(xx) Investment Company Act. The Company is not an "investment
----------------------
company" or an entity "controlled" by an "investment company" as such terms
are defined in the Investment Company Act of 1940, as amended.
(xxi) Environmental Laws. Except as described in the IMC
------------------
Registration Statement and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of
8
<PAGE>
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum or petroleum products (collectively, "Hazardous
Materials") or to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), (B) the Company and its subsidiaries
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or threatened administrative,
regulatory or judicial actions, suits, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigation or proceedings
relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of its
subsidiaries relating to Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company and delivered to the Underwriter or counsel for the Underwriter or to
ML&Co. or counsel for ML&Co. in connection with the offering of the Securities
shall be deemed a representation and warranty by the Company to the Underwriter
and to ML&Co., as the case may be, as to the matters covered thereby.
SECTION 2. Covenants of the Company. The Company covenants with the
------------------------
Underwriter and with ML&Co. as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 2(b), will notify the Underwriter and ML&Co.
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the IMC Registration Statement shall become effective, or any
supplement to the IMC Prospectus or any amended IMC Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the IMC Registration Statement or
any amendment or supplement to the IMC Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the IMC Registration Statement or of any order preventing or
suspending the use of any IMC preliminary prospectus, or of the suspension of
the qualification of the shares of IMC Common Stock deliverable upon payment and
discharge of the Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriter and ML&Co.
notice of its intention to file or prepare any amendment to the IMC Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the
9
<PAGE>
prospectus included in the IMC Registration Statement at the time it became
effective or to the IMC Prospectus, whether pursuant to the 1933 Act, the 1934
Act or otherwise, will furnish the Underwriter and ML&Co. with copies of any
such documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Underwriter or counsel for the Underwriter or ML&Co. or counsel for ML&Co. shall
reasonably object.
(c) Delivery of IMC Registration Statements. The Company has furnished or
will deliver to the Underwriter, counsel for the Underwriter, ML&Co. and counsel
for ML&Co., without charge, signed copies of the IMC Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents incorporated or
deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts. If applicable, the copies of the IMC
Registration Statement and each amendment thereto furnished to the Underwriter
and ML&Co. will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of IMC Prospectuses. The Company has delivered to the
Underwriter, without charge, as many copies of each IMC preliminary prospectus
as the Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to the Underwriter, without charge, during the period when the IMC
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the IMC Prospectus (as amended or supplemented) as the
Underwriter may reasonably request. If applicable, the IMC Prospectus and any
amendments or supplements thereto furnished to the Underwriter and ML&Co. will
be identical to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in the Underwriting
Agreement. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriter, counsel for ML&Co. or counsel for the Company, to
amend the IMC Registration Statement or amend or supplement the IMC Prospectus
in order that the IMC Prospectus will not include any untrue statements of a
material fact or omit to state a material fact necessary in order to make the
statements therein not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of any such counsel, at any such time to amend the IMC Registration
Statement or amend or supplement the IMC Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 2(b), such
amendment or supplement as may be necessary to correct such statement or
omission or to make the IMC Registration Statement or the IMC Prospectus comply
with such requirements, and the Company will furnish to the Underwriter and
ML&Co. such number of copies of such amendment or supplement as the Underwriter
and ML&Co. may reasonably request.
10
<PAGE>
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriter, to qualify the shares of IMC Common Stock
deliverable upon payment and discharge of the Securities for offering and sale
under the applicable securities laws of such states and other jurisdictions of
the United States as the Underwriter may designate and to maintain such
qualifications in effect through the maturity date of the Securities; provided,
however, that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the shares of IMC
Common Stock deliverable upon payment and discharge of the Securities have been
so qualified, the Company will file such statements and reports as may be
required by the laws of such jurisdiction to continue such qualification in
effect through the maturity date of the Securities.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Restriction on Sale of Securities. During a period of 90 days from the
date of the IMC Prospectus, the Company will not, without the prior written
consent of the Underwriter, (x) offer, sell, contract to sell or otherwise
dispose of, directly or indirectly, any shares of IMC Common Stock, securities
convertible into, exchangeable for or repayable with shares of IMC Common Stock,
or rights or warrants to acquire shares of IMC Common Stock or (y) file any
registration statement under the 1933 Act with respect to any shares of IMC
Common Stock, securities convertible into, exchangeable for or repayable with
shares of IMC Common Stock, or rights or warrants to acquire shares of IMC
Common Stock; provided, however, that nothing contained in this subsection (h)
shall restrict or otherwise limit the Company from (i) calling for redemption in
accordance with their terms any securities convertible into IMC Common Stock,
(ii) issuing shares upon the exercise of employee or director stock options
outstanding at the date of this Agreement, (iii) issuing shares upon the
exercise of rights granted as of the date of this Agreement under the Company's
shareholders' rights plan, (iv) issuing shares in connection with acquisitions
of privately-held companies, provided that the number of shares so issued does
--------
not exceed, in the aggregate, __________ (subject to appropriate adjustment for
stock splits, reverse stock splits and stock dividends) and that upon issuance
all such shares constitute "restricted securities" as defined in Rule 144(a)
under the 1933 Act, or (v) offering shares in connection with any registration
statement on Form S-8.
(i) Reporting Requirements. The Company, during the period when the IMC
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder.
SECTION 3. Payment of Expenses. (a) Expenses. The Company will pay all
-------------------
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the IMC Registration
Statement (including financial statements and exhibits) as originally filed and
of each amendment thereto, (ii) the fees and disbursements
11
<PAGE>
of the Company's counsel, accountants and other advisors, (iii) the
qualification of the shares of IMC Common Stock deliverable upon payment and
discharge of the Securities under securities laws in accordance with the
provisions of Section 2(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for ML&Co. in connection therewith and in
connection with the preparation of the Blue Sky Survey and any supplement
thereto, (iv) the printing and delivery to the Underwriter of copies of each IMC
Preliminary Prospectus and of the IMC Prospectus and any amendments or
supplements thereto, (v) the preparation, printing and delivery to the
Underwriter of copies of the Blue Sky Survey and any supplement thereto and (vi)
the filing fees incident to, and the reasonable fees and disbursements of
counsel to the Underwriter in connection with, the review by the National
Association of Securities Dealers, Inc. of the terms of the offering and sale of
the shares of IMC Common Stock deliverable upon payment and discharge of the
Securities.
SECTION 4. Indemnification.
---------------
(a) Indemnification of Underwriter and ML&Co. The Company agrees to
indemnify and hold harmless (1) the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act and (2) ML&Co. and each person, if any, who controls
ML&Co. within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the IMC Registration
Statement (or any amendment thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
IMC preliminary prospectus or the IMC Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 4(d) below) any such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter or ML&Co.,
as the case may be), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission,
12
<PAGE>
or any such alleged untrue statement or omission, referred to under (i)
above, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter, ML&Co. or GVI expressly for use in the IMC Registration Statement
(or any amendment thereto), or any IMC preliminary prospectus or the IMC
Prospectus (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors, Officers. The Underwriter
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the IMC Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the IMC Registration Statement (or any
amendment thereto), or any IMC preliminary prospectus or the IMC Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by the Underwriter expressly for
use in the IMC Registration Statement (or any amendment thereto) or such IMC
preliminary prospectus or the IMC Prospectus (or any amendment or supplement
thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to clause (1) of Section
4(a) above, counsel to the indemnified parties shall be selected by the
Underwriter; in the case of parties indemnified pursuant to clause (2) of
Section 4(a), counsel to the indemnified parties shall be selected by ML&Co.;
and, in the case of parties indemnified pursuant to Section 4(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 4 or Section
5 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
13
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unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 4(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 5. Contribution. If the indemnification provided for in Section 4
------------
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then the Company on the one hand and the
Underwriter and ML&Co. on the other hand shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriter and ML&Co. on the other hand from the offering of the Securities or
(ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Company on the one hand and of the Underwriter and ML&Co. on the other hand in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received from the offering of the Securities shall be
deemed to be such that the Underwriter and ML&Co. shall be responsible for that
portion of the aggregate amount of such losses, liabilities, claims, damages and
expenses represented by the percentage that the total underwriting discount
received by the Underwriter, as set forth on the cover of the ML&Co. Prospectus,
or, if Rule 434 is used, the corresponding location on the ML&Co. Term Sheet,
bears to the aggregate initial public offering price of the Securities as set
forth on such cover and the Company shall be responsible for the balance.
The relative fault of the Company on the one hand and the Underwriter and
ML&Co. on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or GVI on the one hand or by the Underwriter or ML&Co.
on the other hand and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 5, the Underwriter and
ML&Co. shall not be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by the Underwriter
and distributed to the public were offered to the
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public exceeds the amount of any damages which the Underwriter and ML&Co. have
otherwise been required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission.
The Company, the Underwriter and ML&Co. agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 5. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 5 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 5, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter; each
person, if any, who controls ML&Co. within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as ML&Co.; and each director of
the Company, each officer of the Company who signed the IMC Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same
rights to contribution as the Company.
SECTION 6. Representations, Warranties and Agreements to Survive Delivery.
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All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company submitted pursuant to the Underwriting
Agreement, shall remain operative and in full force and effect, regardless of
any investigation made by or on behalf of the Underwriter or controlling person
thereof, or by or on behalf of ML&Co. or controlling person thereof or by or on
behalf of the Company, and shall survive delivery of the Securities to the
Underwriter pursuant to the Underwriting Agreement.
SECTION 7. Termination. In the event that the Underwriter terminates the
-----------
Underwriting Agreement as provided in Section 9 thereof, this Agreement shall
simultaneously terminate, except that the provisions of Section 3, the indemnity
agreements set forth in Section 4, the contribution provisions set forth in
Section 5, and the provisions of Section 6 shall remain in effect.
SECTION 8. Notices. All notices and other communications hereunder shall
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be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to it at Sears Tower Building, Suite 5500,
Chicago, Illinois 60606, attention of Todd Kaplan, Director; notices to ML&Co.
shall be directed to it at 100 Church St., 12th Floor, New York, New York 10007,
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attention of the Secretary, with a copy to the Treasurer at World Financial
Tower, South Tower, New York, New York 10080-6105; notices to the Company shall
be directed to it at 2100 Sanders Road, Northbrook, Illinois 60062, attention of
Corporate Secretary.
SECTION 9. Parties. This Agreement shall inure to the benefit of and be
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binding upon each of the Underwriter, ML&Co. and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriter, ML&Co. and the Company and their respective successors and
the controlling persons and officers and directors referred to in Sections 4 and
5 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriter, ML&Co. and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 11. Effect of Headings. The Article and Section headings herein
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and the Table of Contents are for convenience only and shall not affect the
construction hereof.
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If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriter, ML&Co. and the Company in accordance with its terms.
Very truly yours,
IMC GLOBAL INC.
By______________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By ______________________________________
Authorized Signatory
MERRILL LYNCH & CO., INC.
By ______________________________________
Name:
Title:
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