<PAGE>
PROSPECTUS SUPPLEMENT Filed Pursuant to Rule 424(b)(5)
(TO PROSPECTUS DATED SEPTEMBER 28, 1998) Registration Number 333-63503
$200,000,000
IMC GLOBAL INC.
6 5/8% NOTES DUE 2001
----------------
The Notes bear interest at the rate of 6 5/8% per year. Interest on the
Notes is payable on April 15 and October 15 of each year, beginning April 15,
1999. The Notes will mature on October 15, 2001. The Notes are not redeemable
before maturity and do not have the benefit of any sinking fund.
The Notes are unsecured and rank equally with all of our other unsecured
senior indebtedness. The Notes will be issued only in registered form in
denominations of $1,000.
----------------
<TABLE>
<CAPTION>
PER NOTE TOTAL
-------- ------------
<S> <C> <C>
Public Offering Price(1)............................ 99.701% $199,402,000
Underwriting Discount............................... .45% $ 900,000
Proceeds, before expenses, to IMC Global Inc........ 99.251% $198,502,000
</TABLE>
(1) You will also pay accrued interest, if any, from October 26, 1998.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this Prospectus Supplement or the accompanying Prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
We expect that the Notes will be ready for delivery in book-entry form
only through The Depository Trust Company, on or about October 26, 1998.
----------------
MERRILL LYNCH & CO. CHASE SECURITIES INC.
----------------
The date of this prospectus supplement is October 20, 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company................................................................ S-3
Use of Proceeds............................................................ S-3
Recent Developments........................................................ S-3
Selected Historical Consolidated Financial Data............................ S-5
Description of Notes....................................................... S-6
Underwriting............................................................... S-10
Legal Matters.............................................................. S-11
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 4
Use of Proceeds............................................................ 4
Ratio of Earnings to Fixed Charges......................................... 4
Description of Debt Securities............................................. 5
Description of Debt Warrants............................................... 16
Description of Series Preferred Stock and Common Stock..................... 17
Description of Stock Warrants.............................................. 20
Description of Currency Warrants........................................... 22
Plan of Distribution....................................................... 23
Legal Matters.............................................................. 24
Experts.................................................................... 24
</TABLE>
-----------------
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus include
forward-looking statements. We have based these forward-looking statements on
our current expectations and projections about future events. These forward-
looking statements are subject to risks, uncertainties, and assumptions about
IMC Global Inc. (the "Company"), including, among other things:
l General economic, market or business conditions,
l Conditions in and policies of the agriculture industry,
l Weather,
l Risks associated with international operations and sales,
l Government regulation,
l Risks attendant with mining operations,
l Competition, and
l Other factors referred to in the accompanying prospectus.
We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties, and assumptions, the
forward-looking events discussed in this prospectus supplement and the
accompanying prospectus might not occur.
-----------------
You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We
have not, and the Underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
Underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus supplement and the accompanying
prospectus is accurate as of the date hereof only. Our business, financial
condition, results of operations and prospects may have changed since that
date.
S-2
<PAGE>
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 foremost
distributors in the United States of crop nutrients and related products
through its retail and wholesale distribution networks. The Company is also one
of the world's leading producers of salt, soda ash and other inorganic
chemicals. The Company mines, processes and distributes potash in the United
States and Canada and is a joint venture partner in IMC-Agrico Company, a
leading producer, marketer and distributor of phosphate crop nutrients and
animal feed ingredients. The Company also mines, processes and distributes salt
products in the United States, Canada and Europe and is a major producer of
soda ash and other inorganic chemicals in the United States, Europe and
Australia. The Company has structured its operations into five business units
corresponding to its major product lines as follows: IMC Crop Nutrients
(phosphates and potash), IMC Salt (salt), IMC-Agrico Feed Ingredients (animal
feed), IMC Chemicals (soda ash and other inorganic chemicals) and IMC
AgriBusiness (wholesale and retail distribution).
The Company's principal executive office is located at 2100 Sanders Road,
Northbrook, Illinois 60062, telephone (847) 272-9200.
USE OF PROCEEDS
The Company intends to use the net proceeds of approximately $594.4
million from the sale of the 7.40% Notes due 2002 (the "2002 Notes") and the
7.625% Notes due 2005 (the "2005 Notes", and together with the 2002 Notes, the
"Notes") to repay an equivalent amount of its short term indebtedness, which
bears interest at a weighted average rate of 5.82% (at November 6, 1998), and
which was incurred by the Company in September and October 1998 in connection
with the redemption of the Sifto Canada Notes and the Harris Notes discussed
below.
RECENT DEVELOPMENTS
Recent Financial Results. On October 28, 1998, the Company released its
unaudited financial results for the three-months ended September 30, 1998.
Earnings were $37.8 million, a 42% increase from the same period in 1997. Cash
flow was $176.7 million, a 76% increase over the same period in 1997. Earnings
per diluted share were $.33, an 18% increase over the same period in 1997. Net
earnings for the quarter were $36.9 million, or $.32 per share, compared to
$26.7 million, or $.28 per share, for the same period in 1997. Sales totaled
$756.8 million, an increase of 26% from the same period in 1997, and total
gross margins increased 28% to $191.6 million, compared to $149.3 million for
the same period in 1997.
Financing Activities. This offering is part of an overall refinancing of
debt assumed in the Company's April 1998 acquisition of Harris Chemical Group,
Inc. ("Harris") and affiliated companies. In connection with such refinancing,
Sifto Canada, Inc., a wholly owned subsidiary of Harris, completed a tender
offer for approximately $96 million aggregate principal amount of its debt
securities (the "Sifto Canada Notes") on September 30, 1998 and Harris redeemed
approximately $585 million aggregate principal amount of its debt securities
(the "Harris Notes") on October 15, 1998. These transactions were financed with
short-term indebtedness and the proceeds from the issuance of $200 million
aggregate principal amount of the Company's 6 5/8% Notes due 2001, which were
issued on October 20, 1998.
Also in connection with its refinancing activities and overall debt
reduction efforts, the Company is exploring strategic options for, including
the possible divestiture of, its IMC AgriBusiness business unit and also
certain chemical assets and businesses acquired as part of the Harris
acquisition that are not deemed to be core to the Company's strategy. Such
potential divestitures may be adversely impacted to
S-3
<PAGE>
the extent that adverse capital and syndicated loan markets result in potential
buyers experiencing difficulty in obtaining purchase financing on acceptable
terms.
Restructuring Activities. The Company recently announced the
consolidation of its phosphate and potash businesses into a new operating
entity, IMC Crop Nutrients.
The Company's phosphate business unit, formerly known as IMC-Agrico Crop
Nutrients, is now called IMC-Agrico Phosphates, and is a leading phosphate
producer, with 1997 net sales of $1.5 billion, operating earnings of $257.4
million and total assets of $2.8 billion. The Company's potash business unit,
IMC Kalium, had net sales, operating earnings and total assets of $617.4
million, $214.8 million and $891.1 million, respectively, for the same period.
IMC-Agrico Phosphates is the largest part of IMC-Agrico Company, a joint
venture partnership between the Company and Phosphate Resource Partners Limited
Partnership. IMC-Agrico Company's other component is IMC-Agrico Feed
Ingredients, which had 1997 net sales of $163.5 million and will remain a
separate business unit. The Company owns approximately 80% of IMC-Agrico
Company.
Concurrent with forming IMC Crop Nutrients, the Company is undertaking an
extensive program of performance improvement in the phosphate business,
targeting productivity increases, operating cost reductions and major asset
restructuring. Such asset restructuring includes the Company's recently
announced closure of its Sifto(R) salt warehousing and bagging facility in
Montreal.
The Company is in the process of evaluating the accounting impact of the
foregoing restructuring activities and currently expects to record a charge to
earnings related to such restructuring activities, in an as yet undetermined
amount, in the fourth quarter of 1998. Such charge could be material.
S-4
<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following selected historical consolidated financial information for the
Company with respect to each year in the five-year period ended December 31,
1997 is derived from and should be read in conjunction with the consolidated
financial statements of the Company. The consolidated financial statements of
the Company for each of the years in the three-year period ended December 31,
1997 are included in documents incorporated by reference in the accompanying
prospectus. Such consolidated financial statements have been audited by Ernst &
Young LLP, independent auditors. The following selected consolidated financial
information as of and for each of the six-month periods ended June 30, 1998 and
1997 is derived from and should be read in conjunction with the unaudited
interim condensed consolidated financial statements of the Company which are
included in documents incorporated by reference in the accompanying prospectus.
Such unaudited interim condensed consolidated financial statements reflect all
adjustments (consisting only of normally recurring accruals) which the
management of the Company considers necessary to present fairly the financial
information for such periods. The results of operations for any interim period
are not necessarily indicative of results for a full year. See "Incorporation
of Certain Documents by Reference" in the accompanying prospectus.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEARS ENDED DECEMBER 31,
-------------------- ------------------------------------------------
1998 (1)(2) 1997 1997 (2) 1996 1995 1994 1993 (3)
----------- -------- -------- -------- -------- -------- --------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales............... $1,898.6 $1,713.0 $2,988.6 $2,941.0 $2,940.4 $2,475.7 $1,640.5
Gross margins........... 467.1 430.0 738.6 745.0 778.7 559.9 252.7
Main Pass writedown
(4).................... -- -- 183.7 -- -- -- --
Sterlington litigation
settlement, net (5).... -- -- -- -- -- -- 169.1
Operating earnings
(loss)................. 300.2 297.4 303.0 461.4 566.6 399.7 (98.1)
Interest expense........ 83.7 25.2 53.5 56.7 69.8 77.5 76.6
Other (income) expense,
net.................... (8.9) -- (6.2) (5.9) (15.2) (6.6) 21.1
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
minority interest...... 225.4 272.2 255.7 410.6 512.0 328.8 (195.8)
Minority interest....... 17.2 71.5 124.4 185.7 163.6 106.8 5.3
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
taxes.................. 208.2 200.7 131.3 224.9 348.4 222.0 (201.1)
Provision (credit) for
income taxes........... 73.2 73.3 43.5 89.7 129.4 97.8 (75.2)
-------- -------- -------- -------- -------- -------- --------
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting change...... 135.0 127.4 87.8 135.2 219.0 124.2 (125.9)
Extraordinary charge--
debt retirement........ (2.7) (3.3) (24.9) (8.1) (3.5) (4.4) (25.2)
Cumulative effect on
prior years of change
in accounting for
postemployment benefits
(net of taxes)......... -- -- -- -- -- (5.9) --
-------- -------- -------- -------- -------- -------- --------
Net earnings (loss)..... $ 132.3 $ 124.1 $ 62.9 $ 127.1 $ 215.5 $ 113.9 $ (151.1)
======== ======== ======== ======== ======== ======== ========
DILUTED EARNINGS (LOSS)
PER SHARE:
Earnings (loss) before
extraordinary item and
cumulative effect of
accounting change...... $ 1.18 $ 1.33 $ 0.93 $ 1.39 $ 2.34 $ 1.45 $ (1.50)
Extraordinary charge--
debt retirement........ (0.02) (0.03) (0.26) (0.08) (0.04) (0.05) (0.31)
Cumulative effect on
prior years of change
in
accounting............. -- -- -- -- -- (0.07) --
-------- -------- -------- -------- -------- -------- --------
Net earnings (loss)..... $ 1.16 $ 1.30 $ 0.67 $ 1.31 $ 2.30 $ 1.33 $ (1.81)
======== ======== ======== ======== ======== ======== ========
Diluted weighted average
number of shares
outstanding............ 114.8 95.6 94.7 97.0 95.5 88.8 81.2
BALANCE SHEET DATA (AT
END OF PERIOD):
Working capital......... $ (536.0) $ 592.6 $ 389.1 $ 582.6 $ 507.6 $ 355.2 $ 427.7
Total assets............ 6,741.1 3,611.6 4,673.9 3,485.2 3,521.8 3,275.1 3,280.9
Long-term debt, less
current maturities..... 1,639.1 694.8 1,235.2 656.8 741.7 699.1 950.0
Total stockholders'
equity................. 2,037.3 1,339.9 1,935.7 1,326.2 1,090.4 883.3 653.1
OTHER FINANCIAL DATA:
Capital expenditures.... $ 174.0 $ 105.0 $ 244.0 $ 209.0 $ 146.0 $ 97.7 $ 74.1
Depreciation, depletion
and amortization....... 124.6 100.5 183.2 171.0 166.4 162.7 104.9
</TABLE>
- --------
(1) Operating results reflect the April 1998 acquisition of Harris and
affiliated entities. Results also include a $14.0 million restructuring
charge, $9.1 million after tax benefits or $0.08 per share, recorded in
conjunction with the divestiture of the IMC Vigoro business unit.
(2) Operating results reflect the December 1997 merger with Freeport-McMoRan
Inc. (the "FTX Merger").
(3) Operating results reflect the consolidation of IMC-Agrico Company which was
formed in July 1993.
(4) Represents an adjustment to reduce the historical carrying value to
estimated fair value of the Company's interest in the Main Pass 299 sulphur
and oil & gas operations.
(5) Represents a charge related to the settlement of litigation resulting from
a May 1991 explosion at a nitroparafins plant in Sterlington, Louisiana.
S-5
<PAGE>
DESCRIPTION OF NOTES
The Notes will be issued under an Indenture dated as of August 1, 1998
(the "Indenture") between the Company and The Bank of New York, as Trustee. The
Indenture constitutes the Senior Indenture described in the accompanying
prospectus and the Notes constitute Senior Debt Securities described in the
accompanying prospectus. The following description of the particular terms of
the Notes offered hereby supplements the description of the general terms and
provisions set forth in the prospectus, to which description reference is
hereby made. Unless the context otherwise indicates, references in this
"Description of Notes" to the "Company" or "IMC" refer to IMC Global Inc., the
issuer of the Notes, and not to its subsidiaries.
GENERAL
The 2002 Notes will mature on November 1, 2002, and will be limited to
$300,000,000 aggregate principal amount. The 2005 Notes will mature on November
1, 2005, and will be limited to $300,000,000 aggregate principal amount. Each
2002 Note will bear interest at the rate of 7.40% per annum and each 2005 Note
will bear interest at the rate of 7.625% per annum, in each case from November
12, 1998, or from the most recent interest payment date to which interest has
been paid or duly provided for, payable semi-annually on May 1 and November 1
in each year (each such date being referred to herein as an "Interest Payment
Date"), commencing May 1, 1999, to the person in whose name such Note is
registered at the close of business on the April 15 or October 15, as the case
may be, preceding each Interest Payment Date.
Interest on the Notes will be computed on the basis of a 360-day year of
twelve 30-day months. If any Interest Payment Date or maturity date falls on a
day that is not a Business Day, the required payment shall be made on the next
Business Day as if it were made on the date such payment was due and no
interest shall accrue on the amount so payable from the period from and after
such Interest Payment Date or maturity date, as the case may be, to such next
Business Day. "Business Day" means any day, other than a Saturday or Sunday, on
which banking institutions in New York, New York are open for business.
The Notes will be unsecured, senior debt of the Company and will rank
equally with all other unsecured and unsubordinated indebtedness of the
Company. However, because the Company is a holding company which conducts
substantially all of its operations through subsidiaries, the right of the
Company, and hence the right of creditors of the Company (including the holders
of the Notes), to participate in any distribution of the assets of any
subsidiary upon its liquidation or reorganization or otherwise is necessarily
subject to the prior claims of creditors of the subsidiary, except to the
extent that claims of the Company itself as a creditor of the subsidiary may be
recognized.
The Indenture provision described under "Description of Debt Securities--
Defeasance and Covenant Defeasance" in the accompanying prospectus will be
applicable to the Notes. The Indenture does not contain any covenants or other
provisions applicable to the Notes which might afford beneficial owners of
Notes protection in the event of a highly leveraged transaction, change in
credit rating of the Notes or other similar occurrence. The Notes are not
convertible into other securities.
The Company currently guarantees the payment of $75 million principal
amount of industrial development bonds due 2015 issued by the Florida Polk
County Industrial Development Authority (the "Polk County Bonds"). As a result
of the FTX Merger, the Company is not in technical compliance with one covenant
in such guaranty. The Company has notified The Bank of New York, trustee for
the holders of the Polk County Bonds, regarding this issue. The holders of the
Polk County Bonds have not sought to accelerate the Polk County Bonds or
requested that any other action be taken. Because solicitation of a unanimous
waiver is impractical, the Company currently intends to take no action. The
Company does not believe that any acceleration, redemption or refinancing of
the Polk County Bonds would have a material adverse effect on the Company and
its subsidiaries taken as a whole because the Company would be able to repay
the Polk County Bonds from available sources of liquidity.
S-6
<PAGE>
GLOBAL NOTES
The Company has established a depositary arrangement with The Depository
Trust Company (the "Depositary") with respect to the Notes, the terms of which
are summarized below.
Upon issuance, all Notes will be represented by Global Notes. The Global
Notes representing the Notes will be deposited with, or on behalf of, the
Depositary and will be registered in the name of the Depositary or a nominee of
the Depositary. No Global Notes may be transferred except as a whole by a
nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or such nominee to a successor of the
Depositary or a nominee of such successor.
So long as the Depositary or its nominee is the registered owner of a
Global Note, the Depositary or its nominee, as the case may be, will be the
sole Holder of the Notes represented thereby for all purposes under the
Indenture. Except as otherwise provided in this section, the Beneficial Owners
(as hereinafter defined) of the Global Notes representing the Notes will not be
entitled to receive physical delivery of certificated Notes and will not be
considered the holders thereof for any purpose under the Indenture, and no
Global Note representing the Notes shall be exchangeable or transferable.
Accordingly, each Beneficial Owner must rely on the procedures of the
Depositary and, if such Beneficial Owner is not a Participant (as hereinafter
defined), then such Beneficial Owner must rely on the procedures of the
Participant through which such Beneficial Owner owns its interest in order to
exercise any rights of a Holder under such Global Note or the Indenture. The
laws of some jurisdictions require that certain purchasers of securities take
physical delivery of such securities in certificated form. Such limits and such
laws may impair the ability to transfer beneficial interests in a Global Note
representing the Notes.
The Global Notes representing the Notes will be exchangeable for
certificated Notes of like tenor and terms and of differing authorized
denominations aggregating a like principal amount, only if (i) the Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for the Global Notes, (ii) the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), (iii) the Company in its sole discretion determines that the Global
Notes shall be exchangeable for certificated Notes or (iv) there shall have
occurred and be continuing an Event of Default under the Indenture with respect
to the Notes. Upon any such exchange, the certificated Notes shall be
registered in the names of the Beneficial Owners of the Global Notes
representing the Notes, which names shall be provided by the Depositary's
relevant Participants (as identified by the Depositary) to the Trustee.
The following is based on information furnished by the Depositary:
The Depositary will act as securities depository for the Notes. The Notes
will be issued as fully registered securities registered in the name of
Cede & Co. (the Depositary's partnership nominee). Fully registered Global
Notes will be issued for the Notes, in the aggregate principal amount of
such issue, and will be deposited with the Depositary.
The Depositary is a limited-purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. The Depositary holds securities that its
participants ("Participants") deposit with the Depositary. The Depositary
also facilitates the settlement among Participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes to Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. Direct Participants of the Depositary ("Direct Participants")
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations. The
Depositary is owned by a number of its Direct Participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the Depositary's
system is also available to others such as securities brokers and dealers,
banks and trust companies that clear through or maintain a
S-7
<PAGE>
custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to the
Depositary and its Participants are on file with the Securities and
Exchange Commission (the "Commission").
Purchases of Notes under the Depositary's system must be made by or through
Direct Participants, which will receive a credit for such Notes on the
Depositary's records. The ownership interest of each actual purchaser of
each Note represented by a Global Note ("Beneficial Owner") is in turn to
be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from the Depositary of their
purchase, but Beneficial Owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the Direct or Indirect Participants
through which such Beneficial Owner entered into the transaction. Transfers
of ownership interests in the Global Notes representing the Notes are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners of the Global Notes representing
the Notes will not receive certificated Notes representing their ownership
interests therein, except in the event that use of the book-entry system
for such Notes is discontinued.
To facilitate subsequent transfers, all Global Notes representing the Notes
which are deposited with, or on behalf of, the Depositary are registered in
the name of the Depositary's nominee, Cede & Co. The deposit of Global
Notes with, or on behalf of, the Depositary and their registration in the
name of Cede & Co. effect no change in beneficial ownership. The Depositary
has no knowledge of the actual Beneficial Owners of the Global Notes
representing the Notes; the Depositary's records reflect only the identity
of the Direct Participants to whose accounts such Notes are credited, which
may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by
Direct and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Neither the Depositary nor Cede & Co. will consent or vote with respect to
the Global Notes representing the Notes. Under its usual procedure, the
Depositary mails an Omnibus Proxy to the Company as soon as possible after
the applicable record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts
the Notes are credited on the applicable record date (identified in a
listing attached to the Omnibus Proxy).
Principal, premium, if any, and/or interest, if any, payments on the Global
Notes representing the Notes will be made to the Depositary. The
Depositary's practice is to credit Direct Participants' accounts on the
applicable payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe
that it will not receive payment on such date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of such Participant and not of the Depositary, the Trustee
or the Company, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of principal, premium, if any,
and/or interest, if any, to the Depositary is the responsibility of the
Company or the Trustee, disbursement of such payments to Direct
Participants shall be the responsibility of the Depositary, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities
depository with respect to the Notes at any time by giving reasonable
notice to the Company or the Trustee. Under such circumstances, in the
event that a successor securities depositary is not obtained, certificated
Notes are required to be printed and delivered.
The Company may decide to discontinue use of the system of book-entry
transfers through the Depositary (or a successor securities depository). In
that event, certificated Notes will be printed and delivered.
S-8
<PAGE>
The information in this section concerning the Depositary and the
Depositary's system has been obtained from sources that the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
A further description of the Depositary's procedures with respect to the
Global Notes representing the Notes is set forth in the accompanying prospectus
under "Description of Debt Securities--Book-Entry Debt Securities."
The Depositary has further advised the Company that management of the
Depositary is aware that some computer applications, systems, and the like for
processing data ("Systems") that are dependent upon calendar dates, including
dates before, on, and after January 1, 2000, may encounter "Year 2000
problems." The Depositary has informed its Participants and other members of
the financial community (the "Industry") that it has developed and is
implementing a program so that its Systems, as the same relate to the timely
payment of distributions (including principal and income payments) to
securityholders, book-entry deliveries, and settlement of trades within the
Depositary ("Depositary Services"), continue to function appropriately. This
program includes a technical assessment and a remediation plan, each of which
is complete. Additionally, the Depositary's plan includes a testing phase,
which is expected to be completed within appropriate time frames.
However, the Depositary's ability to perform properly its service is also
dependent upon other parties, including but not limited to issuers and their
agents, as well as the Depositary's Direct Participants and Indirect
Participants and third party vendors from whom the Depositary licenses software
and hardware, and third party vendors on whom the Depositary relies for
information or the provision of services, including telecommunication and
electrical utility service providers, among others. The Depositary has informed
the Industry that it is contacting (and will continue to contact) third party
vendors from whom the Depositary acquires services to: (i) impress upon them
the importance of such services being Year 2000 compliant; and (ii) determine
the extent of their efforts for Year 2000 remediation (and, as appropriate,
testing) of their services. In addition, the Depositary is in the process of
developing such contingency plans as it deems appropriate.
According to the Depositary, the foregoing information with respect to
the Depositary has been provided to the Industry for informational purposes
only and is not intended to serve as a representation, warranty, or contract
modification of any kind.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. All payments of principal and interest will be made by the
Company in immediately available funds. The Notes will trade in the
Depositary's Same-Day Funds Settlement System until maturity, and secondary
market trading activity in the Notes will therefore be required by the
Depositary to settle in immediately available funds.
THE TRUSTEE
The Bank of New York is the Trustee under the Indenture. The Company
maintains normal commercial banking relations with The Bank of New York, which
is also the trustee under certain other indentures of the Company.
S-9
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement (the "Underwriting Agreement") among the Company and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Chase Securities Inc., J.P. Morgan
Securities Inc. and Salomon Smith Barney Inc. (collectively, the
"Underwriters"), the Company has agreed to sell to the Underwriters, and the
Underwriters have severally agreed to purchase, the respective principal
amounts of the Notes set forth opposite their names below. The Underwriting
Agreement provides that the obligations of the Underwriters are subject to
certain conditions precedent and that the Underwriters will be obligated to
purchase all of the Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
UNDERWRITER 2002 NOTES 2005 NOTES
----------- ------------ ------------
<S> <C> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... $192,000,000 $192,000,000
Chase Securities Inc............................ 36,000,000 36,000,000
J.P. Morgan Securities Inc...................... 36,000,000 36,000,000
Salomon Smith Barney Inc........................ 36,000,000 36,000,000
------------ ------------
Total...................................... $300,000,000 $300,000,000
============ ============
</TABLE>
The Underwriters have advised the Company that they propose initially to
offer the Notes to the public at the public offering prices set forth on the
cover of this prospectus supplement, and to certain dealers at such prices less
a concession not in excess of .35% of the principal amount of the 2002 Notes
and .375% of the principal amount of the 2005 Notes. The Underwriters may
allow, and such dealers may reallow, a discount not in excess of .25% of the
principal amount of the 2002 Notes and .25% of the principal amount of the 2005
Notes to certain other dealers. After the initial public offerings, the public
offering prices, concessions and discounts may be changed.
The Notes are new issues of securities with no established trading
market. The Company has been advised by the Underwriters that they intend to
make a market in the Notes, but they are not obligated to do so and may
discontinue market making at any time without notice. The Company can give no
assurance as to the liquidity of or the trading market for the Notes.
In connection with the offering, the Underwriters are permitted to engage
in certain transactions that stabilize the price of the Notes. Such
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Notes. If the Underwriters create a short position
in the Notes in connection with the offering, i.e., if they sell a greater
aggregate principal amount of Notes than is set forth on the cover of this
prospectus supplement, the Underwriters may reduce that short position by
purchasing Notes in the open market. In general, purchases of a security for
the purpose of stabilization or to reduce a short position could cause the
price of the security to be higher than it might be in the absence of such
purchases.
Neither the Company nor any Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Notes. In addition, neither the
Company nor any Underwriter makes any representation that the Underwriters will
engage in such transactions or that such transactions, once commenced, will not
be discontinued without notice.
The Company has agreed to indemnify the several Underwriters against, or
contribute to payments that the Underwriters may be required to make in respect
of, certain liabilities, including liabilities under the Securities Act of
1933, as amended.
S-10
<PAGE>
Certain of the Underwriters and their affiliates have from time to time
provided investment banking, commercial banking, financial advisory and other
services to, and have been engaged in various transactions with, the Company in
the ordinary course of business.
The Company estimates that it will spend approximately $150,000 for
printing, rating agency, trustee and legal fees and other expenses related to
the offering.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for the
Company by Kirkland & Ellis (a partnership including professional
corporations), Chicago, Illinois. Certain legal matters relating to the Notes
offered hereby will be passed upon for the Underwriters by Brown & Wood llp,
New York, New York.
S-11
<PAGE>
PROSPECTUS
IMC GLOBAL INC.
$700,000,000
DEBT SECURITIES, DEBT WARRANTS, SERIES PREFERRED STOCK,
COMMON STOCK, STOCK WARRANTS AND CURRENCY WARRANTS
IMC Global Inc. ("IMC" or the "Company") from time to time may offer (i)
unsecured debt securities, which may be either senior (the "Senior Debt
Securities") or subordinated (the "Subordinated Debt Securities"), and which
may be convertible into shares of common stock, par value $1.00 per share
("Common Stock") of IMC (the "Convertible Debt Securities," and, together with
the Senior Debt Securities and the Subordinated Debt Securities, the "Debt
Securities"), (ii) warrants to purchase Debt Securities (the "Debt Warrants"),
(iii) shares of its series preferred stock (the "Series Preferred Stock"),
which may be convertible into shares of Common Stock, (iv) shares of Common
Stock, (v) warrants to purchase shares of Common Stock (the "Stock Warrants")
and (vi) warrants to receive from the Company the cash value in U.S. dollars
of the right to purchase ("Currency Call Warrants") or to sell ("Currency Put
Warrants," and, together with the Currency Call Warrants, the "Currency
Warrants") such foreign currency or currency units as shall be designated by
the Company at the time of the offering. The Debt Securities, Debt Warrants,
Series Preferred Stock, Common Stock, Stock Warrants and Currency Warrants
(collectively, the "Securities") may be offered either together or separately,
and will be offered in amounts, at prices and on terms to be determined at the
time of offering. The Securities offered pursuant to this Prospectus may be
issued in one or more series or issuances and will be limited to $700,000,000
aggregate public offering price (or the equivalent in foreign currency or
currency units).
The Senior Debt Securities will rank equally in right of payment with all
other Senior Indebtedness (as defined) of the Company. The Subordinated Debt
Securities will be subordinated in right of payment to all Senior Indebtedness
of the Company.
Certain specific terms of the particular Securities in respect of which this
Prospectus is being delivered (the "Offered Securities") are set forth in the
accompanying Prospectus Supplement (as supplemented by any applicable pricing
supplement relating thereto, the "Prospectus Supplement"), including, where
applicable, the initial public offering price of the Securities, the listing
on any securities exchange, other special terms, and (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, original
issue discount, if any, authorized denominations, maturity, premium, if any,
rate (which may be fixed or variable), time and method of calculating payment
of interest, if any, the place or places where principal of, premium, if any,
and interest, if any, on such Debt Securities will be payable, the currency in
which principal of, premium, if any, and interest, if any, on such Debt
Securities will be payable, whether such Debt Securities will be Senior Debt
Securities or Subordinated Debt Securities, any terms of redemption at the
option of the Company or the holder, any sinking fund provisions, any terms
for conversion or exchange into Common Stock and any special provisions
related to Debt Securities issued as medium-term notes, (ii) in the case of
Debt Warrants and Stock Warrants, the Debt Securities and Common Stock,
respectively, for which each such Warrant is exercisable, the exercise price,
duration, detachability, and call provisions, (iii) in the case of Series
Preferred Stock, the specific title and stated value, any dividend,
liquidation, redemption, voting and other rights and any terms for exchange
for Debt Securities or conversion into Debt Securities or Common Stock, (iv)
in the case of Currency Warrants, the base foreign currency or currency units,
the formula for determining the cash settlement value, if any, the procedures
and conditions relating to exercise and any circumstances under which there
will be deemed to be an automatic exercise and (v) in the case of Common
Stock, the number of shares of Common Stock and the terms of the offering and
sale thereof. If so specified in the applicable Prospectus Supplement, Offered
Securities may be issued in whole or in part in the form of one or more
temporary or permanent global securities.
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
The Company may sell the Securities to or through underwriters or dealers
and may also sell Securities directly to other purchasers or through agents.
See "Plan of Distribution." The Prospectus Supplement sets forth the names of
any underwriters, dealers or agents involved in the sale of the Offered
Securities in respect of which this Prospectus is being delivered and any
applicable fee, commission or discount arrangements with them.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is September 28, 1998
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS OR AN OFFER
TO SELL OR THE SOLICITATION OF AN OFFER OR SOLICITATION IN ANY JURISDICTION IN
WHICH AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER OR SOLICITATION WOULD
NOT BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.
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 450 Fifth Street,
N.W., Room 1024, 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 and Northeast Regional Office, 7 World Trade
Center, Suite 1300, 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 national securities exchanges on which the
Company's Common Stock is listed: The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005, and The Chicago Stock Exchange,
Incorporated, 440 South LaSalle Street, Chicago, Illinois 60605. The Company
is subject to the electronic filing requirements of the Commission.
Accordingly, pursuant to the rules and regulations of the Commission, certain
documents, including annual and quarterly reports and proxy statements, filed
by the Company with the Commission have been and will be filed electronically.
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.
This Prospectus constitutes a part of a Registration Statement filed by the
Company with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus omits certain of the information contained
in the Registration Statement in accordance with the rules and regulations of
the Commission. Reference is hereby made to the Registration Statement and
related exhibits for further information with respect to the Company and the
Securities. Statements contained herein concerning the provisions of any
document are not necessarily complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is qualified in
its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company heretofore filed with the Commission
pursuant to the Exchange Act (File No. 1-9759) are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1997;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
3. The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1998;
2
<PAGE>
4. The Company's Current Report on Form 8-K filed on January 6, 1998;
5. The Company's Current Report on Form 8-K filed on January 15, 1998;
6. The Company's Current Report on Form 8-K filed on April 15, 1998, as
amended on June 15, 1998 and September 16, 1998;
7. 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
8. The description of the IMC Preferred Stock Purchase 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.
The consolidated financial statements of Freeport-McMoRan Inc. ("FTX") at
December 31, 1996 and for each of the three years in the period ended December
31, 1996 contained in FTX's Annual Report on Form
10-K for the year ended December 31, 1996 filed with the Commission pursuant
to the Exchange Act (File No. 1-8124) are incorporated herein by reference.
The unaudited interim consolidated financial statements of FTX for the quarter
ended September 30, 1997 contained in FTX's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1997 filed with the Commission pursuant to the
Exchange Act (File No. 1-8124) are incorporated herein by reference.
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 Securities
offered hereby shall be deemed to be incorporated by reference into this
Prospectus or any Prospectus Supplement and to be a part hereof from the date
of filing of such reports and documents; provided, however, that the Report of
the Compensation Committee and the Performance Graph contained in any Proxy
Statement of the Company shall not be so deemed incorporated by reference. Any
statement contained in a document incorporated or deemed to be incorporated by
reference in this Prospectus or any Prospectus Supplement shall be deemed to
be modified or superseded for purposes of this Prospectus or any Prospectus
Supplement to the extent that a statement contained herein, therein or in any
other subsequently filed documents which also is or is deemed to be
incorporated by reference in this Prospectus or in such Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus or any Prospectus Supplement.
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 Corporate Secretary, IMC Global
Inc., 2100 Sanders Road, Northbrook, Illinois 60062, telephone number (847)
272-9200.
This Prospectus and the accompanying Prospectus Supplement, including the
documents incorporated by reference herein, include "forward-looking
statements" within the meaning of various provisions of the Securities Act and
the Exchange Act. All statements, other than statements of historical facts,
included or incorporated by reference in this Prospectus and the Prospectus
Supplement that address activities, events or developments that the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
business strategy and measures to implement strategy, competitive strengths,
goals, expansion and growth of the Company's and its subsidiaries' business
and operations, plans, references to future success as well as other
statements which include words such as "anticipate," "believe," "plan,"
"estimate," "expect" and "intend" and other similar expressions, constitute
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its perception
of historical trends, current conditions and expected future developments as
well as other factors it believes are appropriate in the circumstances.
However, whether actual results and developments will conform with the
Company's expectations and predictions is subject to a number of risks and
uncertainties, including any special considerations included or incorporated
by reference in this Prospectus and any Prospectus Supplement; general
economic, market or business conditions; conditions in and policies of the
agriculture industry; weather; risks associated with export sales and
investments and operations in foreign jurisdictions and any future
international expansion, including those related to economic, political and
regulatory policies of local governments and laws or policies of the United
States and Canada, as
3
<PAGE>
well as those of the United Kingdom and other European countries, China and
other countries in the Far East and Australia; changes in governmental laws
and regulations affecting environmental compliance, taxes and other matters
impacting the Company; the risks attendant with mining operations; the
potential impacts of increased competition in the markets the Company operates
within; risk factors reported from time to time in the reports filed by the
Company with the SEC and other factors, many of which are beyond the control
of the Company and its subsidiaries. Consequently, all of the forward-looking
statements made in this Prospectus and any Prospectus Supplement are qualified
by these cautionary statements, and there can be no assurance that the actual
results or developments anticipated by the Company will be realized or, even
if substantially realized, that they will have the expected consequences to or
effects on the Company and its subsidiaries or their business or operations.
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 foremost
distributors in the United States of crop nutrients and related products
through its retail and wholesale distribution networks. The Company is also
one of the world's leading producers of salt, soda ash and other inorganic
chemicals. The Company mines, processes and distributes potash in the United
States and Canada and is a joint venture partner in IMC-Agrico Company, a
leading producer, marketer and distributor of phosphate crop nutrients and
animal feed ingredients. The Company also mines, processes and distributes
salt products in the United States, Canada and Europe and is a major producer
of soda ash and other inorganic chemicals in the United States, Europe and
Australia. The Company has structured its operations into five business units
corresponding to its major product lines as follows: IMC Crop Nutrients
(phosphates and potash), IMC Salt (salt), IMC-Agrico Feed Ingredients (animal
feed), IMC Chemicals (soda ash and other inorganic chemicals) and IMC
AgriBusiness (wholesale and retail distribution). The Company's principal
executive office is located at 2100 Sanders Road, Northbrook, Illinois 60062,
telephone (847) 272-9200.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes, including working capital, the repayment or
refinancing of indebtedness, future acquisitions and/or capital expenditures.
Pending application of the net proceeds for specific purposes, such proceeds
may be invested in short-term or marketable securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of the
Company for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED -------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
------------- ---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(a). 3.69 5.78 8.24 8.34 5.24 (1.56)
Adjusted ratio of earnings to fixed
charges(b)........................... 3.86 9.21 9.98 8.34 5.24 0.65
</TABLE>
- --------
(a) Earnings consist of pre-tax earnings from continuing operations but before
fixed charges. Fixed charges consist of interest on indebtedness, interest
capitalized as part of fixed assets, amortization of debt expense and rent
expense which is deemed representative of an interest factor.
(b) The adjusted ratio of earnings to fixed charges for the six months ended
June 30, 1998 excludes a charge of $9.1 million relating to the sale of
the Company's IMC Vigoro business unit. The adjusted ratio of earnings to
fixed charges for the year ended December 31, 1997 excludes a charge of
$183.7 million relating to the writedown of the historical carrying value
of IMC's interest in the Main Pass 299 business of Phosphate Resource
Partners Limited Partnership. The adjusted ratio of earnings to fixed
charges for the year ended December 31, 1996 excludes a charge of $98.6
million relating to the merger of The Vigoro Corporation into a wholly
owned subsidiary of IMC. The adjusted ratio of earnings to fixed charges
for the year ended December 31, 1993 excludes a charge of $169.1 million
relating to the settlement of litigation resulting from a May 1991
explosion at a nitroparaffins plant in Sterlington, Louisiana.
4
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities") and the
extent, if any, to which such general provisions may not apply thereto will be
described in the Prospectus Supplement relating to such Offered Debt
Securities.
The Debt Securities may be issued from time to time in one or more series
and will constitute either Senior Debt Securities or Subordinated Debt
Securities. Senior Debt Securities will be issued under an Indenture, dated as
of August 1, 1998 (the "Senior Indenture"), between the Company and The Bank
of New York, as Trustee (the "Senior Trustee"). A copy of the Senior Indenture
is filed as an exhibit to the Registration Statement of which this Prospectus
is a part. The Subordinated Debt Securities will be issued under an Indenture
(the "Subordinated Indenture"), between the Company and a trustee to be named
prior to the offering of any Subordinated Debt Securities, as Trustee (the
"Subordinated Trustee"). A copy of the form of Subordinated Indenture is filed
as an exhibit to the Registration Statement of which this Prospectus is a
part. The Senior Indenture and the Subordinated Indenture are referred to
herein individually as an "Indenture" and, collectively, as the "Indentures,"
and the Senior Trustee and the Subordinated Trustee are referred to herein
individually as the "Trustee" and collectively as the "Trustees."
The following summaries of certain provisions of the Debt Securities and the
Indentures do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all of the provisions of the Indentures,
including the definitions therein of certain terms. Certain capitalized terms
used herein are defined in the Indentures. The Indentures are substantially
identical, except for certain covenants of the Company and provisions relating
to subordination.
GENERAL
The Indentures do not limit the amount of debt securities which can be
issued thereunder and provide that debt securities of any series may be issued
thereunder up to the aggregate principal amount which may be authorized from
time to time by the Company. The Indentures do not limit the amount of other
Indebtedness or securities, other than certain secured Indebtedness as
described below, which may be issued by the Company or its Subsidiaries. All
Senior Debt Securities will be unsecured and will rank on a parity with all
other unsecured and unsubordinated Indebtedness of the Company. All
Subordinated Debt Securities will be unsecured and will be subordinated in
right of payment to the prior payment in full of Senior Indebtedness (which
term includes the Senior Debt Securities) of the Company as described below
under "Provisions Applicable Solely to Subordinated Debt Securities--
Subordination." In addition, creditors of Subsidiaries of the Company are
entitled to a claim on the assets of such Subsidiaries. Consequently, in the
event of a liquidation or reorganization of any Subsidiary, creditors of the
Subsidiary are likely to be paid in full before any distribution is made to
the Company and holders of Senior Debt Securities or Subordinated Debt
Securities, except to the extent that the Company is itself recognized as a
creditor of such Subsidiary, in which case the claims of the Company would
still be subordinate to any security interests in the assets of such
Subsidiary and any Indebtedness of such Subsidiary senior to that held by the
Company.
Reference is made to the Prospectus Supplement for the following terms
thereof: (i) the title of the Offered Debt Securities, which may include
medium-term notes, and classification as Senior Debt Securities or
Subordinated Debt Securities; (ii) any limit upon the aggregate principal
amount of the Offered Debt Securities; (iii) if other than 100% of the
principal amount, the percentage of the principal amount at which the Offered
5
<PAGE>
Debt Securities will be offered; (iv) the date or dates on which the principal
of the Offered Debt Securities will be payable (or method of determination
thereof); (v) the rate or rates (which may be fixed or variable) at which the
Offered Debt Securities will bear interest (or method of determination
thereof), if any, the date or dates from which any such interest will accrue
and on which such interest will be payable, and the record dates for the
determination of the holders to whom interest is payable; (vi) if other than
U.S. dollars, the currency or units based on or relating to currencies in
which the Debt Securities are denominated and which the principal of, interest
on and any Additional Amounts (as defined below) will or may be payable; (vii)
if other than as set forth herein, the place or places where the principal of,
interest on and any Additional Amounts payable in respect of the Offered Debt
Securities will be payable; (viii) the price or prices at which, the period or
periods within which and the terms and conditions upon which Offered Debt
Securities may be redeemed, in whole or in part, at the option of the Company;
(ix) whether the Offered Debt Securities are convertible into Common Stock
and, if so, the terms and conditions upon which such conversion will be
effected including the initial conversion price or conversion rate, the
conversion period and other conversion provisions in addition to or in lieu of
those described in the applicable Indenture; (x) the obligation, if any, of
the Company to redeem, repurchase or repay Offered Debt Securities, whether
pursuant to any sinking fund or analogous provisions or pursuant to other
provisions set forth therein or at the option of a holder thereof; (xi)
whether the Offered Debt Securities will be represented in whole or in part by
one or more global notes registered in the name of a depository or its
nominee; (xii) whether and under what circumstances the Company will pay
additional amounts ("Additional Amounts") in respect of certain taxes imposed
on certain holders of Debt Securities or as otherwise provided; and (xiii) any
other terms or conditions not inconsistent with the provisions of the
Indenture upon which the Offered Debt Securities will be offered. "Principal"
when used herein includes, when appropriate, the premium, if any, on the Debt
Securities. For a description of the terms of the Offered Debt Securities,
reference must be made to both the Prospectus Supplement relating thereto and
to the description of Debt Securities set forth herein.
Unless otherwise provided in the Prospectus Supplement relating to any
Offered Debt Securities, principal, interest and additional Amounts, if any,
will be payable, and the Debt Securities will be transferable or, if
applicable, convertible, at the office or offices or agency maintained by the
Company for such purposes; provided that payment of interest on registered
Debt Securities may be made by check mailed to the persons entitled thereto at
the addresses of such persons appearing on the Security register. In the case
of registered Debt Securities, interest on the Debt Securities will be payable
on any interest payment date to the persons in whose name the Debt Securities
are registered at the close of business on the record date with respect to
such interest payment date.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued only in fully registered form without coupons in
minimum denominations of $1,000 and any integral multiple thereof. The Debt
Securities may be represented in whole or in part by one or more global notes
registered in the name of a depository or its nominee and, if so represented,
interests in such global note will be shown on, and transfers thereof will be
effected only through, records maintained by the designated depository and its
participants as described below. Where Debt Securities of any series are
issued in bearer form, the special restrictions and considerations, including
special offering restrictions and special Federal income tax considerations,
applicable to any such Debt Securities and to payment on and transfer and
exchange of such Debt Securities will be described in the applicable
Prospectus Supplement.
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or bearing interest at a rate which at the time of
issuance is below market rates) to be sold at a substantial discount below
their stated principal amount ("Original Issue Discount Securities"). Federal
income tax consequences and other special considerations applicable to any
such Original Issue Discount Securities will be described in the Prospectus
Supplement relating thereto.
If the purchase price of any Debt Securities is payable in one or more
foreign currencies or currency units or if any Debt Securities are denominated
in one or more foreign currencies or currency units or if the principal of or
interest, if any, on any Debt Securities is payable in one or more foreign
currencies or currency units, the
6
<PAGE>
restrictions, elections, certain Federal income tax considerations, specific
terms and other information with respect to such issue of Debt Securities and
such foreign currency or currency units will be set forth in the applicable
Prospectus Supplement.
Debt Securities may be presented for exchange, and registered Debt
Securities may be presented for transfer, in the manner, at the places or
subject to the restrictions set forth in the applicable Indenture, the Debt
Securities and the Prospectus Supplement relating thereto. Debt Securities in
bearer form and the coupons, if any, appertaining thereto will be transferable
by delivery. No service charge will be made for any transfer or exchange of
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental change payable in connection therewith.
The Indentures require the annual filing by the Company with the Trustee of
a certificate as to compliance with certain covenants contained in the
Indentures.
The Company will comply with Section 14(e) under the Exchange Act, and any
other tender offer rules under the Exchange Act which may then be applicable,
in connection with any obligation of the Company to purchase Offered Debt
Securities at the option of the holders thereof. Any such obligation
applicable to a series of Debt Securities will be described in the Prospectus
Supplement relating thereto.
Unless otherwise described in a Prospectus Supplement relating to any
Offered Debt Securities, other than as described below under "--Limitation on
Liens," the Indentures do not contain any provisions that would limit the
ability of the Company to incur indebtedness or that would afford holders of
Debt Securities protection in the event of a sudden and significant decline in
the credit quality of the Company or a takeover, recapitalization or highly
leveraged or similar transaction involving the Company. Accordingly, the
Company could in the future enter into transactions that could increase the
amount of indebtedness outstanding at that time or otherwise affect the
Company's capital structure or credit rating. Reference is made to the
Prospectus Supplement relating to the particular series of Debt Securities
offered thereby for information with respect to any deletions from,
modifications of or additions to the Events of Default described below or
covenants of the Company contained in the Indentures, including any addition
of a covenant or other provision providing event risk or similar protection.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more temporary or permanent global securities (the "Global
Securities") that will be deposited with, or on behalf of, a Depositary
("Depositary") or its nominee identified in the applicable Prospectus
Supplement. In such a case, one or more Global Securities will be issued in a
denomination or aggregate denomination equal to the portion of the aggregate
principal amount of outstanding debt Securities of the series to be
represented by such Global Security or Global Securities. Unless and until it
is exchanged in whole or in part for Debt Securities in registered form, a
Global Security may not be registered for transfer or exchange except as a
whole by the Depositary for such Global Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any nominee to a successor
Depositary or a nominee of such successor Depositary and except in the
circumstances described in the applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. IMC expects that the
following provisions will apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such Depositary or its nominee. Upon the issuance of
such Global Security, and the deposit of such Global Security with or on
behalf of the Depositary of such Global Security, the Depositary will credit,
on its book-entry registration and transfer system, the respective principal
amounts of
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the Debt Securities represented by such Global Security to the accounts of
institutions that have accounts with such Depositary or its nominee
("participants"). The accounts to be credited will be designated by the
underwriters or agents of such Debt Securities or, if such Debt Securities are
offered and sold directly by the Company, by the Company. Ownership of
beneficial interests in such Global Security will be limited to participants
or Persons that may hold interests through participants. Ownership of
beneficial interests by participants in such Global Security will be shown on,
and the transfer of that ownership interests will be effected only through,
records maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such Global Security by Persons that hold
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Unless otherwise specified in the applicable Prospectus
Supplement, owners of beneficial interests in such Global Security will not be
entitled to have Debt Securities of the series represented by such Global
Security registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in certificate form and
will not be considered the Holders thereof for any purposes under the
applicable Indenture. Accordingly, each Person owning a beneficial interest in
such Global Security must rely on the procedures of the Depositary and, if
such Person is not a participant, on the procedures of the participant through
which such Person owns its interest, to exercise any rights of a Holder under
the applicable Indenture. IMC understands that under existing industry
practices, if IMC requests any action of Holders or an owner of a beneficial
interest in such Global Security desires to give any notice to take any action
a Holder is entitled to give or take under the applicable Indenture, the
Depositary would authorize the participants to give such notice or take such
action, and participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in the applicable Prospectus Supplement.
CERTAIN COVENANTS
Limitation on Liens. The Senior Indenture provides that the Company will
not, and will not permit any of its Restricted Subsidiaries to, create, incur
or otherwise cause or suffer to exist or become effective any Liens of any
kind upon any Principal Property or any shares of stock or indebtedness of any
Restricted Subsidiary now owned or hereafter acquired, unless all payments due
under the Senior Indenture and the Senior Debt Securities are secured on an
equal and ratable basis with the obligation so secured until such time as such
obligation is no longer secured by a Lien, except for Permitted Liens. See
also "--Exempted Indebtedness" below.
The Subordinated Indenture provides that the Company will not, and will not
permit any of its Restricted Subsidiaries to, create, incur, or otherwise
cause or suffer to exist or become effective any Liens of any kind upon any
Principal Property or any shares of stock or indebtedness of any Restricted
Subsidiary (whether such Principal Property, shares of stock or indebtedness
are now owned or hereafter acquired) that secures any Indebtedness that is on
a parity in right of payment with the Subordinated Debt Securities unless all
payments due under the Subordinated Indenture and the Subordinated Debt
Securities are secured on an equal and ratable basis with the obligation so
secured until such time as such obligation is no longer secured by a Lien,
except for Permitted Liens. See also "--Exempted Indebtedness" below.
Limitations on Sale and Leaseback Transactions. The Indentures provide that
neither the Company nor any Restricted Subsidiary will enter into any sale and
leaseback transaction with respect to any Principal Property (except for
temporary leases of a term, including renewals, not exceeding five years)
unless either (a) the
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Company or such Restricted Subsidiary would be entitled, pursuant to the
provisions of the Indentures, to incur Indebtedness secured by a Lien on such
property to be leased without equally and ratably securing the Debt
Securities, or (b) the Company within 180 days after the effective date of
such transaction applies to the voluntary retirement of its Funded Debt an
amount equal to the value of such transaction, defined as the greater of the
net proceeds of the sale of the property leased in such transaction or the
fair value, as determined by the Board of Directors, of the leased property at
the time such transaction was entered into. The Indentures define "Funded
Debt" as indebtedness (including the Debt Securities) maturing by the terms
thereof more than one year after the original creation thereof. See also "--
Exempted Indebtedness" below.
Exempted Indebtedness. Notwithstanding the foregoing limitations on Liens
and sale and leaseback transactions, the Company and its Restricted
Subsidiaries may issue, assume, suffer to exist or guarantee Indebtedness
secured by a Lien without securing the Debt Securities, or may enter into sale
and leaseback transactions without retiring funded debt, or enter into a
combination of such transactions, if the sum of the principal amount of all
such Indebtedness and the aggregate value of all such sale and leaseback
transactions does not at any such time exceed 10% of the consolidated total
assets of the Company and its consolidated Subsidiaries as shown in the latest
audited consolidated balance sheet contained in the latest annual report to
the stockholders of the Company.
CONVERSION
The Indentures contain certain provisions regarding the conversion of Debt
Securities into Common Stock (or cash in lieu thereof). The specific terms
applicable to a series of Convertible Debt Securities, including the initial
conversion price or conversion rate, any adjustments to such conversion price
or conversion rate and the conversion period, and the conditions upon which
such conversion will be effected will be set forth in the Prospectus
Supplement relating thereto.
EVENTS OF DEFAULT AND REMEDIES
An Event of Default with respect to the Debt Securities of any series is
defined in each Indenture as: (i) default in the payment of any installment of
interest on or any Additional Amounts payable in respect of any of the Debt
Securities of such series when and as the same shall become due and payable,
and continuance of such default for a period of 30 days; (ii) default in the
payment of all or any part of the principal of any of the Debt Securities of
such series when and as the same shall become due and payable either at
maturity, upon any redemption, or otherwise; (iii) the failure by the Company
to perform or observe any of its other covenants, conditions or agreements
contained in the Debt Securities of such series or set forth in the applicable
Indenture and continuance of such failure for a period of 90 days after due
notice by the applicable Trustee or by the holders of at least 25% in
principal amount of the Debt Securities of that series then outstanding; (iv)
default in the payment of any scheduled principal of or interest on any
Indebtedness of the Company or any wholly owned Subsidiary of the Company
(other than the Debt Securities of such series) aggregating more than $25
million in principal amount, when due after giving effect to any applicable
grace period, that results in such Indebtedness becoming due and payable prior
to the date on which it would otherwise become due and payable, and such
acceleration shall not have been rescinded or annulled, or such Indebtedness
shall not have been discharged; or (v) certain events of bankruptcy,
insolvency or reorganization involving the Company as more fully described in
the Indentures. Additional Events of Default may be added for the benefit of
holders of certain series of Debt Securities which, if added, will be
described in the Prospectus Supplement relating to such Debt Securities. The
Indentures provide that the Trustee shall notify the holders of Debt
Securities of each series of any continuing default known to the Trustee which
has occurred with respect to that series within 90 days after the occurrence
thereof. The Indentures provide that notwithstanding the foregoing, except in
the case of default in the payment of the principal of, interest on or any
Additional Amounts payable in respect of any of the Debt Securities of such
series the Trustee may withhold such notice if the Trustee in good faith
determines that the withholding of such notice is in the interests of the
holders of Debt Securities of such series.
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If an Event of Default of the type described in clause (v) above shall
happen and be continuing, then the principal of (or, with respect to a series
of Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms of such series), accrued and unpaid interest on,
and any Additional Amounts payable in respect of the Debt Securities will
become immediately due and payable. If one or more Events of Default of the
type described in clauses (i) through (iv) with respect to any series of Debt
Securities at the time outstanding shall happen and be continuing, then either
the Trustee or the holders of not less than 25% of the principal amount of
that series of the Debt Securities then outstanding may declare the principal
(or, with respect to a series of Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such
series), accrued and unpaid interest on and any Additional Amounts payable in
respect of the Debt Securities of that series due and payable immediately.
This provision is subject to the condition that if, after any declaration of
acceleration and before Stated Maturity of the principal with respect to the
Debt Securities of such series, all arrears of interest and any Additional
Amounts and the expenses of the Trustee, its agents or attorneys shall be paid
by or for the account of the Company, and all Defaults (other than the payment
of principal that has been declared due and payable) have been cured to the
satisfaction of the Trustee, then the Trustee shall, upon the written request
of the holders of a majority in principal amount of the Debt Securities of the
applicable series, waive such Default and rescind or annul the declaration of
acceleration; but no such waiver, rescission or annulment shall extend to or
affect any subsequent Default or impair any right consequent thereon.
No holder of any Debt Security of any series will have the right to pursue a
remedy under the applicable Indenture or the Debt Securities, unless (1) such
holder gives the Trustee notice of a continuing Default with respect to the
Debt Securities of that series, (2) the holders of at least a majority in
principal amount of the Debt Securities of the applicable series make a
request to the Trustee to pursue the remedy, (3) such holder or holders
offered the Trustee security or indemnity satisfactory to the Trustee against
any loss, liability or expense and (4) the Trustee does not comply with the
request within 30 days after the receipt of the request and the offer of
security or indemnity. However, nothing contained in the Indentures shall
affect or impair the right of any holder of Debt Securities to institute suit
to enforce payment of the principal of, interest on and any Additional Amounts
payable in respect of such holder's Debt Securities on or after the due dates
expressed in such Debt Securities.
The Company must furnish to the Trustee a statement, detailing any Defaults
of which it is aware, within five days of the occurrence of any Default.
REPORTS
The Indentures provide that the Company will file with the Trustee copies of
the annual reports and other information, documents and reports which the
Company is required to file with the Commission pursuant to the Exchange Act.
If the Company is not required to file such reports and other information, the
Indentures provide that the Company shall file with the Trustee and cause to
be mailed to the holders of Debt Securities (i) annual reports containing the
information required to be contained in an Annual Report on Form 10-K, (ii)
quarterly reports containing the information required to be contained in a
Quarterly Report on Form 10-Q and (iii) promptly after the occurrence of an
event required to be therein reported, such other reports containing
information required to be contained in a Current Report on Form 8-K. The
Company shall also comply with the requirements of Section 314(a) of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act").
SUCCESSOR COMPANY
The Indentures provide that the Company will not consolidate or merge with
or into, or sell, lease, convey or otherwise dispose of all or substantially
all of its assets or assign any of its obligations under the Debt Securities
or applicable Indenture unless (i) the entity formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale,
lease, conveyance or other disposition or assignment shall have been made (the
"Surviving Entity"), is a corporation organized and existing under the laws of
the United States, any state thereof, or the District of Columbia; (ii) the
Surviving Entity assumes by a supplemental
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indenture in a form satisfactory to the Trustee all of the obligations of the
Company under the Debt Securities and the applicable Indenture; and (iii)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing. With respect to the sale of
assets, the phrase "all or substantially all" as used in the Indentures varies
according to the facts and circumstances of the subject transaction, has no
clearly established meaning under New York law (which governs the Indentures)
and is subject to judicial interpretation. Accordingly, in certain
circumstances there may be a degree of uncertainty in ascertaining whether a
particular transaction would involve a disposition of "all or substantially
all" of the assets of a person, and therefore it may be unclear as to whether
a disposition of assets comes within the terms of this provision.
DISCHARGE
Each Indenture provides that it will cease to be of further effect (except
that certain obligations will survive) with respect to a series of Debt
Securities when all outstanding Debt Securities of such series authenticated
and issued have been delivered (other than destroyed, lost or stolen Debt
Securities that have been replaced or paid) to the Trustee for cancellation
and the Company has paid all sums payable under such Indenture.
MODIFICATION OF THE INDENTURES
Each Indenture contains provisions permitting the Company and the applicable
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debt Securities of each series at the time
outstanding under such Indenture, to enter into supplemental indentures to
amend any of the provisions of each Indenture or any supplemental indenture
with respect to the Debt Securities of such series; provided that, unless
consented to by each holder of Debt Securities of such series, no such
supplemental indenture may (1) reduce the amount of Debt Securities whose
holders must consent to an amendment or a waiver; (2) reduce the rate of or
change the time for payment of interest or Additional Amounts, including
default interest on any Debt Security; (3) reduce the principal of or change
the Stated Maturity of any Debt Security or alter the provisions with respect
to redemption; (4) make any Debt Security payable in money other than that
stated in the Debt Security; (5) make any change in the types of amendment
that need the approval of every affected holder of Debt Securities; (6) with
respect to the Senior Indenture, affect the ranking of the Debt Securities; or
(7) waive a Default in the payment of principal of, any Additional Amounts
payable in respect of or interest on, or with respect to, any Debt Security.
The applicable Trustee and the Company may enter into supplemental
indentures which amend the applicable Indenture and the Debt Securities with
respect to a particular series without the consent of any holder of Debt
Securities of such series in order to: (a) cure any ambiguity, omission,
defect or inconsistency; (b) comply with such Indenture concerning the
substitution of successor corporations pursuant to a merger or consolidation;
(c) comply with any requirements of the Commission in connection with the
qualification of such Indenture under the Trust Indenture Act; (d) provide for
uncertificated securities; (e) make any change that does not materially
adversely affect the legal rights of any holder of Debt Securities under the
applicable Indenture as then in effect; (f) secure the Debt Securities and
make intercreditor arrangements with respect to any such Debt Securities
(unless prohibited by such Indenture); (g) provide for a replacement Trustee;
or (h) add to the covenants and agreements of the Company for the benefit of
all the holders of all of the Debt Securities with respect to a series and
surrender any right or power reserved for the Company in such Indenture.
DEFEASANCE AND COVENANT DEFEASANCE
Each Indenture provides that the Company may elect either (a) to terminate
(and be deemed to have satisfied) all its obligations with respect to such
Debt Securities (except for the obligations to register the transfer or
exchange of such Debt Securities, to replace mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities, to compensate and indemnify the Trustee and to punctually pay or
cause to be paid the principal of, interest on and any Additional Amounts
payable in respect of all Debt
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Securities of such series when due) ("defeasance") or (b) to be released from
its obligations with respect to certain covenants, including those described
above under "Certain Covenants--Limitation on Liens" and "--Limitations on
Sale and Leaseback Transactions" above ("covenant defeasance"), upon the
deposit with the Trustee, in trust for such purpose, of money and/or U.S.
Government Obligations (as defined in the Indentures) which through the
payment of principal and interest in accordance with their terms will provide
money, in an amount sufficient (in the opinion of a nationally recognized firm
of independent public accountants) to pay the principal of, interest on and
any Additional Amounts payable in respect of the outstanding Debt Securities
of such series, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor. Such a trust may be established only if,
among other things, the Company has delivered to the Trustee an opinion of
counsel (as specified in such Indenture) with regard to certain matters,
including an opinion to the effect that the holders of such Debt Securities
will not recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and discharge and will be subject to Federal income on
the same amounts and in the same manner and at the same times as would have
been the case if such deposit and defeasance or covenant defeasance, as the
case may be, had not occurred. The Prospectus Supplement may further describe
these or other provisions, if any, permitting defeasance or covenant
defeasance with respect to the Debt Securities of any series.
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Senior Indenture. Prior to the
issuance of any Subordinated Debt Securities under the Subordinated Indenture,
the Company will engage a qualified trustee to serve as Trustee under the
Subordinated Indenture. Such Trustee will be an "eligible trustee" under the
Trust Indenture Act.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
Subordination
The Subordinated Debt Securities will be subordinate and junior in right of
payment, to the extent set forth in the Subordinated Indenture, to all Senior
Indebtedness (as defined below) of the Company. If the Company should default
in the payment of any principal of, interest on or any Additional Amounts
payable in respect of any Senior Indebtedness when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise, then, upon written notice of such default to the
Company by the holders of such Senior Indebtedness of any trustee therefor and
subject to certain rights of the Company to dispute such default and subject
to proper notification of the Trustee, unless and until such default shall
have been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) will be made
or agreed to be made for principal of, interest on or any Additional Amounts
payable in respect of the Subordinated Debt Securities, or in respect of any
redemption, retirement, purchase or other acquisition of the Subordinated Debt
Securities other than those made in capital stock of the Company (or cash in
lieu of fractional shares thereof) pursuant to any conversion right of the
Subordinated Debt Securities or otherwise made in capital stock of the
Company.
The term "Senior Indebtedness" is defined to mean Indebtedness (including
the Senior Debt Securities) of the Company outstanding at any time except (a)
any Indebtedness as to which, by the terms of the instrument creating or
evidencing the same, it is provided that such Indebtedness is not senior in
right of payment to the Subordinated Debt Securities, (b) the Subordinated
Debt Securities, (c) any Indebtedness of the Company to a wholly owned
Subsidiary of the Company, (d) interest accruing after the filing of a
petition initiating certain events of bankruptcy or insolvency unless such
interest is an allowed claim enforceable against the Company in a proceeding
under federal or state bankruptcy laws and (e) trade payables.
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If (i) without the consent of the Company a court shall enter an order for
relief with respect to the Company under the United States federal bankruptcy
laws or a judgment, order or decree adjudging the Company a bankrupt or
insolvent, or enter an order for relief for reorganization, arrangement,
adjustment or composition of or in respect of the Company under the United
States federal or state bankruptcy or insolvency laws or (ii) the Company
shall institute proceedings for the entry of an order for relief with respect
to the Company under the United States federal bankruptcy laws or for an
adjudication of insolvency, or shall consent to the institution of bankruptcy
or insolvency proceedings against it, or shall file a petition seeking, or
seek or consent to reorganization, arrangement, composition or similar relief
under any applicable law, or shall consent to the filing of such petition or
to the appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator or similar official in respect of the Company or of substantially
all of its property, or the Company shall make a general assignment for the
benefit of creditors, then all Senior Indebtedness (including any interest
thereon accruing after the commencement of any such proceedings and any
Additional Amounts payable in respect thereof) will first be paid in full
before any payment or distribution, whether in cash, securities or other
property, is made on account of the principal of, interest on or any
Additional Amounts payable in respect of the Subordinated Debt Securities. In
such event, any payment or distribution on account of the principal of,
interest on or any Additional Amounts payable in respect of a Subordinated
Debt Securities, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan or
reorganization or readjustment the payment of which is subordinate, at least
to the extent provided in the subordination provisions with respect to the
Subordinated Debt Securities, to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such
plan of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the
Subordinated Debt Securities will be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings and any Additional
Amounts payable in respect thereof) has been paid in full. In the event of any
such proceeding, after payment in full of all sums owing with respect to
Senior Indebtedness, the holders of Subordinated Debt Securities, together
with the holders of any obligations of the Company ranking on a parity with
the Subordinated Debt Securities, will be entitled to be repaid from the
remaining assets of the Company the amounts at that time due and owing on
account of unpaid principal of, interest on and any Additional Amounts payable
in respect of the Subordinated Debt Securities and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or obligations of the
Company ranking junior to the Subordinated Debt Securities and such other
obligations.
If any payment or distribution on account of the principal of, interest on
or any Additional Amounts payable in respect of the Subordinated Debt
Securities of any character, whether in cash, securities or other property
(other than securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in the subordination provisions with respect
to the Subordinated Debt Securities, to the payment of all Senior Indebtedness
then outstanding and to any securities issued in respect thereof under any
such plan or reorganization or readjustment), shall be received by the Trustee
or any holder of any Subordinated Debt Securities in contravention of any of
the terms of the Subordinated Indenture and before all the Senior Indebtedness
shall have been paid in full, such payment or distribution or security will be
received in trust for the benefit of, and will be paid over or delivered and
transferred to, the holders of the Senior Indebtedness then outstanding in
accordance with the priorities then existing among such holders for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all such Senior Indebtedness remaining unpaid in full.
By reason of such subordination, in the event of the insolvency of the
Company, holders of Senior Indebtedness may receive more, ratably, than
holders of the Subordinated Debt Securities. In addition, other creditors of
the Company who are not holders of Subordinated Debt Securities or holders of
Senior Indebtedness may recover less, ratably, than holders of Senior
Indebtedness and may recover more, ratably, than holders of Subordinated Debt
Securities. Such subordination will not prevent the occurrence of an Event of
Default or limit the right of acceleration in respect of the Subordinated Debt
Securities.
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CERTAIN DEFINITIONS
"Additional Amounts" shall mean any additional amounts which are required by
a Debt Security, under circumstances specified therein, to be paid by the
Company in respect of certain taxes imposed on certain holders of such Debt
Securities, or as otherwise specified in the terms of such Debt Security, and
which are owing to such holders.
"Affiliate" shall mean, with respect to any Person, another Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such first Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"Capitalized Lease Obligation" shall mean an obligation that is required to
be classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented
by such obligation shall be the capitalized amount of such obligation
determined in accordance with such principles; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under
such lease prior to the first date upon which such lease may be terminated by
the lessee without payment of a penalty.
"Consolidated Net Worth" shall mean the excess of assets over liabilities of
the Company and its consolidated Subsidiaries, plus Minority Interests, as
determined from time to time in accordance with GAAP.
"Default" shall mean any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Indebtedness" shall mean, with respect to any Person, at any date, any of
the following, without duplication, (i) any liability, contingent or
otherwise, of such Person (A) for borrowed money (whether or not the recourse
of the lender is to the whole of the assets of such Person or only to a
portion thereof), (B) evidenced by a note, bond, debenture or similar
instrument or (C) for the payment of money relating to a Capitalized Lease
Obligation or other obligation (whether issued or assumed) relating to the
deferred purchase price of property; (ii) all conditional sale obligations and
all obligations under any title retention agreement (even if the rights and
remedies of the seller under such agreement in the event of default are
limited to repossession or sale of such property), but excluding trade
accounts payable arising in the ordinary course of business; (iii) all
obligations for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction other than entered into in
the ordinary course of business; (iv) all indebtedness of others secured by
(or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on any asset or property
(including, without limitation, leasehold interests and any other tangible or
intangible property) of such Person, whether or not such indebtedness is
assumed by such Person or is not otherwise such Person's legal liability;
provided, that if the obligations so secured have not been assumed in full by
such Person or are otherwise not such Person's legal liability in full, the
amount of such indebtedness for the purposes of this definition shall be
limited to the lesser of the amount of such indebtedness secured by such Lien
or the fair market value of the assets of the property securing such Lien; (v)
all indebtedness of others (including all interest and dividends on any
indebtedness or preferred stock of any other Person for the payment of which
is) guaranteed, directly or indirectly, by such Person or that is otherwise
its legal liability or which such Person has agreed to purchase or repurchase
or in respect of which such Person has agreed contingently to supply or
advance funds; and (vi) obligations in respect of Currency Agreements and
Interest Swap Obligations (as such capitalized terms are defined in the
Indentures).
"Issue Date" shall mean the first date on which a Debt Security is
authenticated by the applicable Trustee pursuant to an Indenture.
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"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, charge or adverse claim affecting title or resulting in an encumbrance
against real or personal property or a security interest of any kind
(including, without limitation, any conditional sale or other title retention
agreement or lease in the nature thereof or any filing or agreement to file a
financing statement as debtor under the Uniform Commercial Code or any similar
statute other than to reflect ownership by a third party or property leased to
the Company or any of its Subsidiaries under a lease that is not in the nature
of a conditional sale or title retention agreement).
"Minority Interest" is defined as any shares of stock of any class of a
Subsidiary that are not owned by the Company or a Subsidiary.
"Permitted Liens" shall mean, with respect to any Person: (i) Liens existing
on the Issue Date; (ii) Liens on property or assets of, or any shares of stock
of or secured debt of, any corporation existing at the time such corporation
becomes a Restricted Subsidiary of the Company or at the time such corporation
is merged into the Company or any of its Restricted Subsidiaries; (iii) Liens
in favor of the Company or any of its Restricted Subsidiaries; (iv) Liens in
favor of governmental bodies to secure progress or advance payments; (v) Liens
securing industrial revenue or pollution control bonds; (vi) Liens on Property
to secure Indebtedness incurred for the purpose of (a) financing all or any
part of the purchase price of such Property incurred prior to, at the time of,
or within 180 days after, the acquisition of such Property or (b) financing
all or any part of the cost of construction, improvement, development or
expansion of any such Property; (vii) statutory liens or landlords',
carriers', warehouseman's, mechanics', suppliers', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business and with
respect to amounts not yet delinquent or being contested in good faith by
appropriate proceedings, if a reserve or other appropriate provisions, if any,
as shall be required in conformity with GAAP shall have been made therefor;
(viii) Liens on current assets of Restricted Subsidiaries securing
Indebtedness of such Restricted Subsidiaries; and (ix) any extensions,
substitutions, replacements or renewals in whole or in part of a Lien (an
"existing Lien") enumerated in clauses (i) through (viii) above; provided that
the Lien may not extend beyond (A) the Property or Indebtedness subject to the
existing Lien and (B) improvements and construction on such Property and the
Indebtedness secured by the Lien may not exceed the Indebtedness secured at
the time by the existing Lien.
"Person" shall mean any individual, corporation, partnership, limited
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or any other entity.
"Principal Property" shall mean any manufacturing plant or warehouse owned
or leased by the Company or any Subsidiary, the gross book value of which
exceeds one percent of Consolidated Net Worth, other than manufacturing plants
and warehouses which the Board of Directors by resolution declares, together
with all other plants and warehouses previously so declared, are not of
material importance to the total business conducted by the Company and its
Restricted Subsidiaries as an entirety.
"Property" of any Person means all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in
the most recent consolidated balance sheet of such Person and its Subsidiaries
under GAAP.
"Restricted Subsidiary" shall mean any Subsidiary of the Company that is not
an Unrestricted Subsidiary.
"Stated Maturity," when used with respect to any security or any installment
of interest thereon, shall mean the date specified in such security as the
fixed date on which the principal of such security or such installment of
interest is due and payable.
"Subsidiary" of any Person shall mean (i) any Person of which more than 50%
of the total voting power of shares of Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more of the Restricted Subsidiaries of
that Person or a combination thereof, and (ii) any partnership,
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joint venture or other Person in which such Person or one or more of the
Restricted Subsidiaries of that Person or a combination thereof has the power
to control by contract or otherwise the board of directors or equivalent
governing body or otherwise controls such entity.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors of the Company in the manner provided below and (ii)
any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may
designate any Subsidiary of the Company (including any newly-acquired or
newly-formed Subsidiary) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary so designated; provided, however, that the Subsidiary to be so
designated has total assets of $5,000 or less.
DESCRIPTION OF DEBT WARRANTS
The Company may issue, together with other Securities or separately, Debt
Warrants for the purchase of Debt Securities. The Debt Warrants are to be
issued under Debt Warrant Agreements (each a "Debt Warrant Agreement") to be
entered into between the Company and a bank or trust company, as Debt Warrant
Agent (the "Debt Warrant Agent"), all as set forth in the Prospectus
Supplement relating to Debt Warrants in respect of which this Prospectus is
being delivered. The Debt Warrant Agent will act solely as an agent of the
Company in connection with the Debt Warrants of such series and will not
assume any obligations or relationship of agency or trust for or with any
holders or beneficial owners of Debt Warrants. A copy of the form of Debt
Warrant Agreement, including the form of Warrant Certificates representing the
Debt Warrants (the "Debt Warrant Certificates"), reflecting the alternative
provisions to be included in the Debt Warrant Agreements that will be entered
into with respect to particular offerings of Debt Warrants, will be filed in
an amendment to the Registration Statement of which this Prospectus is a part
or filed in a Current Report on Form 8-K and incorporated by reference in the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions that will be included in the Debt Warrant
Agreements and the Debt Warrant Certificates do not purport to be complete and
are subject to, and are qualified in their entirety by reference to, all the
provisions of the applicable Debt Warrant Agreement and the Debt Warrant
Certificates, respectively, to be filed in an amendment to the Registration
Statement of which this Prospectus is a part or to be filed in a Current
Report on Form 8-K and incorporated by reference in the Registration Statement
of which this Prospectus is a part, including the definitions therein of
certain capitalized terms not defined herein.
GENERAL
Reference is made to the Prospectus Supplement for the terms of Debt
Warrants in respect of which this Prospectus is being delivered, the Debt
Warrant Agreement relating to such Debt Warrants and the Debt Warrant
Certificates representing such Debt Warrants, including the following: (1) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants and the procedures and
conditions relating to the exercise of such Debt Warrants; (2) the designation
and terms of any related Debt Securities with which such Debt Warrants are
issued and the number of such Debt Warrants issued with each such Debt
Security; (3) the date, if any, on and after which such Debt Warrants and the
related Debt Securities will be separately transferable; (4) the principal
amount of Debt Securities purchasable upon exercise of each Debt Warrant and
the price at which such principal amount of Debt Securities may be purchased
upon such exercise; (5) the date on which the right to exercise such Debt
Warrants shall commence and the date on which such right shall expire (the
"Expiration Date"); (6) if the Debt Securities purchasable upon exercise of
such Debt Warrants are original issue discount Debt Securities, a discussion
of federal income tax considerations applicable thereto; and (7) whether the
Debt Warrants represented by the Debt Warrant Certificates will be issued in
registered or bearer form, and, if registered, where they may be transferred
and registered.
Debt Warrant Certificates will be exchangeable for new Debt Warrant
Certificates of different denominations and Debt Warrants may be exercised at
the corporate trust office of the Debt Warrant Agent or any other office
indicated in the Prospectus Supplement. Prior to the exercise of their Debt
Warrants, holders of Debt Warrants will not have any of the rights of holders
of the Debt Securities purchasable upon such exercise and will not be entitled
to payments of principal of (and premium, if any) or interest, if any, on the
Debt Securities purchasable upon such exercise.
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EXERCISE OF DEBT WARRANTS
Each Debt Warrant will entitle the holder to purchase for cash such
principal amount of Debt Securities at such exercise price as shall in each
case be set forth in, or to be determinable as set forth in the Prospectus
Supplement relating to the Debt Warrants offered thereby. Debt Warrants may be
exercised at any time up to the close of business on the Expiration Date set
forth in the applicable Prospectus Supplement. After the close of business on
the Expiration Date, unexercised Debt Warrants will become void.
Debt Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Debt Warrants in respect of which this Prospectus is being
delivered. Upon receipt of payment and the Debt Warrant Certificate properly
completed and duly executed at the corporate trust office of the Debt Warrant
Agent or any other office indicated in the Prospectus Supplement, the Company
will, as soon as practicable, forward the Debt Securities purchasable upon
such exercise. If less than all of the Debt Warrants represented by such Debt
Warrant Certificate are exercised, a new Debt Warrant Certificate will be
issued for the remaining amount of Debt Warrants.
DESCRIPTION OF SERIES PREFERRED STOCK AND COMMON STOCK
The Company may issue, separately or together with or upon conversion of or
exchange for other Securities, Series Preferred Stock and Common Stock, all as
set forth in the accompanying Prospectus Supplement relating to the Series
Preferred Stock or Common Stock in respect of which this Prospectus is
delivered. The following summaries do not purport to be complete and are
subject to, and are qualified in their entirety by reference to, the following
documents: (i) IMC's Restated Certificate of Incorporation, as amended (the
"Restated Certificate of Incorporation"), (ii) IMC's Amended and Restated By-
Laws (the "By-Laws"), (iii) the Rights Agreement, as amended (the "Rights
Agreement"), between IMC and The First National Bank of Chicago, as Rights
Agent, pursuant to which shares of Series C Preferred Stock are issuable, and
(iv) with respect to any Series Preferred Stock, the Certificate of
Designation with respect to such Series Preferred Stock. A copy of each of the
Restated Certificate of Incorporation, By-Laws and the Rights Agreement are
incorporated by reference as exhibits, and in the case of an offering of
Series Preferred Stock, the Certificate of Designation will be filed in an
amendment to the Registration Statement of which this Prospectus is a part or
filed in a Current Report on Form 8-K and incorporated by reference in the
Registration Statement of which this Prospectus is a part.
The total amount of the authorized capital stock of IMC consists of (i)
300,000,000 shares, $1.00 par value per share of Common Stock, of which
114,327,797 shares of Common Stock were issued and outstanding as of August
11, 1998 and (ii) 12,000,000 shares of Series Preferred Stock, par value $1.00
per share. The Board of Directors has reserved 3,000,000 shares of Series C
Preferred Stock for issuance in connection with the Rights Plan described
below. The Board of Directors of IMC is authorized to create and issue one or
more series of Series Preferred Stock and to determine the rights and
preferences of each series, to the extent permitted by the Restated
Certificate of Incorporation.
SERIES PREFERRED STOCK
General. Under the Restated Certificate of Incorporation, IMC's Board of
Directors is authorized to create and issue up to 12,000,000 shares of Series
Preferred Stock in one or more series and to determine the rights and
preferences of each series, to the extent permitted by the Restated
Certificate of Incorporation. As of September 30, 1997, 3,000,000 shares of
Series C Preferred Stock were reserved for issuance. Reference is made to the
applicable Prospectus Supplement and the Certificate of Designation
establishing such series of Series Preferred Stock in respect of which this
Prospectus is being delivered for the terms of any series of Series Preferred
Stock, including the specific title and stated value, dividend, liquidation,
redemption, voting and other rights with respect to such series of Series
Preferred Stock.
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Reference is made to the applicable Prospectus Supplement relating to the
Series Preferred Stock offered thereby for specific terms, including the
following: (i) the title and stated value of such Series Preferred Stock; (ii)
the number of shares of such Series Preferred Stock offered, the liquidation
preference per share and the initial offering price of such Series Preferred
Stock; (iii) the dividend rate(s), period(s) and/or payment date(s) or
method(s) of calculation thereof applicable to such Series Preferred Stock;
(iv) the date from which dividends on such Series Preferred Stock shall
accumulate, if applicable; (v) the procedures for any auction and remarketing,
if any, for such Series Preferred Stock; (vi) the provisions for a sinking
fund, if any, for such Series Preferred Stock; (vii) the provisions for
redemption, if applicable, of such Series Preferred Stock; (viii) any listing
of such Series Preferred Stock on any securities exchange; (ix) the terms and
conditions, if applicable, upon which such Series Preferred Stock will be
convertible into Common Stock of the Company, including the conversion price
(or manner of calculation thereof); (x) a discussion of Federal income tax
considerations applicable to such Series Preferred Stock; (xi) the relative
ranking and preferences of such Series Preferred Stock as to dividend rights
and rights upon liquidation, dissolution or winding up of the affairs of the
Company; (xii) any limitations on issuance of any series of Series Preferred
Stock ranking senior to or on a parity with such series of Series Preferred
Stock as to dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company; and (xiii) any other specific terms,
preferences, rights (including, without limitation, voting rights),
limitations or restrictions of such Series Preferred Stock.
Liquidation Preference. Unless otherwise specified in the applicable
Prospectus Supplement, upon any liquidation, dissolution or winding up of IMC
whether voluntary or involuntary, the holders of any series of Series
Preferred Stock in respect of which this Prospectus is being delivered will
have preference and priority over the Common Stock and any other class of
stock or series of a class of stock of IMC ranking on liquidation junior to
such series of Series Preferred Stock, for payment out of the assets of IMC or
proceeds thereof, whether from capital or surplus, in the amount set forth in
the applicable Prospectus Supplement. After such payment, the holders of such
series of Series Preferred Stock will be entitled to no other payments. If, in
the case of any such liquidation, dissolution or winding up of IMC, the assets
of IMC or proceeds thereof shall be insufficient to make the full liquidation
payment in respect of such series of Series Preferred Stock and liquidating
payments on any other series of Series Preferred Stock ranking as to
liquidation on a parity with such series, then those assets and proceeds will
be distributed among the holders of such series of Series Preferred Stock and
any such other series of Series Preferred Stock ratably in accordance with the
respective amounts which would be payable on such shares of such series of
Series Preferred Stock and such other series of Series Preferred Stock if all
amounts thereon were paid in full. A sale of all or substantially all of IMC's
assets or a consolidation or merger of IMC with one or more corporations shall
not be deemed to be a liquidation, dissolution or winding up of IMC.
COMMON STOCK
The holders of outstanding shares of the Common Stock are entitled to
receive dividends, subject to the prior rights of any outstanding Series
Preferred Stock, 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 IMC. 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.
Upon any liquidation, dissolution or winding up of IMC, whether voluntary or
involuntary, remaining net assets, if any, of IMC shall be distributed pro
rata to the holders of the Common Stock.
CERTAIN PROVISIONS OF THE RESTATED CERTIFICATE OF INCORPORATION AND BY-LAWS
The Restated Certificate of Incorporation and By-Laws contain certain
provisions that are intended to enhance the likelihood of continuity and
stability in the composition of IMC's Board of Directors and which may have
the effect of delaying, deferring or preventing a future takeover or change in
control of IMC unless such takeover or change of control is approved by IMC's
Board of Directors. Such provisions may also render
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the removal of the current Board of Directors and of management more
difficult. The Restated Certificate of Incorporation provides that before IMC
may purchase outstanding shares of IMC's Common Stock from a beneficial owner
of 3% or more of the outstanding shares of Common Stock at a price known by
IMC to exceed the market price of the Common Stock, a majority of the
stockholders of IMC must have approved such purchase unless the purchase is
made by IMC on the same terms and as a result of an offer to purchase any and
all of IMC's outstanding Common Stock.
Pursuant to the Restated Certificate of Incorporation, the Board of
Directors of IMC 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 IMC entitled to vote generally in the election
of directors (the "Voting Stock"), 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, except in the case of newly created
directorships, if the remaining directors fail to fill any such vacancy, the
stockholders may do so at the next annual or special meting called for that
purpose.
The By-Laws establish an advance notice procedure with regard to the
nomination, other than by or at the direction of the Board of Directors, of
candidates for election as directors and with regard to certain matters to be
brought before an annual meeting of stockholders of IMC. In general, notice
must be received by IMC not less than 60 days prior to the annual meeting and
must contain certain specified information concerning the person to be
nominated or the matter to be brought before the meeting and concerning the
stockholder submitting the proposal.
The Restated Certificate of Incorporation also provides that in the case of
certain mergers, sales of assets, issuances of securities, liquidations or
dissolutions, or reclassifications or recapitalizations involving affiliated
holders of stock representing 20% or more of the voting power of the then
outstanding shares of Voting Stock, such transactions must be approved by 80%
of the combined voting power of the then outstanding Voting Stock, unless such
transactions are approved by a majority of the Disinterested Directors (as
defined in the Restated Certificate of Incorporation) of IMC unless certain
minimum price, form of consideration and procedural requirements are
satisfied. 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, alter, change or repeal
such provisions.
The requirement of a supermajority vote to approve certain corporate
transactions and certain amendments to the Restated Certificate of
Incorporation of IMC could enable a minority of IMC's stockholders to exercise
veto powers over such transactions and amendments.
Special meetings of stockholders may be called only by the Chairman of the
Board of IMC, the President of IMC 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.
Rights Plan. 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.
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 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
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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 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.
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 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. 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).
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.
DESCRIPTION OF STOCK WARRANTS
The Company may issue, together with other securities or separately, Stock
Warrants for the purchase of Common Stock. The Stock Warrants are to be issued
under Stock Warrant Agreements (each a "Stock Warrant Agreement") to be
entered into between the Company and a bank or trust company, as Stock Warrant
Agent (the "Stock Warrant Agent"), all as set forth in the Prospectus
Supplement relating to Stock Warrants in respect of which this Prospectus is
being delivered. The Stock Warrant Agent will act solely as an agent of the
Company in connection with the Stock Warrants of such series and will not
assume any obligations or relationship of agency or trust for or with any
holders or beneficial owners of Stock Warrants. A copy of the form of Stock
Warrant Agreement, including the form of Warrant Certificates representing the
Stock Warrants (the "Stock Warrant Certificates") reflecting the provisions to
be included in the Stock Warrant Agreement that will be entered into with
respect to particular offerings of Stock Warrants, will be filed in an
amendment to the Registration Statement of which this Prospectus is a part or
filed in a Current Report on Form 8-K and
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incorporated by reference in the Registration Statement of which this
Prospectus is a part. The following summaries of certain provisions that will
be included in the Stock Warrant Agreements and the Stock Warrant Certificates
do not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the applicable Stock Warrant
Agreement and the Stock Warrant Certificates, respectively, to be filed in an
amendment to the Registration Statement of which this Prospectus is a part or
to be filed in a Current Report on Form 8-K and incorporated by reference in
the Registration Statement of which this Prospectus is a part, including the
definitions therein of certain capitalized terms not defined herein.
GENERAL
Reference is made to the Prospectus Supplement for the terms of Stock
Warrants in respect of which this Prospectus is being delivered, the Stock
Warrant Agreement relating to such Stock Warrants and the Stock Warrant
Certificates representing such Stock Warrants, including the following: (1)
the offering price of such Stock Warrants, if any; (2) the procedures and
conditions relating to the exercise of such Stock Warrants; (3) the number of
shares of Common Stock purchasable upon exercise of each Stock Warrant and the
initial price at which such shares may be purchased upon exercise; (4) the
date on which the right to exercise such Stock Warrants shall commence and the
date on which such right shall expire (the "Expiration Date"); (5) a
discussion of Federal income tax considerations applicable to the exercise of
Stock Warrants; (6) call provisions of such Stock Warrants, if any; and (7)
any other terms of the Stock Warrants. The shares of Common Stock issuable
upon the exercise of the Stock Warrants will, when issued in accordance with
the Stock Warrant Agreement, be fully paid and nonassessable.
Prior to the exercise of their Stock Warrants, holders of Stock Warrants
will not have any of the rights of holders of the Common Stock purchasable
upon such exercise, and will not be entitled to any dividend payments on the
Common Stock purchasable upon such exercise.
EXERCISE OF STOCK WARRANTS
Each Stock Warrant will entitle the holder to purchase for cash such number
of shares of Common Stock at such exercise price as shall in each case be set
forth in, or be determinable as set forth in, the Prospectus Supplement
relating to the Stock Warrants offered thereby. Unless otherwise specified in
the applicable Prospectus Supplement, Stock Warrants may be exercised at any
time up to the close of business on the Expiration Date set forth in the
applicable Prospectus Supplement. After the close of business on the
Expiration Date, unexercised Stock Warrants will become void.
Stock Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Stock Warrants in respect of which this Prospectus is being
delivered. Upon receipt of payment and the Stock Warrant Certificates properly
completed and duly executed at the corporate trust office of the Stock Warrant
Agent or any other office indicated in the Prospectus Supplement, the Company
will, as soon as practicable, forward a certificate representing the number of
shares of Common Stock purchasable upon such exercise. If less than all of the
Stock Warrants represented by such Stock Warrant Certificate are exercised, a
new Stock Warrant Certificate will be issued for the remaining amount of Stock
Warrants.
ANTIDILUTION PROVISIONS
Unless otherwise specified in the applicable Prospectus Supplement, the
exercise price payable and the number of shares purchasable upon the exercise
of each Stock Warrant will be subject to adjustment in certain events,
including (1) the issuance of a stock dividend to holders of Common Stock or a
combination, subdivision or reclassification of Common Stock; (2) the issuance
of rights, warrants or options to all holders of Common Stock entitling the
holders thereof to purchase Common Stock for an aggregate consideration per
share less than the current market price per share of the Common Stock; or (3)
any distribution by the Company to the holders of its Common Stock of
evidences of indebtedness of the Company or of assets (excluding cash
dividends or distributions payable out of capital surplus and dividends and
distributions referred to in (1) above). No fractional shares will be issued
upon exercise of Stock Warrants, but the Company will pay the cash value of
any fractional shares otherwise issuable.
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DESCRIPTION OF CURRENCY WARRANTS
The Company may issue, together with Debt Securities or Debt Warrants or
separately, Currency Warrants either in the form of Currency Put Warrants
entitling the holders thereof to receive from the Company the Cash Settlement
Value in U.S. dollars of the right to sell a specified amount of a specified
foreign currency or currency units for a specified amount of U.S. dollars, or
in the form of Currency Call Warrants entitling the holders thereof to receive
from the Company the Cash Settlement Value in U.S. dollars of the right to
purchase a specified amount of a specific foreign currency units for a
specified amount of U.S. dollars. The spot exchange rate of the applicable
Base Currency, upon exercise, as compared to the U.S. dollar, will determine
whether the Currency Warrants have a Cash Settlement Value on any given day
prior to their expiration.
The Currency Warrants are to be issued under a Currency Warrant Agreement to
be entered into between the Company and a bank or trust company, as Currency
Warrant Agent (the "Currency Warrant Agent"), all as set forth in the
applicable Prospectus Supplement. The Currency Warrant Agent will act solely
as an agent of the Company in connection with the Currency Warrants of such
series and will not assume any obligations or relationship of agency or trust
for or with any holders or beneficial owners of Currency Warrants. A copy of
the form of Currency Warrant Agreement, including the forms of global Warrant
Certificates representing the Currency Put Warrants and Currency Call Warrants
(the "Currency Warrant Certificates"), reflecting the provisions to be
included in the Currency Warrant Agreement that will be entered into with
respect to particular offerings of Currency Warrants, will be filed in an
amendment to the Registration Statement of which this Prospectus is a part or
filed in a Current Report on Form 8-K and incorporated by reference in the
Registration Statement of which this Prospectus is a part. The description of
the Currency Warrants contained herein and the following summaries of certain
provisions that will be included in the Currency Warrant Agreements and the
Currency Warrant Certificates do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all the provisions of
the applicable Currency Warrant Agreement and the Currency Warrant
Certificates, respectively, to be filed in an amendment to the Registration
Statement of which this Prospectus is a part or to be filed in a Current
Report on Form 8-K and incorporated by reference in the Registration Statement
of which this Prospectus is a part, including the definitions therein of
certain capitalized terms not defined herein.
GENERAL
Reference is made to the Prospectus Supplement for the terms of Currency
Warrants in respect of which this Prospectus is being delivered, the Currency
Warrant Agreement relating to such Currency Warrants and the Currency Warrant
Certificates representing such Currency Warrants, including the following: (1)
whether such Currency Warrants will be Currency Put Warrants, Currency Call
Warrants, or both; (2) the formula for determining the Cash Settlement Value,
if any, of each Currency Warrant; (3) the procedures and conditions relating
to the exercise of such Currency Warrants; (4) the circumstances which will
cause the Currency Warrants to be deemed to be automatically exercised; (5)
any minimum number of Currency Warrants which must be exercised at any one
time, other than upon automatic exercise; and (6) the date on which the right
to exercise such Currency Warrants will commence and the date on which such
right will expire (the "Expiration Date").
BOOK-ENTRY PROCEDURES AND SETTLEMENT
Except as may otherwise be provided in the applicable Prospectus Supplement,
the Currency Warrants will be issued in the form of global Currency Warrant
Certificates, registered in the name of a depositary or its nominee. Holders
will not be entitled to receive definitive certificates representing Currency
Warrants. A holder's ownership of a Currency Warrant will be recorded on or
through the records of the brokerage firm or other entity that maintains such
holder's account. In turn, the total number of Currency Warrants held by an
individual brokerage firm for its clients will be maintained on the records of
the depositary in the name of such brokerage firm or its agent. Transfer of
ownership of any Currency Warrant will be effected only through the selling
holder's brokerage firm.
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EXERCISE OF CURRENCY WARRANTS
Each Currency Warrant will entitle the holder to receive the Cash Settlement
Value of such Currency Warrant on the applicable Exercise Date, in each case
as such terms will be defined in the applicable Prospectus Supplement. If not
exercised prior to 3:00 P.M., New York City time, on the third New York
Business Day preceding the Expiration Date, Currency Warrants will be deemed
automatically exercised on the Expiration Date.
PLAN OF DISTRIBUTION
GENERAL
IMC may sell the Securities (i) through underwriters or dealers; (ii)
directly to one or more other purchasers; (iii) through agents; or (iv) to
both investors and/or dealers through a specific bidding or auction process or
otherwise. The Prospectus Supplement with respect to the Offered Securities
will set forth the terms of the offering of such Offered Securities, including
the name or names of any underwriters, dealers or agents, the purchase price
of such Offered Securities and the proceeds to IMC from such sale, any
underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts, commissions
or concessions allowed or reallowed or paid to dealers, and any bidding or
auction process. Any initial offering price and any discounts, concessions or
commissions allowed or reallowed or paid to dealers may be changed from time
to time.
If underwriters are used in an offering, the Offered Securities will be
acquired by the underwriters for their own account. The Offered Securities may
be sold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The Offered Securities may be offered to the public
either through underwriting syndicates represented by one or more managing
underwriters or directly by one or more of such firms. The specific managing
underwriter or underwriters, if any, will be set forth in the Prospectus
Supplement relating to the Offered Securities together with the members of the
underwriting syndicate, if any. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the Offered
Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all such Offered Securities if any
are purchased.
Offered Securities may be sold directly by IMC or through agents designated
by IMC from time to time. The Prospectus Supplement will set forth the name of
any agent involved in the offer or sale of the Offered Securities in respect
of which the Prospectus Supplement is delivered and any commissions payable by
IMC to such agent. Unless otherwise indicated in the Prospectus Supplement,
any such agent is acting on a best efforts basis for the period of its
appointment.
Any underwriters, dealers, or agents participating in the distribution of
the Offered Securities may be deemed to be underwriters and any discounts or
commissions received by them on the sale or resale of the Offered Securities
may be deemed to be underwriting discounts and commissions under the
Securities Act.
Agents, dealers or underwriters may be entitled, under agreements entered
into with IMC, to indemnification by IMC against certain liabilities,
including liabilities under the Securities Act, and to contribution with
respect to payments which the agents, dealers or underwriters may be required
to make in respect thereof. Agents, dealers and underwriters may engage in
transactions with or perform services for IMC in the ordinary course of
business.
The Offered Securities, other than the Common Stock, will be a new issue or
issues of securities with no established trading market. Any Common Stock
issued by the Company pursuant to this Registration Statement will be listed.
Unless otherwise indicated in a Prospectus Supplement, IMC does not currently
intend to list any Offered Debt Securities or Warrants on any securities
exchange. No assurance can be given that the underwriters, dealers or agents,
if any, involved in the sale of the Offered Securities will make a market in
such Offered Securities. Whether or not any of the Offered Securities are
listed on a national securities exchange or the underwriters, dealers or
agents, if any, involved in the sale of the Offered Securities make a market
in such Offered Securities, no assurance can be given as to the liquidity of
the trading market for such Offered Securities.
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DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, IMC may authorize underwriters
or other persons acting as IMC's agents to solicit offers by certain
institutions to purchase Offered Securities from IMC pursuant to contracts
providing for payment and delivery on a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases will be subject to the approval of
IMC. The obligations of any purchaser under any such contract will be subject
to the condition that the purchase of the Offered Securities shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which
such purchaser is subject. The underwriters and such agents will not have any
responsibility in respect of the validity or performance of such contracts.
LEGAL MATTERS
Unless otherwise indicated in the Prospectus Supplement, certain legal
matters in connection with the securities offered hereby will be passed upon
for IMC by Kirkland & Ellis (a partnership including professional
corporations).
EXPERTS
The consolidated financial statements of the Company as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements have been
incorporated herein in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
The consolidated balance sheets of Harris Chemical Group, Inc. as of March
29, 1997 and March 30, 1996 and the related consolidated statements of
operations, cash flows and common stockholders' equity for each of the three
fiscal years in the period ended March 29, 1997 appearing in the Company's
Current Report on Form 8-K/A filed on June 15, 1998, which is incorporated by
reference in this Prospectus and in the Registration Statement, have been
audited by PricewaterhouseCoopers LLP, independent accountants, as set forth
in their report thereon included therein and incorporated herein by reference.
The consolidated balance sheets of Harris Chemical Group, Inc. as of March 28,
1998 and March 29, 1997 and the related consolidated statements of operations,
cash flows and common stockholders' equity for each of the three fiscal years
in the period ended March 28, 1998 appearing in the Company's Current Report
on Form 8-K/A filed on September 16, 1998, which is incorporated by reference
in this Prospectus and in the Registration Statement, have been audited by
PricewaterhouseCoopers LLP, independent accountants, as set forth in their
report thereon included therein and incorporated herein by reference. Such
financial statements have been incorporated herein in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Harris Chemical Australia Pty Ltd. & Its
Controlled Entities for the year ended June 30, 1997 appearing in the
Company's Current Report on Form 8-K/A filed on June 15, 1998, which is
incorporated by reference in this Prospectus and in the Registration
Statement, have been audited by Arthur Andersen, Chartered Accountants, as set
forth in their report thereon included therein and incorporated herein by
reference. Such financial statements have been incorporated herein in reliance
upon such report given upon the authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of FTX at December 31, 1996 and for
each of the three years in the period ended December 31, 1996 appearing in
FTX's Annual Report on Form 10-K for the year ended December 31, 1996, which
are incorporated by reference in this Prospectus and in the Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report thereon incorporated by reference
herein. In that report, that firm states that its report is based in part on
the report of other independent public accountants, Ernst & Young LLP. Such
financial statements have been incorporated herein by reference in reliance
upon the authority of those firms as experts in accounting and auditing in
giving said reports.
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$600,000,000
IMC GLOBAL INC.
$300,000,000 7.40% NOTES DUE 2002
$300,000,000 7.625% NOTES DUE 2005
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PROSPECTUS SUPPLEMENT
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MERRILL LYNCH & CO.
CHASE SECURITIES INC.
J.P. MORGAN & CO.
SALOMON SMITH BARNEY
NOVEMBER 9, 1998
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