<PAGE>
Filed pursuant to Rule 424(b)3
Registration No. 333-41713
SUBJECT TO COMPLETION, DATED JANUARY 9, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE
PROSPECTUS TO WHICH IT RELATES SHALL CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED JANUARY 9, 1998)
IMC GLOBAL INC.
[LOGO]
$
% DEBENTURES DUE
The % Debentures due (the "Debentures") mature on
. Interest on the Debentures is payable semi-annually on
and , commencing , 1998. The Debentures are redeemable in
whole or in part at any time at the option of the Company at a redemption price
equal to the greater of (i) 100% of the principal amount of such Debentures and
(ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon discounted to the date of redemption on a
semi-annual basis assuming a 360-day year consisting of twelve 30-day months at
the Treasury Rate plus basis points, plus in each case accrued but unpaid
interest thereon to the date of redemption. The Debentures will not be subject
to any sinking fund. See "Certain Terms of the Debentures."
The Debentures will be represented by Global Notes registered in the name of
the nominee of The Depository Trust Company, which will act as the Depositary
(the "Depositary"). Interests in the Global Notes will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary and its participants. Except as described herein, Debentures in
definitive form will not be issued.
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 SUPPLEMENT OR THE PROSPECTUS TO WHICH IT
RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
<S> <C> <C> <C>
Per Debenture % % %
Total $ $ $
</TABLE>
(1) Plus accrued interest, if any, from ,1998.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at $150,000.
The Debentures are offered subject to receipt and acceptance by NationsBanc
Montgomery Securities LLC, Chase Securities Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (collectively, the "Underwriters"), to prior sale,
and to the Underwriters' right to reject any order in whole or in part and to
withdraw, cancel or modify the offer without notice. It is expected that
delivery of the Debentures will be made through the book-entry facilities of the
Depositary on or about , 1998.
NATIONSBANC MONTGOMERY
CHASE SECURITIES INC.
MERRILL LYNCH & CO.
The date of this Prospectus Supplement is January , 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE DEBENTURES,
INCLUDING OVERALLOTMENT, STABILIZING TRANSACTIONS AND SYNDICATE SHORT COVERING
TRANSACTIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
THE COMPANY
IMC Global Inc. ("IMC" or the "Company") is one of the world's leading
producers of crop nutrients for the international agricultural community and one
of the foremost distributors in the United States of crop nutrients and related
products through the Company's retail and wholesale distribution networks. The
Company mines, processes and distributes potash in the United States and Canada
and is a joint venture partner in IMC-Agrico Company ("IMC-Agrico"), a leading
producer, marketer and distributor of phosphate crop nutrients and animal feed
ingredients. The Company believes that it is one of the most efficient North
American producers of concentrated phosphates and potash. The Company's retail
distribution network, which extends principally to corn and soybean farmers in
the eastern Midwest and to cotton, peanut and vegetable farmers in the
southeastern United States, is one of the preeminent distributors of crop
nutrients and related products. The Company also manufactures nitrogen-based and
other high-value crop nutrients which are marketed on a dealer basis,
principally in the midwestern and southeastern United States.
RECENT DEVELOPMENTS
MERGER WITH FREEPORT-MCMORAN INC. On December 22, 1997, Freeport-McMoRan
Inc. ("FTX") merged into the Company (the "FTX Merger"). Each share of FTX
common stock outstanding immediately prior to the FTX Merger was converted into
the right to receive, (i) 0.90 of a share of the common stock, $1.00 par value
per share, of IMC Global Inc. ("IMC Common Stock"); (ii) one-third of a warrant
("IMC Warrant"), with each whole IMC Warrant representing the right to purchase
one share of IMC Common Stock for $44.50; and (iii) a proportionate share of the
common stock of Freeport-McMoRan Sulphur Inc. ("FSC"), a newly formed company.
Prior to the FTX Merger, FTX, through Freeport-McMoRan Resource Partners,
Limited Partnership (recently renamed Phosphate Resource Partners Limited
Partnership) ("FRP"), was engaged in the production and sale of phosphate
fertilizer and animal feed ingredients as well as the mining and sale of
phosphate rock through IMC-Agrico; the mining, transportation, terminalling and
marketing of sulphur; and the exploration, development and production of oil and
gas reserves. In connection with the FTX Merger, FTX, FRP and FSC entered into a
Distribution Agreement pursuant to which FRP contributed FRP's sulphur business
and oil and gas operations, principally those businesses commonly referred to as
the "Main Pass" operations, to FSC. In addition, in connection with the FTX
Merger, IMC transferred its 25% interest in the Main Pass operations to FRP,
which FRP also contributed to FSC. FSC common stock was distributed by FRP to
the FRP unitholders (including FTX), and, as part of the consideration received
in the FTX Merger, holders of FTX common stock received the shares of FSC common
stock distributed to FTX.
IMC and FRP have a 56.5% and 43.5%, respectively, direct economic interest
in IMC-Agrico over the term of the partnership. IMC, as the successor to FTX,
owns a 51.6% interest in FRP and the public unitholders of FRP own in the
aggregate a 48.4% interest in FRP. Accordingly, IMC has a 78.9% economic
interest in IMC-Agrico.
Further information relating to the FTX Merger is contained in the Joint
Proxy Statement/ Prospectus dated November 17, 1997 distributed to stockholders
of the Company and FTX in connection with the FTX Merger. The Joint Proxy
Statement/Prospectus is incorporated by reference herein
S-2
<PAGE>
and certain pro forma condensed consolidated financial information relating to
the FTX Merger is also set forth herein under "Unaudited Pro Forma Condensed
Consolidated Financial Information."
PENDING ACQUISITION OF HARRIS CHEMICAL GROUP. In December, 1997, IMC
entered into separate acquisition agreements with Harris Chemical Group, Inc.
("HCG") and its Australian-based affiliate Penrice Soda Products Pty. Ltd.
("Penrice" and, together with HCG, "Harris") pursuant to which IMC agreed to
acquire, through merger or acquisition of equity, Harris, subject to customary
closing conditions including, without limitation, the expiration or termination
of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976. Harris is a producer and marketer of inorganic chemical and extractive
mineral products with primary manufacturing sites in North America, Europe and
Australia. Harris' principal products are salt, sodium-based chemicals including
soda ash and sodium bicarbonate, sulfate of potash, and boron chemicals.
Together, these businesses serve a variety of industries, including highway and
consumer deicing; container, flat and specialty glass manufacture; agriculture;
food processing; and a variety of chemical process industries. The total
acquisition consideration payable by IMC upon the closing of the transactions is
approximately $450 million in cash; in addition, the Harris entities acquired,
which will become wholly owned subsidiaries of the Company upon consummation of
the transactions, will remain obligated to repay indebtedness of such entities
(approximately $950 million as of March 29, 1997 based on information supplied
to the Company) outstanding prior to the consummation of the transactions. Based
on information supplied to the Company, HCG had net sales of approximately $705
million for its fiscal year ended March 29, 1997 and Penrice had sales of
approximately $80 million (at exchange rates then in effect) for its fiscal year
ended June 30, 1997.
CREDIT FACILITIES. On December 15, 1997, the Company entered into a $650
million five-year revolving credit agreement and a $350 million 364-day
revolving credit agreement (collectively, the "U.S. Credit Agreements") with a
group of banks in order to refinance and replace the outstanding unsecured
indebtedness of the Company, FRP, and IMC-Agrico under their respective
revolving loan facilities and to provide borrowing capacity for general business
purposes. See "Use of Proceeds." Simultaneously with the consummation of the FTX
Merger, certain Canadian subsidiaries of the Company entered into a $100 million
five-year revolving credit agreement (the "Canadian Credit Agreement") with a
group of Canadian banks in order to refinance and replace the outstanding
unsecured indebtedness under the Company's existing term loan facility. The
Company guarantees the obligations of its Canadian subsidiaries under the
Canadian Credit Agreement. The U.S. Credit Agreements contain provisions which
(i) restrict the Company's ability to dispose of a substantial portion of its
consolidated assets, (ii) limit the creation of additional liens on the
Company's and its subsidiaries' assets and (iii) limit the Company's
subsidiaries' incurrence of additional debt. The Canadian Credit Agreement
contains similar covenants applicable to both the Canadian subsidiaries and the
Company. The U.S. Credit Agreements and Canadian Credit Agreement also contain a
leverage ratio test and other covenants.
S-3
<PAGE>
CONCURRENT OFFERING
Concurrently with the offer of the Debentures pursuant to this Prospectus
Supplement, IMC is separately offering $ aggregate principal amount of its
% Notes due (the "Notes") on an underwritten basis. The Notes will be
issued under the same Indenture as the Debentures, will be unsecured, senior
debt of IMC and will rank on parity with all other unsecured and unsubordinated
indebtedness of IMC, including the Debentures.
USE OF PROCEEDS
The Company intends to use the net proceeds of approximately $ from the
sale of the Debentures to repay an equivalent amount of indebtedness outstanding
under the U.S. Credit Agreements. Such indebtedness, which bears interest at
rates based on a Eurodollar rate (6.19% at January 8, 1998), was incurred by the
Company in December 1997 in connection with the repurchase and retirement of
$81.5 million aggregate principal amount of the Company's 9.45% Senior
Debentures due 2011 and $144.3 million aggregate principal amount of FRP's
8 3/4% Senior Subordinated Notes due 2004 and the retirement of amounts
outstanding under the Company's prior credit facilities. The Company intends to
use the net proceeds of approximately $ from the concurrent sale of the
Notes to repay an equivalent amount of indebtedness under the U.S. Credit
Agreements. Affiliates of NationsBanc Montgomery Securities LLC and Chase
Securities Inc. are parties to the U.S. Credit Agreements and, therefore, will
receive a portion of such repayments. See "Underwriting."
Contemporaneously with the offers of the Debentures and the Notes, the
Company is committed to repay $120 million of its outstanding notes and intends
to make such repayment out of borrowings under the U.S. Credit Agreements. Such
notes bear interest at rates ranging from 7.12% to 7.18% per annum and would
have matured at various times from 2000 to 2005.
S-4
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The following summary consolidated financial information for each fiscal
year in the three-year period ended June 30, 1997 and for the nine-month periods
ended September 30, 1997 and September 30, 1996, respectively, is derived from,
and should be read in conjunction with, the audited consolidated financial
statements and notes thereto and the unaudited condensed consolidated financial
statements and notes thereto of the Company incorporated by reference herein.
The results for the nine month period ended September 30, 1997 are not
necessarily indicative of the results that may be expected for the full fiscal
year. Such consolidated financial statements have been restated to reflect the
March 1, 1996 merger with The Vigoro Corporation (the "Vigoro Merger") which was
accounted for as a pooling-of-interests. On June 24, 1997 the Board of Directors
of the Company voted to change the Company's fiscal year to begin on January 1
and end on December 31, effective following completion of the fiscal year ended
June 30, 1997. The summary consolidated financial information for the
twelve-month periods ended December 31, 1996 and December 31, 1995 is presented
as if the Company had changed its fiscal year end to December 31 commencing
January 1, 1995.
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED DECEMBER
SEPTEMBER 30, 31, YEARS ENDED JUNE 30,
---------------------- -------------------- ---------------------------------
1997(1) 1996(1)(2) 1996(2) 1995 1997(1) 1996(1)(2) 1995(1)
--------- ----------- --------- --------- --------- ----------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
STATEMENT OF EARNINGS DATA:
Net sales........................ $ 2,311.7 $ 2,275.6 $ 2,941.0 $ 2,940.4 $ 2,982.0 $ 2,981.0 $ 2,736.1
Gross margins.................... 579.3 560.5 745.0 778.7 770.0 757.2 694.6
Operating earnings............... 381.6 335.1 461.4 566.6 522.8 484.2 494.0
Interest earned and other non-
operating (income) and expense,
net............................ (2.7) (2.8) (5.9) (15.2) (5.7) (10.5) (15.4)
Interest charges................. 38.4 45.9 56.7 69.8 51.1 64.8 70.2
--------- ----------- --------- --------- --------- ----------- ---------
Earnings before minority interest
and items noted below.......... 345.9 292.0 410.6 512.0 477.4 429.9 439.2
Minority interest................ 103.2 143.4 185.7 163.6 155.4 191.5 130.4
--------- ----------- --------- --------- --------- ----------- ---------
Earnings before items noted
below.......................... 242.7 148.6 224.9 348.4 322.0 238.4 308.8
Provision for income taxes....... 88.6 61.9 89.7 129.4 117.5 94.1 115.5
--------- ----------- --------- --------- --------- ----------- ---------
Earnings before extraordinary
item and cumulative effect of
accounting change.............. 154.1 86.7 135.2 219.0 204.5 144.3 193.3
Extraordinary loss-debt
retirement..................... (3.3) (7.5) (8.1) (3.5) (11.4) (6.5)
Cumulative effect on prior years
of changes in accounting for
postemployment benefits (net of
taxes) in 1995................. (5.9)
--------- ----------- --------- --------- --------- ----------- ---------
Net earnings..................... $ 150.8 $ 79.2 $ 127.1 $ 215.5 $ 193.1 $ 144.3 $ 180.9
--------- ----------- --------- --------- --------- ----------- ---------
--------- ----------- --------- --------- --------- ----------- ---------
EARNINGS PER SHARE:
Earnings before extraordinary
item and cumulative effect of
accounting change.............. $ 1.62 $ 0.93 $ 1.44 $ 2.38 $ 2.15 $ 1.56 $ 2.12
Extraordinary loss-debt
retirement..................... (0.03) (0.08) (0.09) (0.04) (0.12) (0.07)
Cumulative effect on prior years
of change in accounting........ (0.06)
--------- ----------- --------- --------- --------- ----------- ---------
Net earnings..................... $ 1.59 $ 0.85 $ 1.35 $ 2.34 $ 2.03 $ 1.56 $ 1.99
--------- ----------- --------- --------- --------- ----------- ---------
--------- ----------- --------- --------- --------- ----------- ---------
Weighted average number of shares
and equivalent shares
outstanding.................... 94.9 93.3 93.9 91.9 95.0 92.7 91.0
</TABLE>
S-5
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED DECEMBER
SEPTEMBER 30, 31, YEARS ENDED JUNE 30,
---------------------- -------------------- ---------------------------------
1997(1) 1996(1)(2) 1996(2) 1995 1997(1) 1996(1)(2) 1995(1)
--------- ----------- --------- --------- --------- ----------- ---------
(UNAUDITED) (UNAUDITED)
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT END OF
PERIOD):.........................
Working capital.................. $ 574.0 $ 538.0 $ 582.6 $ 507.6 $ 592.6 $ 551.8 $ 484.2
Total assets..................... 3,646.1 3,386.3 3,485.2 3,521.8 3,611.6 3,436.8 3,323.2
Long-term debt, less current
maturities..................... 809.9 717.8 656.8 741.7 694.8 736.7 750.2
Total stockholders' equity....... 1,308.4 1,173.9 1,326.2 1,090.4 1,339.9 1,156.3 1,007.8
OTHER FINANCIAL DATA:..............
Capital expenditures............. $ 157.9 $ 134.6 $ 209.0 $ 146.0 $ 223.4 $ 172.7 $ 114.9
Depreciation, depletion and
amortization................... $ 141.5 $ 129.3 $ 171.0 $ 166.4 $ 184.4 $ 168.6 $ 166.4
Ratio of Earnings to Fixed
Charges (3).................... 10.01 7.36 8.24 8.34 10.34 7.63 7.26
Adjusted Ratio of Earnings to
Fixed Charges (4).............. 10.01 9.51 9.98 8.34 10.34 9.16 7.26
</TABLE>
- ------------------------------
(1) See footnotes to the IMC annual or interim financial statements incorporated
by reference herein for a description of non-recurring items and accounting
changes affecting the respective period's results.
(2) Results for the nine months ended September 30, 1996 and the twelve months
ended December 31, 1996 and for the fiscal year ended June 30, 1996 include
special one-time charges of $98.6 million ($69.6 million after tax benefits
or $0.75 per share) for costs related to the Vigoro Merger, as well as costs
associated with, among other things, a corporate restructuring, other asset
valuations and environmental issues.
(3) 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.
(4) The adjusted ratio of earnings to fixed charges for the nine months ended
September 30, 1996, the twelve months ended December 31, 1996 and the fiscal
year ended June 30, 1996 excludes a charge of $98.6 million relating to the
Vigoro Merger.
S-6
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1997 and Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the year ended June 30, 1997 and the three months ended September
30, 1997 have been prepared from the historical financial statements of IMC and
FTX.
The unaudited pro forma condensed consolidated financial information gives
effect to accounting for the FTX Merger as a "purchase transaction," based on
the conversion of each share of FTX common stock into 0.90 of a share of IMC
Common Stock. The Unaudited Pro Forma Condensed Consolidated Statements of
Operations presented herein have been prepared as if the FTX Merger occurred on
July 1, 1996. The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1997 reflects the FTX Merger as if it had occurred on September
30, 1997.
The unaudited pro forma condensed consolidated financial information for the
respective periods presented should be read in conjunction with the accompanying
notes and the historical financial statements and notes thereto of IMC and FTX
incorporated herein by reference.
FTX's most recent fiscal year ended December 31, 1996 differs from IMC's
most recent fiscal year end by more than 93 days. Accordingly, the Unaudited Pro
Forma Condensed Consolidated Statement of Operations for the year ended June 30,
1997 has been updated to include FTX's results for the twelve-month period July
1, 1996 through June 30, 1997.
The following unaudited pro forma condensed consolidated financial
information does not include pro forma financial information for certain
acquisition transactions consummated by IMC or FTX that individually, or in the
aggregate, are not material in relation to IMC's or FTX's respective
consolidated financial position or results of operations. Certain amounts in the
historical financial statements of IMC and FTX have been reclassified for the
pro forma consolidated presentation.
The unaudited pro forma condensed consolidated financial information
includes estimates and information currently available and is subject to change
based upon final purchase accounting of the FTX Merger. The unaudited pro forma
condensed consolidated financial information is not necessarily indicative of
the financial position or results which actually would have been attained if the
FTX Merger had been consummated on the dates indicated above.
S-7
<PAGE>
IMC GLOBAL INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AT SEPTEMBER 30, 1997
(IN MILLIONS)
<TABLE>
<CAPTION>
TRANSFERRED TO
HISTORICAL HISTORICAL FREEPORT SULPHUR FTX'S SHARE OF FTX MERGER
IMC FTX COMPANY (A) IMC-AGRICO (B) ADJUSTMENTS
------------ ------------- ----------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents........... $ 74.4 $ 6.0 $ (4.6) $ (0.4) $ (9.0)(c)
Receivables, net.................... 263.6 78.8 (33.1) (24.6)
Inventories......................... 572.3 166.4 (37.4) (133.1)
Deferred income taxes............... 54.2
Other current assets................ 18.9 33.2 (1.7) (2.1)
------------ ------------- ------- ------- --------------
Total current assets.............. 983.4 284.4 (76.8) (160.2) (9.0)
Property, plant and equipment, net.... 2,445.7 523.6 (296.1) (404.9) 217.1(d)
Other assets.......................... 217.0 151.2 (67.2) (23.7) 824.9(c)(e)
------------ ------------- ------- ------- --------------
Total assets.......................... $ 3,646.1 $ 959.2 $ (440.1) $ (588.8) $ 1,033.0
------------ ------------- ------- ------- --------------
------------ ------------- ------- ------- --------------
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued
liabilities....................... $ 375.9 $ 146.7 $ (44.2) $ (86.5)
Short-term debt and current
maturities of long-term debt...... 33.5 0.4 (0.4)
------------ ------------- ------- ------- --------------
Total current liabilities......... 409.4 147.1 (44.2) (86.9)
Long-term debt, less current
maturities........................... 809.9 536.5 (45.5)
Deferred income taxes................. 360.3 (75.9) $ 80.5(f)
Other noncurrent liabilities.......... 341.2 368.5 (122.9) (72.5) (36.0)(g)
Minority interest..................... 416.9 0.8 (0.8) (411.3)(h)
Stockholders' equity:
Preferred stock..................... 30.4 (30.4)(i)
Common stock........................ 101.9 0.4 22.2(j)
Capital in excess of par value...... 948.5 548.1 274.5(k)
Retained earnings (deficit)......... 541.4 (37.2) (196.3) (383.9) 498.1(l)
Treasury stock...................... (264.3) (635.4) 635.4(m)
Foreign currency translation
adjustment........................ (19.1)
------------ ------------- ------- ------- --------------
Total stockholders' equity........ 1,308.4 (93.7) (196.3) (383.9) 1,399.8
------------ ------------- ------- ------- --------------
Total liabilities and stockholders'
equity............................... $ 3,646.1 $ 959.2 $ (440.1) $ (588.8) $ 1,033.0
------------ ------------- ------- ------- --------------
------------ ------------- ------- ------- --------------
<CAPTION>
PRO FORMA
CONSOLIDATED
---------------
<S> <C>
Assets
Current assets:
Cash and cash equivalents........... $ 66.4
Receivables, net.................... 284.7
Inventories......................... 568.2
Deferred income taxes............... 54.2
Other current assets................ 48.3
---------------
Total current assets.............. 1,021.8
Property, plant and equipment, net.... 2,485.4
Other assets.......................... 1,102.2
---------------
Total assets.......................... $ 4,609.4
---------------
---------------
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued
liabilities....................... $ 391.9
Short-term debt and current
maturities of long-term debt...... 33.5
---------------
Total current liabilities......... 425.4
Long-term debt, less current
maturities........................... 1,300.9
Deferred income taxes................. 364.9
Other noncurrent liabilities.......... 478.3
Minority interest..................... 5.6
Stockholders' equity:
Preferred stock.....................
Common stock........................ 124.5
Capital in excess of par value...... 1,771.1
Retained earnings (deficit)......... 422.1
Treasury stock...................... (264.3)
Foreign currency translation
adjustment........................ (19.1)
---------------
Total stockholders' equity........ 2,034.3
---------------
Total liabilities and stockholders'
equity............................... $ 4,609.4
---------------
---------------
</TABLE>
The accompanying notes are an integral part of these unaudited
pro forma condensed consolidated financial statements.
S-8
<PAGE>
IMC GLOBAL INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
BALANCE SHEET
(IN MILLIONS, EXCEPT PER SHARE AMOUNT)
(a) In connection with the FTX Merger, IMC contributed its 25.0 percent interest
in Main Pass to FRP, and FRP contributed its 58.3 percent interest in Main
Pass together with the 25.0 percent interest received from IMC along with
certain additional sulphur assets of FRP and FTX to FSC. Thereafter, FSC
common stock was distributed to the partners of FRP, including FTX. The
adjustments reflect the elimination of the historical carrying values of
these net assets along with a $119.3 charge, net of related tax benefit, to
reduce the historical carrying value of IMC's interest in Main Pass to
estimated fair value. This charge will be reflected in IMC's results for the
quarter ended December 31, 1997. The estimated charge of $119.3 may change
upon IMC's receipt of a third party appraisal of the fair value of its Main
Pass interest. However, IMC expects the value ascribed to IMC's interest in
Main Pass by the third party appraiser will not differ materially from the
value estimated herein.
(b) The amounts in the column "Historical IMC" reflect 100 percent of the net
assets of IMC-Agrico, as IMC has historically fully consolidated IMC-Agrico.
FTX historically proportionately consolidated its interest in IMC-Agrico and
these amounts are included in the column "Historical FTX." The adjustments
eliminate the historical carrying values of IMC-Agrico that FTX
proportionately consolidated.
(c) Reflects estimated fees related to the FTX Merger of $9.0. The amount of
merger-related costs included herein is estimated using information
currently available and may change as additional information becomes known.
(d) Reflects step-up from book value to fair value pertaining to IMC's
additional interest, of approximately 20%, in IMC-Agrico's property, plant
and equipment.
(e) Reflects estimated goodwill recorded as a result of the FTX Merger.
(f) Reflects deferred taxes provided for the step-up from book value to fair
value on IMC's additional interest in IMC-Agrico property, plant and
equipment (see footnote (d) above).
(g) Reflects purchase accounting adjustments to employee benefit liabilities
assumed by IMC.
(h) Eliminates FTX minority interest and records pro forma minority interest as
a result of the FTX Merger as follows: (i) FRP unitholders' interest in
IMC-Agrico of approximately 20.0 percent; and (ii) FRP unitholders' interest
in all other FRP net assets of 48.4 percent.
(i) As a result of the FTX Merger, FTX preferred stock is no longer outstanding.
(j) As of September 30, 1997, FTX had approximately 25.1 shares of common stock
outstanding (assuming conversion of FTX preferred stock and excluding FTX
shares in treasury) which for purposes of the presentation of pro forma
financial information was assumed, upon consummation of the FTX Merger, to
be convertible into 22.6 shares at an assumed price of $35.25 per share.
Adjustment reflects issuance of IMC Common Stock for FTX common stock of
$22.6 net of the elimination of FTX historical common stock book value of
$0.4.
(k) Reflects: (i) issuance of IMC Common Stock for FTX common stock, net of par
value (see note (j) above) of $773.7; (ii) less the elimination of FTX
historical capital in excess of par value of $548.1; and (iii) plus the
issuance of IMC Warrants of $48.9.
(l) Reflects: (i) elimination of FTX historical retained deficit contributed to
IMC of $617.4 (calculated as historical FTX retained deficit of $37.2 less
retained earnings attributable to FSC of $196.3 less retained earnings
attributable to FTX's proportionate share of IMC-Agrico of $383.9); and (ii)
recording of IMC's estimated write-off of Main Pass of $119.3 (see note (a)
above).
(m) Eliminates FTX historical treasury stock.
S-9
<PAGE>
IMC GLOBAL INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1997
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
TRANSFERRED TO
FREEPORT
HISTORICAL HISTORICAL SULPHUR FTX'S SHARE OF FTX MERGER PRO FORMA
IMC FTX COMPANY (A) IMC-AGRICO (B) ADJUSTMENTS (C) CONSOLIDATED
----------- ----------- --------------- ---------------- ----------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net sales.................... $ 2,982.0 $ 898.6 $ (168.7) $ (729.6) $ 2,982.3
Cost of goods sold........... 2,212.0 679.7 (157.3) (516.2) $ 31.5(d) 2,249.7
----------- ----------- ------- -------- ------- --------------
Gross margins.............. 770.0 218.9 (11.4) (213.4) (31.5) 732.6
Selling, general and
administrative expenses.... 247.2 56.1 (8.3) (20.0) 275.0
----------- ----------- ------- -------- ------- --------------
Operating earnings........... 522.8 162.8 (3.1) (193.4) (31.5) 457.6
Other (income) and expense,
net........................ (5.7) 0.2 (1.4) (6.9)
Interest expense............. 51.1 36.4 (2.6) 84.9
----------- ----------- ------- -------- ------- --------------
Earnings before minority
interest................... 477.4 126.2 (3.1) (189.4) (31.5) 379.6
Minority interest............ 155.4 95.1 (2.7) (91.7) (112.2)(e) 43.9
----------- ----------- ------- -------- ------- --------------
Earnings before taxes........ 322.0 31.1 (0.4) (97.7) 80.7 335.7
Provision for taxes.......... 117.5 14.5 (1.0) (32.1) 40.2(f) 139.1
----------- ----------- ------- -------- ------- --------------
Earnings before extraordinary
item....................... $ 204.5 $ 16.6 $ 0.6 $ (65.6) $ 40.5 $ 196.6
----------- ----------- ------- -------- ------- --------------
----------- ----------- ------- -------- ------- --------------
Earnings per common share.... $ 2.15 $ 1.67
Weighted average number of
shares and equivalent
shares outstanding......... 95.0 117.6
</TABLE>
The accompanying notes are an integral part of these unaudited
pro forma condensed consolidated financial statements.
S-10
<PAGE>
IMC GLOBAL INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
TRANSFERRED TO
HISTORICAL HISTORICAL FREEPORT SULPHUR FTX'S SHARE OF FTX MERGER PRO FORMA
IMC FTX (A) COMPANY (A)(B) IMC-AGRICO (C) ADJUSTMENTS (D) CONSOLIDATED
------------- ----------- ------------------- ---------------- --------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net sales.............. $ 598.7 $ 196.3 $ (38.5) $ (157.8) $ 598.7
Cost of goods sold..... 449.4 582.1 (463.1) (108.4) $ 7.9(e) 467.9
------------- ----------- ------- -------- ------ ---------------
Gross margins........ 149.3 (385.8) 424.6 (49.4) (7.9) 130.8
Selling, general and
administrative
expenses............. 65.1 14.9 (1.8) (6.1) 72.1
------------- ----------- ------- -------- ------ ---------------
Operating earnings
(loss)............... 84.2 (400.7) 426.4 (43.3) (7.9) 58.7
Other (income) and
expense, net......... (2.7) (0.5) (0.5) (3.7)
Interest expense....... 13.2 10.2 (0.8) 22.6
------------- ----------- ------- -------- ------ ---------------
Earnings (loss) before
minority interest.... 73.7 (410.4) 426.4 (42.0) (7.9) 39.8
Minority interest...... 31.7 (149.4) 159.1 (20.3) (17.9)(f) 3.2
------------- ----------- ------- -------- ------ ---------------
Earnings (loss) before
taxes................ 42.0 (261.0) 267.3 (21.7) 10.0 36.6
Provision (benefit) for
taxes................ 15.3 (98.0) 100.6 (8.2) 5.9(g) 15.6
------------- ----------- ------- -------- ------ ---------------
Earnings (loss) before
extraordinary item... $ 26.7 $ (163.0) $ 166.7 $ (13.5) $ 4.1 $ 21.0
------------- ----------- ------- -------- ------ ---------------
------------- ----------- ------- -------- ------ ---------------
Earnings per common
share................ $ 0.28 $ 0.18
Weighted average number
of shares and
equivalent shares
outstanding.......... 93.8 116.4
</TABLE>
The accompanying notes are an integral part of these unaudited
pro forma condensed consolidated financial statements.
S-11
<PAGE>
IMC GLOBAL INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(a) Includes charges for an impairment assessment of FTX sulphur assets.
(b) In connection with the FTX Merger, IMC contributed its 25.0 percent interest
in Main Pass to FRP, and FRP contributed its 58.3 percent interest in Main
Pass together with the 25.0 percent interest received from IMC along with
certain additional sulphur assets of FRP and FTX to FSC. Thereafter, FSC
common stock was distributed to the partners of FRP, including FTX. The
adjustments reflect the elimination of the related operating results.
(c) The amounts in the column "Historical IMC" reflect 100 percent of the
operating results of IMC-Agrico, as IMC has historically fully consolidated
IMC-Agrico. FTX historically proportionately consolidated its interest in
IMC-Agrico and these amounts are included in the column "Historical FTX."
The adjustments eliminate the operating results of IMC-Agrico that FTX
proportionately consolidated.
(d) As a result of the FTX Merger, IMC expects to achieve cost savings through
the consolidation of certain general and administrative functions and other
opportunities for cost savings. No adjustments have been included in the
Unaudited Pro Forma Condensed Consolidated Statements of Operations for such
anticipated cost savings. IMC expects to realize at least $33 million in
annual cost savings immediately, with an additional $7.5 million in annual
savings expected during the seven years following the FTX Merger.
(e) Reflects amortization of step-up from book value to fair value pertaining to
IMC's additional interest in IMC-Agrico's property, plant and equipment over
the assets' respective useful lives; reflects goodwill amortization over 40
years (see notes (d) and (e) of Notes to Unaudited Pro Forma Condensed
Consolidated Balance Sheet).
(f) Eliminates FTX minority interest and records pro forma minority interest as
a result of the FTX Merger as follows: (i) FRP unitholders' interest in
IMC-Agrico of approximately 20.0 percent; and (ii) FRP unitholders' interest
in all other FRP operating results of 48.4 percent.
(g) Reflects the tax effect of FTX Merger Adjustments, excluding goodwill
amortization, at an effective rate of 39 percent.
S-12
<PAGE>
CERTAIN TERMS OF THE DEBENTURES
The Debentures will be issued under an Indenture dated as of July 17, 1997
(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 Debentures constitute Senior Debt Securities described in the
accompanying Prospectus. The following description of the particular terms of
the Debentures 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 "Certain Terms of the Debentures" to the "Company" or "IMC" refer
to IMC Global Inc., the issuer of the Debentures, and not to its subsidiaries.
GENERAL
The Debentures will mature on , and will be limited to $
aggregate principal amount. Each Debenture will bear interest at the rate per
annum stated on the cover page hereof from , 1998, or from the most
recent interest payment date to which interest has been paid, payable
semi-annually on and in each year (each such date being
referred to herein as an "Interest Payment Date"), commencing , 1998,
to the person in whose name a Debenture is registered at the close of business
on or , as the case may be, preceding such Interest Payment
Dates.
The Debentures will be unsecured, senior debt of the Company and will rank
on a parity 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 Debentures), 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. If the acquisition of Harris is completed, Harris and its
subsidiaries will become subsidiaries of the Company and creditors of Harris and
such subsidiaries will therefore become creditors of subsidiaries of the Company
to whose rights the rights of creditors of the Company (including holders of the
Debentures) will be similarly structurally subordinated. See "Recent
Developments--Pending Acquisition of Harris Chemical Group."
The Indenture provision described under "Description of Debt
Securities--Defeasance and Covenant Defeasance" in the accompanying Prospectus
will be applicable to the Debentures. The Indenture does not contain any
covenants or other provisions applicable to the Debentures which might afford
beneficial owners of Debentures protection in the event of a highly leveraged
transaction, change in credit rating of the Debentures or other similar
occurrence. The Debentures 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 requested that any action be taken, and such noncompliance does
not, and any acceleration of the Polk County Bonds, if requested, would not,
currently create a cross-default or cross-acceleration to any other indebtedness
of the Company, including the Debentures and the Notes. Because solicitation of
a unanimous waiver is impractical, the Company currently intends to take no
action. The Company does not believe that any redemption or refinancing of the
Polk County Bonds would have a material adverse effect on the Company and its
subsidiaries taken as a whole.
S-13
<PAGE>
OPTIONAL REDEMPTION
The Debentures are redeemable in whole or in part at any time at the option
of the Company at a redemption price equal to the greater of (i) 100% of the
principal amount of such Debentures and (ii) the sum of the present values of
the remaining scheduled payments of principal and interest thereon discounted to
the date of redemption on a semi-annual basis assuming a 360-day year consisting
of twelve 30-day months at the Treasury Rate plus basis points, plus in each
case accrued but unpaid interest thereon to the date of redemption. The
Debentures will not be subject to any sinking fund.
"TREASURY RATE" means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Debentures to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Debentures. "INDEPENDENT INVESTMENT BANKER" means one of
the Reference Treasury Dealers appointed by the Trustee after consultation with
the Company.
"COMPARABLE TREASURY PRICE" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (a) the average
of the Reference Treasury Dealer Quotations for such redemption date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(b) if the Trustee obtains fewer than four such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"REFERENCE TREASURY DEALER" means each of NationsBanc Montgomery Securities
LLC, Chase Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, their respective successors and any other primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer") selected by the
Company in addition to, or in substitution for, any of such firms; provided,
however, that if any of the foregoing shall cease to be a Primary Treasury
Dealer, the Company will substitute another Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of Debentures to be redeemed.
Unless the Company defaults in payment of the redemption price, on and after the
redemption date interest will cease to accrue on the Debentures or portions
thereof called for redemption.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Debentures 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 Debentures will trade in the
Depositary's Same-Day Funds Settlement System until maturity,
S-14
<PAGE>
and secondary market trading activity in the Debentures will therefore be
required by the Depositary to settle in immediately available funds.
GLOBAL NOTES
The Company has established a depositary arrangement with The Depository
Trust Company (the "Depositary") with respect to the Debentures, the terms of
which are summarized below.
Upon issuance, all Debentures will be represented by Global Notes. The
Global Notes representing the Debentures 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 Debentures 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 Debentures will not be
entitled to receive physical delivery of certificated Debentures and will not be
considered the holders thereof for any purpose under the Indenture, and no
Global Note representing the Debentures 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 Debentures.
The Global Notes representing the Debentures will be exchangeable for
certificated Debentures 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 Debentures or (iv) there shall have
occurred and be continuing an Event of Default under the Indenture with respect
to the Debentures. Upon any such exchange, the certificated Debentures shall be
registered in the names of the Beneficial Owners of the Global Notes
representing the Debentures, 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 Debentures. The
Debentures 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 Debentures, 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
S-15
<PAGE>
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 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 Debentures under the Depositary's system must be made by or
through Direct Participants, which will receive a credit for such Debentures
on the Depositary's records. The ownership interest of each actual purchaser
of each Debenture 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 Debentures 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 Debentures will not receive certificated Debentures
representing their ownership interests therein, except in the event that use
of the book-entry system for such Debentures is discontinued.
To facilitate subsequent transfers, all Global Notes representing the
Debentures 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 Debentures; the Depositary's records reflect only the
identity of the Direct Participants to whose accounts such Debentures 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 Debentures. 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 Debentures 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 Debentures 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
S-16
<PAGE>
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 Debentures 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
Debentures 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 Debentures will be printed and delivered.
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 Debentures is set forth in the accompanying
Prospectus under "Description of Debt Securities--Book-Entry Debt Securities."
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 and in respect
of its outstanding 6 7/8% Debentures due July 15, 2007.
S-17
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
(the "Underwriting Agreement") among the Company and each of NationsBanc
Montgomery Securities LLC, Chase Securities Inc. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated (collectively, the "Underwriters"), the Company has
agreed to sell to each of the Underwriters and each of the Underwriters
severally has agreed to purchase from the Company the aggregate principal amount
of the Debentures set forth opposite its name 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 Debentures if any are purchased.
<TABLE>
<CAPTION>
UNDERWRITER PRINCIPAL AMOUNT
- --------------------------------------------------------------------------------------------- -------------------
<S> <C>
NationsBanc Montgomery Securities LLC........................................................ $
Chase Securities Inc.........................................................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated......................................................................
-------------------
Total......................................................................... $
-------------------
-------------------
</TABLE>
The Underwriters have advised the Company that they propose to offer the
Debentures to the public at the public offering price set forth on the cover
page of this Prospectus Supplement and to certain dealers at such price less a
concession not in excess of % of the principal amount of the Debentures. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of % of the principal amount of the Debentures to certain other dealers. After
the initial public offering, the public offering price, concession and discount
may be changed.
There is no public trading market for the Debentures and the Company does
not intend to apply for listing of the Debentures on any national securities
exchange or for quotation of the Debentures on any automated dealer quotation
system. The Company has been advised by the Underwriters that they presently
intend to make a market in the Debentures after the consummation of the offering
contemplated hereby, although they are under no obligation to do so and may
discontinue any market-making activities at any time without any notice. No
assurance can be given as to the liquidity of the trading market for the
Debentures or that an active public market for the Debentures will develop. If
an active public trading market for the Debentures does not develop, the market
price and liquidity of the Debentures may be adversely affected. If the
Debentures are traded, they may trade at a discount from their initial offering
price, depending on prevailing interest rates, the market for similar
securities, the performance of the Company and certain other factors.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribute to payments that the Underwriters may be required to make in
respect thereof.
In connection with the offering of the Debentures, NationsBanc Montgomery
Securities LLC, on behalf of the Underwriters, may engage in overallotment,
stabilizing transactions and syndicate covering transactions in accordance with
Regulation M under the Exchange Act. Overallotment involves sales in excess of
the offering size, which creates a short position for the Underwriters.
Stabilizing transactions involve bids to purchase the Debentures in the open
market for the purpose of pegging, fixing or maintaining the price of the
Debentures. Syndicate covering transactions involve purchases of the Debentures
in the open market after the distribution has been completed in order to cover
short positions. Such stabilizing transactions and syndicate covering
transactions may cause the price of the Debentures to be higher than it would
otherwise be in the absence of such transactions. Such activities, if commenced,
may be discontinued at any time.
S-18
<PAGE>
From time to time the Underwriters and certain of their affiliates have
engaged, and may in the future engage, in transactions with, and perform
services for, the Company and its affiliates in the ordinary course of business.
In particular, NationsBank, N.A., an affiliate of NationsBanc Montgomery
Securities LLC and The Chase Manhattan Bank, an affiliate of Chase Securities
Inc., are agents and lenders under the U.S. Credit Agreements. Each of
NationsBank, N.A. and The Chase Manhattan Bank will receive a portion of the
amount repaid under the U.S. Credit Agreements with the proceeds of the
offering. See "Use of Proceeds." Because more than 10% of the net proceeds of
the offering will be paid to affiliates of members of the National Association
of Securities Dealers, Inc. (the "NASD") who are participating in the offering,
the offering is being made pursuant to Rule 2710(c)(8) of the Conduct Rules of
the NASD. Chase Securities Inc. and NationsBanc Montgomery Securities LLC are
acting as underwriters in connection with the offering of the Notes. In
addition, certain affiliates of Chase Securities Inc. hold an equity interest in
HCG, and Chase Securities Inc. is serving as an advisor to Harris in connection
with the Company's proposed acquisition of Harris. See "Recent
Developments--Pending Acquisition of Harris Chemical Group."
LEGAL MATTERS
The validity of the Debentures offered hereby will be passed upon for the
Company by Sidley & Austin, Chicago, Illinois and by Marschall I. Smith, Esq.,
Senior Vice President and General Counsel of the Company. Mr. Smith is the
beneficial owner of approximately 17,000 shares of IMC Common Stock and holds
options to purchase 112,100 shares of IMC Common Stock. Certain legal matters
relating to the Debentures offered hereby will be passed upon for the
Underwriters by Mayer, Brown & Platt, Chicago, Illinois. Mayer Brown & Platt
represents the Company from time to time in connection with certain matters.
S-19
<PAGE>
PROSPECTUS
[LOGO]
$500,000,000
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 its 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 $500,000,000 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 and any terms for conversion
or exchange into Common Stock, (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 January 9, 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 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 Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission; Midwest Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511 and Northeast Regional Office, Seven World Trade
Center, 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 are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended June
30, 1997;
2. The Freeport-McMoRan Inc. Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, as amended;
3. The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1997;
4. The Freeport-McMoRan Inc. Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997;
2
<PAGE>
5. The Joint Proxy Statement/Prospectus of the Company and Freeport-McMoRan
Inc. dated November 17, 1997;
6. The Company's Current Reports on Form 8-K filed on July 1, 1997, July
23, 1997, August 12, 1997, August 28, 1997, December 8, 1997, December
12, 1997 and January 6, 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.
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 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;
risks associated with 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; 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
3
<PAGE>
in the reports filed by the Company with the Commission 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 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 believes that
it is one of the most efficient North American producers of concentrated
phosphates and potash. The Company's retail distribution network, which extends
principally to corn and soybean farmers in the eastern Midwest and to cotton,
peanut and vegetable farmers in the southeastern United States, is one of the
preeminent distributors of crop nutrients and related products. The Company also
manufactures nitrogen-based and other high-value crop nutrients which are
marketed on a dealer basis, principally in the midwestern and southeastern
United States. 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 and its consolidated subsidiaries for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS FISCAL YEAR ENDED JUNE
ENDED NINE MONTHS ENDED 30,
SEPTEMBER 30, SEPTEMBER 30, ------------------------
1997 1997(A) 1997 1996 1995 1994
----------------- ----------------- ----- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(b)....................... 6.58 10.01 10.34 7.63 7.26 2.48
Adjusted ratio of earnings to fixed charges(c).............. 6.58 10.01 10.34 9.16 7.26 2.48
<CAPTION>
1993
-----
<S> <C>
Ratio of earnings to fixed charges(b)....................... (1.10)
Adjusted ratio of earnings to fixed charges(c).............. 1.94
</TABLE>
- ------------------------
(a) On June 24, 1997 the Board of Directors of the Company voted to change the
Company's fiscal year to begin on January 1 and end on December 31,
effective December 31, 1997. The ratio of earnings to fixed charges for the
nine-month period ended September 30, 1997 is presented as if the Company
had changed its fiscal year end to December 31 commencing January 1, 1997.
(b) 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.
(c) The adjusted ratio of earnings to fixed charges for the fiscal year ended
June 30, 1996 excludes a charge of $98.6 million relating to the Vigoro
Merger. The ratio of earnings to fixed charges for the fiscal year ended
June 30, 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 July 17, 1997 (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"). 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 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 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
5
<PAGE>
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 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.
6
<PAGE>
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
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
7
<PAGE>
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 interest 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 (whether such Principal Property, shares of stock or
indebtedness are 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 Company or such Restricted Subsidiary would be entitled, pursuant
to the provisions
8
<PAGE>
of the Indentures, to incur Indebtedness secured by a lien on the 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, in the opinion of 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 audited consolidated balance sheet
contained in the latest annual report to the shareholders 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
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 or its
Subsidiaries 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
9
<PAGE>
good faith determines that the withholding of such notice is in the interests of
the holders of Debt Securities of such series.
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 any
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 5 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 Trust Indenture Act 314(a).
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
10
<PAGE>
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 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 supplemental indenture 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.
11
<PAGE>
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 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. Any such Trustee will be an "eligible trustee" under the
Trust Indenture Act of 1939, as amended.
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
12
<PAGE>
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.
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 the 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 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 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
of 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
13
<PAGE>
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.
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 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
14
<PAGE>
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.
"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.
15
<PAGE>
"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 (i) IMC Global Operations Inc.,
IMC-Canada, Freeport-McMoRan Resource Partners, Limited Partnership (recently
renamed Phosphate Resource Partners Limited Partnership) and the Partnership,
and any intermediate holding company between either IMC Global Operations Inc.,
IMC-Canada, Freeport-McMoRan Resource Partners, Limited Partnership or the
Partnership and the Company and (ii) any other 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, 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.
16
<PAGE>
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 of the
Debt Warrant Agreement 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 Debt Warrant Agreement and the Debt Warrant
Certificates, respectively, 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.
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.
17
<PAGE>
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
IMC 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 (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
91,662,523 shares of Common Stock were issued and outstanding as of November 11,
1997 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.
Reference is made to the applicable Prospectus Supplement relating to the
Series Preferred Stock offered thereby for specific terms, including:
(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;
18
<PAGE>
(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
GENERAL. 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.
19
<PAGE>
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 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 meeting 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.
20
<PAGE>
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 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.
21
<PAGE>
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 incorporated by reference in the Registration Statement
of which this Prospectus is a part. The following summaries of certain
provisions of the Stock Warrant Agreement 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 Stock Warrant Agreement and
the Stock Warrant Certificates, respectively, 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.
22
<PAGE>
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.
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 of the Currency Warrant
Agreement 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 Currency Warrant Agreement and the Currency Warrant
Certificates, respectively, 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").
23
<PAGE>
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.
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.
24
<PAGE>
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.
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
Certain legal matters will be passed upon for IMC by Marschall I. Smith,
Esq., Senior Vice President and General Counsel of the Company. Mr. Smith is the
beneficial owner of shares of Common Stock and holds currently exercisable
options to purchase shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company at June 30, 1997 and
for each of the three years in the period ended June 30, 1997 appearing in the
Company's Annual Report on Form 10-K for the year ended June 30, 1997, which is
incorporated by reference in this Prospectus and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon incorporated by reference elsewhere herein which, as to the year
1995, is based in part on the report of Arthur Andersen LLP, independent
auditors. The financial statements referred to above are incorporated herein by
reference in reliance upon such reports given upon the authority of such firms
referred to above as experts in accounting and auditing.
The consolidated financial statements of Freeport-McMoRan Inc. at December
31, 1996 and for each of the three years in the period ended December 31, 1996
appearing in the Freeport-McMoRan Inc. Annual Report on Form 10-K for the year
ended December 31, 1996, which is incorporated by reference in this Prospectus
and Registration Statement have been audited by Arthur Andersen LLP, independent
auditors, as set forth in their report thereon incorporated by reference
elsewhere herein. The financial statements referred to above are incorporated
herein by reference in reliance upon such reports given upon the authority of
such firm referred to above as experts in accounting and auditing.
25
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, 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. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO
NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER
OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<S> <C>
The Company............................... S-2
Recent Developments....................... S-2
Concurrent Offering....................... S-4
Use of Proceeds........................... S-4
Summary Consolidated Financial
Information............................... S-5
Unaudited Pro Forma Condensed Consolidated
Financial Information..................... S-7
Certain Terms of the Debentures........... S-13
Underwriting.............................. S-18
Legal Matters............................. S-19
PROSPECTUS
Available Information..................... 2
Incorporation of Certain Documents by
Reference................................. 2
The Company............................... 4
Use of Proceeds........................... 4
Ratios of Earnings to Fixed Charges....... 4
Description of Debt Securities............ 5
Description of Debt Warrants.............. 17
Description of Series Preferred Stock and
Common Stock.............................. 18
Description of Stock Warrants............. 22
Description of Currency Warrants.......... 23
Plan of Distribution...................... 24
Legal Matters............................. 25
Experts................................... 25
</TABLE>
PROSPECTUS SUPPLEMENT
IMC GLOBAL INC.
$
% DEBENTURES DUE
[LOGO]
NATIONSBANC MONTGOMERY
CHASE SECURITIES INC.
MERRILL LYNCH & CO.
DATED , 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
