<PAGE>1
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From to
Commission File Number 1-11237
AT&T CAPITAL CORPORATION
A DELAWARE I.R.S. EMPLOYER
IDENTIFICATION
CORPORATION No.
22-3211453
44 Whippany Road, Morristown, New Jersey 07962-1983
Telephone Number 201-397-3000
__________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of
exchange on
which
registered
___________________
___________________
Common Stock, New York Stock
Exchange
$.01 par value
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act
of 1934 during the preceding 12 months (or for such shorter
period that the
registrant was required to file such reports), and (2) has been
subject to
such filing requirements for the past 90 days. YES...x...
NO.......
Indicate by check mark if disclosure of delinquent filers
pursuant to Item
405 of Regulation S-K is not contained herein, and will not be
contained,
to the best of registrant's knowledge, in definitive proxy or
information
statements incorporated by reference in Part III of this Form
10-K or any
amendment to this Form 10-K.
( x )
The aggregate market value of the common stock of the registrant
held by
nonaffiliates as of February 28, 1995 was approximately
$164,164,429. For
purposes of the foregoing calculation only, all directors and
officers of
the registrant have been deemed affiliates. As of February 28,
1995, there
were 47,001,356 shares of the registrants common stock $.01 par
value,
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Company's definitive proxy statement dated March
20, 1995
issued in connection with the 1995 annual meeting of shareholders
(Part
III).<PAGE>
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TABLE OF CONTENTS
PART I
Item Description
Page
1. Business.
1
2. Properties.
12
3. Legal Proceedings.
12
4. Submission of Matters to a Vote of
Security-Holders. 12
PART II
5. Market for Registrant's Common Equity and Related
Stockholder Matters.
12
6. Selected Financial Data.
13
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
18
8. Financial Statements and Supplementary Data.
32
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
69
PART III
10. Directors and Executive Officers of the Registrant.
69
11. Executive Compensation.
70
12. Security Ownership of Certain Beneficial Owners and
Management.
70
13. Certain Relationships and Related Transactions.
71
PART IV
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.
71
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PART I
ITEM 1. BUSINESS
RESTRUCTURING AND INITIAL PUBLIC OFFERING
AT&T Capital Corporation ("AT&T Capital" or the "Company"),
was
incorporated on December 21, 1992 as AT&T Leasing, Inc., and was
renamed
AT&T Capital Corporation on March 31, 1993. The Company is the
successor
entity to certain businesses of AT&T Capital Holdings, Inc.
(formerly known
as AT&T Capital Corporation, renamed AT&T Capital Holdings, Inc.
("Old
Capital") on March 31, 1993) a wholly owned subsidiary of AT&T
Corp.
("AT&T") and AT&T Credit Holdings, Inc. which commenced
operations in 1985,
and renamed AT&T Credit Holdings, Inc. ("Old Credit") on March
31, 1993, an
indirect wholly owned subsidiary of AT&T. In a restructuring
that occurred
on March 31, 1993, (the "Restructuring") Old Capital and Old
Credit
transferred substantially all their assets to the Company except
for
certain assets, consisting principally of equity interests in
project
finance transactions and leveraged leases of commercial aircraft
("Lease
Finance Assets"), in exchange for shares of the Company's common
stock and
the assumption by the Company of certain related liabilities.
In connection with the Restructuring, AT&T issued a direct,
full and
unconditional guarantee of all existing indebtedness outstanding
as of
March 31, 1993 for borrowed money incurred, assumed or guaranteed
by Old
Capital entitled to the benefit of a Support Agreement between
AT&T and Old
Capital (the "Support Agreement"), including the debt of Old
Capital
assumed by the Company in the Restructuring. Debt issued by the
Company
subsequent to March 31, 1993, however, is not guaranteed or
supported by
AT&T.
An initial public stock offering combined with a management
stock
offering totalling approximately 14 percent of the Company's
stock occurred
on August 4, 1993. (See Note 8 to the Consolidated Financial
Statements).
As a result of the stock offerings, approximately 86 percent of
the
outstanding common stock of the Company is owned indirectly by
AT&T
(through Old Capital and Old Credit.)
In connection with its initial public offering, the Company
entered
into certain intercompany, operating, license and tax agreements
with AT&T.
The Intercompany Agreement includes a provision requiring minimum
ownership
by AT&T of 20% of the Company's common stock outstanding
immediately after
the initial public offering for a period of five years.
Provisions for
management by the Company of certain portfolios owned by AT&T,
allowing the
Company to utilize certain AT&T corporate and administrative
services (for
a fee) and generally requiring the Company to continue certain
equipment
financing programs for AT&T are also included. The Operating
Agreement,
provides, among other things, that AT&T is required to promote
the
Company's financing and ancillary services and to provide the
Company with
certain preferred provider rights in connection with the
financing of AT&T
products and services. In addition, the Operating Agreement
restricts AT&T
from competing with the Company with respect to certain products
of the
Company. The License Agreement defines the Company's rights to
use certain
AT&T service marks and trade names, and to use "AT&T" as part of
the
corporate names of the Company and certain of its subsidiaries.
The
initial term of the License Agreement will expire on the seventh
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anniversary of the date of the initial public offering. The
License
Agreement may be terminated prior to the end of its term by
either party if
the other party breaches or defaults on terms of the Intercompany
agreement, the Operating Agreement or the License Agreement.
Additionally,
AT&T can elect to terminate the license agreement if the
long-term
unsecured debt of the Company is rated below investment grade by
at least
two nationally recognized rating agencies or if the Company
receives a
qualified audit opinion from its independent accountants.
Because such
license is an important strategic asset of the Company,
termination of the
License Agreement could have an adverse effect on the Company.
DESCRIPTION OF THE BUSINESS
AT&T Capital is one of the largest equipment leasing and
finance
companies in the United States based on the aggregate value of
equipment
leased or financed. The Company is a full-service, diversified
equipment
leasing and finance company that operates in the United States,
Canada,
Europe, the Asia/Pacific Region and Mexico.
The Company leases and finances equipment manufactured and
distributed
by AT&T and its affiliates and numerous other companies. The
Company's
customers include many of the nation's largest industrial and
service
companies, as well as many small and mid-size business customers
and
federal, state and local governments and their agencies.
AT&T Capital, through its various subsidiaries, leases and
finances
telecommunications equipment (such as private branch exchanges
("PBXs"),
telephone systems and voice processing units), general purpose
equipment
(such as office equipment and manufacturing equipment), data
center
equipment (including mainframe computers and related equipment),
other data
processing equipment (such as personal computers, retail
point-of-sale
computers, automatic teller machines and bank transaction
processing
equipment) and transportation equipment (primarily vehicles).
The Company
is the largest lessor in the United States of telecommunications
equipment.
The Company also provides inventory financing for equipment
dealers and
distributors, Small Business Administration ("SBA")lending, and
asset
management and remarketing services. In addition, the Company
offers its
customers certain equipment rental and repair services and
certain other
asset administration services.
AT&T Capital offers a variety of lease and other finance
instruments,
including leases where the Company is the owner of the equipment
for tax or
accounting purposes and leases and installment sales arrangements
where the
end-user is such owner. At December 31, 1994, 12.1% of the
Company's net
investment in leases and finance receivables ("portfolio assets")
consisted
of leases where the Company was the owner of the equipment for
both tax and
accounting purposes. The Company's portfolio assets, which
aggregated
approximately $7.5 billion at December 31, 1994, are diversified
across
various types of financed equipment, with telecommunications
equipment
comprising approximately 26% of such portfolio assets at such
date. At
December 31, 1994, approximately 5% of the Company's portfolio
assets were
comprised of real estate assets (including commercial loans
collateralized
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by real estate generated through the Company's small business
lending
activity, e.g., SBA and franchise lending) and commercial
aircraft leases.
AT&T Capital's portfolio assets are diversified among a
large customer
base as well as geographic regions. At December 31, 1994, the
Company's 99
largest customers (after AT&T and its affiliates) accounted for
approximately 20% of the Company's portfolio assets, and no
single customer
(with the exception of AT&T and its affiliates) accounted for
more than
1.0% of such portfolio assets.
A substantial part of the Company's total United States
assets,
revenue and net income are attributable to leasing and financing
of AT&T
equipment provided to customers of AT&T and its affiliates
(collectively,
"Customers of AT&T Equipment"). AT&T and its affiliates and
employees
(collectively, "AT&T as End-User") are also significant customers
of the
Company, primarily with respect to data processing equipment and
vehicles
leased to as them as end-users.
The following table shows (in millions of dollars) the
assets,
revenue, net income(loss) and income before cumulative effect of
accounting
change and impact of tax rate change related to United States
operations
(together with the respective percentages of the assets, revenue,
net
income(loss) and income before cumulative effect of accounting
change and
impact of tax rate change related to United States operations
represented
by such dollar amounts) attributable to (I) leasing and financing
services
provided by the Company to customers of AT&T equipment, (ii)
transactions
involving AT&T as End-User and (iii) the Company's non-AT&T
businesses, in
each case at and for the years ended December 31, 1992, 1993 and
1994. The
net income(loss) and income before cumulative effect of
accounting change
and impact of tax rate change amounts shown below were calculated
based
upon what the Company believes to be a reasonable allocation of
interest,
income taxes and certain corporate overhead expenses.
Customers of AT&T Equipment
Income
before
cumulative effect
of 1993
accounting
change
and impact
Assets Revenue Net Income of tax
rate change
__________________________________________________________________________
$ % $ % $ % $
%
___________________________________________________________________________
1992 $2,305.0 40.1% $410.5 32.8% $52.4 60.0%
$52.4 60.0%
1993 $2,441.7 40.7% $423.3 33.2% $68.5 87.8%
$75.9 80.1%
1994 $2,749.8 38.4% $458.5 36.7% $84.2 80.5%
$84.2 80.5%
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AT&T as End-User
Income
before
cumulative effect
of 1993
accounting
change
and impact
Assets Revenue Net Income of tax
rate change
___________________________________________________________________________
$ % $ % $ % $
%
___________________________________________________________________________
1992 $658.4 11.4% $185.2 14.8% $13.0 14.9% $13.0
14.9%
1993 $608.8 10.1% $201.9 15.9% $14.2 18.3% $16.9
17.9%
1994 $548.0 7.7% $131.2 10.5% $ 8.5 8.2% $ 8.5
8.2%
Non-AT&T Businesses
Income
before
cumulative effect
of 1993
accounting
Net Income change
and impact
Assets Revenue (Loss) of tax
rate change
___________________________________________________________________________
$ % $ % $ % $
%
___________________________________________________________________________
1992 $2,786.9 48.5% $655.8 52.4% $21.9 25.1% $21.9
25.1%
1993 $2,952.4 49.2% $649.4 50.9% ($ 4.7) (6.1%) $ 1.9
2.0%
1994 $3,850.9 53.9% $660.9 52.8% $11.9 11.3% $11.9
11.3%
The net income(loss) and income before cumulative effect of
accounting
change and impact of tax rate change from the Company's United
States non-AT&T businesses reflects the fact that costs and
expenses associated with
developing additional and changing existing non-AT&T business
units were
substantial. Conversely, the securitization of certain non-AT&T
portfolio
assets positively impacted the non-AT&T businesses in 1992, 1993
and 1994
(see Note 6 to the Consolidated Financial Statements). The
Company intends
to pursue its strategy of expanding its non-AT&T businesses,
while at the
same time enhancing its AT&T relationship. Because the desired
growth in
revenue generated by the Company's non-AT&T businesses can be
expected to
lag behind the incurrence of costs and expenses necessary to
expand and
operate such businesses, the Company anticipates that the
percentage of its
total United States net income and revenue growth attributable to
non-AT&T
businesses may vary from year to year depending upon the
developmental
stages associated with the non-AT&T businesses.
Although the Company operates principally in the United
States, the
Company began operations in the United Kingdom in 1991 and,
through the
hiring of certain employees and the acquisition of certain
operating assets
(but not Portfolio Assets), began significant operations in
Canada in 1992.
In January 1994, the Company purchased the stock of Australian
Guarantee
Corporation Finance (H.K.) Limited ("A.G.C. Finance"), a Hong
Kong-based
vehicle and equipment leasing finance company with assets at that
time of
approximately $150 million. Also in January 1994, the Company,
through its
wholly-owned Canadian subsidiary, acquired the vehicle portfolio
and
infrastructure assets constituting the Avis Canada Leasing
Division of
AvisCar, Inc. ("Avis Leasing"). Avis Leasing provides automobile
leasing
to small and mid-size commercial and corporate clients in Canada
and had
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approximately $90 million in assets at the time of acquisition.
Also in 1994, the Company opened offices in Mexico and
Australia. The
Company, from time to time, investigates potential opportunities
to make
acquisitions abroad, and the Company may open additional foreign
offices on
a limited basis either directly or through acquisition.
On January 4, 1995, the Company acquired the vendor leasing
and
finance companies of Banco Central Hispano and certain of its
affiliates
(collectively, "CFH Leasing International") located in the
United Kingdom,
Germany, France, Italy, Belgium, the Netherlands and Luxembourg.
CFH
Leasing International provides financial services to equipment
manufacturers and vendors. With offices throughout much of
western
Europe, it serves approximately 4,600 customers and had
approximately $540
million in assets at the time of acquisition.
The Company's assets, revenue and net income related to
foreign
operations are not reflected in the above tables which show
assets,
revenue, net income(loss) and income before cumulative effect of
accounting
change and impact of tax rate change attributable to the
Company's United
States operations. At December 31, 1994, 1993 and 1992, the
total assets
of the Company's foreign operations were $873.2 million (or 10.9%
of total
assets), $406.9 million (or 6.3% of total assets) and $145.1
million (or
2.5% of total assets), respectively. The total revenue of such
operations
for the years ended December 31, 1994, 1993 and 1992, were $133.5
million
(or 9.6% of total revenue), $85.0 million (or 6.2% of total
revenue) and
$14.0 million (or 1.1% of total revenue), respectively, and such
operations
generated net losses of $4.2 million, $9.4 million and $13.8
million,
respectively. Such losses reflected the fact that most of the
Company's
foreign operations are in the start-up phase, with revenue from
such
operations not yet covering operating costs and expenses.
Although a substantial majority of the Company's foreign
assets and
revenues at and for the years ended December 31, 1994, 1993 and
1992, were
attributable to the Company's non-AT&T businesses, a principal
focus of
such foreign operations is to serve foreign customers of AT&T and
its
affiliates as well as other vendors. Total assets, revenue and
net income
related to non-AT&T businesses including both domestic and
international
businesses for the year ended December 31, 1994 were $4,698.7
million (or
58.6% of total assets), $789.9 million (or 57.1% of total
revenue), and
$9.0 million (or 9.0% of total net income), respectively. Total
assets,
revenue and net loss (before cumulative effect of accounting
change and the
impact of the tax rate change) related to non-AT&T businesses
including
both domestic and international businesses for the year ended
December 31,
1993 were $3,337.1 million, $731.6 million and $7.5 million,
respectively.
Total assets, revenue and net loss related to non-AT&T businesses
including
both domestic and international businesses for the year ended
December 31,
1992 were $2,906.3 million, $668.1 million and $11.7 million,
respectively.
Income Tax Considerations
The Company is currently a member of AT&T's consolidated
group for
federal income tax purposes. The Company would cease to be a
member of
such consolidated group for federal income tax purposes (a "Tax
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Deconsolidation") if, among other events, AT&T's ownership
interest in the
outstanding common stock decreases to below 80%. Tax
Deconsolidation would
have certain adverse effects on the Company.
As long as the Company is a part of the AT&T consolidated
federal
income tax group, the payment of federal and state income taxes
in all
states in which combined returns are filed associated with sales
of
products manufactured by AT&T is deferred (the amount of such
taxes so
deferred being herein called "Gross Profit Tax Deferral"),
generally as the
products are depreciated or until sold outside the group.
Pursuant to the
Gross Profit Tax Deferral Interest Free Loan Agreement between
the Company
and AT&T, AT&T has extended and has agreed to extend
interest-free loans to
the Company from time to time in an amount equal to the then
outstanding
amount of Gross Profit Tax Deferral. Such loans are repayable by
the
Company when and to the extent that any such deferred taxes are
required to
be paid by AT&T. Upon any Tax Deconsolidation, the Company would
be
required to repay such loans and would no longer receive such
loans, which
have constituted a competitive advantage to the Company in
financing AT&T
products.
Pursuant to the Federal Tax Sharing and the State Tax
Sharing Agreements
between the Company and AT&T, the AT&T consolidated federal
income tax
liability is generally allocated among the members of the AT&T
consolidated
group that report taxable income. Members of the AT&T
consolidated group
that report tax losses are compensated currently by AT&T (through
cash
payments made on a quarterly basis) for their losses to the
extent those
losses are used to reduce the AT&T consolidated federal income
tax
liability. Similar principles and cash payments also apply to
certain
state and local income tax liabilities.
Upon any Tax Deconsolidation, the Company would no longer be
entitled
to receive quarterly cash payments from AT&T in compensation for
the use of
any tax losses. The tax losses would, instead, be available to
the Company
to reduce future taxable income. Thus, the Company may derive a
benefit in
the future from tax losses, but only to the extent the Company
has taxable
income in later years. In 1994, on a stand-alone basis, the
Company had
taxable income.
In addition, upon Tax Deconsolidation, it is possible that
the Company
could be subject to the federal alternative minimum tax. A
taxpayer's
alternative minimum tax liability is computed by applying the
alternative
minimum tax rate, which is lower than the regular tax rate, to a
measure of
taxable income that is broader than that used in computing the
regular tax.
Payments of any alternative minimum tax incurred by the Company
after a Tax
Deconsolidation would be available in the future as credits
against the
Company's regular tax liability.
Although AT&T has the right to reduce its ownership interest
in the
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Company (subject to certain contractual restrictions in the
Intercompany
Agreement between the Company and AT&T) and effect a Tax
Deconsolidation at
any time, AT&T has advised the Company that no decision has been
made to
reduce its ownership interest in the Company. AT&T has indicated
to the
Company that any decision by AT&T to reduce such ownership
interest would
be made, in the future on the basis of all the circumstances
existing at
such time including the effect of any such reduction on AT&T
(including any
benefit to AT&T from the removal from AT&T's consolidated balance
sheet of
the Company's indebtedness (and assets) in the event AT&T's
interest in the
common stock of the Company is reduced below 50%), the needs of
AT&T, the
success of the Company, stock market conditions and other
factors.
Credit Quality
The control of credit losses is an important element of the
Company's
business. The Company seeks to minimize its credit risk through
diversification of its portfolio assets by customer, customer
type,
geographic location and maturity. The Company's financing
activities have
been spread across a wide range of equipment segments (e.g.,
telecommunications, general, data center, other data processing
and
transportation) and a large number of end-users located
throughout the
United States and, to a lesser extent, abroad.
The table below provides allowance for credit losses
components by
loan classification (as prescribed by the Securities and Exchange
Commission, "SEC") where Lease Financing includes capital leases
and
rentals receivable on operating leases and Commercial and
Financial
includes finance receivables (collectively "finance assets"), as
well as
other key credit quality indicators. The breakdown of the
allowance for
credit losses at each year end reflects management's estimate of
credit
losses and may not be indicative of actual future charge-offs by
loan
classification.
(Dollars in Thousands)
1994 1993 1992 1991
1990
___________________________________________________________________________
Balance at beginning
of year:
- - Lease Financing $102,760 $ 87,774 $ 74,106 $ 57,578
$ 31,886
- - Commercial and
Financial 57,059 36,187 19,861 17,791
5,982
___________________________________________________________________________
Total 159,819 123,961 93,967 75,369
37,868
___________________________________________________________________________
Additions Charged
to Operations:
- - Lease Financing 66,306 95,034 88,577 100,445
58,767
- - Commercial and
Financial 14,582 28,644 23,138 8,190
16,741
___________________________________________________________________________
Total $ 80,888 $123,678 $111,715 $108,635
$ 75,508
___________________________________________________________________________
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1994 1993 1992 1991
1990
___________________________________________________________________________
Charge-offs:
- Lease Financing $ 50,294 $ 61,517 $ 76,587 $ 76,422
$ 49,468
- Commercial and
Financial 23,223 14,135 18,183 15,466
4,970
___________________________________________________________________________
Subtotal 73,517 75,652 94,770 91,888
54,438
___________________________________________________________________________
Recoveries:
- Lease Financing 16,316 15,505 15,038 8,261
7,953
- Commercial and
Financial 1,656 1,118 1,365 1,672
38
___________________________________________________________________________
Subtotal 17,972 16,623 16,403 9,933
7,991
___________________________________________________________________________
Net Charge-offs:
- - Lease Financing 33,978 46,012 61,549 68,161
41,515
- - Commercial and
Financial 21,567 13,017 16,818 13,794
4,932
___________________________________________________________________________
Total 55,545 59,029 78,367 81,955
46,447
___________________________________________________________________________
Transfers and Other (a):
- - Lease Financing (6,558) (34,036) (13,360)
(15,756) 8,440
- - Commercial and
Financial (2,176) 5,245 10,006 7,674
-
___________________________________________________________________________
Total (8,734) (28,791) (3,354)
(8,082) 8,440
___________________________________________________________________________
Balance at end of year:
- - Lease Financing 128,530 102,760 87,774 74,106
57,578
- - Commercial and
Financial 47,898 57,059 36,187 19,861
17,791
___________________________________________________________________________
Total $ 176,428 $159,819 $123,961 $ 93,967
$ 75,369
===========================================================================
Percentage of lease
financing assets to
total finance assets 80.6% 80.3% 79.9% 78.9%
78.3%
===========================================================================
Percentage of commercial
and financial assets
to total finance
assets 19.4% 19.7% 20.1% 21.1%
21.7%
===========================================================================
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1994 1993 1992 1991
1990
___________________________________________________________________________
Ratio of Net Charge-offs
during the year to
average finance assets
(excluding operating leases)
outstanding during the
year:
- Lease Financing 0.71% 1.21% 1.89% 2.35%
1.72%
- Commercial and
Financial 1.67% 1.13% 1.51% 1.34%
0.56%
===========================================================================
Nonaccrual assets $120,494 $160,574 $151,562 $ 85,381 $ 80,156
===========================================================================
(a) Primarily includes transfers out of allowance for credit
losses
related to receivables securitized, transfers in of reserves
related
to businesses acquired and reclassifications.
AT&T has agreed in the Operating Agreement to repurchase
certain
finance assets that go into default. Finance assets subject to
such
provisions were $243.0 million, $321.0 million and $282.4 million
at
December 31, 1994, 1993 and 1992, respectively. The Company
believes that
the remaining net investment in finance assets is adequately
reserved for
given the level of the Company's total allowance for credit
losses.
Portfolio credit performance indicators in 1994 have
continued to show
positive trends. Delinquency and charge-off levels have declined
during
1994, and the provision for credit losses decreased $42.8
million, or
34.6%, compared with 1993. The allowance for credit losses as a
percentage
of portfolio assets at December 31, 1994 was 2.30% compared with
2.56% at
December 31, 1993. At December 31, 1994 the allowance for credit
losses
was $176.4 million compared with $159.8 million at December 31,
1993.
Nonaccrual assets at December 31, 1994 totalled $120.5 million
compared
with $160.6 million at December 31, 1993.
The ratio of net charge-offs to average commercial and
financial
assets increased in 1994 compared with 1993, while the allowance
for credit
losses decreased in 1994 compared with 1993 due to reserves
established for
specific assets (particularly in the media portfolio) that were
subsequently charged off in 1994. As a result, in 1994 there
were fewer
assets that required specific reserves.
Accounts are placed in nonaccrual status at 90 days past due
or sooner
if identified as a problem account. Revenue which would have
been recorded
in 1994 on nonaccrual assets had these assets been earning at the
original
contractual rate amounted to approximately $12.9 million.
Revenue actually
recognized in 1994 for assets in nonaccrual status at December
31, 1994
amounted to approximately $7.3 million.
Lease terms that are modified in the normal course of
business, for
which additional consideration is received or insignificant
concessions are
made, are accounted for as changes in a provision for a lease in
accordance
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with Statement of Financial Accounting Standards ("SFAS") No. 13,
"Accounting for Leases." During the past five years, the Company
has had
no significant earning finance assets that are required to be
reported as a
troubled debt restructuring pursuant to SFAS No. 15, "Accounting
by Debtors
and Creditors for Troubled Debt Restructurings".
Residual Value Realization
The establishment and realization of residual values on
leases are
also important elements of the Company's business. Residual
values are
established upon acquisition and leasing of the equipment based
upon the
estimated value of the equipment at the end of the lease term.
These
estimates are derived by the Company from, among other things,
market
information on sales of used equipment, end-of-lease customer
behavior and
estimated obsolescence trends. The Company's risk management
department,
in conjunction with the management of the Company's business
units,
regularly reviews residual values, and if they have declined,
adjustments
are made that result in an immediate charge to income for capital
leases
and adjustments to depreciation expense for operating leases over
the
shorter of the useful life of the asset or the remaining term of
the lease.
In January 1994, the Company entered into a significant lease
extension
associated with mainframe computers leased to AT&T. This
extension
significantly reduced related mainframe residual exposure. At
December 31,
1994 and 1993, total portfolio assets related to mainframe
computers were
$527.1 million, or 7.0%, and $687.0 million, or 11.3%,
respectively. The
related residual values of mainframe computers were $79.1 million
and
$232.2 million at December 31, 1994 and 1993, respectively.
The Company actively manages its residuals by working with
lessees
during the lease term to encourage lessees to extend their leases
or
upgrade and enhance their leased equipment, as appropriate, and
by
monitoring the various equipment industry segments, particularly
the data
center and other data processing industry segments, for
obsolescence
trends. The Company utilizes its asset management (including
asset
remarketing), engineering and other technical expertise to help
manage its
residual positions.
In 1994, 1993 and 1992, the Company recognized, in total
revenue,
amounts in excess of recorded residuals upon the re-lease, sale
or other
disposition by the Company of leased equipment.
Competition and Related Matters
The equipment leasing and finance industry is highly
competitive.
Participants in the industry compete through price (including the
ability
to control costs), risk management, innovation and customer
service.
Principal cost factors include the cost of funds, the cost of
selling to or
obtaining new end-user customers and vendors, and the cost of
managing
portfolios (including, for example, billing, collection, credit
risk
management, residual management, etc.). Adequate risk management
is
required to achieve satisfactory returns on investment and to
provide
appropriate pricing of finance products. The Company believes
that
innovation is necessary to compete in the industry, involving
specialization in certain types of equipment, financial
structuring for
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<PAGE>13
larger transactions, utilization of alternative channels of
distribution
and optimization of tax treatment between owner and user.
End-users of
equipment generally desire transactions to be simple, flexible
and
customer-responsive.
In its leasing and financing operations and programs, the
Company
competes with captive or related leasing companies (such as
General
Electric Capital Corporation and IBM Credit Corporation),
independent
leasing companies (such as Comdisco, Inc.), certain banks engaged
in
leasing, lease brokers and investment banking firms that arrange
for the
financing of leased equipment, and manufacturers and vendors who
lease
their own products to customers. In addition, the Company
competes with
all banking and other financial institutions, manufacturers,
vendors and
others who extend or arrange credit for the acquisition of
equipment and,
in a sense, with the available cash resources of end-users (i.e.,
end-users
may use their available cash resources to purchase for cash
equipment that
the Company may otherwise finance). Many of the competitors of
the Company
are large companies that have substantial capital, technological
and
marketing resources; some of these competitors are significantly
larger
than the Company and have access to capital at a lower cost than
the
Company.
Recently there have been substantial changes in the
equipment leasing and
finance industry, including the sale or cessation of operations
of certain
large competitors of the Company and an apparent trend toward
consolidation. While these developments may on balance be
favorable for
the Company's prospects, they are indicative of the strong
competitive
pressures on all participants in the industry, including the
Company.
The Company's penetration rate for AT&T's sales of
telecommunications
equipment in the United States (i.e., the percentage of the
dollar volume
of such sales that the Company finances) was approximately 37%
for the year
ended December 31, 1994. The Company does not expect material
increases in
this penetration rate, and there can be no assurance that the
existing rate
will be maintained. Although, the Company has a lower
penetration rate
(approximately 22% for the year ended December 31, 1994) with
respect to
sales of AT&T Global Information Solutions products (data
processing and
related products, including personal computers, retail
point-of-sale
computers, automatic teller machines and bank transaction
processing
equipment), the penetration rate has increased in 1994 compared
with 1993.
Additionally, the Company has an insignificant penetration rate
with
respect to international sales of AT&T's network systems products
(large
telecommunications switches, cable products, cellular telephone
equipment
and microwave dishes and equipment), which sales the Company has
been
financing for a shorter period of time. Because the markets for
financing
these products are highly competitive and substantially different
from the
markets for financing telecommunications equipment in the United
States,
there can be no assurance that the penetration rates in these
product areas
will increase.
In addition to competition within the leasing and financing
industry,
competition experienced by AT&T and its affiliates' industries
may
adversely affect the Company because of the significance to the
Company of
its business with customers of AT&T and its affiliates. Those
industries
11
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<PAGE>14
are highly competitive and subject to rapid changes in technology
and
customer needs. Many of AT&T and its affiliates' competitors are
large
companies that have substantial capital, technology and marketing
resources.
Employees
AT&T Capital has approximately 2,700 employees as of
February 28,
1995, each of whom is referred to within the Company as a
"member". Titles
are generally not used internally. In general, the members
function using
a team approach, with business conducted on a collaborative
rather than
hierarchical basis. Management believes that its members are
skilled and
highly motivated and that the Company's ability to achieve its
objectives
depends upon their efforts and competencies. None of the
Company's members
are represented by a union. The Company believes that its
relations with
its members are good.
ITEM 2. PROPERTIES
The Company's properties consist primarily of administrative
offices
and warehouses for the storage and refurbishment of equipment.
The Company
has its headquarters in Morristown, New Jersey, with its
principal domestic
offices and warehouses located in Parsippany, New Jersey;
Framingham,
Massachusetts; Bloomfield Hills, Michigan; Miamisburg, Ohio;
Towson,
Maryland; and Dallas, Texas. The Company's principal
international offices
are in London, England; Toronto, Canada; Hong Kong; Sydney,
Australia; and
Mexico City, Mexico. All these offices and warehouses are leased
(some
being subleased from AT&T or one of its affiliates), except for
two
buildings (of approximately 23,000 and 9,000 square feet) in
Framingham,
Massachusetts, owned by a subsidiary of the Company. Each of
these two
buildings is used for office space and storage and one is
partially sublet
to a nonaffiliated company. The Company considers its present
locations
suitable and adequate to carry on its current business.
ITEM 3. LEGAL PROCEEDINGS
The Company is not currently a party to any pending
litigation nor is
the Company aware of any threatened litigation which in the
opinion of the
Company's management will have a material adverse impact on the
Company's
financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
There have been no matters submitted to a vote of security
holders
during the fourth quarter of 1994.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER
MATTERS
(a) Market Information
The principal market on which the common stock of the
Company is
traded is the New York Stock Exchange.
12
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<PAGE>15
Quarter Ended: Quarterly Stock Prices
Dividends
declared
per
share
High Low
December 31, 1993 $29.250 $22.375
$0.09
March 31, 1994 $27.000 $22.875
$0.09
June 30, 1994 $24.750 $21.625
$0.09
September 30, 1994 $24.375 $21.375
$0.09
December 31, 1994 $24.500 $19.750
$0.10
(b) Holders
As of February 28, 1995, there were 815 holders of
record of the
Company's common stock, including AT&T through Old
Capital and
Old Credit (which held 40,250,000 shares or
approximately 86% of
total shares outstanding).
(c) Dividends
It is anticipated that the Company will continue to pay
regular
quarterly dividends. The declaration of dividends and
their
amounts will be at the discretion of the Company's
board of
directors, and there can be no assurance that
additional
dividends will be declared.
ITEM 6. SELECTED FINANCIAL DATA
The Results of Operations Data for the years ended December
31, 1994,
1993, 1992, 1991 and 1990, as well as the Balance Sheet Data and
Other Data
at December 31, 1994, 1993, 1992 and 1991, are derived from the
Consolidated Financial Statements of the Company at such dates
and for such
periods, which have been audited by Coopers & Lybrand L.L.P.,
independent
accountants. The Results of Operations Data for the years ended
December
31, 1989, 1988, 1987, 1986 and 1985, as well as the Balance Sheet
Data and
Other Data at December 31, 1990, 1989, 1988, 1987, 1986 and 1985,
are
derived from unaudited consolidated financial information. In
management's
opinion, the Company's unaudited consolidated financial
statements at or
for the years ended December 31, 1990, 1989, 1988, 1987, 1986 and
1985,
include all adjustments (consisting of normal recurring
adjustments)
necessary for a fair presentation.
The selected financial data as presented under the
"Financial
Highlights" caption in the Company's Annual Report should be read
in
conjunction with "Management's Discussion and Analysis of
Financial
Condition and Results of Operations" and the Consolidated
Financial
Statements and related notes thereto.
13
<PAGE>
<PAGE>16
For the years ended December
31,
(Dollars in thousands, 1994 1993 1992 1991
1990
except per share amounts)______ ______ ______ ______
______
Results of Operations Data:
Total revenue $1,384,079 $1,359,589 $1,265,526 $1,160,150
$ 881,183
Interest expense 271,812 236,335 252,545 275,650
262,646
Operating and
administrative
expenses 427,187 381,515 359,689 298,833
193,882
Provision for credit
losses 80,888 123,678 111,715 108,635
75,508
Income before income
taxes, extraordinary
loss and cumulative
effect on prior years
of accounting change 173,614 138,040 114,875 82,559
70,891
Income before extra-
ordinary loss, cumu-
lative effect on prior
years of accounting
change and impact of
tax rate change 100,336 83,911 73,572 54,199
47,755
Extraordinary loss - - - -
-
Cumulative effect on
prior years of
accounting change (1) - (2,914) - -
-
Impact of 1993 tax rate
change (1) - (12,401) - -
-
Net income (1) 100,336 68,596 73,572 54,199
47,755
Earnings per share (1) 2.14 1.60 1.83 1.35
1.19
Earnings per share
before tax charges
(1), (2) 2.14 1.95 1.83 1.35
1.19
Dividends paid 17,338 4,216 49,632 55,512
34,423
Dividends per share (7) 0.37 0.09 - -
-
Return on average
equity 10.5% 8.5% 11.4% 10.7%
11.0%
Return on average
assets 1.4% 1.1% 1.3% 1.1%
1.1%
Return on average equity
before tax charges (2) 10.5% 10.3% 11.4% 10.7%
11.0%
Return on average assets
before tax charges (2) 1.4% 1.4% 1.3% 1.1%
1.1%
___________________________________________________________________________
Balance Sheet Data, at December 31:
Total assets 8,021,923 6,409,726 5,895,429 5,197,245
4,722,694
Total debt(3) 5,556,458 4,262,405 4,089,483 3,594,247
3,312,421
Total liabilities 7,013,705 5,485,283 5,158,808 4,647,979
4,257,186
Total shareowners'
equity $1,008,218 $ 924,443 $ 736,621 $ 549,266
$ 465,508
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<PAGE>
<PAGE>17
For the years ended December
31,
(Dollars in thousands, 1989 1988 1987 1986
1985
except per share amounts)______ ______ ______ ______
______
Results of Operations Data:
Total revenue $ 466,508 $ 319,029 $ 259,716 $ 191,284
$ 130,473
Interest expense 177,474 130,913 93,275 67,145
55,947
Operating and
administrative
expenses 118,430 90,528 76,752 55,211
28,198
Provision for credit
losses 32,222 19,135 39,227 28,049
5,970
Income before income
taxes, extraordinary
loss and cumulative
effect on prior years
of accounting change 59,346 47,306 40,269 38,816
39,283
Income before extra-
ordinary loss, cumu-
lative effect on prior
years of accounting
change and impact of
tax rate change 44,416 30,756 26,147 22,659
21,256
Extraordinary loss - - - (1,157)
-
Cumulative effect on
prior years of
accounting change (1) - - - -
-
Impact of 1993 tax rate
change (1) - - - -
-
Net income (1) 44,416 30,756 26,147 21,502
21,256
Earnings per share (1) 1.10 0.76 0.65 0.53
0.53
Earnings per share
before tax charges
(1), (2) 1.10 0.76 0.65 0.53
0.53
Dividends paid 17,746 28,192 24,674 15,195
7,348
Dividends per share (7) - - - -
-
Return on average
equity 12.7% 11.5% 11.8% 13.0%
16.8%
Return on average
assets 1.4% 1.2% 1.3% 1.7%
3.1%
Return on average equity
before tax charges (2) 12.7% 11.5% 11.8% 13.0%
16.8%
Return on average assets
before tax charges (2) 1.4% 1.2% 1.3% 1.7%
3.1%
___________________________________________________________________________
Balance Sheet Data, at December 31:
Total assets 3,836,799 2,715,592 2,324,695 1,552,847
1,048,583
Total debt(3) 2,742,843 1,692,556 1,640,879 1,019,970
739,888
Total liabilities 3,435,792 2,417,280 2,074,198 1,360,870
911,006
Total shareowners'
equity $ 401,007 $ 298,312 $ 250,497 $ 191,977
$ 137,577
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<PAGE>
<PAGE>18
At or for the years ended December
31,
(Dollars in thousands, 1994 1993 1992 1991
1990
except per share amounts)______ ______ ______ ______
______
Other Data:
Net portfolio assets
of the Company $7,484,798 $6,076,805 $5,600,741 $4,956,830
$4,513,280
Allowance for credit
losses 176,428 159,819 123,961 93,967
75,369
Assets of others
managed by the
Company 2,659,526 2,795,663 1,374,354 649,014
313,981
Volume of equipment
financed (4) 4,251,000 3,467,000 3,253,000 2,453,000
2,300,000
Ratio of earnings to
fixed charges (5) 1.62 1.57 1.44 1.29
1.26
Ratio of total debt to
shareowners' equity 5.51 4.61 5.55 6.54
7.12
Ratio of allowance for
credit losses to net
charge-offs 3.18 2.71 1.58 1.15
1.62
Ratio of charge-offs to
net investment (6) 0.73% 0.95% 1.37% 1.62%
1.01%
Ratio of allowance for
credit losses to net
investment (6) 2.30% 2.56% 2.17% 1.86%
1.64%
At or for the years ended December
31,
1989 1988 1987 1986
1985
______ ______ ______ ______
______
Other Data:
Net portfolio assets
of the Company 3,228,609 2,529,834 2,094,593 1,440,626
948,307
Allowance for credit
losses 37,868 42,733 52,695 29,015
8,794
Assets of others
managed by the
Company 102,003 18,529 - -
-
Volume of equipment
financed (4) $1,729,000 $1,489,000 $1,409,000 $1,101,000
$ 679,000
Ratio of earnings to
fixed charges (5) 1.33 1.36 1.43 1.58
1.70
Ratio of total debt to
shareowners' equity 6.84 5.67 6.55 5.31
5.38
Ratio of allowance for
credit losses to net
charge-offs 1.02 1.47 3.04 3.71
4.40
Ratio of charge-offs to
net investment (6) 1.13% 1.13% 0.81% 0.53%
0.21%
Ratio of allowance for
credit losses to net
investment (6) 1.16% 1.66% 2.45% 1.97%
0.92%
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<PAGE>
<PAGE>19
(1) Net income and earnings per share for 1993 were adversely
impacted by
the federal tax rate increase to 35% ($12.4 million) and a
cumulative
effect on prior years of accounting change ($2.9 million). (See
Note 10 to
the Consolidated Financial Statements.) Net income and earnings
per share
without these charges for 1993 would have been $83.9 million and
$1.95 per
share, respectively.
(2) The Company defines return on average equity before tax
charges, return
on average assets before tax charges and earnings per share
before tax
charges, as income before cumulative effect on prior years of
accounting
change and impact of tax rate change as a percentage of average
equity,
average assets and divided by average weighted shares
outstanding,
respectively.
(3) Does not include certain interest free loans from AT&T to the
Company
under certain tax agreements, in aggregate outstanding principle
amounts of
$214.1 million, $188.6 million, $193.1 million, $206.6 million,
$239.6
million, $232.6 million, $244.5 million, $209.0 million, $134.1
million and
$56.9 million at December 31, 1994, 1993, 1992, 1991, 1990, 1989,
1988,
1987, 1986 and 1985, respectively.
(4) Total principal amount of loans and total cost of equipment
associated
with finance and lease transactions recorded by the Company and
the
increase, if any, in outstanding inventory financing loans.
(5) Earnings before income taxes, extraordinary loss and
cumulative effect
on prior years of accounting change plus the sum of interest on
indebtedness and the portion of rentals representative of the
interest
factor divided by the sum of interest on indebtedness and the
portion of
rentals representative of the interest factor. A portion of the
Company's
indebtedness to AT&T does not bear interest.
(6) Net investment includes net investment in finance
receivables, capital
leases and operating leases, prior to deduction of allowance for
credit
losses.
(7) Prior to July 28, 1993, AT&T owned 100% of the Company's
stock and
therefore, dividends per share is not meaningful.
17
<PAGE>
<PAGE>20
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
1994 versus 1993
Net income for the year ended December 31, 1994, was $100.3
million,
an increase of $31.7 million, or 46.3%, compared with 1993.
Earnings per
share for the year ended December 31, 1994, were $2.14, a 33.8%
increase
over the $1.60 reported in 1993. The increase in net income and
earnings
per share for 1994 compared with 1993 was impacted by the 1993
adoption of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income
Taxes" ("SFAS No. 109"), which resulted in a cumulative effect of
accounting
change of $2.9 million, and an $11.4 million charge to reflect
the impact
on deferred tax balances of the third quarter 1993 increase in
the income
tax rate to 35% from 34%. Absent the 1993 effect of adopting
SFAS No. 109
and the impact of the increase in the income tax rate, net income
increased
$17.4 million, or 21.0%, and earnings per share increased $.21
per share.
The increase principally reflected a higher average level of
finance assets
resulting from both origination volume and acquisitions of
portfolios and
businesses, and improved portfolio performance attributable to a
stronger
economy, which contributed to a lower provision for credit
losses.
Finance revenue of $120.8 million increased $13.4 million,
or 12.4%,
for 1994, compared with 1993, while the average earning finance
receivable
portfolio increased $165.3 million, or 15.8%, to $1,213.3 million
for 1994.
The increase in finance revenue due to the higher average earning
finance
receivables was offset by slightly lower average rates earned on
the
average 1994 portfolio compared with rates earned on the average
1993
portfolio. This is consistent with the Company's slightly lower
average
cost of borrowing for 1994, compared with 1993. (See interest
expense
discussion below.) A higher interest rate environment generally
does not
impact the margin on assets that are already recorded by the
Company, since
the Company employs a well-defined strategy to match fund assets
with
borrowings in order to limit interest rate risk. The effects of
higher
borrowing costs would be reflected in the pricing of new assets
leased or
financed. As the lower yielding earning assets (as well as the
corresponding lower cost borrowings) are replaced with higher
yielding
assets, reflective of the current interest rate environment, the
Company's
average rates associated with recorded assets and associated
borrowings
will increase.
Capital lease revenue of $477.9 million increased $85.9
million, or
21.9%, for 1994, compared with 1993, while the average earning
capital
lease portfolio increased $1,007.4 million, or 27.6%, to $4,653.3
million
for 1994. $40.7 million of the increase in capital lease revenue
for 1994,
compared with 1993, is due to international acquisitions and
expansion.
The growth in capital lease revenue resulted from a higher level
of assets
(including an AT&T mainframe lease extension which resulted in
the
reclassification of the lease from an operating lease to a
capital lease)
but was partially offset by a decline in yields due to lower
average rates
associated with recorded assets of the Company. As noted above,
this is
18
<PAGE>
<PAGE>21
consistent with the Company's slightly lower cost of borrowing
for 1994,
compared with 1993. However, the Company has experienced some
margin
compression in certain equipment leasing portfolios as pricing in
connection with some portfolios is less reactive to interest rate
movements.
Rental revenue on operating leases of $475.4 million
decreased $26.8
million, or 5.3%, for 1994, compared with 1993. Depreciation on
operating
leases of $313.6 million decreased $20.6 million, or 6.2%, for
the year
ended December 31, 1994, compared with the year ended December
31, 1993.
These decreases were primarily due to the AT&T mainframe computer
lease
extension during the first quarter of 1994. The terms of the
extension,
which reduced the Company's mainframe residual exposure, resulted
in the
reclassification of the lease from an operating lease to a
capital lease.
The impact of this lease extension reduced rental revenue and
depreciation
by $75.3 million and $51.2 million, respectively, for the year
ended
December 31, 1994, compared with the year ended December 31,
1993. While
domestic rental revenue and depreciation have decreased, rental
revenue and
depreciation related to the Company's international operations
increased
$13.0 million and $10.8 million, respectively, for the year ended
December
31, 1994, compared with the year ended December 31, 1993. Rental
revenue
less associated depreciation ("operating lease margin") was
$161.8 million
or 34.0% of rental revenue for 1994, compared with $167.9
million, or
33.4%, for 1993.
Market forces, economic uncertainty and the transition to a
new
generation of mainframes and technological alternatives, have
adversely
impacted the market for mainframe computers. At December 31,
1994, $527.1
million, or 7.0%, of portfolio assets (with related residual
values of
$79.1 million) related to mainframe computers. This compares
with $687.0
million, or 11.3%, (with related residual values of $232.2
million) at
December 31, 1993. The Company regularly monitors its estimates
of
residual values for all leased equipment including mainframe
computers and
believes that its residual values are conservatively stated.
For the year ended December 31, 1994, revenue from sales of
equipment
purchased for resale of $126.6 million decreased $35.0 million,
or 21.6%,
compared with 1993. Cost of equipment sales of $117.0 million
decreased
$28.8 million, or 19.8%, for 1994, compared with 1993. Equipment
sales
revenue less associated cost of equipment sold ("equipment sales
margin")
was $9.6 million, or 7.6%, of equipment sales revenue for the
year ended
December 31, 1994. Equipment sales margin for the year ended
December 31,
1993, was $15.7 million, or 9.7%, of equipment sales revenue.
The decrease
in the equipment sales margin as a percentage of related revenue
for 1994,
compared with 1993, reflects continued softness in the mainframe
computer
market, as well as increased competition. In 1993, the Company,
was able
to seize an opportunity to expand this activity to Europe.
However, the
European market has experienced increased competition in 1994.
Therefore,
the Company was not able to maintain its 1993 level of European
sales and
expects that future European activity in this area will be
limited.
Other revenue of $183.5 million decreased $13.0 million, or
6.6%, in
1994, compared with 1993. Other revenue consists mainly of sales
of leased
and off-lease equipment, gains on securitization of lease
receivables and
19
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<PAGE>22
service fee revenue. (See Note 6 to the Consolidated Financial
Statements.) The decrease in other revenue for 1994, compared
with 1993,
is primarily due to lower securitization gains of $36.7 million
and lower
service fee revenue of $10.2 million recognized for the year
ended December
31, 1994, compared with the year ended December 31, 1993. The
decreases
were partially offset by increased gains on sales of leased and
off-lease
equipment of $26.8 million.
In the fourth quarter of 1994, the Company securitized
$259.1 million
of lease receivables resulting in a gain of $14.8 million.
Similar
securitizations in the first and fourth quarters of 1993 of
$561.9 million
in lease receivables resulted in $51.5 million in gains. While
the assets
securitized in 1994 were down by 53.9%, the related gain
decreased by
71.3%. The difference is primarily attributable to a higher
discount rate
used in the 1994 securitization due to the higher interest rate
environment.
Under the terms of these securitizations, the Company is
liable to the
purchasers of such receivables for a limited amount of recourse
granted by
the Company to such purchasers. In the unlikely event that all
such
receivables became uncollectible at December 31, 1994, the
Company's
maximum exposure under limited recourse provisions granted to the
purchasers of all securitized lease receivables was $353.1
million. In
addition, the Company provides such purchasers with billing and
collection
and other services with respect to such securitized receivables.
At December 31, 1994, total assets managed by the Company on
behalf of
others were $2.7 billion compared with $2.8 billion at December
31, 1993.
Of the total assets managed by the Company on behalf of others,
55.9% in
1994 and 59.2% in 1993, were assets managed on behalf of AT&T and
its
affiliates.
A substantial part of the Company's total United States
assets,
revenue and net income are attributable to leasing and financing
of AT&T
equipment and to leasing and financing equipment to AT&T and its
affiliates
and employees of AT&T (together, the "relationship with AT&T").
Total
United States assets associated with the relationship with AT&T
were
$3,297.8 million (or 46.1% of total United States assets) and
$3,050.5
million (or 50.8% of total United States assets) at December 31,
1994 and
1993, respectively. Total United States revenue and net income
associated
with the relationship with AT&T was $589.7 million (or 47.2% of
total
United States revenue) and $92.7 million (or 88.7% of total
United States
net income) for 1994, and $625.2 million (or 49.1% of total
United States
revenue) and $92.8 million (or 98.0% of total United States net
income,
excluding the cumulative effect of accounting change and impact
of the tax
rate change) for 1993. The Company's United States non-AT&T
businesses had
assets of $3,850.9 million (or 53.9% of total United States
assets) and
$2,952.4 million (or 49.2% of total United States assets) at
December 31,
1994 and 1993, respectively. The Company's United States
non-AT&T
businesses contributed revenue of $660.9 million (or 52.8% of
total United
States revenue) and net income of $11.9 million (or 11.3% of
total United
States net income) for 1994, and revenue of $649.4 million (or
50.9% of
total United States revenue) and net income of $1.9 million (or
2.0% of
20
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<PAGE>23
total United States net income, excluding the cumulative effect
of
accounting change and the impact of the tax rate change) for
1993.
At December 31, 1994 and 1993, the total assets of the
Company's
international operations were $873.2 million (or 10.9% of total
assets) and
$406.9 million (or 6.3% of total assets), respectively. The
total revenue
of such operations for the years ended December 31, 1994, 1993
and 1992,
were $133.5 million (or 9.6% of total revenue), $85.0 million (or
6.2% of
total revenue) and $14.0 million (or 1.1% of total revenue),
respectively.
The profitability of the Company's international operations
continued to
improve in 1994. While such operations generated net losses of
$4.2
million for the year ended December 31, 1994, the results compare
favorably
to the $9.4 million loss reported in 1993 and the $13.8 million
loss
reported in 1992. These losses reflected the fact that most of
the
Company's international operations are in the start-up phase,
with revenue
from such operations not covering operating costs and expenses.
The
Company's operations in the United Kingdom, which were
established in 1991,
were profitable for the first time in 1994.
Although a substantial majority of the Company's
international assets
and revenues at and for the years ended December 31, 1994, 1993
and 1992,
were attributable to the Company's non-AT&T businesses, a
principal focus
of such foreign operations is to serve foreign customers of AT&T
and its
affiliates as well as other vendors.
Total non-AT&T net income, revenue and total assets
including both
United States and international businesses for the year ended
December 31,
1994, was $9.0 million (or 9.0% of total net income), $789.9
million (or
57.1% of total revenue) and $4,698.7 million (or 58.6% of total
assets),
respectively. For the year ended December 31, 1993, total
non-AT&T net
loss (before the impact of SFAS No. 109 and the impact of the
1993 increase
in the federal tax rate), revenue and total assets including both
United
States and international businesses were $7.5 million, $731.6
million (or
53.8% of total revenue) and $3,337.1 million (or 52.1% of total
assets),
respectively.
Growth in the Company's portfolio assets caused the average
borrowings
outstanding to increase by 15.6%, or $650.2 million, to $4.8
billion, while
the Company's interest expense increased 15.0%, or $35.5 million,
to $271.8
million during the year ended December 31, 1994, compared with
the year
ended December 31, 1993. The increase in average borrowings
caused
interest expense to increase by approximately $37.0 million.
This increase
was partially offset by $1.5 million in lower interest expense
due to lower
average interest rates for the year ended December 31, 1994,
compared with
the year ended December 31, 1993. The Company's average interest
rate on
borrowings was 5.65% for the year ended December 31, 1994,
compared with
5.68% for the year ended December 31, 1993. The recent increase
in
borrowing costs is reflected in new borrowings made by the
Company.
Generally, the Company's product pricing is impacted by interest
rate
movements. As interest rates change, product pricing is
generally adjusted
to compensate for the Company's higher or lower cost of funds.
Although,
in certain portfolios, the Company may not be able to increase
its product
pricing commensurate with, or simultaneous to, any future
increases in its
borrowing costs.
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<PAGE>24
Operating and administrative costs of $427.2 million
increased $45.7
million, or 12.0%, in 1994, compared with 1993. The increase is
primarily
attributable to costs of approximately $30 million associated
with the
start-up of certain non-AT&T businesses, acquisitions and
international
expansion as well as costs of $10.9 million associated with the
Company's
new benefit and incentive plans for the year ended December 31,
1994,
compared with the year ended December 31, 1993. Also
contributing to the
increase were higher costs associated with managing a higher
level of
finance assets. For 1994, operating and administrative costs to
total
year-end assets decreased to 5.3% compared with 6.0% for 1993.
This
decrease can be attributed to some of the Company's start-up
businesses
more fully utilizing their infrastructure, increased operating
efficiencies
and timing of assets financed. The Company's goal is to reach
4.5% or
lower within the next few years.
Effective January 1, 1993, the Company adopted SFAS No. 109.
The
change in accounting for income taxes resulted in a charge to
earnings of
$2.9 million in the first quarter of 1993 as the cumulative
effect on prior
years of this change, but had no effect on cash flows. The
majority of
this charge related to establishing a valuation allowance against
certain
deferred tax assets relating to state and local income taxes.
The effective income tax rate was 42.2% and 48.2% for 1994
and 1993,
respectively. The decrease was primarily due to the effect of
the
retroactive tax rate increase recorded in the third quarter of
1993. Due
to the increase in the federal statutory corporate income tax
rate from 34%
to 35% signed into law in August 1993, the Company recorded an
additional
charge to the provision for income taxes of $12.4 million in
1993. The
$12.4 million charge includes the impact of increasing previously
recorded
deferred tax liabilities by $11.4 million. (See Note 10 to the
Consolidated Financial Statements.) Excluding the $11.4 million
impact of
increasing previously recorded deferred tax liabilities to
reflect the
increase in the federal statutory corporate income tax rate for
1993, the
effective tax rate would have been 39.9%. The increase in the
effective
tax rate for 1994, compared with the adjusted effective tax rate
for 1993,
was due to increased non-deductible goodwill amortization expense
related
to goodwill associated with assets that were sold during the
second quarter
of 1994 as well as various other increases.
See "Credit Quality" below for a discussion of the provision
for
credit losses.
1993 versus 1992
Income before income taxes and cumulative effect of an
accounting change
for the year ended December 31, 1993, of $138.0 million increased
$23.2
million, or 20.2%, compared with the year ended December 31,
1992. Total
revenue of $1,359.6 million for the year ended December 31, 1993,
grew
$94.1 million, or 7.4%, compared with the year-earlier period,
while total
expenses of $1,221.5 million (excluding the provision for income
taxes and
cumulative effect of accounting change) increased $70.9 million,
or 6.2%.
The impact of the federal statutory tax rate increase from 34% to
35% in
1993 of $12.4 million (of which $11.4 million related to the
impact of
adjusting deferred tax balances) adversely affected net income
for 1993,
22
<PAGE>
<PAGE>25
compared with 1992. Also in the first quarter of 1993, the
Company adopted
SFAS No. 109, resulting in a charge to earnings of $2.9 million.
Without
these charges, net income for the year ended December 31, 1993,
would have
been $83.9 million or $1.95 per share, a 14.1% increase over net
income in
the prior year. Reported net income for 1993 was $68.6 million,
or $1.60
per share.
The Company's increase in earnings before income taxes for
the year
ended December 31, 1993, compared with 1992, principally resulted
from a
higher average level of finance assets, increased gains on end of
lease
activity, lower rates on borrowings and higher servicing fees for
managed
portfolios.
Finance revenue of $107.4 million decreased $11.8 million,
or 9.9%,
for 1993, compared with 1992, while the average finance
receivable
portfolio increased $73.0 million, or 7.2%, over the same period.
The
positive revenue variance generated by the increased asset level
was more
than offset by a decline in rates charged to customers that
reflected the
lower interest rate environment of 1993, compared with 1992.
Capital lease revenue of $392.0 million increased $10.8
million, or
2.8%, for 1993, compared with 1992, while the average capital
lease
portfolio increased 14.8%. The growth in capital lease revenue
resulted
from a higher level of assets but was partially offset by a
decline in
product pricing reflective of the lower interest rate
environment.
Rental revenue on operating leases of $502.1 million
increased $31.1
million, or 6.6%, for 1993, compared with 1992. This increase
was due to
increased rates charged to customers and to a slight increase in
the
average net investment in operating leases for 1993, compared
with 1992.
Depreciation on operating leases of $334.2 million increased
$28.7 million,
or 9.4%, for 1993, compared with 1992. Rental revenue less
associated
depreciation ("operating lease margin") was $167.9 million, or
33.4%, of
rental revenue for 1993, compared with $165.5 million, or 35.1%,
for 1992.
The operating lease margin for 1993, was somewhat lower than the
operating
lease margin for 1992, due to lower estimated residual value
assumptions of
equipment in both the primary and secondary markets, particularly
for
computers, resulting in higher depreciation expense.
Market forces, economic uncertainty and the transition to a
new
generation of mainframes and technological alternatives, have
impacted the
market for mainframe computers. At December 31, 1993, $687.0
million, or
11.3%, of portfolio assets, the majority of which were operating
leases,
related to mainframe computers. This compares with $791.9
million, or
14.1%, at December 31, 1992. The Company regularly monitors its
estimates
of residual values for all leased equipment including mainframe
computers
and believes that its residual values are conservatively stated.
As a
result of the Company's analysis of developments affecting the
major
mainframe computer manufacturers and their pricing policies, and
technological advances in the computer industry (e.g., advances
made in
client server architectures), declines in the future residual
value of
certain mainframe computers were identified during 1993. The
effect of
this change increased depreciation expense by $2.5 million in
1993.
23
<PAGE>
<PAGE>26
For the year ended December 31, 1993, revenue from sales of
equipment
purchased for resale increased $28.8 million, or 21.7%, to $161.5
million
compared with 1992. Cost of equipment sales of $145.8 million
increased
$24.7 million, or 20.3%, for 1993, compared with 1992. During
1993, the
Company expanded this activity to Europe which caused the
increase from the
prior year.
In 1993 and 1992, the Company's total United States revenue
associated
with financing provided for customers of AT&T and its affiliates
was $423.3
million, or 33.2%, of total United States revenue, and $410.5
million, or
32.8%, of total United States revenue, respectively. United
States revenue
generated from AT&T and its affiliates and employees of AT&T and
its
affiliates as end-users of equipment was $201.9 million, or
15.9%, and
$185.2 million, or 14.8%, in 1993 and 1992, respectively, of
total United
States revenue. Therefore, $625.2 million, or 49.1%, in 1993 and
$595.7
million, or 47.6%, in 1992, of the Company's total United States
revenue
was associated with the Company's relationship with AT&T.
Other revenue of $196.5 million grew $35.1 million, or
21.8%, in 1993,
compared with 1992. Other revenue consists mainly of gains on
securitization of lease receivables, sales of leased and
off-lease
equipment and service fee revenue. (See Note 6 to the
Consolidated
Financial Statements.) The increase in other revenue for 1993,
compared
with 1992, is primarily due to increased gains on sales of leased
and off-lease equipment of $9.8 million and increased service fee
revenue of $18.8
million, of which $18.4 million relates to service fees from AT&T
for
managing certain assets on behalf of AT&T.
In the first and fourth quarters of 1993, the Company
securitized
$151.9 million and $410.0 million of lease receivables,
respectively,
resulting in a gain of $51.5 million. A similar securitization
in the
fourth quarter of 1992, resulted in a $52.4 million gain.
Under the terms of these securitizations, the Company is
liable to the
purchasers of such receivables for a limited amount of recourse
granted by
the Company to such purchasers. In the unlikely event that all
such
receivables became uncollectible at December 31, 1993, the
Company's
maximum exposure under limited recourse provisions granted to the
purchasers of all securitized lease receivables was $347.3
million. In
addition, the Company provides such purchasers with billing and
collection
and other services with respect to such securitized receivables.
At December 31, 1993, total assets managed by the Company on
behalf of
others were $2.8 billion compared with $1.4 billion at December
31, 1992.
Included in assets managed at December 31, 1993, was $1.4 billion
of lease
finance assets retained by AT&T as a result of the Restructuring.
These
assets consist principally of equity interests in project finance
transactions and leveraged leases of commercial aircraft. Of the
total
assets managed by the Company, 59.2% in 1993, and 21.6% in 1992,
were
assets managed on behalf of AT&T and its affiliates.
The Company continued to benefit from lower interest rates
on its
borrowings. Interest expense of $236.3 million decreased $16.2
million, or
6.4%, in 1993, compared with 1992. The decrease was the result
of a lower
24
<PAGE>
<PAGE>27
cost of funds in 1993, compared with 1992. The lower cost of
funds was
partially offset by an increase in average borrowings for 1993,
compared
with 1992.
Operating and administrative costs of $381.5 million
increased $21.8
million, or 6.1%, in 1993, compared with 1992. The increase in
operating
and administrative costs for 1993, compared with 1992, reflected
an
increase of $11.4 million in the Company's cost of operations in
Europe and
Canada over 1992. The Company's European and Canadian operations
generated
an aggregate net loss of $9.4 million for 1993, compared with an
aggregate
net loss of $13.8 million for 1992.
The Company also incurred an additional $6.7 million in
operating and
administrative costs related to start-up businesses such as Small
Business
Administration ("SBA") lending (which commenced operations late
in 1992)
for 1993, compared with 1992. The balance of the increase in
operating and
administrative expenses for the year ended December 31, 1993,
compared with
the year ended December 31, 1992, is due primarily to costs
associated with
managing a higher level of finance assets.
Effective January 1, 1993, the Company adopted SFAS No. 109.
The
change in accounting for income taxes resulted in a charge to
earnings of
$2.9 million, in the first quarter of 1993, as the cumulative
effect on
prior years of this change, but had no effect on cash flows. The
majority
of this charge related to establishing additional net deferred
tax credits
relating to state and local income taxes.
The effective income tax rate was 48.2% and 36.0% for 1993
and 1992,
respectively. The increase was primarily due to the effect of
the
retroactive 1993 tax rate increase recorded in the third quarter
of 1993.
Due to the increase in the federal statutory corporate income tax
rate from
34% to 35% signed into law in August 1993, the Company recorded
an
additional charge to the provision for income taxes of $12.4
million in
1993. The $12.4 million charge includes the impact of increasing
previously recorded deferred tax liabilities by $11.4 million.
(See Note
10 to the Consolidated Financial Statements.)
See "Credit Quality" below for a discussion of the provision
for
credit losses.
FINANCIAL CONDITION
Portfolio assets (investment in finance receivables, capital
leases
and operating leases), net of reserves, increased by $1,408.0
million, or
23.2%, at December 31, 1994, to $7,484.8 million compared with
December 31,
1993, principally due to growth in the Company's international
lease
portfolio and the domestic automobile lease portfolio, as well as
a lower
level of assets securitized in 1994.
During January 1994, the Company purchased Australian
Guarantee
Corporation Finance (H.K.) Limited ("A.G.C. Finance"), a
subsidiary of
Australian Guarantee Corporation Limited and A.G.C. Overseas
Holdings
Limited. A.G.C. Finance, renamed The Capita Corporation Hong
Kong Limited,
25
<PAGE>
<PAGE>28
is a Hong Kong based automobile and equipment financing and
leasing company
which also provides commercial and personal loans. Also in
January 1994,
the Company purchased Avis Leasing, a division of AvisCar, which
provides
automobile fleet leasing and supporting service programs to small
and mid-size commercial and corporate customers in Canada. The
total assets
acquired through these two international acquisitions were
approximately
$240 million.
Additionally, during 1994, the Company opened offices in
Mexico and
Australia. The Company has from time to time investigated
potential
opportunities to make acquisitions abroad, and the Company may
open
additional foreign offices on a limited basis either directly or
through
acquisition.
As a result of the above mentioned acquisitions, the
Company's
international assets (excluding cross border transactions) at
December 31,
1994, grew to 10.9% of total assets, up from 6.3% at December 31,
1993.
In January 1995, the Company acquired the vendor leasing and
finance
companies of Banco Central Hispano and certain of its affiliates
("CFH
Leasing International") located in the United Kingdom, Germany,
France,
Italy, Belgium, the Netherlands and Luxembourg. CFH Leasing
International
provides financial services to equipment manufacturers and
vendors. With
offices throughout western Europe, it serves approximately 4,600
customers
and had approximately $540 million in assets at the time of
acquisition.
The net investment in finance receivables increased by
$255.6 million,
or 21.4%, at December 31, 1994, to $1,452.9 million compared with
December
31, 1993, due primarily to increases in the Company's
telecommunications
systems portfolio, small business lending portfolio and the
acquisition of
A.G.C. Finance.
The net investment in capital leases increased by $1,229.1
million, or
31.5%, at December 31, 1994, to $5,129.3 million compared with
December 31,
1993. This increase was primarily due to an increase in the
international
lease portfolio and the domestic automobile lease portfolio, as
well as to
a lower level of assets securitized in the Company's small ticket
business
equipment lease portfolio in 1994. Also contributing to the
increase was
the AT&T lease extension in the first quarter of 1994. The terms
of the
extension, which reduced the Company's mainframe residual
exposure,
resulted in a reclassification of the mainframe lease from an
operating
lease to a capital lease. The net investment recorded in capital
leases at
December 31, 1994, with respect to this lease, was approximately
$150
million.
The net investment in operating leases decreased by $76.8
million, or
7.8%, at December 31, 1994, to $902.5 million compared with
December 31,
1993. The decline was primarily due to the AT&T lease extension
during the
first quarter of 1994, discussed above, but was somewhat offset
by
increases in the international lease portfolio and the domestic
automobile
lease portfolio.
26
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<PAGE>29
LIQUIDITY AND CAPITAL RESOURCES
The Company generates a substantial portion of its funds
from lease
and rental receipts, but is also highly dependent upon external
financing,
including the issuance of commercial paper and medium-term notes
in public
markets and, to a lesser extent, privately placed asset-backed
financings
(or securitizations). Standard & Poor's Corporation, Moody's
Investors
Service, Inc., and Duff & Phelps Credit Rating Co. have rated the
Company's
senior long-term debt A, A3 and A, respectively, and have rated
the
Company's commercial paper A-1, P-1 and D-1, respectively.
Funds required to support the Company's operations during
1994, were
derived internally primarily from principal and interest
collections from
customers (which include realization of cash from residual values
through
remarketing activities), and externally from issuances of
commercial paper,
and issuances of medium-term debt. The Company estimates that,
under
existing lease and loan terms, gross cash receipts of
approximately $8.1
billion may be generated in the future.
In 1994, the Company issued commercial paper of $29.0
billion, issued
medium-term notes of $2.1 billion and made commercial paper
repayments of
$28.4 billion and medium-term note repayments of $1.4 billion.
In 1993,
the Company issued commercial paper of $17.0 billion and made
commercial
paper repayments of $17.4 billion, and issued medium-term notes
of $1.2
billion and repaid medium-term notes of $632.6 million.
Additionally, the
Company borrowed and repaid approximately $5.0 billion from AT&T
on a
short-term basis during 1993.
During 1994 and 1993, principal collections from customers
and
proceeds from securitized receivables of approximately $3.8
billion and
$4.1 billion, respectively, were received. These receipts were
primarily
used for financing portfolio assets (including purchases of
finance asset
portfolios and businesses) of approximately $5.5 billion in 1994,
and $5.1
billion in 1993.
In conjunction with the Hong Kong acquisition, the Company
assumed
$106.1 million of A.G.C. Finance's debt, of which $93.0 million
was
outstanding at December 31, 1994.
The Company has paid quarterly dividends every quarter since
the
fourth quarter of 1993, its first full quarter of operations
after its
initial public offering. On January 20, 1995, the Company's
board of
directors declared a quarterly dividend of ten cents per share.
The
dividend was paid on February 28, 1995, to shareowners of record
as of
February 10, 1995.
During 1993, the Company's borrowings consisted primarily of
loans
from AT&T, until July 14, 1993, when the Company established its
own
commercial paper facility. The Company filed a shelf
registration with the
Securities and Exchange Commission ("SEC") on July 26, 1993,
registering
$2.5 billion of debt securities. Borrowing under this shelf
registration
commenced on August 5, 1993. In July 1994, the Company
registered with the
SEC an additional $2.5 billion of debt securities (including
medium-term
notes) and warrants to purchase debt securities, currency
warrants, index
27
<PAGE>
<PAGE>30
warrants and interest rate warrants. At December 31, 1994,
$2,474.7
million of medium-term debt was outstanding under these debt
registrations.
Also in July 1994, the Company re-established credit
facilities of
$2.0 billion. These facilities, negotiated with a consortium of
32 lending
institutions, support the commercial paper issued. At December
31, 1994,
these facilities were unused. The Company also has available
local lines
of credit to meet local funding requirements in Hong Kong,
Canada, the
United Kingdom and Australia of approximately $134 million, of
which
approximately $29 million was unused at December 31, 1994.
On August 4, 1993, the Company received $117.2 million of
proceeds
(excluding costs of the transaction of approximately $1.7
million) from
stock offerings. (See Notes 1 and 8 to the Consolidated
Financial
Statements.) These proceeds were used to reduce the amount of
the
Company's outstanding commercial paper and loans from AT&T
otherwise
required to be "rolled over" (i.e., refinanced at maturity with
the
proceeds of newly-incurred indebtedness for borrowed money).
The Company has, from time to time, borrowed funds directly
from AT&T,
including on an interest free basis pursuant to tax agreements.
These
interest free loans amounted to $214.1 million at December 31,
1994. These
sources of funds would not be available if the Company were to
cease being
a member of AT&T's consolidated group for federal income tax
purposes.
The Company anticipates obtaining all necessary external
financing
through issuances of commercial paper, privately placed
asset-backed
financings (or securitizations), available lines of credit for
certain
foreign operations and debt registrations.
Future financing is contemplated to be arranged through a
large number
of financial institutions as necessary to meet the Company's
capital and
other requirements with the timing of issue, principal amount and
form
depending on the Company's needs, prevailing market and general
economic
conditions.
The Company considers its current financial resources,
together with the
debt facilities referred to above, and estimated future cash
flows, to be
adequate to fund the Company's future growth and operating
requirements.
ASSET AND LIABILITY MANAGEMENT
AT&T Capital's asset and liability management ("ALM")
process takes a
coordinated approach to the management of interest rate and
foreign
currency risks. The Company's overall strategy is to match the
average
maturities of its borrowings with the average cash flows of its
portfolio
assets, as well as the currency denominations of its borrowings
with those
of its portfolio assets, in a manner intended to reduce the
Company's
interest rate and foreign currency exposure. The following
discussion
28
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<PAGE>31
describes certain key elements of this process, including AT&T
Capital's
use of derivatives to manage risk.
Match Funding
AT&T Capital generally matches the duration and maturity
structure of
its liabilities to that of its portfolio assets. The Company
routinely
projects the expected future cash flows related to its current
portfolio
assets. Based on these projections, the Company is able to match
the
maturity and duration of its debt with that of its assets. The
cash flow
projections incorporate assumptions about customer behavior such
as
prepayments, refinancings and charge-offs. The assumptions are
based on
historical experience with the Company's individual markets and
customers
and are continually monitored and updated as markets and customer
behaviors
change, to reflect current customer preferences, competitive
market
conditions, portfolio growth rates and portfolio mix.
Interest Rate Risk and Currency Exchange Risk
AT&T Capital actively manages interest rate risk to protect
the
Company's margins on existing transactions. Interest rate risk
is the risk
of earnings volatility attributable to changes in interest rates.
The
Company routinely analyzes its portfolio assets and strives to
match
floating rate assets with floating rate debt and fixed rate
assets with
fixed rate debt. The Company generally achieves a matched
position
through issuances of commercial paper and medium-term notes, as
well as
through the use of interest rate swaps. The Company does not
speculate on
interest rates, but rather seeks to mitigate the possible impact
of
interest rate fluctuations. This is a continual process due to
prepayments, refinancings, non-performing loans, as well as other
portfolio
dynamics, and therefore, interest rate risk can be significantly
limited
but never fully eliminated. Additionally, the Company enters
into foreign
exchange contracts and participates in the currency swap market
to mitigate
its exposure to assets and liabilities denominated in foreign
currencies
and to meet local funding requirements. The Company expects to
enter into
more foreign exchange contracts and currency swaps in 1995, as a
result of
the January 1995 acquisition of CFH Leasing International,
described above.
Using Derivatives to Manage Interest Rate and Currency Risk
AT&T Capital uses derivatives to match fund its portfolio
and thereby
manage interest rate and currency risk. Derivatives can be
customized in
terms of duration and interest rate basis (i.e., fixed or
floating).
Derivatives used by the Company are operationally efficient to
arrange and
maintain. Whether AT&T Capital issues medium-term notes, on
which it pays
a fixed rate, or issues floating rate debt and utilizes interest
rate
swaps, on which it generally pays a fixed rate and receives a
floating
rate, the Company's interest rate risk position can be equally
well
managed. However, it is the interplay between liquidity,
capital,
portfolio characteristics, and economic and market conditions
which will
determine the final mix of medium-term notes, commercial paper
and swaps
29
<PAGE>
<PAGE>32
(or other derivatives) used to manage interest rate risk. Notes
7 and 13
to the Consolidated Financial Statements provide more details
regarding the
Company's debt portfolio and interest rate and currency swap and
foreign
exchange contract positions.
Derivative Credit Risk
The notional amount of derivative contracts does not
represent direct
credit exposure. Rather, credit exposure may be defined as the
market
value of the derivative contract and the ability of the
counterparty to
perform its payment obligation under the agreement. The majority
of the
Company's interest rate swaps require AT&T Capital to pay a fixed
rate and
receive a floating rate. Therefore, this risk is reduced in a
declining
interest rate environment as the Company is generally in a
payable
position, and is increased in a rising interest rate environment
as the
Company is generally in a receivable position. The Company seeks
to
control the credit risk of its interest rate swap agreements
through credit
approvals, exposure limits and monitoring procedures. All swap
agreements
are with major money center banks and intermediaries rated "A" or
better by
national rating agencies, with the majority of the Company's
counterparties
being rated "AA" or better.
There were no past due amounts or reserves for credit losses
at
December 31, 1994, related to derivative transactions, nor were
there any
charge-offs during the three years ended December 31, 1994.
Debt to Equity
Total debt to equity at December 31, 1994, of 5.51 increased
from 4.61
at December 31, 1993. This increase was due to the deployment of
the
proceeds of the initial public offering of the Company's common
stock in
the third quarter of 1993. As a result of the January 1995
acquisition of
CFH Leasing International, leverage increased to approximately
6.00.
CREDIT QUALITY
The control of credit losses is an important element of the
Company's
business. The Company seeks to minimize its credit risk through
diversification of its portfolio assets by customer, customer
type,
geographic location and maturity. The Company's financing
activities have
been spread across a wide range of equipment segments (e.g.,
telecommunications, general, data center, other data processing,
and
transportation) and a large number of customers located
throughout the
United States and, to a lesser extent, abroad.
Portfolio credit performance indicators continued to improve
in 1994.
Delinquency and charge-off levels declined during 1994, while
nonaccrual
assets at December 31, 1994, totalled $120.5 million compared
with $160.6
30
<PAGE>
<PAGE>33
million at December 31, 1993. This lower level of nonaccrual
assets,
charge-off levels and delinquency, resulted in a decrease in the
Company's
provision for credit losses of $42.8 million, or 34.6%, to $80.9
million,
compared with 1993. For 1994, charge-offs to investment in
portfolio
assets improved to .73%, compared with .95% for 1993. As a
result of the
improved credit performance indicators and the strong economy,
the
allowance for credit losses was 2.30% of the Company's investment
in
portfolio assets at December 31, 1994, compared with 2.56% at
December 31,
1993. At December 31, 1994, the allowance for credit losses was
$176.4
million, compared with $159.8 million at December 31, 1993.
The Company maintains an allowance for credit losses at an
amount
based on a detailed analysis of delinquencies and problem
portfolio assets,
an assessment of overall risk and management's evaluation of
probable
losses in the portfolio as a whole given its diversification, and
a review
of historical loss experience. Management also takes into
consideration
the potential impact of existing and anticipated economic
conditions.
The Company's management believes that the diversity and
strength of
its portfolio assets, along with vigilant attention to risk
management,
position it to deal effectively with a changing global economic
environment.
RECENT PRONOUNCEMENTS
For a discussion of the effect on the Company of SFAS No.
114,
"Accounting by Creditors for Impairment of a Loan" and SFAS No.
118,
"Accounting by Creditors for Impairment of a Loan - Income
Recognition and
Disclosures", each of which was recently issued by the Financial
Accounting
Standards Board ("FASB"), see Note 4 to the Consolidated
Financial
Statements included herein.
The FASB also recently issued SFAS No. 119, "Disclosure
about
Derivative Financial Instruments and Fair Value of Financial
Instruments",
which was effective for the Company's December 31, 1994,
financial
statements. SFAS No. 119 required or suggested certain
disclosures with
respect to derivative financial instruments. (See Note 13 to the
Consolidated Financial Statements included herein.)
31
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<PAGE>34
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
___________________________________________________________________________
At December 31, 1994
1993
(Dollars in Thousands)
___________________________________________________________________________
ASSETS:
Cash and cash equivalents (Note 2) $ 54,464 $
-
Net investment in finance
receivables (Note 4) 1,452,947
1,197,303
Net investment in capital leases
(Notes 4 and 12) 5,129,326
3,900,224
Net investment in operating leases, net of
accumulated depreciation of $567,398 in
1994 and $573,639 in 1993 (Notes 5 and 12) 902,525
979,278
Deferred charges and other assets (Notes 2,
6 and 12) 482,661
332,921
___________________________________________________________________________
Total Assets 8,021,923
6,409,726
___________________________________________________________________________
LIABILITIES AND SHAREOWNERS' EQUITY:
LIABILITIES:
Short-term notes, less unamortized discounts
of $4,619 in 1994 and $3,018 in 1993 (Note 7) 2,176,877
1,546,562
Deferred income taxes (Notes 2 and 10) 555,287
445,613
Income taxes and other payables (Notes 2 and 10) 545,270
479,265
Payables to AT&T and affiliates
(Notes 10 and 12) 356,690
298,000
Due to AT&T and affiliates for
borrowings (Notes 7 and 12) -
35,290
Medium- and long-term debt (Note 7) 3,379,581
2,680,553
Commitments and contingencies (Notes 12 and 13)
___________________________________________________________________________
Total Liabilities $7,013,705
$5,485,283
___________________________________________________________________________
(Continued on next page)
32
<PAGE>
<PAGE>35
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
___________________________________________________________________________
At December 31, 1994
1993
(Dollars in Thousands)
___________________________________________________________________________
SHAREOWNERS' EQUITY (Notes 1, 8 and 11):
Common stock, one cent par value:
Authorized 100,000,000 shares, issued and
outstanding, 46,962,439 shares in 1994 and
46,867,022 in 1993 $ 470 $
469
Additional paid-in capital 782,785
780,591
Recourse loans to senior executives (19,651)
(17,788)
Foreign currency translation adjustments (2,158)
(2,603)
Retained earnings 246,772
163,774
___________________________________________________________________________
Total Shareowners' Equity 1,008,218
924,443
___________________________________________________________________________
Total Liabilities and Shareowners' Equity $8,021,923
$6,409,726
___________________________________________________________________________
The accompanying notes are an integral part of these
Consolidated
Financial Statements.
33
<PAGE>
<PAGE>36
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
___________________________________________________________________________
For the Years Ended December 31, 1994 1993
1992
(Dollars in Thousands, except per share amounts)
___________________________________________________________________________
REVENUE:
Finance revenue (Notes 2 and 4) $ 120,800 $ 107,436
$ 119,231
Capital lease revenue (Notes 2, 4 and 12) 477,875 391,985
381,141
Rental revenue on operating leases
(includes $79,573 in 1994,
$158,592 in 1993, and $143,012 in
1992 from AT&T and affiliates)
(Notes 2, 5 and 12) 475,375 502,132
471,039
Equipment sales (includes $18,689 in 1992
from AT&T and affiliates) (Note 12) 126,567 161,529
132,709
Other revenue, net (Notes 6 and 12) 183,462 196,507
161,406
___________________________________________________________________________
Total Revenue 1,384,079 1,359,589
1,265,526
___________________________________________________________________________
EXPENSES:
Interest (includes $21,602 in 1993
and $27,879 in 1992 to AT&T and
affiliates) (Notes 2, 7, 12 and 13) 271,812 236,335
252,545
Operating and administrative (includes
$24,729 in 1994, $44,775 in 1993, and
$37,457 in 1992 to AT&T and affiliates)
(Notes 2, 11 and 12) 427,187 381,515
359,689
Depreciation on operating leases (Notes
2 and 5) 313,583 334,191
305,523
Cost of equipment sales (Note 12) 116,995 145,830
121,179
Provision for credit losses (Note 2) 80,888 123,678
111,715
___________________________________________________________________________
Total Expenses 1,210,465 1,221,549
1,150,651
___________________________________________________________________________
Income before income taxes and cumulative
effect on prior years of accounting change 173,614 138,040
114,875
Provision for income taxes (Notes 2 and 10) 73,278 66,530
41,303
___________________________________________________________________________
Income before cumulative effect on prior
years of accounting change 100,336 71,510
73,572
Cumulative effect on prior years of
accounting change (Notes 2 and 10) - (2,914)
-
___________________________________________________________________________
NET INCOME $ 100,336 $ 68,596
$ 73,572
___________________________________________________________________________
(Continued on next page)
34
<PAGE>
<PAGE>37
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Continued)
___________________________________________________________________________
For the Years Ended December 31, 1994 1993
1992
(Dollars in Thousands, except per share amounts)
___________________________________________________________________________
Earnings per common share and common
share equivalent (Note 8):
Income before cumulative effect on
prior years of accounting change $ 2.14 $ 1.67
$ 1.83
Cumulative effect on prior years of
accounting change - (.07)
-
___________________________________________________________________________
Net Income Per Share $ 2.14 $ 1.60
$ 1.83
___________________________________________________________________________
Weighted average shares
outstanding (thousands): 46,906 43,002
40,250
___________________________________________________________________________
The accompanying notes are an integral part of these
Consolidated
Financial Statements.
35
<PAGE>
<PAGE>38
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS'
EQUITY
___________________________________________________________________________
For the Years Ended December 31, 1994 1993
1992*
(Dollars in Thousands)
___________________________________________________________________________
Common stock
Balance at beginning of year $ 469 $ 403
$ 403
Stock issuances:
Public offering (Note 1) - 58
-
Pension and benefit plans (Note 11) 1 8
-
___________________________________________________________________________
Balance at end of year 470 469
403
___________________________________________________________________________
Additional paid-in capital
Balance at beginning of year 780,591 638,371
473,409
Capital contributions - 9,106
164,962
Stock issuances:
Public offering (Note 1) - 114,482
-
Pension and benefit plans (Note 11) 2,194 18,632
-
___________________________________________________________________________
Balance at end of year 782,785 780,591
638,371
___________________________________________________________________________
Recourse loans to senior executives
(Note 11)
Balance at beginning of year (17,788) -
-
Loans made (2,760) (17,788)
-
Loans repaid 897 -
-
___________________________________________________________________________
Balance at end of year (19,651) (17,788)
-
___________________________________________________________________________
Foreign currency translation adjustments
Balance at beginning of year (2,603) (1,547)
-
Unrealized translation gain (loss) 445 (1,056)
(1,547)
___________________________________________________________________________
Balance at end of year (2,158) (2,603)
(1,547)
___________________________________________________________________________
Retained earnings
Balance at beginning of year 163,774 99,394
75,454
Net income 100,336 68,596
73,572
Cash dividends paid (Note 8) (17,338) (4,216)
(49,632)
___________________________________________________________________________
Balance at end of year 246,772 163,774
99,394
___________________________________________________________________________
Total Shareowners' Equity $1,008,218 $924,443
$736,621
___________________________________________________________________________
* Certain amounts have been reclassified to conform to the
1994 and 1993
presentation.
The accompanying notes are an integral part of these
Consolidated
Financial Statements.
36
<PAGE>
<PAGE>39
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
___________________________________________________________________________
For the Years Ended December 31, 1994 1993
1992*
(Dollars in Thousands)
___________________________________________________________________________
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 100,336 $ 68,596 $
73,572
Noncash items included in income:
Depreciation and amortization 353,954 384,933
308,419
Deferred taxes 106,384 43,419
111,973
Provision for credit losses 80,888 123,678
111,715
Gain on receivables
securitizations (14,799) (51,496)
(52,887)
Cumulative effect on prior years
of accounting change - 2,914
-
Increase in receivables
from AT&T and affiliates - -
(66)
(Increase) decrease in deferred
charges and other assets (41,837) 78,174
(97,156)
Increase (decrease) in income taxes
and other payables 3,068 72,451
(24,607)
Increase (decrease) in payables to
AT&T and affiliates (10,257) (1,340)
7,523
___________________________________________________________________________
Net Cash Provided by
Operating Activities 577,737 721,329
438,486
___________________________________________________________________________
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisitions of fixed
assets, net (6,622) (6,555)
(15,849)
Purchase of businesses, net of cash
acquired (234,375) -
(28,504)
Purchase of finance asset portfolios (217,939) (100,589)
(228,512)
Financings and lease equipment
purchases (5,031,041) (5,027,031)
(4,782,911)
Principal collections from
customers, net of amounts
included in income 3,572,112 3,621,189
3,457,271
Cash proceeds from receivables
securitizations 203,934 507,160
612,709
Increase in investments, net - -
19
___________________________________________________________________________
Net Cash Used for Investing
Activities $(1,713,931) $(1,005,826) $
(985,777)
___________________________________________________________________________
(Continued on next page)
37
<PAGE>
<PAGE>40
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
___________________________________________________________________________
For the Years Ended December 31, 1994 1993
1992*
(Dollars in Thousands)
___________________________________________________________________________
CASH FLOW FROM FINANCING ACTIVITIES:
Increase (decrease) in short-term
notes, net $ 523,370 $ (355,463) $
62,648
Additions to medium- and
long-term debt 2,142,993 1,161,638
1,317,618
Repayments of medium- and
long-term debt (1,448,470) (632,563)
(388,903)
Increase (decrease) in payables to AT&T
and affiliates (9,897) 9
(559,402)
Capital contributions from AT&T - -
164,962
Dividends paid (17,338) (4,216)
(49,632)
Proceeds from sale of common stock, net - 115,092
-
___________________________________________________________________________
Net Cash Provided by Financing
Activities 1,190,658 284,497
547,291
___________________________________________________________________________
Net Increase in Cash
and Cash Equivalents 54,464 -
-
Cash and Cash Equivalents at
Beginning of Period - -
-
___________________________________________________________________________
Cash and Cash Equivalents at
End of Period $ 54,464 $ - $
-
___________________________________________________________________________
Interest paid was $253,960, $247,565 and $206,861 during
1994, 1993 and
1992, respectively.
Net income taxes received were $55,712, $22,972 and $68,753,
during
1994, 1993 and 1992, respectively.
Noncash Investing and Financing Activities:
In 1994, 1993 and 1992, the Company entered into capital
lease
obligations of $41,442, $25,259 and $64,917, respectively, for
equipment
that was subleased. In 1994, the Company assumed $106,945 of
debt in
conjunction with acquisitions. In 1993, Old Capital (as defined
in Note 1)
made capital contributions to the Company of $9,106 primarily
relating to
deferred tax assets arising as a result of the Restructuring.
* Certain amounts have been reclassified to conform to the
1994
presentation.
The accompanying notes are an integral part of these
Consolidated
Financial Statements.
38
<PAGE>
<PAGE>41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
1. BACKGROUND, INITIAL PUBLIC OFFERING AND BASIS OF PRESENTATION
Background
AT&T Capital Corporation ("AT&T Capital" or the "Company"),
was
incorporated on December 21, 1992, as AT&T Leasing, Inc., and was
renamed
AT&T Capital on March 31, 1993. The Company is the successor
entity to
certain businesses of AT&T Capital Corporation, a wholly owned
subsidiary
of AT&T Corp. ("AT&T") that was renamed AT&T Capital Holdings,
Inc., on
March 31, 1993 ("Old Capital"), and AT&T Credit Corporation, a
wholly owned
subsidiary of Old Capital that commenced operations in 1985, and
was
renamed AT&T Credit Holdings, Inc., on March 31, 1993 ("Old
Credit"). In a
restructuring which occurred on March 31, 1993 (the
"Restructuring"), Old
Capital and Old Credit transferred substantially all their
assets, except
for certain assets consisting principally of equity interests in
project
finance transactions and leveraged leases of commercial aircraft
("Lease
Finance Assets"), in exchange for shares of the Company's common
stock and
the assumption by the Company of certain related liabilities.
In connection with the Restructuring, AT&T issued a direct,
full and
unconditional guarantee of all existing indebtedness outstanding
as of
March 31, 1993, for borrowed money incurred, assumed or
guaranteed by Old
Capital entitled to the benefit of a support agreement between
AT&T and Old
Capital, including the debt of Old Capital assumed by the Company
in the
Restructuring. Debt issued by the Company subsequent to March
31, 1993,
however, is not guaranteed or supported by AT&T.
Initial Public Offering
An initial public stock offering combined with a management
stock
offering totalling approximately 14 percent of the Company's
stock occurred
on August 4, 1993. (See Note 8.) As a result of the stock
offerings,
approximately 86 percent of the outstanding common stock of the
Company is
owned by AT&T through Old Credit and Old Capital.
Basis of Presentation
The consolidated financial statements reflect the financial
position,
results of operations and cash flows of the businesses
transferred to the
Company on March 31, 1993, by Old Capital and Old Credit as a
result of the
Restructuring. The Restructuring was accounted for in a manner
similar to
a pooling of interests. The common stock issued in connection
with the
incorporation of the Company has been reflected as outstanding
for all
periods presented.
The consolidated financial statements include allocations of
certain
liabilities and expenses relating to the businesses transferred
to the
Company by Old Capital and Old Credit.
39
<PAGE>
<PAGE>42
In the Restructuring described above, the Company assumed
all the
outstanding indebtedness (including indebtedness to third
parties) of Old
Capital, but none of the outstanding indebtedness to third
parties of Old
Credit. For the periods and at the dates reflected in the
consolidated
financial statements, the statements reflect outstanding
indebtedness in an
aggregate principal amount equal to the aggregate principal
amount of
indebtedness associated with the assets and business (the "AT&T
Capital
Business") transferred to the Company and its subsidiaries in the
Restructuring. However, as actually occurred in the
Restructuring, no
third-party indebtedness of Old Credit was directly allocated to
the AT&T
Capital Business. To the extent the third-party indebtedness of
Old
Capital was not associated with the AT&T Capital Business, such
amount was
reflected as a reduction of the debt shown as "Due to AT&T and
affiliates
for borrowings." Conversely, to the extent the third-party
indebtedness of
Old Credit was associated with the AT&T Capital Business, such
amount was
reflected as an increase in the debt shown as "Due to AT&T and
affiliates
for borrowings." Interest expense shown in the consolidated
financial
statements reflects the actual interest expense associated with
the AT&T
Capital Business for the periods indicated. See Note 10 for a
discussion
of certain interest free loans made by AT&T to the Company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
The accompanying consolidated financial statements include
all
majority-owned subsidiaries. The accounts of operations located
outside of
the United States are included on the basis of their fiscal
years, ended
either November 30, or December 31.
Revenue Recognition for Finance Receivables and Capital Leases
For loans and other financing contracts (Finance
Receivables), revenue
is recognized over the life of the contract using the interest
method.
For leases classified as Capital Leases, the difference
between (I)
the sum of the minimum lease payments due and the estimated
unguaranteed
residual values and (ii) the asset purchase price paid by the
Company is
initially recorded as unearned income. The difference is
subsequently
amortized over the life of the lease contract and recognized as
revenue,
using the interest method. Unguaranteed residual values are
determined on
the basis of studies prepared by the Company, professional
appraisals,
historical experience and industry data.
Accrual of income on portfolio assets is generally suspended
when a
loan or a lease becomes contractually delinquent for 90 days or
more (or
earlier if specifically identified). Accrual is resumed when the
receivable becomes contractually current and management believes
there is
no longer any significant probability of loss.
40
<PAGE>
<PAGE>43
Investment in Operating Leases
Equipment under Operating Leases is generally depreciated
over the
estimated useful life of the asset. During the term of the
related lease,
annual depreciation is generally calculated on a straight-line
basis based
on the estimated residual values at the end of the respective
lease terms.
Rental revenue is recognized on a straight-line basis over the
related
lease term.
Residual Values
Residual values are reviewed by the Company at least
annually.
Declines in residual values for capital leases are recognized as
an
immediate charge to income. Declines in residual values for
operating
leases are recognized as adjustments to depreciation expense on
operating
leases over the shorter of the useful life of the asset or the
remaining
term of the lease.
Allowance for Credit Losses
In connection with the financing of leases and other
receivables, the
Company records an allowance for credit losses to provide for
estimated
losses in the portfolio. The allowance for credit losses is at a
level
deemed adequate by management considering delinquencies and
problem assets,
an assessment of overall risks and management's evaluation of
probable
losses in the portfolio as a whole given its diversification, and
a review
of historical loss experience. The Company's charge-off policy
is based on
an analysis of the aging of the Company's portfolio, a review of
all non-performing receivables and leases, and prior collection
experience. An
account is reserved for or charged off when analysis indicates
that the
account is uncollectible. Additionally, Company policy generally
requires
accounts 180 days past due to be reserved for or charged off.
Cash Equivalents
The Company considers all highly liquid investments with an
original
maturity of three months or less to be cash equivalents.
Income Taxes
Through 1992, the Company used the deferred method under
Accounting
Principles Board Opinion No. 11, "Accounting for Income Taxes" to
compute
deferred taxes. Effective January 1, 1993, the Company adopted
SFAS No.
109, which changed the method of accounting for income taxes from
the
deferred method to the liability method and requires deferred tax
balances
to be determined using the enacted income tax rates for the years
in which
these taxes will actually be paid or refunds received.
In the first quarter of 1993, the Company recognized a
charge to net
income of $2.9 million as the cumulative prior years' effect of
this
accounting change. This change in accounting for income taxes
had no
effect on cash flows. Also during 1993, the Company recorded an
additional
$12.4 million to the provision for income taxes due to the
increase in the
highest federal corporate income tax rate from 34% to 35% of
which $11.4
million relates to adjusting prior years deferred tax balances.
41
<PAGE>
<PAGE>44
Other Assets
The cost of property and equipment is depreciated on a
straight-line
basis over their estimated useful lives, which generally range
from three
to twenty-five years. Leasehold improvements are amortized over
the lesser
of the term of the related lease or the estimated useful lives of
the
related assets on a straight-line basis.
Goodwill represents the excess of the cost of companies
acquired over
the fair value of their net assets at dates of acquisition, and
is
amortized as a charge against income on a straight-line basis
generally
over three to twenty year periods.
Derivative Financial Instruments
The Company enters into derivative financial instruments,
mainly
interest rate swaps and currency swaps, to hedge interest rate
and foreign
currency exchange risk and to match fund assets and liabilities.
Interest
rate swaps generally involve the exchange of interest payments
without the
exchange of underlying notional principal amounts. Currency
swaps
generally involve both the exchange of principal and interest
payments in
distinct currencies. The criteria which must be satisfied for
hedges are
as follows: (1) the asset or liability to be hedged exposes AT&T
Capital,
as a whole, to interest rate or currency exchange risk, (2) the
derivative
acts to reduce the interest rate or currency exchange risk by
reducing the
sensitivity to interest rate or currency exchange movements, and
(3) the
derivative is designated and effective as a hedge.
For interest rate swaps, the Company records a net
receivable or
payable related to interest to be received or paid as an
adjustment to
interest expense. In the event of an early termination of a swap
contract,
the gain or loss on a swap accounted for as a hedge is amortized
over the
remaining life of the related asset. The Company does not enter
into
speculative swaps; however, if the underlying transaction
associated with a
swap accounted for as a hedge is terminated early, the swap would
be
considered speculative. The gain or loss on a speculative swap
would be
recognized immediately.
The Company enters into foreign exchange contracts as a
hedge against
assets and liabilities denominated in foreign currencies. Gains
and losses
are recognized on the contracts and offset foreign exchange gains
or losses
on the related assets and liabilities.
Foreign Currency Translation
The financial statements of the Company's foreign operations
are
translated into U.S. dollars in accordance with SFAS No. 52,
"Foreign
Currency Translation", the resulting translation adjustments are
recorded
42
<PAGE>
<PAGE>45
as a separate component of shareowners' equity. A transaction
gain or loss
realized upon settlement of a foreign currency transaction
generally is
included in determining net income for the period in which the
transaction
is settled.
Earnings Per Common Share and Common Share Equivalent
Earnings per common share and common share equivalent are
calculated
using the weighted average number of common shares outstanding
during the
period giving effect to dilutive common stock equivalents in the
form of
stock options using the treasury stock method. Fully diluted
earnings per
share is not materially different from primary earnings per
share.
3. ACQUISITIONS
In January 1994, the Company purchased the stock of
A.G.C. Finance,
a Hong Kong-based vehicle and equipment leasing finance company
with assets
at the time of acquisition of approximately $150 million. Also
in January
1994, the Company, through its wholly owned Canadian subsidiary
acquired
the vehicle portfolio and infrastructure assets constituting the
Avis
Canada Leasing Division of AvisCar, Inc. ("Avis Leasing"). Avis
Leasing
provides automobile leasing to small and mid-size commercial and
corporate
clients in Canada and had approximately $90 million in assets at
the time
of acquisition.
In April 1994, the Company acquired Goldome Industrial
Credit
Corporation ("GICC"), with assets at the time of acquisition of
approximately $75 million. GICC provides financing programs for
machine
tool vendors, distributors and manufacturers.
On January 4, 1995, the Company acquired the vendor leasing
and
finance companies of Banco Central Hispano and certain of its
affiliates
("CFH Leasing International") located in the United Kingdom,
Germany,
France, Italy, Belgium, the Netherlands and Luxembourg. CFH
Leasing
International provides financial services to equipment
manufacturers and
vendors and had approximately $540 million in assets at the time
of
acquisition. This acquisition will be reflected in the Company's
financial
statements in the first quarter of 1995.
The above acquisitions were accounted for by the purchase
method and
the total cash paid for all of the above was approximately $311.9
million.
In addition, the Company assumed certain existing debt associated
with
these acquisitions. The results of operations are included, or
in the case
of CFH Leasing International, will be included, in the income
statement of
the Company from the respective acquisition dates. Unaudited pro
forma
revenue, net income and earnings per share would have been
approximately
$1,442.0 million, $108.0 million and $2.31, respectively, for
the year
ended 1994 had the acquisitions occurred on January 1, 1994, and
approximately $1,461.0 million, $78.0 million and $1.82,
respectively, for
the year ended 1993 had the above acquisitions occurred on
January 1, 1993.
The pro forma information is based on various assumptions and is
not
necessarily indicative of results of operations that would have
been
43
<PAGE>
<PAGE>46
reported had the acquisitions been completed at the dates
mentioned above.
The associated goodwill is amortized over periods not to exceed
15 years.
4. INVESTMENT IN FINANCE ASSETS
The finance receivable and capital lease portfolios
consisted of the
following:
Finance
Receivables Capital
Leases
At December 31, 1994 1993 1994
1993
___________________________________________________________________________
Receivables $1,634,454 $1,348,691 $5,712,848
$4,267,481
Estimated unguaranteed
residual values - - 606,207
566,668
Unearned income (133,620) (94,328) (1,066,457)
(835,845)
Allowance for credit losses (47,887) (57,060) (123,272)
(98,080)
___________________________________________________________________________
Net investment $1,452,947 $1,197,303 $5,129,326
$3,900,224
___________________________________________________________________________
The schedule of maturities at December 31, 1994 for the
finance
receivable and capital lease portfolios is as follows:
Finance
Capital
Receivables
Leases
___________________________________________________________________________
1995 $ 488,403
$1,765,863
1996 268,133
1,485,331
1997 209,750
1,231,372
1998 157,735
689,336
1999 98,396
314,064
2000 and thereafter 412,037
226,882
___________________________________________________________________________
Total $1,634,454
$5,712,848
___________________________________________________________________________
Rights to certain lease receivables are purchased at a
discount from
AT&T. AT&T is appointed as agent to bill and collect purchased
receivables, and is reimbursed for the reasonable cost thereof.
All
rights, title, and interest in these receivables are assigned to
the
Company by AT&T. AT&T has agreed to repurchase certain finance
receivables
and capital leases that go into default, and the Company will be
reimbursed
for any adjustments in the face value of the purchased finance
assets. At
December 31, 1994 and 1993, $155,312 and $222,803, respectively,
of the
Company's net investment in finance receivables contained such
recourse
provisions. At December 31, 1994 and 1993, $87,716 and $98,223,
respectively, of the Company's net investment in capital leases
contained
such provisions.
44
<PAGE>
<PAGE>47
The FASB recently issued SFAS No. 114, "Accounting by
Creditors for
Impairment of a Loan", and SFAS No. 118, "Accounting by Creditors
for
Impairment of a Loan - Income Recognition and Disclosures", each
of which
must be adopted by the Company by the first quarter of 1995. The
new
standards require that impaired loans be measured based on the
present
value of expected cash flows, discounted at the loan's effective
interest
rate or the fair value of the collateral if the loan is secured,
as well as
certain related disclosures. When adopted, the new standards
will not have
a material effect on the consolidated financial statements of the
Company.
5. EQUIPMENT UNDER OPERATING LEASES
The following is a summary of equipment under operating
leases at
December 31, 1994 and 1993, including equipment on lease to AT&T
affiliates
(see Note 12):
At December 31, 1994
1993
___________________________________________________________________________
Data processing $ 571,504 $
838,952
Telecommunications equipment 366,259
348,017
Automobiles 304,936
188,321
Test equipment and other 204,153
134,545
___________________________________________________________________________
1,446,852
1,509,835
Less: Accumulated depreciation (567,398)
(573,639)
Rentals receivable, net 23,071
43,082
___________________________________________________________________________
Net investment in operating leases $ 902,525 $
979,278
___________________________________________________________________________
Minimum future rentals to be received on noncancelable
operating
leases as of December 31, 1994, are as follows:
1995
$362,694
1996
199,671
1997
104,534
1998
30,340
1999
16,203
2000 and thereafter
4,306
___________________________________________________________________________
Total minimum future rentals
$717,748
___________________________________________________________________________
45
<PAGE>
<PAGE>48
6. OTHER REVENUE
Other revenue consisted of the following:
For the Years Ended December 31, 1994 1993
1992
___________________________________________________________________________
Net gain on sale of leased and off-lease
equipment $ 76,453 $ 49,653
$ 39,868
Gain on receivables securitizations 14,799* 51,496*
52,887*
Service fee revenue 27,203 37,363
18,559
Other portfolio related revenue 65,007 57,995
50,092
___________________________________________________________________________
Total other revenue $183,462 $196,507
$161,406
___________________________________________________________________________
* $14,799, $39,106 and $52,887 relates to securitizations in
the fourth
quarter of 1994, 1993 and 1992, respectively; and $12,390 relates
to a
securitization in the first quarter of 1993.
For the years ended December 31, 1994, 1993 and 1992, the
Company
securitized portions of its capital lease portfolio amounting to
$259,061,
$561,943 and $511,188, with proceeds received of $287,550,
$648,887 and
$587,292, respectively. In conjunction with the 1994 and 1993
securitizations, at December 31, 1994, $96,177 of the sale
proceeds were
retained by the purchaser until certain receivable collections
are attained
and are included in other assets. In addition, in 1992, the
Company
securitized portions of its finance receivable portfolio of
$24,664, with
proceeds received of $25,417. The transactions provide for
limited
recourse to the Company for any uncollectible amounts. Under the
agreements, the Company will service these accounts for the
purchasers. A
portion of the gains have been deferred representing service fees
to be
earned over the terms of the agreements plus an estimate of the
losses
under recourse provisions for the lease receivables securitized.
In 1992,
the Company increased the allowance for losses related to prior
securitizations by $8.9 million to reflect the Company's
increased exposure
to recourse provisions due to economic conditions. At December
31, 1994
and 1993, $853,003 and $985,104, respectively, of receivables
previously
securitized remained outstanding. The Company's maximum exposure
under
these recourse provisions, in the unlikely event that all such
receivables
became uncollectible, amounted to $353,143 at December 31, 1994,
and
$347,317 at December 31, 1993. The Company has recorded a
liability for
the amount that it expects to reimburse.
7. DEBT
Commercial Paper
Commercial paper is generally issued at a discount. The
maturities of
commercial paper ranged up to eight months (with the majority
maturing
within 90 days) at December 31, 1994 and 1993, respectively.
Interest
rates ranged from 5.0% to 6.0% and 3.1% to 3.4% at December 31,
1994 and
1993, respectively. The discount amortized on commercial paper
amounted to
$3,176 and $12,009 in 1994 and 1993, respectively. Interest is
payable at
maturity.
46
<PAGE>
<PAGE>49
The Company has revolving credit facilities totalling $2.0
billion,
all of which were available at December 31, 1994 and 1993, to
support the
commercial paper issued. These facilities contain certain
restrictive
covenants with which the Company is in compliance. In addition,
certain of
the Company's foreign operations had short-term bank lines of
credit of
approximately $134.0 million, of which approximately $28.6
million was
unused at December 31, 1994.
Data with respect to short-term notes (principally
commercial paper)
are as follows:
1994 1993
1992
___________________________________________________________________________
End of year balance, net $2,176,877 $1,546,562
$1,899,655
Weighted average interest rate at
December 31, 5.8% 3.3%
3.2%
Highest month-end balance 2,176,877 2,067,592
2,128,463
Average month-end balance (a) 1,741,872 1,313,312
1,829,298
Weighted average interest rate (b) 4.3% 3.3%
4.0%
___________________________________________________________________________
(a) The average month-end balance was computed by dividing the
total of
the outstanding month-end balances by the number of months
in the
year.
(b) The weighted average interest rate during the year is
calculated by
dividing the interest charged for the year by the weighted
average
short-term notes outstanding during the year.
Medium- and Long-term Debt
Medium- and long-term debt outstanding at December 31, 1994
and 1993,
consisted of the following:
Maturities 1994
1993
___________________________________________________________________________
3.24% - 5.99% Medium-term notes 1994 - 1998 $1,340,625
$1,731,215
6.00% - 6.99% Medium-term notes 1994 - 1999 1,548,900
377,300
7.00% - 10.05% Medium-term notes 1994 - 2002 326,795
439,520
11.88% - 11.95% Subordinated
serial notes 1994 - 1996 6,250
11,250
Other long-term debt 1994 - 2001 157,011
121,268
___________________________________________________________________________
Total medium- and long-term debt $3,379,581
$2,680,553
___________________________________________________________________________
47
<PAGE>
<PAGE>50
The Company's medium- and long-term debt matures as follows:
1995
$1,750,172
1996
835,814
1997
507,399
1998
139,018
1999
74,903
2000 and thereafter
72,275
___________________________________________________________________________
Total
$3,379,581
___________________________________________________________________________
Long-term debt outstanding at December 31, 1994 and 1993,
included
$980,000 and $475,000, respectively, of variable rate debt with
interest
rates ranging from 5.79% to 6.20%, and 3.24% to 3.98%,
respectively. Such
variable rate debt periodically reprices based on various indices
and
generally matures in one to two years.
To reduce exposure to interest rate movements, the Company
enters into
interest rate swap agreements. (See Note 13 for a discussion of
the
Company's derivative activities.) The weighted average interest
rate on
average total debt outstanding was 5.65% and 5.68% for the years
ended
December 31, 1994 and 1993, respectively.
In addition, the Company had interest bearing debt payable
to AT&T and
affiliates of $35,290 at December 31, 1993, bearing interest at
3.34%.
During 1994, the Securities and Exchange Commission ("SEC")
declared
effective a debt registration statement (which allows the Company
to issue
debt to the public) of $2.5 billion. As of December 31, 1994,
$1,808,325
of this debt registration was available for issuance.
As a result of the Restructuring (see Note 1), medium-term
notes
outstanding at March 31, 1993, entitled to the benefit of a
support
agreement between AT&T and Old Capital (which agreement was
terminated in
the Restructuring) became directly guaranteed by AT&T. At
December 31,
1994 and 1993, the amount of such guaranteed debt was $747,895
and
$1,441,035, respectively.
8. SHAREOWNERS' EQUITY AND EARNINGS PER SHARE
During 1994, the Company's board of directors declared
dividends
totalling thirty-seven cents per share. In addition, on January
20, 1995,
the Company's board of directors declared a quarterly dividend of
ten cents
per share to shareowners of record on February 10, 1995. The
dividend was
paid on February 28, 1995.
On June 28, 1993, the Company effected a 402,500 for one
stock
reclassification. The par value of the stock remained at $.01
per share.
Accordingly, common stock and additional paid-in capital have
been restated
to reflect the reclassification.
48
<PAGE>
<PAGE>51
On August 4, 1993, the Company sold common shares in an
initial public
stock offering and in a management stock offering. The shares
issued
represent approximately 14 percent of the total shares
outstanding after
the offerings. AT&T, through Old Credit and Old Capital, remains
the owner
of 40,250,000 shares. The net proceeds received by the Company
from the
sale of the common stock in the stock offerings were $115,092.
Certain
costs of the offerings not offset by the proceeds were borne by
AT&T. Such
proceeds did not include $17,788 of future proceeds attributable
to the
purchases of common stock in the management stock offering that
were funded
by recourse loans from the Company to certain senior executives
of the
Company.
9. FAIR VALUE DISCLOSURES
Fair value is a subjective and imprecise measurement that is
based on
assumptions and market data which require significant judgment
and may only
be valid at a particular point in time. The use of different
market
assumptions or valuation methodologies may have a material effect
on the
estimated fair value amounts. Accordingly, management cannot
provide
assurance that the fair values presented are indicative of the
amounts that
the Company could realize in a current market exchange.
The following methods and assumptions were used to estimate
the fair
value of each class of financial instruments at December 31, 1994
and 1993:
Cash and Cash Equivalents
For cash and cash equivalents the carrying amount is a
reasonable
estimate of fair value.
Net Investment in Finance Receivables
The fair value of the finance receivable portfolio is
estimated by
discounting the expected future cash flows using the current
rates at which
similar loans would be made to borrowers with similar credit
ratings and
for the same remaining maturities.
Short-term Notes and Due to AT&T for Borrowings
The carrying amount is a reasonable estimate of fair value.
Gross Profit Tax Deferral Payable to AT&T
The fair value of the gross profit tax deferral is estimated
by
discounting the expected future cash flows using the Company's
current cost
of debt.
Medium- and Long-term Debt
Rates currently available to the Company for debt with
similar terms
and remaining maturities are used to estimate the fair value of
existing
debt.
49
<PAGE>
<PAGE>52
Interest Rate and Currency Swap Agreements
The fair value of interest rate and currency swaps is
estimated by
discounting the expected future cash flows using the rate at
which the
Company could terminate the swaps in the market today.
Foreign Exchange Contracts
The fair value of foreign exchange contracts is estimated
based on
current market quotes for foreign exchange contracts with the
same
remaining terms.
Credit Facilities
The fair value of the credit facilities are based on fees
currently
paid for similar arrangements.
The following is the carrying value and fair value (as
determined
using the methods described above):
December 31, 1994 December
31, 1993
___________________________________________________________________________
Carrying Fair Carrying
Fair
Amount Value Amount
Value
___________________________________________________________________________
Assets:
Cash and cash equivalents $ 54,464 $ 54,464 $ -
$ -
Net investment in finance
receivables (Note 4) 1,452,947 1,432,070 1,197,303
1,213,982
Liabilities:
Short-term notes (Note 7) 2,176,877 2,176,877 1,546,562
1,546,562
Gross profit tax deferral
payable to AT&T (Note 10) 214,066 184,238 188,562
162,753
Medium- and long-term debt
(Note 7) 3,379,581 3,319,101 2,680,553
2,727,578
Due to AT&T and affiliates
for borrowings (Notes 7 $ - $ - $ 35,290
$ 35,290
and 12)
___________________________________________________________________________
Matching maturities of its portfolio assets and debt is a
key
component of the financial strategy used by the Company to manage
interest
rate risk. Based on unaudited calculations performed by the
Company, the
decreased fair value of the Company's debt has been offset by the
decreased
fair value of the Company's lease portfolio at December 31, 1994.
The fair
value of the Company's lease portfolio is not a required
disclosure under
SFAS No. 107, "Disclosure About Fair Value of Financial
Instruments" and,
therefore, only the fair value of the loan portfolio has been
disclosed.
50
<PAGE>
<PAGE>53
Off-balance Sheet Financial Instruments
At December 31, 1994 and 1993, the Company had interest rate
swaps
with a notional amount of $2,711,773 and $2,713,569,
respectively. Had the
Company terminated these swaps at December 31, 1994 and 1993, it
would have
received $57,033 and $195, respectively, and would have paid
$4,726 and
$27,764, respectively. (See Note 13.)
At December 31, 1994 and 1993, the Company had $221,817 and
$149,210,
respectively, of currency swaps outstanding. If terminated at
December 31,
1994 and 1993, the Company would have received $11,200 and
$1,977,
respectively, and would have paid $2,338 and $1,734,
respectively, for
these currency swaps.
At December 31, 1994 and 1993, the Company had $318,054 and
$165,969,
respectively, of foreign exchange forward contracts outstanding.
The
contracts had a fair value of $321,290 and $165,688 at December
31, 1994
and December 31, 1993, respectively.
The fees for the Company's $2.0 billion revolving credit
facilities
are .0775% of the unused portion per year plus a .0125% set-up
fee. In
addition, the Company had approximately $28.6 million of unused
foreign
credit facilities for which the fees are negligible. (See Note
7.)
At December 31, 1994 and 1993, the Company had a maximum
exposure
under limited recourse provisions related to asset
securitizations, in the
unlikely event that all such receivables became uncollectible, of
$353,143
and $347,317, respectively. The Company has recorded a liability
for the
amount that it expects to reimburse. (See Note 6.)
10. INCOME TAXES
The Company is included in the consolidated federal income
tax return,
and for certain states, combined state returns, of AT&T. AT&T
does not
expect to be subject to the alternative minimum tax ("AMT")
provisions of
the 1986 Tax Reform Act in 1994. Also, in 1993, the Company
utilized all
AMT credits arising from 1990 and 1992 AMT payments made. The
Company's
income tax expense would not have differed materially from that
reported
had the Company filed tax returns on a stand-alone basis.
As part of an intercompany agreement, the Company has
received
interest free loans to the extent of the tax deferrals generated
by
transactions between AT&T and the Company. These interest free
loans
amounted to $214,066 and $188,562 at December 31, 1994 and 1993,
respectively. The average balance outstanding for such loans was
$213,172,
$200,835 and $198,255 for the years ended December 31, 1994, 1993
and 1992,
respectively. These amounts are repaid to AT&T as the temporary
differences that generated the deferrals reverse. In the event
the Company
was not eligible for inclusion in the consolidated tax return of
AT&T,
these loans would not be available.
51
<PAGE>
<PAGE>54
At December 31, 1994 and 1993, taxes currently receivable
from AT&T
and third parties were $23,286 and taxes currently payable to
AT&T and
third parties were $70,010, respectively.
Effective January 1, 1993, the Company adopted SFAS No. 109.
Among
other provisions, this standard requires deferred tax balances to
be
determined using the enacted income tax rates for the years in
which taxes
will be paid or refunds received. Prior to 1993, the Company's
deferred
tax accounts reflected the statutory rates that were in effect
when the
deferrals were initiated. The adoption of SFAS No. 109 resulted
in a
charge to net income in 1993 of $2,914 which was recorded as the
cumulative
effect of an accounting change.
Also in 1993, the Company recorded an additional $12.4
million ($11.4
million of which relates to prior years deferred tax balances) to
the
provision for income taxes under SFAS No. 109 to reflect the
increase in
the highest federal corporate income tax rate from 34% to 35%.
The provision (benefit) for income taxes consisted of the
following:
For the Years Ended December 31, 1994 1993
1992
___________________________________________________________________________
Current:
Federal $(13,494) $ (8,948)
$(82,057)
State and local (23,150) 31,448
10,691
Foreign taxes 3,538 611
696
___________________________________________________________________________
Total current portion (33,106) 23,111
(70,670)
___________________________________________________________________________
Deferred:
Federal 72,729 67,101
115,242
State and local 33,655 (23,682)
(3,269)
Foreign - -
-
___________________________________________________________________________
Total deferred portion 106,384 43,419
111,973
___________________________________________________________________________
Total provision for income taxes $ 73,278 $ 66,530
$ 41,303
___________________________________________________________________________
The Company recorded tax credits of $3,446 in 1994 and $1,019
in 1992.
No tax credits were recorded in 1993.
52
<PAGE>
<PAGE>55
Deferred income tax (liabilities) assets are composed of the
following:
At December
31,
1994
1993
__________________________________________________________________________
Gross deferred income tax liabilities:
Lease related differences $(607,085)
$(521,371)
Other (89,463)
(36,843)
__________________________________________________________________________
Gross deferred income tax liabilities (696,548)
(558,214)
__________________________________________________________________________
Gross deferred income tax assets:
Allowance for credit losses 101,591
92,766
Pensions 8,052
7,751
State and foreign net operating losses 18,802
12,617
Other 17,293
4,411
__________________________________________________________________________
Gross deferred income tax assets 145,738
117,545
__________________________________________________________________________
Valuation allowance (4,477)
(4,944)
__________________________________________________________________________
Net deferred income tax liabilities $(555,287)
$(445,613)
__________________________________________________________________________
A valuation allowance has been recorded to offset related
deferred tax
assets due to the uncertainty of realizing the benefit of
separate state
net operating loss carryforwards and net operating loss
carryforwards of
foreign subsidiaries. State tax loss carryforwards of $285,194
related to
various state jurisdictions expire in the following years:
1995
$ 4,663
1996
10,974
1997
26,090
1998
19,896
1999
9,463
2000 and thereafter
214,108
___________________________________________________________________________
Total
$285,194
___________________________________________________________________________
Financial statements for the years prior to the January 1993
adoption
of SFAS No. 109 were not restated to reflect the new accounting
standard.
53
<PAGE>
<PAGE>56
This table shows the principal sources of the provision for
deferred taxes
for 1992:
For the Year Ended December 31,
1992
___________________________________________________________________________
Additional tax depreciation on
leased equipment
$ 403,796
Financing income on leased equipment
(318,754)
Provision for credit losses
(23,699)
Gain on sale of assets
39,046
Deferred AMT credits
(7,046)
Other, net
18,630
___________________________________________________________________________
Total deferred tax provision
$ 111,973
___________________________________________________________________________
A reconciliation between the federal statutory tax rate and
the
Company's effective tax rate is shown below:
For the Years Ended December 31, 1994
1993 1992
___________________________________________________________________________
Federal statutory income tax rate 35.0%
35.0% 34.0%
State and local income taxes, net of federal
income tax effect 3.9
3.7 4.3
Impact of federal tax rate increase on prior years
deferred taxes -
8.4 -
Excess deferred credits on terminated leases -
- - (4.4)
Tax exempt lease income (1.7)
(0.8) (0.2)
Goodwill 1.2
0.8 1.1
Other 3.8
1.1 1.2
___________________________________________________________________________
Effective tax rate 42.2%
48.2% 36.0%
___________________________________________________________________________
The Company has no available AMT credit carryforwards at
December 31,
1994, to reduce future federal income taxes payable.
For the years ended December 31, 1994, 1993 and 1992, the
consolidated
income (loss) before income taxes and cumulative effect of
accounting
change by domestic and foreign source was $177,662 and $(4,048),
$153,010
and $(14,970), and $132,297 and $(17,422), respectively.
11. PENSION AND BENEFIT PLANS
Pension
Effective January 1, 1994, all employees of the Company and
its
domestic subsidiaries were covered by the AT&T Capital
Corporation
Retirement and Savings Plan ("RSP"), a qualified defined
contribution plan.
54
<PAGE>
<PAGE>57
Under a defined contribution plan, the amount of future pension
benefits is
based solely on the amount contributed and the returns earned on
those
amounts. The RSP is composed of a profit sharing plan (including
a cash or
deferred arrangement) under Section 401(k) of the Internal
Revenue Code and
a money purchase plan. The Company's annual contribution, which
is
discretionary above 5%, is expected to equal approximately 9% of
employee
pay (i.e., aggregate base salaries and annual incentives of
participants in
the RSP). In addition, the Company matches an amount equal to
66-2/3% of
the first 6% that each employee contributes to the RSP under
Section
401(k). RSP participants can select from a variety of funds
within the RSP
to invest their allotments. The Company recorded $13,525 of
expense in
1994 related to the RSP. In addition, the Company recorded
pension expense
of $1,366 in connection with RSP-related nonqualified defined
contribution
plans. The Company also sponsors various international plans
which are
available to certain employees of its international subsidiaries.
The
plans are similar to the RSP, in that they provide for employees
of the
Company to contribute a percentage of their salary to provide for
postretirement income. The Company recorded $1,034 of pension
expense in
1994 related to the various international plans.
Prior to 1994, most of the Company's employees were covered
by AT&T's
noncontributory defined benefit pension plans. Also, through
December 31,
1993, other eligible employees of several wholly owned
subsidiaries of the
Company were covered by an AT&T qualified defined contribution
retirement
plan, with provisions similar to the RSP. The Company recorded
pension
expense related to the AT&T noncontributory defined benefit plans
of $4,457
and $3,320 in 1993 and 1992, respectively. In addition, the
Company
recorded costs of $6,312 and $1,795, in 1993 and 1992,
respectively,
related to the AT&T qualified defined contribution retirement
plan.
On December 8, 1993, the Company sponsored three unfunded
supplemental
nonqualified defined benefit retirement plans, which became
effective on
January 1, 1994, that provide certain employees with additional
benefits
after retirement. The costs of these plans in 1994 included the
following
components:
________________________________________________________________________
Service cost - benefits earned
$ 575
Interest cost on projected benefit obligation
427
Amortization
374
________________________________________________________________________
Net periodic pension cost
$1,376
________________________________________________________________________
55
<PAGE>
<PAGE>58
The funded status of the plans at December 31, 1994 is as
follows:
________________________________________________________________________
Accumulated benefit obligations:
Vested benefit obligation
$1,119
Non-vested benefit obligation
2,578
Total
3,697
Additional benefits on estimated future salary
1,176
Total projected benefit obligation
4,873
Plan assets at fair value
-
Unfunded projected benefit obligation
4,873
Unrecognized prior service cost
4,391
Unrecognized net gain
(894)
Unrecognized transition obligation
-
Additional liability
2,387
Accrued pension liability recorded
$3,763
________________________________________________________________________
For 1994, the projected benefit obligation was determined
using an
assumed discount rate of 8.75% and assumed long-term rates of
increase in
future compensation levels of 4.5% or 5.5%, depending on the
plan.
Share Performance Incentive Plan
The Company's Share Performance Incentive Plan ("SPIP") is
designed to
grant cash incentive awards to key employees at the end of a
three-year
performance period, based on the appreciation of the Company's
stock
relative to (1) the share performance of a select benchmark group
of
companies in the leasing, finance or lending business, and (2)
the return
of three-year risk-free treasury notes plus 150 basis points.
The cash
awards will be calculated at the end of performance periods
ending June 30,
1996, 1997, 1998, 1999 and 2000, respectively. The estimated
compensation
expense relating to the SPIP is charged against income over the
respective
performance periods.
Leveraged Stock Purchase Plan
In 1993, the Company adopted the Leveraged Stock Purchase
Plan
("LSPP") under which 2,000,000 shares of common stock and options
to
purchase common stock were reserved for purchase or grant. The
terms and
provisions of the LSPP required certain senior management
employees to
purchase an aggregate of 851,716 shares of common stock in
conjunction with
the Company's initial public offering at the offering price of
$21.50 per
share ("offering price"). The eligible employees had the option
of
borrowing from the Company, on a recourse basis, 88.5% to 97.7%
of the
purchase price of the shares. The recourse loans mature on
August 4, 2000,
and have a stated interest rate of 6.0% compounded on an annual
basis. The
purchased shares are pledged as collateral for the recourse
loans. Sale of
these shares is prohibited prior to August 4, 1996, and is
contingent upon
repayment of the loan and certain other requirements. The
recourse loans
are shown on the balance sheet as a reduction of equity.
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In addition, under the LSPP, the same senior management
employees were
granted premium priced stock options which will provide
participants with
an opportunity to purchase up to 1,095,040 shares of Company
stock at an
exercise price equal to 125% of the initial public offering price
($26.875
per share). The options are exercisable during the period from
August 4,
1996, through August 4, 2003. During 1994, 54,895 options were
forfeited.
No options were forfeited during 1993. Pursuant to the terms of
the LSPP,
no further purchases of stock, Company loans or option grants
will be made
under the LSPP.
Long Term Incentive Plan
In 1993, the Company adopted a Long Term Incentive Plan
("LTIP") under
which the Company may grant various stock-based and other awards
to
employees of the Company. The number of shares available for
grant under
the LTIP is 2,000,000. Similar to the LSPP, eligible employees
have the
option of borrowing from the Company, on a recourse basis, 88.5%
to 97.7%
of the purchase price of the shares. The recourse loans, which
are due
seven years from the loan date, have stated interest rates
ranging from
6.0% to 7.74% compounded on an annual basis. The purchased
shares are
pledged as collateral for the recourse loans. Sale of these
shares is
prohibited for a three-year period and is contingent upon
repayment of the
loan and certain other requirements. The recourse loans are
shown on the
balance sheet as a reduction of equity. Awards under the LTIP
will be made
to executives and employees of the Company at the Company's
discretion.
The following table summarizes the option activity relating
to the
LTIP:
Shares Under Option Number Price
Per Share
___________________________________________________________________________
Options granted in connection with
initial public offering 697,908
$21.50
Changes in 1993:
Options canceled (11,605)
$21.50
___________________________________________________________________________
Options outstanding at December 31, 1993 686,303
$21.50
Changes in 1994:
Options exercised (274)
$21.50
Options canceled (85,367)
$21.50-$26.15
Options granted 502,707
$21.81-$30.63
___________________________________________________________________________
Options outstanding at December 31, 1994 1,103,369
$21.50-$30.63
___________________________________________________________________________
Options exercisable at December 31, 1994 7,264
$21.50-$26.13
___________________________________________________________________________
In addition, the Company has awarded restricted stock under
the LTIP
to certain employees in consideration of services rendered.
During 1994
and 1993, respectively, restricted stock awards of 17,801 and
15,306 were
made to employees under the LTIP.
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As of December 31, 1994 and 1993, respectively, 735,936 and
1,298,391
shares were available for issuance under the LTIP. The shares
are not
subject to stock appreciation right features.
Employee Stock Purchase Plan
In April 1994, the Company's shareowners approved an
employee stock
purchase plan effective August 1, 1994. The AT&T Capital
Corporation 1994
Employee Stock Purchase Plan ("ESPP") enables employees to
purchase shares
of AT&T Capital common stock at a discount. The price per share
is 90% of
the fair market value of the common stock at the time of its
purchase. No
compensation expense is recorded in connection with the ESPP.
The maximum
aggregate number of shares of common stock that may be purchased
under the
ESPP is 500,000. During 1994, 13,484 shares were purchased by
employees at
prices ranging from $19.02 to $21.83 per share. At December 31,
1994,
there were 486,516 shares available for offering under the ESPP.
Postretirement and Postemployment Benefits
Effective January 1, 1993, the Company in conjunction with
AT&T,
adopted SFAS No. 106, "Employers' Accounting for Postretirement
Benefits
Other Than Pensions". The standard requires companies to accrue
postretirement benefits during the years employees are working
and earning
benefits for retirement. Previously, the Company expensed these
benefits
as the claims were incurred. During 1992, it was decided that
AT&T would
keep the responsibility for the initial liability at the AT&T
consolidated
level and charge the Company only for the earned benefit service
cost in
each period. Accordingly, the Company has no identifiable
initial
liability and all costs associated with such obligation have been
assumed
by AT&T. However, had the Company recorded its initial
transition
obligation in the first quarter of 1993, the amount would have
been
immaterial to the Company's financial position and results of
operations.
Additionally, management believes that SFAS No. 106 will not have
a
material impact on the Company's financial position or its
results of
operations in the future as postretirement benefits are generally
not
extended.
In November 1992, the FASB issued SFAS No. 112, "Employers'
Accounting
for Postemployment Benefits" ("SFAS No. 112"). Analogous to SFAS
No. 106
for postretirement benefits, this standard requires companies to
accrue for
estimated future postemployment benefit expenses during the
periods when
employees are working. Postemployment benefits are any benefits
other than
retirement benefits that are provided after employment is
discontinued.
The Company, in conjunction with AT&T, elected to adopt SFAS No.
112 in
1993. Initial adoption of SFAS No. 112 did not have an effect on
the
Company. Additionally, management believes that SFAS No. 112
will not have
a material impact on the Company's financial position or its
results of
operations in the future.
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12. RELATED-PARTY TRANSACTIONS
The Company leases certain office facilities from AT&T and
affiliates.
Future minimum rental payments under noncancelable,
long-term leases
with AT&T and affiliates are as follows:
1995
$ 4,291
1996
4,243
1997
2,640
1998
52
1999
-
2000 and thereafter
-
___________________________________________________________________________
Total
$11,226
___________________________________________________________________________
Rental expense under existing leases with AT&T and
affiliates amounted
to $4,101, $7,998 and $8,164, in 1994, 1993 and 1992,
respectively.
The Company purchases services from AT&T and affiliates,
including
data processing, billing and collection, administration and other
services.
The Company's expenses for such services were $20,628 in 1994,
$32,320 in
1993 and $19,529 in 1992. Additionally, the Company was charged
a fee by
AT&T for corporate overhead allocations of $6,444 in 1992. The
Company was
not charged such a fee from AT&T in 1994 or 1993.
At December 31, 1994, 1993 and 1992, the Company was the
lessor to
AT&T of equipment comprising $268,616, $145,812 and $142,499 of
capital
leases and $204,647, $376,970 and $468,497 of equipment under
operating
leases, respectively. Revenue related to these leases was
$108,808,
$170,788 and $153,087 in 1994, 1993 and 1992, respectively.
In 1992, revenue from equipment sales to AT&T and affiliates
was
$18,689, and the cost of these sales was $17,753. The Company
had no
significant sales of equipment to AT&T and affiliates in 1994 and
1993.
The Company also had an interest bearing intercompany note
receivable
from AT&T and affiliates of $40,105 at December 31, 1994 and an
interest
bearing intercompany debt payable to AT&T and affiliates of
$35,290 at
December 31, 1993, respectively. (See Note 7.) Additionally,
the Company
had interest free loans related to tax agreements from AT&T at
December 31,
1994 and 1993, respectively, of $214,066 and $188,562. (See Note
10.)
In 1993, AT&T and the Company entered into an operating
agreement,
pursuant to which AT&T provides the Company with the right to be
the
preferred provider of leasing and financing services for AT&T's
products on
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a basis consistent with past practice. The Company and AT&T have
also
entered into an intercompany agreement whereby the Company
manages and
administers, for a fee, certain lease portfolios, including the
Lease
Finance Assets of Old Capital and Old Credit which were not
transferred to
the Company. (See Note 1.) During 1994, 1993 and 1992, the
Company
recognized service fee revenue of $8,551, $18,361 and $4,200,
respectively,
for such services.
In connection with the Restructuring, AT&T has issued a
direct, full
and unconditional guarantee of all existing indebtedness
outstanding as of
March 31, 1993 for borrowed money incurred, assumed or guaranteed
by Old
Capital entitled to the benefit of a support agreement between
AT&T and Old
Capital, including the debt of Old Capital that was transferred
to the
Company. Debt issued by the Company subsequent to March 31,
1993, is not
guaranteed or supported by AT&T. At December 31, 1994 and 1993,
the amount
of such guaranteed debt was $747,895 and $1,441,035,
respectively.
13. COMMITMENTS AND CONTINGENCIES
Derivative Financial Instruments
In the normal course of business, the Company is routinely
party to
various derivative financial instruments. These financial
instruments are
used by the Company to reduce interest rate and foreign currency
exposure,
as well as to meet the financing needs of its customers.
At both December 31, 1994 and 1993, in management's opinion,
there was
no significant risk of loss in the event of nonperformance of the
counterparties to derivative contracts. Generally, the Company
does not
require collateral or other security to support financial
instruments with
credit risk. There were no past due amounts, nor were there any
reserves
for credit losses on derivatives as of December 31, 1994, 1993
and 1992.
Information is provided below for each significant
derivative product
type. The derivatives, with which the Company is involved, are
primarily
interest rate swaps, currency swaps, and foreign currency forward
exchange
contracts.
Interest Rate and Currency Swaps
The Company enters into interest rate and foreign currency
swap
agreements with major money center banks and intermediaries
located in
major financial centers to reduce interest rate exposure, to more
closely
match the maturity of its debt portfolio to that of its asset
portfolio and
to reduce its exposure to currency fluctuations. Interest rate
swaps also
allow the Company to raise funds at floating rates and
effectively swap
them into fixed rates that are lower than those available to the
Company if
fixed-rate borrowings were made directly. Foreign currency swaps
are used
primarily to hedge Canadian dollars and pounds sterling.
Under interest rate swaps, the Company agrees with other
parties to
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exchange, at specified intervals, the difference between
fixed-rate and
floating-rate interest amounts calculated by reference to an
agreed
notional principal amount. A generic swap's notional amount
generally does
not change for the life of the contract. Amortizing and
accreting swaps'
notional amounts generally change based upon a predetermined
amortization
or accretion schedule.
The notional amounts shown below represent an agreed upon
amount on
which calculations of amounts to be exchanged are based. They do
not
represent amounts exchanged by the parties and, therefore, are
not a
measure of the exposure of the Company. The Company's exposure
is limited
to the current fair value of the contracts with a positive fair
value at
the reporting date. (See Note 9.) A key assumption in the
information
below is that rates remain constant at the reporting date levels.
To the
extent that rates change, the variable interest rate information
will
change.
Activity in interest rate and currency swaps which are all
held for
purposes other than trading for 1994 and 1993, is summarized as
follows:
Generic Amortizing Generic
Pay Pay Pay Currency
Notional Amounts Fixed Fixed Floating Swaps
Total
___________________________________________________________________________
December 31, 1992 $ 650,000 $ 936,684 $ 50,000 $ 32,186
$1,668,870
Additions 789,000 582,744 450,000 117,024
1,938,768
Maturities/
amortization (300,000) (394,859) (50,000) -
(744,859)
Terminations - - - -
-
__________________________________________________________________________
December 31, 1993 1,139,000 1,124,569 450,000 149,210
2,862,779
Additions 607,800 285,972 175,000 129,860
1,198,632
Maturities/
amortization (175,000) (445,568) (450,000) (57,253)
(1,127,821)
Terminations - - - -
-
__________________________________________________________________________
December 31, 1994 $1,571,800 $ 964,973 $175,000 $221,817
$2,933,590
__________________________________________________________________________
The schedule of maturities at December 31, 1994 for interest
rate and
currency swaps which are all held for purposes other than trading
is as
follows:
Generic Amortizing Generic
Pay Pay Pay Currency
Fixed Fixed Floating Swaps
Total
___________________________________________________________________________
Total notional
amounts $1,571,800 $964,973 $175,000 $221,817
$2,933,590
Weighted average
pay rate 5.75% 5.57% 6.04% 6.21%
5.74%
Weighted average
receive rate 6.08% 6.09% 5.94% 6.09%
6.08%
___________________________________________________________________________
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Generic Amortizing Generic
Pay Pay Pay Currency
Fixed Fixed Floating Swaps
Total
___________________________________________________________________________
1995 Maturities $350,000 $414,180 $175,000 $108,455
$1,047,635
Weighted average
pay rate 4.29% 5.19% 6.04% 6.27%
5.14%
Weighted average
receive rate 6.09% 6.09% 5.94% 6.09%
6.07%
1996 Maturities $527,000 $291,935 - $ 74,970 $
893,905
Weighted average
pay rate 5.42% 5.35% - 5.83%
5.43%
Weighted average
receive rate 6.04% 6.09% - 6.09%
6.06%
1997 Maturities $163,300 $141,019 - $ 36,603 $
340,922
Weighted average
pay rate 5.72% 5.89% - 6.80%
5.91%
Weighted average
receive rate 6.14% 6.09% - 6.09%
6.11%
1998 Maturities $300,000 $ 46,749 - $ 1,789 $
348,538
Weighted average
pay rate 6.41% 7.03% - 6.05%
6.49%
Weighted average
receive rate 6.09% 6.09% - 6.09%
6.09%
1999 Maturities $200,000 $ 30,736 - - $
230,736
Weighted average
pay rate 8.01% 6.83% - -
7.86%
Weighted average
receive rate 6.09% 6.09% - -
6.09%
2000-2017 Maturities $ 31,500 $ 40,354 - - $
71,854
Weighted average
pay rate 7.01% 7.24% - -
7.14%
Weighted average
receive rate 6.09% 6.09% - -
6.09%
___________________________________________________________________________
Foreign Currency Forward Exchange Contracts
The Company enters into foreign currency forward exchange
contracts to
manage foreign exchange risk (primarily Canadian dollars and
pounds
sterling). The notional amount of such contracts was $318,054
and $165,969
at December 31, 1994 and 1993, respectively. The Company enters
into these
contracts to hedge the cash flows associated with foreign
currency
denominated assets. The term of these contracts is rarely more
than three
years. The purpose of the Company's foreign currency hedging
activities is
to protect the Company from the risk that the eventual dollar net
cash
inflows resulting from these assets will not be adversely
affected by
changes in exchange rates.
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Other Commitments and Contingencies
Certain regional office facilities and equipment of the
Company are
leased from unrelated parties with renewal options of one to five
years.
Rental expense to unrelated parties for the years ended December
31, 1994,
1993 and 1992 was $14,202, $9,626 and $16,992, respectively.
Rental
expense associated with sublease rentals on operating leases for
1994, 1993
and 1992, was $115, $419 and $5,026, respectively. Minimum
annual rental
commitments at December 31, 1994, under these agreements are as
follows:
1995
$21,828
1996
18,171
1997
13,247
1998
7,769
1999
7,540
2000 and thereafter
3,729
___________________________________________________________________________
Total
$72,284
___________________________________________________________________________
The total of minimum rentals to be received in the future
under
noncancelable subleases related to operating leases as of
December 31,
1994, was $11,998. The total of minimum rentals to be received
in the
future under noncancelable subleases related to capital leases as
of
December 31, 1994, was $65,010.
The Company is not currently a party to any material legal
proceeding,
nor is the Company aware of any pending or threatened litigation
which in
the opinion of management would have a material impact on its
financial
condition or results of operations.
14. FOREIGN OPERATIONS
The Company operates primarily in one business segment -
equipment
leasing and financing. This segment represents more than 90% of
consolidated revenue, net income and total assets.
The following data on other geographic areas pertain to
operations
that are located outside the U.S. (primarily Canada, Europe and
Hong Kong).
Net income includes certain allocated operating expenses and
interest
expense. Revenues between geographic areas are not material.
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A summary of the Company's operations by geographic area is
presented
below:
For the years ended December 31, 1994 1993
1992
__________________________________________________________________________
Total Revenue:
United States $1,250,591 $1,274,615
$1,251,493
Foreign 133,488 84,974
14,033
__________________________________________________________________________
Total $1,384,079 $1,359,589
$1,265,526
__________________________________________________________________________
Net Income (Loss):
United States $104,558 $78,024
$87,329
Foreign (4,222) (9,428)
(13,757)
__________________________________________________________________________
Total $100,336 $68,596
$73,572
__________________________________________________________________________
At December 31, 1994 1993
1992
__________________________________________________________________________
Total Assets:
United States $7,148,737 $6,002,857
$5,750,294
Foreign 873,186 406,869
145,135
__________________________________________________________________________
Total $8,021,923 $6,409,726
$5,895,429
__________________________________________________________________________
15. QUARTERLY DATA (Unaudited)
Quarters First Second Third Fourth
Total
1994
___________________________________________________________________________
Total revenue $326,012 $332,216 $348,368 $377,483
$1,384,079
Interest expense 60,107 65,654 68,942 77,109
271,812
Net income 15,805 18,901 25,040 40,590
100,336
Earnings per share 0.34 0.40 0.53 0.86 $
2.14
Stock price per share
high 27.000 24.750 24.375 24.500
low $ 22.875 $ 21.625 $ 21.375 $ 19.750
___________________________________________________________________________
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Quarters First Second Third Fourth
Total
1993
___________________________________________________________________________
Total revenue $327,542 $317,019 $330,718 $384,310
$1,359,589
Interest expense 59,572 57,747 57,911 61,105
236,335
Income before
cumulative
effect on prior
years of
accounting
change 14,722 13,769 3,166 39,853
71,510
Net income 11,808 13,769 3,166 39,853
68,596
Earnings per share $ 0.29 $ 0.34 $ 0.07 0.85
$ 1.60
Stock price per share
high - - - 29.250
low - - - $ 22.375
___________________________________________________________________________
Net income and earnings per share in the first and fourth
quarters of
1993, and the fourth quarter of 1994, reflected certain
securitization
transactions. (See Note 6.)
Net income and earnings per share for the first quarter of
1993, were
impacted by a $2,914 charge, or $.07 per share, for the adoption
of SFAS
No. 109. (See Notes 2 and 10.)
Net income and earnings per share for the third quarter of
1993, were
impacted by a $11.4 million charge related to the increase in the
federal
tax rate to 35%. (See Notes 2 and 10.)
Earnings per share are computed independently for each
quarter
presented. Because of changes in the weighted average number of
shares
outstanding, the sum of the quarterly earnings per share may not
equal the
earnings per share for the year.
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REPORT OF MANAGEMENT
____________________
Management is responsible for the preparation, integrity and
objectivity of the financial statements and all other financial
information
included in this report. Management is also responsible for
maintaining a
system of internal controls as a fundamental requirement for the
operational and financial integrity of results.
The financial statements, which reflect the consolidated
accounts of
AT&T Capital Corporation and its subsidiaries, and other
financial
information shown were prepared in conformity with generally
accepted
accounting principles. Estimates included in the financial
statements were
based on judgments of qualified personnel.
To maintain its system of internal controls, management
carefully
selects key personnel and establishes the organizational
structure to
provide an appropriate division of responsibility. We believe it
is
essential to conduct business affairs in accordance with the
highest
ethical standards as set forth in the AT&T Code of Conduct.
These
guidelines and other informational programs are designed and used
to ensure
that policies, standards, and managerial authorities are
understood
throughout the organization. AT&T Capital's Business Controls
Group, in
conjunction with AT&T's internal auditors, monitor compliance
with the
system of internal controls by means of an annual plan of
internal audits.
On an ongoing basis, the system of internal controls is reviewed,
evaluated
and revised as necessary in light of the results of constant
management
oversight, internal and independent audits, changes in the
Company's
business and other conditions.
Management believes that the system of internal controls,
taken as a
whole, provides reasonable assurance that (1) financial records
are
adequate and can be relied upon to permit the preparation of
financial
statements in conformity with generally accepted accounting
principles, and
(2) access to assets occurs only in accordance with management's
authorizations.
The Audit Committee of the board of directors, which is
composed of
directors who are not employees of the Company or AT&T, meets
periodically
with management, AT&T Capital's Business Controls Group and the
independent
auditors to review the manner in which these groups of
individuals are
performing their responsibilities and to carry out the Audit
Committee's
oversight role with respect to auditing, internal controls and
financial
reporting matters. Periodically, the independent auditors meet
privately
with the Audit Committee. Both the internal auditors and the
independent
auditors have access to the Audit Committee and its individual
members at
any time.
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<PAGE>69
The financial statements have been audited by Coopers &
Lybrand
L.L.P., Independent Auditors. Their audits were conducted in
accordance
with generally accepted auditing standards and include a
consideration of
the internal control structure and substantive tests of
transactions.
Their report follows.
Thomas C. Wajnert
Chairman and
Chief Executive Officer
Edward M. Dwyer
Senior Vice President,
Chief Financial Officer and Treasurer
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<PAGE>70
REPORT OF INDEPENDENT AUDITORS
______________________________
To the Shareowners of AT&T Capital Corporation:
We have audited the consolidated balance sheets of AT&T
Capital
Corporation and Subsidiaries at December 31, 1994 and 1993, and
the related
consolidated statements of income, changes in shareowners' equity
and cash
flows for each of the three years in the period ended December
31, 1994.
These financial statements are the responsibility of the
Company's
management. Our responsibility is to express an opinion on these
financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing
standards. Those standards require that we plan and perform the
audit to
obtain reasonable assurance about whether the financial
statements are free
of material misstatement. An audit includes examining, on a test
basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles
used and significant estimates made by management, as well as
evaluating
the overall financial statement presentation. We believe that
our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present
fairly, in all material respects, the consolidated financial
position of
AT&T Capital Corporation and Subsidiaries at December 31, 1994
and 1993,
and the consolidated results of their operations and their cash
flows for
each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles.
As discussed in Note 10 to the Consolidated Financial
Statements, in
1993, the Company changed its method of accounting for income
taxes.
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York
January 26, 1995
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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no changes in independent auditors and no
disagreements with independent auditors on any accounting
or
financial disclosure during the past two years.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
DIRECTORS
The information set forth under the caption "Nominees for
Election" in the
Company's Proxy Statement for its Annual Meeting of Stockholders
to be
held on April 21, 1995 (the "Proxy Statement") to be filed within
120 days
after the end of the Company's fiscal year ended December 31,
1994, is
incorporated herein by reference.
EXECUTIVE OFFICERS
Executive officers of the Company serve at the discretion of the
Board of
Directors. No officer of the Company has a written employment or
noncompetition agreement with the Company, although each such
officer has
agreed not to disclose confidential information of the Company.
The
Company does not have "key man" insurance coverage on any of its
officers.
The executive officers of the Company comprise the Corporate
Leadership
Team consisting of the following six officers: Messrs. Wajnert,
Rothman,
Van Sickle, Dwyer, and McCarthy and Ms. Morey.
Thomas C. Wajnert, 51, has served as Chairman of the Board
of
Directors and Chief Executive Officer of the Company since July
1993 and as
a director of the Company since April 1993. From April 1993 to
July 1993
Mr. Wajnert was President, Chief Executive Officer and Vice
Chairman of the
Board of Directors of the Company. From February 1990 to March
1993, Mr.
Wajnert was President and Chief Executive Officer and a director
of Old
Capital. From October 1984 to May 1993, Mr. Wajnert was the
Chief
Executive Officer of Old Credit.
Irving H. Rothman, 47, has served as Group President of the
Company
since April 1993. Together with Mr. Van Sickle, Mr. Rothman
shares
responsibility for the operations of the Company, with the heads
of the
Company's several business units reporting to Messrs. Rothman and
Van
Sickle jointly. From March 1992 to March 1993 Mr. Rothman served
as Vice
Chairman of Old Credit. From November 1991 to March 1993, Mr.
Rothman was
Group President of Old Capital. From March 1990 to January 1992,
Mr.
Rothman was president and Chief Operating Officer of Old Credit
and from
February 1990 to March 1993, Mr. Rothman was a director of Old
Credit.
From February 1988 to February 1990, Mr. Rothman was Executive
Vice
President and Chief Financial Officer of Old Credit.
69
<PAGE>
<PAGE>72
Charles D. Van Sickle, 52, has served as Group President of
the
Company since April 1993. Together with Mr. Rothman, Mr. Van
Sickle shares
responsibility for the operations of the Company, with the heads
of the
Company's business units reporting to Messrs. Van Sickle and
Rothman
jointly. From November 1991 to March 1993, Mr. Van Sickle was
Group
President of Old Capital and from March 1992 to March 1993, he
was Vice
Chairman of Old Capital's Capital Markets division. From January
1991 to
March 1992 Mr. Van Sickle was President and Chief Operating
Officer of Old
Capital's Capital Markets division. From March 1990 to January
1991 and
from November 1991 to March 1993, Mr. Van Sickle was a director
of Old
Credit. From February 1988 to January 1991, Mr. Van Sickle was a
Senior
Vice President of Old Credit's Capital Markets division.
Edward M. Dwyer, 38, has served as Senior Vice President,
Chief
Financial Officer and Treasurer of the Company since July 1994.
From April
1993 to June 1994, Mr. Dwyer was Vice President and Treasurer of
the
Company. From July 1991 to March 1993, he was Vice President and
Treasurer
of Old Capital. From February 1990 to July 1991, Mr. Dwyer was
Chief
Financial Officer of Old Capital's Capital Markets division.
From October
1989 to February 1990, he was Old Capital's Head of Business
Planning.
G. Daniel McCarthy, 45, has served as Senior Vice President,
General
Counsel, Secretary and Chief Risk Management Officer of the
Company since
April 1993. From February 1990 to March 1993, Mr. McCarthy was
Senior Vice
President, General Counsel, Secretary and Chief Risk Management
Officer of
Old Capital. From February 1988 to February 1990 he was Vice
President,
General Counsel and Secretary of Old Credit.
Ruth A. Morey, 51, has served as Senior Vice President and
Corporate
Resource Officer of the Company since April 1993. From February
1990 to
March 1993, Ms. Morey served as Senior Vice President and Chief
Administrative Officer of Old Capital. From March 1989 to
February 1991,
Ms. Morey was Vice President of Old Credit's Human Resources
division and
from March 1990 to March 1993 she was a director of Old Credit.
From 1987
to March 1989, Ms. Morey was the head of Old Credit's Human
Resources
division.
Item 11. EXECUTIVE COMPENSATION.
The information set forth under the caption "Executive
Compensation"
in the Proxy Statement is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The information set forth under the caption "Security
Ownership" in
the Proxy Statement is incorporated herein by reference.
70
<PAGE>
<PAGE>73
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information set forth under the caption "Executive
Compensation"
in the Proxy Statement is incorporated herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 10-K.
(a) Documents filed as a part of the report:
(1) Financial Statements: Page
Consolidated Balance Sheets 32
Consolidated Statements of Income 34
Consolidated Statements of Changes
in Shareowners' Equity 36
Consolidated Statements of Cash Flows 37
Notes to the Consolidated Financial
Statements 39
Report of Management 66
Report of Independent Auditors 68
(2) Financial Statement Schedules:
Schedule VIII - Valuation and Qualifying Accounts
Financial statement schedules other than the one
listed above
are omitted because the required information is
included in
the financial statements or notes thereto or because
of the
absence of conditions under which they are required.
Report of Independent Auditors
(3) Exhibits:
Exhibit
Number
3(a). Restated Certificate of Incorporation of the
registrant
(incorporated by reference to Exhibit 3.1 to the
registrant's
Registration Statement on Form S-1 [No. 33-49605],
filed with
the Securities and Exchange Commission).
3(b). Amended and Restated By-laws of the registrant
dated as of
October 21, 1994.
71
<PAGE>
<PAGE>74
4(a). Indenture dated as of July 1, 1993 between the
registrant
and Chemical Bank, Trustee (the
"Indenture")(incorporated
by reference to Exhibit 4A to the registrant's
Registration
Statement on Form S-3 [No. 33-49671] filed with the
Securities and Exchange Commission).
4(b). First Indenture Supplement dated as of June 24,
1994, to the
Indenture (incorporated by reference to Exhibit
4A-2 to the
registrant's Registration Statement on Form S-3
[No.33-54359]
filed with the Securities and Exchange Commission).
4(c). Instruments other than described above in 4(a) and
4(b) that
define the rights of holders of long-term debt of
the
registrant and all of its consolidated
subsidiaries, are
omitted pursuant to Item 601(b)(4)(iii)(A) of
Regulation S-K.
The registrant hereby agrees to furnish a copy of
any such
instrument to the Securities and Exchange
Commission upon
request.
10(a). Operating Agreement between the registrant and AT&T
dated as
of June 25, 1993 (incorporated by reference to
exhibit 10.1
to the registrant's Registration Statement on Form
S-1 [No.
33-49605] filed with the Securities and Exchange
Commission).
10(b). Intercompany Agreement between the registrant and
AT&T dated
as of June 25, 1993 (incorporated by reference to
Exhibit
10.2 to the registrant's Registration Statement on
Form S-1
[No. 33-49605] filed with the Securities and
Exchange
Commission).
10(c). License Agreement between the registrant and AT&T
dated as of
June 25, 1993 (incorporated by reference to Exhibit
10.3 to
the registrant's Registration Statement on Form S-1
[No. 33-
49605] filed with the Securities and Exchange
Commission).
10(d). Registration Rights Agreement between the
registrant and AT&T
dated as of June 25, 1993 (incorporated by
reference to
Exhibit 10.4 to the registrant's Registration
Statement on
Form S-1 [No. 33-49605] filed with the Securities
and
Exchange Commission).
10(e). Tax Agreements between the registrant and AT&T
dated as of
June 25, 1993 (incorporated by reference to Exhibit
10.5 to
the registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(f). AT&T Capital Corporation 1993 Long Term Incentive
Plan
(incorporated by reference to Exhibit 10.9 to the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(g). Form of Stock Option Agreement under the 1993 Long
Term
Incentive Plan (incorporated by reference to
Exhibit 10.10 to
the registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
72
<PAGE>
<PAGE>75
10(h). Form of Restricted Stock Agreement under the 1993
Long Term
Incentive Plan (incorporated by reference to
Exhibit 10.11 to
the registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(i). Form of Director's Stock Option Agreement under the
1993 Long
Term Incentive Plan (incorporated by reference to
Exhibit
10.12 to the registrant's Registration Statement on
Form S-1
[No. 33-49605] filed with the Securities and
Exchange
Commission).
10(j). Form of Director's Restricted Stock Award under the
1993 Long
Term Incentive Plan (incorporated by reference to
Exhibit
10.13 to the registrant's Registration Statement on
Form S-1
[No. 33-49605] filed with the Securities and
Exchange
Commission).
10(k). AT&T Capital Corporation 1993 Leveraged Stock
Purchase Plan
(incorporated by reference to Exhibit 10.14 to the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(l). Form of Stock Purchase Agreement and related
exhibits under
the 1993 Leveraged Stock Purchase Plan
(incorporated by
reference to Exhibit 10.15 to the registrant's
Registration
Statement on Form S-1 [No. 33-49605] filed with the
Securities and Exchange Commission).
10(m). AT&T Capital Corporation 1993 Annual Incentive Plan
(incorporated by reference to Exhibit 10.16 to the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(n). AT&T Capital Corporation 1993 Share Performance
Incentive
Plan (incorporated by reference to Exhibit 10.17 to
the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(o). Restructuring Agreement dated as of March 29, 1993,
among the
Registrant, Old Capital, Old Credit and AT&T
(incorporated by
reference to Exhibit 10.18 to the registrant's
Registration
Statement on Form S-1 [No. 33-49605] filed with the
Securities and Exchange Commission).
10(p). Credit Agreement dated as of July 11, 1994, among
the
registrant, the Banks listed therein and Morgan
Guaranty
Trust Company of New York, as Agent (three-year
term).
73
<PAGE>
<PAGE>76
10(q). Credit Agreement dated as of July 11, 1994, among
the
registrant, the Banks listed therein and Morgan
Guaranty
Trust Company of New York, as Agent (364-day term).
10(r). Form of AT&T Capital Corporation 1993 Employee
Compensation
Adjustment Plan (incorporated by reference to
Exhibit 10.21
to the registrant's Registration Statement on Form
S-1 [No.
33-49605] filed with the Securities and Exchange
Commission).
10(s). Form of AT&T Capital Corporation 1993 Deferred
Compensation
Plan (incorporated by reference to Exhibit 10.22 to
the
registrant's Registration Statement on Form S-1
[No.33-
49605]filed with the Securities and Exchange
Commission).
10(t). Form of AT&T Capital Corporation 1993 Financial
Counseling
Plan (incorporated by reference to Exhibit 10.22 to
the
registrant's Registration Statement on Form S-1
[No.33-49605]
filed with the Securities and Exchange Commission).
10(u). AT&T Capital Corporation 1994 Employee Stock
Purchase Plan
(incorporated by reference to Exhibit 4(c) to the
registrant's Registration Statement on Form S-8
[No. 33-
54315] filed with the Securities and Exchange
Commission).
10(v). Form of Summary Plan Description AT&T Capital
Corporation
Retirement and Savings Plan (including the Form of
Description AT&T Capital Corporation Excess Benefit
Plan).
10(w). AT&T Capital Corporation 1995 Annual Incentive
Plan.
10(x). AT&T Capital Corporation 1995 Senior Executive
Annual
Incentive Plan (incorporated by reference to
Exhibit A
to the registrant's definitive Proxy Statement
dated March
20, 1995 issued in connection with the 1995 Annual
Meeting of
Stockholders).
10(y). Form of Summary Plan Description of AT&T Capital
Corporation
Executive Benefit Plan.
10(z). Form of Summary Plan Description of AT&T Capital
Corporation
Supplemental Executive Retirement Plan.
10(aa).Form of Summary Plan Description of AT&T Capital
Corporation
Compensation Limit Excess Plan.
11. Computation of Earnings Per Share
12. Computation of Ratio of Earnings to Fixed Charges.
21. Subsidiaries of the registrant.
23. Consent of Coopers & Lybrand L.L.P.
74
<PAGE>
<PAGE>77
24(a). Powers of Attorney executed by officers and
directors who
signed this report.
24(b). Certificate of Corporate Resolution.
27. Financial Data Schedule
(b) Reports on Form 8-K:
None
75
<PAGE>
<PAGE>78
SCHEDULE VIII
AT&T CAPITAL CORPORATION
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars In Thousands)
Column A Column B Column C Column D Column E
Column F
___________________________________________________________________________
Other
Balance at Charge-offs, Additions/
Balance
Beginning Net of (Deductions)
at End
of Period Additions Recoveries (a)
of Period
___________________________________________________________________________
1994
Allowance for
Credit Losses:
Lease Financing(1)$102,760 $ 66,306 $ 33,978 $ (6,558)
$128,530
Commercial &
Financial (2) 57,059 14,582 21,567 (2,176)
47,898
___________________________________________________________________________
Total $159,819 $ 80,888 $ 55,545 $ (8,734)
$176,428
===========================================================================
1993
Allowance for
Credit Losses:
Lease Financing(1)$ 87,774 $ 95,034 $ 46,012 $(34,036)
$102,760
Commercial &
Financial (2) 36,187 28,644 13,017 5,245
57,059
__________________________________________________________________________
Total $123,961 $123,678 $ 59,029 $(28,791)
$159,819
==========================================================================
1992
Allowance for
Credit Losses:
Lease Financing(1)$ 74,106 $ 88,577 $ 61,549 $(13,360)
$ 87,774
Commercial &
Financial (2) 19,861 23,138 16,818 10,006
36,187
__________________________________________________________________________
Total $ 93,967 $111,715 $ 78,367 $ (3,354)
$123,961
==========================================================================
(1) Shown on the balance sheet as a deduction from applicable
finance
assets, primarily capital leases.
(2) Shown on the balance sheet as a deduction from finance
receivables.
(a) Primarily includes transfers out of credit losses related to
receivables securitized, transfers in of reserves related to
businesses acquired and reclassifications.
76
<PAGE>
<PAGE>79
REPORT OF INDEPENDENT AUDITORS
______________________________
Our report on the consolidated financial statements of AT&T
Capital
Corporation and Subsidiaries is included on page 68 of this Form
10-K. In
connection with our audits of such financial statements, we have
also
audited the related financial statement schedule listed as an
exhibit on
page 71 of this Form 10-K.
In our opinion, the financial statement schedule referred to
above, when
considered in relation to the basic financial statements taken as
a whole,
presents fairly, in all material respects, the information
required to be
included therein.
As discussed in our report referred to above, the Company changed
its
method of accounting for income taxes in 1993.
COOPERS & LYBRAND
L.L.P.
1301 Avenue of the Americas
New York, New York
January 26, 1995
77
<PAGE>
<PAGE>80
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities
Exchange Act of 1934, the registrant has duly caused this report
to be
signed on its behalf by the undersigned, thereunto duly
authorized.
AT&T CAPITAL
CORPORATION
Thomas C.
Wajnert
By_____________________________
Thomas C.
Wajnert,
March 15, 1995 (Chairman and Chief
Executive
Officer)
Pursuant to the requirements of the Securities Exchange Act
of 1934,
this report has been signed below by the following persons on
behalf of the
registrant and in the capacities and on the dates indicated.
Principal Executive Officer:
T. C. Wajnert Chairman and Chief
Executive Officer
Principal Financial Officer:
E. M. Dwyer Senior Vice President,
Chief Financial Officer
and Treasurer
Thomas C.
Wajnert
By
_________________________
Principal Accounting Officer: (Thomas C.
Wajnert,
Attorney-in-fact* and
on his own
behalf as
R. Oliu, Jr. Vice President, Controller Director and a
Principal
and Chief Accounting Officer Executive
Officer).
Directors:
T. C. Wajnert
J. P. Clancey
J. P. Kelly March 15, 1995
G. M. Lowrie
A. J. Mandl
R. A. McGinn
J. J. Melone
R. W. Miller * by power of
attorney
S. L. Prendergast
B. Walker, Jr.
78
<PAGE>
<PAGE>81
EXHIBIT INDEX
Exhibit
Number
3(a). Restated Certificate of Incorporation of the
registrant
(incorporated by reference to Exhibit 3.1 to the
registrant's
Registration Statement on Form S-1 [No. 33-49605],
filed with
the Securities and Exchange Commission).
3(b). Amended and Restated By-laws of the registrant
dated as of
October 21, 1994.
4(a). Indenture dated as of July 1, 1993 between the
registrant
and Chemical Bank, Trustee (the
"Indenture")(incorporated
by reference to Exhibit 4A to the registrant's
Registration
Statement on Form S-3 [No. 33-49671] filed with the
Securities and Exchange Commission).
4(b). First Indenture Supplement dated as of June 24,
1994, to the
Indenture (incorporated by reference to Exhibit
4A-2 to the
registrant's Registration Statement on Form S-3
[No.33-54359]
filed with the Securities and Exchange Commission).
4(c). Instruments other than described above in 4(a) and
4(b) that
define the rights of holders of long-term debt of
the
registrant and all of its consolidated
subsidiaries, are
omitted pursuant to Item 601(b)(4)(iii)(A) of
Regulation S-K.
The registrant hereby agrees to furnish a copy of
any such
instrument to the Securities and Exchange
Commission upon
request.
10(a). Operating Agreement between the registrant and AT&T
dated as
of June 25, 1993 (incorporated by reference to
exhibit 10.1
to the registrant's Registration Statement on Form
S-1 [No.
33-49605] filed with the Securities and Exchange
Commission).
10(b). Intercompany Agreement between the registrant and
AT&T dated
as of June 25, 1993 (incorporated by reference to
Exhibit
10.2 to the registrant's Registration Statement on
Form S-1
[No. 33-49605] filed with the Securities and
Exchange
Commission).
10(c). License Agreement between the registrant and AT&T
dated as of
June 25, 1993 (incorporated by reference to Exhibit
10.3 to
the registrant's Registration Statement on Form S-1
[No. 33-
49605] filed with the Securities and Exchange
Commission).
10(d). Registration Rights Agreement between the
registrant and AT&T
dated as of June 25, 1993 (incorporated by
reference to
Exhibit 10.4 to the registrant's Registration
Statement on
Form S-1 [No. 33-49605] filed with the Securities
and
Exchange Commission).
79
<PAGE>
<PAGE>82
10(e). Tax Agreements between the registrant and AT&T
dated as of
June 25, 1993 (incorporated by reference to Exhibit
10.5 to
the registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(f). AT&T Capital Corporation 1993 Long Term Incentive
Plan
(incorporated by reference to Exhibit 10.9 to the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(g). Form of Stock Option Agreement under the 1993 Long
Term
Incentive Plan (incorporated by reference to
Exhibit 10.10 to
the registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(h). Form of Restricted Stock Agreement under the 1993
Long Term
Incentive Plan (incorporated by reference to
Exhibit 10.11 to
the registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(i). Form of Director's Stock Option Agreement under the
1993 Long
Term Incentive Plan (incorporated by reference to
Exhibit
10.12 to the registrant's Registration Statement on
Form S-1
[No. 33-49605] filed with the Securities and
Exchange
Commission).
10(j). Form of Director's Restricted Stock Award under the
1993 Long
Term Incentive Plan (incorporated by reference to
Exhibit
10.13 to the registrant's Registration Statement on
Form S-1
[No. 33-49605] filed with the Securities and
Exchange
Commission).
10(k). AT&T Capital Corporation 1993 Leveraged Stock
Purchase Plan
(incorporated by reference to Exhibit 10.14 to the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(l). Form of Stock Purchase Agreement and related
exhibits under
the 1993 Leveraged Stock Purchase Plan
(incorporated by
reference to Exhibit 10.15 to the registrant's
Registration
Statement on Form S-1 [No. 33-49605] filed with the
Securities and Exchange Commission).
10(m). AT&T Capital Corporation 1993 Annual Incentive Plan
(incorporated by reference to Exhibit 10.16 to the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
10(n). AT&T Capital Corporation 1993 Share Performance
Incentive
Plan (incorporated by reference to Exhibit 10.17 to
the
registrant's Registration Statement on Form S-1
[No.
33-49605] filed with the Securities and Exchange
Commission).
80
<PAGE>
<PAGE>83
10(o). Restructuring Agreement dated as of March 29, 1993,
among the
Registrant, Old Capital, Old Credit and AT&T
(incorporated by
reference to Exhibit 10.18 to the registrant's
Registration
Statement on Form S-1 [No. 33-49605] filed with the
Securities and Exchange Commission).
10(p). Credit Agreement dated as of July 11, 1994, among
the
registrant, the Banks listed therein and Morgan
Guaranty
Trust Company of New York, as Agent (three-year
term).
10(q). Credit Agreement dated as of July 11, 1994, among
the
registrant, the Banks listed therein and Morgan
Guaranty
Trust Company of New York, as Agent (364-day term).
10(r). Form of AT&T Capital Corporation 1993 Employee
Compensation
Adjustment Plan (incorporated by reference to
Exhibit 10.21
to the registrant's Registration Statement on Form
S-1 [No.
33-49605] filed with the Securities and Exchange
Commission).
10(s). Form of AT&T Capital Corporation 1993 Deferred
Compensation
Plan (incorporated by reference to Exhibit 10.22 to
the
registrant's Registration Statement on Form S-1
[No.33-
49605]filed with the Securities and Exchange
Commission).
10(t). Form of AT&T Capital Corporation 1993 Financial
Counseling
Plan (incorporated by reference to Exhibit 10.22 to
the
registrant's Registration Statement on Form S-1
[No.33-49605]
filed with the Securities and Exchange Commission).
10(u). AT&T Capital Corporation 1994 Employee Stock
Purchase Plan
(incorporated by reference to Exhibit 4(c) to the
registrant's Registration Statement on Form S-8
[No. 33-
54315] filed with the Securities and Exchange
Commission).
10(v). Form of Summary Plan Description of AT&T Capital
Corporation
Retirement and Savings Plan (including the Form of
Description of AT&T Capital Corporation Excess
Benefit Plan).
10(w). AT&T Capital Corporation 1995 Annual Incentive
Plan.
10(x). AT&T Capital Corporation 1995 Senior Executive
Annual
Incentive Plan (incorporated by reference to
Exhibit A
to the registrant's definitive Proxy Statement
dated March
20, 1995 issued in connection with the 1995 Annual
Meeting of
Stockholders).
10(y). Form of Summary Plan Description of AT&T Capital
Corporation
Executive Benefit Plan.
81
<PAGE>
<PAGE>84
10(z). Form of Summary Plan Description of AT&T Capital
Corporation
Supplemental Executive Retirement Plan.
10(aa).Form of Summary Plan Description of AT&T Capital
Corporation
Compensation Limit Excess Plan.
11. Computation of Earnings Per Share
12. Computation of Ratio of Earnings to Fixed Charges.
21. Subsidiaries of the registrant.
23. Consent of Coopers & Lybrand L.L.P.
24(a). Powers of Attorney executed by officers and
directors who
signed this report.
24(b). Certificate of Corporate Resolution.
27. Financial Data Schedule
82
<PAGE>1
EXHIBIT 3(b)
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION
AMENDED AND RESTATED
BY-LAWS
OCTOBER 21, 1994
BY-LAWS
OF
AT&T CAPITAL CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Dover, County of Kent, State
of
Delaware.
Section 2. Other Offices. The Corporation may also have
offices at
such other places both within and without the State of Delaware
as the
Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders
for the
election of directors or for any other purpose shall be held at
such time
and place, either within or without the State of Delaware, as
shall be
designated from time to time by the Board of Directors and stated
in the
notice of the meeting or in a duly executed waiver of notice
thereof. Each
meeting of the stockholders shall be chaired by the Chairman of
the Board
of Directors or his designee.
Section 2. Annual Meetings. The Annual Meeting of
Stockholders shall
be held on such date and at such time as shall be designated from
time to
time by the Board of Directors and stated in the notice of the
meeting, at
which meeting the stockholders shall elect by a plurality vote a
Board of
Directors, and transact such other business as may properly be
brought
before the meeting. Written notice of the Annual Meeting stating
the
place, date and hour of the meeting shall be given to each
stockholder
entitled to vote at such meeting not less than ten nor more than
sixty days
before the date of the meeting. Any previously scheduled Annual
Meeting of
Stockholders may be postponed by resolution of the Board of
Directors upon
public notice given on or prior to the date previously scheduled
for such
meeting.
<PAGE>
<PAGE>2
Section 3. Special Meetings. Unless otherwise prescribed
by law or
by the Restated Certificate of Incorporation of the Corporation
(including
any Certificates of Designation with respect to any Preferred
Stock, the
"Certificate of Incorporation"), Special Meetings of
Stockholders, for any
purpose or purposes, may be called by (i) the Chairman of the
Board of
Directors, (ii) the Chief Executive Officer, (iii) the President,
(iv) the
Secretary or (v) the Chairman of the Executive Committee, and
shall be
called by any such officer at the request in writing of a
majority of the
entire Board of Directors or, so long as (and only so long as)
such request
is received prior to the Trigger Date, of the holders of a
majority of the
then outstanding Common Stock. Such request shall state the
purpose or
purposes of the proposed meeting. Written notice of a Special
Meeting of
Stockholders stating the place, date and hour of the meeting and
the
purpose or purposes for which the meeting is called shall be
given not less
than ten nor more than sixty days before the date of the meeting
to each
stockholder entitled to vote at such meeting. Except as
otherwise required
by law or by the Certificate of Incorporation, no business shall
be
transacted at any Special Meeting of Stockholders other than the
items of
business stated in the notice of meeting. If the Chairman of a
Special
Meeting of Stockholders determines that any business proposed to
be
conducted at such meeting was not properly brought before such
meeting in
accordance with the foregoing procedures, the Chairman shall
declare to
such meeting that such business was not properly brought before
such
meeting, and such business shall not be transacted.
For purposes of these By-Laws:
1. "Trigger Date" shall mean the first date on which AT&T
ceases to
beneficially own (excluding for such purposes shares of Common
Stock
beneficially owned by AT&T but not for its own account, including
(in such
exclusion) beneficial ownership which arises by virtue of some
entity that
is an affiliate of AT&T being a sponsor or advisor of a mutual or
similar
fund that beneficially owns shares of Common Stock) forty percent
or more
of the then outstanding Common Stock and preferred stock entitled
to vote
together with the Common Stock as a single class (collectively,
the "Voting
Stock");
2. "AT&T" shall have the meaning specified in Section D(1)
of
Article FIFTH of the Certificate of Incorporation; and
3. "affiliate" and "beneficial ownership" shall have the
respective
meanings given to such terms in Rules 12b-2 and 13d-3 of the
General Rules
and Regulations under the Securities Exchange Act of 1934, as
amended (the
"Exchange Act"), as in effect at the Filing Time (as defined in
the
Certificate of Incorporation).
Section 4. Quorum. Except as otherwise provided by law or
by the
Certificate of Incorporation, the holders of a majority of the
capital
stock issued and outstanding and entitled to vote thereat,
present in
person or represented by proxy, shall constitute a quorum at all
meetings
of the stockholders for the transaction of business. If,
however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person
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<PAGE>3
or represented by proxy, shall have power to adjourn the meeting
from time
to time, without notice other than announcement at the meeting of
the
place, date and hour of the adjourned meeting, until a quorum
shall be
present or represented. At such adjourned meeting at which a
quorum shall
be present or represented, any business may be transacted which
might have
been transacted at the meeting as originally noticed. If the
adjournment
is for more than thirty days, or if after the adjournment a new
record date
is fixed for the adjourned meeting, a notice of the adjourned
meeting shall
be given to each stockholder entitled to vote at the meeting.
Section 5. Voting. Unless otherwise required by law, the
Certificate
of Incorporation or these By-Laws, any question brought before
any meeting
of stockholders shall be decided by the vote of the holders of a
majority
of the stock represented and entitled to vote thereat. Each
stockholder
represented at a meeting of stockholders shall be entitled to
cast one vote
for each share of the capital stock entitled to vote thereat held
by such
stockholder or such other vote, if any, as shall be set forth in
the
Certificate of Incorporation. Such votes may be cast in person
or by duly
executed proxy but no proxy shall be voted on or after three
years from its
date, unless such proxy provides for a longer period. The Board
of
Directors, in its discretion, or the officer of the Corporation
presiding
at a meeting of stockholders, in his discretion, may require that
any votes
cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The
officer of the
Corporation who has charge of the stock ledger of the Corporation
shall
prepare and make, at least ten days before every meeting of
stockholders, a
complete list of the stockholders entitled to vote at the
meeting, arranged
in alphabetical order, and showing the address of each
stockholder and the
number of shares registered in the name of each stockholder.
Such list
shall be open to the examination of any stockholder, for any
purpose
germane to the meeting, during ordinary business hours, for a
period of at
least ten days prior to the meeting, either at a place within the
city
where the meeting is to be held, which place shall be specified
in the
notice of the meeting, or, if not so specified, at the place
where the
meeting is to be held. The list shall also be produced and kept
at the
time and place of the meeting during the whole time thereof, and
may be
inspected by any stockholder of the Corporation who is present.
Section 7. Stock Ledger. The stock ledger of the
Corporation shall
be the only evidence as to who are the stockholders entitled to
examine the
stock ledger, the list required by Section 6 of this Article II
or the
books of the Corporation, or to vote in person or by proxy at any
meeting
of stockholders.
Section 8. Nomination of Directors. After the Trigger
Date, only
persons who are nominated in accordance with the following
procedures shall
be eligible for election as directors of the Corporation, except
as may be
otherwise provided in the Certificate of Incorporation with
respect to the
right of holders of preferred stock of the Corporation to
nominate and
elect a specified number of directors in certain circumstances:
Nominations of persons for election to the Board of
Directors may be
made at any annual meeting of stockholders (a) by or at the
direction of
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<PAGE>4
the Board of Directors (or any duly authorized committee thereof)
or (b) by
any stockholder of the Corporation (i) who is a stockholder of
record on
the date of the giving of the notice provided for in this Section
8 and on
the record date for the determination of stockholders entitled to
vote at
such annual meeting and (ii) who complies with the notice
procedures set
forth in this Section 8.
In addition to any other applicable requirements of (i) the
Exchange
Act and the rules and regulations thereunder, (ii) the General
Corporation
Law of the State of Delaware, (iii) the rules or regulations of
any
national securities exchange or similar body overseeing any
trading of
shares of the Corporation, (iv) the Certificate of Incorporation
or (v)
these By-laws, for a nomination to be made by a stockholder, such
stockholder must have given timely notice thereof in proper
written form to
the Secretary of the Corporation, as set forth below.
To be timely, a stockholder's notice to the Secretary must
be
delivered to or mailed and received at the principal executive
offices of
the Corporation not less than sixty (60) days nor more than
ninety (90)
days prior to the anniversary date of the immediately preceding
annual
meeting of stockholders; provided, however, that in the event
that the
annual meeting is called for a date that is not within thirty
(30) days
before or after such anniversary date, notice by the stockholder
in order
to be timely must be so received not later than the close of
business on
the tenth (10th) day following the day on which notice of the
date of the
annual meeting was mailed or public disclosure of the date of the
annual
meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary
must set forth (a) as to each person whom the stockholder
proposes to
nominate for election as a director (i) the name, age, business
address and
residence address of the person, (ii) the principal occupation or
employment of the person, (iii) the class or series and number of
shares of
capital stock of the Corporation which are owned beneficially or
of record
by the person and (iv) any other information relating to the
person that
would be required to be disclosed in a proxy statement or other
filings
required to be made in connection with solicitations of proxies
for
election of such person as a director pursuant to Section 14 of
the
Exchange Act and the rules and regulations promulgated thereunder
or any
other applicable laws, rules or regulations (including those of
any
national securities exchange or similar body overseeing any
trading of
shares of the Corporation); and (b) as to the stockholder giving
the notice
(i) the name and record address of such stockholder, (ii) the
class or
series and number of shares of capital stock of the Corporation
which are
owned beneficially or of record by such stockholder, (iii) a
detailed
description of all arrangements or understandings between such
stockholder
and each proposed nominee and any other person or persons
(including their
names) pursuant to which the nomination(s) are to be made by such
stockholder, (iv) a representation that such stockholder intends
to appear
in person or by proxy at the annual meeting to nominate the
persons named
in its notice and (v) any other information relating to such
stockholder
that would be required to be disclosed in a proxy statement or
other
filings required to be made in connection with solicitations of
proxies for
election of directors pursuant to Section 14 of the Exchange Act
and the
rules and regulations promulgated thereunder. Such notice must
be
<PAGE>
<PAGE>5
accompanied by a written consent of each proposed nominee to
being named as
a nominee and to serve as a director if elected.
After the Trigger Date, no person shall be eligible for
election as a
director of the Corporation unless nominated in accordance with
the
procedures set forth in this Section 8. If the Chairman of an
Annual
Meeting of Stockholders determines that a nomination was not made
in
accordance with the foregoing procedures, the Chairman shall
declare to
such meeting that the nomination was defective and such defective
nomination shall be void for all purposes and shall be
disregarded.
Section 9. Business at Annual Meetings. No business may be
transacted at an Annual Meeting of Stockholders, other than
business that
is either (a) specified in the notice of meeting (or any
supplement
thereto) given by or at the direction of the Board of Directors
(or any
duly authorized committee thereof), (b) otherwise properly
brought before
the Annual Meeting of Stockholders by or at the direction of the
Board of
Directors (or any duly authorized committee thereof) or (c)
otherwise
properly brought before the Annual Meeting of Stockholders by any
stockholder of the Corporation (i) who is a stockholder of record
on the
date of the giving of the notice provided for in this Section 9
and on the
record date for the determination of stockholders entitled to
vote at such
annual meeting and (ii) who complies with the notice procedures
set forth
in this Section 9.
In addition to any other applicable requirements of (i) the
Exchange
Act and the rules and regulations thereunder, (ii) the General
Corporation
Law of the State of Delaware, (iii) the rules or regulations of
any
national securities exchange or similar body overseeing any
trading of
shares of the Corporation, (iv) the Certificate of Incorporation
or (v)
these By-laws, for business to be properly brought before an
Annual Meeting
of Stockholders by a stockholder (other than business consisting
of the
election of directors, with respect to which the procedures set
forth in
Section 8 shall be applicable), such stockholder must have given
timely
notice thereof in proper written form to the Secretary of the
Corporation.
To be timely, a stockholder's notice to the Secretary must
be
delivered to or mailed and received at the principal executive
offices of
the Corporation not less than sixty (60) days nor more than
ninety (90)
days prior to the anniversary date of the immediately preceding
Annual
Meeting of Stockholders; provided, however, that in the event
that the
Annual Meeting of Stockholders is called for a date that is not
within
thirty (30) days before or after such anniversary date, notice by
the
stockholder in order to be timely must be so received not later
than the
close of business on the tenth (10th) day following the day on
which notice
of the date of the Annual Meeting of Stockholders was mailed or
public
disclosure of the date of the Annual Meeting of Stockholders was
made,
whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary
must set forth as to each matter such stockholder proposes to
bring before
the Annual Meeting of Stockholders (i) a brief description of the
business
desired to be brought before the Annual Meeting of Stockholders
and the
reasons for conducting such business at such meeting, (ii) the
name and
record address of such stockholder and the name and address of
the
<PAGE>
<PAGE>6
beneficial owner, if any, on whose behalf the proposal is made,
(iii) the
class or series and number of shares of capital stock of the
Corporation
which are owned beneficially or of record by such stockholder,
(iv) a
description of all arrangements or understandings between such
stockholder
and any other person or persons (including their names) in
connection with
the proposal of such business by such stockholder and any
material interest
of such stockholder and such other person or persons in such
business and
(v) a representation that such stockholder intends to appear in
person or
by proxy at such meeting to bring such business before the
meeting.
No business shall be conducted at any Annual Meeting of
Stockholders
except business brought before such meeting in accordance with
the
procedures set forth in this Section 9; provided, however, that
once
business has been properly brought before an Annual Meeting of
Stockholders
in accordance with such procedures, nothing in this Section 9
shall be
deemed to preclude discussion at such meeting by any stockholder
of any
such business. If the Chairman of an Annual Meeting of
Stockholders
determines that business was not properly brought before such
meeting in
accordance with the foregoing procedures, the Chairman shall
declare to
such meeting that the business was not properly brought before
the meeting
and such business shall not be transacted.
Section 10. Inspectors. Prior to any meeting of
stockholders, the
Board of Directors or the Chief Executive Officer shall appoint
one or more
inspectors to act at such meeting and make a written report
thereof and may
designate one or more persons as alternate inspectors to replace
any
inspector who fails to act. If no inspector or alternate is able
to act at
the meeting of stockholders, the person presiding at the meeting
shall
appoint one or more inspectors to act at the meeting. Each
inspector,
before entering upon the discharge of his duties, shall take and
sign an
oath faithfully to execute the duties of inspector with strict
impartiality
and according to the best of his or her ability. The inspectors
shall
ascertain the number of shares outstanding and the voting power
of each,
determine the shares represented at the meeting and (subject to
any
appropriate review) the validity of proxies and ballots, count
all votes
and ballots, determine and retain for a reasonable period a
record of the
disposition of any challenges made to any determination by the
inspectors
and certify their determination of the number of shares
represented at the
meeting and their count of all votes and ballots. The inspectors
may
appoint or retain other persons to assist them in the performance
of their
duties. The date and time of the opening and closing of the
polls for each
matter upon which the stockholders will vote at a meeting shall
be
announced at the meeting. No ballot, proxy or vote, nor any
revocation
thereof or change thereto, shall be accepted by the inspectors
after the
closing of the polls. In determining the validity and counting
of proxies
and ballots, the inspectors shall be limited to an examination of
the
proxies, any envelopes submitted therewith, any information
provided by a
stockholder who submits a proxy by telegram, cablegram or other
electronic
transmission from which it can be determined that the proxy was
authorized
by the stockholder, ballots and the regular books and records of
the
corporation, and they may also consider other reliable
information for the
limited purpose of reconciling proxies and ballots submitted by
or on
behalf of banks, brokers, their nominees or similar persons which
represent
more votes than the holder of a proxy is authorized by the record
owner to
cast or more votes than the stockholder holds of record. If the
inspectors
<PAGE>
<PAGE>7
consider other reliable information for such purpose, they shall,
at the
time they make their certification, specify the precise
information
considered by them, including the person or persons from whom
they obtained
the information, when the information was obtained, the means by
which the
information was obtained and the basis for the inspectors' belief
that such
information is accurate and reliable.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of
Directors
shall consist of not less than three nor more than twenty-five
members, the
exact number of which shall be fixed from time to time by
resolution
adopted by the affirmative vote of a majority of the entire Board
of
Directors. Any director may resign at any time by delivering a
written
notice of resignation, signed by such director, to the Board of
Directors
or the Chief Executive Officer. Unless otherwise specified
therein, such
resignation shall take effect upon delivery. Directors need not
be
stockholders.
Section 2. Vacancies. Any vacancy on the Board of
Directors may be
filled in accordance with Section 223 of the General Corporation
Law of the
State of Delaware; provided, however, that after the Trigger
Date,
vacancies and newly created directorships resulting from any
increase in
the authorized number of directors may only be filled by a
majority of the
directors then in office, though less than a quorum, or by a sole
remaining
director, and the directors so chosen shall hold office until the
next
election of directors and until their successors are duly elected
and
qualified, or until their earlier death, resignation or removal.
Section 3. Duties and Powers. The business of the
Corporation shall
be managed by or under the direction of the Board of Directors
which may
exercise all such powers of the Corporation and do all such
lawful acts and
things as are not by statute or by the Certificate of
Incorporation or by
these By-Laws directed or required to be exercised or done by the
stockholders.
Section 4. Meetings. The Board of Directors of the
Corporation may
hold meetings, both regular and special, either within or without
the State
of Delaware. Each meeting of the Board of Directors shall be
chaired by
the Chairman of the Board of Directors, who shall be a director
chosen by a
majority of the entire Board, or, in his absence, by the Vice
Chairman of
the Board of Directors, who shall also be a director chosen by a
majority
of the entire Board, or, in their absence, by such director as
shall be
chosen by a majority of the directors in attendance at such
meeting.
Regular meetings of the Board of Directors may be held without
notice at
such time and at such place as may from time to time be
determined by the
Board of Directors. Special meetings of the Board of Directors
may be
called by the Chairman, the Vice Chairman, the Chief Executive
Officer, the
President or any director. Notice thereof stating the place,
date and hour
of the meeting shall be given to each director either by mail not
less than
forty-eight (48) hours before the date of the meeting, by
telephone or
telegram on twenty-four (24) hours' notice, or on such shorter
notice as
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<PAGE>8
the person or persons calling such meeting may deem necessary or
appropriate in the circumstances.
Section 5. Quorum. Except as may be otherwise specifically
provided
by law, the Certificate of Incorporation or these By-Laws, at all
meetings
of the Board of Directors, a majority of the entire Board of
Directors
shall constitute a quorum for the transaction of business and the
act of a
majority of the directors present at any meeting at which there
is a quorum
shall be the act of the Board of Directors. If a quorum shall
not be
present at any meeting of the Board of Directors, the directors
present
thereat may adjourn the meeting from time to time, without notice
other
than announcement at the meeting, until a quorum shall be
present.
Section 6. Actions by Consent. Unless otherwise provided
by the
Certificate of Incorporation or these By-Laws, any action
required or
permitted to be taken at any meeting of the Board of Directors or
of any
committee thereof may be taken without a meeting, by written
consent of all
the members of the Board of Directors or such committee, as the
case may
be, which consent may be executed in counterparts, and the
writing or
writings are filed with the minutes of proceedings of the Board
of
Directors or such committee.
Section 7. Meetings by Means of Conference Telephone.
Unless
otherwise provided by the Certificate of Incorporation or these
By-Laws,
members of the Board of Directors of the Corporation, or any
committee
thereof, may participate in a meeting of the Board of Directors
or such
committee by means of a conference telephone or similar
communications
equipment by means of which all persons participating in the
meeting can
hear each other, and participation in a meeting pursuant to this
Section 7
shall constitute presence in person at such meeting.
Section 8. Committees. The Board of Directors may, by
resolution
passed by a majority of the entire Board of Directors, designate
one or
more committees, each committee to consist of one or more of the
directors
of the Corporation. The Board of Directors may designate one or
more
directors as alternate members of any committee, who may replace
any absent
or disqualified member at any meeting of any such committee. In
the
absence or disqualification of a member of a committee, and in
the absence
of a designation by the Board of Directors of an alternate member
to
replace the absent or disqualified member, the member or members
thereof
present at any meeting and not disqualified from voting, whether
or not he
or they constitute a quorum, may unanimously appoint another
member of the
Board of Directors to act at the meeting in the place of any
absent or
disqualified member. Any committee, to the extent allowed by law
and
provided in the resolution establishing such committee, shall
have and may
exercise all the powers and authority of the Board of Directors
in the
management of the business and affairs of the Corporation. Each
committee
shall keep regular minutes and report to the Board of Directors
when
required.
Section 9. Compensation. The directors may be paid their
expenses,
if any, of attendance at each meeting of the Board of Directors
and may be
paid a fixed sum for attendance at each meeting of the Board of
Directors
or a stated salary or retainer as director. No such payment
shall preclude
<PAGE>
<PAGE>9
any director from serving the Corporation in any other capacity
and
receiving compensation therefor. Members of special or standing
committees
may be allowed like compensation for attending committee meetings
or acting
as chairman of any committee.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall
be chosen
by the Board of Directors and shall be a Chief Executive Officer,
a
President, a Secretary and a Treasurer. The Board of Directors,
in its
discretion, may also choose one or more Vice Presidents,
Assistant
Secretaries, Assistant Treasurers and other officers. Any number
of
offices may be held by the same person, unless otherwise
prohibited by law,
the Certificate of Incorporation or these By-Laws. The officers
of the
Corporation need not be stockholders of the Corporation nor need
such
officers be directors of the Corporation. The Chairman and Vice
Chairman
of the Board of Directors, in such capacity, shall not be
considered
officers of the Corporation.
Section 2. Election. The Board of Directors at its first
meeting
held after each Annual Meeting of Stockholders shall elect the
officers of
the Corporation who shall hold their offices for such terms and
shall
exercise such powers and perform such duties as shall be
determined from
time to time by the Board of Directors; and all officers of the
Corporation
shall hold office until their successors are chosen and
qualified, or until
their earlier death, resignation or removal. Any vacancy
occurring in any
office of the Corporation shall be filled by the Board of
Directors. The
salaries and other compensation of all officers of the
Corporation shall be
fixed from time to time by the Board of Directors or the
appropriate
committee thereof; provided that the Board of Directors or such
committee
may delegate to the Chief Executive Officer (who may further
delegate such
power) the power to fix from time to time the salaries and other
compensation of any officer of the Corporation other than the
Chief
Executive Officer.
Section 3. Voting Securities Owned by the Corporation.
Powers of
attorney, proxies, waivers of notice of meeting, consents and
other
instruments relating to securities owned by the Corporation may
be executed
in the name of and on behalf of the Corporation by the Chief
Executive
Officer, the President or any Vice President and any such officer
may, in
the name of and on behalf of the Corporation, take all such
action as any
such officer may deem advisable to vote in person or by proxy at
any
meeting of security holders of any corporation in which the
Corporation may
own securities and at any such meeting shall possess and may
exercise any
and all rights and powers incident to the ownership of such
securities and
which, as the owner thereof, the Corporation might have exercised
and
possessed if present. The Board of Directors may, by resolution,
from time
to time confer like powers upon any other person or persons.
Section 4. Chief Executive Officer. The Chief Executive
Officer
shall be the chief executive officer of the Corporation, shall
have general
and active supervision, and plenary power, over all the business
and
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<PAGE>10
affairs of the Corporation, subject to the control of the Board
of
Directors, shall be responsible for the general management and
direction of
all the business and affairs of the Corporation and except where
by law the
signature of the President is required, shall possess the same
power as the
President to execute, in the name and on behalf of the
Corporation, all
bonds, mortgages, contracts and other instruments of the
Corporation which
may be authorized by the Board of Directors. During the absence
or
disability of the President, the Chief Executive Officer shall
exercise all
the powers and discharge all the duties of the President. The
Chief
Executive Officer shall also perform such other duties and may
exercise
such other powers as are incident to his office or as from time
to time may
be assigned to him by these By-Laws or by the Board of Directors.
Section 5. President. The President shall, subject to the
control of
the Board of Directors and of the Chief Executive Officer, have
general and
active supervision over all the business and affairs of the
Corporation and
shall see that all orders and resolutions of the Board of
Directors and of
the Chief Executive Officer are carried into effect. At the
request of the
Chief Executive Officer or in his absence or in the event of his
inability
or refusal to act, the President shall perform the duties of the
Chief
Executive Officer and when so acting, shall have all the powers
of and be
subject to all the restrictions upon the Chief Executive Officer.
The
President shall execute, in the name and on behalf of the
Corporation, all
bonds, mortgages, contracts and other instruments of the
Corporation
requiring a seal, under the seal of the Corporation, except where
required
by law to be otherwise signed and executed and except that the
other
officers of the Corporation may sign and execute documents when
so
authorized by these By-Laws, the Board of Directors, the Chief
Executive
Officer or the President. The President also may execute, in the
name and
on behalf of the Corporation, all other bonds, mortgages,
contracts and
other instruments of the Corporation. The President shall also
perform
such other duties and may exercise such other powers as are
incident to his
office or as from time to time may be assigned to him by these
By-Laws or
by the Board of Directors or by the Chief Executive Officer.
Section 6. Vice Presidents. In the absence of the
President or in
the event of his inability or refusal to act, the Vice President
or the
Vice Presidents if there is more than one (in the order
designated by the
Board of Directors) shall perform the duties of the President,
and when so
acting, shall have all the powers of and be subject to all the
restrictions
upon the President. Each Vice President shall perform such other
duties
and have such other powers as the Board of Directors, the Chief
Executive
Officer or the President from time to time may prescribe.
Section 7. Secretary. The Secretary shall attend all
meetings of the
Board of Directors and all meetings of stockholders and record
all the
proceedings thereat in a book or books to be kept for that
purpose; the
Secretary shall also perform like duties for each standing
committee when
required by such committee. The Secretary shall give, or cause
to be
given, notice of all meetings of the stockholders and special
meetings of
the Board of Directors, and shall perform such other duties as
may be
prescribed by the Board of Directors, the Chairman of the Board
of
Directors, the Chief Executive Officer or the President. If the
Secretary
shall be unable or shall refuse to cause to be given notice of
any meeting
of the stockholders or special meeting of the Board of Directors,
and if
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<PAGE>11
there be no Assistant Secretary, then the Board of Directors, the
Chairman
of the Board of Directors, the Chief Executive Officer or the
President may
choose another officer to cause such notice to be given. The
Secretary
shall have custody of the seal of the Corporation and the
Secretary or any
Assistant Secretary, if there be one, shall have authority to
affix the
same to any instrument requiring it and when so affixed, it may
be attested
by the signature of the Secretary or by the signature of any such
Assistant
Secretary. The Board of Directors may give general authority to
any other
officer to affix the seal of the Corporation and to attest the
affixing by
his signature. The Secretary shall see that all books, reports,
statements, certificates and other documents and records required
by law to
be kept or filed are properly kept or filed, as the case may be.
In
addition, the Secretary shall, promptly upon receipt of a request
for
indemnification from any director, officer, employee or agent
pursuant to
Section 3 of Article VIII, advise the Board of Directors in
writing of the
receipt of such request.
Section 8. Treasurer. Subject at all times to the control
of the
Board of Directors, the Chief Executive Officer and the
President, the
Treasurer shall have custody of, and be responsible for, the
corporate
funds and securities and shall invest the same in his discretion
and shall
keep full and accurate accounts of receipts and disbursements in
books
belonging to the Corporation and shall deposit all moneys and
other
valuable effects in the name and to the credit of the Corporation
in such
depositories as may be designated by the Board of Directors. The
Treasurer
shall disburse the funds of the Corporation as may be ordered by
the Board
of Directors, taking proper vouchers for such disbursements, and
shall
render to the Chief Executive Officer or the President, and the
Board of
Directors, at its regular meetings, or when the Board of
Directors so
requires, an account of all his transactions as Treasurer and of
the
financial condition of the Corporation. The Treasurer shall
perform such
other duties and have such other powers as the Board of
Directors, the
Chief Executive Officer or the President from time to time may
prescribe.
Section 9. Assistant Secretaries. Except as may be
otherwise
provided in these By-Laws, Assistant Secretaries, if there be
any, shall
perform such duties and have such powers as from time to time may
be
assigned to them by the Board of Directors, the Chief Executive
Officer,
the President, any Vice President, if there be one, or the
Secretary, and
in the absence of the Secretary or in the event of his disability
or
refusal to act, shall perform the duties of the Secretary, and
when so
acting, shall have all the powers of and be subject to all the
restrictions
upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if
there be
any, shall perform such duties and have such powers as from time
to time
may be assigned to them by the Board of Directors, the Chief
Executive
Officer, the President, any Vice President, if there be one, or
the
Treasurer, and in the absence of the Treasurer or in the event of
his
disability or refusal to act, shall perform the duties of the
Treasurer,
and when so acting, shall have all the powers of and be subject
to all the
restrictions upon the Treasurer.
<PAGE>
<PAGE>12
Section 11. Other Officers. Such other officers as the
Board of
Directors may choose shall perform such duties and have such
powers as from
time to time may be assigned to them by the Board of Directors.
The Board
of Directors may delegate to any other officer of the Corporation
the power
to choose such other officers and to prescribe their respective
duties and
powers.
Section 12. Removal and Resignation; Vacancies. Any
officer may be
removed for or without cause at any time by the Board of
Directors. Any
officer may resign at any time by delivering a written notice of
resignation, signed by such officer, to the Board of Directors or
the Chief
Executive Officer. Unless otherwise specified therein, such
resignation
shall take effect upon delivery. Any vacancy occurring in any
office of
the Corporation by death, resignation, removal or otherwise,
shall be
filled by the Board of Directors.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in
the
Corporation shall be entitled to have a certificate signed, in
the name of
the Corporation (i) by the Chief Executive Officer, the President
or a Vice
President and (ii) by the Treasurer or an Assistant Treasurer, or
the
Secretary or an Assistant Secretary of the Corporation,
certifying the
number of shares owned by him in the Corporation.
Section 2. Signatures. Where a certificate is
countersigned by (i) a
transfer agent other than the Corporation or its employee, or
(ii) a
registrar other than the Corporation or its employee, any other
signature
on the certificate may be facsimile. In case any officer,
transfer agent or
registrar who has signed or whose facsimile signature has been
placed upon
a certificate shall have ceased to be such officer, transfer
agent or
registrar before such certificate is issued, it may be issued by
the
Corporation with the same effect as if he or it were such
officer, transfer
agent or registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may
direct a
new certificate to be issued in place of any certificate
theretofore issued
by the Corporation alleged to have been lost, stolen or
destroyed, upon the
making of an affidavit of that fact by the person claiming the
certificate
of stock to be lost, stolen or destroyed. When authorizing such
issue of a
new certificate, the Board of Directors may, in its discretion
and as a
condition precedent to the issuance thereof, require the owner of
such
lost, stolen or destroyed certificate, or his legal
representative, to
advertise the same in such manner as the Board of Directors shall
require
and/or to give the Corporation a bond in such sum as it may
direct as
indemnity against any claim that may be made against the
Corporation with
respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 4. Transfers. Stock of the Corporation shall be
transferable
in the manner prescribed by law and in these By-Laws. Transfers
of stock
shall be made on the books of the Corporation only by the person
named in
the certificate or by his attorney lawfully constituted in
writing and upon
<PAGE>
<PAGE>13
the surrender of the certificate therefor, which shall be
cancelled before
a new certificate shall be issued.
Section 5. Record Date. In order that the Corporation may
determine
the stockholders entitled to notice of or to vote at any meeting
of
stockholders or any adjournment thereof, or, prior to the Trigger
Date,
entitled to express consent to corporate action in writing
without a
meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise
any rights
in respect of any change, conversion or exchange of stock, or for
the
purpose of any other lawful action, the Board of Directors may
fix, in
advance, a record date, which shall not be more than sixty days
nor less
than ten days before the date of such meeting, nor more than
sixty days
prior to any such other corporate action. A determination of
stockholders
of record entitled to notice of or to vote at a meeting of
stockholders
shall apply to any adjournment of the meeting; provided, however,
that the
Board of Directors may fix a new record date for the adjourned
meeting.
Section 6. Beneficial Owners. The Corporation shall be
entitled to
recognize the exclusive right of a person registered on its books
as the
owner of shares to receive dividends, and to vote as such owner,
and for
all other purposes, and shall not be bound to recognize any
equitable or
other claim to or interest in such share or shares on the part of
any other
person, whether or not it shall have express or other notice
thereof,
except as otherwise provided by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by
law, the
Certificate of Incorporation or these By-Laws to be given to any
director,
member of a committee or stockholder, such notice may be given by
mail,
addressed to such director, member of a committee or stockholder,
at his
address as it appears on the records of the Corporation, with
postage
thereon prepaid, and such notice shall be deemed to be given at
the time
when the same shall be deposited in the United States mail.
Written notice
may also be given personally or by telegram, facsimile, telex,
cable or
nationally recognized overnight courier.
Section 2. Waivers of Notice. Whenever any notice is
required by
law, the Certificate of Incorporation or these By-Laws, to be
given to any
director, member of a committee or stockholder, a waiver thereof
in
writing, signed by the person or persons entitled to said notice,
whether
before or after the time stated therein, and, in the case of a
waiver of
notice of a meeting, whether or not the business to be transacted
at or the
purposes of such meeting is set forth in such waiver, shall be
deemed
equivalent thereto. The attendance of any person at any meeting,
in person
or, in the case of a meeting of stockholders, by proxy, shall
constitute a
waiver of notice of such meeting except where such person attends
such
meeting for the express purpose of objecting at the beginning of
such
meeting to the transaction of any business on the grounds that
such meeting
is not duly called or convened.
<PAGE>
<PAGE>14
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of
the
Corporation, subject to the provisions of the Certificate of
Incorporation,
if any, may be declared by the Board of Directors at any regular
or special
meeting, and may be paid in cash, in property, or in shares of
capital
stock. Before payment of any dividend, there may be set aside
out of any
funds of the Corporation available for dividends such sum or sums
as the
Board of Directors from time to time, in its absolute discretion,
deems
proper as a reserve or reserves to meet contingencies, or for
equalizing
dividends, or for repairing or maintaining any property of the
Corporation,
or for any proper purpose, and the Board of Directors may modify
or abolish
any such reserve.
Section 2. Disbursements. All checks or demands for money
and notes
of the Corporation shall be signed by such officer or officers or
such
other person or persons as may be provided by these By-laws or as
the Board
of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation
shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed
thereon the name of the Corporation, the year of its organization
and the
words "Corporate Seal--Delaware". The seal may be used by
causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or
Proceedings other
Than Those by or in the Right of the Corporation. Subject to
Section 3 of
this Article VIII, the Corporation shall, to the fullest extent
permitted
by applicable law, indemnify any person who was or is a party to
(or
witness in) or is threatened to be made a party to (or witness
in) any
threatened, pending or completed action, suit or proceeding,
whether civil,
criminal, administrative or investigative (other than an action
or suit by
or in the right of the Corporation) by reason of the fact that he
is or was
or has agreed to become a director or officer of the Corporation,
or is or
was a director or officer of the Corporation serving (or has
agreed to
serve) at the request of the Corporation as a director or
officer,
employee, trustee or agent of or in any other capacity with
respect to
another corporation, partnership, joint venture, trust, employee
benefit
plan or other enterprise (in any of the foregoing capacities, a
"Representative of the Corporation"), or by reason of any action
alleged to
have been taken or omitted in such capacity, and may indemnify
any person
who was or is a party to (or witness in) or is threatened to be
made a
party to (or witness in) any such action, suit or proceeding by
reason of
the fact that he is or was or has agreed to become an employee or
agent of
the Corporation, or is or was serving (or has agreed to serve) at
the
<PAGE>
<PAGE>15
request of the Corporation as a Representative of the
Corporation, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in
settlement actually and reasonably incurred by him in connection
with such
action, suit or proceeding and any appeal therefrom, if he acted
in good
faith and in a manner he reasonably believed to be in or not
opposed to the
best interests of the Corporation, and, with respect to any
criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful.
The termination of any action, suit or proceeding by judgment,
order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did
not act in good faith and in a manner which he reasonably
believed to be in
or not opposed to the best interests of the Corporation, and,
with respect
to any criminal action or proceeding, have reasonable cause to
believe that
his conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or
Proceedings by or
in the Right of the Corporation. Subject to Section 3 of this
Article
VIII, the Corporation shall, to the fullest extent permitted by
applicable
law, indemnify any person who was or is a party to (or witness
in) or is
threatened to be made a party to (or witness in) any threatened,
pending or
completed action or suit by or in the right of the Corporation to
procure a
judgment in its favor by reason of the fact that he is or was or
has agreed
to become a director or officer of the Corporation, or is or was
a director
or officer of the Corporation serving (or has agreed to serve) at
the
request of the Corporation as a Representative of the
Corporation, or by
reason of any action alleged to have been taken or omitted in
such
capacity, and may indemnify any person who was or is a party to
(or witness
in) or is threatened to be made a party to (or witness in) any
such action,
suit or proceeding by reason of the fact that he is or was or has
agreed to
become an employee or agent of the Corporation, or is or was an
employee or
agent of the Corporation serving (or has agreed to serve) at the
request of
the Corporation as a Representative of the Corporation, against
expenses
(including attorneys' fees) actually and reasonably incurred by
him in
connection with the defense or settlement of such action or suit
if he
acted in good faith and in a manner he reasonably believed to be
in or not
opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or
matter as
to which such person shall have been adjudged to be liable to the
Corporation unless and only to the extent that the Delaware Court
of
Chancery or the court in which such action or suit was brought
shall
determine upon application that, despite the adjudication of
liability but
in view of all the circumstances of the case, such person is
fairly and
reasonably entitled to indemnity for such expenses which the
Delaware Court
of Chancery or such other court shall deem proper.
Section 3. Authorization of Indemnification; Procedures.
Any
indemnification under this Article VIII (unless ordered by a
court) shall
be made by the Corporation only as authorized in the specific
case upon a
determination that indemnification of the director or officer (or
employee
or agent, as the case may be) is proper in the circumstances
because he has
met the applicable standard of conduct set forth in Section 1 or
Section 2
of this Article VIII, as the case may be. A director, officer,
employee or
agent seeking indemnification under this Article VIII shall
submit to the
Secretary of the Corporation a written request including such
documentation
and information as is reasonably available to such director,
officer,
<PAGE>
<PAGE>16
employee or agent and reasonably necessary to determine whether
and to what
extent such director, officer, employee or agent is entitled to
indemnification (the "Supporting Documentation"). Such
determination shall
be made not later than 60 calendar days after receipt by the
Corporation of
such request together with the Supporting Documentation (i) by
the Board of
Directors by a majority vote of a quorum consisting of directors
who were
not parties to such action, suit or proceeding, or (ii) if such a
quorum is
not obtainable, or, even if obtainable a quorum of disinterested
directors
so directs, by independent legal counsel in a written opinion, or
(iii) by
majority vote of the stockholders. If no such determination has
been made
within 60 calendar days after receipt by the Corporation of the
request
therefor together with the Supporting Documentation such
director, officer,
employee or agent shall be deemed entitled to indemnification,
unless (x)
such director, officer, employee or agent misrepresented or
failed to
disclose a material fact in making the request for
indemnification or in
the Supporting Documentation or (y) such indemnification is
prohibited by
law. Notwithstanding the foregoing, to the extent that a
director or
officer of the Corporation has been successful on the merits or
otherwise
in defense of any action, suit or proceeding described above, or
in defense
of any claim, issue or matter therein, he shall be indemnified
against
expenses (including attorneys' fees) actually and reasonably
incurred by
him in connection therewith, without the necessity of
authorization in the
specific case. If a determination shall have been made or deemed
to have
been made, pursuant to this Section 3, or pursuant to the
preceding
sentence is not required to be made, that any director, officer,
employee
or agent is entitled to indemnification, the Corporation shall be
obligated
to pay the amounts constituting such indemnification within five
days after
such determination has been made or deemed to have been made and
shall be
conclusively bound by such determination unless (A) such
director, officer,
employee or agent misrepresented or failed to disclose a material
fact in
making the request for indemnification or in the Supporting
Documentation
or (B) such indemnification is prohibited by law. In the event
that (x)
advancement of expenses is not timely made pursuant to Section 6
or (y)
payment of indemnification is not made within five calendar days
after a
determination of entitlement to indemnification has been made or
deemed to
have been made or is not required to be made pursuant to this
Section 3,
such director, officer, employee or agent shall be entitled to
seek
judicial enforcement, in any court of competent jurisdiction, of
the
Corporation's obligations to pay such advancement of expenses or
indemnification. Notwithstanding the foregoing, the Corporation
may bring
an action, in an appropriate court in the State of Delaware or
any other
court of competent jurisdiction, contesting the right of any
director,
officer, employee or agent to receive indemnification hereunder
due to the
occurrence of an event or a condition described in subclause (A)
or (B) of
the second preceding sentence (a "Disqualifying Event");
provided, however,
that in any such action the Corporation shall have the burden of
proving
the occurrence of such Disqualifying Event.
Section 4. Good Faith Defined. For purposes of any
determination
under Section 3 of this Article VIII, a person shall be deemed to
have
acted in good faith and in a manner he reasonably believed to be
in or not
opposed to the best interests of the Corporation, or, with
respect to any
criminal action or proceeding, to have had no reasonable cause to
believe
his conduct was unlawful, if his action is based on the records
or books of
account of the Corporation or another enterprise, or on
information
<PAGE>
<PAGE>17
supplied to him by the officers of the Corporation or another
enterprise in
the course of their duties, or on the advice of legal counsel for
the
Corporation or another enterprise or on information or records
given or
reports made to the Corporation or another enterprise by an
independent
certified public accountant or by an appraiser or other expert
selected
with reasonable care by the Corporation or another enterprise,
unless the
Corporation shall sustain the burden of proof that such person
had actual
knowledge that such records, books of account, information,
advice or
reports were incorrect in a material respect. The term "another
enterprise" as used in this Section 4 shall mean any other
corporation or
any partnership, joint venture, trust, employee benefit plan or
other
enterprise of which such person is or was serving at the request
of the
Corporation as a Representative of the Corporation. The
provisions of this
Section 4 shall not be deemed to be exclusive or to limit in any
way the
circumstances in which a person may be deemed to have met the
applicable
standard of conduct set forth in Sections 1 or 2 of this Article
VIII, as
the case may be.
Section 5. Actions for Indemnification. Notwithstanding
any contrary
determination in the specific case under Section 3 of this
Article VIII,
and notwithstanding the absence of any determination thereunder,
any
director or officer shall, after the 60 calendar day period
referred to in
Section 3 of this Article VIII has elapsed, be entitled to seek
an
adjudication of his entitlement to indemnification under this
Article VIII
either, at his sole option, in (i) any court of competent
jurisdiction in
the State of Delaware or (ii) an arbitration to be conducted by a
single
arbitrator pursuant to the then applicable rules of the American
Arbitration Association. The basis of any such indemnification
shall be a
determination by such court or arbitrator that indemnification of
the
director or officer is proper in the circumstances because he has
met the
applicable standards of conduct set forth in Sections 1 or 2 of
this
Article VIII, as the case may be. It shall be a defense to any
such
adjudication (other than an adjudication brought to enforce a
claim for the
advance of costs, charges and expenses under Section 6 of this
Article VIII
where the required undertaking, if any, has been received by the
Corporation) that the claimant has not met the standard of
conduct set
forth in Section 1 or 2 of this Article VIII, but the burden of
proving
such defense shall be on the Corporation. Neither a contrary
determination
in the specific case under Section 3 of this Article VIII nor the
absence
of any determination thereunder shall be a defense to such claim
for
indemnification or create a presumption that the director or
officer
seeking indemnification has not met any applicable standard of
conduct.
The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section 5
that the
procedures and presumptions of this Article VIII are not valid,
binding and
enforceable and shall stipulate in any such court or before any
such
arbitrator that the Corporation is bound by all the provisions of
this
Article. Notice of any adjudication for indemnification pursuant
to this
Section 5 shall be given to the Corporation promptly upon the
filing of the
application for such adjudication. If successful, in whole or in
part, the
director or officer seeking indemnification shall also be
entitled to be
paid the expense (including attorneys' fees) of prosecuting such
adjudication.
<PAGE>
<PAGE>18
Section 6. Expenses Payable in Advance. Expenses
(including
attorneys' fees) incurred by a director or officer in defending
or
investigating any threatened or pending action, suit or
proceeding shall be
paid by the Corporation in advance of the final disposition of
such action,
suit or proceeding within five business days after the receipt by
the
Corporation of a statement or statements from such director or
officer
requesting such advance or advances from time to time. Such
statement or
statements shall reasonably evidence such expenses and shall
include or be
accompanied by an undertaking by or on behalf of such director or
officer
to repay such amount or amounts if it shall ultimately be
determined that
he is not entitled to be indemnified by the Corporation as
authorized in
this Article VIII. Such expenses (including attorneys' fees)
incurred by
other employees and agents of the Corporation may be so paid upon
such
terms and conditions, if any, as the Board of Directors deems
appropriate.
The Board of Directors may authorize the Corporation's counsel to
represent
such Director, officer, employee or agent in any action, suit or
proceeding, whether or not the Corporation is a party to such
action, suit
or proceeding.
Section 7. Nonexclusivity of Indemnification and
Advancement of
Expenses. The indemnification and advancement of expenses
provided by or
granted pursuant to this Article VIII shall not be deemed
exclusive of any
other rights to which those seeking indemnification or
advancement of
expenses may be entitled under the Certificate of Incorporation,
any By-Law, agreement, contract, vote of stockholders or
disinterested directors
or pursuant to the direction (howsoever embodied) of any court of
competent
jurisdiction or otherwise, both as to action in his official
capacity and
as to action in another capacity while holding such office, it
being the
policy of the Corporation that indemnification of the persons
specified in
Sections 1 and 2 of this Article VIII shall be made to the
fullest extent
permitted by law. The provisions of this Article VIII shall not
be deemed
to preclude the indemnification of any person who is not
specified in
Sections 1 or 2 of this Article VIII but whom the Corporation has
the power
or obligation to indemnify under the provisions of the General
Corporation
Law of the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may, to the fullest
extent
permitted by applicable law, purchase and maintain insurance on
behalf of
any person who is or was or has agreed to become a director,
officer,
employee or agent of the Corporation, or is or was a director,
officer,
employee or agent of the Corporation serving at the request of
the
Corporation as a Representative of the Corporation against any
liability
asserted against him and incurred by him in any such capacity, or
arising
out of his status as such, whether or not the Corporation would
have the
power or the obligation to indemnify him against such liability
under the
provisions of this Article VIII.
Section 9. Certain Definitions. For purposes of this
Article VIII,
references to "fines" shall include any excise taxes assessed on
or against
a person with respect to any employee benefit plan; and
references to
"serving at the request of the Corporation" shall include any
service as a
director, officer, employee or agent of the Corporation which
imposes
duties on, or involves services by, such director or officer with
respect
to an employee benefit plan, its participants or beneficiaries;
and a
person who acted in good faith and in a manner he reasonably
believed to be
<PAGE>
<PAGE>19
in the interest of the participants and beneficiaries of an
employee
benefit plan shall be deemed to have acted in a manner "in or not
opposed
to the best interests of the Corporation" as referred to in this
Article
VIII.
Section 10. Survival of Indemnification and Advancement of
Expenses;
Contract Right. The indemnification and advancement of expenses
provided
by, or granted pursuant to, this Article VIII shall continue as
to a person
who has ceased to be a director, officer, employee or agent and
shall inure
to the benefit of the heirs, executors and administrators of such
a person.
The indemnification provisions of this Article VIII shall be
deemed to be a
contract between the Corporation and each director, officer,
employee and
agent who serves in any such capacity at any time while these
provisions
are in effect, and any repeal or modification thereof shall not
affect any
right or obligation then existing with respect to any state of
facts then
or previously existing or any action, suit or proceeding
previously or
thereafter brought or threatened based in whole or in part upon
any such
state of facts. Such a "contract right" may not be modified
retroactively
without the consent of such director, officer, employee or agent.
Section 11. Limitation on Indemnification. Notwithstanding
anything
contained in this Article VIII to the contrary, except for
proceedings to
enforce rights to indemnification (which shall be governed by
Section 5
hereof), the Corporation shall not be obligated to indemnify any
director
or officer in connection with a proceeding (or part thereof)
initiated by
such person unless such proceeding (or part thereof) was
authorized or
consented to by the Board of Directors of the Corporation.
Section 12. Severability. If this Article VIII or any
portion hereof
shall be invalidated on any ground by any court of competent
jurisdiction,
then the Corporation shall nevertheless indemnify each director
or officer
and may indemnify each employee or agent of the Corporation as to
costs,
charges and expenses (including attorneys' fees), judgments,
fines and
amounts paid in settlement with respect to any action, suit or
proceeding,
whether civil, criminal, administrative or investigative,
including an
action by or in the right of the Corporation, to the fullest
extent
permitted by any applicable portion of this Article VIII that
shall not
have been invalidated and to the fullest extent permitted by
applicable
law.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. The Board of Directors shall have
the express
power, without a vote of stockholders, to adopt any By-Law, and
to amend,
alter or repeal these By-Laws, except to the extent that these
By-Laws or
the Certificate of Incorporation otherwise provide. The Board of
Directors
may exercise such power upon the affirmative vote of a majority
of the
entire Board of Directors. Stockholders may not adopt any
By-Law, nor
amend, alter or repeal these By-Laws of the Corporation, except
upon the
affirmative vote of the holders of at least a majority of the
votes
entitled to be cast by the holders of all then outstanding shares
of stock
<PAGE>
<PAGE>20
of the Corporation entitled to vote generally in the election of
directors,
voting together as a single class.
ARTICLE X
CONSTRUCTION
Section 1. Construction. In the event of any conflict
between the
provisions of these By-Laws as in effect from time to time and
the
provisions of the Certificate of Incorporation of the Corporation
as in
effect from time to time, the provisions of such Certificate of
Incorporation shall be controlling.
Section 2. Entire Board of Directors. As used in this
Article X and
in these By-Laws generally, the term "entire Board of Directors"
means the
total number of directors which the Corporation would have if
there were no
vacancies in the Board of Directors.
<PAGE>1
Exhibit 10(p)
Form 10-K for 1994
File No. 1-11237
CONFORMED COPY
$500,000,000
CREDIT AGREEMENT
dated as of
July 11, 1994
among
AT&T Capital Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
<PAGE>2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. . . . . . . . . . . . . . . . . . .
. 1
1.02 Accounting Terms and Determinations. . . . . . .
. 11
1.03 Types of Borrowings. . . . . . . . . . . . . . .
. 12
1.04 Basis for Ratings. . . . . . . . . . . . . . . .
. 12
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend. . . . . . . . . . . . . . .
. 12
2.02 Notice of Committed Borrowing. . . . . . . . . .
. 13
2.03 Money Market Borrowings. . . . . . . . . . . . .
. . . 13
2.04 Notice to Banks; Funding of Loans. . . . . . . .
. 17
2.05 Notes. . . . . . . . . . . . . . . . . . . . . .
. 18
2.06 Maturity of Loans; Termination of
Commitments. . . . . . . . . . . . . . . . . .
. 19
2.07 Interest Rates . . . . . . . . . . . . . . . . .
. 19
2.08 Facility Fees. . . . . . . . . . . . . . . . . .
. 22
2.09 Optional Termination or
Reduction of Commitments . . . . . . . . . . .
. 23
2.10 Method of Electing Interest Rates. . . . . . . .
. 23
2.11 Optional Prepayments . . . . . . . . . . . . . .
. 24
2.12 General Provisions as to Payments. . . . . . . .
. 25
2.13 Funding Losses . . . . . . . . . . . . . . . . .
. 26
2.14 Computation of Interest and Fees . . . . . . . .
. 27
2.15 Regulation D Compensation. . . . . . . . . . . .
. 27
ARTICLE III
CONDITIONS
SECTION 3.01 Closing. . . . . . . . . . . . . . . . . . . . .
. 28
3.02 Borrowings . . . . . . . . . . . . . . . . . . .
. 28
<PAGE>
<PAGE>3
Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power. . . . . . . . . .
. 29
4.02 Corporate and Governmental
Authorization; No Contravention. . . . . . . .
. 29
4.03 Binding Effect . . . . . . . . . . . . . . . . .
. 29
4.04 Financial Information. . . . . . . . . . . . . .
. 30
4.05 Litigation.. . . . . . . . . . . . . . . . . . .
. 30
4.06 Subsidiaries.. . . . . . . . . . . . . . . . . .
. 31
4.07 Not an Investment Company. . . . . . . . . . . .
. 31
4.08 Full Disclosure. . . . . . . . . . . . . . . . .
. 31
ARTICLE V
COVENANTS
SECTION 5.01 Information. . . . . . . . . . . . . . . . . . .
. 31
5.02 Maintenance of Existence . . . . . . . . . . . .
. 32
5.03 Fixed Charge Coverage. . . . . . . . . . . . . .
. 32
5.04 Debt . . . . . . . . . . . . . . . . . . . . . .
. 32
5.05 Limitation on Secured Debt . . . . . . . . . . .
. 33
5.06 Consolidations, Mergers and
Sales of Assets. . . . . . . . . . . . . . . .
. 35
5.07 Use of Proceeds. . . . . . . . . . . . . . . . .
. 35
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default. . . . . . . . . . . . . . . .
. 36
6.02 Notice of Default. . . . . . . . . . . . . . . .
. 38
6.03 Rescission . . . . . . . . . . . . . . . . . . .
. 38
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization. . . . . . . . . .
. 38
7.02 Agent and Affiliates.. . . . . . . . . . . . . .
. 38
7.03 Action by Agent. . . . . . . . . . . . . . . . .
. 39
<PAGE>
<PAGE>4
Page
7.04 Consultation with Experts. . . . . . . . . . . .
. 39
7.05 Liability of Agent . . . . . . . . . . . . . . .
. 39
7.06 Indemnification. . . . . . . . . . . . . . . . .
. 39
7.07 Credit Decision. . . . . . . . . . . . . . . . .
. 40
7.08 Successor Agent. . . . . . . . . . . . . . . . .
. 40
7.09 Agent's Fee. . . . . . . . . . . . . . . . . . .
. 40
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair. . . . . . . . . . .
. 40
8.02 Illegality . . . . . . . . . . . . . . . . . . .
. 41
8.03 Increased Cost and Reduced Return. . . . . . . .
. 42
8.04 Taxes. . . . . . . . . . . . . . . . . . . . . .
. 44
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans. . . . . . . . . . .
. 46
8.06 Substitution of Bank . . . . . . . . . . . . . .
. 47
8.07 Compensation . . . . . . . . . . . . . . . . . .
. 47
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices. . . . . . . . . . . . . . . . . . . . .
. 47
9.02 No Waivers . . . . . . . . . . . . . . . . . . .
. 48
9.03 Expenses; Indemnification. . . . . . . . . . . .
. 48
9.04 Sharing of Set-Offs. . . . . . . . . . . . . . .
. 49
9.05 Amendments and Waivers . . . . . . . . . . . . .
. 49
9.06 Successors and Assigns . . . . . . . . . . . . .
. 49
9.07 Collateral . . . . . . . . . . . . . . . . . . .
. 51
9.08 Governing Law; Submission to Juris-
diction. . . . . . . . . . . . . . . . . . . .
. 51
9.09 Counterparts; Integration;
Effectiveness. . . . . . . . . . . . . . . . .
. 52
9.10 WAIVER OF JURY TRIAL . . . . . . . . . . . . . .
. 52
9.11 Confidentiality. . . . . . . . . . . . . . . . .
. 52
<PAGE>5
Page
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the
Agent
Exhibit G - Assignment and Assumption Agreement
<PAGE>
<PAGE>6
CREDIT AGREEMENT
AGREEMENT dated as of July 11, 1994 among AT&T
CAPITAL CORPORATION, the BANKS listed on the signature pages
hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent.
W I T N E S S E T H :
WHEREAS, the Borrower (as defined below) has
heretofore entered into a $500,000,000 Credit Agreement
dated as of July 12, 1993 with the banks listed on the
signature pages thereof and Morgan Guaranty Trust Company of
New York, as agent for such banks (the "Existing Credit
Agreement"); and
WHEREAS, the Borrower wishes to enter into this
Agreement to replace the Existing Credit Agreement; and
WHEREAS, upon the effectiveness of this Agreement
in accordance with Section 9.09, the Existing Credit
Agreement shall terminate;
NOW, THEREFORE, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of
Money Market Quotes setting forth Money Market Absolute
Rates pursuant to Section 2.03.
"Accounts Receivable" shall mean (i) any accounts
receivable (whether or not earned by performance), chattel
paper, instruments, documents, general intangibles, trade
acceptances, any other rights to receive installment, rental
or other payments for, or relating to amounts due or to
become due on account of equipment or goods sold or leased
or to be sold or leased or services rendered or to be
<PAGE>
<PAGE>7
rendered or funds advanced or loaned or to be advanced or
loaned and other rights to payment of any kind, (ii) any
proceeds of any of the foregoing and (iii) any interest in
any property or asset of any kind (whether of the obligor
under such Accounts Receivable or any other Person) securing
the payment of any item listed in clause (i) hereof.
"Adjusted CD Rate" has the meaning set forth in
Section 2.07(b).
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Borrower) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"Applicable Lending Office" means, with respect to
any Bank, (i) in the case of its Domestic Loans, its
Domestic Lending Office, (ii) in the case of its Euro-Dollar
Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in
Section 2.07(h).
"Assessment Rate" has the meaning set forth in
Section 2.07(b).
"Asset Drop-Down" has the meaning set forth in
Section 5.06.
"Assignee" has the meaning set forth in Section
9.06(c).
"AT&T" means American Telephone and Telegraph
Company, a New York corporation, and its successors.
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for
such day.
<PAGE>
<PAGE>8
"Base Rate Loan" means (i) a Committed Loan which
bears interest at the Base Rate pursuant to the applicable
Notice of Committed Borrowing or Notice of Interest Rate
Election or the provisions of Article VIII or (ii) an
overdue amount which was a Base Rate Loan immediately before
it became overdue.
"Borrower" means AT&T Capital Corporation, a
Delaware corporation, and its successors.
"Borrower's 1993 Form 10-K" means the Borrower's
annual report on Form 10-K for 1993, as filed with the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
"Borrower's Latest Form 10-Q" means the Borrower's
quarterly report on Form 10-Q for the quarter ended March
31, 1994, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
"Borrowing" has the meaning set forth in Section
1.03.
"CD Base Rate" has the meaning set forth in
Section 2.07(b).
"CD Loan" means (i) a Committed Loan which bears
interest at a CD Rate pursuant to the applicable Notice of
Committed Borrowing or Notice of Interest Rate Election or
(ii) an overdue amount which was a CD Loan immediately
before it became overdue.
"CD Rate" means a rate of interest determined
pursuant to Section 2.07(b) on the basis of an Adjusted CD
Rate.
"CD Reference Banks" means Chemical Bank,
Citibank, N.A. and Morgan Guaranty Trust Company of New
York.
"Closing Date" means the date on which the Agent
shall have received the documents specified in or pursuant
to Section 3.01.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages hereof, as such amount may be reduced from
time to time pursuant to Section 2.09.
<PAGE>
<PAGE>9
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.01; provided that, if any such loan or
loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal
amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision,
as the case may be.
"Consolidated Debt" means at any date the Debt of
the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date.
"Consolidated EBIT" means, for any period, the sum
of (i) the consolidated net income from continuing
operations of the Borrower and its Consolidated Subsidiaries
for such period before extraordinary items and without
giving effect to unusual non-recurring events plus (ii) to
the extent deducted in determining such consolidated net
income from continuing operations, the sum of Consolidated
Interest Expense and the provision for income tax for such
period.
"Consolidated Interest Expense" means, for any
period, the interest expense of the Borrower and its
Consolidated Subsidiaries determined on a consolidated basis
for such period.
"Consolidated Net Tangible Assets" means, at the
date of any determination, the total assets appearing on the
consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as at the end of the most recent
fiscal quarter of the Borrower for which such balance sheet
is available, prepared in accordance with generally accepted
accounting principles, less (a) all current liabilities
(obligations whose liquidation is reasonably expected to
occur within twelve months), (b) investments in and advances
to Subsidiaries of the Borrower other than Restricted
Subsidiaries or other entities accounted for on the equity
method of accounting, and (c) Intangible Assets.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Borrower in its consolidated
financial statements if such statements were prepared as of
such date.
<PAGE>
<PAGE>10
"Consolidated Tangible Net Worth" means, at any
date, the consolidated stockholders' equity of the Borrower
and its Consolidated Subsidiaries less Intangible Assets,
all determined as of such date.
"Debt" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money and (ii) all obligations of others for borrowed money
guaranteed by such Person; provided, however, that any
recourse provided by any Person in connection with any sale,
transfer or other disposition by such Person of Accounts
Receivable or of any subsidiary of such Person substantially
all the assets of which are Accounts Receivable which
constitutes a "sale" under generally accepted accounting
principles (as in effect at the time of such sale, transfer
or other disposition) shall not, in any event, constitute
Debt.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its
Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as
its Domestic Lending Office by notice to the Borrower and
the Agent; provided that any Bank may so designate separate
Domestic Lending Offices for its Base Rate Loans, on the one
hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans
or both.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.07(b).
"Drop-Down Subsidiary" has the meaning set forth
in Section 5.06.
<PAGE>
<PAGE>11
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 9.09.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for
international business (including dealings in dollar
deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or
affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the
Agent.
"Euro-Dollar Loan" means (i) a Committed Loan
which bears interest at a Euro-Dollar Rate pursuant to the
applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a
Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Rate" means a rate of interest
determined pursuant to Section 2.07(c) on the basis of a
London Interbank Offered Rate.
"Euro-Dollar Reference Banks" means the principal
London offices of The Fuji Bank, Limited, Royal Bank of
Canada and Morgan Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents).
<PAGE>
<PAGE>12
"Event of Default" has the meaning set forth in
Section 6.01.
"Existing Credit Agreement" has the meaning set
forth in the recitals hereto.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or Money Market Loans (excluding Money Market LIBOR
Loans bearing interest at the Base Rate pursuant to Section
8.01(a)) or any combination of the foregoing.
"Group of Loans" means at any time a group of
Loans consisting of (i) all Committed Loans which are Base
Rate Loans at such time or (ii) all Committed Loans which
are Fixed Rate Loans of the same type having the same
Interest Period at such time; provided that, if a Committed
Loan of any particular Bank is converted to or made as a
Base Rate Loan pursuant to Section 8.02 or 8.05, such Loan
shall be included in the same Group or Groups of Loans from
time to time as it would have been in if it had not been so
converted or made.
"Indemnitee" has the meaning set forth in Section
9.03(b).
"Intangible Assets", means the value (net of any
applicable reserves), as shown on or reflected in the
Borrower's balance sheet, of: (i) all trade names,
trademarks, licenses, patents, copyrights and goodwill; (ii)
organization and development costs; (iii) deferred charges
<PAGE>
<PAGE>13
(other than prepaid items such as insurance, taxes,
interest, commissions, rents and similar items and tangible
assets being amortized); and (iv) unamortized debt discount
and expense, less unamortized premium.
"Interest Period" means: (1) with respect to each
Euro-Dollar Loan, a period commencing on the date of
borrowing specified in the applicable Notice of Borrowing or
on the date specified in the applicable Notice of Interest
Rate Election and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable
notice; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (c) below, be extended to the next
succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(2) with respect to each CD Loan, a period commencing on
the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice
of Interest Rate Election and ending 30, 60, 90 or 180 days
thereafter, as the Borrower may elect in the applicable
notice; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
<PAGE>
<PAGE>14
after the Termination Date shall end on the Termination
Date.
(3) with respect to each Money Market LIBOR Loan, the
period commencing on the date of borrowing specified in the
applicable Notice of Borrowing and ending such whole number
of months thereafter as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (c) below, be extended to the next
succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause (c) below, end on the
last Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(4) with respect to each Money Market Absolute Rate Loan,
the period commencing on the date of borrowing specified in
the applicable Notice of Borrowing and ending such number of
days thereafter (but not less than 14 days) as the Borrower
may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, or any successor statute.
"Level I Status" exists at any date if, at such
<PAGE>
<PAGE>15
date, (i) the Borrower's outstanding senior unsecured long-term
debt is rated both A+ or higher by S&P and A1 or higher
by Moody's and (ii) the Borrower's commercial paper is rated
both A1 or higher by S&P and P1 by Moody's.
"Level II Status" exists at any date if, at such
date, (a) both (i) the Borrower's outstanding senior
unsecured long-term debt is rated both A- or higher by S&P
and A3 or higher by Moody's and (ii) the Borrower's
commercial paper is rated both A1 or higher by S&P and P1 by
Moody's and (b) Level I Status does not exist at such date.
"Level III Status" exists at any date if, at such
date, neither Level I Status nor Level II Status exists.
"LIBOR Auction" means a solicitation of Money
Market Quotes setting forth Money Market Margins based on
the London Interbank Offered Rate pursuant to Section 2.03.
"Lien" means any mortgage, pledge, security
interest or lien.
"Loan" means a Domestic Loan or a Euro-Dollar Loan
or a Money Market Loan and "Loans" means Domestic Loans or
Euro-Dollar Loans or Money Market Loans or any combination
of the foregoing.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.07(c).
"Material Adverse Effect" means a material adverse
effect on the consolidated financial position of the
Borrower and its subsidiaries.
"Money Market Absolute Rate" has the meaning set
forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each
Bank, its Domestic Lending Office or such other office,
branch or affiliate of such Bank as it may hereafter
designate as its Money Market Lending Office by notice to
the Borrower and the Agent; provided that any Bank may from
time to time by notice to the Borrower and the Agent
designate separate Money Market Lending Offices for its
<PAGE>
<PAGE>16
Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case
all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made
by a Bank pursuant to a LIBOR Auction (including such a loan
bearing interest at the Base Rate pursuant to Section
8.01(a)).
"Money Market Loan" means a Money Market LIBOR
Loan or a Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.03.
"Moody's" means Moody's Investors Service, Inc. or
any successor rating agency acceptable to the Agent and the
Borrower.
"Non-Recourse Debt" of the Borrower or any
Restricted Subsidiary means any indebtedness for borrowed
money of the Borrower or any Restricted Subsidiary, as the
case may be, which is secured by any Lien on or payable
solely from the income and proceeds of any property
(including, without limiting the generality of such term,
any intangible assets), shares of stock, other equity
interests or debt of the Borrower or such Restricted
Subsidiary, as the case may be, and which is not a general
obligation of the Borrower or such Restricted Subsidiary, as
the case may be.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
<PAGE>
<PAGE>17
"Notice of Interest Rate Election" has the meaning
set forth in Section 2.10.
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
9.06(b).
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its Prime Rate.
"Quarterly Date" means the last Euro-Dollar
Business Day of each March, June, September and December.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Required Banks" means at any time Banks having at
least 51% of the aggregate amount of the Commitments or, if
the Commitments shall have been terminated, holding Notes
evidencing at least 51% of the aggregate unpaid principal
amount of the Loans.
"Restricted Subsidiary" means each Subsidiary of
the Borrower organized under the laws of any State of the
United States or the District of Columbia no substantial
portion of the business of which is carried on outside of
the United States; provided that each Drop-Down Subsidiary
(as defined in Section 5.06) shall be a Restricted
Subsidiary.
"S&P" means Standard & Poor's Corporation or any
successor rating agency acceptable to the Agent and the
Borrower.
<PAGE>
<PAGE>18
"Status" means, at any date, whichever of Level I
Status, Level II Status or Level III Status exists at such
date.
"Subsidiary" means any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by the Borrower
(or, if such term is used with reference to any other
Person, by such other Person).
"Termination Date" means July 11, 1997, or, if
such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day.
"United States" means the United States of
America, including the States and the District of Columbia,
but excluding its territories and possessions.
"Wholly-Owned Restricted Subsidiary" means any
Restricted Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly
owned by the Borrower.
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time,
applied on a basis consistent (except for changes made in
consultation with the Borrower's independent public
accountants) with the most recent audited consolidated
financial statements of the Borrower and its subsidiaries
delivered to the Banks; provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend any
covenant in Article V to eliminate the effect of any change
in generally accepted accounting principles on the operation
of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article V for such
purpose), then the Borrower's compliance with such covenant
shall be determined on the basis of generally accepted
accounting principles in effect immediately before the
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<PAGE>19
relevant change in generally accepted accounting principles
became effective, until either such notice is withdrawn or
such covenant is amended in a manner satisfactory to the
Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to the Borrower pursuant to Article II on
the same date, all of which Loans are of the same type
(subject to Article VIII) and, except in the case of Base
Rate Loans, have the same Interest Period or initial
Interest Period. Borrowings are classified for purposes of
this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing"
is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which
participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all
Banks participate in proportion to their Commitments, while
a "Money Market Borrowing" is a Borrowing under Section 2.03
in which the Bank participants are determined on the basis
of their bids in accordance therewith).
SECTION 1.04. Basis for Ratings. The credit
ratings to be utilized in the determination of a Status are
the ratings assigned to unsecured obligations of the
Borrower without third party credit support. Ratings
assigned to any obligation which is secured or which has the
benefit of third party credit support shall be disregarded.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank
severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Borrower pursuant to
this Section from time to time prior to the Termination Date
in amounts such that the aggregate principal amount of
Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate
principal amount of $50,000,000 or any larger multiple of
$5,000,000 (except that any such Borrowing may be in the
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<PAGE>20
aggregate amount available in accordance with Section
3.02(c)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this
Section, prepay Loans to the extent permitted by Section
2.11, and reborrow at any time prior to the Termination
Date.
SECTION 2.02. Notice of Committed Borrowing. The
Borrower shall give the Agent notice (a "Notice of Committed
Borrowing") not later than 10:30 A.M. (New York City time)
on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the
third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(a) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic
Borrowing or a Euro-Dollar Business Day in the case of
a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
(c) whether the Loans comprising such Borrowing
are to bear interest initially at the Base Rate or at a
CD Rate or a Euro-Dollar Rate, and
(d) in the case of a Fixed Rate Borrowing, the
duration of the initial Interest Period applicable
thereto, subject to the provisions of the definition of
Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to
Committed Borrowings pursuant to Section 2.01, the Borrower
may, as set forth in this Section, request the Banks to make
offers to make Money Market Loans to the Borrower prior to
the Termination Date. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When the
Borrower wishes to request offers to make Money Market Loans
under this Section, it shall transmit to the Agent by telex
or facsimile transmission a Money Market Quote Request
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<PAGE>21
substantially in the form of Exhibit B hereto so as to be
received no later than 10:30 A.M. (New York City time) on
(x) the fourth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective) specifying:
(i) the proposed date of Borrowing, which shall
be a Euro-Dollar Business Day in the case of a LIBOR
Auction or a Domestic Business Day in the case of an
Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period, and
(iv) whether the Money Market Quotes requested are
to set forth a Money Market Margin or a Money Market
Absolute Rate.
The Borrower may request offers to make Money Market Loans
for more than one Interest Period in a single Money Market
Quote Request. No Money Market Quote Request shall be given
within five Euro-Dollar Business Days (or such other number
of days as the Borrower and the Agent may agree) of any
other Money Market Quote Request.
(c) Invitation for Money Market Quotes. Promptly
upon receipt of a Money Market Quote Request, the Agent
shall send to the Banks by telex or facsimile transmission
an Invitation for Money Market Quotes substantially in the
form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money
Market Quotes offering to make the Money Market Loans to
which such Money Market Quote Request relates in accordance
with this Section.
(d) Submission and Contents of Money Market
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<PAGE>22
Quotes. (i) Each Bank may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex
or facsimile transmission at its offices specified in or
pursuant to Section 9.01 not later than (x) 4:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:30 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by
the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the
Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than (x)
one hour prior to the deadline for the other Banks, in the
case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute
Rate Auction. Subject to Articles III and VI, any Money
Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of
the Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit D hereto and shall in any
case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be
$5,000,000 or a larger multiple of $1,000,000, (y) may
not exceed the principal amount of Money Market Loans
for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount
of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
(C) in the case of a LIBOR Auction, the margin
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<PAGE>23
above or below the applicable London Interbank Offered
Rate (the "Money Market Margin") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest
Period specified in the related Invitation for Money Market
Quotes.
(iii) Any Money Market Quote shall be disregarded
if it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar
language;
(C) proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(i).
(e) Notice to Borrower. The Agent shall promptly
notify the Borrower of the terms (x) of any Money Market
Quote submitted by a Bank that is in accordance with
subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. Any such
subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money
Market Quote. The Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market
<PAGE>
<PAGE>24
Loans for which offers have been received for each Interest
Period specified in the related Money Market Quote Request,
(B) the respective principal amounts and Money Market
Margins or Money Market Absolute Rates, as the case may be,
so offered and (C) if applicable, limitations on the
aggregate principal amount of Money Market Loans for which
offers in any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later
than 10:30 A.M. (New York City time) on (x) the third
Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify
the aggregate principal amount of offers for each Interest
Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount
set forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $5,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise
fails to comply with the requirements of this
Agreement.
(g) Allocation by Agent. If offers are made by
two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in
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<PAGE>25
respect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans
in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as
possible (in multiples of $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by the Agent of the
amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents
thereof and of such Bank's share (if any) of such Borrowing
and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City
time) on the date of each Borrowing, each Bank participating
therein shall make available its share of such Borrowing, in
Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied,
the Agent will make the funds so received from the Banks
available to the Borrower by 3:00 P.M. (New York City time)
on the date of such Borrowing at the Agent's aforesaid
address.
(c) Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsection (b) of this Section
2.04 and the Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding
amount. If and to the extent that such Bank shall not have
so made such share available to the Agent, such Bank and the
Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest
thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, a
rate per annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section
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<PAGE>26
2.07 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute
such Bank's Loan included in such Borrowing for purposes of
this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank
shall be evidenced by a single Note payable to the order of
such Bank for the account of its Applicable Lending Office
in an amount equal to the aggregate unpaid principal amount
of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and
the Agent, request that its Loans of a particular type be
evidenced by a separate Note in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference
in this Agreement to the "Note" of such Bank shall be deemed
to refer to and include any or all of such Notes, as the
context may require.
(c) Upon receipt of each Bank's Note pursuant to
Section 3.01(a), the Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount and type of
each Loan made by it and the date and amount of each payment
of principal made by the Borrower with respect thereto, and
may, if such Bank so elects in connection with any transfer
or enforcement of its Note, endorse on the schedule forming
a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make
any such recordation or endorsement or any error in making
the same shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its
Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
SECTION 2.06. Maturity of Loans; Termination of
Commitments. (a) The Commitments shall terminate on the
Termination Date, and all Committed Loans shall mature, and
the principal amount thereof shall be due and payable, on
such date.
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<PAGE>27
(b) Each Money Market Loan included in any Money
Market Borrowing shall mature, and the principal amount
thereof shall be due and payable, on the last day of the
Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base
Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made
until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable quarterly
in arrears on each Quarterly Date and on the Termination
Date, and, with respect to the principal amount of any Base
Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on
each date a Base Rate Loan is so converted. Any overdue
principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 1% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day during
each Interest Period applicable thereto, at a rate per annum
equal to the sum of the Applicable Margin for such day plus
the Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such
portion shall bear interest during such Interest Period at
the rate applicable to Base Rate Loans during such period.
Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer
than 90 days, at intervals of 90 days after the first day
thereof. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 1% plus
the rate applicable to Base Rate Loans for such day.
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<PAGE>28
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid at
10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of
such CD Reference Bank to which such Interest Period applies
and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve
Percentage.
<PAGE>
<PAGE>29
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. S 327.3(e) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day
during each Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin for such
day plus the London Interbank Offered Rate applicable to
such Interest Period. Such interest shall be payable for
each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of
three months after the first day thereof.
The "London Interbank Offered Rate" applicable to
any Interest Period means a rate of interest determined by
the Agent on the basis of at least two offered rates for
deposits in United States dollars for a period equal to such
Interest Period commencing on the first day of such Interest
Period appearing on the Reuters Screen LIBO Page as of 11:00
A.M. (London time) on the day that is two Euro-Dollar
Business Days prior to the first day of such Interest
Period. If at least two such offered rates appear on the
Reuters Screen LIBO Page, the rate with respect to each
Interest Period will be the arithmetic average (rounded
upwards to the next 1/16th of 1%) of such offered rates. If
fewer than two offered rates appear, the "London Interbank
Offered Rate" in respect of any Interest Period will be the
average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which
deposits in dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar
Business Days before the first day of such Interest Period
in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
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<PAGE>30
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
each day from and including the date payment thereof was due
to but excluding the date of actual payment, at a rate per
annum equal to the sum of 1% plus the rate applicable to
Base Rate Loans for such day.
(e) Subject to Section 8.01(a), each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto,
at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in
accordance with Section 2.07(c) as if the related Money
Market LIBOR Borrowing were a Committed Euro-Dollar
Borrowing) plus (or minus) the Money Market Margin quoted by
the Bank making such Loan in accordance with Section 2.03.
Each Money Market Absolute Rate Loan shall bear interest on
the outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall
be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan
shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 1% plus the
Base Rate for such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the Borrower and the participating Banks of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest
error.
(g) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation necessary to determine an interest rate in
accordance with this Section, the Agent shall determine the
relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or
Banks or, if none of such quotations is available on a
timely basis, the provisions of Section 8.01 shall apply.
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<PAGE>31
(h) The "Applicable Margin" with respect to any
Euro-Dollar Loan or CD Loan at any date is the applicable
percentage amount set forth in the table below based on the
Status on such date:
Level I Level II Level III
Status Status Status
Euro-Dollar Loans 0.2700%
0.3000% 0.4250%
CD Loans 0.3950%
0.4250% 0.5500%
SECTION 2.08. Facility Fees. The Borrower shall
pay to the Agent for the account of the Banks ratably a
facility fee at the Facility Fee Rate. Such facility fee
shall accrue from and including the Closing Date to but
excluding the Termination Date (or earlier date of
termination of the Commitments in their entirety), on the
daily aggregate amount of the Commitments (whether used or
unused). Accrued facility fees shall be payable quarterly
on each Quarterly Date and upon the date of termination of
the Commitments in their entirety.
The "Facility Fee Rate" at any date is: (i)
0.0800% if Level I Status exists at such date, (ii) 0.1000%
if Level II Status exists at such date and (iii) 0.2000% if
Level III Status exists at such date.
SECTION 2.09. Optional Termination or Reduction
of Commitments. The Borrower may, upon at least three
Domestic Business Days' notice to the Agent, (i) terminate
the Commitments at any time, if no Loans are outstanding at
such time or (ii) ratably reduce from time to time by an
aggregate amount of $25,000,000 or any larger multiple of
$5,000,000, the aggregate amount of the Commitments in
excess of the aggregate outstanding principal amount of the
Loans.
SECTION 2.10. Method of Electing Interest Rates.
(a) The Loans included in each Committed Borrowing shall
bear interest initially at the type of rate specified by the
Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each
Group of Loans (subject in each case to the provisions of
Article VIII), as follows:
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<PAGE>32
(i) if such Loans are Base Rate Loans, the
Borrower may elect to convert such Loans to CD Loans as
of any Domestic Business Day or to Euro-Dollar Loans as
of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or
Euro-Dollar Loans or elect to continue such Loans as CD
Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest
Period applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the
Borrower may elect to convert such Loans to Base Rate
Loans or CD Loans or elect to continue such Loans as
Euro-Dollar Loans for an additional Interest Period, in
each case effective on the last day of the then current
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a
"Notice of Interest Rate Election") to the Agent at least
three Euro-Dollar Business Days before the conversion or
continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic
Loans to Domestic Loans of the other type or continued as
Domestic Loans of the same type for an additional Interest
Period, in which case such notice shall be delivered to the
Agent at least two Domestic Business Days before such
conversion or continuation is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (i) such portion is
allocated ratably among the Loans comprising such Group and
(ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each
$50,000,000 or any larger multiple of $5,000,000.
(b) Each Notice of Interest Rate Election shall
specify:
(i) the Group of Loans (or portion thereof) to
which such notice applies;
(ii) the date on which the conversion or
continuation selected in such notice is to be
effective, which shall comply with the applicable
clause of subsection (a) above;
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<PAGE>33
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if such new Loans
are Fixed Rate Loans, the duration of the initial
Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans
or Euro-Dollar Loans for an additional Interest Period,
the duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition
of Interest Period.
(c) Upon receipt of a Notice of Interest Rate
Election from the Borrower pursuant to subsection (a) above,
the Agent shall promptly notify each Bank of the contents
thereof and such notice shall not thereafter be revocable by
the Borrower. If the Borrower fails to deliver a timely
Notice of Interest Rate Election to the Agent for any Group
of Fixed Rate Loans, such Loans shall be converted into Base
Rate Loans on the last day of the then current Interest
Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The
Borrower may, upon at least one Domestic Business Day's
notice to the Agent, prepay the Group of Base Rate Loans (or
any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) in whole at any time, or from
time to time in part in amounts aggregating $50,000,000 or
any larger multiple of $5,000,000, by paying the principal
amount to be prepaid together with accrued interest thereon
to the date of prepayment. Each such optional prepayment
shall be applied to prepay ratably the Loans of the several
Banks included in such Group or Borrowing.
(b) The Borrower may, upon at least three
Domestic Business Days' notice to the Agent, in the case of
a Group of CD Loans or upon at least three Euro-Dollar
Business Days' notice to the Agent, in the case of a Group
of Euro-Dollar Loans, prepay the Loans comprising such a
Group on the last day of any Interest Period applicable to
such Group, in whole at any time, or from time to time in
part in amounts aggregating $50,000,000 or any larger
multiple of $5,000,000, by paying the principal amount to be
prepaid together with accrued interest thereon to the date
of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks
included in such Group.
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<PAGE>34
(c) Except as provided in subsection (a) above,
the Borrower may not prepay all or any portion of the
principal amount of any Money Market Loan prior to the
maturity thereof.
(d) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of,
and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal
of, or interest on, the Domestic Loans or of fees shall be
due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Loans or the Money
Market LIBOR Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the
Money Market Absolute Rate Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar
Business Day. If the date for any payment of principal is
extended pursuant to this Agreement or by operation of law
or otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is
due to the Banks hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to
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<PAGE>35
the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for
each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower
makes any payment of principal with respect to any Fixed
Rate Loan or any Fixed Rate Loan is converted to a Base Rate
Loan (pursuant to Article VI or VIII or otherwise) on any
day prior to the last day of an Interest Period applicable
thereto, or if the Borrower fails to borrow or prepay any
Fixed Rate Loans after notice has been given to any Bank in
accordance with Section 2.04(a) or 2.11(d), the Borrower
shall reimburse each Bank as provided in the following
paragraph for any resulting loss or expense incurred by it
(or by a Participant in the related Loan), including
(without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but
excluding loss of the Applicable Margin or any other margin
for the period after any such payment or conversion or
failure to borrow or prepay.
A certificate of each Bank setting forth such
amount or amounts (including the computation of such amount
or amounts) as shall be necessary to compensate such Bank or
a Participant for the out-of-pocket expenses incurred by
such Bank shall be delivered to the Borrower and such amount
or amounts may be reviewed by the Borrower. If the
Borrower, after receipt of any such certificate from such
Bank, disagrees in good faith with such Bank on the
computation of the amount or amounts owed to such Bank
pursuant to this Section 2.13, the Bank and the Borrower
shall negotiate in good faith to promptly resolve such
disagreement. Any payment required to be paid to such Bank
pursuant to this Section 2.13 shall be paid within 30 days
after demand is made therefor (or if there is a
disagreement, after such disagreement is resolved). Each
Bank shall have a duty to mitigate the damages to such Bank
that may arise as a consequence of such funding losses
described above to the extent that such mitigation will not,
in the judgment of such Bank, entail any cost or
disadvantage to such Bank that such Bank is not reimbursed
or compensated for by the Borrower.
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<PAGE>36
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. For so
long as any Bank maintains reserves against "Eurocurrency
liabilities" (or any other category of liabilities which
includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of
extensions of credit or other assets which includes loans by
a non-United States office of such Bank to United States
residents), and as a result the cost to such Bank (or its
Applicable Lending Office) of making or maintaining its
Euro-Dollar Loans is increased, then such Bank may require
the Borrower to pay, contemporaneously with each payment of
interest on the Euro-Dollar Loans, additional interest on
the related Euro-Dollar Loan of such Bank at a rate per
annum up to but not exceeding the excess of (i)(A) the
applicable London Interbank Offered Rate divided by (B) one
minus the Euro-Dollar Reserve Percentage over (ii) the rate
specified in clause (i)(A). Any Bank wishing to require
payment of such additional interest (x) shall so notify the
Borrower, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank
at the rate and place indicated in such notice with respect
to each Interest Period commencing at least three Euro-Dollar
Business Days after the giving of such notice and (y)
shall furnish to the Borrower at least five Euro-Dollar
Business Days prior to each date on which interest is
payable on the Euro-Dollar Loans an officers' certificate
setting forth the amount to which such Bank is then entitled
under this Section 2.15 (which shall be consistent with such
Bank's good faith estimate of the level at which the related
reserves are maintained by it).
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<PAGE>37
ARTICLE III
CONDITIONS
SECTION 3.01. Closing. The closing hereunder
shall occur upon receipt by the Agent of the following
documents, each dated the Closing Date unless otherwise
indicated:
(a) a duly executed Note for the account of each
Bank dated on or before the Closing Date complying with
the provisions of Section 2.05;
(b) an opinion of the General Counsel or any
Assistant General Counsel of the Borrower,
substantially in the form of Exhibit E hereto;
(c) an opinion of Davis Polk & Wardwell, special
counsel for the Agent, substantially in the form of
Exhibit F hereto; and
(d) all documents the Agent may reasonably
request relating to the existence of the Borrower, the
corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the
Agent.
The Agent shall promptly notify the Borrower and the Banks
of the Closing Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) the Closing Date shall have occurred not
later than the Effective Date;
(b) receipt by the Agent of a Notice of Borrowing
as required by Section 2.02 or 2.03, as the case may
be;
(c) immediately after such Borrowing, the
aggregate outstanding principal amount of the Loans
will not exceed the aggregate amount of the
Commitments;
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<PAGE>38
(d) immediately before and after such Borrowing,
no Default shall have occurred and be continuing; and
(e) the representations and warranties of the
Borrower contained in this Agreement (except the
representations and warranties set forth in Section
4.04(c) and 4.05) shall be true in all material
respects on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in clauses (c), (d)
and (e) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware,
and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted except those which the failure
to have would not have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery
and performance by the Borrower of this Agreement and the
Notes are within the Borrower's corporate power, have been
duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any material agreement,
judgment, injunction, order, decree or other material
instrument binding upon the Borrower or result in the
creation or imposition of any Lien on any asset of the
Borrower.
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<PAGE>39
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower
and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding
obligations of the Borrower, in each case enforceable
against the Borrower in accordance with their respective
terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws affecting creditors' rights
generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the
Borrower and its subsidiaries as of December 31, 1993 and
the related consolidated statements of income, changes in
stockholders' equity and cash flows for the fiscal year then
ended, reported on by Cooper's & Lybrand and set forth in
the Borrower's 1993 Form 10-K, a copy of which has been
delivered to each of the Banks, present fairly, in all
material respects, the consolidated financial position of
the Borrower and its subsidiaries as of such date and the
consolidated results of their operations and cash flows for
such fiscal year, in conformity with generally accepted
accounting principles.
(b) The unaudited consolidated balance sheet of
the Borrower and its subsidiaries as of March 31, 1994 and
the related unaudited consolidated statements of income and
cash flows for the three months then ended, set forth in the
Borrower's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, present fairly, in all
material respects, the consolidated financial position of
the Borrower and its subsidiaries as of such date and the
consolidated results of their operations and cash flows for
such three-month period, in conformity with generally
accepted accounting principles for interim financial
information applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section,
subject to normal year-end adjustments.
(c) From March 31, 1994 through the Closing Date
there has been no material adverse change in the
consolidated financial condition of the Borrower and its
subsidiaries.
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<PAGE>40
SECTION 4.05. Litigation. There is no action,
suit or proceeding pending against, or to the knowledge of
the Borrower threatened against, the Borrower or any of its
Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a
reasonable probability of an adverse decision which would
have a Material Adverse Effect, or which in any manner draws
into question the validity of this Agreement or the Notes.
SECTION 4.06. Subsidiaries. Each of the
Borrower's Consolidated Subsidiaries which is a corporation
is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of
incorporation, and has all corporate power and all
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted, except those which the failure to have would not
have a Material Adverse Effect.
SECTION 4.07. Not an Investment Company. The
Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 4.08. Full Disclosure. No written
information heretofore furnished by the Borrower to the
Agent or any Bank pursuant to Section 4.04 of this Agreement
is, and no written information hereafter furnished by the
Borrower to the Agent or any Bank pursuant to Section 5.01
of this Agreement contains or will contain any material
misstatement of any material facts.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has
any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will
deliver to each of the Banks:
(a) within 105 days after the end of each fiscal
year of the Borrower, a consolidated balance sheet of
the Borrower and its subsidiaries as of the end of such
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<PAGE>41
fiscal year and the related consolidated statements of
income, changes in stockholders' equity and cash flows
for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal
year, all reported on in a manner acceptable to the
Securities and Exchange Commission by Coopers & Lybrand
or other independent public accountants of nationally
recognized standing;
(b) within 60 days after the end of each of the
first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower
and its subsidiaries as of the end of such quarter and
the related consolidated statements of income for such
quarter and the related consolidated statements of
income and cash flows for the portion of the Borrower's
fiscal year ended at the end of such quarter, setting
forth in the case of such statements of income in
comparative form the figures for the corresponding
quarter and in the case of such statements of income
and cash flows the corresponding portion of the
Borrower's previous fiscal year, all certified as to
fairness of presentation, generally accepted accounting
principles and consistency by the chief financial
officer or the chief accounting officer of the
Borrower, subject to normal year end adjustments;
(c) simultaneously with the delivery of each set
of financial statements referred to in clauses (a) and
(b) above, a certificate of the chief financial officer
or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations
required to establish whether the Borrower was in
compliance with the requirements of Sections 5.03 and
5.04, inclusive, on the date of the consolidated
balance sheet included in such financial statements and
(ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists,
setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect
thereto;
(d) promptly after the mailing thereof to the
shareholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed; and
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<PAGE>42
(e) promptly after the filing thereof, copies of
all reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with
the Securities and Exchange Commission.
SECTION 5.02. Maintenance of Existence. The
Borrower will preserve, renew and keep in full force and
effect its corporate existence except as otherwise permitted
under Section 5.06.
SECTION 5.03. Fixed Charge Coverage. The ratio
of Consolidated EBIT to Consolidated Interest Expense will
not, for any period of four consecutive fiscal quarters, be
less than 1.15 to 1.
SECTION 5.04. Debt.
(a) Consolidated Debt determined at the end of
any fiscal quarter will not exceed 850% of Consolidated
Tangible Net Worth determined at the end of such fiscal
quarter, and Consolidated Debt determined at the end of any
fiscal month which is not the last month of a fiscal quarter
will not exceed 850% of the greater of (i) Consolidated
Tangible Net Worth determined at the end of the most
recently ended fiscal quarter or (ii) Consolidated Tangible
Net Worth determined at the end of such fiscal month.
(b) Total Debt of all Restricted Subsidiaries
determined at the end of any fiscal month (excluding Debt of
a Restricted Subsidiary to the Borrower or to a Wholly-Owned
Restricted Subsidiary) will not exceed 10% of Consolidated
Net Tangible Assets determined at the end of such fiscal
month.
SECTION 5.05. Limitation on Secured Debt. The
Borrower will not, nor will it permit any Restricted
Subsidiary to, incur, issue, assume or guarantee any Debt
secured by any Lien on any property or assets of the
Borrower or any Restricted Subsidiary, or on any shares of
stock or Debt of any Restricted Subsidiary, without
effectively providing that the principal of, premium, if
any, and interest, if any, on the Loans (together with, if
the Borrower so determines, any other Debt of the Borrower
or such Restricted Subsidiary, which is not subordinated to
the Loans) shall be secured equally and ratably with (or
prior to) such Debt, so long as any such Debt shall be so
secured, unless, after giving effect thereto, the aggregate
<PAGE>
<PAGE>43
amount of all such secured Debt of the Borrower and the
Restricted Subsidiaries would not exceed 10% of Consolidated
Net Tangible Assets of the Borrower and the Restricted
Subsidiaries; provided, however, that no Asset Drop Down
shall, in any event, constitute a Lien; and provided further
that neither the satisfaction and discharge of any Debt
pursuant to any indenture or instrument governing such Debt,
nor the defeasance of any Debt pursuant to any indenture or
instrument governing such Debt, shall be deemed the
incurrence, issue, assumption or guarantee of Debt secured
by a Lien for purposes of this Section. Notwithstanding the
foregoing, this Section shall neither limit nor be deemed or
construed as limiting the right of the Borrower or any
Restricted Subsidiary to incur, issue, assume or guarantee
any Debt secured by any one or more of the following: (1)
Liens on property of, or on any shares of stock or Debt of,
any corporation existing at the time such corporation
becomes a Restricted Subsidiary of the Borrower; (2) Liens
on property, shares of stock, other equity interests, or
Debt existing at the time of acquisition or repossession
thereof by the Borrower or any Restricted Subsidiary; (3)
Liens on physical property (or any Accounts Receivable
arising in connection with the lease thereof), shares of
stock, other equity interests, or Debt acquired (or, in the
case of physical property, constructed) after the date
hereof by the Borrower or any Restricted Subsidiary, which
Liens are created prior to, at the time of, or within one
year after such acquisition (or, in the case of physical
property, the completion of such construction or
commencement of commercial operation of such property,
whichever is later) to secure any Debt issued, incurred,
assumed or guaranteed prior to, at the time of, or within
one year after such acquisition (or such completion or
commencement, whichever is later) or to secure any other
Debt issued, incurred, assumed or guaranteed at any time
thereafter for the purpose of refinancing all or any part of
such Debt; (4) Liens on Accounts Receivable of the Borrower
or any Restricted Subsidiary arising from or in connection
with transactions entered into by the Borrower or such
Restricted Subsidiary after the date hereof or on Accounts
Receivable acquired by the Borrower or such Restricted
Subsidiary after such date from others, which Liens are
created prior to, at the time of, or within one year after
such Accounts Receivable arise or are acquired or, if later,
the completion of the delivery or installation of the
equipment or goods or the rendering of the services or the
advancement or loaning of funds relating thereto (i) as a
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<PAGE>44
result of any guarantee, repurchase or other contingent
(direct or indirect) or recourse obligation of the Borrower
or such Restricted Subsidiary in connection with the
discounting, sale, assignment, transfer or other disposition
of such Accounts Receivable or any interest therein, or (ii)
to secure or provide for the payment of all or any part of
the investment of the Borrower or such Restricted Subsidiary
in any such Accounts Receivable (whether or not such
Accounts Receivable are the Accounts Receivable on which
such Liens are created) or the purchase price thereof or to
secure any debt (including, without limitation, Non-Recourse
Debt) issued, incurred, assumed or guaranteed for the
purpose of financing or refinancing all or any part of such
investment or purchase price; (5) Liens in favor of the
Borrower or any Restricted Subsidiary; (6) Liens in favor of
the United States of America or any State thereof or the
District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or
other payments pursuant to any contract or provision of any
statute; (7) Liens securing the performance of letters of
credit, bids, tenders, sales contracts, purchase agreements,
leases, surety and performance bonds, and other similar
obligations not incurred in connection with the borrowing of
money; (8) Liens to secure Non-Recourse Debt in connection
with the Borrower or any Restricted Subsidiary engaging in
any leveraged or single-investor or other lease
transactions, whether (in the case of Liens on or relating
to leases or groups of leases or the particular properties
subject thereto) such Liens be on the particular properties
subject to any leases involved in any of such transactions
and/or the rental or other payments or rights under such
leases or, in the case of any group of related or unrelated
leases, on the properties subject to the leases comprising
such group and/or the rental or other payments or rights
under such leases, or on any direct or indirect interest
therein, and whether (in any case) (i) such Liens be created
prior to, at the time of, or at any time after the entering
into of such lease transactions and/or (ii) such leases be
in existence prior to, or be entered into by the Borrower or
such Restricted Subsidiary at the time of or at any time
after, the purchase or other acquisition by the Borrower or
such Restricted Subsidiary of the properties subject to such
leases; and (9) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole
or in part, of any of the foregoing; provided, however, that
any such extension, renewal or replacement shall be limited
to all or a part of the property or assets which secured the
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<PAGE>45
Lien so extended, renewed or replaced (plus any improvements
on such property).
SECTION 5.06. Consolidations, Mergers and Sales
of Assets. The Borrower covenants that it will not merge or
consolidate with any other corporation or sell or convey all
or substantially all of its assets to any person (other than
such a sale or conveyance to a Subsidiary or any successor
thereto (such a sale or conveyance being called an "Asset
Drop-Down")), unless (i) either the Borrower shall be the
continuing corporation or the successor corporation or the
person which acquires by sale or conveyance substantially
all the assets of the Borrower (if other than the Borrower)
shall be a corporation organized under the laws of the
United States of America or any State thereof and shall
expressly assume the due and punctual payment of the
principal of and interest on all the Notes according to
their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this
Agreement to be performed or observed by the Borrower, by
one or more agreements, reasonably satisfactory in form to
the Required Banks, executed and delivered to the Agent by
such corporation, and (ii) the Borrower or such successor
corporation, as the case may be, shall not, immediately
after such merger or consolidation, or such sale or
conveyance, be in default in the performance of any such
covenant or condition. In the event of any Asset Drop-Down
after the date of this Agreement, any subsequent sale or
conveyance of assets by a Subsidiary to which assets were
transferred in such Asset Drop-Down (a "Drop-Down
Subsidiary") will be deemed to be a sale or conveyance of
assets by the Borrower for purposes of this Section 5.06.
SECTION 5.07. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrower for general corporate purposes, including, without
limitation, the repayment of maturing commercial paper and
other Debt of the Borrower. None of such proceeds will be
used for the purpose of buying or carrying any "margin
stock" within the meaning of Regulation U.
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<PAGE>46
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) the Borrower shall fail to pay when due any
principal of any Loan, or shall fail to pay within five
Domestic Business Days of the due date thereof any
interest on any Loan, any fees or any other amount
payable hereunder;
(b) the Borrower shall fail to observe or perform
any covenant contained in Sections 5.02, 5.03, 5.04 or
5.06;
(c) the Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above)
for 30 days after notice thereof has been given to the
Borrower by the Agent at the request of the Required
Banks;
(d) any representation or warranty made by the
Borrower in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to
have been materially incorrect when made (or deemed
made pursuant to Section 3.02);
(e) the Borrower shall fail to make any payment
or payments, in the aggregate in excess of
$300,000,000, on principal of Debt of the Borrower when
due and such failure shall continue for 30 days after
the due date thereof or, if longer, beyond any
applicable grace periods;
(f) any event or condition shall occur which
results in the acceleration of the maturity of the
principal of any Debt of the Borrower in the aggregate
in excess of $300,000,000 which acceleration shall not
have been rescinded within 30 days;
(g) the Borrower shall commence a voluntary case
seeking liquidation, reorganization or other relief
with respect to itself or its debts under any
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<PAGE>47
bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case seeking such relief
commenced against it under any such law, or shall make
a general assignment for the benefit of creditors, or
shall admit in writing its inability generally to pay
its debts as they become due;
(h) an order for relief shall be entered against
the Borrower under the federal bankruptcy laws as now
or hereafter in effect in an involuntary case or other
proceeding seeking liquidation, reorganization or other
relief with respect to it or its debts or seeking the
appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any
substantial part of its property, and such decree or
order shall remain undismissed and unstayed for a
period of 20 days;
(i) both (i) a person or group of persons (within
the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) other than AT&T shall
have acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 20% or more of
the outstanding shares of common stock of the Borrower
and (ii) the Borrower shall have ceased to be a
Subsidiary of AT&T; provided that, notwithstanding
clauses (i) and (ii) above, no Event of Default shall
occur under this paragraph (i) if and for so long as
both (x) officers, directors and employees of AT&T
constitute a majority of the Board of Directors of the
Borrower and (y) no person or group of persons has
beneficial ownership of a greater percentage of the
outstanding shares of common stock of the Borrower than
does AT&T;
then, and in every such event, the Agent shall (i) if
requested by Banks having more than 50% in aggregate amount
of the Commitments, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
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<PAGE>48
Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes (together with accrued
interest thereon) shall thereupon become, immediately due
and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the
Borrower; provided that in the case of any of the Events of
Default specified in paragraph (g) or (h) above with respect
to the Borrower, without any notice to the Borrower or any
other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Borrower under Section 6.01(c) promptly
upon being requested to do so by the Required Banks and
shall thereupon notify all the Banks thereof.
SECTION 6.03 Rescission. If at any time after
termination of the Commitments and/or acceleration of the
maturity of the Loans pursuant to Section 6.01, the Borrower
shall pay all arrears of interest and all payments on
account of principal of the Loans which shall have become
due otherwise than by acceleration (with interest on
principal at the rates specified in this Agreement) and all
Defaults (other than nonpayment of principal of and accrued
interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to
Section 9.05 hereof, then upon the written consent of the
Required Banks and notice to the Borrower, such termination
of the Commitments and/or such acceleration and their
consequences may be rescinded and annulled; but such action
shall not affect any subsequent Default or impair any right
or remedy consequent thereon. The provisions of the
preceding sentence are intended merely to bind the Banks to
a decision which may be made at the election of the
Required Banks; they are not intended to benefit the
Borrower and do not give the Borrower the right to require
the Banks to rescind or annul any acceleration hereunder,
even if the conditions set forth herein are met.
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the Notes as are delegated
to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan
Guaranty Trust Company of New York shall have the same
rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though
it were not the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower
as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations
of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this
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<PAGE>50
Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness
or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile
transmission or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees'
gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action
under this Agreement.
SECTION 7.08. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Borrower. Upon any such resignation, the Borrower shall
have the right to appoint a successor Agent from among the
Banks. If no successor Agent shall have been so appointed,
and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then
the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America
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<PAGE>51
or of any State thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested
with all the rights and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall
pay to the Agent for its own account fees in the amounts and
at the times previously agreed upon between the Borrower and
the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any CD Loan, Euro-Dollar Loan or
Money Market LIBOR Loan:
(a) the Agent is advised by the CD Reference
Banks or, under the circumstances contemplated by the
final sentence of the definition of London Interbank
Offered Rate, the Euro-Dollar Reference Banks that
deposits in dollars (in the applicable amounts) are not
being offered to the Reference Banks in the relevant
market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans,
Banks having 50% or more of the aggregate principal
amount of the affected Loans advise the Agent that the
Adjusted CD Rate or the London Interbank Offered Rate,
as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of
funding their CD Loans or Euro-Dollar Loans, as the
case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such
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<PAGE>52
suspension no longer exist, (i) the obligations of the Banks
to make CD Loans or Euro-Dollar Loans, as the case may be,
or to convert outstanding Loans into CD Loans or Euro-Dollar
Loans, as the case may be, shall be suspended and (ii) each
outstanding CD Loan or Euro-Dollar Loan, as the case may be,
shall be converted into a Base Rate Loan on the last day of
the then current Interest Period applicable thereto. Unless
the Borrower notifies the Agent at least one Domestic
Business Day before the date of any Fixed Rate Borrowing for
which a Notice of Borrowing has previously been given that
it elects not to borrow on such date, (i) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall
instead be made as a Base Rate Borrowing and (ii) if such
Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the
Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day
to but excluding the last day of the Interest Period
applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, or to
convert outstanding Loans into Euro-Dollar Loans, shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate
Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may
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<PAGE>53
lawfully continue to maintain and fund such Loan to such day
or (b) immediately if such Bank shall determine that it may
not lawfully continue to maintain and fund such Loan to such
day.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after (x) the date hereof, in the case of any
Committed Loan or any obligation to make Committed Loans or
(y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding (i) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve
Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement with respect to which such Bank is entitled
to compensation during the relevant Interest Period under
Section 2.15, special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of
any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank
to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
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<PAGE>54
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its
Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by
such Bank to be material, then pursuant to paragraph (c)
below, the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its
Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower
and the Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such
Bank to compensation pursuant to this Section. A
certificate of the Bank setting forth such amount or amounts
(including computation of such amount or amounts) as shall
be necessary to compensate the Bank or its Parent as
specified in paragraph (a) or (b) above, as the case may be,
shall be delivered to the Borrower and such amount or
amounts may be reviewed by the Borrower. Unless the
Borrower disagrees in good faith with the computation of the
amount or amounts in such certificate, the Borrower shall
pay to the Bank, within 30 days after receipt by the
Borrower of such certificate delivered by the Bank, the
amount shown as due on any such certificate. If the
Borrower, after receipt of any such certificate from the
Bank, disagrees with the Bank on the computation of the
amount or amounts owed to the Bank pursuant to paragraph (a)
or (b) above, the Bank and the Borrower shall negotiate in
good faith to promptly resolve such disagreement. In either
case, however, the Bank shall have a duty to mitigate the
damages that may arise as a consequence of paragraph (a) or
(b) above (including, without limitation, changing its
Applicable Lending Office) to the extent that such
mitigation will not, in the judgment of the Bank, entail any
cost or disadvantage to the Bank that the Bank is not
reimbursed or compensated for by the Borrower.
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<PAGE>55
SECTION 8.04. Taxes. (a) Any and all payments
by the Borrower to or for the account of any Bank or the
Agent hereunder or under any Note shall be made free and
clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges
or withholdings imposed by the United States or any
political subdivision or taxing authority thereof, and all
liabilities with respect thereto, excluding, in the case of
each Bank and the Agent, taxes imposed on its net income,
and franchise taxes imposed on it, by the United States or
any political subdivision or taxing authority thereof (all
such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note to any Bank or
the Agent, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law and (iv)
the Borrower shall furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes and any other
excise or property taxes, or charges or similar levies which
arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect
to, this Agreement or any Note (hereinafter referred to as
"Other Taxes").
(c) The Borrower agrees to indemnify each Bank
and the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as
the case may be) and any liability (including penalties,
interest and reasonable out-of-pocket expenses) arising
therefrom or with respect thereto (other than any such
liability that results from the gross negligence or willful
misconduct of each Bank and the Agent, whether or not such
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<PAGE>56
Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other governmental
authority). This indemnification shall be made within 30
days from the date such Bank or the Agent (as the case may
be) makes written demand therefor. If any Bank or the Agent
receives a refund in respect of any Taxes or Other Taxes for
which such Bank or the Agent has received payment from the
Borrower hereunder it shall promptly repay such refund
(including any interest received by such Bank or the Agent
from the taxing authority with respect to the refund with
respect to such Taxes or Other Taxes) to the Borrower, net
of all reasonable out-of-pocket expenses of such Bank;
provided that the Borrower, upon the request of such Bank or
the Agent, agrees to return such refund (plus penalties,
interest or other charges) to such Bank or the Agent in the
event such Bank or the Agent is required to repay such
refund.
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the
Internal Revenue Service, duly executed by such Bank,
certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party
which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct
of a trade or business in the United States. If the form
provided by a Bank at the time such Bank first becomes a
party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at
such rate shall be considered excluded from "Taxes" as
defined in Section 8.04(a).
(e) Each Bank further agrees to promptly notify
the Borrower if such Bank changes its Applicable Lending
Office and, upon written request from the Borrower, deliver
forms 1001 or 4224 required pursuant to Section 8.04(d)
prior to the immediately following due date of any payment
by the Borrower hereunder.
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(f) The Borrower shall not be required to pay any
additional amounts to any Bank or the Agent in respect of
Taxes and Other Taxes pursuant to paragraphs (a), (b) and
(c) above if the obligation to pay such additional amounts
would not have arisen but for a failure by such Bank or
Agent to comply with the provisions of paragraphs (d) and
(e) above unless such failure results from (i) a change in
applicable law, regulation or official interpretation
thereof or (ii) an amendment, modification or revocation of
any applicable tax treaty or a change in official position
regarding the application or interpretation thereof, in each
case after the date hereof or after such Bank became a party
hereto; provided, however, that should a Bank, which is
otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request
to assist such Bank to recover such Taxes.
(g) Any Bank claiming any additional amounts
payable under this Section 8.04 shall (i) to the extent
legally able to do so, upon reasonable written request from
the Borrower, file any certificate or document if such
filing would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue, and the
Borrower shall not be obligated to pay such additional
amounts if, after the Borrower's request, any Bank could
have filed such certificate or document and failed to do so;
or (ii) consistent with legal and regulatory restrictions,
use reasonable efforts to change the jurisdiction of its
Applicable Lending Office if the making of such change would
avoid the need for or reduce the amount of any additional
amounts which may thereafter accrue and would not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank.
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (i) the obligation of any
Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04 with
respect to its CD Loans or Euro-Dollar Loans and the
Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Agent, have elected
that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Borrower
that the circumstances giving rise to such suspension or
demand for compensation no longer exist:
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(a) all Loans which would otherwise be made by
such Bank as (or continued as or converted into) CD
Loans or Euro-Dollar Loans, as the case may be, shall
instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, has been repaid (or
converted to a Base Rate Loan), all payments of
principal which would otherwise be applied to repay
such Fixed Rate Loans shall be applied to repay its
Base Rate Loans instead.
If such Bank notifies the Borrower that the circumstances
giving rise to such notice no longer apply, the principal
amount of each such Base Rate Loan shall be converted into a
CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable
to the related CD Loans or Euro-Dollar Loans of the other
Banks.
SECTION 8.06. Substitution of Bank. If any Bank
(i) has demanded compensation for increased costs pursuant
to Section 8.03 or 8.04 or, (ii) has determined that the
making or continuation of any Euro-Dollar Rate Loan has
become unlawful or impermissible pursuant to Section 8.02
and similar additional interest or compensation has not been
demanded by, or a similar determination has not been made
by, all of the Banks, the Borrower shall have the right to
designate an Assignee which is not an Affiliate of the
Borrower to purchase for cash, pursuant to an Assignment and
Assumption Agreement, the outstanding Loans and Commitment
of such Bank and to assume all of such Bank's other rights
and obligations hereunder without recourse to or warranty
by, or expense to, such Bank, for a purchase price equal to
the principal amount of all of such Bank's outstanding Loans
plus any accrued but unpaid interest thereon and the accrued
but unpaid facility fees in respect of that Bank's
Commitment hereunder plus such amount, if any, as would be
payable pursuant to Section 2.13 if the outstanding Loans of
such Bank were prepaid in their entirety on the date of
consummation of such assignment.
SECTION 8.07. Compensation. The Borrower shall
not be liable for compensating any Bank under Sections 2.13,
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<PAGE>59
8.03 and 8.04 for any funding losses, increased costs or
taxes incurred by such Bank more than 30 days prior to such
Bank's written notice of its intention to demand payment
therefor.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or
telex or facsimile number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address or telex
or facsimile number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other
address or telex or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and
the Borrower. Each such notice, request or other
communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received,
(ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means,
when received at the address specified in this Section;
provided that notices to the Agent under Article II or
Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The
Borrower shall pay (i) all reasonable out-of-pocket expenses
of the Agent, including reasonable fees and disbursements of
special counsel for the Agent, in connection with the
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preparation and administration of this Agreement, any waiver
or consent hereunder or any amendment hereof or any Default
or alleged Default hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by
the Agent and each Bank, including reasonable fees and
disbursements of counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent
and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses,
damages, costs and reasonable out-of-pocket expenses of any
kind (including, without limitation, the reasonable fees and
disbursements of counsel) which were actually incurred by
such Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or
any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct.
SECTION 9.04. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to any Note held by it which is greater
than the proportion received by any other Bank in respect of
the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other
Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest
with respect to the Notes held by the Banks shall be shared
by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness under the Notes.
SECTION 9.05. Amendments and Waivers. Any
provision of this Agreement or the Notes may be amended or
<PAGE>
<PAGE>61
waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (i) increase
or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal
of or rate of interest on any Loan or any fees hereunder,
(iii) postpone the scheduled maturity of any payment of
principal of or interest on any Loan or any fees hereunder
or for termination of any Commitment or (iv) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any
action under this Section or any other provision of this
Agreement.
SECTION 9.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this
Agreement described in clause (i), (ii) or (iii) of Section
9.05 without the consent of the Participant. The Borrower
agrees that each Participant shall, to the extent provided
in its participation agreement, be entitled to the benefits
<PAGE>
<PAGE>62
of Sections 2.13 and 2.15 and Article VIII with respect to
its participating interest. An assignment or other transfer
which is not permitted by subsection (c) or (d) below shall
be given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance
with this subsection (b).
(c) Any Bank may at any time assign to one or
more banks or other institutions (each an "Assignee") all,
or a proportionate part of all, of its rights and
obligations under this Agreement and the Notes, and such
Assignee shall assume such rights and obligations, pursuant
to an Assignment and Assumption Agreement in substantially
the form of Exhibit G hereto executed by such Assignee and
such transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent; provided that such
assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market
Loans; and provided further that the interest of the
Assignee shall be in a minimum amount equivalent to an
original Commitment of $15,000,000 and the collective
interest of the transferor Bank and its affiliates shall be
in a minimum amount equivalent to an original Commitment of
$25,000,000 unless, in the case of the transferor Bank and
its affiliates, they have no Commitment after giving effect
to such assignment. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall
be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by
any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to
the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee
for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 8.04.
<PAGE>
<PAGE>63
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any
greater payment under Section 8.03 or 8.04 than such Bank
would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the
provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
(f) Any Bank may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 9.06, disclose to the
Assignee or Participant or proposed Assignee or Participant
any information relating to the Borrower or its Subsidiaries
furnished to such Bank by the Agent or by or on behalf of
the Borrower; provided that, prior to any such disclosure,
such Assignee or Participant or proposed Assignee or
Participant shall agree to preserve in accordance with
Section 9.11 the confidentiality of any confidential
information described therein.
SECTION 9.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
<PAGE>
<PAGE>64
SECTION 9.09. Counterparts; Integration;
Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the
entire agreement and understanding among the parties hereto
and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective on and
as of July 11, 1994, provided that on or prior to such date,
the Agent shall have received counterparts hereof signed by
each of the parties hereto (or, in the case of any party as
to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party).
On the Effective Date, the Borrower shall prepay or repay
any loans outstanding under the Existing Credit Agreement,
together with accrued interest thereon and shall pay all
fees accrued thereunder to the Effective Date. The Borrower
and the Banks which are parties to the Existing Credit
Agreement, comprising the "Required Banks" as defined
therein, agree that the commitments thereunder shall
terminate in their entirety on and as of the Effective Date
without further action by any party to the Existing Credit
Agreement.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.11. Confidentiality. Subject to
Section 9.06(f) hereof, the Banks shall hold all nonpublic
information obtained pursuant to the requirements of this
Agreement and identified as such by the Borrower in
accordance with such Bank's customary procedures for
handling confidential information of this nature and in
accordance with safe and sound banking practices and in any
event may make disclosure reasonably required by a bona fide
offeree or transferee in connection with the contemplated
transfer, or as required or requested by any governmental
authority or representative thereof, or pursuant to legal
process, or to its accountants, lawyers and other advisors,
and shall require any such offeree or transferee to agree
(and require any of its offerees, transferees or
participants to agree) to comply with this Section 9.11.
<PAGE>
<PAGE>65
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
AT&T CAPITAL CORPORATION
By /s/ Nicholas S. Cyprus
Title: Vice President and
Controller
44 Whippany Road
Morristown, New Jersey 07962
Fax: (201) 397-3106
Commitments
$40,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Matthias Blumshein
Title: Associate
$25,000,000 BARCLAYS BANK PLC
By /s/ Andrew Wynn
Title: Director
$25,000,000 THE CHASE MANHATTAN BANK, N.A.
By /s/ Robert T. Smith
Title: Vice President
<PAGE>
<PAGE>66
Commitments
$25,000,000 CHEMICAL BANK
By /s/ Marion J. Henry
Title: Vice President
$25,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ R. Ivosevich
Title: Senior Vice President
$25,000,000 THE FUJI BANK, LIMITED
By /s/ Y. Shitsugu
Title: Vice President and
Manager
$16,250,000 THE FIRST NATIONAL BANK OF
CHICAGO
By /s/ Judith L. Mayberry
Title: Vice President
$16,250,000 CITIBANK, N.A.
By /s/ James M. Walsh
Title: Attorney-in-fact
<PAGE>
<PAGE>67
Commitments
$16,250,000 CREDIT SUISSE
By /s/ Jay Chall
Title: Member of Senior
Management
By /s/ Andrea Shkane
Title: Associate
$16,250,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ Bina R. Dabbah
Title: Vice President
By /s/ Alain M. Bolea
Title: Director
$16,250,000 THE INDUSTRIAL BANK OF JAPAN,
LTD., NEW YORK BRANCH
By /s/ Junri Oda
Title: Senior Vice President
and Senior Manager
$16,250,000 MELLON BANK, N.A.
By /s/ James S. Wolf
Title: First Vice President
<PAGE>
<PAGE>68
Commitments
$16,250,000 NATIONSBANK OF NORTH
CAROLINA, N.A.
By /s/ Moses James Sawney
Title: Vice President
$16,250,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Mark Williams
Title: Vice President
$16,250,000 ROYAL BANK OF CANADA
By /s/ Thomas M. Byrne
Title: Manager
$16,250,000 SOCIETE GENERALE
By /s/ Philippe de Rozieres
Title: Vice President
$16,250,000 THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By /s/ Shuntaro Higashi
Title: Joint General Manager
<PAGE>
<PAGE>69
Commitments
$16,250,000 SWISS BANK CORPORATION
By /s/ Sean M. Harrigan
Title: Executive Director
Merchant Banking
By /s/ Teresa A. Portela
Title: Associate Director
Merchant Banking
$10,000,000 ABN AMRO BANK N.V. NEW YORK BRANCH
By /s/ Ann K. Schwalbenberg
Title: Vice President
By /s/ James B. Sieger
Title: Vice President
$10,000,000 THE BANK OF NEW YORK
By /s/ Edward F. Ryan, Jr.
Title: Vice President
$10,000,000 BANK OF HAWAII
By /s/ J. Bryan Scearce
Title: Assistant Vice President
<PAGE>
<PAGE>70
Commitments
$10,000,000 BANQUE PARIBAS
By /s/ Richard G. Burrows
Title: Vice President
By /s/ Stanley P. Berkman
Title: Senior Vice President
$10,000,000 CIBC INC.
By /s/ Leslie L. Rogers
Title: Vice President
$10,000,000 COMERICA BANK
By /s/ Martin G. Ellis
Title: Assistant Vice President
$10,000,000 COMMERZBANK AKTIENGESELLSCHAFT
NEW YORK BRANCH
By /s/ Juergen Boysen
Title: Senior Vice President
By /s/ Michael D. Hintz
Title: Vice President
<PAGE>
<PAGE>71
Commitments
$10,000,000 CONTINENTAL BANK
By /s/ Kathryn N. Robinson
Title: Vice President
$10,000,000 DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ Susan A. Hodge
Title: Vice President
By /s/ J. M. Leffler
Title: First Vice President
$10,000,000 THE FIRST NATIONAL BANK OF BOSTON
By /s/ Heather R. Johnson
Title: Vice President
$10,000,000 THE NORTHERN TRUST COMPANY
By /s/ Kristina V. L. Warland
Title: Second Vice President
<PAGE>
<PAGE>72
Commitments
$10,000,000 TORONTO DOMINION (NEW YORK), INC.
By /s/ C.A. Clause
Title: Vice President
$10,000,000 TRUST COMPANY BANK
By /s/ Marion C. Shields
Title: Vice President
$10,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Linda M. Harris
Title: Senior Vice President
_________________
$500,000,000
Total Commitments
<PAGE>
<PAGE>73
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Matthias Blumschein
Title: Associate
60 Wall Street
New York, New York 10260-0060
Attention: Matthias Blumschein
Telex number: 177615<PAGE>
<PAGE>74
EXHIBIT A
NOTE
New York, New York
, 19
For value received, AT&T Capital Corporation, a
Delaware corporation (the "Borrower"), promises to pay to
the order of
(the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the
Bank to the Borrower pursuant to the Credit Agreement
referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in
Federal or other immediately available funds at the office
of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made by the Bank, the respective types
thereof and all repayments of the principal thereof shall be
recorded by the Bank and, if the Bank so elects in
connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be
endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any
such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit
Agreement.
<PAGE>
<PAGE>75
This note is one of the Notes referred to in the
$500,000,000 Credit Agreement dated as of July 11, 1994
among the Borrower, the banks listed on the signature pages
thereof and Morgan Guaranty Trust Company of New York, as
Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made
to the Credit Agreement for provisions for the mandatory and
optional prepayment hereof and the acceleration of the
maturity hereof.
AT&T CAPITAL CORPORATION
By________________________
Title:
<PAGE>
<PAGE>76
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________
Amount of
Amount of Type of Principal Notation
Date Loan Loan Repaid Made By
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
<PAGE>
<PAGE>77
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: AT&T Capital Corporation
Re: $500,000,000 Credit Agreement (the "Credit
Agreement") dated as of July 11, 1994 among
the Borrower, the Banks listed on the
signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of
the Credit Agreement that we request Money Market Quotes for
the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to
them in the Credit Agreement.
AT&T CAPITAL CORPORATION
By________________________
Title:
_____________________
*Amount must be $5,000,000 or a larger multiple of
$1,000,000.
**Not less than one month (LIBOR Auction) or not less
than 14 days (Absolute Rate Auction), subject to the
provisions of the definition of Interest Period.
<PAGE>
<PAGE>78
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to AT&T
Capital Corporation (the "Borrower")
Pursuant to Section 2.03 of the $500,000,000
Credit Agreement dated as of July 11, 1994 among the
Borrower, the Banks parties thereto and the undersigned, as
Agent, we are pleased on behalf of the Borrower to invite
you to submit Money Market Quotes to the Borrower for the
following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Please respond to this invitation by no later than
[4:00 P.M.] [9:30 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
<PAGE>
<PAGE>79
EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to AT&T Capital
Corporation (the "Borrower")
In response to your invitation on behalf of the
Borrower dated _____________, 19__, we hereby make the
following Money Market Quote on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted
shall not exceed $____________.]**
__________
* As specified in the related Invitation.
(Notes continued on following page)
<PAGE>
<PAGE>80
** Principal amount bid for each Interest Period may not
exceed principal amount requested. Specify aggregate
limitation if the sum of the individual offers exceeds the
amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable
conditions set forth in the $500,000,000 Credit Agreement
dated as of July 11, 1994 among the Borrower, the Banks
listed on the signature pages thereof and yourselves, as
Agent, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in
part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 14 days, as
specified in the related Invitation. No more than five bids
are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify
whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).
<PAGE>
<PAGE>81
EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am [General Counsel] [Assistant General Counsel]
of AT&T Capital Corporation (the "Borrower"), and as such,
have acted as counsel for the Borrower in connection with
the $500,000,000 Credit Agreement (the "Credit Agreement")
dated as of July 11, 1994 among the Borrower, the banks
listed on the signature pages thereof and Morgan Guaranty
Trust Company of New York, as Agent. Terms defined in the
Credit Agreement are used herein as therein defined. This
opinion is being rendered to you at the request of the
Borrower pursuant to Section 3.01(b) of the Credit
Agreement.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The Borrower is a corporation duly
incorporated, validly existing and in good standing under
the laws of Delaware, and has all corporate power and all
<PAGE>
<PAGE>82
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted, except those which the failure to have would not
have a Material Adverse Effect.
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate power, have been duly authorized by
all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower
or of any material agreement, judgment, injunction, order,
decree or other material instrument binding upon the
Borrower or result in the creation or imposition of any Lien
on any asset of the Borrower.
3. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, in each case
enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws affecting creditors'
rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity
or at law).
4. There is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against,
the Borrower or any of its Consolidated Subsidiaries before
any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable probability of an
adverse decision which would have a Material Adverse Effect
or which in any manner draws into question the validity of
the Credit Agreement or the Notes.
5. Each of the Borrower's Consolidated
Subsidiaries which is a corporation is a corporation validly
existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate power
and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted, except those which the failure to have would not
have a Material Adverse Effect.
<PAGE>
<PAGE>83
I am a member of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, I express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
or furnished to any other person without my prior written
consent.
Very truly yours, <PAGE>
<PAGE>84
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
$500,000,000 Credit Agreement (the "Credit Agreement") dated
as of July 11, 1994 among AT&T Capital Corporation, a
Delaware corporation (the "Borrower"), the banks listed on
the signature pages thereof (the "Banks") and Morgan
Guaranty Trust Company of New York, as Agent (the "Agent"),
and have acted as special counsel for the Agent for the
purpose of rendering this opinion pursuant to Section
3.01(c) of the Credit Agreement. Terms defined in the
Credit Agreement are used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate power and have been duly authorized
by all necessary corporate action.
<PAGE>
<PAGE>85
2. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, in each case
enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws affecting creditors'
rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity
or at law).
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
any other person without our prior written consent.
Very truly yours,<PAGE>
<PAGE>86
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
AT&T CAPITAL CORPORATION (the "Borrower") and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the $500,000,000 Credit
Agreement dated as of July 11, 1994 among the Borrower, the
Assignor and the other Banks party thereto, as Banks, and
the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans to the Borrower
in an aggregate principal amount at any time outstanding not
to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by
the Assignor under the Credit Agreement in the aggregate
principal amount of $__________ are outstanding at the date
hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its
outstanding Committed Loans, and the Assignee proposes to
accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
<PAGE>
<PAGE>87
otherwise defined herein shall have the respective meanings
set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Borrower
and the Agent and the payment of the amounts specified in
Section 3 required to be paid on the date hereof (i) the
Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under
the Credit Agreement with a Commitment in an amount equal to
the Assigned Amount, and (ii) the Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount
and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein
shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or facility fees
accrued to the date hereof in respect of the Assigned Amount
are for the account of the Assignor and such fees accruing
from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest
<PAGE>
<PAGE>88
therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent.
This Agreement is conditioned upon the consent of the
Borrower and the Agent pursuant to Section 9.06(c) of the
Credit Agreement. The execution of this Agreement by the
Borrower and the Agent is evidence of this consent.
Pursuant to Section 9.06(c) the Borrower agrees to execute
and deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The
Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the
solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By_________________________
Title:
<PAGE>
<PAGE>89
[ASSIGNEE]
By__________________________
Title:
AT&T CAPITAL CORPORATION
By__________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
<PAGE>1
Exhibit 10(q)
Form 10-K for 1994
File No. 1-11237
$1,500,000,000
CREDIT AGREEMENT
dated as of
July 11, 1994
among
AT&T Capital Corporation
The Banks Listed Herein
and
Morgan Guaranty Trust Company of New York,
as Agent
<PAGE>
<PAGE>2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions. . . . . . . . . . . . . . . . . . .
. 1
1.02 Accounting Terms and Determinations. . . . . . .
. 11
1.03 Types of Borrowings. . . . . . . . . . . . . . .
. 12
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments to Lend. . . . . . . . . . . . . . .
. 12
2.02 Notice of Committed Borrowing. . . . . . . . . .
. 13
2.03 Money Market Borrowings. . . . . . . . . . . . .
. 13
2.04 Notice to Banks; Funding of Loans. . . . . . . .
. 17
2.05 Notes. . . . . . . . . . . . . . . . . . . . . .
. 18
2.06 Maturity of Loans; Termination of
Commitments. . . . . . . . . . . . . . . . . .
. 19
2.07 Interest Rates . . . . . . . . . . . . . . . . .
. 19
2.08 Facility Fees. . . . . . . . . . . . . . . . . .
. 22
2.09 Optional Termination or
Reduction of Commitments . . . . . . . . . . .
. 23
2.10 Method of Electing Interest Rates. . . . . . . .
. 23
2.11 Optional Prepayments . . . . . . . . . . . . . .
. 24
2.12 General Provisions as to Payments. . . . . . . .
. 25
2.13 Funding Losses . . . . . . . . . . . . . . . . .
. 26
2.14 Computation of Interest and Fees . . . . . . . .
. 27
2.15 Regulation D Compensation. . . . . . . . . . . .
. 27
ARTICLE III
CONDITIONS
SECTION 3.01 Closing. . . . . . . . . . . . . . . . . . . . .
. 28
3.02 Borrowings . . . . . . . . . . . . . . . . . . .
. 28
<PAGE>
<PAGE>3
Page
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 Corporate Existence and Power. . . . . . . . . .
. 29
4.02 Corporate and Governmental
Authorization; No Contravention. . . . . . . .
. 29
4.03 Binding Effect . . . . . . . . . . . . . . . . .
. 29
4.04 Financial Information. . . . . . . . . . . . . .
. 30
4.05 Litigation.. . . . . . . . . . . . . . . . . . .
. 30
4.06 Subsidiaries.. . . . . . . . . . . . . . . . . .
. 31
4.07 Not an Investment Company. . . . . . . . . . . .
. 31
4.08 Full Disclosure. . . . . . . . . . . . . . . . .
. 31
ARTICLE V
COVENANTS
SECTION 5.01 Information. . . . . . . . . . . . . . . . . . .
. 31
5.02 Maintenance of Existence . . . . . . . . . . . .
. 32
5.03 Fixed Charge Coverage. . . . . . . . . . . . . .
. 32
5.04 Debt . . . . . . . . . . . . . . . . . . . . . .
. 32
5.05 Limitation on Secured Debt . . . . . . . . . . .
. 33
5.06 Consolidations, Mergers and
Sales of Assets. . . . . . . . . . . . . . . .
. 35
5.07 Use of Proceeds. . . . . . . . . . . . . . . . .
. 35
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default. . . . . . . . . . . . . . . .
. 36
6.02 Notice of Default. . . . . . . . . . . . . . . .
. 38
6.03 Rescission . . . . . . . . . . . . . . . . . . .
. 38
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization. . . . . . . . . .
. 38
7.02 Agent and Affiliates.. . . . . . . . . . . . . .
. 38
7.03 Action by Agent. . . . . . . . . . . . . . . . .
. 39
7.04 Consultation with Experts. . . . . . . . . . . .
. 39
7.05 Liability of Agent . . . . . . . . . . . . . . .
. 39
7.06 Indemnification. . . . . . . . . . . . . . . . .
. 39
7.07 Credit Decision. . . . . . . . . . . . . . . . .
. 40
7.08 Successor Agent. . . . . . . . . . . . . . . . .
. 40
7.09 Agent's Fee. . . . . . . . . . . . . . . . . . .
. 40
<PAGE>
<PAGE>4
Page
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 Basis for Determining Interest
Rate Inadequate or Unfair. . . . . . . . . . .
. 40
8.02 Illegality . . . . . . . . . . . . . . . . . . .
. 41
8.03 Increased Cost and Reduced Return. . . . . . . .
. 42
8.04 Taxes. . . . . . . . . . . . . . . . . . . . . .
. 44
8.05 Base Rate Loans Substituted for
Affected Fixed Rate Loans. . . . . . . . . . .
. 46
8.06 Substitution of Bank . . . . . . . . . . . . . .
. 47
8.07 Compensation . . . . . . . . . . . . . . . . . .
. 47
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices. . . . . . . . . . . . . . . . . . . . .
. 47
9.02 No Waivers . . . . . . . . . . . . . . . . . . .
. 48
9.03 Expenses; Indemnification. . . . . . . . . . . .
. 48
9.04 Sharing of Set-Offs. . . . . . . . . . . . . . .
. 49
9.05 Amendments and Waivers . . . . . . . . . . . . .
. 49
9.06 Successors and Assigns . . . . . . . . . . . . .
. 49
9.07 Collateral . . . . . . . . . . . . . . . . . . .
. 51
9.08 Governing Law; Submission to Juris-
diction. . . . . . . . . . . . . . . . . . . .
. 51
9.09 Counterparts; Integration;
Effectiveness. . . . . . . . . . . . . . . . .
. 52
9.10 WAIVER OF JURY TRIAL . . . . . . . . . . . . . .
. 52
9.11 Confidentiality. . . . . . . . . . . . . . . . .
. 52
Exhibit A - Note
Exhibit B - Money Market Quote Request
Exhibit C - Invitation for Money Market Quotes
Exhibit D - Money Market Quote
<PAGE>
<PAGE>5
Exhibit E - Opinion of Counsel for the Borrower
Exhibit F - Opinion of Special Counsel for the
Agent
Exhibit G - Assignment and Assumption Agreement
<PAGE>
<PAGE>6
CREDIT AGREEMENT
AGREEMENT dated as of July 11, 1994 among AT&T
CAPITAL CORPORATION, the BANKS listed on the signature pages
hereof and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The following terms,
as used herein, have the following meanings:
"Absolute Rate Auction" means a solicitation of
Money Market Quotes setting forth Money Market Absolute
Rates pursuant to Section 2.03.
"Accounts Receivable" shall mean (I) any accounts
receivable (whether or not earned by performance), chattel
paper, instruments, documents, general intangibles, trade
acceptances, any other rights to receive installment, rental
or other payments for, or relating to amounts due or to
become due on account of equipment or goods sold or leased
or to be sold or leased or services rendered or to be
rendered or funds advanced or loaned or to be advanced or
loaned and other rights to payment of any kind, (ii) any
proceeds of any of the foregoing and (iii) any interest in
any property or asset of any kind (whether of the obligor
under such Accounts Receivable or any other Person) securing
the payment of any item listed in clause (I) hereof.
"Adjusted CD Rate" has the meaning set forth in
Section 2.07(b).
"Administrative Questionnaire" means, with respect
to each Bank, an administrative questionnaire in the form
prepared by the Agent and submitted to the Agent (with a
copy to the Borrower) duly completed by such Bank.
"Agent" means Morgan Guaranty Trust Company of New
York in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
<PAGE>
<PAGE>7
"Applicable Lending Office" means, with respect to
any Bank, (I) in the case of its Domestic Loans, its
Domestic Lending Office, (ii) in the case of its Euro-Dollar
Loans, its Euro-Dollar Lending Office and (iii) in the case
of its Money Market Loans, its Money Market Lending Office.
"Applicable Margin" has the meaning set forth in
Section 2.07(h).
"Assessment Rate" has the meaning set forth in
Section 2.07(b).
"Asset Drop-Down" has the meaning set forth in
Section 5.06.
"Assignee" has the meaning set forth in Section
9.06(c).
"AT&T" means American Telephone and Telegraph
Company, a New York corporation, and its successors.
"Bank" means each bank listed on the signature
pages hereof, each Assignee which becomes a Bank pursuant to
Section 9.06(c), and their respective successors.
"Base Rate" means, for any day, a rate per annum
equal to the higher of (I) the Prime Rate for such day and
(ii) the sum of 1/2 of 1% plus the Federal Funds Rate for such
day.
"Base Rate Loan" means (I) a Committed Loan which
bears interest at the Base Rate pursuant to the applicable
Notice of Committed Borrowing or Notice of Interest Rate
Election or the provisions of Article VIII or (ii) an
overdue amount which was a Base Rate Loan immediately before
it became overdue.
"Borrower" means AT&T Capital Corporation, a
Delaware corporation, and its successors.
"Borrower's 1993 Form 10-K" means the Borrower's
annual report on Form 10-K for 1993, as filed with the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934.
"Borrower's Latest Form 10-Q" means the Borrower's
quarterly report on Form 10-Q for the quarter ended March
31, 1994, as filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934.
<PAGE>
<PAGE>8
"Borrowing" has the meaning set forth in Section
1.03.
"CD Base Rate" has the meaning set forth in
Section 2.07(b).
"CD Loan" means (I) a Committed Loan which bears
interest at a CD Rate pursuant to the applicable Notice of
Committed Borrowing or Notice of Interest Rate Election or
(ii) an overdue amount which was a CD Loan immediately
before it became overdue.
"CD Rate" means a rate of interest determined
pursuant to Section 2.07(b) on the basis of an Adjusted CD
Rate.
"CD Reference Banks" means Chemical Bank,
Citibank, N.A. and Morgan Guaranty Trust Company of New
York.
"Closing Date" means the date on which the Agent
shall have received the documents specified in or pursuant
to Section 3.01.
"Commitment" means, with respect to each Bank, the
amount set forth opposite the name of such Bank on the
signature pages hereof, as such amount may be reduced from
time to time pursuant to Section 2.09.
"Committed Loan" means a loan made by a Bank
pursuant to Section 2.01; provided that, if any such loan or
loans (or portions thereof) are combined or subdivided
pursuant to a Notice of Interest Rate Election, the term
"Committed Loan" shall refer to the combined principal
amount resulting from such combination or to each of the
separate principal amounts resulting from such subdivision,
as the case may be.
"Consolidated Debt" means at any date the Debt of
the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis as of such date.
"Consolidated EBIT" means, for any period, the sum
of (I) the consolidated net income from continuing
operations of the Borrower and its Consolidated Subsidiaries
for such period before extraordinary items and without
giving effect to unusual non-recurring events plus (ii) to
the extent deducted in determining such consolidated net
income from continuing operations, the sum of Consolidated
Interest Expense and the provision for income tax for such
period.
<PAGE>
<PAGE>9
"Consolidated Interest Expense" means, for any
period, the interest expense of the Borrower and its
Consolidated Subsidiaries determined on a consolidated basis
for such period.
"Consolidated Net Tangible Assets" means, at the
date of any determination, the total assets appearing on the
consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as at the end of the most recent
fiscal quarter of the Borrower for which such balance sheet
is available, prepared in accordance with generally accepted
accounting principles, less (a) all current liabilities
(obligations whose liquidation is reasonably expected to
occur within twelve months), (b) investments in and advances
to Subsidiaries of the Borrower other than Restricted
Subsidiaries or other entities accounted for on the equity
method of accounting, and Intangible Assets.
"Consolidated Subsidiary" means at any date any
Subsidiary or other entity the accounts of which would be
consolidated with those of the Borrower in its consolidated
financial statements if such statements were prepared as of
such date.
"Consolidated Tangible Net Worth" means, at any
date, the consolidated stockholders' equity of the Borrower
and its Consolidated Subsidiaries less Intangible Assets,
all determined as of such date.
"Debt" of any Person means at any date, without
duplication, (I) all obligations of such Person for borrowed
money and (ii) all obligations of others for borrowed money
guaranteed by such Person; provided, however, that any
recourse provided by any Person in connection with any sale,
transfer or other disposition by such Person of Accounts
Receivable or of any subsidiary of such Person substantially
all the assets of which are Accounts Receivable which
constitutes a "sale" under generally accepted accounting
principles (as in effect at the time of such sale, transfer
or other disposition) shall not, in any event, constitute
Debt.
"Default" means any condition or event which
constitutes an Event of Default or which with the giving of
notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Domestic Business Day" means any day except a
Saturday, Sunday or other day on which commercial banks in
New York City are authorized by law to close.
<PAGE>
<PAGE>10
"Domestic Lending Office" means, as to each Bank,
its office located at its address set forth in its
Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office)
or such other office as such Bank may hereafter designate as
its Domestic Lending Office by notice to the Borrower and
the Agent; provided that any Bank may so designate separate
Domestic Lending Offices for its Base Rate Loans, on the one
hand, and its CD Loans, on the other hand, in which case all
references herein to the Domestic Lending Office of such
Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Domestic Loans" means CD Loans or Base Rate Loans
or both.
"Domestic Reserve Percentage" has the meaning set
forth in Section 2.07(b).
"Drop-Down Subsidiary" has the meaning set forth
in Section 5.06.
"Effective Date" means the date this Agreement
becomes effective in accordance with Section 9.09.
"Euro-Dollar Business Day" means any Domestic
Business Day on which commercial banks are open for
international business (including dealings in dollar
deposits) in London.
"Euro-Dollar Lending Office" means, as to
each Bank, its office, branch or affiliate located at
its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or
affiliate of such Bank as it may hereafter designate as its
Euro-Dollar Lending Office by notice to the Borrower and the
Agent.
"Euro-Dollar Loan" means (I) a Committed Loan
which bears interest at a Euro-Dollar Rate pursuant to the
applicable Notice of Committed Borrowing or Notice of
Interest Rate Election or (ii) an overdue amount which was a
Euro-Dollar Loan immediately before it became overdue.
"Euro-Dollar Rate" means a rate of interest
determined pursuant to Section 2.07 on the basis of a
London Interbank Offered Rate.
<PAGE>
<PAGE>11
"Euro-Dollar Reference Banks" means the principal
London offices of The Fuji Bank, Limited, Royal Bank of
Canada and Morgan Guaranty Trust Company of New York.
"Euro-Dollar Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement for a member bank of the
Federal Reserve System in New York City with deposits
exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which
the interest rate on Euro-Dollar Loans is determined or any
category of extensions of credit or other assets which
includes loans by a non-United States office of any Bank to
United States residents).
"Event of Default" has the meaning set forth in
Section 6.01.
"Federal Funds Rate" means, for any day, the rate
per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New
York on the Domestic Business Day next succeeding such day,
provided that (I) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Domestic Business
Day as so published on the next succeeding Domestic Business
Day, and (ii) if no such rate is so published on such next
succeeding Domestic Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to Morgan Guaranty
Trust Company of New York on such day on such transactions
as determined by the Agent.
"Fixed Rate Loans" means CD Loans or Euro-Dollar
Loans or Money Market Loans (excluding Money Market LIBOR
Loans bearing interest at the Base Rate pursuant to Section
8.01(a)) or any combination of the foregoing.
"Group of Loans" means at any time a group of
Loans consisting of (I) all Committed Loans which are Base
Rate Loans at such time or (ii) all Committed Loans which
are Fixed Rate Loans of the same type having the same
Interest Period at such time; provided that, if a Committed
Loan of any particular Bank is converted to or made as a
<PAGE>
<PAGE>12
Base Rate Loan pursuant to Section 8.02 or 8.05, such Loan
shall be included in the same Group or Groups of Loans from
time to time as it would have been in if it had not been so
converted or made.
"Indemnitee" has the meaning set forth in Section
9.03(b).
"Intangible Assets", means the value (net of any
applicable reserves), as shown on or reflected in the
Borrower's balance sheet, of: (I) all trade names,
trademarks, licenses, patents, copyrights and goodwill; (ii)
organization and development costs; (iii) deferred charges
(other than prepaid items such as insurance, taxes,
interest, commissions, rents and similar items and tangible
assets being amortized); and (iv) unamortized debt discount
and expense, less unamortized premium.
"Interest Period" means: (1) with respect to each
Euro-Dollar Loan, a period commencing on the date of
borrowing specified in the applicable Notice of Borrowing or
on the date specified in the applicable Notice of Interest
Rate Election and ending one, two, three or six months
thereafter, as the Borrower may elect in the applicable
notice; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause below, be extended to the next
succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause below, end on the
last Euro-Dollar Business Day of a calendar month; and
any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(2) with respect to each CD Loan, a period commencing on
the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice
of Interest Rate Election and ending 30, 60, 90 or 180 days
<PAGE>
<PAGE>13
thereafter, as the Borrower may elect in the applicable
notice; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next
succeeding Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(3) with respect to each Money Market LIBOR Loan, the
period commencing on the date of borrowing specified in the
applicable Notice of Borrowing and ending such whole number
of months thereafter as the Borrower may elect in accordance
with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause below, be extended to the next
succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar
month, in which case such Interest Period shall end on
the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall, subject to clause below, end on the
last Euro-Dollar Business Day of a calendar month; and
any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
(4) with respect to each Money Market Absolute Rate Loan,
the period commencing on the date of borrowing specified in
the applicable Notice of Borrowing and ending such number of
days thereafter (but not less than 14 days) as the Borrower
may elect in accordance with Section 2.03; provided that:
(a) any Interest Period which would otherwise end
on a day which is not a Euro-Dollar Business Day shall,
subject to clause (b) below, be extended to the next
succeeding Euro-Dollar Business Day; and
<PAGE>
<PAGE>14
(b) any Interest Period which would otherwise end
after the Termination Date shall end on the Termination
Date.
"Internal Revenue Code" means the Internal Revenue
Code of 1986, as amended, or any successor statute.
"LIBOR Auction" means a solicitation of Money
Market Quotes setting forth Money Market Margins based on
the London Interbank Offered Rate pursuant to Section 2.03.
"Lien" means any mortgage, pledge, security
interest or lien.
"Loan" means a Domestic Loan or a Euro-Dollar Loan
or a Money Market Loan and "Loans" means Domestic Loans or
Euro-Dollar Loans or Money Market Loans or any combination
of the foregoing.
"London Interbank Offered Rate" has the meaning
set forth in Section 2.07(c).
"Material Adverse Effect" means a material adverse
effect on the consolidated financial position of the
Borrower and its subsidiaries.
"Money Market Absolute Rate" has the meaning set
forth in Section 2.03(d).
"Money Market Absolute Rate Loan" means a loan to
be made by a Bank pursuant to an Absolute Rate Auction.
"Money Market Lending Office" means, as to each
Bank, its Domestic Lending Office or such other office,
branch or affiliate of such Bank as it may hereafter
designate as its Money Market Lending Office by notice to
the Borrower and the Agent; provided that any Bank may from
time to time by notice to the Borrower and the Agent
designate separate Money Market Lending Offices for its
Money Market LIBOR Loans, on the one hand, and its Money
Market Absolute Rate Loans, on the other hand, in which case
all references herein to the Money Market Lending Office of
such Bank shall be deemed to refer to either or both of such
offices, as the context may require.
"Money Market LIBOR Loan" means a loan to be made
by a Bank pursuant to a LIBOR Auction (including such a loan
bearing interest at the Base Rate pursuant to Section
8.01(a)).
<PAGE>
<PAGE>15
"Money Market Loan" means a Money Market LIBOR
Loan or a Money Market Absolute Rate Loan.
"Money Market Margin" has the meaning set forth in
Section 2.03(d).
"Money Market Quote" means an offer by a Bank to
make a Money Market Loan in accordance with Section 2.03.
"Non-Recourse Debt" of the Borrower or any
Restricted Subsidiary means any indebtedness for borrowed
money of the Borrower or any Restricted Subsidiary, as the
case may be, which is secured by any Lien on or payable
solely from the income and proceeds of any property
(including, without limiting the generality of such term,
any intangible assets), shares of stock, other equity
interests or debt of the Borrower or such Restricted
Subsidiary, as the case may be, and which is not a general
obligation of the Borrower or such Restricted Subsidiary, as
the case may be.
"Notes" means promissory notes of the Borrower,
substantially in the form of Exhibit A hereto, evidencing
the obligation of the Borrower to repay the Loans, and
"Note" means any one of such promissory notes issued
hereunder.
"Notice of Borrowing" means a Notice of Committed
Borrowing (as defined in Section 2.02) or a Notice of Money
Market Borrowing (as defined in Section 2.03(f)).
"Notice of Interest Rate Election" has the meaning
set forth in Section 2.10.
"Parent" means, with respect to any Bank, any
Person controlling such Bank.
"Participant" has the meaning set forth in Section
9.06(b).
"Person" means an individual, a corporation, a
partnership, an association, a trust or any other entity or
organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Prime Rate" means the rate of interest publicly
announced by Morgan Guaranty Trust Company of New York in
New York City from time to time as its Prime Rate.
<PAGE>
<PAGE>16
"Quarterly Date" means the last Euro-Dollar
Business Day of each March, June, September and December.
"Reference Banks" means the CD Reference Banks or
the Euro-Dollar Reference Banks, as the context may require,
and "Reference Bank" means any one of such Reference Banks.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System, as in effect from
time to time.
"Required Banks" means at any time Banks having at
least 51% of the aggregate amount of the Commitments or, if
the Commitments shall have been terminated, holding Notes
evidencing at least 51% of the aggregate unpaid principal
amount of the Loans.
"Restricted Subsidiary" means each Subsidiary of
the Borrower organized under the laws of any State of the
United States or the District of Columbia no substantial
portion of the business of which is carried on outside of
the United States; provided that each Drop-Down Subsidiary
(as defined in Section 5.06) shall be a Restricted
Subsidiary.
"Subsidiary" means any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are
at the time directly or indirectly owned by the Borrower
(or, if such term is used with reference to any other
Person, by such other Person).
"Termination Date" means July 10, 1995, or, if
such day is not a Euro-Dollar Business Day, the next
preceding Euro-Dollar Business Day.
"United States" means the United States of
America, including the States and the District of Columbia,
but excluding its territories and possessions.
"Wholly-Owned Restricted Subsidiary" means any
Restricted Subsidiary all of the shares of capital stock or
other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly
owned by the Borrower.
<PAGE>
<PAGE>17
SECTION 1.02. Accounting Terms and
Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder
shall be prepared in accordance with generally accepted
accounting principles as in effect from time to time,
applied on a basis consistent (except for changes made in
consultation with the Borrower's independent public
accountants) with the most recent audited consolidated
financial statements of the Borrower and its subsidiaries
delivered to the Banks; provided that, if the Borrower
notifies the Agent that the Borrower wishes to amend any
covenant in Article V to eliminate the effect of any change
in generally accepted accounting principles on the operation
of such covenant (or if the Agent notifies the Borrower that
the Required Banks wish to amend Article V for such
purpose), then the Borrower's compliance with such covenant
shall be determined on the basis of generally accepted
accounting principles in effect immediately before the
relevant change in generally accepted accounting principles
became effective, until either such notice is withdrawn or
such covenant is amended in a manner satisfactory to the
Borrower and the Required Banks.
SECTION 1.03. Types of Borrowings. The term
"Borrowing" denotes the aggregation of Loans of one or more
Banks to be made to the Borrower pursuant to Article II on
the same date, all of which Loans are of the same type
(subject to Article VIII) and, except in the case of Base
Rate Loans, have the same Interest Period or initial
Interest Period. Borrowings are classified for purposes of
this Agreement either by reference to the pricing of Loans
comprising such Borrowing (e.g., a "Euro-Dollar Borrowing"
is a Borrowing comprised of Euro-Dollar Loans) or by
reference to the provisions of Article II under which
participation therein is determined (i.e., a "Committed
Borrowing" is a Borrowing under Section 2.01 in which all
Banks participate in proportion to their Commitments, while
a "Money Market Borrowing" is a Borrowing under Section 2.03
in which the Bank participants are determined on the basis
of their bids in accordance therewith).
<PAGE>
<PAGE>18
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend. Each Bank
severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Borrower pursuant to
this Section from time to time prior to the Termination Date
in amounts such that the aggregate principal amount of
Committed Loans by such Bank at any one time outstanding
shall not exceed the amount of its Commitment. Each
Borrowing under this Section shall be in an aggregate
principal amount of $50,000,000 or any larger multiple of
$5,000,000 (except that any such Borrowing may be in the
aggregate amount available in accordance with Section
3.02(c)) and shall be made from the several Banks ratably in
proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this
Section, prepay Loans to the extent permitted by Section
2.11, and reborrow at any time prior to the Termination
Date.
SECTION 2.02. Notice of Committed Borrowing. The
Borrower shall give the Agent notice (a "Notice of Committed
Borrowing") not later than 10:30 A.M. (New York City time)
on (x) the date of each Base Rate Borrowing, (y) the second
Domestic Business Day before each CD Borrowing and (z) the
third Euro-Dollar Business Day before each Euro-Dollar
Borrowing, specifying:
(a) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic
Borrowing or a Euro-Dollar Business Day in the case of
a Euro-Dollar Borrowing,
(b) the aggregate amount of such Borrowing,
whether the Loans comprising such Borrowing are
to bear interest initially at the Base Rate or at a CD
Rate or a Euro-Dollar Rate, and
(d) in the case of a Fixed Rate Borrowing, the
duration of the initial Interest Period applicable
thereto, subject to the provisions of the definition of
Interest Period.
SECTION 2.03. Money Market Borrowings.
(a) The Money Market Option. In addition to <PAGE>
<PAGE>19
Committed Borrowings pursuant to Section 2.01, the Borrower
may, as set forth in this Section, request the Banks to make
offers to make Money Market Loans to the Borrower prior to
the Termination Date. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but
shall have no obligation to, accept any such offers in the
manner set forth in this Section.
(b) Money Market Quote Request. When the
Borrower wishes to request offers to make Money Market Loans
under this Section, it shall transmit to the Agent by telex
or facsimile transmission a Money Market Quote Request
substantially in the form of Exhibit B hereto so as to be
received no later than 10:30 A.M. (New York City time) on
(x) the fourth Euro-Dollar Business Day prior to the date of
Borrowing proposed therein, in the case of a LIBOR Auction
or (y) the Domestic Business Day next preceding the date of
Borrowing proposed therein, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective) specifying:
(I) the proposed date of Borrowing, which shall
be a Euro-Dollar Business Day in the case of a LIBOR
Auction or a Domestic Business Day in the case of an
Absolute Rate Auction,
(ii) the aggregate amount of such Borrowing, which
shall be $5,000,000 or a larger multiple of $1,000,000,
(iii) the duration of the Interest Period
applicable thereto, subject to the provisions of the
definition of Interest Period, and
(iv) whether the Money Market Quotes requested are
to set forth a Money Market Margin or a Money Market
Absolute Rate.
The Borrower may request offers to make Money Market Loans
for more than one Interest Period in a single Money Market
Quote Request. No Money Market Quote Request shall be given
within five Euro-Dollar Business Days (or such other number
of days as the Borrower and the Agent may agree) of any
other Money Market Quote Request.
Invitation for Money Market Quotes. Promptly <PAGE>
<PAGE>20
upon receipt of a Money Market Quote Request, the Agent
shall send to the Banks by telex or facsimile transmission
an Invitation for Money Market Quotes substantially in the
form of Exhibit C hereto, which shall constitute an
invitation by the Borrower to each Bank to submit Money
Market Quotes offering to make the Money Market Loans to
which such Money Market Quote Request relates in accordance
with this Section.
(d) Submission and Contents of Money Market
Quotes. (I) Each Bank may submit a Money Market Quote
containing an offer or offers to make Money Market Loans in
response to any Invitation for Money Market Quotes. Each
Money Market Quote must comply with the requirements of this
subsection (d) and must be submitted to the Agent by telex
or facsimile transmission at its offices specified in or
pursuant to Section 9.01 not later than (x) 4:00 P.M. (New
York City time) on the fourth Euro-Dollar Business Day prior
to the proposed date of Borrowing, in the case of a LIBOR
Auction or (y) 9:30 A.M. (New York City time) on the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective); provided that Money Market Quotes submitted by
the Agent (or any affiliate of the Agent) in the capacity of
a Bank may be submitted, and may only be submitted, if the
Agent or such affiliate notifies the Borrower of the terms
of the offer or offers contained therein not later than (x)
one hour prior to the deadline for the other Banks, in the
case of a LIBOR Auction or (y) 15 minutes prior to the
deadline for the other Banks, in the case of an Absolute
Rate Auction. Subject to Articles III and VI, any Money
Market Quote so made shall be irrevocable except with the
written consent of the Agent given on the instructions of
the Borrower.
(ii) Each Money Market Quote shall be in
substantially the form of Exhibit D hereto and shall in any
case specify:
(A) the proposed date of Borrowing,
(B) the principal amount of the Money Market Loan
for which each such offer is being made, which
principal amount (w) may be greater than or less than
the Commitment of the quoting Bank, (x) must be <PAGE>
<PAGE>21
$5,000,000 or a larger multiple of $1,000,000, (y) may
not exceed the principal amount of Money Market Loans
for which offers were requested and (z) may be subject
to an aggregate limitation as to the principal amount
of Money Market Loans for which offers being made by
such quoting Bank may be accepted,
in the case of a LIBOR Auction, the margin
above or below the applicable London Interbank Offered
Rate (the "Money Market Margin") offered for each such
Money Market Loan, expressed as a percentage (specified
to the nearest 1/10,000th of 1%) to be added to or
subtracted from such base rate,
(D) in the case of an Absolute Rate Auction, the
rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Money Market Absolute Rate")
offered for each such Money Market Loan, and
(E) the identity of the quoting Bank.
A Money Market Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest
Period specified in the related Invitation for Money Market
Quotes.
(iii) Any Money Market Quote shall be disregarded
if it:
(A) is not substantially in conformity with
Exhibit D hereto or does not specify all of the
information required by subsection (d)(ii);
(B) contains qualifying, conditional or similar
language;
proposes terms other than or in addition to
those set forth in the applicable Invitation for Money
Market Quotes; or
(D) arrives after the time set forth in
subsection (d)(I).
(e) Notice to Borrower. The Agent shall promptly
notify the Borrower of the terms (x) of any Money Market
Quote submitted by a Bank that is in accordance with
subsection (d) and (y) of any Money Market Quote that
amends, modifies or is otherwise inconsistent with a
previous Money Market Quote submitted by such Bank with
<PAGE>
<PAGE>22
respect to the same Money Market Quote Request. Any such
subsequent Money Market Quote shall be disregarded by the
Agent unless such subsequent Money Market Quote is submitted
solely to correct a manifest error in such former Money
Market Quote. The Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Money Market
Loans for which offers have been received for each Interest
Period specified in the related Money Market Quote Request,
(B) the respective principal amounts and Money Market
Margins or Money Market Absolute Rates, as the case may be,
so offered and if applicable, limitations on the aggregate
principal amount of Money Market Loans for which offers in
any single Money Market Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later
than 10:30 A.M. (New York City time) on (x) the third
Euro-Dollar Business Day prior to the proposed date of
Borrowing, in the case of a LIBOR Auction or (y) the
proposed date of Borrowing, in the case of an Absolute Rate
Auction (or, in either case, such other time or date as the
Borrower and the Agent shall have mutually agreed and shall
have notified to the Banks not later than the date of the
Money Market Quote Request for the first LIBOR Auction or
Absolute Rate Auction for which such change is to be
effective), the Borrower shall notify the Agent of its
acceptance or non-acceptance of the offers so notified to it
pursuant to subsection (e). In the case of acceptance, such
notice (a "Notice of Money Market Borrowing") shall specify
the aggregate principal amount of offers for each Interest
Period that are accepted. The Borrower may accept any Money
Market Quote in whole or in part; provided that:
(I) the aggregate principal amount of each Money
Market Borrowing may not exceed the applicable amount
set forth in the related Money Market Quote Request,
(ii) the principal amount of each Money Market
Borrowing must be $5,000,000 or a larger multiple of
$1,000,000,
(iii) acceptance of offers may only be made on the
basis of ascending Money Market Margins or Money Market
Absolute Rates, as the case may be, and
(iv) the Borrower may not accept any offer that is
described in subsection (d)(iii) or that otherwise
fails to comply with the requirements of this
Agreement.
<PAGE>
<PAGE>23
(g) Allocation by Agent. If offers are made by
two or more Banks with the same Money Market Margins or
Money Market Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in
respect of which such offers are accepted for the related
Interest Period, the principal amount of Money Market Loans
in respect of which such offers are accepted shall be
allocated by the Agent among such Banks as nearly as
possible (in multiples of $1,000,000, as the Agent may deem
appropriate) in proportion to the aggregate principal
amounts of such offers. Determinations by the Agent of the
amounts of Money Market Loans shall be conclusive in the
absence of manifest error.
SECTION 2.04. Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Borrowing, the
Agent shall promptly notify each Bank of the contents
thereof and of such Bank's share (if any) of such Borrowing
and such Notice of Borrowing shall not thereafter be
revocable by the Borrower.
(b) Not later than 12:00 Noon (New York City
time) on the date of each Borrowing, each Bank participating
therein shall make available its share of such Borrowing, in
Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. Unless the Agent determines that any applicable
condition specified in Article III has not been satisfied,
the Agent will make the funds so received from the Banks
available to the Borrower by 3:00 P.M. (New York City time)
on the date of such Borrowing at the Agent's aforesaid
address.
Unless the Agent shall have received notice
from a Bank prior to the date of any Borrowing that such
Bank will not make available to the Agent such Bank's share
of such Borrowing, the Agent may assume that such Bank has
made such share available to the Agent on the date of such
Borrowing in accordance with subsection (b) of this Section
2.04 and the Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding
amount. If and to the extent that such Bank shall not have
so made such share available to the Agent, such Bank and the
Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest
thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is
repaid to the Agent, at (I) in the case of the Borrower, a
<PAGE>
<PAGE>24
rate per annum equal to the higher of the Federal Funds Rate
and the interest rate applicable thereto pursuant to Section
2.07 and (ii) in the case of such Bank, the Federal Funds
Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute
such Bank's Loan included in such Borrowing for purposes of
this Agreement.
SECTION 2.05. Notes. (a) The Loans of each Bank
shall be evidenced by a single Note payable to the order of
such Bank for the account of its Applicable Lending Office
in an amount equal to the aggregate unpaid principal amount
of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and
the Agent, request that its Loans of a particular type be
evidenced by a separate Note in an amount equal to the
aggregate unpaid principal amount of such Loans. Each such
Note shall be in substantially the form of Exhibit A hereto
with appropriate modifications to reflect the fact that it
evidences solely Loans of the relevant type. Each reference
in this Agreement to the "Note" of such Bank shall be deemed
to refer to and include any or all of such Notes, as the
context may require.
Upon receipt of each Bank's Note pursuant to
Section 3.01(a), the Agent shall forward such Note to such
Bank. Each Bank shall record the date, amount and type of
each Loan made by it and the date and amount of each payment
of principal made by the Borrower with respect thereto, and
may, if such Bank so elects in connection with any transfer
or enforcement of its Note, endorse on the schedule forming
a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Bank to make
any such recordation or endorsement or any error in making
the same shall not affect the obligations of the Borrower
hereunder or under the Notes. Each Bank is hereby
irrevocably authorized by the Borrower so to endorse its
Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
SECTION 2.06. Maturity of Loans; Termination of
Commitments. (a) The Commitments shall terminate on the
Termination Date, and all Committed Loans shall mature, and
the principal amount thereof shall be due and payable, on
such date.
<PAGE>
<PAGE>25
(b) Each Money Market Loan included in any Money
Market Borrowing shall mature, and the principal amount
thereof shall be due and payable, on the last day of the
Interest Period applicable to such Borrowing.
SECTION 2.07. Interest Rates. (a) Each Base
Rate Loan shall bear interest on the outstanding principal
amount thereof, for each day from the date such Loan is made
until it becomes due, at a rate per annum equal to the Base
Rate for such day. Such interest shall be payable quarterly
in arrears on each Quarterly Date and on the Termination
Date, and, with respect to the principal amount of any Base
Rate Loan converted to a CD Loan or a Euro-Dollar Loan, on
each date a Base Rate Loan is so converted. Any overdue
principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a
rate per annum equal to the sum of 1% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the
outstanding principal amount thereof, for each day during
each Interest Period applicable thereto, at a rate per annum
equal to the sum of the Applicable Margin for such day plus
the Adjusted CD Rate applicable to such Interest Period;
provided that if any CD Loan or any portion thereof shall,
as a result of clause (2)(b) of the definition of Interest
Period, have an Interest Period of less than 30 days, such
portion shall bear interest during such Interest Period at
the rate applicable to Base Rate Loans during such period.
Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer
than 90 days, at intervals of 90 days after the first day
thereof. Any overdue principal of or interest on any CD
Loan shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to the sum of 1% plus
the rate applicable to Base Rate Loans for such day.
<PAGE>
<PAGE>26
The "Adjusted CD Rate" applicable to any Interest
Period means a rate per annum determined pursuant to the
following formula:
[ CDBR ]*
ACDR = [ ---------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
DRP = Domestic Reserve Percentage
AR = Assessment Rate
__________
* The amount in brackets being rounded upward, if
necessary, to the next higher 1/100 of 1%
The "CD Base Rate" applicable to any Interest
Period is the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the next
higher 1/100 of 1%) of the prevailing rates per annum bid at
10:00 A.M. (New York City time) (or as soon thereafter as
practicable) on the first day of such Interest Period by two
or more New York certificate of deposit dealers of
recognized standing for the purchase at face value from each
CD Reference Bank of its certificates of deposit in an
amount comparable to the principal amount of the CD Loan of
such CD Reference Bank to which such Interest Period applies
and having a maturity comparable to such Interest Period.
"Domestic Reserve Percentage" means for any day
that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect
of new non-personal time deposits in dollars in New York
City having a maturity comparable to the related Interest
Period and in an amount of $100,000 or more. The Adjusted
CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Domestic Reserve
Percentage.
"Assessment Rate" means for any day the annual
assessment rate in effect on such day which is payable by a
<PAGE>
<PAGE>27
member of the Bank Insurance Fund classified as adequately
capitalized and within supervisory subgroup "A" (or a
comparable successor assessment risk classification) within
the meaning of 12 C.F.R. S 327.3(e) (or any successor
provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's)
insuring time deposits at offices of such institution in the
United States. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change
in the Assessment Rate.
Each Euro-Dollar Loan shall bear interest on
the outstanding principal amount thereof, for each day
during each Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin for such
day plus the London Interbank Offered Rate applicable to
such Interest Period. Such interest shall be payable for
each Interest Period on the last day thereof and, if such
Interest Period is longer than three months, at intervals of
three months after the first day thereof.
The "London Interbank Offered Rate" applicable to
any Interest Period means a rate of interest determined by
the Agent on the basis of at least two offered rates for
deposits in United States dollars for a period equal to such
Interest Period commencing on the first day of such Interest
Period appearing on the Reuters Screen LIBO Page as of 11:00
A.M. (London time) on the day that is two Euro-Dollar
Business Days prior to the first day of such Interest
Period. If at least two such offered rates appear on the
Reuters Screen LIBO Page, the rate with respect to each
Interest Period will be the arithmetic average (rounded
upwards to the next 1/16th of 1%) of such offered rates. If
fewer than two offered rates appear, the "London Interbank
Offered Rate" in respect of any Interest Period will be the
average (rounded upward, if necessary, to the next higher
1/16 of 1%) of the respective rates per annum at which
deposits in dollars are offered to each of the Euro-Dollar
Reference Banks in the London interbank market at
approximately 11:00 A.M. (London time) two Euro-Dollar
Business Days before the first day of such Interest Period
in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
(d) Any overdue principal of or interest on any
Euro-Dollar Loan shall bear interest, payable on demand, for
<PAGE>
<PAGE>28
each day from and including the date payment thereof was due
to but excluding the date of actual payment, at a rate per
annum equal to the sum of 1% plus the rate applicable to
Base Rate Loans for such day.
(e) Subject to Section 8.01(a), each Money Market
LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for the Interest Period applicable thereto,
at a rate per annum equal to the sum of the London Interbank
Offered Rate for such Interest Period (determined in
accordance with Section 2.07 as if the related Money Market
LIBOR Borrowing were a Committed Euro-Dollar Borrowing) plus
(or minus) the Money Market Margin quoted by the Bank making
such Loan in accordance with Section 2.03. Each Money
Market Absolute Rate Loan shall bear interest on the
outstanding principal amount thereof, for the Interest
Period applicable thereto, at a rate per annum equal to the
Money Market Absolute Rate quoted by the Bank making such
Loan in accordance with Section 2.03. Such interest shall
be payable for each Interest Period on the last day thereof
and, if such Interest Period is longer than three months, at
intervals of three months after the first day thereof. Any
overdue principal of or interest on any Money Market Loan
shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 1% plus the
Base Rate for such day.
(f) The Agent shall determine each interest rate
applicable to the Loans hereunder. The Agent shall give
prompt notice to the Borrower and the participating Banks of
each rate of interest so determined, and its determination
thereof shall be conclusive in the absence of manifest
error.
(g) Each Reference Bank agrees to use its best
efforts to furnish quotations to the Agent as contemplated
by this Section. If any Reference Bank does not furnish a
timely quotation necessary to determine an interest rate in
accordance with this Section, the Agent shall determine the
relevant interest rate on the basis of the quotation or
quotations furnished by the remaining Reference Bank or
Banks or, if none of such quotations is available on a
timely basis, the provisions of Section 8.01 shall apply.
(h) The "Applicable Margin" with respect to any
Euro-Dollar Loan or CD Loan at any date is the applicable
percentage amount set forth in the table below:
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<PAGE>29
Euro-Dollar Loans 0.3000%
CD Loans 0.4250%
SECTION 2.08. Facility Fees. The Borrower shall
pay to the Agent for the account of the Banks ratably a
facility fee at the Facility Fee Rate. Such facility fee
shall accrue from and including the Closing Date to but
excluding the Termination Date (or earlier date of
termination of the Commitments in their entirety), on the
daily aggregate amount of the Commitments (whether used or
unused). Accrued facility fees shall be payable quarterly
on each Quarterly Date and upon the date of termination of
the Commitments in their entirety.
The "Facility Fee Rate" at any date is 0.0700%.
SECTION 2.09. Optional Termination or Reduction
of Commitments. The Borrower may, upon at least three
Domestic Business Days' notice to the Agent, (I) terminate
the Commitments at any time, if no Loans are outstanding at
such time or (ii) ratably reduce from time to time by an
aggregate amount of $25,000,000 or any larger multiple of
$5,000,000, the aggregate amount of the Commitments in
excess of the aggregate outstanding principal amount of the
Loans.
SECTION 2.10. Method of Electing Interest Rates.
(a) The Loans included in each Committed Borrowing shall
bear interest initially at the type of rate specified by the
Borrower in the applicable Notice of Committed Borrowing.
Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each
Group of Loans (subject in each case to the provisions of
Article VIII), as follows:
(I) if such Loans are Base Rate Loans, the
Borrower may elect to convert such Loans to CD Loans as
of any Domestic Business Day or to Euro-Dollar Loans as
of any Euro-Dollar Business Day;
(ii) if such Loans are CD Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or
Euro-Dollar Loans or elect to continue such Loans as CD
Loans for an additional Interest Period, in each case
effective on the last day of the then current Interest
Period applicable to such Loans; and
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<PAGE>30
(iii) if such Loans are Euro-Dollar Loans, the
Borrower may elect to convert such Loans to Base Rate
Loans or CD Loans or elect to continue such Loans as
Euro-Dollar Loans for an additional Interest Period, in
each case effective on the last day of the then current
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a
"Notice of Interest Rate Election") to the Agent at least
three Euro-Dollar Business Days before the conversion or
continuation selected in such notice is to be effective
(unless the relevant Loans are to be converted from Domestic
Loans to Domestic Loans of the other type or continued as
Domestic Loans of the same type for an additional Interest
Period, in which case such notice shall be delivered to the
Agent at least two Domestic Business Days before such
conversion or continuation is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to
only a portion of the aggregate principal amount of the
relevant Group of Loans; provided that (I) such portion is
allocated ratably among the Loans comprising such Group and
(ii) the portion to which such Notice applies, and the
remaining portion to which it does not apply, are each
$50,000,000 or any larger multiple of $5,000,000.
(b) Each Notice of Interest Rate Election shall
specify:
(I) the Group of Loans (or portion thereof) to
which such notice applies;
(ii) the date on which the conversion or
continuation selected in such notice is to be
effective, which shall comply with the applicable
clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if such new Loans
are Fixed Rate Loans, the duration of the initial
Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans
or Euro-Dollar Loans for an additional Interest Period,
the duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition
of Interest Period.
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<PAGE>31
Upon receipt of a Notice of Interest Rate
Election from the Borrower pursuant to subsection (a) above,
the Agent shall promptly notify each Bank of the contents
thereof and such notice shall not thereafter be revocable by
the Borrower. If the Borrower fails to deliver a timely
Notice of Interest Rate Election to the Agent for any Group
of Fixed Rate Loans, such Loans shall be converted into Base
Rate Loans on the last day of the then current Interest
Period applicable thereto.
SECTION 2.11. Optional Prepayments. (a) The
Borrower may, upon at least one Domestic Business Day's
notice to the Agent, prepay the Group of Base Rate Loans (or
any Money Market Borrowing bearing interest at the Base Rate
pursuant to Section 8.01(a)) in whole at any time, or from
time to time in part in amounts aggregating $50,000,000 or
any larger multiple of $5,000,000, by paying the principal
amount to be prepaid together with accrued interest thereon
to the date of prepayment. Each such optional prepayment
shall be applied to prepay ratably the Loans of the several
Banks included in such Group or Borrowing.
(b) The Borrower may, upon at least three
Domestic Business Days' notice to the Agent, in the case of
a Group of CD Loans or upon at least three Euro-Dollar
Business Days' notice to the Agent, in the case of a Group
of Euro-Dollar Loans, prepay the Loans comprising such a
Group on the last day of any Interest Period applicable to
such Group, in whole at any time, or from time to time in
part in amounts aggregating $50,000,000 or any larger
multiple of $5,000,000, by paying the principal amount to be
prepaid together with accrued interest thereon to the date
of prepayment. Each such optional prepayment shall be
applied to prepay ratably the Loans of the several Banks
included in such Group.
Except as provided in subsection (a) above, the
Borrower may not prepay all or any portion of the principal
amount of any Money Market Loan prior to the maturity
thereof.
(d) Upon receipt of a notice of prepayment
pursuant to this Section, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not
thereafter be revocable by the Borrower.
SECTION 2.12. General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of,
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<PAGE>32
and interest on, the Loans and of fees hereunder, not later
than 12:00 Noon (New York City time) on the date when due,
in Federal or other funds immediately available in New York
City, to the Agent at its address referred to in Section
9.01. The Agent will promptly distribute to each Bank its
ratable share of each such payment received by the Agent for
the account of the Banks. Whenever any payment of principal
of, or interest on, the Domestic Loans or of fees shall be
due on a day which is not a Domestic Business Day, the date
for payment thereof shall be extended to the next succeeding
Domestic Business Day. Whenever any payment of principal
of, or interest on, the Euro-Dollar Loans or the Money
Market LIBOR Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall
be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another
calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day.
Whenever any payment of principal of, or interest on, the
Money Market Absolute Rate Loans shall be due on a day which
is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar
Business Day. If the date for any payment of principal is
extended pursuant to this Agreement or by operation of law
or otherwise, interest thereon shall be payable for such
extended time.
(b) Unless the Agent shall have received notice
from the Borrower prior to the date on which any payment is
due to the Banks hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower
has made such payment in full to the Agent on such date and
the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to
the amount then due such Bank. If and to the extent that
the Borrower shall not have so made such payment, each Bank
shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for
each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the
Agent, at the Federal Funds Rate.
SECTION 2.13. Funding Losses. If the Borrower
makes any payment of principal with respect to any Fixed
Rate Loan or any Fixed Rate Loan is converted to a Base Rate
Loan (pursuant to Article VI or VIII or otherwise) on any
day prior to the last day of an Interest Period applicable
thereto, or if the Borrower fails to borrow or prepay any
Fixed Rate Loans after notice has been given to any Bank in
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<PAGE>33
accordance with Section 2.04(a) or 2.11(d), the Borrower
shall reimburse each Bank as provided in the following
paragraph for any resulting loss or expense incurred by it
(or by a Participant in the related Loan), including
(without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but
excluding loss of the Applicable Margin or any other margin
for the period after any such payment or conversion or
failure to borrow or prepay.
A certificate of each Bank setting forth such
amount or amounts (including the computation of such amount
or amounts) as shall be necessary to compensate such Bank or
a Participant for the out-of-pocket expenses incurred by
such Bank shall be delivered to the Borrower and such amount
or amounts may be reviewed by the Borrower. If the
Borrower, after receipt of any such certificate from such
Bank, disagrees in good faith with such Bank on the
computation of the amount or amounts owed to such Bank
pursuant to this Section 2.13, the Bank and the Borrower
shall negotiate in good faith to promptly resolve such
disagreement. Any payment required to be paid to such Bank
pursuant to this Section 2.13 shall be paid within 30 days
after demand is made therefor (or if there is a
disagreement, after such disagreement is resolved). Each
Bank shall have a duty to mitigate the damages to such Bank
that may arise as a consequence of such funding losses
described above to the extent that such mitigation will not,
in the judgment of such Bank, entail any cost or
disadvantage to such Bank that such Bank is not reimbursed
or compensated for by the Borrower.
SECTION 2.14. Computation of Interest and Fees.
Interest based on the Prime Rate hereunder shall be computed
on the basis of a year of 365 days (or 366 days in a leap
year) and paid for the actual number of days elapsed
(including the first day but excluding the last day). All
other interest and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last
day).
SECTION 2.15. Regulation D Compensation. For so
long as any Bank maintains reserves against "Eurocurrency
liabilities" (or any other category of liabilities which
includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of
extensions of credit or other assets which includes loans by
a non-United States office of such Bank to United States
<PAGE>
<PAGE>34
residents), and as a result the cost to such Bank (or its
Applicable Lending Office) of making or maintaining its
Euro-Dollar Loans is increased, then such Bank may require
the Borrower to pay, contemporaneously with each payment of
interest on the Euro-Dollar Loans, additional interest on
the related Euro-Dollar Loan of such Bank at a rate per
annum up to but not exceeding the excess of (I)(A) the
applicable London Interbank Offered Rate divided by (B) one
minus the Euro-Dollar Reserve Percentage over (ii) the rate
specified in clause (I)(A). Any Bank wishing to require
payment of such additional interest (x) shall so notify the
Borrower, in which case such additional interest on the
Euro-Dollar Loans of such Bank shall be payable to such Bank
at the rate and place indicated in such notice with respect
to each Interest Period commencing at least three Euro-Dollar
Business Days after the giving of such notice and (y)
shall furnish to the Borrower at least five Euro-Dollar
Business Days prior to each date on which interest is
payable on the Euro-Dollar Loans an officers' certificate
setting forth the amount to which such Bank is then entitled
under this Section 2.15 (which shall be consistent with such
Bank's good faith estimate of the level at which the related
reserves are maintained by it).
ARTICLE III
CONDITIONS
SECTION 3.01. Closing. The closing hereunder
shall occur upon receipt by the Agent of the following
documents, each dated the Closing Date unless otherwise
indicated:
(a) a duly executed Note for the account of each
Bank dated on or before the Closing Date complying with
the provisions of Section 2.05;
(b) an opinion of the General Counsel or any
Assistant General Counsel of the Borrower,
substantially in the form of Exhibit E hereto;
an opinion of Davis Polk & Wardwell, special
counsel for the Agent, substantially in the form of
Exhibit F hereto; and
(d) all documents the Agent may reasonably
request relating to the existence of the Borrower, the
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<PAGE>35
corporate authority for and the validity of this
Agreement and the Notes, and any other matters relevant
hereto, all in form and substance satisfactory to the
Agent.
The Agent shall promptly notify the Borrower and the Banks
of the Closing Date, and such notice shall be conclusive and
binding on all parties hereto.
SECTION 3.02. Borrowings. The obligation of any
Bank to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) the Closing Date shall have occurred not
later than the Effective Date;
(b) receipt by the Agent of a Notice of Borrowing
as required by Section 2.02 or 2.03, as the case may
be;
immediately after such Borrowing, the aggregate
outstanding principal amount of the Loans will not
exceed the aggregate amount of the Commitments;
(d) immediately before and after such Borrowing,
no Default shall have occurred and be continuing; and
(e) the representations and warranties of the
Borrower contained in this Agreement (except the
representations and warranties set forth in Section
4.04 and 4.05) shall be true in all material respects
on and as of the date of such Borrowing.
Each Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of
such Borrowing as to the facts specified in clauses (c), (d)
and (e) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The
<PAGE>
<PAGE>36
Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware,
and has all corporate power and all governmental licenses,
authorizations, consents and approvals required to carry on
its business as now conducted except those which the failure
to have would not have a Material Adverse Effect.
SECTION 4.02. Corporate and Governmental
Authorization; No Contravention. The execution, delivery
and performance by the Borrower of this Agreement and the
Notes are within the Borrower's corporate power, have been
duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene,
or constitute a default under, any provision of applicable
law or regulation or of the certificate of incorporation or
by-laws of the Borrower or of any material agreement,
judgment, injunction, order, decree or other material
instrument binding upon the Borrower or result in the
creation or imposition of any Lien on any asset of the
Borrower.
SECTION 4.03. Binding Effect. This Agreement
constitutes a valid and binding agreement of the Borrower
and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding
obligations of the Borrower, in each case enforceable
against the Borrower in accordance with their respective
terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance,
moratorium and similar laws affecting creditors' rights
generally and by general principles of equity (regardless of
whether considered in a proceeding in equity or at law).
SECTION 4.04. Financial Information.
(a) The consolidated balance sheet of the
Borrower and its subsidiaries as of December 31, 1993 and
the related consolidated statements of income, changes in
stockholders' equity and cash flows for the fiscal year then
ended, reported on by Cooper's & Lybrand and set forth in
the Borrower's 1993 Form 10-K, a copy of which has been
delivered to each of the Banks, present fairly, in all
material respects, the consolidated financial position of
the Borrower and its subsidiaries as of such date and the
consolidated results of their operations and cash flows for
such fiscal year, in conformity with generally accepted
accounting principles.
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<PAGE>37
(b) The unaudited consolidated balance sheet of
the Borrower and its subsidiaries as of March 31, 1994 and
the related unaudited consolidated statements of income and
cash flows for the three months then ended, set forth in the
Borrower's Latest Form 10-Q, a copy of which has been
delivered to each of the Banks, present fairly, in all
material respects, the consolidated financial position of
the Borrower and its subsidiaries as of such date and the
consolidated results of their operations and cash flows for
such three-month period, in conformity with generally
accepted accounting principles for interim financial
information applied on a basis consistent with the financial
statements referred to in subsection (a) of this Section,
subject to normal year-end adjustments.
From March 31, 1994 through the Closing Date
there has been no material adverse change in the
consolidated financial condition of the Borrower and its
subsidiaries.
SECTION 4.05. Litigation. There is no action,
suit or proceeding pending against, or to the knowledge of
the Borrower threatened against, the Borrower or any of its
Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a
reasonable probability of an adverse decision which would
have a Material Adverse Effect, or which in any manner draws
into question the validity of this Agreement or the Notes.
SECTION 4.06. Subsidiaries. Each of the
Borrower's Consolidated Subsidiaries which is a corporation
is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of
incorporation, and has all corporate power and all
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted, except those which the failure to have would not
have a Material Adverse Effect.
SECTION 4.07. Not an Investment Company. The
Borrower is not an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
SECTION 4.08. Full Disclosure. No written
information heretofore furnished by the Borrower to the
Agent or any Bank pursuant to Section 4.04 of this Agreement
is, and no written information hereafter furnished by the
Borrower to the Agent or any Bank pursuant to Section 5.01
<PAGE>
<PAGE>38
of this Agreement contains or will contain any material
misstatement of any material facts.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Bank has
any Commitment hereunder or any amount payable under any
Note remains unpaid:
SECTION 5.01. Information. The Borrower will
deliver to each of the Banks:
(a) within 105 days after the end of each fiscal
year of the Borrower, a consolidated balance sheet of
the Borrower and its subsidiaries as of the end of such
fiscal year and the related consolidated statements of
income, changes in stockholders' equity and cash flows
for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal
year, all reported on in a manner acceptable to the
Securities and Exchange Commission by Coopers & Lybrand
or other independent public accountants of nationally
recognized standing;
(b) within 60 days after the end of each of the
first three quarters of each fiscal year of the
Borrower, a consolidated balance sheet of the Borrower
and its subsidiaries as of the end of such quarter and
the related consolidated statements of income for such
quarter and the related consolidated statements of
income and cash flows for the portion of the Borrower's
fiscal year ended at the end of such quarter, setting
forth in the case of such statements of income in
comparative form the figures for the corresponding
quarter and in the case of such statements of income
and cash flows the corresponding portion of the
Borrower's previous fiscal year, all certified as to
fairness of presentation, generally accepted accounting
principles and consistency by the chief financial
officer or the chief accounting officer of the
Borrower, subject to normal year end adjustments;
simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b)
above, a certificate of the chief financial officer or
the chief accounting officer of the Borrower (I)
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<PAGE>39
setting forth in reasonable detail the calculations
required to establish whether the Borrower was in
compliance with the requirements of Sections 5.03 and
5.04, inclusive, on the date of the consolidated
balance sheet included in such financial statements and
(ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists,
setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect
thereto;
(d) promptly after the mailing thereof to the
shareholders of the Borrower generally, copies of all
financial statements, reports and proxy statements so
mailed; and
(e) promptly after the filing thereof, copies of
all reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) which the Borrower shall have filed with
the Securities and Exchange Commission.
SECTION 5.02. Maintenance of Existence. The
Borrower will preserve, renew and keep in full force and
effect its corporate existence except as otherwise permitted
under Section 5.06.
SECTION 5.03. Fixed Charge Coverage. The ratio
of Consolidated EBIT to Consolidated Interest Expense will
not, for any period of four consecutive fiscal quarters, be
less than 1.15 to 1.
SECTION 5.04. Debt.
(a) Consolidated Debt determined at the end of
any fiscal quarter will not exceed 850% of Consolidated
Tangible Net Worth determined at the end of such fiscal
quarter, and Consolidated Debt determined at the end of any
fiscal month which is not the last month of a fiscal quarter
will not exceed 850% of the greater of (I) Consolidated
Tangible Net Worth determined at the end of the most
recently ended fiscal quarter or (ii) Consolidated Tangible
Net Worth determined at the end of such fiscal month.
(b) Total Debt of all Restricted Subsidiaries
determined at the end of any fiscal month (excluding Debt of
a Restricted Subsidiary to the Borrower or to a Wholly-Owned
Restricted Subsidiary) will not exceed 10% of Consolidated
Net Tangible Assets determined at the end of such fiscal
month.
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<PAGE>40
SECTION 5.05. Limitation on Secured Debt. The
Borrower will not, nor will it permit any Restricted
Subsidiary to, incur, issue, assume or guarantee any Debt
secured by any Lien on any property or assets of the
Borrower or any Restricted Subsidiary, or on any shares of
stock or Debt of any Restricted Subsidiary, without
effectively providing that the principal of, premium, if
any, and interest, if any, on the Loans (together with, if
the Borrower so determines, any other Debt of the Borrower
or such Restricted Subsidiary, which is not subordinated to
the Loans) shall be secured equally and ratably with (or
prior to) such Debt, so long as any such Debt shall be so
secured, unless, after giving effect thereto, the aggregate
amount of all such secured Debt of the Borrower and the
Restricted Subsidiaries would not exceed 10% of Consolidated
Net Tangible Assets of the Borrower and the Restricted
Subsidiaries; provided, however, that no Asset Drop Down
shall, in any event, constitute a Lien; and provided further
that neither the satisfaction and discharge of any Debt
pursuant to any indenture or instrument governing such Debt,
nor the defeasance of any Debt pursuant to any indenture or
instrument governing such Debt, shall be deemed the
incurrence, issue, assumption or guarantee of Debt secured
by a Lien for purposes of this Section. Notwithstanding the
foregoing, this Section shall neither limit nor be deemed or
construed as limiting the right of the Borrower or any
Restricted Subsidiary to incur, issue, assume or guarantee
any Debt secured by any one or more of the following: (1)
Liens on property of, or on any shares of stock or Debt of,
any corporation existing at the time such corporation
becomes a Restricted Subsidiary of the Borrower; (2) Liens
on property, shares of stock, other equity interests, or
Debt existing at the time of acquisition or repossession
thereof by the Borrower or any Restricted Subsidiary; (3)
Liens on physical property (or any Accounts Receivable
arising in connection with the lease thereof), shares of
stock, other equity interests, or Debt acquired (or, in the
case of physical property, constructed) after the date
hereof by the Borrower or any Restricted Subsidiary, which
Liens are created prior to, at the time of, or within one
year after such acquisition (or, in the case of physical
property, the completion of such construction or
commencement of commercial operation of such property,
whichever is later) to secure any Debt issued, incurred,
assumed or guaranteed prior to, at the time of, or within
one year after such acquisition (or such completion or
commencement, whichever is later) or to secure any other
Debt issued, incurred, assumed or guaranteed at any time
thereafter for the purpose of refinancing all or any part of
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<PAGE>41
such Debt; (4) Liens on Accounts Receivable of the Borrower
or any Restricted Subsidiary arising from or in connection
with transactions entered into by the Borrower or such
Restricted Subsidiary after the date hereof or on Accounts
Receivable acquired by the Borrower or such Restricted
Subsidiary after such date from others, which Liens are
created prior to, at the time of, or within one year after
such Accounts Receivable arise or are acquired or, if later,
the completion of the delivery or installation of the
equipment or goods or the rendering of the services or the
advancement or loaning of funds relating thereto (I) as a
result of any guarantee, repurchase or other contingent
(direct or indirect) or recourse obligation of the Borrower
or such Restricted Subsidiary in connection with the
discounting, sale, assignment, transfer or other disposition
of such Accounts Receivable or any interest therein, or (ii)
to secure or provide for the payment of all or any part of
the investment of the Borrower or such Restricted Subsidiary
in any such Accounts Receivable (whether or not such
Accounts Receivable are the Accounts Receivable on which
such Liens are created) or the purchase price thereof or to
secure any debt (including, without limitation, Non-Recourse
Debt) issued, incurred, assumed or guaranteed for the
purpose of financing or refinancing all or any part of such
investment or purchase price; (5) Liens in favor of the
Borrower or any Restricted Subsidiary; (6) Liens in favor of
the United States of America or any State thereof or the
District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or
other payments pursuant to any contract or provision of any
statute; (7) Liens securing the performance of letters of
credit, bids, tenders, sales contracts, purchase agreements,
leases, surety and performance bonds, and other similar
obligations not incurred in connection with the borrowing of
money; (8) Liens to secure Non-Recourse Debt in connection
with the Borrower or any Restricted Subsidiary engaging in
any leveraged or single-investor or other lease
transactions, whether (in the case of Liens on or relating
to leases or groups of leases or the particular properties
subject thereto) such Liens be on the particular properties
subject to any leases involved in any of such transactions
and/or the rental or other payments or rights under such
leases or, in the case of any group of related or unrelated
leases, on the properties subject to the leases comprising
such group and/or the rental or other payments or rights
under such leases, or on any direct or indirect interest
therein, and whether (in any case) (I) such Liens be created
prior to, at the time of, or at any time after the entering
into of such lease transactions and/or (ii) such leases be
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<PAGE>42
in existence prior to, or be entered into by the Borrower or
such Restricted Subsidiary at the time of or at any time
after, the purchase or other acquisition by the Borrower or
such Restricted Subsidiary of the properties subject to such
leases; and (9) any extension, renewal or replacement (or
successive extensions, renewals or replacements), in whole
or in part, of any of the foregoing; provided, however, that
any such extension, renewal or replacement shall be limited
to all or a part of the property or assets which secured the
Lien so extended, renewed or replaced (plus any improvements
on such property).
SECTION 5.06. Consolidations, Mergers and Sales
of Assets. The Borrower covenants that it will not merge or
consolidate with any other corporation or sell or convey all
or substantially all of its assets to any person (other than
such a sale or conveyance to a Subsidiary or any successor
thereto (such a sale or conveyance being called an "Asset
Drop-Down")), unless (I) either the Borrower shall be the
continuing corporation or the successor corporation or the
person which acquires by sale or conveyance substantially
all the assets of the Borrower (if other than the Borrower)
shall be a corporation organized under the laws of the
United States of America or any State thereof and shall
expressly assume the due and punctual payment of the
principal of and interest on all the Notes according to
their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this
Agreement to be performed or observed by the Borrower, by
one or more agreements, reasonably satisfactory in form to
the Required Banks, executed and delivered to the Agent by
such corporation, and (ii) the Borrower or such successor
corporation, as the case may be, shall not, immediately
after such merger or consolidation, or such sale or
conveyance, be in default in the performance of any such
covenant or condition. In the event of any Asset Drop-Down
after the date of this Agreement, any subsequent sale or
conveyance of assets by a Subsidiary to which assets were
transferred in such Asset Drop-Down (a "Drop-Down
Subsidiary") will be deemed to be a sale or conveyance of
assets by the Borrower for purposes of this Section 5.06.
SECTION 5.07. Use of Proceeds. The proceeds of
the Loans made under this Agreement will be used by the
Borrower for general corporate purposes, including, without
limitation, the repayment of maturing commercial paper and
other Debt of the Borrower. None of such proceeds will be
used for the purpose of buying or carrying any "margin
stock" within the meaning of Regulation U.
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ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more
of the following events ("Events of Default") shall have
occurred and be continuing:
(a) the Borrower shall fail to pay when due any
principal of any Loan, or shall fail to pay within five
Domestic Business Days of the due date thereof any
interest on any Loan, any fees or any other amount
payable hereunder;
(b) the Borrower shall fail to observe or perform
any covenant contained in Sections 5.02, 5.03, 5.04 or
5.06;
the Borrower shall fail to observe or perform
any covenant or agreement contained in this Agreement
(other than those covered by clause (a) or (b) above)
for 30 days after notice thereof has been given to the
Borrower by the Agent at the request of the Required
Banks;
(d) any representation or warranty made by the
Borrower in this Agreement or in any certificate
delivered pursuant to this Agreement shall prove to
have been materially incorrect when made (or deemed
made pursuant to Section 3.02);
(e) the Borrower shall fail to make any payment
or payments, in the aggregate in excess of
$300,000,000, on principal of Debt of the Borrower when
due and such failure shall continue for 30 days after
the due date thereof or, if longer, beyond any
applicable grace periods;
(f) any event or condition shall occur which
results in the acceleration of the maturity of the
principal of any Debt of the Borrower in the aggregate
in excess of $300,000,000 which acceleration shall not
have been rescinded within 30 days;
(g) the Borrower shall commence a voluntary case
seeking liquidation, reorganization or other relief
with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or
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<PAGE>44
hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its
property, or shall consent to any such relief or to the
appointment of or taking possession by any such
official in an involuntary case seeking such relief
commenced against it under any such law, or shall make
a general assignment for the benefit of creditors, or
shall admit in writing its inability generally to pay
its debts as they become due;
(h) an order for relief shall be entered against
the Borrower under the federal bankruptcy laws as now
or hereafter in effect in an involuntary case or other
proceeding seeking liquidation, reorganization or other
relief with respect to it or its debts or seeking the
appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any
substantial part of its property, and such decree or
order shall remain undismissed and unstayed for a
period of 20 days;
(I) both (I) a person or group of persons (within
the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) other than AT&T shall
have acquired beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and
Exchange Commission under said Act) of 20% or more of
the outstanding shares of common stock of the Borrower
and (ii) the Borrower shall have ceased to be a
Subsidiary of AT&T; provided that, notwithstanding
clauses (I) and (ii) above, no Event of Default shall
occur under this paragraph (I) if and for so long as
both (x) officers, directors and employees of AT&T
constitute a majority of the Board of Directors of the
Borrower and (y) no person or group of persons has
beneficial ownership of a greater percentage of the
outstanding shares of common stock of the Borrower than
does AT&T;
then, and in every such event, the Agent shall (I) if
requested by Banks having more than 50% in aggregate amount
of the Commitments, by notice to the Borrower terminate the
Commitments and they shall thereupon terminate, and (ii) if
requested by Banks holding Notes evidencing more than 50% in
aggregate principal amount of the Loans, by notice to the
Borrower declare the Notes (together with accrued interest
thereon) to be, and the Notes (together with accrued
interest thereon) shall thereupon become, immediately due
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<PAGE>45
and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the
Borrower; provided that in the case of any of the Events of
Default specified in paragraph (g) or (h) above with respect
to the Borrower, without any notice to the Borrower or any
other act by the Agent or the Banks, the Commitments shall
thereupon terminate and the Notes (together with accrued
interest thereon) shall become immediately due and payable
without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall
give notice to the Borrower under Section 6.01 promptly
upon being requested to do so by the Required Banks and
shall thereupon notify all the Banks thereof.
SECTION 6.03 Rescission. If at any time after
termination of the Commitments and/or acceleration of the
maturity of the Loans pursuant to Section 6.01, the Borrower
shall pay all arrears of interest and all payments on
account of principal of the Loans which shall have become
due otherwise than by acceleration (with interest on
principal at the rates specified in this Agreement) and all
Defaults (other than nonpayment of principal of and accrued
interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to
Section 9.05 hereof, then upon the written consent of the
Required Banks and notice to the Borrower, such termination
of the Commitments and/or such acceleration and their
consequences may be rescinded and annulled; but such action
shall not affect any subsequent Default or impair any right
or remedy consequent thereon. The provisions of the
preceding sentence are intended merely to bind the Banks to
a decision which may be made at the election of the
Required Banks; they are not intended to benefit the
Borrower and do not give the Borrower the right to require
the Banks to rescind or annul any acceleration hereunder,
even if the conditions set forth herein are met.
ARTICLE VII
THE AGENT
SECTION 7.01. Appointment and Authorization.
Each Bank irrevocably appoints and authorizes the Agent to
take such action as agent on its behalf and to exercise such
powers under this Agreement and the Notes as are delegated
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<PAGE>46
to the Agent by the terms hereof or thereof, together with
all such powers as are reasonably incidental thereto.
SECTION 7.02. Agent and Affiliates. Morgan
Guaranty Trust Company of New York shall have the same
rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though
it were not the Agent, and Morgan Guaranty Trust Company of
New York and its affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with
the Borrower or any Subsidiary or affiliate of the Borrower
as if it were not the Agent hereunder.
SECTION 7.03. Action by Agent. The obligations
of the Agent hereunder are only those expressly set forth
herein. Without limiting the generality of the foregoing,
the Agent shall not be required to take any action with
respect to any Default, except as expressly provided in
Article VI.
SECTION 7.04. Consultation with Experts. The
Agent may consult with legal counsel (who may be counsel for
the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or
experts.
SECTION 7.05. Liability of Agent. Neither the
Agent nor any of its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for
any action taken or not taken by it in connection herewith
(I) with the consent or at the request of the Required Banks
or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (I) any statement,
warranty or representation made in connection with this
Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the
Borrower; (iii) the satisfaction of any condition specified
in Article III, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness
or genuineness of this Agreement, the Notes or any other
instrument or writing furnished in connection herewith. The
Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile
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<PAGE>47
transmission or similar writing) believed by it to be
genuine or to be signed by the proper party or parties.
SECTION 7.06. Indemnification. Each Bank shall,
ratably in accordance with its Commitment, indemnify the
Agent, its affiliates and their respective directors,
officers, agents and employees (to the extent not reimbursed
by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees'
gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this
Agreement or any action taken or omitted by such indemnitees
hereunder.
SECTION 7.07. Credit Decision. Each Bank
acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will,
independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action
under this Agreement.
SECTION 7.08. Successor Agent. The Agent may
resign at any time by giving notice thereof to the Banks and
the Borrower. Upon any such resignation, the Borrower shall
have the right to appoint a successor Agent from among the
Banks. If no successor Agent shall have been so appointed,
and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then
the retiring Agent may, on behalf of the Banks, appoint a
successor Agent, which shall be a commercial bank organized
or licensed under the laws of the United States of America
or of any State thereof and having a combined capital and
surplus of at least $50,000,000. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested
with all the rights and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this
Article shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent.
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SECTION 7.09. Agent's Fee. The Borrower shall
pay to the Agent for its own account fees in the amounts and
at the times previously agreed upon between the Borrower and
the Agent.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair. If on or prior to the first day of
any Interest Period for any CD Loan, Euro-Dollar Loan or
Money Market LIBOR Loan:
(a) the Agent is advised by the CD Reference
Banks or, under the circumstances contemplated by the
final sentence of the definition of London Interbank
Offered Rate, the Euro-Dollar Reference Banks that
deposits in dollars (in the applicable amounts) are not
being offered to the Reference Banks in the relevant
market for such Interest Period, or
(b) in the case of CD Loans or Euro-Dollar Loans,
Banks having 50% or more of the aggregate principal
amount of the affected Loans advise the Agent that the
Adjusted CD Rate or the London Interbank Offered Rate,
as the case may be, as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of
funding their CD Loans or Euro-Dollar Loans, as the
case may be, for such Interest Period,
the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies
the Borrower that the circumstances giving rise to such
suspension no longer exist, (I) the obligations of the Banks
to make CD Loans or Euro-Dollar Loans, as the case may be,
or to convert outstanding Loans into CD Loans or Euro-Dollar
Loans, as the case may be, shall be suspended and (ii) each
outstanding CD Loan or Euro-Dollar Loan, as the case may be,
shall be converted into a Base Rate Loan on the last day of
the then current Interest Period applicable thereto. Unless
the Borrower notifies the Agent at least one Domestic
Business Day before the date of any Fixed Rate Borrowing for
which a Notice of Borrowing has previously been given that
it elects not to borrow on such date, (I) if such Fixed Rate
Borrowing is a Committed Borrowing, such Borrowing shall
instead be made as a Base Rate Borrowing and (ii) if such
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<PAGE>49
Fixed Rate Borrowing is a Money Market LIBOR Borrowing, the
Money Market LIBOR Loans comprising such Borrowing shall
bear interest for each day from and including the first day
to but excluding the last day of the Interest Period
applicable thereto at the Base Rate for such day.
SECTION 8.02. Illegality. If, on or after the
date of this Agreement, the adoption of any applicable law,
rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
any Bank (or its Euro-Dollar Lending Office) with any
request or directive (whether or not having the force of
law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or
its Euro-Dollar Lending Office) to make, maintain or fund
its Euro-Dollar Loans and such Bank shall so notify the
Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank
notifies the Borrower and the Agent that the circumstances
giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, or to
convert outstanding Loans into Euro-Dollar Loans, shall be
suspended. Before giving any notice to the Agent pursuant
to this Section, such Bank shall designate a different
Euro-Dollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank. If such notice is given, each Euro-Dollar Loan of
such Bank then outstanding shall be converted to a Base Rate
Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may
lawfully continue to maintain and fund such Loan to such day
or (b) immediately if such Bank shall determine that it may
not lawfully continue to maintain and fund such Loan to such
day.
SECTION 8.03. Increased Cost and Reduced Return.
(a) If on or after (x) the date hereof, in the case of any
Committed Loan or any obligation to make Committed Loans or
(y) the date of the related Money Market Quote, in the case
of any Money Market Loan, the adoption of any applicable
law, rule or regulation, or any change in any applicable
law, rule or regulation, or any change in the interpretation
or administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
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<PAGE>50
any Bank (or its Applicable Lending Office) with any request
or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall
impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, but
excluding (I) with respect to any CD Loan any such
requirement included in an applicable Domestic Reserve
Percentage and (ii) with respect to any Euro-Dollar Loan any
such requirement with respect to which such Bank is entitled
to compensation during the relevant Interest Period under
Section 2.15, special deposit, insurance assessment
(excluding, with respect to any CD Loan, any such
requirement reflected in an applicable Assessment Rate) or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Bank (or its
Applicable Lending Office) or shall impose on any Bank (or
its Applicable Lending Office) or on the United States
market for certificates of deposit or the London interbank
market any other condition affecting its Fixed Rate Loans,
its Note or its obligation to make Fixed Rate Loans and the
result of any of the foregoing is to increase the cost to
such Bank (or its Applicable Lending Office) of making or
maintaining any Fixed Rate Loan, or to reduce the amount of
any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its
Note with respect thereto, by an amount deemed by such Bank
to be material, then, within 15 days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to
such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after
the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any
such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with
the interpretation or administration thereof, or any request
or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank
or comparable agency (including any determination by any
such authority, central bank or comparable agency that, for
purposes of capital adequacy requirements, the Commitments
hereunder do not constitute commitments with an original
maturity of one year or less, which shall be deemed a change
in the interpretation and administration of such
requirements), has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a
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<PAGE>51
consequence of such Bank's obligations hereunder to a level
below that which such Bank (or its Parent) could have
achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be
material, then pursuant to paragraph below, the Borrower
shall pay to such Bank such additional amount or amounts as
will compensate such Bank (or its Parent) for such
reduction.
Each Bank will promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank to
compensation pursuant to this Section. A certificate of the
Bank setting forth such amount or amounts (including
computation of such amount or amounts) as shall be necessary
to compensate the Bank or its Parent as specified in
paragraph (a) or (b) above, as the case may be, shall be
delivered to the Borrower and such amount or amounts may be
reviewed by the Borrower. Unless the Borrower disagrees in
good faith with the computation of the amount or amounts in
such certificate, the Borrower shall pay to the Bank, within
30 days after receipt by the Borrower of such certificate
delivered by the Bank, the amount shown as due on any such
certificate. If the Borrower, after receipt of any such
certificate from the Bank, disagrees with the Bank on the
computation of the amount or amounts owed to the Bank
pursuant to paragraph (a) or (b) above, the Bank and the
Borrower shall negotiate in good faith to promptly resolve
such disagreement. In either case, however, the Bank shall
have a duty to mitigate the damages that may arise as a
consequence of paragraph (a) or (b) above (including,
without limitation, changing its Applicable Lending Office)
to the extent that such mitigation will not, in the judgment
of the Bank, entail any cost or disadvantage to the Bank
that the Bank is not reimbursed or compensated for by the
Borrower.
SECTION 8.04. Taxes. (a) Any and all payments
by the Borrower to or for the account of any Bank or the
Agent hereunder or under any Note shall be made free and
clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges
or withholdings imposed by the United States or any
political subdivision or taxing authority thereof, and all
liabilities with respect thereto, excluding, in the case of
each Bank and the Agent, taxes imposed on its net income,
and franchise taxes imposed on it, by the United States or
any political subdivision or taxing authority thereof (all
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<PAGE>52
such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under any Note to any Bank or
the Agent, (I) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums payable
under this Section 8.04) such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower
shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law and (iv)
the Borrower shall furnish to the Agent, at its address
referred to in Section 9.01, the original or a certified
copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes and any other
excise or property taxes, or charges or similar levies which
arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect
to, this Agreement or any Note (hereinafter referred to as
"Other Taxes").
The Borrower agrees to indemnify each Bank and
the Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes
imposed or asserted by any jurisdiction on amounts payable
under this Section 8.04) paid by such Bank or the Agent (as
the case may be) and any liability (including penalties,
interest and reasonable out-of-pocket expenses) arising
therefrom or with respect thereto (other than any such
liability that results from the gross negligence or willful
misconduct of each Bank and the Agent, whether or not such
Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other governmental
authority). This indemnification shall be made within 30
days from the date such Bank or the Agent (as the case may
be) makes written demand therefor. If any Bank or the Agent
receives a refund in respect of any Taxes or Other Taxes for
which such Bank or the Agent has received payment from the
Borrower hereunder it shall promptly repay such refund
(including any interest received by such Bank or the Agent
from the taxing authority with respect to the refund with
respect to such Taxes or Other Taxes) to the Borrower, net
of all reasonable out-of-pocket expenses of such Bank;
provided that the Borrower, upon the request of such Bank or
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<PAGE>53
the Agent, agrees to return such refund (plus penalties,
interest or other charges) to such Bank or the Agent in the
event such Bank or the Agent is required to repay such
refund.
(d) Each Bank organized under the laws of a
jurisdiction outside the United States, on or prior to the
date of its execution and delivery of this Agreement in the
case of each Bank listed on the signature pages hereof and
on or prior to the date on which it becomes a Bank in the
case of each other Bank, and from time to time thereafter if
requested in writing by the Borrower (but only so long as
such Bank remains lawfully able to do so), shall provide the
Borrower with Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the
Internal Revenue Service, duly executed by such Bank,
certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party
which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct
of a trade or business in the United States. If the form
provided by a Bank at the time such Bank first becomes a
party to this Agreement indicates a United States interest
withholding tax rate in excess of zero, withholding tax at
such rate shall be considered excluded from "Taxes" as
defined in Section 8.04(a).
(e) Each Bank further agrees to promptly notify
the Borrower if such Bank changes its Applicable Lending
Office and, upon written request from the Borrower, deliver
forms 1001 or 4224 required pursuant to Section 8.04(d)
prior to the immediately following due date of any payment
by the Borrower hereunder.
(f) The Borrower shall not be required to pay any
additional amounts to any Bank or the Agent in respect of
Taxes and Other Taxes pursuant to paragraphs (a), (b) and
above if the obligation to pay such additional amounts would
not have arisen but for a failure by such Bank or Agent to
comply with the provisions of paragraphs (d) and (e) above
unless such failure results from (I) a change in applicable
law, regulation or official interpretation thereof or (ii)
an amendment, modification or revocation of any applicable
tax treaty or a change in official position regarding the
application or interpretation thereof, in each case after
the date hereof or after such Bank became a party hereto;
provided, however, that should a Bank, which is otherwise
exempt from or subject to a reduced rate of
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<PAGE>54
withholding tax, become subject to Taxes because of its
failure to deliver a form required hereunder, the Borrower
shall take such steps as such Bank shall reasonably request
to assist such Bank to recover such Taxes.
(g) Any Bank claiming any additional amounts
payable under this Section 8.04 shall (I) to the extent
legally able to do so, upon reasonable written request from
the Borrower, file any certificate or document if such
filing would avoid the need for or reduce the amount of any
such additional amounts which may thereafter accrue, and the
Borrower shall not be obligated to pay such additional
amounts if, after the Borrower's request, any Bank could
have filed such certificate or document and failed to do so;
or (ii) consistent with legal and regulatory restrictions,
use reasonable efforts to change the jurisdiction of its
Applicable Lending Office if the making of such change would
avoid the need for or reduce the amount of any additional
amounts which may thereafter accrue and would not, in the
judgment of such Bank, be otherwise disadvantageous to such
Bank.
SECTION 8.05. Base Rate Loans Substituted for
Affected Fixed Rate Loans. If (I) the obligation of any
Bank to make or maintain Euro-Dollar Loans has been
suspended pursuant to Section 8.02 or (ii) any Bank has
demanded compensation under Section 8.03 or 8.04 with
respect to its CD Loans or Euro-Dollar Loans and the
Borrower shall, by at least five Euro-Dollar Business Days'
prior notice to such Bank through the Agent, have elected
that the provisions of this Section shall apply to such
Bank, then, unless and until such Bank notifies the Borrower
that the circumstances giving rise to such suspension or
demand for compensation no longer exist:
(a) all Loans which would otherwise be made by
such Bank as (or continued as or converted into) CD
Loans or Euro-Dollar Loans, as the case may be, shall
instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the
related Fixed Rate Loans of the other Banks), and
(b) after each of its CD Loans or Euro-Dollar
Loans, as the case may be, has been repaid (or
converted to a Base Rate Loan), all payments of
principal which would otherwise be applied to repay
such Fixed Rate Loans shall be applied to repay its
Base Rate Loans instead.
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<PAGE>55
If such Bank notifies the Borrower that the circumstances
giving rise to such notice no longer apply, the principal
amount of each such Base Rate Loan shall be converted into a
CD Loan or Euro-Dollar Loan, as the case may be, on the
first day of the next succeeding Interest Period applicable
to the related CD Loans or Euro-Dollar Loans of the other
Banks.
SECTION 8.06. Substitution of Bank. If any Bank
(I) has demanded compensation for increased costs pursuant
to Section 8.03 or 8.04 or, (ii) has determined that the
making or continuation of any Euro-Dollar Rate Loan has
become unlawful or impermissible pursuant to Section 8.02
and similar additional interest or compensation has not been
demanded by, or a similar determination has not been made
by, all of the Banks, the Borrower shall have the right to
designate an Assignee which is not an Affiliate of the
Borrower to purchase for cash, pursuant to an Assignment and
Assumption Agreement, the outstanding Loans and Commitment
of such Bank and to assume all of such Bank's other rights
and obligations hereunder without recourse to or warranty
by, or expense to, such Bank, for a purchase price equal to
the principal amount of all of such Bank's outstanding Loans
plus any accrued but unpaid interest thereon and the accrued
but unpaid facility fees in respect of that Bank's
Commitment hereunder plus such amount, if any, as would be
payable pursuant to Section 2.13 if the outstanding Loans of
such Bank were prepaid in their entirety on the date of
consummation of such assignment.
SECTION 8.07. Compensation. The Borrower shall
not be liable for compensating any Bank under Sections 2.13,
8.03 and 8.04 for any funding losses, increased costs or
taxes incurred by such Bank more than 30 days prior to such
Bank's written notice of its intention to demand payment
therefor.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including bank wire, telex, facsimile transmission
or similar writing) and shall be given to such party: (x)
in the case of the Borrower or the Agent, at its address or
<PAGE>
<PAGE>56
telex or facsimile number set forth on the signature pages
hereof, (y) in the case of any Bank, at its address or telex
or facsimile number set forth in its Administrative
Questionnaire or (z) in the case of any party, such other
address or telex or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and
the Borrower. Each such notice, request or other
communication shall be effective (I) if given by telex, when
such telex is transmitted to the telex number specified in
this Section and the appropriate answerback is received,
(ii) if given by mail, 72 hours after such communication is
deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means,
when received at the address specified in this Section;
provided that notices to the Agent under Article II or
Article VIII shall not be effective until received.
SECTION 9.02. No Waivers. No failure or delay by
the Agent or any Bank in exercising any right, power or
privilege hereunder or under any Note shall operate as a
waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
SECTION 9.03. Expenses; Indemnification. (a) The
Borrower shall pay (I) all reasonable out-of-pocket expenses
of the Agent, including reasonable fees and disbursements of
special counsel for the Agent, in connection with the
preparation and administration of this Agreement, any waiver
or consent hereunder or any amendment hereof or any Default
or alleged Default hereunder and (ii) if an Event of Default
occurs, all reasonable out-of-pocket expenses incurred by
the Agent and each Bank, including reasonable fees and
disbursements of counsel, in connection with such Event of
Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify the Agent
and each Bank, their respective affiliates and the
respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee
harmless from and against any and all liabilities, losses,
damages, costs and reasonable out-of-pocket expenses of any
kind (including, without limitation, the reasonable fees and
disbursements of counsel) which were actually incurred by
such Indemnitee in connection with any investigative,
administrative or judicial proceeding (whether or not such
<PAGE>
<PAGE>57
Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or
any actual or proposed use of proceeds of Loans hereunder;
provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct.
SECTION 9.04. Sharing of Set-Offs. Each Bank
agrees that if it shall, by exercising any right of set-off
or counterclaim or otherwise, receive payment of a
proportion of the aggregate amount of principal and interest
due with respect to any Note held by it which is greater
than the proportion received by any other Bank in respect of
the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank
receiving such proportionately greater payment shall
purchase such participations in the Notes held by the other
Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest
with respect to the Notes held by the Banks shall be shared
by the Banks pro rata; provided that nothing in this Section
shall impair the right of any Bank to exercise any right of
set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of indebtedness of
the Borrower other than its indebtedness under the Notes.
SECTION 9.05. Amendments and Waivers. Any
provision of this Agreement or the Notes may be amended or
waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks
(and, if the rights or duties of the Agent are affected
thereby, by the Agent); provided that no such amendment or
waiver shall, unless signed by all the Banks, (I) increase
or decrease the Commitment of any Bank (except for a ratable
decrease in the Commitments of all Banks) or subject any
Bank to any additional obligation, (ii) reduce the principal
of or rate of interest on any Loan or any fees hereunder,
(iii) postpone the scheduled maturity of any payment of
principal of or interest on any Loan or any fees hereunder
or for termination of any Commitment or (iv) change the
percentage of the Commitments or of the aggregate unpaid
principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any
action under this Section or any other provision of this
Agreement.
SECTION 9.06. Successors and Assigns. (a) The
provisions of this Agreement shall be binding upon and inure
<PAGE>
<PAGE>58
to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Banks.
(b) Any Bank may at any time grant to one or more
banks or other institutions (each a "Participant")
participating interests in its Commitment or any or all of
its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon
notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations
hereunder, and the Borrower and the Agent shall continue to
deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement.
Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the
obligations of the Borrower hereunder including, without
limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that
such participation agreement may provide that such Bank will
not agree to any modification, amendment or waiver of this
Agreement described in clause (I), (ii) or (iii) of Section
9.05 without the consent of the Participant. The Borrower
agrees that each Participant shall, to the extent provided
in its participation agreement, be entitled to the benefits
of Sections 2.13 and 2.15 and Article VIII with respect to
its participating interest. An assignment or other transfer
which is not permitted by subsection or (d) below shall be
given effect for purposes of this Agreement only to the
extent of a participating interest granted in accordance
with this subsection (b).
Any Bank may at any time assign to one or more
banks or other institutions (each an "Assignee") all, or a
proportionate part of all, of its rights and obligations
under this Agreement and the Notes, and such Assignee shall
assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement in substantially the
form of Exhibit G hereto executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed
consent of the Borrower and the Agent; provided that such
assignment may, but need not, include rights of the
transferor Bank in respect of outstanding Money Market
Loans; and provided further that the interest of the
Assignee shall be in a minimum amount equivalent to an
original Commitment of $15,000,000 and the collective
interest of the transferor Bank and its affiliates shall be
<PAGE>
<PAGE>59
in a minimum amount equivalent to an original Commitment of
$25,000,000 unless, in the case of the transferor Bank and
its affiliates, they have no Commitment after giving effect
to such assignment. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor
Bank of an amount equal to the purchase price agreed between
such transferor Bank and such Assignee, such Assignee shall
be a Bank party to this Agreement and shall have all the
rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor
Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by
any party shall be required. Upon the consummation of any
assignment pursuant to this subsection (c), the transferor
Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to
the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee
for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the
United States of America or a state thereof, it shall
deliver to the Borrower and the Agent certification as to
exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 8.04.
(d) Any Bank may at any time assign all or any
portion of its rights under this Agreement and its Note to a
Federal Reserve Bank. No such assignment shall release the
transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee
of any Bank's rights shall be entitled to receive any
greater payment under Section 8.03 or 8.04 than such Bank
would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the
provisions of Section 8.02, 8.03 or 8.04 requiring such Bank
to designate a different Applicable Lending Office under
certain circumstances or at a time when the circumstances
giving rise to such greater payment did not exist.
(f) Any Bank may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 9.06, disclose to the
Assignee or Participant or proposed Assignee or Participant
any information relating to the Borrower or its Subsidiaries
furnished to such Bank by the Agent or by or on behalf of
the Borrower; provided that, prior to any such disclosure,
<PAGE>
<PAGE>60
such Assignee or Participant or proposed Assignee or
Participant shall agree to preserve in accordance with
Section 9.11 the confidentiality of any confidential
information described therein.
SECTION 9.07. Collateral. Each of the Banks
represents to the Agent and each of the other Banks that it
in good faith is not relying upon any "margin stock" (as
defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
SECTION 9.08. Governing Law; Submission to
Jurisdiction. This Agreement and each Note shall be
governed by and construed in accordance with the laws of the
State of New York. The Borrower hereby submits to the
nonexclusive jurisdiction of the United States District
Court for the Southern District of New York and of any New
York State court sitting in New York City for purposes of
all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The
Borrower irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to
the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
SECTION 9.09. Counterparts; Integration;
Effectiveness. This Agreement may be signed in any number
of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were
upon the same instrument. This Agreement constitutes the
entire agreement and understanding among the parties hereto
and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective on and
as of July 11, 1994, provided that on or prior to such date,
the Agent shall have received counterparts hereof signed by
each of the parties hereto (or, in the case of any party as
to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such
party of execution of a counterpart hereof by such party).
SECTION 9.10. WAIVER OF JURY TRIAL. EACH OF THE
BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
<PAGE>
<PAGE>61
SECTION 9.11. Confidentiality. Subject to
Section 9.06(f) hereof, the Banks shall hold all nonpublic
information obtained pursuant to the requirements of this
Agreement and identified as such by the Borrower in
accordance with such Bank's customary procedures for
handling confidential information of this nature and in
accordance with safe and sound banking practices and in any
event may make disclosure reasonably required by a bona fide
offeree or transferee in connection with the contemplated
transfer, or as required or requested by any governmental
authority or representative thereof, or pursuant to legal
process, or to its accountants, lawyers and other advisors,
and shall require any such offeree or transferee to agree
(and require any of its offerees, transferees or
participants to agree) to comply with this Section 9.11.
<PAGE>
<PAGE>62
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed by their respective
authorized officers as of the day and year first above
written.
AT&T CAPITAL CORPORATION
By /s/ Nicholas S. Cyprus
Title: Vice President and
Controller
44 Whippany Road
Morristown, New Jersey 07962
Fax: (201) 397-3106
Commitments
$120,000,000 MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Mathias Blumschein
Title: Associate
$75,000,000 BARCLAYS BANK PLC
By /s/ Andrew Wynn
Title: Director
$75,000,000 THE CHASE MANHATTAN BANK, N.A.
By /s/ Robert T. Smith
Title: Vice President
<PAGE>
<PAGE>63
Commitments
$75,000,000 CHEMICAL BANK
By /s/ Marion J. Henry
Title: Vice President
$75,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By /s/ R. Ivosevich
Title: Senior Vice President
$75,000,000 THE FUJI BANK, LIMITED
By /s/ Y. Shitsugu
Title: Vice President and
Manager
$48,750,000 THE FIRST NATIONAL BANK OF
CHICAGO
By /s/ Judith L. Mayberry
Title: Vice President
$48,750,000 CITIBANK, N.A.
By /s/ James M. Walsh
Title: Attorney-in-fact
<PAGE>
<PAGE>64
Commitments
$48,750,000 CREDIT SUISSE
By /s/ Jay Chall
Title: Member of Senior
Management
By /s/ Andrea Shkane
Title: Associate
$48,750,000 DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By /s/ Bina R. Dabbah
Title: Vice President
By /s/ Alain M. Bolea
Title: Director
$48,750,000 THE INDUSTRIAL BANK OF JAPAN,
LTD., NEW YORK BRANCH
By /s/ Junri Oda
Title: Senior Vice President
and Senior Manager
$48,750,000 MELLON BANK, N.A.
By /s/ James S. Wolf
Title: First Vice President
<PAGE>
<PAGE>65
Commitments
$48,750,000 NATIONSBANK OF NORTH
CAROLINA, N.A.
By /s/ Moses James Sawney
Title: Vice President
$48,750,000 PNC BANK, NATIONAL ASSOCIATION
By /s/ Mark Williams
Title: Vice President
$48,750,000 ROYAL BANK OF CANADA
By /s/ Thomas M. Byrne
Title: Manager
$48,750,000 SOCIETE GENERALE
By /s/ Philippe de Rozieres
Title: Vice President
$48,750,000 THE SUMITOMO BANK, LIMITED,
NEW YORK BRANCH
By /s/ Shuntaro Higashi
Title: Joint General Manager
<PAGE>
<PAGE>66
Commitments
$48,750,000 SWISS BANK CORPORATION
By /s/ Sean M. Harrigan
Title: Executive Director
Merchant Banking
By /s/ Teresa A. Portela
Title: Associate Director
Merchant Banking
$30,000,000 ABN AMRO BANK N.V. NEW YORK
BRANCH
By /s/ Ann K. Schwalbenberg
Title: Vice President
By /s/ James B. Sieger
Title: Vice President
$30,000,000 THE BANK OF NEW YORK
By /s/ Edward F. Ryan, Jr.
Title: Vice President
$30,000,000 BANK OF HAWAII
By /s/ J. Bryan Scearce
Title: Assistant Vice
President
<PAGE>
<PAGE>67
Commitments
$30,000,000 BANQUE PARIBAS
By /s/ Richard G. Burrows
Title: Vice President
By /s/ Stanley P. Berkman
Title: Senior Vice President
$30,000,000 CIBC INC.
By /s/ Leslie L. Rogers
Title: Vice President
$30,000,000 COMERICA BANK
By /s/ Martin G. Ellis
Title: Assistant Vice
President
<PAGE>
<PAGE>68
Commitments
$30,000,000 COMMERZBANK AKTIENGESELLSCHAFT
NEW YORK BRANCH
By /s/ Juergen Boysen
Title: Senior Vice President
By /s/ Michael D. Hintz
Title: Vice President
$30,000,000 CONTINENTAL BANK
By /s/ Kathryn N. Robinson
Title: Vice President
$30,000,000 DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By /s/ Susan A. Hodge
Title: Vice President
By /s/ J. M. Leffler
Title: First Vice President
$30,000,000 THE FIRST NATIONAL BANK OF BOSTON
By /s/ Heather R. Johnson
Title: Vice President
<PAGE>
<PAGE>69
Commitments
$30,000,000 THE NORTHERN TRUST COMPANY
By /s/ Kristina V. L. Warland
Title: Second Vice President
$30,000,000 TORONTO DOMINION (NEW YORK), INC.
By /s/ C. A. Clause
Title: Vice President
$30,000,000 TRUST COMPANY BANK
By /s/ Marion C. Shields
Title: Vice President
$30,000,000 WACHOVIA BANK OF GEORGIA, N.A.
By /s/ Linda M. Harris
Title: Senior Vice President
_________________
Total Commitments
$1,500,000,000
<PAGE>
<PAGE>70
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Matthias Blumschein
Title: Associate
60 Wall Street
New York, New York 10260-0060
Attention: Matthias Blumschein
Telex number: 177615<PAGE>
<PAGE>71
EXHIBIT A
NOTE
New York, New York
, 19
For value received, AT&T Capital Corporation, a
Delaware corporation (the "Borrower"), promises to pay to
the order of
(the "Bank"), for the account of its Applicable Lending
Office, the unpaid principal amount of each Loan made by the
Bank to the Borrower pursuant to the Credit Agreement
referred to below on the maturity date provided for in the
Credit Agreement. The Borrower promises to pay interest on
the unpaid principal amount of each such Loan on the dates
and at the rate or rates provided for in the Credit
Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in
Federal or other immediately available funds at the office
of Morgan Guaranty Trust Company of New York, 60 Wall
Street, New York, New York.
All Loans made by the Bank, the respective types
thereof and all repayments of the principal thereof shall be
recorded by the Bank and, if the Bank so elects in
connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information
with respect to each such Loan then outstanding may be
endorsed by the Bank on the schedule attached hereto, or on
a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any
such recordation or endorsement shall not affect the
obligations of the Borrower hereunder or under the Credit
Agreement.
<PAGE>
<PAGE>72
This note is one of the Notes referred to in the
$1,500,000,000 Credit Agreement dated as of July 11, 1994
among the Borrower, the banks listed on the signature pages
thereof and Morgan Guaranty Trust Company of New York, as
Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made
to the Credit Agreement for provisions for the mandatory and
optional prepayment hereof and the acceleration of the
maturity hereof.
AT&T CAPITAL CORPORATION
By
Title:
<PAGE>
<PAGE>73
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
__________________________________________________________________
Amount of
Amount of Type of Principal Notation
Date Loan Loan Repaid Made By
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
<PAGE>
<PAGE>74
EXHIBIT B
Form of Money Market Quote Request
[Date]
To: Morgan Guaranty Trust Company of New York
(the "Agent")
From: AT&T Capital Corporation
Re: $1,500,000,000 Credit Agreement (the "Credit
Agreement") dated as of July 11, 1994 among
the Borrower, the Banks listed on the
signature pages thereof and the Agent
We hereby give notice pursuant to Section 2.03 of
the Credit Agreement that we request Money Market Quotes for
the following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount* Interest Period**
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Terms used herein have the meanings assigned to
them in the Credit Agreement.
AT&T CAPITAL CORPORATION
By________________________
Title:
____________________
*Amount must be $5,000,000 or a larger multiple of
$1,000,000.
**Not less than one month (LIBOR Auction) or not less
than 14 days (Absolute Rate Auction), subject to the
provisions of the definition of Interest Period.<PAGE>
<PAGE>75
EXHIBIT C
Form of Invitation for Money Market Quotes
To: [Name of Bank]
Re: Invitation for Money Market Quotes to AT&T
Capital Corporation (the "Borrower")
Pursuant to Section 2.03 of the $1,500,000,000
Credit Agreement dated as of July 11, 1994 among the
Borrower, the Banks parties thereto and the undersigned, as
Agent, we are pleased on behalf of the Borrower to invite
you to submit Money Market Quotes to the Borrower for the
following proposed Money Market Borrowing(s):
Date of Borrowing: __________________
Principal Amount Interest Period
$
Such Money Market Quotes should offer a Money
Market [Margin] [Absolute Rate]. [The applicable base rate
is the London Interbank Offered Rate.]
Please respond to this invitation by no later than
[4:00 P.M.] [9:30 A.M.] (New York City time) on [date].
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By______________________
Authorized Officer
<PAGE>
<PAGE>76
EXHIBIT D
Form of Money Market Quote
To: Morgan Guaranty Trust Company of New York,
as Agent
Re: Money Market Quote to AT&T Capital
Corporation (the "Borrower")
In response to your invitation on behalf of the
Borrower dated _____________, 19__, we hereby make the
following Money Market Quote on the following terms:
1. Quoting Bank: ________________________________
2. Person to contact at Quoting Bank:
_____________________________
3. Date of Borrowing: ____________________*
4. We hereby offer to make Money Market Loan(s) in the
following principal amounts, for the following Interest
Periods and at the following rates:
Principal Interest Money Market
Amount** Period*** [Margin****] [Absolute Rate*****]
$
$
[Provided, that the aggregate principal amount of Money
Market Loans for which the above offers may be accepted
shall not exceed $____________.]**
__________
* As specified in the related Invitation.
** Principal amount bid for each Interest Period may not
exceed principal amount requested. Specify aggregate
(Notes continued on following page)
<PAGE>
<PAGE>77
limitation if the sum of the individual offers exceeds the
amount the Bank is willing to lend. Bids must be made for
$5,000,000 or a larger multiple of $1,000,000.
We understand and agree that the offer(s) set
forth above, subject to the satisfaction of the applicable
conditions set forth in the $1,500,000,000 Credit Agreement
dated as of July 11, 1994 among the Borrower, the Banks
listed on the signature pages thereof and yourselves, as
Agent, irrevocably obligates us to make the Money Market
Loan(s) for which any offer(s) are accepted, in whole or in
part.
Very truly yours,
[NAME OF BANK]
Dated:_______________ By:__________________________
Authorized Officer
__________
*** Not less than one month or not less than 14 days, as
specified in the related Invitation. No more than five bids
are permitted for each Interest Period.
**** Margin over or under the London Interbank Offered Rate
determined for the applicable Interest Period. Specify
percentage (to the nearest 1/10,000 of 1%) and specify
whether "PLUS" or "MINUS".
***** Specify rate of interest per annum (to the nearest
1/10,000th of 1%).
<PAGE>
<PAGE>78
EXHIBIT E
OPINION OF
COUNSEL FOR THE BORROWER
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
I am [General Counsel] [Assistant General Counsel]
of AT&T Capital Corporation (the "Borrower"), and as such,
have acted as counsel for the Borrower in connection with
the $1,500,000,000 Credit Agreement (the "Credit Agreement")
dated as of July 11, 1994 among the Borrower, the banks
listed on the signature pages thereof and Morgan Guaranty
Trust Company of New York, as Agent. Terms defined in the
Credit Agreement are used herein as therein defined. This
opinion is being rendered to you at the request of the
Borrower pursuant to Section 3.01(b) of the Credit
Agreement.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The Borrower is a corporation duly
incorporated, validly existing and in good standing under
the laws of Delaware, and has all corporate power and all
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted, except those which the failure to have would not
have a Material Adverse Effect.
<PAGE>
<PAGE>79
2. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate power, have been duly authorized by
all necessary corporate action, require no action by or in
respect of, or filing with, any governmental body, agency or
official and do not contravene, or constitute a default
under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of the Borrower
or of any material agreement, judgment, injunction, order,
decree or other material instrument binding upon the
Borrower or result in the creation or imposition of any Lien
on any asset of the Borrower.
3. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, in each case
enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws affecting creditors'
rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity
or at law).
4. There is no action, suit or proceeding pending
against, or to the best of my knowledge threatened against,
the Borrower or any of its Consolidated Subsidiaries before
any court or arbitrator or any governmental body, agency or
official, in which there is a reasonable probability of an
adverse decision which would have a Material Adverse Effect
or which in any manner draws into question the validity of
the Credit Agreement or the Notes.
5. Each of the Borrower's Consolidated
Subsidiaries which is a corporation is a corporation validly
existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate power
and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted, except those which the failure to have would not
have a Material Adverse Effect.
I am a member of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, I express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any <PAGE>
<PAGE>80
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
or furnished to any other person without my prior written
consent.
Very truly yours, <PAGE>
<PAGE>81
EXHIBIT F
OPINION OF
DAVIS POLK & WARDWELL, SPECIAL COUNSEL
FOR THE AGENT
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Dear Sirs:
We have participated in the preparation of the
$1,500,000,000 Credit Agreement (the "Credit Agreement")
dated as of July 11, 1994 among AT&T Capital Corporation, a
Delaware corporation (the "Borrower"), the banks listed on
the signature pages thereof (the "Banks") and Morgan
Guaranty Trust Company of New York, as Agent (the "Agent"),
and have acted as special counsel for the Agent for the
purpose of rendering this opinion pursuant to Section 3.01
of the Credit Agreement. Terms defined in the Credit
Agreement are used herein as therein defined.
We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials and
other instruments and have conducted such other
investigations of fact and law as we have deemed necessary
or advisable for purposes of this opinion.
Upon the basis of the foregoing, we are of the
opinion that:
1. The execution, delivery and performance by the
Borrower of the Credit Agreement and the Notes are within
the Borrower's corporate power and have been duly authorized
<PAGE>
<PAGE>82
by all necessary corporate action.
2. The Credit Agreement constitutes a valid and
binding agreement of the Borrower and the Notes constitute
valid and binding obligations of the Borrower, in each case
enforceable against the Borrower in accordance with their
respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws affecting creditors'
rights generally and by general principles of equity
(regardless of whether considered in a proceeding in equity
or at law).
We are members of the Bar of the State of New York
and the foregoing opinion is limited to the laws of the
State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no
opinion as to the effect (if any) of any law of any
jurisdiction (except the State of New York) in which any
Bank is located which limits the rate of interest that such
Bank may charge or collect.
This opinion is rendered solely to you in
connection with the above matter. This opinion may not be
relied upon by you for any other purpose or relied upon by
any other person without our prior written consent.
Very truly yours,<PAGE>
<PAGE>83
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among
[ASSIGNOR] (the "Assignor"), [ASSIGNEE] (the "Assignee"),
AT&T CAPITAL CORPORATION (the "Borrower") and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, this Assignment and Assumption Agreement
(the "Agreement") relates to the $1,500,000,000 Credit
Agreement dated as of July 11, 1994 among the Borrower, the
Assignor and the other Banks party thereto, as Banks, and
the Agent (the "Credit Agreement");
WHEREAS, as provided under the Credit Agreement,
the Assignor has a Commitment to make Loans to the Borrower
in an aggregate principal amount at any time outstanding not
to exceed $__________;
WHEREAS, Committed Loans made to the Borrower by
the Assignor under the Credit Agreement in the aggregate
principal amount of $__________ are outstanding at the date
hereof; and
WHEREAS, the Assignor proposes to assign to the
Assignee all of the rights of the Assignor under the Credit
Agreement in respect of a portion of its Commitment
thereunder in an amount equal to $__________ (the "Assigned
Amount"), together with a corresponding portion of its
outstanding Committed Loans, and the Assignee proposes to
accept assignment of such rights and assume the
corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing
and the mutual agreements contained herein, the parties
hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not
otherwise defined herein shall have the respective meanings
<PAGE>
<PAGE>84
set forth in the Credit Agreement.
SECTION 2. Assignment. The Assignor hereby
assigns and sells to the Assignee all of the rights of the
Assignor under the Credit Agreement to the extent of the
Assigned Amount, and the Assignee hereby accepts such
assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to
the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the
principal amount of the Committed Loans made by the Assignor
outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Borrower
and the Agent and the payment of the amounts specified in
Section 3 required to be paid on the date hereof (I) the
Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under
the Credit Agreement with a Commitment in an amount equal to
the Assigned Amount, and (ii) the Commitment of the Assignor
shall, as of the date hereof, be reduced by a like amount
and the Assignor released from its obligations under the
Credit Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein
shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the
assignment and sale contemplated in Section 2 hereof, the
Assignee shall pay to the Assignor on the date hereof in
Federal funds the amount heretofore agreed between them.
It is understood that commitment and/or facility fees
accrued to the date hereof in respect of the Assigned Amount
are for the account of the Assignor and such fees accruing
from and including the date hereof are for the account of
the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party
hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest
therein and shall promptly pay the same to such other party.
SECTION 4. Consent of the Borrower and the Agent.
<PAGE>
<PAGE>85
This Agreement is conditioned upon the consent of the
Borrower and the Agent pursuant to Section 9.06 of the
Credit Agreement. The execution of this Agreement by the
Borrower and the Agent is evidence of this consent.
Pursuant to Section 9.06 the Borrower agrees to execute and
deliver a Note payable to the order of the Assignee to
evidence the assignment and assumption provided for herein.
SECTION 5. Non-Reliance on Assignor. The
Assignor makes no representation or warranty in connection
with, and shall have no responsibility with respect to, the
solvency, financial condition, or statements of the
Borrower, or the validity and enforceability of the
obligations of the Borrower in respect of the Credit
Agreement or any Note. The Assignee acknowledges that it
has, independently and without reliance on the Assignor, and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to
enter into this Agreement and will continue to be
responsible for making its own independent appraisal of the
business, affairs and financial condition of the Borrower.
SECTION 6. Governing Law. This Agreement shall
be governed by and construed in accordance with the laws of
the State of New York.
SECTION 7. Counterparts. This Agreement may be
signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their duly
authorized officers as of the date first above written.
[ASSIGNOR]
By_________________________
Title:
[ASSIGNEE]
By__________________________
Title:
<PAGE>
<PAGE>86
AT&T CAPITAL CORPORATION
By__________________________
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By__________________________
Title:
<PAGE>1
Exhibit 10(v)
Form 10-K for 1994
File No. 1-11237
AT&T CAPITAL CORPORATION
RETIREMENT AND SAVINGS PLAN
HIGHLIGHTS OF THE RETIREMENT AND SAVINGS PLAN
AT&T Capital Corporation adopted the AT&T Capital
Corporation
Retirement and Savings Plan (RSP) effective January 1, 1994 for
its members
and the members of its subsidiaries. This summary refers to AT&T
Capital
Corporation and its subsidiaries collectively as the "Company."
The RSP is designed to help you build financial resources
for the
future. Here's how the RSP can help you achieve your retirement
goals:
A convenient, regular way to save up to 12% of your pay on a
before-tax or
after-tax basis using payroll deductions,
. A matching contribution from the Company equal to 662/3 cents
for every
$l you save on the first 6% of your pay,
. An overall uniform points contribution from the Company which
is
expected to be 9% of total payroll,
. The uniform points contribution allocated to your account will
be based
on pay and service and will equal 6% to 13% of your pay,
assuming the
overall contribution is 9%,
. A choice of investment options,
. Vesting (ownership) in your contributions of 100% at all times,
. Vesting in matching contributions of 100% after a maximum of
11/2 years
of vesting service,
. Vesting in uniform points contributions at the rate of 20% for
each year
of vesting service uniform points contributions are fully
vested once
you complete 5 years of vesting service,
. A tax advantage for your savings while they grow current income
taxes
are not paid on your before-tax contributions, matching
contributions,
uniform points contributions, or any investment earnings while
they
remain in the RSP,
. Access to your before-tax contributions in the event of an
approved
hardship or at any time after you reach age 591/2,
. Access to your unmatched after-tax contributions at any time,
. Access to your matched after-tax contributions, after they have
been in
the RSP for at least 24 months,
. Access to your contributions and matching contributions through
loans,
and
. A choice of payment options when you leave the Company.
ELIGIBILITY AND PARTICIPATION
Who Is Eligible
You are eligible to participate in the RSP if you are a
regular, full-time or part-time member of the Company. However,
you are not eligible to
participate in the RSP if you are a "leased member" (e.g.,
employed by a
<PAGE>
<PAGE>2
temporary employment service), a nonresident alien with no U.S.
source
income, or a U.S. citizen residing outside the United States and
covered by
a retirement plan in the foreign country.
You are eligible to participate in the RSP:
with respect to your contributions and matching contributions on
the first
day of the month after you become employed by the Company, and
. with respect to uniform points contributions on the January 1
following
the year you become employed by the Company.
For eligibility purposes, transferees from AT&T are treated
the same
as newly hired members.
For rehired members, if you were eligible to participate in
the RSP
before you left the Company and are rehired before you have a
break in
service, you will be eligible to participate in the RSP once you
complete
an hour of service.
However, if you are rehired after you have a break-in
service, you
must fulfill the eligibility requirements again, just as a new
member
would.
If you are uncertain whether or not you are eligible to
participate,
ask your local Human Resources representative.
How You Enroll
Uniform Points Contributions
Once you are eligible, you automatically begin to receive
allocations
of uniform points contributions. You don't have to do anything to
enroll,
except to select your investment options under the RSP. Your RSP
investment
elections will apply to all monies contributed under the RSP. For
more
information, please see "Your Investment Decisions".
Your Contributions and Matching Contributions
If you want to make before-tax or after-tax contributions
and receive
matching contributions from the Company, you must enroll in the
RSP. When
you are hired, you will receive an enrollment package containing
all the
information you will need to designate a beneficiary and to begin
to make
contributions. Your contributions will begin as soon as
practicable after
you enroll.
If you do not elect to contribute to the RSP when you first
become
eligible, you may enroll later at any time by requesting an
enrollment
package from your local Human Resources office and following the
enrollment
procedures.
Please note that your election to contribute to the RSP will not
be
effective unless you have chosen your investment options.
<PAGE> 3
CONTRIBUTIONS TO YOUR ACCOUNT
Your Contributions
The RSP allows you to save in two ways before-tax and
after-tax. Your
total contributions can be up to 12% of your pay. When you
enroll, you will
be asked to specify what percentage of your contributions should
be before-tax and what percentage should be after-tax.
Under the RSP, "pay" means your cash compensation from the
Company
before reductions for taxes or before-tax contributions to any of
the
Company's member benefit plans, including your base pay,
commissions,
overtime, shift differentials, wages and awards and payments
under the
Company's Annual Incentive Plan (or any successor plan) to the
extent
includible in your taxable income. However, your "pay" under the
RSP does
not include awards or payments under the Company's long term
incentive
award programs such as the Share Performance Incentive Plan and
the Long
Term Incentive Plan.
Before-Tax Contributions
You may contribute from 1% to 12% of your pay on a
before-tax basis,
up to certain limits (see "Limits On Contributions" on page 6).
Your
before-tax contributions go into your account before federal
income taxes
are withheld from your pay. For many participants, this advantage
extends
to state and local income taxes too. You defer paying income
taxes on
before-tax savings dollars until you receive them from the RSP as
a
payment. And, just as important, these before-tax savings dollars
reduce
your salary for tax purposes. Because you pay less taxes, you
have more
money to save or spend. Please look at the example to see how
this works.
Social security taxes, by law, must be withheld from your
unreduced
pay whether you save on a before-tax or after-tax basis. But
because social
security taxes are based on your unreduced pay, your social
security
benefit will not be affected by your participation in the RSP.
After-Tax Contributions
You also may contribute from 1% to 12% of your pay on an
after-tax
basis. Remember, your total before-tax and after-tax
contributions are
limited to 12% of your pay.
Your after-tax contributions are deducted automatically from
your
paycheck, but after federal income taxes have already been
withheld from
your pay. After-tax contributions are more readily available for
withdrawal
than before-tax contributions.
Matching Contributions
For every before-tax or after-tax dollar you contribute to
the RSP up
to the first 6% of your pay, the Company will contribute 662/3
cents to
your account. The Company does not match your contributions above
6% of
your pay. Also, matching contributions will not be made if you
are under a
withdrawal suspension (see the section entitled "Withdrawals
While You Are
Employed" beginning on page 19) or a loan penalty suspension (as
described
in the loan default section on page 17).
<PAGE>
<PAGE>4
Matching contributions will be made to your account monthly
as soon as
practicable after each payroll period.
Uniform Points Contributions
Each year, the Company will contribute to the RSP a
percentage of the
total pay (see page 3) of all members participating in the RSP.
The
contribution is expected to be 9%, but will not be less than 5%,
of total
pay.
Allocation of Uniform Points Contributions
Once the total uniform points contribution to the RSP is
determined,
the contribution will be allocated to participants on a "uniform
points"
system. The uniform points system allocates the Company's
contribution to
each participant based upon years of service and pay.
Under the uniform points system, you will be allocated:
1 point for each $200 of pay, and
. 10 points for each full year of service and 5/6 of a point for
each
additional full month of service.
Your allocation of the total uniform points contribution
will equal
the Company's total contribution multiplied by a fraction. The
fraction
will equal your points for the year divided by all participants'
points for
the year.
If the uniform points contribution is 9% of total pay, your
allocation
will be at least 6% and no more than 13% of your pay regardless
of the
number of your points.
Your account will receive 1/12 of the total annual
allocation each
month, provided you are actively employed by the Company on the
last day of
that month. The Company expects that the allocation for January
March of
each year will be made at one time generally by April 30;
separate
allocations will be made for the months of April through December
generally
by the end of the following month. For example, the allocation
for April
will be made by May 31 and the allocation for December will be
made by
January 31 of the next year or as soon as administratively
feasible.
Service
In determining the uniform points contribution for a year, a
participant's service will be determined as of the last day of
February of
that year and the total "pay" of all participants is based on the
12 months
ending on that day. For example, the uniform points contribution
for 1994
will be 9% of the total pay of all participants from March 1,
1993 through
February 28, 1994 and each participant will receive an allocation
based on
his or her service as of February 28, 1994.
All your years and months of service after December 31, 1993
with the
Company is counted in determining your points. For members as of
December 31, 1993, your service also includes:
All service before January 1, 1994 with AT&T Capital Corporation,
<PAGE>5
All service before January 1, 1994 with a subsidiary of AT&T
Capital
Corporation after AT&T Capital Corporation acquired at least
50%
ownership of the subsidiary, and
. All service before January 1, 1994 with AT&T or any "affiliate"
of AT&T
while affiliated with AT&T.
Two companies are "affiliated" if, under Internal Revenue
Service
rules, they are under common control generally, they are at least
80%
commonly owned.
Examples
Let's look at some examples:
Example 1:
You have 5 years and 6 months of service as of the last day of
February and
your pay is $30,000 for the 12 months ending on that day. You
will have 205
points:
5 years of service x 10 points = 50
6 months of service x 5/6 point = 5
$30,000 / $200 = 150 x 1 point = 150
Total: 205
Assume the Company's uniform points contribution equals 9% of pay
and the
Company's total pay for the 12 months ending March 31 is
$100,000,000. The
Company's total uniform points contribution for the year would
equal
$9,000,000.
If the points for all participants equal 580,000, your account
would
receive an annual allocation of $3,181.03 calculated as follows:
205 points x $9,000,000 = $3,181.03
580,000 points
Example 2:
You have 19 years of service as of the last day of February and
your pay is
$70,000 for the 12 months ending on that day. You will have 540
points:
19 years of service x 10 points = 190
$70,000 / $200 = 350 x 1 point = 350
Total: 540
Assume the Company's total uniform points contribution for the
year would
equal $9,000,000.
If the points for all participants equal 580,000, your account
would
receive an annual allocation of $8,379.31 calculated as follows:
540 points x $9,000,000 = $8,379.31
580,000 points
Rollover Contributions
You may also invest the taxable portion of an account you
have
accumulated under a prior employers' tax qualified retirement
plan in the
RSP. Rollover contributions are not eligible for matching
contributions.
If you transferred your money from a prior employer's plan
to an
individual retirement account (IRA), you may be able to transfer
the value
of that rollover IRA to the RSP. The Internal Revenue Service has
specific
guidelines on these "rollover" contributions. There are two types
of
rollovers: a 60-day rollover and a direct rollover. Under the
60-day
rollover, the check from the distributing plan or rollover IRA is
payable
to you and you send a check to the RSP.
<PAGE>
<PAGE>6
Please note that if you use a 60-day rollover, your
distribution from
the prior plan will be subject to 20% income tax withholding on
the taxable
portion of the prior plan's distribution. Under the direct
rollover, the
check from the distributing plan or rollover IRA is sent directly
to the
RSP and no federal taxes are withheld.
You may invest your rollover contributions in the investment
options
available under the RSP. See "Your Investment Decisions" on page
9.
If you have questions about rollover contributions, contact
the
Corporate Benefit Office.
Transfers of Account Balances from AT&T Subsidiary Plans
If you were a participant in the AT&T Long Term Savings Plan
for
Management Members, AT&T Long Term Savings and Security Plan,
AT&T
Retirement Savings and Profit Sharing Plan, AT&T Global
Information
Solutions Company Savings Plan, or Encore International, Inc. Tax
Deferred
Savings Plan and were eligible to participate in the RSP on
January 1,
1994, you are fully vested in all contributions made to those
plans as of
December 31, 1993. Your account balances under those plans have
been
transferred to the RSP. You may invest these balances in the
investment
options available under the RSP. See "Your Investment Decisions"
on page 9.
If you were a participant in the Eaton Financial Corporation
401(k)
Profit Sharing Plan and were eligible to participate in the RSP
on January
1, 1994, you are fully vested in your Eaton Financial Corporation
401(k)
Profit Sharing Plan and all contributions made to that plan as of
December
31, 1992. Your account balances under the Eaton Financial
Corporation
401(k) Profit Sharing Plan will be transferred as soon as
administratively
practical.
Limits on Contributions
The Internal Revenue Code places several restrictions on
tax-qualified
plans that may limit the amount of your benefit under the RSP.
The RSP
must:
Ignore any of your pay that exceeds $150,000 in a year this limit
will be
adjusted from time to time for inflation,
. Limit your before-tax contributions to a certain dollar limit
that is
set each year this dollar limit, which is $9,240 in 1994, is
adjusted
annually for inflation, and
. Limit your contributions, matching contributions, and uniform
points
contributions to the lesser of $30,000 or 25% of your taxable
pay in any
calendar year.
Once your before-tax contributions reach the dollar limit
for a year,
your designation of before-tax dollars for the remainder of the
year will
automatically be treated as an after-tax designation.
So that you may save as much as possible for your
retirement, the
Company has established an additional plan known as an "Excess
Benefit
Plan" which will hold contributions in excess of the $30,000 or
25% of pay
<PAGE>
<PAGE>7
limit. If the total contributions for the year would exceed the
limit, the
excess contributions the Company makes in your behalf will be
credited
under the Excess Benefit Plan, rather than to the RSP.
The Company intends that, to the extent administratively
practicable,
contributions will be made to the RSP as follows:
First, your before-tax contributions up to the limit will be made
to the
RSP,
. Then, your after-tax contributions up to the limit will be made
to the
RSP,
. Then, matching contributions up to the limit will be made to
the RSP,
and
. Finally, uniform points contributions up to the limit will be
made to
the RSP.
The Excess Benefit Plan is described in more detail in a
separate
section of this summary.
Non-Discrimination Tests
The Internal Revenue Code imposes several tests to assure
that plans
like the RSP are used by a balanced proportion of members at
lower and
higher pay levels. One test compares the average before-tax
contributions
of both groups of members. Another test compares the average
after-tax
contributions and matching contributions of both groups of
members.
If the before-tax contribution levels are not balanced, the
before-tax
savings for some higher-paid members may have to be reduced. If
the after-tax and matching contribution levels are not balanced,
then the RSP will
refund amounts related to the excess after-tax contributions to
the
affected higher paid members and any matching contributions made
with
respect to refunded contributions will be forfeited.
There are other Internal Revenue Code provisions that are
designed to
ensure that plans like the RSP do not discriminate in favor of
highly
compensated members.
If the amount you decide to save in the RSP, or if the
amount
contributed in your behalf, is affected by any of these rules,
you will be
notified.
Changing Your Savings
You may change the percentage of pay you are saving at any
time by
calling the recordkeeper's voice response system (VRS) (see page
27). The
changes will take effect as soon as administratively practical.
Remember: your savings are based on a percentage of eligible
pay. If
your pay changes during the year, the Company will automatically
change the
dollar amount of your contribution in accordance with the
percentage of pay
you have elected.
<PAGE>
<PAGE>8
If you need to stop saving through the RSP, you may do so at
any time
by calling the VRS (see page 27). Your savings will stop as soon
as
administratively possible, but no later than the end of the next
month. If
you decide to resume savings through the RSP again, you may do so
at any
time.
WHAT THE BEFORE-TAX ADVANTAGE MEANS TO YOU
Savings with before-tax dollars means that you can keep more
of what
you earn. The dollars and cents effect depends upon your
situation:
If you are not saving now, but would like to start, you can begin
saving on
a before-tax basis. The amount you actually save in the RSP
will be more
than the amount that your take home pay is reduced. If, for
instance,
you save $150 monthly before-tax to the RSP, your take home pay
may
decrease by less than $108 because of your tax reduction.
. If you are already saving a portion of your pay on an after-tax
basis,
you can save the same amount through the RSP on a before-tax
basis and
actually increase your spendable income.
(Please see the example below.)
Or you could save more on a before-tax basis and keep your
spendable
income the same as it is today.
The following example illustrates how much you can reduce
the federal
income tax you pay and increase your spendable income by saving
before-tax
rather than after-tax dollars in the RSP. Let's assume you earn
$30,000 a
year and you decide to contribute 6% of your annual salary
($1,800) to the
RSP as before-tax savings. Here is how much you can reduce your
taxes and
increase your take-home pay.
As this example illustrates, if you save $1,800 on a
before-tax basis
rather than on an after-tax basis, you can reduce your taxes by
$504 for
the year. The advantages of before-tax savings provide a valuable
incentive
to save in the RSP and work toward your long-term financial
goals. Keep in
mind, however, that your before-tax savings are not as readily
available
for withdrawal before age 591/2 as are your after-tax savings.
Annual Before- Tax
Savings
Annual After- Tax
Savings
W-2
$30,000
$30,000
Before-Tax Savings
- -1,800
- -0
W-2 Taxable Wages
28,200
30,000
Estimated 1994
Federal Income
Taxes*
- -3,330
- -3,834
Estimated 1994
Social Security
Taxes
- -2,295
- -2,295
Pay After Taxes
22,575
23,871
After-Tax Savings
- -0
- -1,800
Spendable Income
22,575
22,071
Tax Reduction/Extra
Take Home Pay
$504
<PAGE>
<PAGE>9
individual taking the standard deduction and claiming one
exemption. The
1994 standard deduction for a single individual is $3,700 and
each
exemption in 1994 reduces gross income by $2,350 for purposes of
calculating federal income taxes. Not shown are any additional
tax savings
from the deferral of state and local taxes.
YOUR INVESTMENT DECISIONS
When you become a participant in the RSP, the recordkeeper
will
establish an account for you. The recordkeeper will credit to
your account
your before-tax and after-tax contributions, the matching
contributions and
uniform points contributions made in your behalf, your rollover
contributions, amounts transferred from other plans, and earnings
on all of
these.
You decide how to invest your account among the investment
options
described below. However, the contributions must be directed
among the
investments in increments of 1%. Your contributions, matching
contributions, and uniform points contributions will be allocated
among the
various options you have chosen in accordance with your current
investment
direction. You may change your investment direction as often as
you like by
calling the recordkeeper's voice response system (see page 27).
You also may transfer past investment balances from one
investment
option to another, in increments of 1%, as often as you like.
Each investment option is subject to a degree of risk.
Selecting the
appropriate option is your responsibility and the Company cannot
advise you
on how to invest. You may wish to consult with your own financial
or
investment advisor to assess risks associated with each option
and to
decide which of the investment options is better for you. To the
extent
that you exercise control over the investment of your accounts,
the Company
and other plan fiduciaries will not be liable for losses
resulting from
your investment decisions.
The AT&T Shares Fund
The AT&T Shares Fund is invested entirely in shares of
common stock of
AT&T Corp. ("AT&T"). Your interest in the AT&T Shares Fund will
be in whole
and fractional shares of AT&T common stock.
Voting AT&T Shares
Before each annual or special meeting of shareholders of
AT&T, the
trustee will send you a copy of the Annual Report to Shareowners
if you are
invested in AT&T shares. You also will receive the proxy
soliciting
material for the meeting and a form requesting instructions for
the trustee
on how to vote the AT&T shares represented by amounts credited to
your
account. The trustee will vote such shares based on your
instructions. The
trustee will not vote AT&T shares for which it does not receive
voting
instructions.
<PAGE>
<PAGE>10
Merrill Lynch Basic Value Fund, Inc.
According to its investment manager, the Merrill Lynch Basic
Value
Fund, Inc.'s objectives are to seek capital appreciation and,
secondarily,
income by investing in securities, primarily equities, that Fund
management
believes are undervalued. The Fund seeks to invest in stocks that
possess
one or more of the following characteristics:
Are selling at a discount from per-share book value (that is, a
company's
assets, minus its liabilities, divided by the number of shares
of common
stock outstanding) or from historic price-to-earnings ratios,
. Have dividends greater than the stock market average,
. Seem capable of recovering from situations that caused the
companies to
become temporarily out of favor.
Merrill Lynch Capital Fund, Inc.
According to its investment manager, the Merrill Lynch
Capital Fund,
Inc. seeks the highest total investment return consistent with
prudent
risk. Total investment return is the aggregate of income and
capital value
changes over time. The Fund has a fully managed investment policy
utilizing
equity, debt and convertible securities. This allows management
for the
Fund to vary investment policy based on its evaluation of changes
in
economic and market trends. Consistent with this policy, the
Fund's
portfolio may, at any given time, be invested substantially in
equity
securities (stocks), corporate bonds or money market securities,
although
it is the expectation of management for the Fund that, over long
periods, a
major portion of the Fund's portfolio will consist of equity
securities of
larger market capitalization companies. Dividends are declared
and
reinvested semiannually.
Merrill Lynch Federal Securities Trust
According to its investment manager, the Merrill Lynch
Federal
Securities Trust seeks high current income. The Fund seeks a
current return
through investments in U.S. government and government agencies
including
the Government National Mortgage Association. The Fund may seek
to enhance
its return through the use of certain portfolio strategies
involving
options, and to hedge its portfolio through the use of options
and futures
transactions.
Merrill Lynch Global Allocation Fund, Inc.
According to its investment manager, the Merrill Lynch
Global
Allocation Fund, Inc. seeks high total investment return
consistent with
prudent risk. The Fund has a fully managed investment policy
utilizing U.S.
and foreign equity, debt, money market securities, the
combination of which
will be varied from time to time, both with respect to types of
securities
and markets in response to changing market and economic trends.
This fully
managed investment approach provides the Fund with the
opportunity to
benefit from anticipated shifts in the relative performance of
different
types of securities and different capital markets. Dividends are
declared
and reinvested semiannually.
<PAGE>
<PAGE>11
investment return will be subject to fluctuations in foreign
currency
exchange rates.
Merrill Lynch Phoenix Fund, Inc.
According to its investment manager, the Merrill Lynch
Phoenix Fund,
Inc.'s objective is to seek long-term capital appreciation
through
investment in a diversified portfolio of equity and fixed income
securities
that Fund management believes are undervalued given current or
future
prospects. The Fund seeks to invest in securities of issuers that
are in
weak financial condition or are experiencing poor operating
results but
which Fund management believes are undervalued due to Fund
management's
assessment of the current or prospective condition of the market.
The
investment policy of the Fund is based upon the belief that the
prices of
troubled issuers are often depressed to a greater extent than
warranted by
the condition of the issuer and that, while investment in such
securities
involves a high degree of risk, such investments offer the
opportunity for
significant capital gains.
The Stable Fund
The Stable Fund consists of shares in the Merrill Lynch
Retirement
Preservation Trust and a portfolio of guaranteed investment
contracts
transferred from the AT&T Long Term Savings Plan for Management
Members,
the AT&T Long Term Savings and Security Plan, and the AT&T
Retirement
Savings and Profit Sharing Plan. In addition, a portion of the
Stable Fund
is held in the Merrill Lynch Government Fund. The rate of return
for the
Stable Fund will initially represent a blending of the respective
earnings
of the Merrill Lynch Retirement Preservation Trust, the Merrill
Lynch
Government Fund, and the transferred guaranteed investment
contracts that
have not yet matured.
Any new contributions invested in the Stable Fund, and
amounts
transferred from other investment options, will be invested in
the Merrill
Lynch Retirement Preservation Trust. As the transferred
guaranteed
investment contracts mature, proceeds from those contracts will
also be
invested in the Merrill Lynch Retirement Preservation Trust.
According to its investment manager, the Merrill Lynch
Retirement
Preservation Trust seeks to provide preservation of participant's
investments, liquidity, and current income that is typically
higher than
money market funds. The Trust invests primarily in a broadly
diversified
portfolio of Guaranteed Investment Contracts in an obligations of
U.S.
government and U.S. government agencies' securities. The Trust
also invests
in high-quality money market securities. Participants purchase
units which
the Trust seeks to maintain at $1 per unit. Income is declared
and
reinvested daily. (Although the Trust purchases Guaranteed
Investment
Contracts, neither the Trust nor its units is guaranteed.)
Self-Directed Option
Some RSP participants may wish to pursue investment options
beyond the
core group of investment options previously described. These
participants
<PAGE>
<PAGE>12
may establish a self-directed Retirement Cash Management Account
(RCMA
Account) and invest in a wide array of investments available
through
Merrill Lynch, including:
Other Merrill Lynch mutual funds at their net asset value,
. Other mutual funds subject to their normal sales charges and/or
fees,
. Corporate bonds and bond funds, and
. Most publicly traded securities (other than AT&T or AT&T
Capital
Corporation stock).
No contributions will be invested directly in this option.
However,
you may transfer assets to the self-directed option from other
investment
options under the RSP.
If you want more information about this option, your local
Human
Resources representatives will be able to direct you to a Merrill
Lynch
Financial Consultant designated to work with RSP participants.
The Merrill
Lynch Financial Consultant will be able to discuss the
self-directed option
in greater detail, including limitations on the amount of
contributions or
savings that may be invested in this option. The Financial
Consultant will
also be able to work with you to tailor an investment strategy in
line with
your specific investment objectives.
UNDERSTANDING YOUR ACCOUNT
Account Valuations
Your account reflects your participation in the investment
options
under the RSP. The recordkeeper values your account in dollars on
a daily
basis and you can access your account by using the recordkeeper's
voice
response system. See page 27.
Account Statements
Four times a year you will receive a personal statement of
account
showing the value of your account as of March 31, June 30,
September 30,
and December 31.
You may also receive the following statements:
Distribution or Withdrawal Statement when you elect a payout from
your
account,
. Confirmation Statement when you elect a fund or asset transfer,
a change
in your investment options, or a change in your before-tax or
after-tax
contribution percentages, and
. Adjustment Statement when an adjustment/correction is made to
your
account.
You should review all statements immediately to compare the
information against your own records. If there is any
discrepancy, you must
report it within 30 days of receiving the statement. Your local
Human
Resources representatives will be able to direct you where and
how to
report the discrepancy. No adjustments will be made to your
account for any
discrepancy reported more than 30 days after receipt of the
statement.
<PAGE>
<PAGE>13
VESTING
Your Contributions
The value of your before-tax and after-tax contributions is
always
100% vested. This means that you fully own those contributions
and their
earnings.
Matching Contributions
You will own the value of the matching contributions
allocated to your
account and their earnings after you become vested.
Members as of January 1, 1994
If you were employed by the Company before 1994 and are a
member on
January 1, 1994, you are immediately 100% vested in the matching
contributions allocated to your account and their earnings.
New Members
If you were first employed by the Company after December 31,
1993, you
will vest in the matching contributions allocated to your account
and their
earnings within a maximum of 11/2 years of service. If you become
employed
by the Company or an "affiliate" (see page 13) before July 1 of
any year,
you vest 100% on December 31 of that year (provided you remain in
service
until December 31). However, if you become employed by the
Company or an
affiliate on or after July 1 of any year, you vest 100% on
December 31 of
the following year (again, provided you remain in service until
December 31
of the following year).
If you leave the Company or an affiliate before you become
vested as
described in the previous paragraph, you will vest 100% only
after you
return to the Company (or an affiliate) and complete a year and a
half of
"vesting service."
Once you are 100% vested in your matching contributions and
earnings,
you are 100% vested in all future matching contributions and
earnings made
to your account.
Uniform Points Contributions
You will vest in uniform points contributions and their
earnings
gradually over 5 years. If you become employed by the Company or
an
affiliate before July 1 of any year, you vest 20% on December 31
of that
year (provided you remain in service until December 31). However,
if you
become employed on or after July 1 of any year, you vest 20% on
December 31
of the following year (again, provided you remain in service
until December
31).
Thereafter, you vest an additional 20% at the end of each
calendar
year of vesting service you complete. Once you become 100%
vested, you are
fully vested in all uniform points contributions and earnings
that are made
to your account, including future contributions and earnings made
to your
account.
<PAGE>
<PAGE>14
Summary of Vesting Schedules:
Hired
Matching
Contribution
Uniform Points
Contribution
(100%)
(20%)
(40%)
(60%)
(80%)
(100%)
3/1/94
12/31/94
12/31/94
12/31/95
12/31/96
12/31/97
12/31/98
9/1/94
12/31/95
12/31/95
12/31/96
12/31/97
12/31/98
12/31/99
Vesting Service
You earn vesting service for all continuous periods of
service at:
The Company (including service at Encore International, Inc.,
Eaton
Financial Corporation, United States Leasing International,
Inc., and
U.S. Instrument Rental before those companies were acquired by
AT&T
Capital Corporation),
. AT&T, or at any company while it was "affiliated" with AT&T,
before
January 1, 1994,
. AT&T Global Information Solutions Company (formerly, NCR
Corporation)
before it was acquired by AT&T, or
. Any company while it is "affiliated" with AT&T Capital
Corporation,
after December 31, 1993.
Two companies are "affiliated" if, under Internal Revenue
Service
rules, they are under common control generally, they are at least
80%
commonly owned.
Your vesting service includes periods beginning on the
day(s) you are
first entitled to payment for services and ending on the day(s) a
break in
service begins.
Break In Service
A break in service is a continuous period of at least 12
months during
which you are not employed by the Company or an "affiliate" of
the Company.
A break will begin on the date you retire, quit, are discharged,
or if
earlier, the 12-month anniversary of the date on which you are
otherwise
first absent from service.
If you weren't vested before your break and you return to
work for the
Company, your previous service will be counted for vesting
purposes in the
RSP after you complete one year of vesting service and only if
the number
of your consecutive one-year breaks in service was less than five
years.
If you are absent from work due to:
Your pregnancy,
. The birth of your child, or
. Caring for your child immediately after birth or adoption,
the 12-consecutive month period beginning on the first
anniversary of the
<PAGE>
<PAGE>15
maternity/paternity absence will not constitute a break in
service.
Event Vesting
Your account automatically becomes 100% vested in the value
of the
Company and matching contributions and their earnings, regardless
of how
long you've been employed by the Company, if one of the following
events
occurs:
You terminate employment because of "disability" as determined
under the
AT&T Capital Corporation Long Term Disability Plan,
. You are laid off,
. You reach age 65, or
. You are assigned to an entity (other than a subsidiary
participating in
the RSP or a foreign affiliate) in which the Company has a
direct or
indirect equity interest.
Amounts Transferred From AT&T Subsidiary Plans
For members as of December 31, 1993, you are always fully
vested in
amounts transferred to your account from the AT&T Long Term
Savings Plan
for Management Members, AT&T Long Term Savings and Security Plan,
AT&T
Retirement Savings and Profit Sharing Plan, AT&T Global
Information
Solutions Company Savings Plan, Eaton Financial Corporation
401(k) Profit
Sharing Plan, and the Encore International, Inc. Tax Deferred
Savings Plan.
For members who transfer from another AT&T company after
1993, you
will continue to receive vesting credit under your prior plan for
service
with the Company as long as the Company and your prior employer
are
"affiliated."
LOANS
Eligibility
If you are a member on the active payroll of the Company,
the RSP
allows you to borrow money from your contributions (plus
earnings) and from
matching contributions (plus earnings) that were made to the RSP.
Term and Amount of Loan, Interest Rate
You may only have one outstanding loan at a time one loan
must be
fully satisfied before another loan may be taken.
You may take a loan for a term of up to 56 months. However,
you may
take a loan to purchase your principal residence for a term of up
to 20
years. If you terminate employment for any reason, a loan will be
due and
payable three months following the termination date.
The smallest amount you can borrow is $1,000. The largest
amount you
can borrow is the least of:
<PAGE>
<PAGE>16
the vested portion of your account attributable to your
contributions and
matching contributions,
. 50% of the vested portion of your entire account balance, or
. $50,000 less your highest outstanding loan balance from the
previous 12
months.
In general, the outstanding balance of loans from any other
qualified
retirement plans maintained by the Company or an "affiliate" is
included in
determining the highest outstanding loan balance during the
previous 12
months.
Loans are made at an interest rate set by the Plan
Administrator. The
current rate is equivalent to the "prime rate" in effect on the
20th day of
the month (or first business day following) prior to the month in
which the
loan is approved, plus 1%. The prime rate is the interest rate
reported in
the Wall Street Journal (Eastern Edition) in its general guide to
money
rates as the base rate on corporate loans at large United States
money
center commercial banks. The interest rate, once established for
a loan,
remains the same throughout the term of the loan.
Security for the Loan
A portion of your account balance, equal to the amount of
the loan,
will be considered as security for the loan. In no event will the
security
exceed 50% of your total vested account balance or your vested
account
balance attributable to your contributions and matching
contributions at
the time the loan is processed.
The loan amount will be generated by the "liquidation" of an
equal
amount from your account balance. This amount will be transferred
to a loan
subaccount established under the RSP and the proceeds will be
distributed
to you. The transfer of funds equal to the loan amount, from your
vested
account balance to the loan subaccount, will be made in the
following
order:
Profit sharing contributions transferred from the AT&T Retirement
Savings
and Profit Sharing Plan (AT&T RSPSP);
. Your before-tax contributions to the RSP and before-tax
contributions
transferred from the AT&T Long Term Savings Plan for Management
Members
(AT&T LTSPME), AT&T Long Term Savings and Security Plan (AT&T
LTSSP),
AT&T RSPSP, and the AT&T Global Information Solutions Company
Savings
Plan (GIS Plan) and related earnings;
. Matching contributions to the RSP and related earnings;
. Matching contributions and related earnings transferred from
the AT&T
LTSPME, AT&T LTSSP, AT&T RSPSP, and the GIS Plan;
. Your after-tax basic contributions and related earnings to the
RSP and
after-tax contributions transferred from the AT&T LTSPME, AT&T
LTSSP,
AT&T RSPSP, and the GIS Plan and related earnings;
. Amounts rolled over from another qualified plan and earnings on
the
rolled over amounts; and
. Your after-tax supplemental contributions to the RSP and
after-tax
contributions transferred from the AT&T LTSPME, AT&T LTSSP,
AT&T RSPSP,
and the GIS Plan and related earnings.
<PAGE>
<PAGE>17
Repayment of Loan
You repay the loan in equal monthly payments over the term
of the loan
through after-tax payroll deductions. Repayments will generally
begin with
the payroll period after the loan is processed. The loan
repayment amount,
which is a monthly amount, will be deducted according to your pay
frequency. For example, one payment per month will be made if you
are paid
monthly, and two payments per month will be made if you are paid
biweekly.
In either case, repayments will be credited to your account
monthly.
Loan repayments have priority over your before-tax and
after-tax basic
and supplementary contributions to the Plan. If there are pay
periods in
which there is no pay, or pay is insufficient to collect the
entire
scheduled repayment amount, the missed payment(s) will be made up
in
subsequent pay periods; however, no more than two regular loan
repayments
will be collected in a given pay period, i.e., the normal loan
repayment
and the make-up loan repayment.
Loan repayments are made according to "level amortization"
over the
term of the loan; each monthly repayment will be applied first as
interest
on the unpaid principal balance of the loan, and the remainder of
the
monthly repayment will be applied to reduce the unpaid principal
balance.
As the unpaid loan balance is reduced by the repayments, the
remaining
portion of your account balance is increased with repayments
being invested
according to your current investment direction (or last chosen
investment
direction, if you are not currently contributing).
Loan repayments will be suspended during a formal leave of
absence but
not beyond 12 months of leave, at which time the loan will become
due and
payable in full. Payment in full will also be required at the
time of
retirement or other termination of employment, upon death, or
upon default.
A loan may be repaid, in full, at any time, without penalty.
Early
partial repayments are not permitted. Arrangements for early
repayment must
be made by telephoning the recordkeeper (see page 27).
Renegotiation of Loan
Loan renegotiation means that any of the loan terms have
changed after
the initial loan proceeds have been distributed. However, no
renegotiation
may extend the term of the loan beyond 56 months of the original
loan date
or, in the event the loan is for the purchase of your principal
residence,
20 years.
A loan may be renegotiated only upon:
a demotion, where your basic salary or rate of pay has been
reduced, or
. sickness disability, where benefits have been reduced to less
than full
pay.
. A loan renegotiation must be processed through the recordkeeper
(see
page 27). Once the circumstances of the renegotiation have been
verified
with the payroll office, a new loan package will be forwarded
to you for
review and signature.
<PAGE>
<PAGE>18
Default
A loan will be in default if any of the following
circumstances
occurs:
The amount of repayment in arrears is equal to or in excess of
the
equivalent of three monthly repayments as originally scheduled
on
initiation of the loan.
. The loan is not repaid within the five years required by law,
except for
loans used to purchase your principal residence when the term
of the
loan is longer than five years.
. The loan is not repaid within three months following any
termination of
employment.
. The loan is not repaid after 12 months during a leave of
absence.
. You enter into bankruptcy, insolvency, or receivership.
You will be notified of the reason for the default, the
amount that
must be repaid to remedy the default (which is the entire
outstanding
balance and any accrued, but unpaid, interest), the due date and
the
designated location for the payment.
If the loan is not paid in full, the unpaid balance will be
considered
a deemed distribution for tax purposes. The distribution will be
reported
to the Internal Revenue Service. If you are under age 591/2, the
deemed
distribution may result in a 10% early withdrawal penalty on the
taxable
portion, in addition to normal federal income tax.
If the source of any part of the defaulted loan involves
before-tax
monies, the portion of your account balance representing the
before-tax
monies that is considered as security for the loan will be held
in the loan
sub-account until you attain age 591/2, terminate employment, or
die,
whichever is earlier. Upon the occurrence of any of those events,
the
before-tax portion of the defaulted loan will be distributed.
However,
because this distribution of the defaulted loan has no value,
there will be
no tax penalties resulting from its distribution.
If you are an active member at the time of the default and
the default
is not remedied, your matching contributions will be suspended
for 12
months and you will not be granted another loan for the same
period.
Applying for a Loan
There is a $40 application fee each time you receive a loan.
The fee
is deducted from your account in addition to the proceeds of the
loan.
If you are interested in borrowing from your account under
the RSP,
please call the recordkeeper (see page 27) and speak to a
Participant
Service Representative (PSR). The PSR will direct you how to
apply for the
loan.
During your call to the recordkeeper, you can model various
loan
scenarios by varying the dollar amount of the loan, repayment
amount,
interest rate, and/or total number of payments. The PSR will
provide you
with the current interest rate and the amount available to
borrow. You will
<PAGE>
<PAGE>19
then be asked to provide some of the variables required to model
the loan:
the loan amount, the repayment period, the interest rate, and the
repayment
amount. The PSR will provide you with the dollar amount of the
loan,
repayment amount, total number of payments, interest rate, total
finance
charge, and the total of all repayments over the term of the
loan.
Please note that if you are married and were a participant
in the AT&T
Global Information Solutions Company Savings Plan or Eaton
Financial
Corporation 401(k) Profit Sharing Plan whose account balance was
transferred to the RSP, you must apply for a loan on a written
application
provided by the Company. Your spouse must consent in writing to
the use of
your account balance as security for the loan. The consent must
be
witnessed by a plan representative or a notary public, and must
specifically acknowledge the effect of the loan on your account
balance. No
consent shall be required if it is established to the
satisfaction of the
Company that it cannot be obtained because you have no spouse or
your
spouse cannot be located, or under such other circumstances as
may be
prescribed by Internal Revenue Service regulations.
WITHDRAWALS WHILE YOU ARE EMPLOYED
The RSP is designed to help you save for retirement.
However, you may
take certain withdrawals during your working years. Withdrawals
while you
are employed are subject to the following restrictions:
The minimum withdrawal amount is $500,
. No uniform points contributions and related earnings are
available for
an in-service withdrawal, and
. Nonvested matching contributions and related earnings are not
available
for an in-service withdrawal.
The circumstances under which you may withdraw your
after-tax
contributions, before-tax contributions, and vested matching
contributions
are described below. First, however, you need to understand how
the RSP
treats your contributions and amounts transferred from other
plans.
Basic and Supplemental Contributions
Under the RSP, your contributions are recorded in two ways:
On a before-tax and after-tax basis, and
. On a basic and supplemental contribution basis.
The part of your contribution up to the first 6% of your pay
is
considered your basic contribution and is what is matched by the
Company.
Your contribution in excess of 6% of your pay is your
supplemental
contribution.
If you are making both before-tax and after-tax
contributions, your
before-tax contributions count toward your basic contribution
first.
<PAGE>
<PAGE>20
For example, assume your annual pay is $92,400 and you want
to
contribute 12% to the RSP ($11,088) and you want to make the
largest
permissible before-tax contribution ($9,240 for 1994, which
equals 10% of
your pay). The RSP will treat your contribution as follows:
The first 6% of your pay ($5,544) will be a before-tax basic
contribution,
. The next 4% of your pay ($3,696) will be a before-tax
supplemental
contribution, and
. The next 2% of your pay ($1,848) will be an after-tax
supplemental
contribution.
Transfers from Other Plans
The RSP keeps track of amounts transferred from another plan
and those
contributions are subject to the same withdrawal restrictions as
if they
had been made directly to the RSP. Your before-tax contributions
to the
other plan will be treated as before-tax contributions (basic or
supplemental depending on how much of the contribution was
matched under
the prior plan) to the RSP. Similarly, your after-tax
contributions to the
other plan will be treated as after-tax contributions (basic or
supplemental) to the RSP.
Withdrawals After You Reach Age 59-1/2 or Upon Becoming Disabled
The funds available for withdrawal after age 591/2, or after
you
become disabled, and the order in which they will be taken out of
the RSP
are as follows:
Your after-tax contributions and related earnings,
. Any amounts rolled over from another qualified plan and related
earnings note amounts transferred from other plans (see page 6)
are not
considered a rollover
. Any vested matching contributions and related earnings, and
. Your before-tax contributions and related earnings.
Withdrawals Before You Reach Age 59-1/2
The funds available for withdrawal before age 591/2 and the
order in
which they will be taken out of the RSP are as follows:
Your after-tax supplemental contributions and related earnings,
. Your after-tax basic contributions that have been in the RSP
(or prior
plan) for at least 24 months and any earnings on after-tax
basic
contributions,
. Any amounts rolled over from another qualified plan note
amounts
transferred from other plans (see page 6) are not considered a
rollover and related earnings,
. Vested matching contributions that have been in the RSP (or
prior plan)
for at least 24 months and earnings on vested matching
contributions,
and
. Your after-tax basic contributions that have been in the RSP
(or prior
plan) for less than 24 months if these amounts are withdrawn
you will be
unable to contribute to the RSP (and receive matching
contributions) for
12 months after the withdrawal.
<PAGE>
<PAGE>21
Please note that amounts transferred from other AT&T and
Company plans
may be withdrawn before you reach age 591/2 subject to the
following rules:
1992 vested matching contributions, after-tax basic
contributions, and
related earnings transferred from the AT&T Long Term Savings
Plan for
Management Employees (AT&T LTSPME), AT&T Long Term Savings and
Security
Plan (AT&T LTSSP), and AT&T Retirement Savings and Profit
Sharing Plan
(AT&T RSPSP) may be withdrawn however, if these transferred
amounts are
withdrawn before January 1, 1995, you will be unable to
contribute to
the RSP (and receive matching contributions) for 12 months
after the
withdrawal, and
. 1993 vested matching contributions, after-tax basic
contributions, and
related earnings transferred from the AT&T LTSMPME, AT&T LTSSP,
and AT&T
RSPSP and all your after-tax basic contributions, vested
matching
contributions, and related earnings transferred from the AT&T
Global
Information Solutions Company Savings Plan (GIS Plan) may be
withdrawn however, if these transferred amounts are withdrawn
before
January 1, 1996, you will be unable to contribute to the RSP
(and
receive matching contributions) for 12 months after the
withdrawal.
Hardship Withdrawals (Your Before-Tax Contributions)
Because of the tax advantage of before-tax contributions,
the Internal
Revenue Service has strict regulations regarding withdrawals from
your
account. In general, if you are not yet age 591/2 you may make an
in-service withdrawal from your before-tax contributions only if
you have a
financial hardship that creates an immediate and heavy financial
need that
cannot be relieved by all other readily available financial
resources,
including other available withdrawals and loans from the RSP. You
also may
be able to make a hardship withdrawal of company contributions
and related
earnings transferred from the Eaton Financial Corporation 401(k)
Profit
Sharing Plan.
NOTE: As of September 1994, the Eaton Financial Corporation
401(k)
Profit Sharing Plan account balances have not been transferred,
but will be
transferred to the RSP as soon as administratively practical.
For all hardship withdrawals, the following applies:
The amount requested cannot be greater than the amount necessary
to meet
your financial hardship,
. You may not use the hardship withdrawal funds for any purpose
other than
the purpose for which you submitted the request, and
. You cannot contribute to the RSP (and receive matching
contributions)
for at least 12 months after the withdrawal.
. Reasons for financial hardships under the RSP are:
. To make a down payment and pay closing costs for the purchase
of your
principal residence,
. To make payments to avoid eviction from your principal
residence, or
foreclosure on the mortgage of your principal residence,
. Extensive home repairs or renovations related to fire, natural
disaster,
or other unforeseeable event,
. To pay heavy legal expenses,
. To purchase or repair the vehicle you or your spouse use to
commute to
and from work (your primary transportation vehicle) the
purchase or
<PAGE>
<PAGE>22
To pay for tuition and other related education expenses after
high school
for you or your dependents for the next 12 months,
. To pay unreimbursed medical expenses for you or your
dependents, or
. To pay funeral expenses for a dependent.
You will be required to supply proof of the hardship event
such as a
home purchase contract, foreclosure or eviction notice, doctor or
hospital
bills, or tuition bill, and provide documentation as to the
amount
necessary to satisfy the hardship. You must also sign a statement
attesting
that any other sources of funds, e.g., bank accounts, have been
reasonably
exhausted, and that the financial need cannot be relieved except
through
the exercise of a hardship withdrawal. In addition, you must have
taken all
available withdrawals and loans from the RSP in order to receive
a hardship
withdrawal.
The funds available for a hardship distribution are your
before-tax
contributions for all Plan Years and related earnings on
before-tax
contributions made to a prior plan before January 1, 1989.
Applying for an In-Service Withdrawal
If you want to apply for an in-service withdrawal, you must
submit the
appropriate forms which are available from your local Human
Resources
representative.
For a before-tax hardship withdrawal, your application will
be
reviewed by the local Human Resources representative and if
complete,
forwarded to the Corporate Benefit Office for approval. You will
be
informed in writing of the approval or denial by the Corporate
Benefit
Office.
PAYMENTS FROM THE RSP AFTER EMPLOYMENT ENDS
When you leave the Company, you are entitled to a
distribution from
your account (unless you transfer to an "affiliated" company).
You will
need to decide how and when you want to receive payment. If the
total
vested value of your account is equal to or less than $3,500, the
Company
may elect to pay your benefit immediately. If the total vested
value of
your account is more than $3,500:
You may begin payment of your account immediately, or
. You may defer payment of your account until you reach age
701/2.
While your account is deferred, it remains invested in the
funds you
select. In addition, you can transfer fund balances to other
investment
options under the RSP. See "Your Investment Decisions" on page 9.
For a discussion about the RSP benefit payable if you die
before
payments begin, please see page 24.
How to Request a Distribution
To receive benefits from the RSP when you leave, you must
submit the
<PAGE>
<PAGE>23
appropriate forms which are available from the Corporate Benefits
Office.
How Your Account Is Paid
Generally, all withdrawals and distributions from the RSP
will be made
in cash. However, you may choose to receive the value of your
account
invested in the AT&T Shares Fund in cash, or in full shares of
AT&T common
stock and cash for partial shares, or a combination of shares and
cash.
If the total vested value of your account is equal to or
less than
$3,500, you will be paid in a single lump sum. If the vested
value of your
account is greater than $3,500, you choose how the vested value
of your
account is paid.
Your Contributions, Matching Contributions, Rollover
Contributions, and
Their Earnings
You may choose to have your contributions, matching
contributions,
rollover contributions, and earnings on these amounts distributed
to you in
either:
A single lump sum,
. A direct rollover, where your before-tax contributions,
matching
contributions, rollover contributions, and related earnings are
paid
directly to your IRA or to another employer plan that accepts
your
rollover, or
. A self-directed annual withdrawal of any amount in your account
provided
you have completed at least 10 years of service when you leave
the
Company.
Uniform Points Contributions and Their Earnings
If you are not married on the date your benefits are to
begin, the
Company will use the vested value of your uniform points
contribution
account to buy a single life annuity for you. The annuity will
provide you
with monthly payments for as long as you live.
If you are married on the date your benefits are to begin,
the Company
will use the vested value of your uniform points contribution
account to
buy a joint and 50% survivor annuity for you. The annuity will
provide you
with monthly payments for as long as you live. If you die and are
survived
by a spouse, your spouse will receive a monthly benefit for the
remainder
of his or her life equal to 50% of the benefit you were receiving
at the
time of your death.
Throughout this booklet any reference to spouse refers only
to a
lawful spouse.
You may, however, elect to waive this form of payment.
Before you
receive your distribution, the Corporate Benefits Office will
provide a
detailed explanation of the life annuity or joint and survivor
annuity
option. You will be given the option of waiving the life annuity
or joint
and survivor annuity form of payment during the 90-day period
before the
annuity is to begin.
<PAGE>
<PAGE>24
If you are married, your spouse must consent in writing to the
waiver in
the presence of a notary or a plan representative. You may revoke
any prior
waiver.
The Corporate Benefits Office will provide you with forms to
make this
election. Since your spouse participates in this election, you
must
immediately inform the Corporate Benefits Office of any change in
your
marital status.
If you and your spouse elect not to take a joint and
survivor annuity,
or if you are not married when your benefits are scheduled to
begin and
have elected not to take a life annuity, you may elect an
alternative form
of payment. This payment may be made in one of the following
methods:
A single lump sum,
. A direct rollover, where before-tax contributions, matching
contributions, rollover contributions, and related earnings are
paid
directly to your IRA or to another employer plan that accepts
your
rollover, or
. A self-directed annual withdrawal of any amount in your account
if you
have at least 10 years of service when you leave the Company.
Amounts Transferred from Other Plans
In addition to the other forms of benefit available under
the RSP, the
following special provisions apply to amounts transferred from
certain
plans:
Annuities (account balances transferred from the AT&T Global
Information
Solutions Company Savings Plan or the Eaton Financial
Corporation 401(k)
Profit Sharing Plan) All or part of your transferred account
balance
will be paid as a joint and 50% survivor annuity, unless you
elect to
receive another form of benefit with your spouse's consent.
Other
annuity forms may also be available for your transferred
account
balance.
. Installments (account balances transferred from the AT&T Global
Information Solutions Company Savings Plan or the Encore
International,
Inc. Tax Deferred Savings Plan) You may be able to receive all
or part
of your transferred account balance in a self-directed annual
withdrawal
even if you have less than 10 years of service.
If you are eligible for the annuity or installment forms of
distribution, you will receive the information necessary to make
the
elections when you are ready to receive your distribution.
Forfeitures
If you leave the Company (unless you transfer to an
affiliated
company) before you are fully vested, you will be entitled to
receive
payment of the vested portion of uniform points contributions and
matching
contributions, and related earnings. However, you will forfeit
the
nonvested portion of these contributions and earnings.
If you return to work for the Company before you have five
consecutive
<PAGE>
<PAGE>25
one-year breaks in service (see page 14) and you repay the amount
of any
payment you received, the amounts that were forfeited will be
restored to
your account. If you do not repay the value of any payment that
was made to
you, or if you are rehired after you have five consecutive
one-year breaks
in service, the amount forfeited will not be restored.
Forfeited balances will be used first to restore account
balances of
rehired members who have met the conditions for restoring their
forfeited
balances and then to decrease future Company contributions.
DEATH BENEFITS BEFORE YOU BEGIN TO RECEIVE YOUR BENEFIT
Before-Tax Contributions, After-Tax Contributions, Matching
Contributions,
Rollover Contributions, and Amounts Transferred from Certain
Other Plans
When you enroll, you will be asked to name a beneficiary the
person or
persons who will receive the benefits from your account if you
die. Upon
your death, your beneficiary will be entitled to a distribution
of 100% of
your before-tax and after-tax contributions, matching
contributions,
rollover contributions, amounts transferred from the AT&T Long
Term Savings
Plan for Management Members, AT&T Long Term Savings and Security
Plan, AT&T
Retirement Savings and Profit Sharing Plan, or Encore
International, Inc.
Tax Deferred Savings Plan, and their related earnings. Your
beneficiary
will receive a lump sum distribution unless he or she elects any
other form
of benefit to which you would have been entitled if you had
terminated
employment before you died.
You may name anyone as your beneficiary. However, if you are
married
and name someone other than your spouse as your beneficiary, the
law
requires that your spouse consent to the designation showing his
or her
understanding that if you die he or she will receive no benefits.
If you have not designated a beneficiary and you are
married, your
spouse will be considered your beneficiary. If you are not
married, your
account will be paid to your estate if you have not designated a
beneficiary or if your beneficiary dies before you do.
Uniform Points Contributions and Amounts Transferred from Certain
Other
Plans
If you die while you are employed by the Company, you will
become 100%
vested in the uniform points contributions in your account and
their
earnings. If you die after you leave the Company, your vested
percentage in
these amounts will not be changed upon your death.
If you are not married when you first become a participant,
you will
be asked to name a beneficiary. If you have a vested interest in
the
uniform points contributions, amounts transferred from the AT&T
Global
Information Solutions Company Savings Plan or Eaton Financial
Corporation
401(k) Profit Sharing Plan, and their related earnings and die
before you
receive a distribution of these amounts, then your beneficiary
will be
entitled to distribution of 100% of these amounts. Your
beneficiary will
<PAGE>
<PAGE>26
receive a lump sum distribution unless he or she elects any other
form of
benefit (other than an annuity form of benefit) to which you
would have
been entitled if you had terminated employment before you died.
If you have
not designated a beneficiary or if your beneficiary dies before
you, then
your account will be paid to your estate.
If you are married, have a vested interest in the uniform
points
contributions, amounts transferred from the AT&T Global
Information
Solutions Company Savings Plan or Eaton Financial Corporation
401(k) Profit
Sharing Plan, and their related earnings allocated to your
account, and you
die before you receive a distribution of these amounts, then your
legal
spouse will be covered by a preretirement survivor annuity. The
amount of
the survivor annuity will be the actuarial equivalent of 100% of
the vested
portion of your account balance attributable to these
contributions and
earnings. Your spouse will be able to elect any other form of
benefit under
the RSP. Once you have reached age 35, you will be able, with
your spouse's
consent, to waive the preretirement survivor annuity and
designate another
form of benefit or beneficiary. Your local Human Resources
Representative
will provide you with forms to make this election. Since your
spouse
participates in this election, you must immediately inform the
local Human
Resources representative of any change in your marital status.
Changes In Beneficiaries
You may change beneficiaries at any time. To do so, you (and
your
spouse, when required) should complete the appropriate
beneficiary
designation form and return it to your local Human Resources
Representative.
TAX CONSIDERATIONS
The following discussion of tax considerations is intended
to provide
guidelines only. Tax laws are complex and subject to change.
Before you
make decisions about receiving money from your RSP account, you
should
consult a qualified tax expert.
Under current law, you do not pay federal income taxes on
your before-tax contributions. For most participants, this
advantage also applies to
state income taxes. You also don't pay any federal or state
income taxes on
matching contributions, uniform points contributions, or any
earnings as
long as they stay in the RSP. You will be required to pay federal
and state
income taxes on these amounts when they are withdrawn or
distributed.
You won't owe any taxes on your after-tax contributions when
they are
withdrawn or distributed since you already paid taxes on those
contributions when they were deposited in your account. However,
you will
owe taxes on earnings on your after-tax contributions when
withdrawn or
distributed.
Shares
If you receive AT&T shares in a distribution, the value of
what you
receive will not include any increase in value over the amount
paid for the
<PAGE>
<PAGE>27
shares by the RSP. The increase will be taxable to you as a
capital gain
when you sell the shares.
10% Excise Tax on Early Withdrawals
There may be a 10% excise (penalty) tax on the taxable
portion of an
in-service withdrawal or distribution if you receive the
withdrawal or
distribution before age 591/2. This 10% excise tax is in addition
to the
regular income tax you must pay on the taxable portion of the
withdrawal.
However, the excise tax does not apply if:
You are least age 591/2,
. You terminate employment after reaching age 55,
. You become disabled or die,
. You use the distribution for medical expenses that are
deductible on
your tax return, or
. The distribution is part of a qualified domestic relations
order (see
page 31).
20% Withholding
If you choose to have your RSP benefit paid to you, the Plan
Administrator is required to withhold 20% of the payment and send
it to the
IRS as income tax withholding to be credited against your taxes.
You can
avoid this 20% withholding if you choose a direct rollover that
is, having
your RSP benefits paid directly to your IRA or to another
employer plan
that accepts your rollover.
If you choose to have the RSP benefit paid to you, you can
still
decide, within 60 days after you receive payment, to rollover all
or a part
of it to an IRA or another employer plan that accepts rollovers.
You can
rollover up to 100% of the taxable portion of your distribution,
including
an amount equal to the 20% that was withheld. If you choose to
rollover
100%, you must find other money within the 60-day period to
contribute to
the IRA or the employer plan to replace the 20% that was
withheld. On the
other hand, if you rollover only the 80% that you received, you
will be
taxed on the 20% that was withheld.
NONTRANSFERABILITY OF BENEFITS
You or your beneficiary may not assign or transfer amounts
under the
RSP. Similarly, amounts credited to your account may not be used
to pay
your debts or obligations unless you first elect a withdrawal
from your
account. However, the RSP will comply with a court-issued
"qualified
domestic relations order" or a qualified tax levy.
If you become divorced or separated, certain court orders,
referred to
as a domestic relations order, could require that part of your
benefits be
paid to someone else your former spouse or children, for example.
AT&T
Capital Corporation has established guidelines for processing
domestic
relations orders. As soon as you are aware of any court
proceedings which
may affect your benefits, contact the Corporate Benefit Office.
<PAGE>
<PAGE>28
CONTACTING THE RECORDKEEPER
After you've enrolled in the RSP, you may want updates on
your
accounts, or want to make changes to your investment decisions.
You'll be
able to access your account virtually 24 hours a day, seven days
week including holidays.
Here's how the recordkeeper's voice response system (VRS)
works:
To reach the VRS line, dial:
. 1-800-228-401K
. To access the VRS system, you'll use the same Personal
Identification
Number (PIN) you received when you enrolled in the RSP.
. When you dial the VRS number, you'll be asked to enter your
5-digit PIN,
and your social security number.
. If you don't know your PIN, you'll need to speak to a
Participant
Service Representative (PSR); PSRs are available Monday through
Friday,
8:00 a.m. to 7:00 p.m., Eastern Standard Time.
. Once you're in the VRS system, you'll be able to:
Change before-tax and after-tax savings percentages,
Obtain current account balances, including totals by
investment,
Obtain current investment direction,
Change investment direction of future contributions,
Transfer existing assets among funds, and
Receive investment information and performance history.
At any time during your call, you'll be able to press "0" to
speak
with a PSR (providing you call during the hours listed above).
If your request is received before 3:00 PM Eastern Standard
Time, it
will be processed that day; if the request is received after 3:00
p.m.
Eastern Standard Time, it will be processed the next business
day.
If you have any questions on how to use the VRS or how to
contact a
service representative, please call your local Human Resources
representative.
CLAIM AND APPEAL PROCEDURES
Claim Procedures
Please see "Applying For An In-Service Withdrawal" on page
21 and "How
To Request A Distribution" on page 22 for information on filing a
claim for
benefits under the RSP. If a claim for benefits is denied,
either in whole
or in part, you or your dependents will receive written
notification from
the Administrative Committee.
If a claim for benefits is denied, either in whole or in
part, you or
your dependents will receive written notification from the
Corporate
Benefit Office. This written notification will include:
<PAGE>
<PAGE>29
The specific reason or reasons for the denial,
. Specific reference to pertinent RSP provisions on which the
denial was
based,
. A description of any additional material or information
necessary to
perfect the claim and an explanation of why the material or
information
is necessary, and
. Appropriate information about the steps to be taken if you,
your
dependent, or a person authorized to represent you or your
dependent
wishes to submit the claim for review.
The Corporate Benefit Office will respond to your claim
within 90 days
after it receives your claim submitted according to the
procedures
described in this section. This 90-day period may be extended up
to an
additional 90 days if the Corporate Benefit Office notifies you
before the
original 90-day period expires.
If a claim for benefits is denied, in whole or in part, or
if you or
your dependents believe that benefits under the RSP to which you
or your
dependents are entitled have not been provided, you, your
dependents or
authorized representative may appeal this denial or other action
by the
Corporate Benefit Office.
Appeal Procedures
Please note that the RSP requires that you pursue all your
claim and
appeal rights described in this section before you seek any other
legal
recourse regarding claims for benefits.
You must appeal in writing within 60 days after you receive
notification of the Corporate Benefit Office's decision or, if
you didn't
receive notification, within 60 days after the 90-day period has
lapsed.
Send your written request for review of any denied claim or other
disputed
matter directly to the Administrative Committee at the address
listed on
page 32. The person sending the request has the right to:
Review pertinent plan documents. You can obtain them by following
the
procedures described under "Plan Documents," page 33, and
. Send to the Administrative Committee a written statement of the
issues
and any other documents in support of the claim for benefits or
other
matter under review.
The Administrative Committee will provide a written response
to the
appeal within 60 days after it is received. The 60-day period may
be
extended up to an additional 60 days if the Administrative
Committee
notifies you before the original 60-day period expires. If the
Administrative Committee does not respond within 60 (or 120)
days, the
claimant may consider the claim denied.
The Administrative Committee serves as the final review
committee
under the RSP and has sole and complete discretionary authority
to
determine conclusively for all parties, and in accordance with
the terms of
the documents or instruments governing the RSP, any and all
questions
arising from administration of the RSP and interpretation of all
plan
provisions, determination of all questions relating to
participation of
<PAGE>
<PAGE>30
eligible members and eligibility for benefits, determination of
all
relevant facts, the amount and type of benefits payable to any
participant,
spouse or beneficiary, and construction of all terms of the RSP.
Notwithstanding the foregoing, AT&T Capital Corporation has
sole and
complete discretionary authority to determine questions relating
to
eligibility of participants for membership in the RSP and to
amend or
terminate the RSP at any time. Respective decisions by the
Administrative
Committee and AT&T Capital Corporation shall be conclusive and
binding on
all parties and not subject to further review. In any case, as a
participant or dependent of a participant in the RSP, you may
have further
rights under the Member Retirement Income Security Act of 1974,
as amended
(ERISA) (see page 31).
FAMILY AND MEDICAL LEAVE ACT OF 1993
The Family and Medical Leave Act of 1993 (FMLA) requires
covered
employers to provide up to 12 weeks of unpaid, job-protected
leave to
"eligible" members for certain family and medical reasons.
Members are
eligible if they have worked for the Company for at least 1 year
and for at
least 1,250 hours over the previous 12 months.
Under the FMLA, an eligible member may take an unpaid leave
for any of
the following reasons:
To care for the member's child after birth, or placement for
adoption or
foster care;
. To care for the member's spouse, child, or parent, who has a
serious
health condition, or
. For a serious health condition that makes the member unable to
perform
his or her job.
The member may be required to provide advance leave notice
and medical
certification. Taking of leave may be denied if requirements are
not met.
The member ordinarily must provide 30 days' advance notice when
the leave
is "foreseeable."
. The Company may require medical certification to support a
request for
leave because of a serious health condition, and may require
second or
third opinions (at the Company's expense) and a fitness for
duty report
to return to work.
. During the FMLA leave, the Company must maintain the member's
health
coverage for up to 12 weeks of leave (up to the amount normally
paid by
the Company, under the same terms and conditions as apply to
active
members who are not on a FMLA leave). Members must continue to
pay any
required member contributions in order to continue coverage.
. Upon return from FMLA leave, most members must be restored to
their
original or equivalent positions with equivalent pay, and other
terms
and conditions of employment.
. The use of FMLA leave cannot result in the loss of any
employment
benefit that accrued before the start of any member's leave.
<PAGE>
<PAGE>31
FMLA makes it unlawful for any employer to:
. Interfere with, restrain, or deny the exercise of any right
provided
under the FMLA, and
. Discharge or discriminate against any person for opposing any
practice
made unlawful by the FMLA or for involvement in any proceeding
under or
relating to the FMLA.
FMLA does not affect any federal or state law prohibiting
discrimination, or supersede any state or local law or collective
bargaining agreement which provides greater family or medical
leave rights.
RIGHTS OF A PLAN PARTICIPANT OR BENEFICIARY UNDER ERISA
As a participant in the AT&T Capital Corporation Retirement
and
Savings Plan, you have these rights and protections under ERISA:
You can examine, without charge, all plan documents, including
the
contracts with claims administrators and trustee, and the
copies of all
documents filed by the plan with the U.S. Department of Labor,
such as
detailed annual reports. You may examine these documents at the
Corporate Benefit Office. See the "Administrative Information"
section
for information about where you can examine these documents.
. You can obtain copies of all plan documents and other plan
information
upon written request to the Corporate Benefit Office. You will
be
charged a reasonable fee for copies of the documents requested
unless
federal law requires that they be furnished without charge. See
the
"Administrative Information" section to learn where to direct
correspondence.
. You can receive a summary of the RSP's annual financial report
a copy of
this summary annual report is furnished to each participant
once a year.
In addition to creating rights for plan participants, ERISA
imposes
duties upon the people who are responsible for the operation of
the member
benefit plans. These people, called fiduciaries of the plan, have
a duty to
operate the plans prudently and in the interest of plan
participants and
beneficiaries. No one, including your employer or any other
person, may
fire you or otherwise discriminate against you in any way to
prevent you
from obtaining a benefit or exercising your rights under ERISA.
If your claim for benefits is denied in whole or in part,
you will
receive a written explanation of the reason for
the denial. If you do not hear from the appropriate party within
the
designated time frame, your claim or appeal is considered denied.
You have
the right to have the appropriate party review and reconsider
your claim.
(See the "Claim and Appeal Procedures" section.)
Under ERISA, there are steps you can take to enforce the
above rights.
For instance, if you request materials from the plan and do not
receive
them within 30 days, you may file suit in a federal court. In
such cases,
the court may require the Company to provide the materials and
pay you up
to $100 a day until you receive the materials, unless the
materials were
not sent for reasons beyond the control of the Company. If you
have a claim
<PAGE>
<PAGE>32
for benefits that is denied or ignored, in whole or in part, you
may file
suit in a state or federal court.
If plan fiduciaries misuse the plan's money, or if you are
discriminated against for asserting your rights under ERISA, you
may seek
assistance from the U.S. Department of Labor, or you may file
suit in
federal court. The court will decide who will pay court costs and
legal
fees. If you are successful, the court may order the person you
have sued
to pay these costs and fees. If you lose, the court may order you
to pay
costs and fees, for example, if it finds your claim to be
frivolous.
For answers to questions about the RSP, contact the
Corporate Benefit
Office or the recordkeeper, as appropriate. See the
"Administrative
Information" section for information about whom to contact. If
you have any
questions about this statement of your rights, or about your
rights under
ERISA, contact the nearest area office of the Pension and Welfare
Benefits
Administration, U.S. Department of Labor.
ADMINISTRATIVE INFORMATION
Plan Name
The official plan name is the AT&T Capital Corporation
Retirement and
Savings Plan.
Recordkeeper
The recordkeeper is Merrill Lynch Group Member Services, 265
Davidson
Avenue, Somerset, New Jersey 08873.
800-228-401K
Trustee
The trustee is Merrill Lynch Trust Company, 300 Davidson
Avenue,
Somerset, New Jersey 08873.
Plan Administrator
The Plan Administrator for the AT&T Capital Corporation
Retirement and
Savings Plan is AT&T Capital Corporation. An Administrative
Committee
appointed by the Compensation Committee of AT&T Capital
Corporation's Board
of Directors administers the RSP on AT&T Capital Corporation's
behalf.
Administrative Committee
The Administrative Committee is located at AT&T Capital
Corporation,
44 Whippany Road, Morristown, New Jersey 07962. The current
members of the
Administrative Committee are the Corporate Resource Officer and
the General
Counsel of AT&T Capital Corporation.
<PAGE>
<PAGE>33
Legal Service
Direct process of legal service to AT&T Capital Corporation,
44
Whippany Road, Morristown, New Jersey 07962 (Attn: General
Counsel).
Corporate Benefit Office
AT&T Capital Corporation
Attn: Corporate Benefit Office
44 Whippany Road
Morristown, New Jersey 07962
201-397-3000
Type of Plan, Plan Records, and Plan Year
The AT&T Capital Corporation Retirement and Savings Plan is
considered
a pension plan and an individual account plan under the Member
Retirement
Income Security Act of 1974, as amended (ERISA). As an individual
account
plan, contributions to and benefits under the RSP are not
guaranteed by the
Pension Benefit Guaranty Corporation. The RSP and all records are
kept on a
calendar-year basis beginning January 1 and ending December 31.
Employer and Plan Identification Numbers
AT&T Capital Corporation and the RSP are identified by the
following
numbers under Internal Revenue Service rules:
Description Number
Employer Identification 22-3211453
Number (assigned by
the IRS)
Plan Identification 001
Number (assigned by
AT&T Capital Corporation)
Plan Documents
The information contained in this summary plan description
provides
only the highlights of the AT&T Capital Corporation Retirement
and Savings
Plan. It does not attempt to cover all details. RSP details are
contained
in the official plan documents. These documents legally govern
the
operation of the RSP.
You can review the plan documents, as well as the annual
report of the
RSP as filed with the federal government, at the Corporate
Benefit Office
during normal working hours. You must submit your request to
review
documents in writing and allow 10 days for your request to be
processed. If
you submit a written request to the Corporate Benefit Office, you
can
obtain copies of these documents within 30 days. You will be
charged a
reasonable fee for the copies unless federal law requires that
the
documents be furnished without charge.
Submit all requests in writing to the Corporate Benefit
Office.
<PAGE>
<PAGE>34
Payment of Benefits and Plan Funding
Your contributions, matching contributions, and uniform
points
contributions to the RSP go into a trust fund managed under the
terms of a
trust agreement by the RSP's trustee: Merrill Lynch. The Trustee
pays all
benefits under the RSP from the available funds in the trust.
Funds are
held in the trust exclusively for participants in the RSP and
their
beneficiaries.
Plan Expenses
Certain expenses incurred in administering the RSP are paid
from the
trust fund, including some recordkeeping fees, confirmation fees,
asset
transfer expenses, proxy fees, check processing fees, enrollment
and
communication expenses, and similar expenses. Expenses that
relate to a
particular participant's account such as loan application fees
are
allocated to that account. All other expenses are allocated among
the
accounts of all the participants If you have any questions about
the
allocation of these expenses, please contact the recordkeeper or
the
Corporate Benefits Office.
Plan Continuation
The Compensation Committee of the Board of Directors of AT&T
Capital
Corporation (or its delegate) reserves the right to amend,
suspend, or
terminate the RSP at any time. If the RSP is terminated, if there
is a
partial termination affecting you, or if the Company permanently
ceases
contributions to the RSP, you will immediately be 100% vested in
the value
of all uniform points contributions as of the date of
termination.
AT&T Capital Corporation does not guarantee the continuation of
any
benefits during employment, nor does it guarantee any specific
level of
benefits. Also, benefits are provided at AT&T Capital
Corporation's
discretion and do not create a contract of employment.
AT&T Capital Corporation
EXCESS BENEFIT PLAN
Purpose of the Excess Benefit Plan
The Internal Revenue Code imposes certain limits on the
amount of
contributions that may be made on your behalf to the AT&T Capital
Corporation Retirement and Savings Plan. The AT&T Capital
Corporation
Excess Benefit Plan is designed to allow you to save as much as
possible
for your retirement by allowing AT&T Capital Corporation and its
subsidiaries to credit contributions in excess of certain
Internal Revenue
Code limits to this plan on your behalf.
This summary refers to AT&T Capital Corporation and its
subsidiaries
collectively as the "Company."
The Excess Benefit Plan is considered an "unfunded" plan
under the
Member Retirement Income Security Act of 1974, as amended (see
"Payment of
Benefits and Plan Funding" on page 41). One advantage of the
"unfunded"
nature of the Excess Benefit Plan is that you will not have to
pay taxes on
<PAGE>
<PAGE>35
amounts credited to your account until those accounts are paid to
you.
Internal Revenue Code Limits
The Internal Revenue Code limits the amount of your
contributions,
matching contributions, and uniform points contributions that may
be made
to the Retirement and Savings Plan on your behalf. In general,
these
contributions may not exceed the lesser of $30,000 or 25% of your
taxable
pay in any calendar year.
Participation
If the total contributions for a year to the Retirement and
Savings
Plan would exceed the $30,000 or 25% of pay (pay still includes
only
compensation up to the 401(a)(17) limits this limit is $150,000
in 1994)
Internal Revenue Code limit, you will automatically become a
participant in
this Excess Benefit Plan. You won't have to do anything to
enroll.
The Corporate Benefit Office will notify you if you become a
participant.
CONTRIBUTIONS TO YOUR ACCOUNT
When you become a participant in the Excess Benefit Plan,
the Company
will establish an account on your behalf. No contributions to the
Retirement and Savings Plan will be made in excess of the $30,000
or 25% of
pay Internal Revenue Code limit. However, in any year in which
the total
contributions on your behalf would exceed either of these limits,
the
Company will credit to your account under this Excess Benefit
Plan uniform
points contributions and matching contributions in excess of the
Internal
Revenue Code ($30,000/25% of pay) limit. Pay still includes only
compensation up to the Internal Revenue Code limit of $150,000 in
1994. If
the Internal Revenue Code limit is still exceeded, then your
after-tax and
before-tax contributions in excess of the limit will be refunded
to you.
Example:
Let's assume the following:
Your pay is $25,000 before reduction for before-tax
contributions,
. You make the maximum before-tax contribution
. permitted under the Retirement and Savings Plan of 12% (i.e.,
$3,000),
. A matching contribution of 4% is allocated to your account
under the
Retirement and Savings Plan, and
. An uniform points contribution of 9% of pay before reduction
for before-tax contributions would be allocated to your account
under the
Retirement and Savings Plan if there were no Internal Revenue
Code
limits.
The total contributions under the Retirement and Savings Plan are
calculated as follows:
$25,000 x 9% (uniform points contribution) = $2,250
$25,000 x 12% (your before-tax contribution) = $3,000
$25,000 x 4% (matching contribution) = $1,000
$6,250
Even though these percentages (9% + 12% + 4%) add up to only 25%,
the
Internal Revenue Code limit would still affect you. This is
because in
computing the Internal Revenue Code limit, your before-tax
contributions to
<PAGE>
<PAGE>36
the Retirement and Savings Plan (and to the Company's flexible
benefits
program) are deducted from your pay first.
Therefore, in applying the limitation, your "pay" would be only:
$ 25,000
- 3,000 (before-tax contributions)
$ 22,000
The Internal Revenue Code limitation would then equal $5,500
($22,000 x
25%).
Because total contributions of $6,250 exceed the Internal Revenue
Code
limitation of $5,500, the excess amount ($750) cannot be
contributed to the
Retirement and Savings Plan.
However, $750 will be credited to your Excess Benefit Plan
account.
EARNINGS ON YOUR ACCOUNT
Excess Plan Investments
All amounts credited under the Excess Benefit Plan for an
eligible
active member will be credited to an account on the Company's or
recordkeeper's books.
The amounts in your account will be deemed to be periodically
invested and
reinvested in designated investment fund shares identified by
the
Company.
. Your account will be adjusted to reflect gains, losses, and
earnings as
though the amounts were in fact invested and reinvested in
investment
fund shares.
At present it is not clear whether allowing members to
direct their
own investments is practicable or may jeopardize the plan's
"unfunded"
status.
Consequently your investment directions will not be applied
to your
account at this time. The Administrative Committee will instead
credit your
account with interest at a rate no less than the rate of return
on
investments in the Merrill Lynch Government Fund, or a similar
investment
option.
VESTING
You vest in contributions and earnings credited to your
account in the
same manner as under the Retirement and Savings Plan. (See pages
12 through
14 for information about vesting.)
NONTRANSFERABILITY OF BENEFITS
You or your beneficiary may not assign or transfer amounts
under the
Excess Benefit Plan. Similarly, amounts credited to your account
may not be
used to pay your debts or obligations.
<PAGE>
<PAGE>37
PAYMENT OF YOUR EXCESS BENEFIT PLAN BENEFIT
The vested portion of your Excess Benefit Plan account will
be paid to
you in 60 monthly installments beginning as of the later of the
first day
of the month after:
You reach age 65, or
. You terminate employment with the Company (or any affiliate).
However, you may ask the Company to pay your account at any
time after
you terminate employment or in another form. The Company, in its
sole
discretion, may elect to:
Pay your benefit to you in any form available under the
Retirement and
Savings Plan that it considers appropriate, and
. Begin to pay your benefit as of the first day of any month
after
termination of your employment it you terminate before your
65th
birthday.
If you die before you have received your vested Excess
Benefit Plan
account, the vested balance will be paid in a lump sum to your
spouse or,
if not married, your beneficiary under the AT&T Capital
Corporation
Retirement and Savings Plan.
Forfeitures
If you leave the Company (unless you transfer to an
affiliated
company) before you are fully vested, you will forfeit the
nonvested
portion of your Excess Benefit Plan account when you have a
five-year break
in service.
CLAIM AND APPEAL PROCEDURES
Claim Procedures
If you are vested when you leave the Company, your Excess
Benefit Plan
benefit will be paid automatically upon termination of your
employment from
the Company or your 65th birthday. If you believe you are
eligible and you
don't receive an Excess Benefit Plan benefit, you have a right to
file a
written application for benefits.
If your claim for benefits is denied, either in whole or in
part, you
will receive written notification from the Corporate Benefit
Office. This
written notification will include:
The specific reason or reasons for the denial,
. Specific reference to pertinent Excess Benefit Plan provisions
on which
the denial was based,
. A description of any additional material or information
necessary to
perfect the claim and an explanation of why the material or
information
is necessary, and
. Appropriate information about the steps to be taken if you or a
person
authorized to represent you wishes to submit the claim for
review.
<PAGE>
<PAGE>38
after receiving your claim submitted according to the procedures
described
in this section. This 90-day period may be extended up to an
additional 90
days if the Corporate Benefit Office notifies you before the
original 90-day period expires.
If a claim for benefits is denied, in whole or in part, or
if you
believe that benefits under the Excess Benefit Plan to which you
are
entitled have not been provided, you or your authorized
representative may
appeal this denial or other action by the Corporate Benefit
Office.
Appeal Procedures
Please note that the Excess Benefit Plan requires that you
pursue all
your claim and appeal rights described in this section before you
seek any
other legal recourse regarding claims for benefits.
You must appeal in writing within 60 days after you receive
notification of the Corporate Benefit Office's decision or, if
you didn't
receive notification, within 60 days after the 90-day period has
lapsed.
Send your written request for review of any denied claim or other
disputed
matter directly to the Administrative Committee at the address
listed on
page 40. The person sending the request has the right to:
Review pertinent plan documents. You can obtain them by following
the
procedures described under "Plan Documents," page 41, and
. Send to the Administrative Committee a written statement of the
issues
and any other documents in support of the claim for benefits or
other
matter under review.
The Administrative Committee will provide a written response
to the
appeal within 60 days after it is received. The 60-day period may
be
extended up to an additional 60 days if the Administrative
Committee
notifies you before the original 60-day period expires. If the
Administrative Committee does not respond within 60 (or 120)
days, you may
consider the claim denied.
The Administrative Committee serves as the final review
committee
under the Excess Benefit Plan and has sole and complete
discretionary
authority to determine conclusively for all parties, and in
accordance with
the terms of the documents or instruments governing the Excess
Benefit
Plan, any and all questions arising from administration of the
Excess
Benefit Plan and interpretation of all plan provisions,
determination of
all questions relating to participation of eligible members and
eligibility
for benefits, determination of all relevant facts, the amount and
type of
benefits payable to any participant, and construction of all
terms of the
Excess Benefit Plan.
Notwithstanding the foregoing, AT&T Capital Corporation has
sole and
complete discretionary authority to determine questions relating
to
eligibility for participation in the Excess Benefit Plan and to
amend or
terminate the Excess Benefit Plan at any time. Respective
decisions by the
Administrative Committee and AT&T Capital Corporation shall be
conclusive
and binding on all parties and not subject to further review.
<PAGE>
<PAGE>39
ADMINISTRATIVE INFORMATION
Plan Name
The official plan name is the AT&T Capital Corporation
Excess Benefit
Plan.
Recordkeeper
The recordkeeper is Merrill Lynch Group Member Services, 265
Davidson
Avenue, Somerset, New Jersey 08873.
Trustee
The trustee is Merrill Lynch Trust Company, 300 Davidson
Avenue,
Somerset, New Jersey 08873.
Plan Administrator
The Plan Administrator for the AT&T Capital Corporation
Excess Benefit
Plan is AT&T Capital Corporation. An Administrative Committee
appointed by
the Compensation Committee of the Board of Directors of AT&T
Capital
Corporation administers the Excess Benefit Plan on AT&T Capital
Corporation's behalf.
Administrative Committee
The Administrative Committee is located at AT&T Capital
Corporation,
44 Whippany Road, Morristown, New Jersey 07962. Currently the
Administrative Committee members are the Corporate Resource
Officer and the
General Counsel of AT&T Capital Corporation.
Legal Service
Direct process of legal service to AT&T Capital Corporation,
44
Whippany Road, Morristown, New Jersey 07962 (Attn: General
Counsel).
Corporate Benefit Office
The Corporate Benefit Office
AT&T Capital Corporation
Attn: Corporate Benefit Office
44 Whippany Road
Morristown, NJ 07962
201-397-3000
Type of Plan, Plan Records, and Plan Year
The AT&T Capital Corporation Excess Benefit Plan is exempt
from most
of the requirements under the Member Retirement Income Security
Act of
1974, as amended ("ERISA"). It is a nonqual-ified pension plan
under the
Internal Revenue Code. Benefits under the Excess Benefit Plan are
not
guaranteed by the Pension Benefit Guarantee Corporation
The Excess Benefit Plan and all records are kept on a
calendar-year
basis beginning January 1 and ending December 31.
<PAGE>
<PAGE>40
Employer and Plan Identification Numbers
AT&T Capital Corporation and the Excess Benefit Plan are
identified by the
following numbers under Internal Revenue Service rules:
Description Number
Employer Identification 22-3211453
Number (assigned by the IRS)
Plan Identification Number 002
(assigned by AT&T Capital
Corporation)
Plan Documents
The information contained in this summary plan description
provides
only the highlights of the AT&T Capital Corporation Excess
Benefit Plan. It
does not attempt to cover all details. Excess Benefit Plan
details are
contained in the official plan documents. These documents legally
govern
the operation of the Excess Benefit Plan.
You can review the Excess Benefit Plan documents at the
Corporate
Benefit Office during normal working hours. You must submit your
request to
review in writing and allow 10 days for your request to be
processed. If
you submit a written request to the Corporate Benefits Office,
you can
obtain copies of these documents within 30 days. You will be
charged a
reasonable fee for the copies unless federal law requires that
the
documents be furnished without charge.
Submit all requests in writing to the Corporate Benefit
Office.
Payment of Benefits and Plan Funding
The Excess Benefit Plan is considered an "unfunded" deferred
compensation plan under ERISA and the Internal Revenue Code.
However, AT&T
Capital Corporation has established a trust to which it intends
to make
regular contributions to fund its obligations under the Excess
Benefit
Plan. Funds are held in the trust to pay benefits for Excess
Benefit Plan
participants. However, if the Company becomes insolvent, the
trust may be
used to pay benefits to the general creditors of the Company.
Excess
Benefit Plan benefits will be paid primarily from this trust. If
there are
insufficient assets in the trust, Excess Benefit Plan benefits
will then be
paid from the general assets of the Company.
Plan Continuation
The Compensation Committee of the Board of Directors of AT&T
Capital
Corporation (or its delegate) reserves the right to modify,
suspend,
change, or terminate the Excess Benefit Plan at any time. AT&T
Capital
Corporation does not guarantee the continuation of any benefits
during
employment, nor does it guarantee any specific level of benefits.
Also,
benefits are provided at AT&T Capital Corporation's discretion
and do not
create a contract of employment.
<PAGE>1
EXHIBIT 10(w)
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION 1995 MEMBER
ANNUAL INCENTIVE PLAN
February 23, 1995
SECTION 1: PURPOSE
The purpose of the Plan is to provide incentive payments for
certain
eligible employees of the Company and certain of its subsidiaries
and to:
i. support the Company's belief that its success is built
through
sharing ideas, people, and resources;
ii. build teamwork and collaboration;
iii. provide distinctions in rewards based on performance;
and
iv. reinforce the importance of the Company's performance.
SECTION 2: DEFINITIONS
The following terms, as used herein, will have the meaning
specified
below:
a. "Adjusted Target Pool" means a Target Pool adjusted
pursuant to
Section 3(b).
b. "Award" means a cash payment made pursuant to the Plan
(whether
or not deferred pursuant to any deferred compensation plan of the
Company).
c. "Board" means the Board of Directors of the Company.
d. "Cause" means (i) a conviction of a Participant of a
felony
(whether or not such conviction is subject to appeal), (ii) a
determination
by the Board or the Committee that the Participant has defrauded
the
Company or any of its subsidiaries, (iii) a determination by the
Board or
the Committee that a Participant has misappropriated any property
or
business of the Company or any of its subsidiaries with a value
in excess
of $100 or intentionally damaged any property or business of the
Company or
any of its subsidiaries, or (iv) a determination by the Board or
the
Committee that a Participant has engaged in willful and serious
misconduct.
e. "Change in Control" means any of the following:
i. an acquisition (other than in a Non-control
Transaction, as
defined in clause (iii) below) of any shares of capital stock or
other
securities of the Company generally entitled to vote in elections
for
directors ("Voting Securities") by a "Person" or "Group" (as such
terms are
used in Sections 13 and 14 of the Securities Exchange Act of
1934, as
amended (the "Exchange Act")), other than the Company, any
<PAGE>
<PAGE>2
subsidiary of the Company or any employee benefit plan (or a
trust forming
a part thereof) maintained by the Company or any subsidiary of
the Company,
as a result of which such person or group becomes the "Beneficial
Owner"
(as such term is used in Section 13 of the Exchange Act) of
Voting
Securities representing fifteen percent (15%) or more of the
combined
voting power of all Voting Securities then outstanding; provided
that no
such acquisition shall be deemed to give rise to a Change in
Control so
long as, after giving effect to such acquisition, AT&T Corp.
("AT&T")
remains the Beneficial Owner of Voting Securities representing a
greater
percentage of the combined voting power of all Voting Securities
then
outstanding than is represented by the Voting Securities
beneficially owned
by such Person or Group; provided, further, that an acquisition
of Voting
Securities directly from the Company or any subsidiary of the
Company shall
not be deemed to give rise to a Change in Control if, immediately
prior to
such acquisition, no Person or Group is directly or indirectly in
"Control"
of the Company (as such term is defined in Rule 405 under the
Securities
Act of 1933, as amended);
ii. the individuals who, as of the effective date of
the Plan,
are members of the Board (the "Incumbent Board"), cease for any
reason to
constitute at least two-thirds of the Board; provided, however,
that if the
election, or nomination for election by the Company's
stockholders, of any
new director was approved by a vote of at least two-thirds of the
Incumbent
Board, such new director shall, for the purposes of this
definition, be
considered a member of the Incumbent Board; provided, further,
however,
that no individual shall be considered a member of the Incumbent
Board if
such individual initially assumed office as a result of either an
actual or
threatened "Election Contest" (as described in Rule 14a-11 under
the
Exchange Act) or other actual or threatened solicitation of
proxies or
consents by or on behalf of any person or group other than the
Board (a
"Proxy Contest"), including by reason of any agreement intended
to avoid or
settle any Election Contest or Proxy Contest; or
iii. The approval by the requisite vote of the
Company's
stockholders of:
A. a merger, consolidation or reorganization
involving the
Company, unless (1) the stockholders of the Company, immediately
before
such merger, consolidation or reorganization, own, directly or
indirectly
immediately following such merger, consolidation or
reorganization, at
least sixty percent (60%) of the combined voting power of the
outstanding
voting securities of the corporation surviving such merger,
consolidation,
or reorganization (the "Surviving Corporation") in substantially
the same
proportion as their ownership of the Voting Securities of the
Company
immediately prior to such merger, consolidation or
reorganization, (2) the
individuals who were members of the Incumbent Board immediately
prior to
the execution of the agreement providing for such merger,
consolidation or
reorganization constitute at least two-thirds of the members of
the board
of directors of the Surviving Corporation and (3) no Person
(other than the
Company, any subsidiary of the Company, any employee benefit plan
(or any
trust forming a part thereof) maintained by the Company, the
Surviving
Corporation or any subsidiary thereof, or any Person who,
immediately prior
to such merger, consolidation or reorganization had beneficial
ownership of
fifteen percent (15%) or more of the then outstanding Voting
Securities of
the Company) has beneficial ownership of fifteen percent (15%) or
more of
<PAGE>
<PAGE>3
the combined voting power of the Surviving Corporation's then
outstanding
voting securities (a transaction meeting the criteria set forth
in the
foregoing clauses (1) through (3) being sometimes referred to
herein as a
"Non-control Transaction");
B. a complete liquidation or dissolution of the
Company; or
C. an agreement for the sale or other disposition
of all or
substantially all of the assets of the Company to any Person
(other than a
transfer to a subsidiary of the Company).
Notwithstanding the foregoing, a Change in Control
shall not
be deemed to have occurred solely because any Person or Group
becomes the
Beneficial Owner of more than the permitted amount of the
outstanding
Voting Securities of the Company as a result of an acquisition of
Voting
Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of
Voting
Securities owned by such Person or Group, provided that if (i) a
Change in
Control would have been deemed to have occurred but for the
operation of
this sentence as a result of such acquisition of Voting
Securities by the
Company and (ii) such Person or Group thereupon or thereafter
becomes the
Beneficial Owner of any additional Voting Securities resulting in
an
increase in the percentage of the then outstanding Voting
Securities
beneficially owned by such Person or Group (and which percentage
is in
excess of fifteen percent (15%)), then a Change in Control shall
be deemed
to have occurred at the time of such acquisition of beneficial
ownership of
such additional Voting Securities by such Person or Group.
f. "Committee" means the Compensation Committee of the
Board.
g. "Company" means AT&T Capital Corporation, a Delaware
corporation,
and its successors.
h. "Corporate Leadership Team" or "CLT" means the
Corporate
Leadership Team of the Company or any successor strategic
committee of the
Company.
i. "Corporate Support Leader" or "CSL" means the head,
regardless of
title, of the Corporate Resources, Finance and Risk Management
CSUs (other
than on a designated interim basis) or such other individuals or
positions
designated from time to time by the CLT.
j. "Corporate Support Unit" or "CSU" means a unit of the
Company
involved in supporting the Strategic Business Units as designated
by the
CLT from time to time.
k. "Disability" means "disability" within the meaning of
the
Company's long-term disability plan, as in effect at the time.
l. "IPO Date" means August 4, 1993.
m. "Member" means a non-probationary, active regular
full-time or
regular part-time employee of the Company or any subsidiary of
the Company.
<PAGE>
<PAGE>4
n. "Net Income" means the consolidated net after-tax
income of the
Company, after adjustment to omit the effects of any
extraordinary items
and the cumulative effects of changes in accounting principles as
shown in
the Company's audited consolidated statement of income.
o. "Participant" means a Member who satisfies the
eligibility
requirements in Section 3(a) and who has been selected by the CLT
to
participate in the Plan.
p. "Performance Criteria" means the criteria to measure
performance
for a Plan Year from among one or more of the following:
i. Net Income;
ii. Return to Equity;
iii. any other criteria related to Company performance,
CSU or
SBU performance, individual performance or any other category of
performance as designated by the CLT from time to time.
q. "Performance Goal" means the level of performance as
established
by the CLT with respect to a Performance Criterion.
r. "Plan" means the AT&T Capital Corporation 1995 Annual
Incentive
Plan.
s. "Plan Year" means the calendar year.
t. "Discretionary Fund" means the fund established
pursuant to
Section 3(f).
u. "Qualifying Termination" of the employment of a
Participant with
the Company and any of its subsidiaries in connection with a
Change in
Control means any of the following:
i. a termination of such employment by the Company
and such
subsidiaries within two (2) years after such Change in Control,
other than
a termination for Cause or in a case of Retirement, death, or
Disability;
ii. A termination of such employment by such
Participant within
two (2) years after a Change in Control for one or more of the
following
reasons:
A. The assignment to such Participant of any
duties
inconsistent, in a way significantly adverse to such Participant,
with such
Participant's positions, duties, responsibilities and status with
the
Company and such subsidiaries immediately prior to such Change in
Control,
or a significant reduction in the duties and responsibilities
held by such
Participant immediately prior to such Change in Control; a change
in such
Participant's reporting responsibilities, title or offices as in
effect
immediately prior to such Change in Control that is significantly
adverse
to the Participant; or any removal of such Participant from or
any failure
to re-elect such Participant to any position with the Company or
any such
subsidiary that such Participant held immediately prior to such
Change in
<PAGE>
<PAGE>5
Control except in connection with such Participant's promotion or
a
termination of employment for Cause or in a case of Retirement,
death, or
Disability; or
B. a reduction by the Company or such
subsidiaries in such
Participant's base annual salary as in effect immediately prior
to such
Change in Control; the failure by the Company and such
subsidiaries to
continue in effect any employee benefit plan or compensation plan
in which
such Participant was participating immediately prior to such
Change in
Control unless such Participant is permitted to participate in
other plans
providing substantially comparable benefits to such Participant;
or the
taking of any action by the Company or such subsidiaries that
would
adversely affect such Participant's participation in or
materially reduce
such Participant's benefits under any such plan; or
C. the Company or such subsidiaries requiring
such
Participant to be based anywhere other than such Participant's
present work
location or a location within twenty-five (25) miles from such
present
location; or the Company requiring such Participant to travel on
company
business to an extent substantially more burdensome than such
Participant's
travel obligations immediately prior to such Change in Control;
provided that, in the case of any such termination
of
employment by the Participant, such termination shall not be
deemed to be a
Qualifying Termination unless such termination occurs within
ninety (90)
days after the occurrence of the events constituting the reason
for such
termination; or
iii. a termination of such employment by the Company
and such
subsidiaries within one (1) year prior to a Change in Control,
other than a
termination for Cause or in a case of Retirement, death, or
Disability, if
the Participant can demonstrate that such termination (A) was at
the
request of a third party with which AT&T or its subsidiaries
(other than
the Company and the subsidiaries of the Company to the extent
that they are
not directly or indirectly controlled by AT&T at the time) had
entered into
negotiations or an agreement with regard to such Change in
Control or (B)
otherwise occurred in connection with, or in anticipation of,
such Change
in Control, provided that, in either such case, such Change in
Control
actually occurs.
v. "Retirement" means the voluntary retirement of a Member
pursuant
to a retirement plan of the Company or any subsidiary of the
Company.
o. "Return to Equity" means Net Income divided by the
average of the
Company's consolidated shareholder equity, as of the end of each
month in
the twelve-month period ending on December 31 of a Plan Year.
w. "Strategic Business Unit" or "SBU" means a strategic
business
unit of the Company as designated by the CLT from time to time.
x. "SBU Head" means the head, regardless of title, of an
SBU (other
than on a designated interim basis).
<PAGE>
<PAGE>6
y. "Target Award" means, with respect to a Participant for
any Plan
Year, the base salary earned by such Participant for such Plan
Year
multiplied by the percentage established for such Participant for
purposes
of calculating his Target Award, provided that such percentage
may not
exceed 43% without the Committee's approval.
z. "Target Pool" means a Target Pool established pursuant
to Section
3(b).
aa. "Unit Head Fund" means the fund established pursuant to
Section
3(g).
SECTION 3: AWARDS
a. Eligibility. All Members, other than Members who are
part of the
Corporate Leadership Team or who participate in an incentive plan
designated by the CLT as a substitute for this Plan, will be
eligible to
participate in the Plan. If the effective date of a Participant's
participation in the Plan is after January 1 but prior to October
1 of a
Plan Year, the Participant will be entitled to receive only that
portion of
the Award that he would have otherwise been entitled to receive
for such
Plan Year determined by multiplying the amount of such Award by a
fraction,
the numerator of which is the number of days of the Participant's
active
service during such Plan Year and the denominator of which is
365. No
Participant whose effective date of participation in the Plan is
after
September 30 of a Plan Year may receive an Award for such Plan
Year.
b. Target Pools and Adjusted Target Pools. Each Plan Year,
the CLT
will establish a Target Pool with respect to the CSUs and each
SBU. Each
such Target Pool will be adjusted by the CLT based on the extent
to which
applicable Performance Goals have been attained (an "Adjusted
Target
Pool"). Except to the extent paid from the Discretionary Fund or
the Unit
Head Fund, Awards paid to Members of a CSU or SBU may not, in the
aggregate, exceed the Adjusted Target Pool for the CSUs or
applicable SBU.
c. Performance Criteria and Performance Goals. Each Plan
Year,
Performance Criteria and Performance Goals will be established
by, or in
accordance with guidelines established by, the CLT. The CLT shall
also
determine the extent to which such Performance Criteria shall be
weighted
in determining Awards. Performance Criteria, Performance Goals
and
weightings may vary from Participant to Participant and SBU to
SBU, between
the CSUs and one or more SBUs and from Plan Year to Plan Year.
The CLT may
in its sole discretion, during or after any Plan Year, increase
or decrease
the amount of any Performance Goal and/or the weighting of any
Performance
Criteria for such Plan Year to reflect (i) extraordinary, unusual
or non-recurring items or events or (ii) material differences
between any
significant assumptions used by the CLT in establishing a
Performance Goal
and/or the weighting of a Performance Criteria and actual events
or
conditions experienced during such Plan Year.
d. Target Awards. Target Awards will be established for
each
Participant by, or in accordance with guidelines established by,
the CLT.
<PAGE>
<PAGE>7
Schedules will also be established by, or in accordance with
guidelines
established by, the CLT setting forth the percentage of the
Target Award
for each group of Participants payable at specified levels of
performance,
based on the Performance Goal for each Performance Criteria and
the
weighting established for such Performance Criteria.
e. Determination of Awards. Subject to Section 3(b), (i)
actual
Awards payable to Participants will be based upon the extent to
which
Performance Goals have been achieved, and (ii) all such
determinations
regarding the achievement of Performance Goals and the
calculation of
Awards will be made and/or approved by the CLT.
f. Discretionary Fund. A Discretionary Fund will be
established for
each Plan Year. Such fund will be in addition to, and will be
equal to ten
percent (10%) of, the aggregate of the Adjusted Target Pools for
such Plan
Year. Awards may be made from the Discretionary Fund in the sole
and
absolute discretion of the CLT. Such Awards may be made without
regard to
the extent to which any Performance Goals have been met.
g. Unit Head Fund. A Unit Head Fund will be established
with respect
to the CSUs and each SBU for each Plan Year. Such fund will be in
addition
to, and will be equal to ten percent (10%) of, the Adjusted
Target Pool
applicable to the CSUs or such SBU, as the case may be, for such
Plan Year.
Subject to any rules and guidelines established with respect
thereto,
Awards may be made from the Unit Head Fund in the sole and
absolute
discretion of the applicable CSL or SBU Head. Such Awards may be
made
without regard to whether any Performance Criteria have been met.
h. Payment of Awards. Awards will be paid in a lump sum
cash payment
as soon as practicable after the close of the Plan Year to which
such
Awards relate but in no event later than March 15 of the Plan
Year
immediately following such Plan Year.
i. If a Participant ceases to be employed by the
Company and
its subsidiaries prior to the Company's last regular business day
in any
Plan Year, including without limitation by reason of transferring
to AT&T
or a subsidiary thereof other than the Company and its
subsidiaries (if
such transfer takes place more than three (3) years after the IPO
Date),
then the Participant's participation in the Plan shall terminate
forthwith
and such Participant will not be eligible to receive an Award for
such Plan
Year.
ii. Notwithstanding clause (i) above, if prior to
December 31st
of any Plan Year (x) a Participant who has completed during such
Plan Year
at least three (3) months full-time or regular part-time active
service
ceases to be employed by the Company and any of its subsidiaries
by reason
of death, Disability or Retirement or (y) a Participant transfers
to an
employment position with the Company or a subsidiary of the
Company in
which he is no longer eligible to participate in the Plan or (z)
a
Participant transfers to AT&T or a subsidiary thereof other than
the
Company and its subsidiaries within three (3) years after the IPO
Date, the
Participant will receive that portion, and only that portion, of
the Award
that he would otherwise have been entitled to receive for such
Plan Year
determined by multiplying the amount of such Award by a fraction,
the
<PAGE>
<PAGE>8
numerator of which is the number of days of the Participant's
active
service during such Plan Year through the date of his termination
or
transfer and the denominator of which is 365. In the event a
Participant
ceases to be employed by the Company and its subsidiaries by
reason of
death, the CLT may elect to pay such a pro rata Award based on an
estimate
of performance for such Plan Year.
iii. In the event a Participant transfers from a CSU or
SBU to
another CSU or SBU during a Plan Year, the Participant's Award,
if any,
with respect to such Plan Year will be determined based on his
relative
participation in each such unit determined by the application of
fractions,
the numerators of which are the numbers of days of the
Participant's active
service in each such unit and the denominators of which are 365;
provided,
however, that such numerators will only include active service in
units
with respect to which the Participant was eligible to participate
in the
Plan.
i. Acceleration Upon Change in Control. In the event of a
Qualifying
Termination of the employment of any Member with the Company
prior to the
end of any Plan Year in connection with a Change in Control, such
Member
shall become irrevocably vested with the right to receive an
Award for such
Plan Year equal to the higher of (i) 110% of such Member's Target
Award for
such Plan Year and (ii) such Member's Award for the Plan Year
immediately
preceding such Change in Control. Similarly, in the event of such
a
Qualifying Termination between the end of any Plan Year and March
15 of the
immediately following Plan Year, such Member shall become
irrevocably
vested with the right to receive an Award with respect to such
Plan Year
equal to the highest of (i) the Award for such Plan Year, to the
extent
already determined, (ii) 110% of such Member's Target Award for
such Plan
Year, and (iii) such Member's Award for the Plan Year immediately
preceding
such Change in Control. The Company shall pay the Member such
amount no
later than March 15 of the Plan Year immediately following the
Plan Year to
which such Award relates.
SECTION 4: ADMINISTRATION
a. Authority. Except as otherwise provided in the Plan,
the Plan
will be administered by the CLT, who will have full and complete
authority,
in its sole and absolute discretion, (i) to exercise all of the
powers
granted to it under the Plan, (ii) to construe, interpret, and
implement
the Plan and any related document, (iii) to prescribe, amend, and
rescind
rules and guidelines relating to the Plan, (iv) to make all
determinations
necessary or advisable in administering the Plan, and (v) to
correct any
defect, supply any omission and reconcile any inconsistency in
the Plan.
b. Determinations. The actions and determinations of the
CLT, the
CSL or an SBU Head, as the case may be, will, within the scope of
their
respective authority on all matters relating to the Plan and any
Awards be
final and conclusive. Such determinations under the Plan need not
be
uniform and may be made by it selectively among persons who
receive, or who
are eligible to receive, Awards, whether or not such persons are
similarly
situated.
<PAGE>
<PAGE>9
c. Expenses. The Company will pay all costs and expenses
of
administering the Plan, including but not limited to the payment
of expert
fees.
d. Delegation. The CLT may delegate the authority to
execute and
deliver such instruments and documents, to do all such acts and
things, and
to take all such other steps deemed necessary, advisable or
convenient for
the effective administration of the Plan in accordance with its
terms and
purpose.
SECTION 5: MISCELLANEOUS
a. Award Confers No Right to Employment. No Member or
other person
shall have any right or claim to any Award under the Plan except
in
accordance with the provisions of the Plan. The Plan shall not be
construed
as creating any contract of employment or otherwise conferring
upon any
Member any legal right to continuation of employment, nor as
limiting or
qualifying the right of the Company and its subsidiaries to
discharge any
Member without regard to the effect that such discharge might
have upon
such Member's rights under the Plan.
b. Unfunded Plan. Nothing in this Plan shall be
interpreted as
requiring the Company or any subsidiary of the Company to fund or
otherwise
set aside or earmark any assets for the purposes of satisfying
any
obligations under this Plan. The Company's obligations hereunder
shall
constitute general unsecured obligations, payable out of the
Company's
general assets, and no Member shall have any right to any
specific assets
of the Company or any subsidiary of the Company.
c. Withholding Taxes. The Company will deduct any
withholding taxes
applicable to the payment of an Award hereunder (i) from the
amount to be
paid under such Award or (ii) from any other amount then or
thereafter
payable by the Company or any subsidiary of the Company to the
relevant
Member.
d. Successors. Awards granted hereunder shall be binding
upon any
successor or successors to the Company or any relevant subsidiary
of the
Company.
e. Non-Assignability of Rights. No interest, right or
claim in or to
any Award payable hereunder shall be assignable, transferable or
subject to
sale, mortgage, pledge, hypothecation, commutation, anticipation,
garnishment, attachment, execution, or levy of any kind, and the
Company
will not recognize any attempt to assign, transfer, sell,
mortgage, pledge,
hypothecate, commute or anticipate the same, except to the extent
required
by law.
f. Facility of Payments. In the event that the CLT or its
designee
determines that any Member to whom an Award is payable under the
Plan is
unable to care for his affairs because of illness or accident, or
otherwise, the CLT or its designee may direct that any payment
due shall be
paid to the duly appointed legal representative of such person,
or if there
<PAGE>
<PAGE>10
be no duly appointed legal representative, to the spouse, a
child, a parent
or other blood relative of the person, or to any person deemed by
the CLT
or its designees to have incurred expense for the benefit of such
person,
and any such payments so made shall be a complete discharge of
the
liabilities of the Company therefor.
g. Applicability of Employee Compensation Adjustment Plan.
The
rights of a Participant under any Award granted to such
Participant under
the Plan shall be subject to the provisions of the AT&T Capital
Corporation
Employee Compensation Adjustment Plan, as in effect from time to
time, to
the extent applicable to such Participant.
h. Governing Law. This Plan and the Awards granted
hereunder shall
be governed in accordance with the laws of the State of New
Jersey without
regard to the conflicts of law rules thereof.
i. Number and Gender. Where from the context it appears
appropriate,
each term used in this Plan in either the singular or plural
shall include
the singular and the plural, and pronouns stated in the
masculine, feminine
or neuter gender shall include the masculine, feminine, and
neuter.
j. Captions. Captions of this Plan are inserted for
convenience of
reference only, and the Plan is not to be construed by
interpretation
thereof.
k. Amendments. The Plan may be amended or terminated by
the Board or
the Committee in any respect except that (i) no amendment may be
made which
would adversely affect the rights of a Participant under an Award
granted
and outstanding prior to the date such amendment is adopted and
(ii)
following any Change in Control, no such amendment may be made
which would
adversely affect the rights of Participants in the event of a
Qualifying
Termination of their employment (including, without limitation,
the
definition of what constitutes a "Qualifying Termination").
l. Effective Date. The Plan shall be effective January 1,
1995.
<PAGE>1
EXHIBIT 10(y)
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION
EXECUTIVE BENEFIT PLAN
This is a summary of the benefits available to eligible
members under
the AT&T Capital Corporation Executive Benefit Plan. More
detailed
information is provided in the official plan documents. If there
is a
conflict between statements in this summary and the terms of the
plan
documents, the plan documents will control and govern the
operation of the
Executive Benefit Plan. AT&T Capital Corporation reserves the
right to
modify, suspend, change, or terminate the Executive Benefit Plan
at any
time. Questions about your benefits should be addressed to the
Corporate
Benefit Office. Because of the many detailed provisions of the
Executive
Benefit Plan, no one other than the Corporate Benefit Office is
authorized
to advise you about your benefits. AT&T Capital Corporation
cannot be bound
by statements made by unauthorized personnel.
PURPOSE
The AT&T Capital Corporation Executive Benefit Plan is
designed to
provide deferred compensation benefits to certain members of the
Corporate
Leadership Forum of AT&T Capital Corporation by:
Providing an additional source of income at retirement based
on a
percentage of your final pay if you meet certain requirements
upon
termination of your employment, and
Allowing you to defer receipt of up to 4% of your pay until
you
terminate employment.
[Chairman/CEO only]
In addition, this summary describes additional benefits that
AT&T
Capital Corporation will provide to replace your benefits under
AT&T's
Senior Management Plans and Programs.
[Continue for all participants]
This summary refers to AT&T Capital Corporation and its
subsidiaries
collectively as the "Company."
The Executive Benefit Plan is considered an "unfunded" plan
under the
Employee Retirement Income Security Act of 1974, as amended, (see
the
"Payment Of Benefits And Plan Funding" section). One advantage of
the
"unfunded" nature of the Executive Benefit Plan is that you will
not have
to pay taxes on amounts credited to your account until paid to
you.
<PAGE>
<PAGE>2
PARTICIPATION
You are a participant in the Executive Benefit Plan, if you
are:
An employee of the Company on or after January 1, 1994, who
is
eligible to participate in the AT&T Capital Corporation
Retirement and
Savings Plan, and
A member of AT&T Capital Corporation's Corporate Leadership
Team or
Strategic Business Leaders, as of January 1, 1994, or you are a
member of
the AT&T Capital Leadership Forum, and
Designated to be eligible by the Compensation Committee of
AT&T
Capital Corporation's Board of Directors.
EXECUTIVE RETIREMENT BENEFIT
ELIGIBILITY AND AMOUNT
[Chairman/CEO benefits]
You will be eligible to receive your executive retirement
benefit if
your employment with the Company terminated after you reach age
55. If you
are eligible, the amount of your annual executive retirement
benefit (less
any applicable reductions see below) will be a percentage of your
"final
pay" determined as follows:
Termination of Employment at Age: Percentage of Final Pay
55 35%
56 36%
57 37%
58 38%
59 39%
60 or later 40%
[CLT benefits]
If you became a member of the CLT before January 1, 1994,
you will be
eligible to receive your executive retirement benefit if your
employment
with the Company is terminated after completing 10 years of
service and
reaching age 58. If you are eligible, the amount of your annual
executive
retirement benefit (less any applicable reductions see below)
will be a
percentage of your "final pay" determined as follows:
Termination of Employment at Age: Percentage of Final Pay
58 38%
59 39%
60 or later 40%
If you became a member of the CLT after December 31, 1993,
you will be
eligible to receive your executive retirement benefit if you
terminate
employment with the Company after completing 15 years of service
and after
reaching age 58. If you are eligible, the amount of your annual
executive
<PAGE>
<PAGE>3
retirement benefit (less any applicable reductions see below)
will be a
percentage of your "final pay" determined as follows:
Termination of Employment at Age: Percentage of Final Pay
58 35%
59 36.5%
60 or later 38%
[SBU Head benefits]
You are eligible to receive your executive retirement
benefit if you
terminate employment with the Company after completing 20 years
of service
and reaching age 58. If you are eligible, your annual executive
retirement
benefit (less any applicable reductions see below) will be a
percentage of
your "final pay" determined as follows:
Termination of Employment at Age: Percentage of Final Pay
58 35%
59 36.5%
60 or later 38%
Under the Executive Benefit Plan, all your years and months
of service
include:
service with AT&T Capital Corporation;
service before January 1, 1994 with AT&T or and "affiliate"
of AT&T
will affiliated with AT&T; and
service with a subsidiary of AT&T Capital Corporation after
AT&T
Capital Corporation acquired at least 50% ownership of the
subsidiary.
Service with a subsidiary before AT&T Capital Corporation
acquired at
least 50% ownership of the subsidiary is not counted unless the
Compensation Committee (or its delegate) specifically resolves to
count
pre-acquisition service.
Two companies are "affiliated" if, under Internal Revenue
Service
rules, they are under common control - generally, they are at
least 80%
commonly owned.
[All participants]
Unless the Compensation Committee (or its delegate)
specifically
determines otherwise, you will be eligible for an executive
retirement
benefit only if you are a member of AT&T Capital Corporation's
Corporate
Leadership Forum when you leave the Company.
The amount of your executive retirement benefit will be
reduced by
amounts payable to you under:
The AT&T Capital Corporation Retirement and Savings Plan,
the AT&T
Capital Corporation Excess Benefit Plan, and the AT&T Capital
Corporation
Compensation Limit Excess Plan, to the extent attributable to
"uniform
points contributions" under those plans,
The AT&T Capital Corporation Supplemental Executive
Retirement Plan,
<PAGE>
<PAGE>4
The AT&T Management Pension Plan, and
Any other nonqualified pension plan sponsored by AT&T or the
Company
in which you participate or had participated.
Under the Executive Benefit Plan, "pay" means your cash
compensation
from the Company before reductions for taxes or before-tax
contributions to
any of the Company's employee benefit plans, including your base
salary,
any applicable commissions, short term bonuses, and awards and
payments
under the Company's Annual Incentive Plan (or any successor plan)
to the
extent includible in your taxable income. However, your "pay"
under the
Executive Benefit Plan does not include awards or payments under
the
Company's long term incentive award programs such as the AT&T
Capital
Corporation Share Performance Incentive Plan and Long Term
Incentive Plan.
"Final Pay" means your pay during the 12 calendar months
immediately
preceding the date you leave the Company, or if greater,
one-third of your
pay during the 36 calendar months immediately preceding the date
you leave
the Company.
PAYMENT OF EXECUTIVE RETIREMENT BENEFIT
Your executive retirement benefit will be paid in monthly
installments
beginning as of the first day of the month after you terminate
employment
with the Company. In general, your benefit will be paid in the
form of a:
Life annuity if you are not married, or
Joint and 45% survivor annuity with your spouse as your
contingent
annuitant if you are married.
However, the Company, in its sole discretion, may elect to
pay your
executive retirement benefit to you in any form available under
the
Retirement and Savings Plan that it considers appropriate.
If you are married and you die after you have become
eligible for, but
before you have begun to receive, your executive retirement
benefit, a
survivor annuity will be paid to your surviving spouse equal to
45% of the
benefit that would have been payable had you terminated
employment and
begun to receive your benefit.
SUPPLEMENTAL SAVINGS
The AT&T Capital Corporation Retirement and Savings Plan
allows
participants to contribute on a before-tax or after-tax basis up
to 12% of
pay. Under certain prior AT&T plans, participants were allowed to
contribute up to 16% of pay.
So that you may save as much as possible for your
retirement, the
Executive Benefit Plan allows you to have the Company deduct, on
a
before-tax basis, up to 4% of your pay from your paycheck and to
have the
deduction credited to an account established by the Company on
your behalf.
To defer up to 4% of your pay for any year, you must file a
written
<PAGE>
<PAGE>5
election with the Compensation Committee by December 31 of the
prior year.
For example, You must make your election to defer your 1994 pay
by December
31, 1993.
EARNINGS ON YOUR ACCOUNT
Your supplemental savings under the Executive Benefit Plan
will be
credited to an account on the Company's or recordkeeper's books.
The amounts in your account will be deemed to be
periodically invested
and reinvested in designated investment fund shares identified by
the
Company.
Your account will be adjusted to reflect gains, losses, and
earnings
as though the amount were in fact invested and reinvested in
investment
fund shares.
At present it is not clear whether allowing members to
direct their
own investments is practicable or may jeopardize the plan's
"unfunded"
status.
Consequently your investment directions will not be applied
to your
supplemental savings at this time. The Administrative Committee
will
instead credit your account with interest at a rate no less than
the rate
of return on investments in the Merrill Lynch Government Fund, or
a similar
investment option.
PAYMENT Of YOUR SUPPLEMENTAL SAVINGS
Your supplemental savings account will be paid to you in 60
monthly
installments beginning as of the later of the first day of the
month after:
You reach age 65, or
You terminate employment with the Company (or any
affiliate).
However, the Company, in its sole discretion, may elect to:
Pay your benefit to you in any form available under the
Retirement and
Savings Plan that it considers appropriate, and/or
Begin to pay your benefit as of the first day of any month
after
termination of your employment if you terminate before your 65th
birthday.
If you die before you have received your supplemental
savings account,
the balance will be paid in a lump sum to your spouse or, if not
married,
your beneficiary under the Retirement and Savings Plan.
OTHER BENEFITS [Chairman/CEO only]
In addition to the other benefits described in this summary,
AT&T
Capital Corporation will provide you with the following benefits
to which
<PAGE>
<PAGE>6
you were previously entitled under AT&T's Senior Management Plans
and
Programs:
AT&T intends to continue your coverage under, and AT&T
Capital
Corporation will pay AT&T for premiums associated with, the:
Senior Management Basic Life Insurance Program, and
Senior Management Individual Life Insurance Program
AT&T Capital Corporation also will create a program, through
insurance
or otherwise:
To duplicate the benefits you would have been entitled to
receive
under the AT&T Senior Management Long-Term Disability and
Survivor
Protection Plan ("SMLTDSPP"), except that you will be eligible
for the
"Minimum Retirement Benefit" under that plan if you terminate
employment on
or after your 60th birthday;
To duplicate the "Surviving Spouse Benefit" that would have
been
payable under the SMLTDSPP if you die before your 55th birthday;
To provide a benefit equal to the greater of (i) the
"Surviving Spouse
Benefit" that would have been payable under the SMLTDSPP or (ii)
the normal
survivor benefit payable under the Executive Benefit Plan, if you
die on or
after your 55th birthday; and
To duplicate the accident, sickness, pensioner death, and
other
post-retirement death benefits under the "Death Benefits"
provisions for
Senior
Managers in the AT&T Non-Qualified Pension Plan if you terminate
employment
on or after your 60th birthday or if you become disabled.
CLAIM AND APPEAL PROCEDURES
CLAIM PROCEDURES
If you are eligible, your Executive Benefit Plan benefit
will be paid
automatically upon termination of your employment from the
Company. If you
believe you are eligible and you don't receive a Executive
Benefit Plan
benefit, you have a right to file a written application for
benefits to the
Compensation Committee at the address listed in the
"Administrative
Information" section.
If your claim for benefits is denied, either in whole or in
part, you
will receive written notification from the Compensation
Committee. This
written notification will include:
The specific reason or reasons for the denial,
Specific reference to pertinent Executive Benefit Plan
provisions on
which the denial was based,
A description of any additional material or information
necessary to
<PAGE>
<PAGE>7
perfect the claim and an explanation of why the material or
information is
necessary, and
Appropriate information about the steps to be taken if you
or a person
authorized to represent you wishes to submit the claim for
review.
The Compensation Committee will respond to your claim within
90 days
after it receives your claim submitted according to the
procedures
described in this section. This 90-day period may be extended up
to an
additional 90 days if the Compensation Committee notifies you
before the
original 90-day period expires.
If a claim for benefits is denied, in whole or in part, or
if you
believe that benefits under the Executive Benefit Plan to which
you are
entitled have not been provided, you or your authorized
representative may
appeal this denial or other action by the Compensation Committee.
APPEAL PROCEDURES
You must appeal in writing within 60 days after you receive
notification of the Compensation Committee's decision or, if you
didn't
receive notification, within 60 days after the 90-day period has
lapsed.
Send your written request for review of any denied claim or other
disputed
matter directly to the Board of Directors at the Company's
address listed
in the "Administrative Information" section. The person sending
the request
has the right to:
Review pertinent plan documents. You can obtain them by
following the
procedures described under the "Plan Documents" section, and
Send to the Board of Directors a written statement of the
issues and
any other documents in support of the claim for benefits or other
matter
under review.
The Board of Directors will provide a written response to
the appeal
within 60 days after it is received. The 60-day period may be
extended up
to an additional 60 days if the Board of Directors notifies you
before the
original 60-day period expires. If the Board of Directors does
not respond
within 60 (or 120) days, you may consider the claim denied.
The Board of Directors serves as the final review committee
under the
Executive Benefit Plan and has sole and complete discretionary
authority to
determine conclusively for all parties, and in accordance with
the terms of
the documents or instruments governing the Executive Benefit
Plan, any and
all questions arising from administration of the Executive
Benefit Plan and
interpretation of all plan provisions, determination of all
questions
relating to participation of eligible members and eligibility for
benefits,
determination of all relevant facts, the amount and type of
benefits
payable to any participant, and construction of all terms of the
Executive
Benefit Plan.
Notwithstanding the foregoing, AT&T Capital Corporation has
sole and
complete discretionary authority to determine questions relating
to
<PAGE>
<PAGE>8
eligibility of participants for membership in the Executive
Benefit Plan
and to amend or terminate the Executive Benefit Plan at any time.
Respective decisions by the Compensation Committee and the Board
of
Directors shall be conclusive and binding on all parties and not
subject to
further review.
Please note that the Executive Benefit Plan requires that
you pursue
all your claim and appeal rights described in this section before
you seek
any other legal recourse regarding claims for benefits.
RIGHTS OF A PLAN PARTICIPANT OR BENEFICIARY UNDER ERISA
As a participant in the AT&T Capital Corporation Executive
Benefit
Plan, you have these rights and protections under ERISA:
You can examine, without charge, all plan documents and the
copies of
all documents filed by the plan with the U.S. Department of
Labor. You may
examine these documents at the Plan Administrator's office. See
the
"Administrative Information" section for information about where
you can
examine these documents.
You can obtain copies of all plan documents and other plan
information
upon written request to the Plan Administrator. You will be
charged a
reasonable fee for copies of the documents requested unless
federal law
requires that they be furnished without charge. See the
"Administrative
Information" section to learn where to direct correspondence.
No one, including your employer or any other person, may
fire you or
otherwise discriminate against you in any way to prevent you from
obtaining
a benefit or exercising your rights under ERISA.
If your claim for benefits is denied in whole or in part,
you will
receive a written explanation of the reason for the denial. If
you do not
hear from the appropriate party within the designated time frame,
your
claim or appeal is considered denied. You have the right to have
the
appropriate party review and reconsider your claim. (See the
"Claim and
Appeal Procedures" section.)
Under ERISA, there are steps you can take to enforce the
above rights.
For instance, if you request materials from the plan and do not
receive
them within 30 days, you may file suit in a federal court. In
such cases,
the court may require the Company to provide the materials and
pay you up
to $100 a day until you receive the materials, unless the
materials were
not sent for reasons beyond the control of the Company. If you
have a claim
for benefits that is denied or ignored, in whole or in part, you
may file
suit in a state or federal court.
If you are discriminated against for asserting your rights
under
ERISA, you may seek assistance from the U.S. Department of Labor,
or you
may file suit in federal court. The court will decide who will
pay court
costs and legal fees. If you are successful, the court may order
the person
you have sued to pay these costs and fees. If you lose, the court
may order
<PAGE>
<PAGE>9
you to pay costs and fees, for example, if it finds your claim to
be
frivolous.
For answers to questions about the Executive Benefit Plan,
contact the
Compensation Committee. See the "Administrative Information"
section for
information about whom to contact. If you have any questions
about this
statement of your rights, or about your rights under ERISA,
contact the
nearest area office of the Pension and Welfare Benefits
Administration,
U.S. Department of Labor.
ADMINISTRATIVE INFORMATION
PLAN NAME
The official plan name is the AT&T Capital Corporation
Executive
Benefit Plan.
PLAN ADMINISTRATOR
The Plan Administrator for the AT&T Capital Corporation
Executive
Benefit Plan is AT&T Capital Corporation. The Compensation
Committee of
AT&T Capital Corporation's Board of Directors administers the
Executive
Benefit Plan on AT&T Capital Corporation's behalf.
COMPENSATION COMMITTEE
The Compensation Committee may be contacted in writing at
AT&T Capital
Corporation, 44 Whippany Road, Morristown, New Jersey 07962.
LEGAL SERVICE
Direct process of legal service to AT&T Capital Corporation,
44
Whippany Road, Morristown, New Jersey 07962 (Attn: General
Counsel).
CORPORATE BENEFIT OFFICE
AT&T Capital Corporation
Attn: Corporate Benefit Office
44 Whippany Road
Morristown, New Jersey 07962
201-397-3256
PLAN RECORDS, PLAN YEAR, AND TYPE OF PLAN
The AT&T Capital Corporation Executive Benefit Plan is
considered a
"top hat plan" under ERISA, established for a select group of
management or
highly compensated members. The Executive Benefit Plan is a
nonqualified
pension plan under the Internal Revenue Code. Benefits under the
Executive
Benefit Plan are not guaranteed by the Pension Benefit Guarantee
Corporation.
The Executive Benefit Plan and all records are kept on a
calendar-year
basis--beginning January 1 and ending December 31.
<PAGE>
<PAGE>10
EMPLOYER AND PLAN IDENTIFICATION NUMBERS
AT&T Capital Corporation and the Executive Benefit Plan are
identified
by the following numbers under Internal Revenue Service rules:
Description Number
Employer Identification Number
(assigned by the IRS) 22-3211453
Plan Identification Number (assigned
by AT&T Capital Corporation) 005
PLAN DOCUMENTS
The information contained in this summary provides only the
highlights
of the AT&T Capital Corporation Executive Benefit Plan. It does
not attempt
to cover all the details in the official plan documents. These
documents
legally govern the operation of the Executive Benefit Plan.
You can review the plan documents at the Corporate Benefit
Office
during normal working hours. You must submit your request to
review in
writing and allow 10 days for your request to be processed. If
you submit a
written request to the Corporate Benefit Office, you can obtain
copies of
these documents within 30 days. You will be charged a reasonable
fee for
the copies unless federal law requires that the documents be
furnished
without charge.
Submit all requests in writing to the Corporate Benefit Office.
NONTRANSFERABILITY OF BENEFITS
You or your beneficiary may not assign or transfer amounts
under the
Executive Benefit Plan. Similarly, amounts credited to your
account may not
be used to pay your debts or obligations. However, the Executive
Benefit
Plan will comply with a qualified federal tax levy.
PAYMENT OF BENEFITS AND PLAN FUNDING
The Executive Benefit Plan is considered an "unfunded"
deferred
compensation plan under ERISA and the Internal Revenue Code.
However, AT&T
Capital Corporation may establish a trust to which it may make
contributions to fund its obligations under the Executive Benefit
Plan.
Funds are held in the trust to pay benefits for Executive Benefit
Plan
participants. However, if the Company becomes insolvent, the
trust may be
used to pay benefits to the general creditors of the Company.
Executive
Benefit Plan benefits will be paid primarily from this trust. If
there are
insufficient assets in the trust, Executive Benefit Plan benefits
will then
be paid from the general assets of the Company.
TRUSTEE
The trustee is Merrill Lynch Trust Company, 300 Davidson
Avenue,
Somerset, New Jersey 08873.
<PAGE>
<PAGE>11
PLAN CONTINUATION
The Compensation Committee of the Board of Directors of AT&T
Capital
Corporation (or its delegate) reserves the right to modify,
suspend,
change, or terminate the Executive Benefit Plan at any time. AT&T
Capital
Corporation does not guarantee the continuation of any benefits
during
employment, nor does it guarantee any specific level of benefits.
Also,
benefits are provided at AT&T Capital Corporation's discretion
and do not
create a contract of employment.
<PAGE>1
EXHIBIT 10(z)
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
This is a summary of the benefits available to eligible
members under
the AT&T Capital Corporation Supplemental Executive Retirement
Plan. More
detailed information is provided in the official plan documents.
If there
is a conflict between statements in this summary and the terms of
the plan
documents, the plan documents will control and govern the
operation of the
Supplemental Executive Retirement Plan. AT&T Capital Corporation
reserves
the right to modify, suspend, change, or terminate the
Supplemental
Executive Retirement Plan at any time. Questions about your
benefits
should be addressed to the Corporate Benefit Office. Because of
the many
detailed provisions of the Supplemental Executive Retirement
Plan, no one
other than the Corporate Benefit Office is authorized to advise
you about
your benefits. AT&T Capital Corporation cannot be bound by
statements made
by unauthorized personnel.
PURPOSE
The AT&T Capital Corporation Supplemental Executive
Retirement Plan
("SERP") is designed to provide supplemental retirement benefits
to certain
members of AT&T Capital Corporation and its subsidiaries. This
summary
refers to AT&T Capital Corporation and its subsidiaries
collectively as the
"Company."
The SERP is intended to ease the transition for eligible
members from
coverage under the AT&T Management Pension Plan, the AT&T Pension
Plan, or
the NCR Corporation Pension Plan to coverage under the AT&T
Capital
Corporation Retirement and Savings Plan.
PARTICIPATION
You are a participant in the SERP if you were a participant
in the
AT&T Management Pension Plan, the AT&T Pension Plan, or the NCR
Corporation
Pension Plan as of December 31, 1993, and
You were a member of the AT&T Capital Corporate Leadership
Forum on
December 31, 1993, or
On December 31, 1993, you were employed by the Company and
had at
least 10 years of AT&T and/or AT&T Capital Corporation or NCR
service or
you were within 10 years of service pension eligibility (under
the terms of
the AT&T Management Pension Plan as of December 31, 1993) (For
this
purpose, service with a company acquired by AT&T or AT&T Capital
Corporation is included.), and
- your total pay for 1993 was at least $115,200, or
- the average of your pay for the 36 months immediately
before
you terminate employment with the Company is at least twice the
Social
Security Wage Base in effect in the year you terminate.
<PAGE>
<PAGE>2
Under the SERP, "pay" means your cash compensation from the
Company
before reductions for taxes or before-tax contributions to any of
the
Company's employee benefit plans, including your base salary, any
applicable commissions, short term bonuses, and awards and
payments under
the Company's Annual Incentive Plan (or any successor plan) to
the extent
includible in your taxable income. However, your "pay" under the
SERP does
not include awards or payments under the Company's long term
incentive
award programs such as the Share Performance Incentive Plan and
the Long
Term Incentive Plan.
SERP BENEFITS
ELIGIBILITY
You will be eligible for a SERP benefit if, when you leave
the
Company:
You meet the eligibility requirements for a service pension
under the
AT&T Management Pension Plan under the terms of the AT&T
Management Pension
Plan as in effect in the year you leave the Company, assuming you
were
covered by the AT&T Management Pension Plan from the date of your
hire by
the Company (or by a company acquired by the Company), and
Your Company Benefit is less than the 95% of your Assumed
Retirement
Benefit at age 60.
COMPANY BENEFIT
Your Company Benefit is comprised of two pieces:
Your monthly benefit attributable to the uniform points
contributions
credited to your AT&T Capital Corporation Retirement and Savings
Plan and
AT&T Capital Corporation Excess Benefit Plan accounts as of the
date you
leave the Company, plus interest on those contributions credited
at the
annual yield rate on long-term U.S. government bonds, and
Your monthly benefit payable under the AT&T Management
Pension Plan,
the AT&T Pension Plan, and/or the NCR Corporation Pension Plan.
Interest credited on uniform points contributions in any
year is based
on the annual yield rate on long-term U.S. government bonds for
the prior
calendar year.
Your Company Benefit is calculated as the monthly benefit
payable
under the particular plan in the form of a single life annuity.
ASSUMED RETIREMENT BENEFIT
Your Assumed Retirement Benefit is equal to the monthly
benefit that
would have been payable in the form of a single life annuity
under the AT&T
Management Pension Plan, the AT&T Pension Plan, or the NCR
Corporation
Pension Plan, had you remained covered by the plan you were in as
of
December 31, 1993 until you terminated employment with the
Company except
<PAGE>
<PAGE>3
that your Assumed Retirement Benefit will disregard any special
enhancements to any such plan such as, for example, an early
retirement
window program or a "5 & 5" benefit.
AMOUNT OF SERP BENEFIT
Your monthly SERP benefit equals the difference between your
Company
Benefit payable for that month and 95% of your Assumed Retirement
Benefit,
multiplied by an actuarial equivalence factor. The actuarial
equivalence
factor reflects the commencement of benefits before age 60 and is
based on
an 8% interest rate and the Unisex (50/50) AT&T Retiree Mortality
Table.
EARLY RETIREMENT FACTORS
The following table illustrates the early retirement factors
under the
SERP:
Age at Early Retirement
Early Retirement Reduction Factor
50 0.3804
51 0.4172
52 0.4578
53 0.5029
54 0.5529
55 0.6085
56 0.6704
57 0.7394
58 0.8166
59 0.9030
60 1.0000
Your monthly SERP benefit takes into account the frozen AT&T
or NCR
pension that is actually payable when you leave employment. If
you leave
the Company before you are eligible to begin receiving your
benefit under
the AT&T Management Pension Plan, the AT&T Pension Plan, or the
NCR
Corporation Pension Plan, your Company Benefit will not include
your frozen
AT&T or NCR pension in calculating your initial SERP benefit.
When you
become eligible to begin receiving your AT&T or NCR pension, your
SERP
benefit will be reduced by the amount of your AT&T or NCR pension
payable
in the form of a single life annuity. Please look at the example
of
Employee C below to see how this works.
PAYMENT OF SERP BENEFIT
Your SERP benefit will begin as of the first day of the
month after
you terminate employment with the Company. In general, your SERP
benefit
will be paid each month for the rest of your life.
CLAIM AND APPEAL PROCEDURES
CLAIM PROCEDURES
If you are eligible, your SERP benefit will be paid
automatically upon
<PAGE>
<PAGE>4
termination of your employment from the Company. If you believe
you are
eligible and you don't receive a SERP benefit, you have a right
to file a
written application for benefits.
If your claim for benefits is denied, either in whole or in
part, you
will receive written notification from the Corporate Benefit
Office. This
written notification will include:
The specific reason or reasons for the denial,
Specific reference to pertinent SERP provisions on which the
denial
was based,
A description of any additional material or information
necessary to
perfect the claim and an explanation of why the material or
information is
necessary, and
Appropriate information about the steps to be taken if you
or a person
authorized to represent you wishes to submit the claim for
review.
The Corporate Benefit Office will respond to your claim
within 90 days
after it receives your claim submitted according to the
procedures
described in this section. This 90-day period may be extended up
to an
additional 90 days if the Corporate Benefit Office notifies you
before the
original 90-day period expires.
If a claim for benefits is denied, in whole or in part, or
if you
believe that benefits under the SERP to which you are entitled
have not
been provided, you or your authorized representative may appeal
this denial
or other action by the Corporate Benefit Office.
APPEAL PROCEDURES
You must appeal in writing within 60 days after you receive
notification of the Corporate Benefit Office's decision or, if
you didn't
receive notification, within 60 days after the 90-day period has
lapsed.
Send your written request for review of any denied claim or other
disputed
matter directly to the Administrative Committee at the Company's
address
listed in the "Administrative Information" section. The person
sending the
request has the right to:
Review pertinent plan documents. You can obtain them by
following the
procedures described under the "Plan Documents" section, and
Send to the Administrative Committee a written statement of
the issues
and any other documents in support of the claim for benefits or
other
matter under review.
The Administrative Committee will provide a written response
to the
appeal within 60 days after it is received. The 60-day period may
be
extended up to an additional 60 days if the Administrative
Committee
notifies you before the original 60-day period expires. If the
Administrative Committee does not respond within 60 (or 120)
days, you may
consider the claim denied.
<PAGE>
<PAGE>5
The Administrative Committee serves as the final review
committee
under the SERP and has sole and complete discretionary authority
to
determine conclusively for all parties, and in accordance with
the terms of
the documents or instruments governing the SERP, any and all
questions
arising from administration of the SERP and interpretation of all
plan
provisions, determination of all questions relating to
participation of
eligible members and eligibility for benefits, determination of
all
relevant facts, the amount and type of benefits payable to any
participant,
and construction of all terms of the SERP.
Notwithstanding the foregoing, AT&T Capital Corporation has
sole and
complete discretionary authority to determine questions relating
to
eligibility of participants for membership in the SERP and to
amend or
terminate the SERP at any time. Respective decisions by the
Administrative
Committee and AT&T Capital Corporation shall be conclusive and
binding on
all parties and not subject to further review.
Please note that the SERP requires that you pursue all your
claim and
appeal rights described in this section before you seek any other
legal
recourse regarding claims for benefits.
RIGHTS OF A PLAN PARTICIPANT OR BENEFICIARY UNDER ERISA
As a participant in the AT&T Capital Corporation
Supplemental
Executive Retirement Plan, you have these rights and protections
under
ERISA:
You can examine, without charge, all plan documents and the
copies of
all documents filed by the plan with the U.S. Department of
Labor. You may
examine these documents at the Corporate Benefit Office. See the
"Administrative Information" section for information about where
you can
examine these documents.
You can obtain copies of all plan documents and other plan
information
upon written request to the Corporate Benefit Office. You will be
charged a
reasonable fee for copies of the documents requested unless
federal law
requires that they be furnished without charge. See the
"Administrative
Information" section to learn where to direct correspondence.
No one, including your employer or any other person, may
fire you or
otherwise discriminate against you in any way to prevent you from
obtaining
a benefit or exercising your rights under ERISA.
If your claim for benefits is denied in whole or in part,
you will
receive a written explanation of the reason for the denial. If
you do not
hear from the appropriate party within the designated time frame,
your
claim or appeal is considered denied. You have the right to have
the
appropriate party review and reconsider your claim. (See the
"Claim and
Appeal Procedures" section.)
Under ERISA, there are steps you can take to enforce the
above rights.
For instance, if you request materials from the plan and do not
receive
them within 30 days, you may file suit in a federal court. In
such cases,
<PAGE>
<PAGE>6
the court may require the Company to provide the materials and
pay you up
to $100 a day until you receive the materials, unless the
materials were
not sent for reasons beyond the control of the Company. If you
have a claim
for benefits that is denied or ignored, in whole or in part, you
may file
suit in a state or federal court.
If you are discriminated against for asserting your rights
under
ERISA, you may seek assistance from the U.S. Department of Labor,
or you
may file suit in federal court. The court will decide who will
pay court
costs and legal fees. If you are successful, the court may order
the person
you have sued to pay these costs and fees. If you lose, the court
may order
you to pay costs and fees, for example, if it finds your claim to
be
frivolous.
For answers to questions about the SERP, contact the
Corporate Benefit
Office. See the "Administrative Information" section for
information about
whom to contact. If you have any questions about this statement
of your
rights, or about your rights under ERISA, contact the nearest
area office
of the Pension and Welfare Benefits Administration, U.S.
Department of
Labor.
ADMINISTRATIVE INFORMATION
PLAN NAME
The official plan name is the AT&T Capital Corporation
Supplemental
Executive Retirement Plan.
PLAN ADMINISTRATOR
The Plan Administrator for the AT&T Capital Corporation
Supplemental
Executive Retirement Plan is AT&T Capital Corporation. An
Administrative
Committee appointed by the Compensation Committee of AT&T Capital
Corporation's Board of Directors administers the SERP on AT&T
Capital
Corporation's behalf.
ADMINISTRATIVE COMMITTEE
The Administrative Committee is located at AT&T Capital
Corporation,
44 Whippany Road, Morristown, New Jersey 07962. The current
members of the
Administrative Committee are the Chief Financial Officer, the
General
Counsel, and the Corporate Resource Officer of AT&T Capital
Corporation.
LEGAL SERVICE
Direct process of legal service to AT&T Capital Corporation,
44
Whippany Road, Morristown, New Jersey 07962 (Attn: General
Counsel).
<PAGE>
<PAGE>7
CORPORATE BENEFIT OFFICE
AT&T Capital Corporation
Attn: Corporate Benefit Office
44 Whippany Road
Morristown, New Jersey 07962
201-397-3256
TYPE OF PLAN, PLAN RECORDS, AND PLAN YEAR
The AT&T Capital Corporation Supplemental Executive
Retirement Plan is
considered a "top hat plan" under ERISA, established for a select
group of
management or highly compensated members. The SERP is a
nonqualified
pension plan under the Internal Revenue Code. Benefits under the
SERP are
not guaranteed by the Pension Benefit Guarantee Corporation. The
SERP and
all records are kept on a calendar-year basis - beginning January
1 and
ending December 31.
EMPLOYER AND PLAN IDENTIFICATION NUMBERS
AT&T Capital Corporation and the SERP are identified by the
following
numbers under Internal Revenue Service rules:
Description Number
Employer Identification Number
(assigned by the IRS) 22-3211453
Plan Identification Number (assigned
by AT&T Capital Corporation) 004
PLAN DOCUMENTS
The information contained in this summary provides only the
highlights
of the AT&T Capital Corporation Supplemental Executive Retirement
Plan. It
does not attempt to cover all the details. SERP details are
contained in
the official plan documents. These documents legally govern the
operation
of the SERP.
You can review the plan documents at the Corporate Benefit
Office
during normal working hours. You must submit your request to
review
documents in writing and allow 10 days for your request to be
processed. If
you submit a written request to the Corporate Benefit Office, you
can
obtain copies of these documents within 30 days. You will be
charged a
reasonable fee for the copies unless federal law requires that
the
documents be furnished without charge.
Submit all requests in writing to the Corporate Benefit
Office.
NONTRANSFERABILITY OF BENEFITS
You or your beneficiary may not assign or transfer amounts
under the
SERP. Similarly, amounts credited to your account may not be used
to pay
your debts or obligations. However, the SERP will comply with a
qualified
federal tax levy.
<PAGE>
<PAGE>8
PAYMENT OF BENEFITS AND PLAN FUNDING
The SERP is considered an "unfunded" deferred compensation
plan under
ERISA and the Internal Revenue Code. However, AT&T Capital
Corporation may
establish a trust to which it may make contributions to fund its
obligations under the SERP. Funds are held in the trust to pay
benefits for
SERP participants. However, if the Company becomes insolvent, the
trust may
be used to pay benefits to the general creditors of the Company.
SERP
benefits will be paid primarily from this trust. If there are
insufficient
assets in the trust, SERP benefits will then be paid from the
general
assets of the Company.
TRUSTEE
The trustee is Merrill Lynch Trust Company, 300 Davidson
Avenue,
Somerset, New Jersey 08873.
PLAN CONTINUATION
The Compensation Committee of the Board of Directors of AT&T
Capital
Corporation (or its delegate) reserves the right to modify,
suspend,
change, or terminate the SERP at any time. AT&T Capital
Corporation does
not guarantee the continuation of any benefits during employment,
nor does
it guarantee any specific level of benefits. Also, benefits are
provided at
AT&T Capital Corporation's discretion and do not create a
contract of
employment.
<PAGE>1
EXHIBIT 10(aa)
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION
COMPENSATION LIMIT EXCESS PLAN
This is a summary of the benefits available to eligible
members under
the AT&T Capital Corporation Compensation Limit Excess Plan. More
detailed
information is provided in the official plan documents. If there
is a
conflict between statements in this summary and the terms of the
plan
documents, the plan documents will control and govern the
operation of the
Compensation Limit Excess Plan. AT&T Capital Corporation
reserves the
right to modify, suspend, change, or terminate the Compensation
Limit
Excess Plan at any time. Questions about your benefits should be
addressed
to the Corporate Benefit Office. Because of the many detailed
provisions of
the Compensation Limit Excess Plan, no one other than the
Corporate Benefit
Office is authorized to advise you about your benefits. AT&T
Capital
Corporation cannot be bound by statements made by unauthorized
personnel.
PURPOSE
AT&T Capital Corporation's retirement program is designed to
help
members build financial resources for the future. This is
accomplished
primarily through the AT&T Capital Corporation Retirement and
Savings Plan
(the "RSP"). However, the Internal Revenue Code requires that the
RSP
ignore any portion of a member's pay that exceeds $150,000 in a
year. This
compensation limit, which may be adjusted by the Internal Revenue
Service
from time to time, caps the amount a member may elect to
contribute to the
RSP and the amount of Company matching and uniform points
contributions
that may be made to the RSP.
To help members affected by the compensation limit attain
their
retirement goals, AT&T Capital Corporation adopted the AT&T
Capital
Corporation Compensation Limit Excess Plan (the "Plan") effective
January
1, 1995 for certain of its members and members of its
subsidiaries employed
on or after January 1, 1995.
Under the plan, "Compensation" means cash compensation from
the AT&T
Capital Corporation or its Subsidiaries (collectively, the
"Company") as
defined in the RSP; "Excess Compensation" means compensation in
excess of
the $150,000 Internal Revenue Code limit.
The plan provides for a uniform points allocation for
eligible members
on Excess Compensation received during the fiscal year beginning
on March 1
and ending on the last day of February in the current year.
The plan also allows eligible members to defer from 1% to 6%
of Excess
Ccompensation received during a calendar year on a before-tax
basis and to
receive a matching allocation from the Company with respect to
the deferred
Excess Compensation. The first year in which you may defer Excess
Compensation is 1995.
<PAGE>
<PAGE>2
ELIGIBILITY AND PARTICIPATION
Who is eligible
Uniform points allocations
You will automatically participate in the uniform points
portion of
this plan if during the year:
You are eligible to receive a uniform points contribution
under the
RSP, and you had excess compensation during the fiscal year
ending on
the last day of February in the current year.
You won't have to do anything to receive this benefit.
For example, if you earned $175,000 between March 1, 1993
and February
28, 1994, your uniform points contribution to the RSP was based
on $150,000
and the uniform points allocation under this Plan will be based
on your
Excess Compensation ($50,000) you received in that period.
Please note
that to receive a uniform points allocation for 1994 (that is,
with respect
to Excess Compensation earned between March 1, 1993 and February
28, 1994),
you must be employed by the Company on January 1, 1995. For 1995
and later
years, please see "Allocations Under the Plan-Uniform Points
Allocation"
below. For more information about the uniform points system,
please see
the summary plan description for the RSP.
Member before-tax deferrals and Company matching contributions
You are eligible to defer Excess Compensation under the Plan
and
receive an allocation of a Company match only if:
You are eligible to contribute to the RSP in the current
calendar
year, You have Excess Compensation in the current
calendar
year, and
You had Excess Compensation in the prior calendar year.
For example, to defer your 1995 Excess Compensation, your
1994
compensation must have exceeded $150,000.
To defer any of your Excess Compensation in a calendar year,
you must
file a written election with the Corporate Benefit Office of AT&T
Capital
Corporation. You may elect to defer your 1995 Excess Compensation
by filing
<PAGE>
<PAGE>3
your election by January 30, 1995. Your election will become
irrevocable on
January 30, 1995 and cannot be changed after that date. For 1996
and later
years, you must file your irrevocable election by the prior
December 31.
ALLOCATIONS UNDER THE PLAN
Uniform Points Allocations
Under the RSP, your allocation of the total uniform points
contribution equals the Company's total contribution multiplied
by a
fraction your points for the year divided by all participants'
points for
the year. Your account receives 1/12 of the total annual uniform
points
allocation each month, provided you are employed on the last day
of that
month. The Company generally expects that the allocation for
January March
of each year will be made at one time by April 30 and separate
allocations
for the months of April through December will be made quarterly
by the end
of the month following the quarter.
Under this plan, your uniform points allocation for a
calendar year
equals your uniform points percentage under the RSP multiplied by
your
Excess Compensation (i.e., compensation in excess of $150,000)
for the 12-months ending on the last day of February in that
year.
Your uniform points allocation for 1994 will be made as soon
as
practicable in 1995. For 1995 and later years, it is intended
that your
account will be credited under this Plan at the same time that
your account
under the RSP receives the uniform points allocations.
How Much Can I Defer Under the Plan?
The Plan allows you to save on a before-tax basis from 1% to
6% (in 1%
increments) of your Excess Ccompensation received during a
calendar year.
These before-tax savings are in addition to any of your
before-tax and
after-tax savings under the RSP.
How Much Does the Company Allocate in Matching Contributions?
For every dollar you defer under the Plan up to the first 6%
of your
Excess Compensation, the Company will allocate 66-2/3 cents to
your
account. The Company does not match contributions above 6% of
Excess
Compensation. Matching contributions are allocated monthly to
participant
accounts.
VESTING
The value of your before-tax deferrals is always 100%
vested.
If you were employed by the Company before January 1, 1994,
you are
immediately 100% vested in the matching contributions credited to
your
account and their earnings. If you were first employed by the
Company after
December 31, 1993, you will vest in the matching contributions
and their
earnings within a maximum of 11/2 years of service.
<PAGE>
<PAGE>4
You will vest in uniform points contributions and their
earnings
gradually over 5 years. You will vest 20% at the end of each year
of
"vesting service" you complete. At the end of five years you will
be 100%
vested. After completing five years of service, you will be 100%
vested in
all uniform points contributions and earnings that are credited
to your
account, including future contributions and earnings credited to
that
account.
The Company's rules for crediting service are described in
the summary
plan description for the RSP.
If you leave the Company (unless you transfer to an
affiliate (for
example, AT&T) of the Company) before becoming fully "vested" in
matching
and uniform points contributions you will receive payment of the
vested
portion of your Plan account. However, you will forfeit the
nonvested
portion.
EARNINGS ON YOUR ACCOUNT
Your savings and uniform points contributions under the
Compensation
Limit Excess Plan will be credited to an account on the Company's
or
recordkeeper's books.
The amounts in your account will be deemed to be
periodically invested
and reinvested in designated investment fund shares identified by
the
Company.
Your account will be adjusted to reflect gains, losses, and
earnings
as though the amount were in fact invested and reinvested in
investment
fund shares.
At present it is not clear whether allowing members to
direct their
own investments is practicable or may jeopardize the plan's
"unfunded"
status.
Consequently your investment directions will not be applied
to your
account at this time. The administrative committee will instead
credit your
account with interest at a rate no less than the rate of return
on
investments in the Merrill Lynch Government Fund, or a similar
investment
option.
The recordkeeper values each account in dollars on a daily
basis. You
can obtain information about your account by using the
recordkeeper's voice
response system or by calling a service representative of the
recordkeeper.
Instructions on how to use the voice response system and how to
contact a
service representative are available from the Corporate Benefit
Office of
AT&T Capital Corporation.
You will receive periodic personal statements showing the
value of
your accounts under the Plan.
<PAGE>
<PAGE>5
DISTRIBUTIONS FROM THE PLAN
The Plan does not permit loans from participant accounts and
the Plan
does not permit withdrawals before termination of employment.
PAYMENT OF PLAN ACCOUNTS
The vested portion of your Plan account will be paid in cash
to you in
60 monthly installments beginning as of the later of:
the first day of the month after your 65th birthday, or
the first day of the month after termination of your
employment with
the Company (or any affiliate).
However, AT&T Capital Corporation in its sole discretion may
elect to:
pay your benefit in any form available under the RSP that it
considers
appropriate, and/or
begin to pay your benefit as of first day of any month after
termination of your employment if you terminate employment before
age 65.
DEATH BENEFITS
If you die while employed by the Company, you will become
100% vested
in the matching and uniform points contributions allocated to
your account
and their earnings. If you die after leaving the Company, your
vested
percentage in these amounts will not be changed upon the death.
If you die before you have received your vested Plan
account, the
vested balance will be paid in a lump sum to your spouse or, if
you are not
married, to your beneficiary under the RSP.
CLAIM AND APPEAL PROCEDURES
CLAIM PROCEDURES
If you are eligible, your Compensation Limit Excess Plan
benefit will
be paid automatically upon termination of your employment from
the Company.
If you believe you are eligible and you don't receive a
Compensation Limit
Excess Plan benefit, you have a right to file a written
application for
benefits to the Corporate Benefit Office at the address listed in
the
"administrative information" section.
If your claim for benefits is denied, either in whole or in
part, you
will receive written notification from the Corporate Benefit
Office. This
written notification will include:
the specific reason or reasons for the denial,
<PAGE>
<PAGE>6
specific reference to pertinet Compensation Limit Excess
Plan
provisions on which the denial was based,
a description of any additional material or information
necessary to
perfect the claim and an explanation of why the material or
information is
necessary, and
appropriate information about the steps to be taken if you
or a person
authorized to represent you wishes to submit the claim for
review.
The Corporate Benefit Office will respond to your claim
within 90 days
after it receives your claim submitted according to the
procedures
described in this section. This 90-day period may be extended up
to an
additional 90 days if the Corporate Benefit Office notifies you
before the
original 90-day period expires.
If a claim for benefits is denied, in whole or in part, or
if you
believe that benefits under the Compensation Limit Excess Plan to
which you
are entitled have not been provided, you or your authorized
representative
may appeal this denial or other action by the Corporate Benefit
Office.
APPEAL PROCEDURES
You must appeal in writing within 60 days after you receive
notification of
the corporate benefit office's decision or, if you didn't receive
notification, within 60 days after the 90-day period has lapsed.
Send your
written request for review of any denied claim or other disputed
matter
directly to the administrative committee at the company's address
listed in
the "administrative information" section. The person sending the
request
has the right to:
review pertinent plan documents. You can obtain them by
following the
procedures described under the "plan documents" section, and
send to the administrative committee a written statement of
the issues
and any other documents in support of the claim for benefits or
other
matter under review.
The administrative committee will provide a written response
to the
appeal within 60 days after it is received. The 60-day period may
be
extended up to an additional 60 days if the administrative
committee
notifies you before the original 60-day period expires. If the
administrative committee does not respond within 60 (or 120)
days, you may
consider the claim denied.
The administrative committee serves as the final review
committee
under the Compensation Limit Excess Plan and has sole and
complete
discretionary authority to determine conclusively for all
parties, and in
accordance with the terms of the documents or instruments
governing the
Compensation Limit Excess Plan, any and all questions arising
from
administration of the Compensation Limit Excess Plan and
interpretation of
all Plan provisions, determination of all questions relating to
participation of eligible members and eligibility for benefits,
<PAGE>
<PAGE>7
determination of all relevant facts, the amount and type of
benefits
payable to any participant, and construction of all terms of the
Compensation Limit Excess Plan.
Notwithstanding the foregoing, AT&T Capital Ccorporation
shall have
sole and complete discretionary authority to determine questions
relating
to eligibility of participants for membership in the Compensation
Limit
Excess Plan and to amend or terminate the Compensation Limit
Excess Plan at
any time. Respective decisions by the administrative committee
and AT&T
Capital Corporation shall be conclusive and binding on all
parties and not
subject to further review.
Please note that the Compensation Limit Excess Plan requires
that you
pursue all your claim and appeal rights described in this section
before
you seek any other legal recourse regarding claims for benefits.
Rights of a Plan Participant or Beneficiary Under ERISA
As a participant in the AT&T Capital Corporation
Compensation Limit
Excess Plan, you have these rights and protections under erisa:
you can examine, without charge, all Plan documents and the
copies of
all documents filed by the Plan with the U.S. Department of
Labor. You may
examine these documents at the Plan Administrator's office. See
the
"Administrative Information" section for information about where
you can
examine these documents.
you can obtain copies of all Plan documents and other Plan
information
upon written request to the Plan Administrator. You will be
charged a
reasonable fee for copies of the documents requested unless
federal law
requires that they be furnished without charge. See the
"Administrative
Information" section to learn where to direct correspondence.No
one,
including your employer or any other person, may fire you or
otherwise
discriminate against you in any way to prevent you from obtaining
a benefit
or exercising your rights under ERISA.
If your claim for benefits is denied in whole or in part,
you will
receive a written explanation of the reason for the denial. If
you do not
hear from the appropriate party within the designated time frame,
your
claim or appeal is considered denied. You have the right to have
the
appropriate party review and reconsider your claim. (see the
"claim and
appeal procedures" section.) Under ERISA, there are steps you
can take to
enforce the above rights. For instance, if you request materials
from the
plan and do not receive them within 30 days, you may file suit in
a federal
court. In such cases, the court may require the Company to
provide the
materials and pay you up to $100 a day until you receive the
materials,
unless the materials were not sent for reasons beyond the control
of the
Company. If you have a claim for benefits that is denied or
ignored, in
whole or in part, you may file suit in a state or federal court.
If you are discriminated against for asserting your rights
under
ERISA, you may seek assistance from the U.S. Department of Labor,
or you
may file suit in federal court. The court will decide who will
pay court
costs and legal fees. If you are successful, the court may order
the person
<PAGE>
<PAGE>8
you have sued to pay these costs and fees. If you lose, the court
may order
you to pay costs and fees, for example, if it finds your claim to
be
frivolous.
For answers to questions about the Compensation Limit Excess
Plan,
contact the Corporate Benefit Office. See the "Administrative
Information"
section for information about whom to contact. If you have any
questions
about this statement of your rights, or about your rights under
ERISA,
contact the nearest area office of the Pension and Welfare
Benefits
Administration, U.S. Department of Labor.
ADMINISTRATIVE INFORMATION
Plan Name
The official plan name is the AT&T Capital Corporation
Compensation
Limit Excess Plan.
PLAN ADMINISTRATOR
The Plan Administrator for the Plan is AT&T Capital
Corporation. An
Administrative Committee appointed by the Compensation Committee
of AT&T
Capital Corporation administers the Plan on AT&T Capital
Corporation's
behalf.
ADMINISTRATIVE COMMITTEE
The Administrative Committee is located at AT&T Capital
Corporation,
44 Whippany Road, Morristown, New Jersey 07962. The current
members of the
Administrative Committee are the Chief Financial Officer, the
General
Counsel, and the Corporate Resource Officer of AT&T Capital
Corporation.
LEGAL SERVICE
Direct process of legal service to AT&T Capital Corporation,
44
Whippany Road, Morristown, New Jersey 07962 (attn: General
Counsel).
CORPORATE BENEFIT OFFICE
AT&T Capital COrporation
ATTN: Corporate Benefit Office
44 Whippany Road
Morristown, New Jersey 07962
201-397-3256
PLAN RECORDS, PLAN YEAR, AND TYPE OF PLAN
The AT&T Capital Corporation Compensation Limit Excess Plan
is
considered a "top hat plan" under ERISA, established for a select
group of
<PAGE>
<PAGE>9
management or highly compensated members. The Compensation Limit
Excess
Plan is a nonqualified pension plan under the Internal Revenue
Code.
Benefits under the Compensation Limit Excess Plan are not
guaranteed by the
Pension Benefit Guarantee Corporation.
The Compensation Limit Excess Plan and all records are kept
on a
calendar-year basis beginning January 1 and ending December 31.
NONTRANSFERABILITY OF BENEFITS
You or your beneficiary may not assign or transfer amounts
under the
Compensation Limit Excess Plan. Similarly, amounts credited to
your account
may not be used to pay your debts or obligations. However, the
Compensation
Limit Excess Plan will comply with a qualified federal tax levy.
EMPLOYER AND PLAN IDENTIFICATION NUMBERS
AT&T Capital Corporation and the Compensation Limit Excess
Plan are
identified by the following numbers under Internal Revenue
Service rules:
Description Number
Employer Identification Number
(assigned by the IRS) 22-3211453
Plan Identification Number
(assigned by AT&T Capital
Corporation) 006
PLAN DOCUMENTS
The information contained in this summary plan description
provides
only the highlights of the AT&T Capital Corporation Compensation
Limit
Excess Plan. It does not attempt to cover all details. Plan
details are
covered in the official plan documents. These documents legally
govern the
operation of the Compensation Limit Excess Plan.
You can review the Compensation Limit Excess Plan documents
at the
Corporate Benefit Office during normal working hours. You must
submit your
request to review in writing and allow 10 days for your request
to be
processed. If you submit a written request to the Corporate
Benefit Office,
you can obtain copies of these documents within 30 days. You will
be
charged a reasonable fee for the copies unless federal law
requires that
the documents be furnished without charge.
Submit all requests in writing to the Corporate Benefit Office.
PAYMENT OF BENEFITS AND PLAN FUNDING
The Compensation Limit Excess Plan is considered an
"unfunded"
deferred compensation plan under ERISA and the Internal Revenue
Code.
However, AT&T Capital Corporation has established a trust to
which it will
<PAGE>
<PAGE>10
make contributions to fund its obligations under the Compensation
Limit
Excess Plan. Funds are held in the trust to pay benefits for
Compensation
Limit Excess Plan participants. However, if the Company becomes
insolvent,
the trust may be used to pay benefits to the general creditors of
the
Company. Compensation Limit Excess Plan benefits will be paid
primarily
from this trust. If there are insufficient assets in the trust,
Compensation Limit Excess Plan benefits will then be paid from
the general
assets of the Company.
RECORDKEEPER
The recordkeeper for the Plan is Merrill Lynch Group
Employee
Services, 265 Davidson Avenue, Somerset, New Jersey 08873.
TRUSTEE
The trustee is Merrill Lynch Trust Company, 300 Davidson
Avenue,
Somerset, New Jersey 08873.
PLAN CONTINUATION
The Compensation Committee of the Board of Directors of AT&T
Capital
Corporation (or its delegate) reserves the right to modify,
suspend,
change, or terminate the Compensation Limit Excess Plan at any
time. AT&T
Capital Corporation does not guarantee the continuation of any
benefits
during employment, nor does it guarantee any specific level of
benefits.
Also, benefits are provided at AT&T Capital Corporation's
discretion and do
not create a contract of employment.
<PAGE>1
EXHIBIT 11
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands except per share data)
Year Ended December 31, 1994 1993 1992 1991
1990
___________________________________________________________________________
Income before cumulative
effect of accounting
change $100,336 $ 71,510 $ 73,572 $ 54,199
$ 47,755
Cumulative effect on
prior years of
accounting change - (2,914) - -
-
___________________________________________________________________________
Net income $100,336 $ 68,596 $ 73,572 $ 54,199
$ 47,755
===========================================================================
Primary
Average shares
outstanding* 46,876 42,969 40,250 40,250
40,250
Net effect of dilutive
stock options - based
on the treasury
method using average
market price 30 33 - -
-
___________________________________________________________________________
Total 46,906 43,002 40,250 40,250
40,250
===========================================================================
Per share amounts:
Income before cumulative
effect of accounting
change $ 2.14 $ 1.67 $ 1.83 $ 1.35
$ 1.19
Cumulative effect on
prior years of
accounting change - (.07) - -
-
___________________________________________________________________________
Net income $ 2.14 $ 1.60 $ 1.83 $ 1.35
$ 1.19
===========================================================================
<PAGE>
<PAGE>2
EXHIBIT 11
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Thousands except per share data)
(Continued)
Year Ended December 31, 1994 1993 1992 1991
1990
___________________________________________________________________________
Fully Diluted**
Average shares
outstanding* 46,876 42,969 40,250 40,250
40,250
Net effect of dilutive
stock options - based
on the treasury method
using the greater of
the average market
price or year end price 30 33 - -
-
___________________________________________________________________________
Total 46,906 43,002 40,250 40,250
40,250
===========================================================================
Per share amounts:
Income before cumulative
effect of accounting
change $ 2.14 $ 1.67 $ 1.83 $ 1.35
$ 1.19
Cumulative effect on
prior years of
accounting change - (.07) - -
-
___________________________________________________________________________
Net income $ 2.14 $ 1.60 $ 1.83 $ 1.35
$ 1.19
===========================================================================
* 1992, 1991 and 1990 shares are restated to give effect to a
402,500-for-one stock reclassification.
** This calculation is submitted in accordance with Regulation
S-K item 601
(b) 11 although not required by footnote 2 to paragraph 14 of APB
Opinion
No. 15 because it results in dilution of less than 3 %.
<PAGE>1
EXHIBIT 12
Form
10-K for 1994
File
No. 1-11237
AT&T CAPITAL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO
FIXED CHARGES
(Dollars in Thousands)
Year Ended December 31, 1994 1993 1992 1991
1990
___________________________________________________________________________
Earnings from continuing
operations:
Income before
income taxes
and extraordinary
loss $173,614 $138,040 $114,875 $ 82,559
$ 70,891
Deduct undistributed
earnings on equity
investments, net of
losses - - -
(14) -
Add fixed charges
included in income
before income taxes
and cumulative effect
of accounting change 277,913 242,100 258,312 279,926
269,035
___________________________________________________________________________
Total earnings from
continuing
operations, as
adjusted $451,527 $380,140 $373,187 $362,471
$339,926
___________________________________________________________________________
Total fixed charges* $277,913 $242,100 $258,312 $279,926
$269,597
Ratio of earnings
to fixed charges 1.62 1.57 1.44 1.29
1.26
___________________________________________________________________________
* Fixed charges include interest on indebtedness,
preferred stock
dividends and the portion of rentals representative of the
interest
factor.
<PAGE>1
EXHIBIT 21
Form
10-K for 1994
File
No. 1-11237
SUBSIDIARIES OF AT&T CAPITAL CORPORATION
As of December 31, 1994
State or
Other
Jurisdiction
of
Incorporation
Name of Subsidiary(*) or
Organization
___________________________________________________________________________
Arrendadora Capita Corporation S.A. de C.V. Mexico
AT&T Automotive Services, Inc. Delaware
AT&T Capital Canada, Inc. (1) Ontario,
Canada
AT&T Capital FSC, Inc. Virgin
Islands
AT&T Capital Limited England
Norfolk Finance Limited England
Keep Leasing Limited England
AT&T Commercial Finance Corporation (2) Delaware
ATMOR Properties Inc. (in trust) Delaware
AT&T Capital Leasing Services, Inc. (3)
Massachusetts
The Lease Factor, Inc.
Massachusetts
Eaton Express Corporation
Massachusetts
AT&T Capital Services Corporation Delaware
AT&T Systems Leasing Corporation Michigan
AT&T Credit Corporation Delaware
AT&T Credit International, Inc. Delaware
AT&T Credit Consumer Finance Corporation Delaware
AT&T Credit Corporation of Puerto Rico Delaware
NCR Credit Corp. Delaware
AT&T Small Business Lending Corporation Delaware
Capita International L.L.C. Delaware
Capita Resources, Inc. Delaware
Capital Syndication Corporation Delaware
The Capita Corporation Australia Limited(4) Australia
The Capita Corporation de Mexico, S.A. de C.V.(5) Mexico
The Capita Corporation Hong Kong Limited (6) Hong Kong
The Equipment Insurance Company Vermont
(*) All subsidiaries do business under their corporate names, and
the other
names indicated in the footnotes below.
(1) Hyster Credit Company
(2) Hyster Credit Company and JCB Finance Company
(3) Eaton Financial Company
(4) AT&T Capital Corporation and The Capita Corporation
(5) AT&T Capital de Mexico and The Capita Corporation
(6) AT&T Capital Corporation
<PAGE>1
Exhibit 23
Form 10-K for 1994
File No. 1-11237
CONSENT OF INDEPENDENT AUDITORS
_______________________________
We consent to the incorporation by reference in the registration
statements
of AT&T Capital Corporation and Subsidiaries on Forms S-3 (File
No. 33-54359) and S-8 (File Nos. 33-49877 and 33-54315) of our
reports dated
January 26, 1995, which include explanatory paragraphs that
describe the
Company's change in its method of accounting for income taxes in
1993, on
our audits of the consolidated financial statements and financial
statement
schedule of AT&T Capital Corporation and Subsidiaries as of
December 31,
1994 and 1993, and for the years ended December 31, 1994, 1993
and 1992,
which reports are included in this Annual Report on Form 10-K.
COOPERS & LYBRAND
L.L.P.
1301 Avenue of the Americas
New York, New York
March 15, 1995
<PAGE>1
EXHIBIT 24(a)
Form
10-K for 1994
File
No. 1-11237
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR. and EDWARD M. DWYER, and each of them, as
attorneys for him
and in his name, place and stead, and in each of his offices and
capacities
as a director, an officer, or both an officer and a director of
the
Company, to execute and file such annual report on Form 10-K, and
thereafter to execute and file any amendment or amendments
thereto on Form
8, hereby giving and granting to said attorneys full power and
authority to
do and perform each and every act and thing whatsoever requisite
and
necessary to be done in and about the premises, including the use
or
transmission of any personal identification numbers assigned to
the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 28th day of February, 1995.
Thomas C. Wajnert
Director, Chairman of the
Board
and Chief Executive
Officer
STATE OF NEW JERSEY )
) ss:
COUNTY OF MORRIS )
On the 28th day of February, 1995, personally appeared
before me,
Thomas C. Wajnert, to me known, and known to me to be the person
described
in and who executed the foregoing instrument and duly
acknowledged that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 28th day of February,
1995.
/S/ Ann E. McNee
___________________________
Notary Public of New Jersey
My commission expires July
7,1997
(Seal)
<PAGE>
<PAGE>2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR. and THOMAS C. WAJNERT, and each of them, as
attorneys for
his and in his name, place and stead, and in each of his offices
and
capacities as a director, an officer, or both an officer and a
director of
the Company, to execute and file such annual report on Form 10-K,
and
thereafter to execute and file any amendment or amendments
thereto on Form
8, hereby giving and granting to said attorneys full power and
authority to
do and perform each and every act and thing whatsoever requisite
and
necessary to be done in and about the premises, including the use
or
transmission of any personal identification numbers assigned to
the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 23rd day of February, 1995.
Edward M. Dwyer
Senior Vice President,
Chief Financial Officer
and Treasurer
STATE OF NEW JERSEY )
) ss:
COUNTY OF MORRIS )
On the 23rd day of February, 1995, personally appeared
before me,
Edward M. Dwyer to me known, and known to me to be the person
described in
and who executed the foregoing instrument and duly acknowledged
that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 23rd day of February,
1995.
/S/ Suzanne M. Queally
Notary Public of New Jersey
My commission expires June
23, 1998
(Seal)
<PAGE>3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
EDWARD M. DWYER and THOMAS C. WAJNERT, and each of them, as
attorneys for
him and in his name, place and stead, and in each of his offices
and
capacities as a director, an officer, or both an officer and a
director of
the Company, to execute and file such annual report on Form 10-K,
and
thereafter to execute and file any amendment or amendments
thereto on Form
8, hereby giving and granting to said attorneys full power and
authority to
do and perform each and every act and thing whatsoever requisite
and
necessary to be done in and about the premises, including the use
or
transmission of any personal identification numbers assigned to
the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 23rd day of February, 1995.
Ramon Oliu, Jr.
Vice President and
Controller
STATE OF NEW JERSEY )
) ss:
COUNTY OF MORRIS )
On the 23rd day of February, 1995, personally appeared
before me,
Ramon Oliu, Jr., to me known, and known to me to be the person
described in
and who executed the foregoing instrument and duly acknowledged
that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 23rd day of February,
1995.
/S/ Suzanne M. Queally
________________________________
Notary Public of New Jersey
My commission expires June
23, 1998
(Seal)
<PAGE>4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 22nd day of February, 1995.
John P. Clancey
Director
STATE OF NEW JERSEY )
) ss:
COUNTY OF SOMERSET )
On the 22nd day of February, 1995, personally appeared
before me,
John P. Clancey, to me known, and known to me to be the person
described in
and who executed the foregoing instrument and duly acknowledged
that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 22nd day of February,
1995.
/S/ Annette M. Franklin
____________________________________
Notary Public of New Jersey
My commission expires Jan.
30, 1997
(Seal)
<PAGE>5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 24th day of February, 1995.
James P. Kelly
Director
STATE OF GEORGIA )
) ss:
COUNTY OF FULTON )
On the 24th day of February, 1995 personally appeared before
me,
James P. Kelly, to me known, and known to me to be the person
described in
and who executed the foregoing instrument and duly acknowledged
that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 24th day of February,
1995.
/S/ Mawanna Mone
_______________________________________
Notary Public of Fulton
County, Georgia
My commission expires Feb. 8,
1997
(Seal)
<PAGE>6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 24th day of February, 1995.
Gerald M. Lowrie
Director
DISTRICT OF COLUMBIA )
) ss:
)
On the 24th day of February, 1995, personally appeared
before me,
Gerald M. Lowrie, to me known, and known to me to be the person
described
in and who executed the foregoing instrument and duly
acknowledged that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 24th day of February,
1995.
/S/ Linda L. Monga
Notary Public
My commission expires May 31,
1998
(Seal)
<PAGE>7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 22nd day of February, 1995.
Alex J. Mandl
Director
STATE OF NEW JERSEY )
) ss:
COUNTY OF MORRIS )
On the 22nd day of February, 1995, personally appeared
before me, Alex
J. Mandl, to me known, and known to me to be the person described
in and
who executed the foregoing instrument and duly acknowledged that
he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 22nd day of February,
1995.
/S/ Marie A. Corona
Notary Public of New
Jersey
My commission expires June
16, 1998
(Seal)
<PAGE>8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 23rd day of February, 1995.
Richard A. McGinn
Director
STATE OF NEW JERSEY )
) ss:
COUNTY OF MORRIS )
On the 23rd day of February, 1995, personally appeared
before me,
Richard A. McGinn, to me known, and known to me to be the person
described
in and who executed the foregoing instrument and duly
acknowledged that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 23rd day of February,
1995.
/S/ Ingrid E. Loubriel
Notary Public of New Jersey
My commission expires July
6, 1997
(Seal)
<PAGE>9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 23rd day of February, 1995.
Joseph J. Melone
Director
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On the 23rd day of February, 1995, personally appeared
before me,
Joseph J. Melone, to me known, and known to me to be the person
described
in and who executed the foregoing instrument and duly
acknowledged that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 23rd day of February,
1995.
/S/ Marie Peterson
Notary Public, State of New
York
My commission expires Nov.
19, 1996
(Seal)
<PAGE>10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 23rd day of February, 1995.
Richard W. Miller
Director
STATE OF NEW JERSEY )
) ss:
COUNTY OF SOMERSET )
On the 23rd day of February, 1995, personally appeared
before me,
Richard W. Miller, to me known, and known to me to be the person
described
in and who executed the foregoing instrument and duly
acknowledged that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 23rd day of February,
1995.
/S/ Marie A. Pope
Notary Public of New Jersey
My commission expires June
1998
(Seal)
<PAGE>11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 28th day of February, 1995.
S. Lawrence Prendergast
Director
STATE OF NEW JERSEY )
) ss:
COUNTY OF UNION )
On the 28th day of February, 1995, personally appeared
before me,
S. Lawrence Prendergast, to me known, and known to me to be the
person
described in and who executed the foregoing instrument and duly
acknowledged that he executed and delivered the same for the
purpose
therein expressed.
WITNESS my hand and official seal this 28th day of February,
1995.
/S/ Joanne Cutcliff
___________________________
Notary Public of New Jersey
My commission expires Feb.
16, 1999
(Seal)
<PAGE>12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, AT&T CAPITAL CORPORATION, a Delaware corporation
(hereinafter
referred to as the "Company"), proposes to file shortly with the
Securities
and Exchange Commission, under the provisions of the Securities
Act of
1934, as amended, an annual report on Form 10-K; and
WHEREAS, the undersigned is a director, an officer, or both
an officer
and a director of the Company, as indicated below, under his
name:
NOW, THEREFORE, the undersigned hereby constitutes and
appoints
RAMON OLIU, JR., EDWARD M. DWYER and THOMAS C. WAJNERT, and each
of them,
as attorneys for him and in his name, place and stead, and in
each of his
offices and capacities as a director, an officer, or both an
officer and a
director of the Company, to execute and file such annual report
on Form 10-K, and thereafter to execute and file any amendment or
amendments thereto
on Form 8, hereby giving and granting to said attorneys full
power and
authority to do and perform each and every act and thing
whatsoever
requisite and necessary to be done in and about the premises,
including the
use or transmission of any personal identification numbers
assigned to the
undersigned by the Securities and Exchange Commission, as fully,
for all
intents and purposes, as the undersigned might or could do if
personally
present at the doing thereof, hereby ratifying and confirming all
that said
attorneys may or shall lawfully do, or cause to be done, by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power
of
Attorney this 27th day of February, 1995.
Brooks Walker, Jr.
Director
STATE OF CALIFORNIA )
) ss:
COUNTY OF SAN FRANCISCO )
On the 27th day of February, 1995, personally appeared
before me,
Brooks Walker, Jr., to me known, and known to me to be the person
described
in and who executed the foregoing instrument and duly
acknowledged that he
executed and delivered the same for the purpose therein
expressed.
WITNESS my hand and official seal this 27th day of February,
1995.
/S/ Audrey S. Dodic
Notary Public - California
My commission expires Sept.
26, 1995
(Seal)
<PAGE>1
EXHIBIT 24(b)
Form
10-K for 1994
File
No. 1-11237
CERTIFICATE OF CORPORATE RESOLUTION
I, Robert J. Ingato, an Assistant Secretary of AT&T Capital
Corporation, hereby certify that the following resolutions were
duly
adopted by the Audit Committee of AT&T Capital Corporation's
Board of
Directors at a meeting held on March 1, 1995:
RESOLVED: that the Company's annual report on Form 10-K for
1994
substantially in the form presented to the Committee at this
meeting is
approved, with such changes as the Chief Financial Officer may
approve,
provided that any material changes will also be approved by the
General
Counsel and the Chief Executive Officer and that the Audit
Committee will
be advised of any material changes made in the financial
statements (or
related notes) in the Form 10-K; and
FURTHER RESOLVED: that the Chief Executive Officer, the
Chief
Financial Officer and the Controller are each severally
authorized to sign
the Form 10-K in the name and on behalf of the Company.
Robert J. Ingato
Dated: March 15, 1995 Robert J. Ingato
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information primarily extracted from
AT&T Capital Corporation's audited consolidated income statement and balance
sheet for and at the year ended December 31, 1994 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994<F3>
<CASH> 54,464
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> (176,428)
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> (567,398)<F2>
<TOTAL-ASSETS> 8,021,923
<CURRENT-LIABILITIES> 0
<BONDS> 3,379,581
<COMMON> 470
0
0
<OTHER-SE> 1,007,748
<TOTAL-LIABILITY-AND-EQUITY> 8,021,923
<SALES> 126,567
<TOTAL-REVENUES> 1,384,079
<CGS> 116,995
<TOTAL-COSTS> 430,578
<OTHER-EXPENSES> 427,187
<LOSS-PROVISION> 80,888
<INTEREST-EXPENSE> 271,812
<INCOME-PRETAX> 173,614
<INCOME-TAX> 73,278
<INCOME-CONTINUING> 100,336
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 100,336
<EPS-PRIMARY> 2.14
<EPS-DILUTED> 2.14
<FN>
<F1> This item is not applicable since the Company does not prepare a
classified balance sheet.
<F2> Accumulated depreciation relates to equipment under operating leases.
<F3> *In accordance with Regulation S-K item 601(c) 2, inapplicable or
immaterial financial data is reflected as zero value.
</FN>
</TABLE>
