<PAGE>
RULE NO. 424(b)(5)
REGISTRATION NOS. 333-3808
333-52011
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED APRIL 8, 1997)
$120,000,000
CYTEC INDUSTRIES INC.
LOGO
6.846% MANDATORY PAR PUT REMARKETED SECURITIES SM ("MOPPRS SM") DUE MAY 11, 2025
---------------
The annual interest rate on the 6.846% MandatOry Par Put Remarketed
Securities SM (the "MOPPRS SM") due May 11, 2025 of Cytec Industries Inc. (the
"Company") to May 11, 2005 (the "Remarketing Date") is 6.846%. THE MOPPRS ARE
SUBJECT TO MANDATORY TENDER ON THE REMARKETING DATE. If Merrill Lynch, Pierce,
Fenner & Smith Incorporated, as Remarketing Dealer (the "Remarketing Dealer"),
has elected to remarket the MOPPRS as described herein, the MOPPRS will be
subject to mandatory tender to the Remarketing Dealer at 100% of the principal
amount thereof for remarketing on the Remarketing Date, except in the limited
circumstances described herein. See "Description of the MOPPRS--Tender of the
MOPPRS; Remarketing." If the Remarketing Dealer for any reason does not
purchase all tendered MOPPRS on the Remarketing Date or elects not to remarket
the MOPPRS, or in certain other limited circumstances described herein, the
Company will be required to repurchase the MOPPRS from the beneficial owners
("Beneficial Owners") thereof at 100% of the principal amount thereof plus
accrued interest, if any. See "Description of the MOPPRS--Repurchase."
Interest on the MOPPRS is payable semiannually on May 11 and November 11 of
each year, commencing November 11, 1998. Except in the limited circumstances
described herein, the MOPPRS are not subject to redemption by the Company
prior to the Stated Maturity Date.
Ownership of the MOPPRS will be maintained in book-entry form by or through
The Depository Trust Company ("DTC"). Interests in the MOPPRS will be shown
on, and transfers thereof will be effected only through, records maintained by
DTC and its participants. Beneficial Owners of the MOPPRS will not have the
right to receive physical certificates evidencing their ownership except under
the limited circumstances described herein. Settlement for the MOPPRS will be
made in immediately available funds. The secondary market trading activity in
the MOPPRS will therefore settle in immediately available funds. All payments
of principal and interest on the MOPPRS will be made by the Company in
immediately available funds so long as the MOPPRS are maintained in book-entry
form. Beneficial interests in the MOPPRS may be acquired, or subsequently
transferred, only in denominations of $1,000 and integral multiples thereof.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR
THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------
The MOPPRS will be sold to the public at varying prices relating to
prevailing market prices at the time of resale to be determined by the
Underwriters at the time of each sale. Before deducting expenses payable by
the Company estimated at $200,000, the net proceeds to the Company will be
103.125% of the principal amount of the MOPPRS sold and the aggregate net
proceeds will be $123,750,000, plus accrued interest, if any, from May 11,
1998. For further information with respect to the plan of distribution, see
"Underwriting."
The MOPPRS are offered by the Underwriters, subject to prior sale, when, as
and if issued to and accepted by the Underwriters and subject to certain other
conditions. The Underwriters reserve the right to withdraw, cancel or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the MOPPRS will be made through the book-entry facilities of DTC
on or about May 11, 1998.
---------------
MERRILL LYNCH & CO.
SBC WARBURG DILLON READ INC.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
---------------
The date of this Prospectus Supplement is May 6, 1998.
- -------
"MandatOry Par Put Remarketed Securities SM" and "MOPPRS SM" are service marks
owned by Merrill Lynch & Co., Inc.
<PAGE>
THE UNDERWRITERS MAY ENGAGE IN TRANSACTIONS THAT MAINTAIN OR OTHERWISE
AFFECT THE PRICE OF THE MOPPRS. SUCH TRANSACTIONS MAY INCLUDE OVER-ALLOTMENT
TRANSACTIONS AND THE PURCHASE OF MOPPRS TO COVER THE UNDERWRITERS' SHORT
POSITIONS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
AVAILABLE INFORMATION
The Securities and Exchange Commission maintains a web site on the Internet
at http://www.sec.gov that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission including, with respect to the Company, the materials incorporated
by reference herein. See "Available Information" in the Prospectus.
S-2
<PAGE>
THE COMPANY
Unless indicated otherwise, the term "Company," with respect to periods
beginning on or after December 17, 1993, the effective date of the transfer of
substantially all of the assets and liabilities of the chemicals business of
American Cyanamid Company ("Cyanamid") to the Company (the "Spin-off"), refers
collectively to Cytec and its subsidiaries, and with respect to periods prior
to the Spin-off, the term refers to the chemicals business of Cyanamid.
Cyanamid was acquired by American Home Products Corporation in November 1994.
The Company is a vertically integrated industrial chemicals company which
focuses on value-added specialty products. The Company's products serve a
broad group of end users, including the aerospace, plastics, coatings, mining,
paper, water treatment and automotive industries. The Company's primary
strategic focus is on value-added specialty chemicals and specialty materials,
a significant portion of which utilize building block chemicals manufactured
by the Company.
The Company develops, manufactures and markets products in three general
product categories: specialty chemicals, specialty materials and building
block chemicals. Specialty chemicals include principally water treating, paper
and mining chemicals, coatings and resin products and polymer additives.
Specialty materials include principally aerospace materials. Building block
chemicals include principally acrylonitrile, acrylamide, melamine and
methanol. The Company has manufacturing facilities in eight countries and
sells its products worldwide. The Company's telephone number is (973) 357-
3100.
RECENT DEVELOPMENTS
On September 30, 1997, the Company acquired substantially all of the assets
and liabilities of Fiberite, Inc. (collectively with its parent, Fiberite
Holdings, Inc., "Fiberite"), a leading worldwide supplier of advanced
composite materials for aerospace, industrial and recreational applications,
for $344.0 million in cash (the "Fiberite Acquisition"). The assets acquired
include all of the businesses of Fiberite, except for its satellite materials
business. Annualized sales in 1997 for the acquired businesses were
approximately $267.4 million. The Fiberite Acquisition has been accounted for
under the purchase method of accounting and the results of operations have
been included in the Company's consolidated statement of income from October
1, 1997. The aggregate purchase price was financed primarily through $200.0
million of borrowings under the Company's 364-day credit facility with a two-
year term-out option (the "Fiberite Acquisition Facility") and borrowings
under the Company's $200.0 million revolving credit facility (the "Credit
Agreement" and collectively with the Fiberite Acquisition Facility, the
"Credit Facilities"). The Company issued $100.0 million aggregate principal
amount of 6.50% Notes due 2003 and $100.0 million aggregate principal amount
of Notes due 2008 in March 1998. The net proceeds from the sale of such
securities were used to repay approximately $198.0 million of indebtedness
outstanding under the Credit Facilities.
The Company's management regularly reviews the business portfolio of the
Company in terms of strategic fit and financial performance and may from time
to time dispose of products or product lines and/or acquire additional
products or technologies. On February 13, 1998, the Company confirmed that it
is in negotiations with Dyno Industrier ASA ("Dyno") to acquire Dyno's amino
coating resins business, consisting primarily of Dyno's 50% interest in Dyno-
Cytec, one of the Company's unconsolidated associated companies, for a
purchase price of approximately $60.0 million. On January 26, 1998, the
Company announced that it is exploring all strategic options to enhance the
value of its wholly owned subsidiary Conap, Inc. ("Conap"), including the
possible divestiture of Conap. No assurances can be given as to the results of
negotiations with Dyno or the assessment of strategic options for Conap.
On January 26, 1998, Darryl Fry, the Company's Chairman and Chief Executive
Officer informed the Board of Directors of his intention to retire as Chairman
of the Board at the age of 60 in January 1999 and to relinquish his Chief
Executive Officer responsibilities on May 11, 1998, at the time of the
Company's annual meeting of
S-3
<PAGE>
stockholders. Accordingly, the Board announced its intent to appoint David
Lilley to the additional position of Chief Executive Officer on May 11, 1998.
Mr. Lilley has been the President and Chief Operating Officer and a Director
of the Company since January 1997.
In connection with the Fiberite Acquisition and in contemplation of the
offering of certain debt securities, the Company entered into a series of rate
lock agreements (the "Rate Lock Agreements") with several banks commencing in
September 1997. The Company has made, or will make, payments aggregating
approximately $4.9 million to settle Rate Lock Agreements relating to the
MOPPRS offered hereby, which payments will be amortized or recognized over the
life of the MOPPRS as an increase in interest expense of the MOPPRS.
USE OF PROCEEDS
The net proceeds from the sale of the MOPPRS will be used (i) to repay
approximately $84.0 million of indebtedness outstanding under the Company's
Credit Agreement, (ii) to repay $20.0 million of indebtedness outstanding
under the Company's Fiberite Acquisition Facility and (iii) for general
corporate purposes. The indebtedness to be repaid currently bears interest at
a weighted average rate equal to one month LIBOR plus 22 basis points, or
5.88%. Substantially all of the indebtedness being refinanced was incurred in
September 1997 in connection with the Fiberite Acquisition. Repayments of
amounts outstanding under the Company's Credit Agreement will increase the
capacity available to the Company under such facility for general corporate
purposes, which may include, among other purposes, acquisitions, repurchases
of the Company's common stock and contributions to the Company's Voluntary
Employee Benefit Association trust accounts to prefund postretirement benefit
liabilities.
Amounts repaid under the Fiberite Acquisition Facility cannot be reborrowed
without the consent of the lenders under such facility. The Company
anticipates that it will arrange a new $200.0 million bank facility to be
available for general corporate purposes to replace the Fiberite Acquisition
Facility, although no assurances can be given as to whether or when such new
facility will be successfully arranged.
S-4
<PAGE>
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data as of and for the years
ended December 31, 1997, 1996 and 1995 have been derived from the Company's
audited consolidated financial statements, which are incorporated by reference
into this Prospectus Supplement.
The selected historical consolidated financial data as of and for the three-
month period ended March 31, 1997 have been derived from the Company's
unaudited consolidated financial statements, which are incorporated by
reference into this Prospectus Supplement. The selected historical
consolidated financial data as of and for the three-month period ended March
31, 1998 have been derived from the Company's unaudited balance sheet,
statement of operations and statement of cash flows as contained in the
Company's Current Report on Form 8-K dated April 16, 1998 which is
incorporated by reference into this Prospectus Supplement. The results of
operations for the three months ended March 31, 1998 are not necessarily
indicative of results to be expected for the full year.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------------------------- -------------------------
1997 1996 1995 1998 1997
------------ ------------ ------------ ------------ ------------
(IN MILLIONS, EXCEPT PER SHARE DATA, RATIOS AND PERCENTAGES)
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS:
Net sales................ $1,290.6 $1,259.6 $1,260.1 $ 368.2 $ 306.5
Gross profit............. 359.7(1) 361.5 347.9 109.8 71.5(2)
Selling and technical
services, administrative
and general expenses and
amortization of
acquisition intangibles. 195.8(3) 186.1 181.6 52.7 45.8
Research and process
development expenses.... 44.7(4) 40.2 44.2 10.9 10.3
Earnings from operations. 119.2 135.2 122.1 46.2 15.4
Equity in earnings of
associated companies.... 12.3 24.8 24.6 5.1 4.5
Net earnings............. 113.6(5) 100.1 282.2(6) 31.2 26.9(7)
Dividends on preferred
stock................... -- -- 10.7 -- --
Excess of repurchase
price over related book
value of Series A
Preferred Stock and
Series B Preferred
Stock................... -- -- 195.2(8) -- --
Net earnings available to
common stockholders..... 113.6 100.1 76.3 31.2 26.9
Net earnings per common
share
Basic................... $ 2.50 $ 2.13 $ 1.98 $ 0.69 $ 0.59
Diluted................. 2.39 2.03 1.50 0.66 0.56
Share base for earnings
per share
Basic................... 45.5 47.0 38.5 45.5 45.6
Diluted................. 47.6 49.3 54.5 47.4 47.7
BALANCE SHEET DATA (AT
PERIOD END):
Cash and cash
equivalents............. $ 6.4 $ 20.4 $ 12.0 $ 29.3 $ 29.4
Total assets............. 1,614.1 1,261.1 1,293.8 1,686.6 1,181.8
Long-term debt........... 324.0 89.0 66.0 343.4 7.0
Total stockholders'
equity.................. 387.4 314.4 342.9 414.7 332.8
OTHER DATA:
Operating margin......... 9.2%(9) 10.7% 9.7% 12.5% 5.0%(10)
Ratio of earnings to
fixed charges(11).......
Historical.............. 8.9 13.4 19.3 7.4 15.5
Pro Forma(12)........... 5.1 -- -- -- --
Capital additions........ $ 91.4 $ 72.5 $ 97.2 $ 24.7 $ 14.2
Depreciation and
amortization............ 78.8 89.0 89.9 22.4 19.6
</TABLE>
- --------
(1) Includes restructuring and other charges of $34.6 relating primarily to
manufacturing sites located in Fortier, Louisiana; Willow Island, West
Virginia; Botlek; The Netherlands; and Linden, New Jersey.
(2) Includes restructuring and other charges of $18.6 relating primarily to
manufacturing sites located in Botlek, The Netherlands and Linden, New
Jersey.
(footnotes continued on next page)
S-5
<PAGE>
(footnotes continued from previous page)
(3) Includes restructuring and other charges of $5.8 relating to sales force,
customer service and corporate headquarters restructuring, costs related
to the integration of Fiberite and costs for reorganizing the legal
entity structure in Europe.
(4) Includes restructuring and other charges of $2.0 related to the reduction
of corporate research and development overhead and the write-off of in-
process research and development acquired from Fiberite.
(5) Includes a pre-tax gain of $22.3 relating primarily to the divestiture of
the acrylic fibers product line in the first quarter of 1997, pre-tax
charges of $9.0 for reducing the carrying amount of Conap to net
realizable value and expected losses on certain other assets being held
for sale and a pre-tax charge of $1.0 for up-front costs to fund the
Fiberite Acquisition. Also includes a gain of $24.4 resulting from the
reversal of the remaining previously established tax valuation allowance.
(6) Includes $193.0 resulting from the reversal of a previously established
tax valuation allowance.
(7) Includes a pre-tax gain of $22.3 relating primarily to the divestiture of
the acrylic fibers product line.
(8) Represents a charge to retained earnings in the fourth quarter of 1995
for the excess of the repurchase price over the related book value upon
repurchase of the Series A Preferred Stock and Series B Preferred Stock.
(9) Includes the effect of restructuring and other charges of $42.4 described
in footnotes (1), (3) and (4) above of approximately (3.3%).
(10) Includes the effect of restructuring and other charges of $18.6 described
in footnote (2) above of approximately (6.1%).
(11) For purposes of computing the ratio of earnings to fixed charges (a)
earnings consist of earnings before income tax (benefit) expense plus the
Company's share of pre-tax equity in earnings of associated companies
plus fixed charges less capitalized interest and (b) fixed charges
consist of interest on long-term debt plus the portion of rentals deemed
representative of an interest factor plus the Company's share of such
charges of associated companies.
(12) The pro forma ratio of earnings to fixed charges gives effect to the
Company's increased interest expense pursuant to this Offering as well as
$200.0 principal amount of senior debt securities issued in March 1998 to
refinance indebtedness incurred in connection with the Fiberite
Acquisition as of the beginning of the period, but does not include any
effect of the Fiberite Acquisition prior to the time of the acquisition
on September 30, 1997. No pro forma ratio is presented for the three
months ended March 31, 1998 because the change in the ratio from the
historical ratio is less than 10%.
S-6
<PAGE>
SUMMARY PRO FORMA FINANCIAL DATA
The following unaudited pro forma information presents a summary of
consolidated results of operations of the Company and Fiberite as if the
Fiberite Acquisition had occurred on January 1, 1996. The unaudited pro forma
information set forth below should be read in conjunction with the historical
consolidated financial statements of the Company and the notes thereto and the
financial statements of Fiberite and the notes thereto, in each case as
included or incorporated herein by reference.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1997 1996
----------- -----------
(IN MILLIONS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Net sales.......................................... $ 1,491.1 $ 1,463.6
Net earnings available to common stockholders...... 111.5 85.2
Diluted net earnings per common share.............. 2.34 1.73
</TABLE>
These unaudited pro forma results have been prepared for comparative
purposes only and include adjustments related to depreciation expense,
amortization expense, interest expense and the related income tax effects of
these adjustments. The following table presents a summary of unaudited pro
forma adjustments, as noted above, relating to the Fiberite Acquisition and
their impact on unaudited pro forma net earnings and accompanying respective
earnings per share:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
----------------------
1997 1996
---------- ----------
(IN MILLIONS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Fiberite earnings (loss) before income taxes(1)... $ 2.9 $ (12.9)
Depreciation and adjustment to align with Cytec's
useful lives 5.0 5.6
Goodwill amortization, net of Fiberite historical. (2.6) (4.4)
Interest expense, net of Fiberite historical...... (8.7) (13.3)
---------- ----------
Pro forma impact on earnings before income taxes.. (3.4) (25.0)
---------- ----------
Pro forma impact on net earnings available to
common stockholders.............................. (2.1) (14.9)
Diluted net earnings per common share impact...... $ (0.05) $(0.30)
</TABLE>
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(1) Included in Fiberite's earnings before taxes for the year ended December
31, 1996, are charges for $9.9 related to stock compensation and for the
year ended December 31, 1997, $3.0 of expenses related to an initial
public offering and other transactions which were not completed.
The pro forma information presented above does not purport to be indicative
of the results of operations which actually would have resulted had the
Fiberite Acquisition occurred on January 1, 1996. In addition, the pro forma
information is not intended to be a projection of future results of operations
or financial position of the Company for any future period or as of any future
date and does not reflect synergies currently expected to result from the
integration of Fiberite and the Company.
S-7
<PAGE>
CAPITALIZATION
The following table sets forth the cash and cash equivalents and
consolidated capitalization of the Company as of March 31, 1998 and as
adjusted to give effect to the sale by the Company of the MOPPRS offered
hereby and the application of the estimated net proceeds therefrom as
described under "Use of Proceeds."
<TABLE>
<CAPTION>
AS OF MARCH 31,
1998
--------------------
ACTUAL AS ADJUSTED
------- -----------
(IN MILLIONS,
EXCEPT
SHARE AND PER SHARE
DATA)
<S> <C> <C>
Cash and cash equivalents................................. $ 29.3 $ 48.9
======= =======
Long-term debt
Credit Agreement borrowings............................. 84.0 --
Fiberite Acquisition Facility borrowings................ 60.0 40.0
6.50% Notes............................................. 99.9 99.9
6.75% Notes............................................. 99.5 99.5
6.846% MOPPRS........................................... -- 120.0
------- -------
Total long-term obligations........................... 343.4 359.4
------- -------
Put options(1)............................................ 10.1 10.1
Stockholders' Equity
Preferred stock, 20,000,000 shares authorized, issued
and outstanding, 4,000 shares, Series C, $.01 par
value, at liquidation value of $25 per share........... 0.1 0.1
Common stock, $.01 par value per share, 150,000,000
shares authorized, 48,144,447 issued in 1998........... 0.5 0.5
Additional paid-in capital(1)........................... 190.5 190.5
Retained earnings....................................... 362.6 362.6
Unearned compensation................................... (4.9) (4.9)
Accumulated translation adjustments..................... (7.2) (7.2)
Treasury stock, at cost, 2,797,570 shares............... (126.9) (126.9)
------- -------
Total stockholders' equity(1)......................... 414.7 414.7
------- -------
Total capitalization................................ $ 768.2 $ 784.2
======= =======
</TABLE>
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(1) Subsequent to March 31, 1998, the Company has (i) sold put options on an
aggregate of 200,000 shares of its common stock in exchange for proceeds
of approximately $0.5 million and (ii) put options on an aggregate of
100,000 shares of its common stock have expired unexercised. The put
options entitle the holders to sell shares of the Company's common stock
to the Company on certain dates at specified prices. If the proceeds from
the additional 200,000 options and the maximum potential repurchase
obligations of the currently outstanding put options on an aggregate of
300,000 shares were reflected in the table above, cash would be increased
by $0.5 million, put options would be increased by $5.8 million and
additional paid-in capital and total stockholders' equity would each be
reduced by $5.3 million. Also subsequent to March 31, 1998 and consistent
with the Company's ongoing share repurchase program announced in February
1997, the Company has repurchased approximately 30,000 shares of its
common stock for a total market price of approximately $1.7 million.
S-8
<PAGE>
DESCRIPTION OF THE MOPPRS
GENERAL
The MOPPRS are to be issued as a series of Debt Securities under the
Indenture, dated as of March 15, 1998, between the Company and PNC Bank,
National Association, as trustee (the "Trustee"), which is more fully
described in the accompanying Prospectus. The following description of the
terms of the MOPPRS supplements, and to the extent inconsistent therewith
replaces, the description of the general terms and provisions of the Debt
Securities set forth in the accompanying Prospectus. The MOPPRS will mature on
May 11, 2025 (the "Stated Maturity Date").
The MOPPRS will be senior unsecured obligations of the Company and will be
limited to $120,000,000 aggregate principal amount. Except in the limited
circumstances described herein, the MOPPRS are not subject to redemption prior
to the Stated Maturity Date at the option of the Company. See "Redemption"
below.
The MOPPRS will bear interest at the annual interest rate of 6.846% to May
11, 2005 (the "Remarketing Date"). If the Remarketing Dealer elects to
remarket the MOPPRS, except in the limited circumstances described herein, (i)
the MOPPRS will be subject to mandatory tender to the Remarketing Dealer at
100% of the principal amount thereof for remarketing on the Remarketing Date,
on the terms and subject to the conditions described herein, and (ii) on and
after the Remarketing Date, the MOPPRS will bear interest at the rate
determined by the Remarketing Dealer in accordance with the procedures set
forth below (the "Interest Rate to Maturity"). See "Tender of the MOPPRS;
Remarketing" below.
Under the circumstances described below, the MOPPRS are subject to
redemption by the Company from the Remarketing Dealer on the Remarketing Date.
See "Redemption" below. If the Remarketing Dealer for any reason does not
purchase all tendered MOPPRS on the Remarketing Date or elects not to remarket
the MOPPRS, or in certain other limited circumstances described herein, the
Company will be required to repurchase the MOPPRS from the Beneficial Owners
thereof on the Remarketing Date, at 100% of the principal amount thereof plus
accrued interest, if any. See "Repurchase" below.
The MOPPRS will bear interest from May 11, 1998, payable semiannually on May
11 and November 11 of each year (each, an "Interest Payment Date"), commencing
November 11, 1998, to the persons in whose name the MOPPRS are registered on
the fifteenth calendar day (whether or not a Business Day) immediately
preceding the related Interest Payment Date (each, a "Record Date"). Interest
on the MOPPRS will be computed on the basis of a 360-day year of twelve 30-day
months. "Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in The City of New York are authorized or obligated
by law, executive order or governmental decree to be closed.
Interest payable on any Interest Payment Date and at the Stated Maturity
Date or date of earlier redemption or repurchase shall be the amount of
interest accrued from and including the next preceding Interest Payment Date
in respect of which interest has been paid or duly provided for (or from and
including May 11, 1998, if no interest has been paid or duly provided for with
respect to the MOPPRS) to but excluding such Interest Payment Date or the
Stated Maturity Date or date of redemption or repurchase, as the case may be.
If any Interest Payment Date or the Stated Maturity Date or date of redemption
or repurchase of the MOPPRS falls on a day that is not a Business Day, the
payment shall be made on the next Business Day with the same force and effect
as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or the Stated Maturity Date or date of earlier redemption or
repurchase, as the case may be.
The MOPPRS will be issued in denominations of $1,000 and integral multiples
thereof.
S-9
<PAGE>
Tender of the MOPPRS; Remarketing
The following description sets forth the terms and conditions of the
remarketing of the MOPPRS, in the event that the Remarketing Dealer elects to
purchase the MOPPRS and remarkets the MOPPRS on the Remarketing Date.
Mandatory Tender.
Provided that the Remarketing Dealer gives notice to the Company and the
Trustee on a Business Day not later than five Business Days prior to the
Remarketing Date of its intention to purchase the MOPPRS for remarketing (the
"Notification Date"), each MOPPRS will be automatically tendered, or deemed
tendered, to the Remarketing Dealer for purchase on the Remarketing Date,
except in the circumstances described under "Repurchase" below. The purchase
price for the tendered MOPPRS to be paid by the Remarketing Dealer will equal
100% of the principal amount thereof. See "Notification of Results;
Settlement" below. When the MOPPRS are tendered for remarketing, the
Remarketing Dealer may remarket the MOPPRS for its own account at varying
prices to be determined by the Remarketing Dealer at the time of each sale.
From and after the Remarketing Date, the MOPPRS will bear interest at the
Interest Rate to Maturity. If the Remarketing Dealer elects to remarket the
MOPPRS, the obligation of the Remarketing Dealer to purchase the MOPPRS on the
Remarketing Date is subject, among other things, to the conditions that, since
the Notification Date, no material adverse change in the condition of the
Company and its subsidiaries, considered as one enterprise, shall have
occurred and that no Event of Default (as defined in the Indenture), or any
event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default, with respect to the MOPPRS shall have occurred
and be continuing. If for any reason the Remarketing Dealer does not purchase
all tendered MOPPRS on the Remarketing Date, the Company will be required to
repurchase the MOPPRS from the Beneficial Owners thereof at a price equal to
the principal amount thereof plus all accrued and unpaid interest, if any, on
the MOPPRS to the Remarketing Date. See "Repurchase" below.
The Interest Rate to Maturity shall be determined by the Remarketing Dealer
by 3:30 p.m., New York City time, on the third Business Day immediately
preceding the Remarketing Date (the "Determination Date") to the nearest one
hundred-thousandth (0.00001) of one percent per annum and will be equal to
5.951% (the "Base Rate") plus the Applicable Spread (as defined below) which
will be based on the Dollar Price (as defined below) of the MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as a
spread (in the form of a percentage or in basis points) above the Base Rate,
obtained by the Remarketing Dealer on the Determination Date from the bids
quoted by five Reference Corporate Dealers (as defined below) for the full
aggregate principal amount of the MOPPRS at the Dollar Price, but assuming (i)
an issue date equal to the Remarketing Date, with settlement on such date
without accrued interest, (ii) a maturity date equal to the Stated Maturity
Date of the MOPPRS, and (iii) a stated annual interest rate, payable
semiannually on each Interest Payment Date, equal to the Base Rate plus the
spread bid by the applicable Reference Corporate Dealer. If fewer than five
Reference Corporate Dealers bid as described above, then the Applicable Spread
shall be the lowest of such bid indications obtained as described above. The
Interest Rate to Maturity announced by the Remarketing Dealer, absent manifest
error, shall be binding and conclusive upon the Beneficial Owners and Holders
of the MOPPRS, the Company and the Trustee.
"Dollar Price" means, with respect to the MOPPRS, the present value
determined by the Remarketing Dealer, as of the Remarketing Date, of the
Remaining Scheduled Payments (as defined below) discounted to the Remarketing
Date, on a semiannual basis (assuming a 360-day year consisting of twelve 30-
day months), at the Treasury Rate (as defined below).
"Reference Corporate Dealers" means each of the Remarketing Dealer and four
other leading dealers of publicly traded debt securities of the Company in The
City of New York to be chosen by the Company with the consent of the
Remarketing Dealer, which consent shall not be unreasonably withheld, subject
to certain limited exceptions.
S-10
<PAGE>
"Comparable Treasury Issues" means the United States Treasury security or
securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities of thirty years.
"Comparable Treasury Price" means, with respect to the Remarketing Date, (a)
the offer prices for the Comparable Treasury Issues (expressed in each case as
a percentage of its principal amount) on the Determination Date, as set forth
on "Telerate Page 500" (or such other page as may replace Telerate Page 500)
or (b) if such page (or any successor page) is not displayed or does not
contain such offer prices on such Business Day, (i) the average of the
Reference Treasury Dealer Quotations for such Remarketing Date, after
excluding the highest and lowest of such Reference Treasury Dealer Quotations,
or (ii) if the Remarketing Dealer obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations. "Telerate Page 500" means the display designated as "Telerate Page
500" on Dow Jones Markets Limited (or such other page as may replace Telerate
Page 500 on such service) or such other service displaying the offer prices
specified in (a) above as may replace Dow Jones Markets Limited.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and SBC
Warburg Dillon Read Inc. (or their respective affiliates which are primary
U.S. Government securities dealers) and their respective successors; provided,
however, that if any of the foregoing or their affiliates shall cease to be a
primary U.S. Government securities dealer in The City of New York (a "Primary
Treasury Dealer"), the Remarketing Dealer shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and the Remarketing Date, the offer prices for the Comparable
Treasury Issues (expressed in each case as a percentage of its principal
amount) quoted to the Remarketing Dealer by such Reference Treasury Dealer by
3:30 p.m., New York City time, on the Determination Date.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing Date
to and including the Stated Maturity Date.
"Treasury Rate" means, with respect to the Remarketing Date, the rate per
annum equal to the semiannual equivalent yield to maturity or interpolated (on
a day count basis) yield to maturity of the Comparable Treasury Issues (as
defined below), assuming a price for the Comparable Treasury Issues (expressed
as a percentage of its principal amount), equal to the Comparable Treasury
Price (as defined below) for such Remarketing Date.
NOTIFICATION OF RESULTS; SETTLEMENT. Provided the Remarketing Dealer has
previously notified the Company and the Trustee on the Notification Date of
its intention to purchase all tendered MOPPRS on the Remarketing Date, the
Remarketing Dealer will notify the Company, the Trustee and DTC by telephone,
confirmed in writing, by 4:00 p.m., New York City time, on the Determination
Date, of the Interest Rate to Maturity.
All of the tendered MOPPRS will be automatically delivered to the account of
the Trustee, by book-entry through DTC pending payment of the purchase price
therefor, on the Remarketing Date.
In the event that the Remarketing Dealer purchases the tendered MOPPRS on
the Remarketing Date, the Remarketing Dealer will make or cause the Trustee to
make payment to the DTC Participant of each tendering Beneficial Owner of the
MOPPRS, by book entry through DTC by the close of business on the Remarketing
Date against delivery through DTC of such Beneficial Owner's tendered MOPPRS,
of 100% of the principal amount of the tendered MOPPRS that have been
purchased for remarketing by the Remarketing Dealer. If the Remarketing Dealer
does not purchase all of the MOPPRS on the Remarketing Date, it will be the
obligation of the Company to make or cause to be made such payment for the
MOPPRS, as described below under "Repurchase." In any case, the Company will
make or cause the Trustee to make payment of interest to each Beneficial Owner
of the MOPPRS due on the Remarketing Date by book entry through DTC by the
close of business on the Remarketing Date.
S-11
<PAGE>
The transactions described above will be executed on the Remarketing Date
through DTC in accordance with the procedures of DTC, and the accounts of the
respective DTC Participants will be debited and credited and the MOPPRS
delivered by book entry as necessary to effect the purchases and sales
thereof.
Transactions involving the sale and purchase of the MOPPRS remarketed by the
Remarketing Dealer on and after the Remarketing Date will settle in
immediately available funds through DTC's Same-Day Funds Settlement System.
The tender and settlement procedures described above, including provisions
for payment by purchasers of MOPPRS in the remarketing or for payment to
selling Beneficial Owners of tendered MOPPRS, may be modified to the extent
required by DTC or to the extent required to facilitate the tender and
remarketing of the MOPPRS in certificated form, if the book-entry system is no
longer available for the MOPPRS at the time of the remarketing. In addition,
the Remarketing Dealer may, in accordance with the terms of the Indenture,
modify the tender and settlement procedures set forth above in order to
facilitate the tender and settlement process.
As long as DTC's nominee holds the certificates representing any MOPPRS in
the book entry system of DTC, no certificates for such MOPPRS will be
delivered by any selling Beneficial Owner to reflect any transfer of such
MOPPRS effected in the remarketing. In addition, under the terms of the MOPPRS
and the Remarketing Agreement (described below), the Company has agreed that,
notwithstanding any provision to the contrary set forth in the Indenture, (i)
it will use its best efforts to maintain the MOPPRS in book-entry form with
DTC or any successor thereto and to appoint a successor depositary to the
extent necessary to maintain the MOPPRS in book-entry form, and (ii) it will
waive any discretionary right it otherwise has under the Indenture to cause
the MOPPRS to be issued in certificated form.
For further information with respect to transfers and settlement through
DTC, see "Description of Debt Securities--Book-Entry System" in the
accompanying Prospectus.
THE REMARKETING DEALER. The Company and the Remarketing Dealer are entering
into a Remarketing Agreement, the general terms and provisions of which are
summarized below.
The Remarketing Dealer will not receive any fees or reimbursement of
expenses from the Company in connection with the remarketing.
The Company will agree to indemnify the Remarketing Dealer against certain
liabilities, including liabilities under the Securities Act of 1933 (the
"Act"), arising out of or in connection with its duties under the Remarketing
Agreement.
In the event that the Remarketing Dealer elects to remarket the MOPPRS as
described herein, the obligation of the Remarketing Dealer to purchase the
MOPPRS from tendering Beneficial Owners of the MOPPRS will be subject to
several conditions precedent set forth in the Remarketing Agreement, including
the conditions that, since the Notification Date, no material adverse change
in the condition of the Company and its subsidiaries, considered as one
enterprise, shall have occurred and that no Event of Default (as defined in
the Indenture), or any event which, with the giving of notice or passage of
time, or both, would constitute an Event of Default, with respect to the
MOPPRS shall have occurred and be continuing. In addition, the Remarketing
Agreement will provide for the termination thereof by the Remarketing Dealer
on or before the Remarketing Date, upon the occurrence of certain events as
set forth in the Remarketing Agreement.
No Holder or Beneficial Owner of any MOPPRS shall have any rights or claims
under the Remarketing Agreement or against the Remarketing Dealer as a result
of the Remarketing Dealer not purchasing such MOPPRS.
The Remarketing Agreement will also provide that the Remarketing Dealer may
resign at any time as Remarketing Dealer, such resignation to be effective 10
days after the delivery to the Company and the Trustee
S-12
<PAGE>
of notice of such resignation. In such case, it shall be the sole obligation
of the Company to appoint a successor Remarketing Dealer.
The Remarketing Dealer, in its individual or any other capacity, may buy,
sell, hold and deal in any of the MOPPRS. The Remarketing Dealer may exercise
any vote or join in any action which any Beneficial Owner of the MOPPRS may be
entitled to exercise or take with like effect as if it did not act in any
capacity under the Remarketing Agreement. The Remarketing Dealer, in its
individual capacity, either as principal or agent, may also engage in or have
an interest in any financial or other transaction with the Company as freely
as if it did not act in any capacity under the Remarketing Agreement.
Repurchase
In the event that (i) the Remarketing Dealer for any reason does not notify
the Company of the Interest Rate to Maturity by 4:00 p.m., New York City time,
on the Determination Date, or (ii) prior to the Remarketing Date, the
Remarketing Dealer has resigned and no successor has been appointed on or
before the Determination Date, or (iii) since the Notification Date, the
Remarketing Dealer terminates the Remarketing Agreement due to the occurrence
of a material adverse change in the condition of the Company and its
subsidiaries, considered as one enterprise, or an Event of Default, or any
event which, with the giving of notice or passage of time, or both, would
constitute an Event of Default, with respect to the MOPPRS, or any other event
constituting a termination event under the Remarketing Agreement, or (iv) the
Remarketing Dealer elects not to remarket the MOPPRS, or (v) the Remarketing
Dealer for any reason does not purchase all tendered MOPPRS on the Remarketing
Date, the Company will repurchase the MOPPRS as a whole on the Remarketing
Date at a price equal to 100% of the principal amount of the MOPPRS plus all
accrued and unpaid interest, if any, on the MOPPRS to the Remarketing Date. In
any such case, payment will be made by the Company to the DTC Participant of
each tendering Beneficial Owner of the MOPPRS, by book-entry through DTC by
the close of business on the Remarketing Date against delivery through DTC of
such Beneficial Owner's tendered MOPPRS.
Redemption
If the Remarketing Dealer elects to remarket the MOPPRS on the Remarketing
Date, the MOPPRS will be subject to mandatory tender to the Remarketing Dealer
for remarketing on such date, in each case subject to the conditions described
above under "Tender of the MOPPRS; Remarketing" and "Repurchase" and to the
Company's right to redeem the MOPPRS from the Remarketing Dealer as described
in the next sentence. The Company will notify the Remarketing Dealer and the
Trustee, not later than the Business Day immediately preceding the
Determination Date, if the Company irrevocably elects to exercise its right to
redeem the MOPPRS, in whole but not in part, from the Remarketing Dealer on
the Remarketing Date at the Optional Redemption Price.
The "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of the MOPPRS and (ii) the Dollar Price, plus in either case
accrued and unpaid interest from the Remarketing Date on the principal amount
being redeemed to the date of redemption. If the Company elects to redeem the
MOPPRS, it shall pay the redemption price therefor in same-day funds by wire
transfer to an account designated by the Remarketing Dealer on the Remarketing
Date.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary of certain United States Federal income tax
consequences of the purchase, ownership and disposition of the MOPPRS by an
initial holder thereof is based upon laws, regulations, rulings and decisions
now in effect, all of which are subject to change (including changes in
effective dates) or possible differing interpretations. It deals only with
MOPPRS held as capital assets by a holder who purchases MOPPRS from the
Underwriters at the "issue price" (the first price at which a substantial
amount of the MOPPRS are sold), and does not purport to deal with persons in
special tax situations, such as financial institutions, insurance
S-13
<PAGE>
companies, regulated investment companies, dealers in securities or
currencies, persons holding MOPPRS as a hedge against currency risk or as a
position in a "straddle" for tax purposes, or persons whose functional
currency is not the U.S. dollar. Moreover, this summary addresses only tax
consequences of holding MOPPRS through the Remarketing Date. Persons
considering the purchase of the MOPPRS should consult their own tax advisors
concerning the application of United States Federal income tax laws to their
particular situations as well as any consequences of the purchase, ownership
and disposition of the MOPPRS arising under the laws of any other taxing
jurisdiction.
As used herein, the term "U.S. Holder" means a Beneficial Owner of a MOPPRS
that is for United States Federal income tax purposes (i) a citizen or
resident of the United States, (ii) a corporation, partnership or other entity
created or organized in or under the laws of the United States or of any
political subdivision thereof (other than a partnership that is not treated as
a United States person under any applicable Treasury regulations), (iii) an
estate whose income is subject to United States Federal income tax regardless
of its source, (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have the authority to control all substantial
decisions of the trust, or (v) any other person whose income or gain in
respect of a MOPPRS is effectively connected with the conduct of a United
States trade or business. Notwithstanding the preceding sentence, to the
extent provided in Treasury regulations, certain trusts in existence on August
20, 1996, and treated as United States persons prior to such date, that elect
to continue to be treated as United States persons also will be a U.S. Holder.
As used herein, the term "non-U.S. Holder" means a Beneficial Owner of a
MOPPRS that is not a U.S. Holder. A person described in (v) above will
nevertheless be subject to withholding tax as described below under Non-U.S.
Holders unless it provides to the Company a properly executed IRS Form 4224.
The United States Federal income tax treatment of debt obligations such as
the MOPPRS is not entirely certain. Because the MOPPRS are subject to
mandatory tender or repurchase on the Remarketing Date, the Company intends to
treat the MOPPRS as maturing on the Remarketing Date for United States Federal
income tax purposes. By purchasing the MOPPRS, the U.S. Holder agrees to
follow such treatment for United States Federal income tax purposes. As a
result of such treatment, interest on the MOPPRS will constitute "qualified
stated interest" and generally will be taxable to a U.S. Holder as ordinary
interest income at the time accrued or received (in accordance with the U.S.
Holder's regular method of tax accounting).
The Company does not expect any MOPPRS to be issued at a discount. If,
however, MOPPRS were issued at a discount greater than the statutory de
minimis amount (an amount greater than 1/4 of 1% of the MOPPRS' stated
redemption price multiplied by the number of complete years from issue to the
Remarketing Date), then a Holder must include original issue discount ("OID")
in income as it accrues under a constant yield method in advance of receipt of
the cash payments attributable to such income, regardless of the Holder's
regular method of accounting. In general, OID is calculated for each accrual
period as the excess of (i) the adjusted issue price at the beginning of that
period times the yield to maturity over (ii) qualified stated interest for
that period. The adjusted issue price is the original issue price, plus prior
OID and minus prior payments other than qualified stated interest.
Under the foregoing treatment, upon the sale, exchange or retirement of a
MOPPRS, a U.S. Holder generally will recognize taxable gain or loss equal to
the difference between the amount realized on the sale, exchange or retirement
(other than amounts representing accrued and unpaid interest) and such U.S.
Holder's adjusted tax basis in the MOPPRS. A U.S. Holder's adjusted tax basis
in a MOPPRS generally will equal such U.S. Holder's initial investment in the
MOPPRS increased by any original issue discount included in income and
decreased by the amount of any payments, other than qualified stated interest
payments, received with respect to such MOPPRS. Such gain or loss will
generally be capital gain or loss if the MOPPRS were held as a capital asset.
Capital gain recognized by an individual generally is subject to maximum
Federal income tax based on the holding period of the asset sold, as follows:
(i) 39.6% if held for not more than one year; (ii) 28% if held for more than
one year but not more than eighteen months; and (iii) 20% if held for more
than eighteen months.
S-14
<PAGE>
There can be no assurance that the Internal Revenue Service ("IRS") will
agree with the Company's treatment of the MOPPRS and it is possible that the
IRS could assert another treatment and that a court would uphold the IRS. For
instance, it is possible that the IRS could seek to treat the MOPPRS as
maturing on the Stated Maturity Date.
In the event the MOPPRS were treated as maturing on the Stated Maturity
Date, the MOPPRS would be treated as having contingent interest under the
Internal Revenue Code of 1986, as amended (the "Code"), because the Interest
Rate to Maturity will not be determined until the Determination Date. In such
event, under Treasury Regulations (the "Contingent Payment Regulations"), a
projected payment schedule for the MOPPRS would be constructed based upon the
Company's current borrowing costs for comparable debt instruments of the
Company, from which an estimated yield on the MOPPRS would be calculated. A
U.S. Holder would be required to include in income original issue discount in
an amount equal to the product of the adjusted issue price of the MOPPRS at
the beginning of each interest accrual period and that estimated yield. In
general, for these purposes, a MOPPRS' adjusted issue price would equal the
MOPPRS' issue price increased by the interest previously accrued on the
MOPPRS, and reduced by all payments made on the MOPPRS. As a result of the
application of the Contingent Payment Regulations, it is possible that a U.S.
Holder would be required to include interest in income in excess of actual
cash payments received for certain taxable years. The Company does not intend
to treat the MOPPRS as having contingent interest and will not construct a
projected payment schedule.
In addition, the character of any gain or loss, upon the sale or exchange of
a MOPPRS (including a sale pursuant to the mandatory tender on the Remarketing
Date) by a U.S. Holder, will likely differ if the MOPPRS were treated as
contingent payment obligations. Any such taxable gain generally would be
treated as ordinary income. Any such taxable loss generally would be ordinary
to the extent of previously accrued original issue discount, and any excess
would generally be treated as capital loss.
Non-U.S. Holders
A non-U.S. Holder will not be subject to United States Federal income taxes
on payments of principal, premium (if any) or interest (including original
issue discount, if any) on a MOPPRS, unless such non-U.S. Holder is a direct
or indirect 10% or greater shareholder of the Company, a controlled foreign
corporation related to the Company or a bank receiving interest described in
section 881(c)(3)(A) of the Code. To qualify for the exemption from taxation,
the last United States payor in the chain of payment prior to payment to a
non-U.S. Holder (the "Withholding Agent") must have received in the year in
which a payment of interest or principal occurs, or in either of the two
preceding calendar years, a statement that (i) is signed by the Beneficial
Owner of the MOPPRS under penalties of perjury, (ii) certifies that such owner
is not a U.S. Holder and (iii) provides the name and address of the Beneficial
Owner. The statement may be made on an IRS Form W-8 or a substantially similar
form, and the Beneficial Owner must inform the Withholding Agent of any change
in the information on the statement within 30 days of such change. If a MOPPRS
is held through a securities clearing organization or certain other financial
institutions, the organization or institution may provide a signed statement
to the Withholding Agent. However, in such case, the signed statement must be
accompanied by a copy of the IRS Form W-8 or the substitute form provided by
the Beneficial Owner to the organization or institution. The Treasury
Department is considering implementation of further certification requirements
aimed at determining whether the issuer of a debt obligation is related to
holders thereof.
Generally, a non-U.S. Holder will not be subject to United States Federal
income taxes on any amount which constitutes gain upon retirement or
disposition of a MOPPRS, provided the gain is not effectively connected with
the conduct of a trade or business in the United States by the non-U.S.
Holder. Certain other exceptions may be applicable, and a non-U.S. Holder
should consult its tax advisor in this regard.
The MOPPRS will not be includible in the estate of a non-U.S. Holder unless
the individual is a direct or indirect 10% or greater shareholder of the
Company or, at the time of such individual's death, payments in respect of the
MOPPRS would have been effectively connected with the conduct by such
individual of a trade or business in the United States.
S-15
<PAGE>
Backup Withholding
Backup withholding of United States Federal income tax at a rate of 31% may
apply to payments made in respect of the MOPPRS to registered owners who are
not "exempt recipients" and who fail to provide certain identifying
information (such as the registered owner's taxpayer identification number) in
the required manner. Generally, individuals are not exempt recipients, whereas
corporations and certain other entities generally are exempt recipients.
Payments made in respect of the MOPPRS to a U.S. Holder must be reported to
the IRS, unless the U.S. Holder is an exempt recipient or establishes an
exemption. Compliance with the identification procedures described in the
preceding section would establish an exemption from backup withholding for
those non-U.S. Holders who are not exempt recipients.
In addition, upon the sale of a MOPPRS to (or through) a broker, the broker
must withhold 31% of the entire purchase price, unless either (i) the broker
determines that the seller is a corporation or other exempt recipient or (ii)
the seller provides, in the required manner, certain identifying information
and, in the case of a non-U.S. Holder, certifies that such seller is a non-
U.S. Holder (and certain other conditions are met). Such a sale must also be
reported by the broker to the IRS, unless either (i) the broker determines
that the seller is an exempt recipient or (ii) the seller certifies its non-
U.S. status (and certain other conditions are met). Certification of the
registered owner's non-U.S. status would be made normally on an IRS Form W-8
under penalties of perjury, although in certain cases it may be possible to
submit other documentary evidence.
Any amounts withheld under the backup withholding rules from a payment to a
Beneficial Owner would be allowed as a refund or a credit against such
Beneficial Owner's United States Federal income tax provided the required
information is furnished to the IRS.
New Withholding Regulations
On October 6, 1997, the Treasury Department issued new regulations (the "New
Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules described above. The New
Regulations attempt to unify certification requirements and modify reliance
standards. The New Regulations will generally be effective for payments made
after December 31, 1999, subject to certain transition rules. Prospective
investors are urged to consult their own tax advisors regarding the New
Regulations.
S-16
<PAGE>
ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain restrictions on (a) employee benefit plans (as
defined in Section 3(3) of ERISA), (b) plans described in section 4975(e)(1)
of the Code, including individual retirement accounts or Keogh plans, (c) any
entities whose underlying assets include plan assets by reason of a plan's
investment in such entities (each a "Plan") and (d) persons who have certain
specified relationships to such Plans ("Parties-in-Interest" under ERISA and
"Disqualified Persons" under the Code). Moreover, based on the reasoning of
the United States Supreme Court in John Hancock Life Ins. v. Harris Trust and
Sav. Bank, 114 S. Ct. 517 (1993), an insurance company's general account may
be deemed to include assets of the Plans investing in the general account
(e.g., through the purchase of an annuity contract). ERISA also imposes
certain duties on persons who are fiduciaries of Plans subject to ERISA and
prohibits certain transactions between a Plan and Parties-in-Interest or
Disqualified Persons with respect to such Plans.
The Company and the Remarketing Dealer, because of their activities or the
activities of their respective affiliates, may be considered to be Parties-in-
Interest or Disqualified Persons with respect to certain Plans. If the MOPPRS
are acquired by a Plan with respect to which the Company or the Remarketing
Dealer is, or subsequently becomes, a Party-in-Interest or Disqualified
Person, the purchase, holding or resale of the MOPPRS could be deemed to be a
direct or indirect violation of the prohibited transaction rules of ERISA and
the Code unless such transaction were subject to one or more statutory or
administrative exemptions such as prohibited transaction Class Exemption
("PTCE") 75-1, which exempts certain transactions involving employee benefit
plans and certain broker-dealers, reporting dealers and banks; PTCE 90-1,
which exempts certain transactions between insurance company pooled separate
accounts and Parties-in-Interest or Disqualified Persons; PTCE 91-38, which
exempts certain transactions between bank collective investment funds and
Parties-in-Interest or Disqualified Persons; PTCE 84-14, which exempts certain
transactions effected on behalf of a Plan by a "qualified professional asset
manager;" PTCE 95-60, which exempts certain transactions between insurance
company general accounts and Parties-in-Interest or Disqualified Persons; or
PTCE 96-23, which exempts certain transactions effected on behalf of a Plan by
an "in-house asset manager." Even if the conditions specified in one or more
of these exemptions are met, the scope of relief provided by these exemptions
will not necessarily cover all acts that might be construed as prohibited
transactions.
Accordingly, prior to making an investment in the MOPPRS, a Plan should
determine whether the Company or the Remarketing Dealer is a Party-in-Interest
or Disqualified Person with respect to such Plan and, if so, whether such
transaction is subject to one or more statutory or administrative exemptions,
including those described above.
Prior to making an investment in the MOPPRS, Plans should consult with their
legal advisers concerning the impact of ERISA and the Code and the potential
consequences of such investment with respect to their specific circumstances.
Moreover, each Plan fiduciary should take into account, among other
considerations, whether the fiduciary has the authority to make the investment
on behalf of the Plan; whether the investment constitutes a direct or indirect
transaction with a Party-in-Interest or a Disqualified Person; and whether
under the general fiduciary standards of investment procedure and
diversification an investment in the MOPPRS is appropriate for the Plan,
taking into account the overall investment policy of the Plan and the
composition of the Plan's investment portfolio.
S-17
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in the Purchase Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each
of the Underwriters has severally agreed to purchase from the Company, the
respective principal amount of the MOPPRS set forth opposite its name below.
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF MOPPRS
----------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................ $ 62,400,000
SBC Warburg Dillon Read Inc.................................. 19,200,000
Morgan Stanley & Co. Incorporated............................ 19,200,000
Salomon Brothers Inc......................................... 19,200,000
------------
Total...................................................... $120,000,000
============
</TABLE>
The Underwriters have advised the Company that the Underwriters propose to
offer the MOPPRS from time to time for sale in negotiated transactions or
otherwise, at prices relating to prevailing market prices determined at the
time of sale. The Underwriters may effect such transactions by selling MOPPRS
to or through dealers and such dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from the Underwriters and
any purchasers of MOPPRS for whom they may act as agent. The Underwriters and
any dealers that participate with the Underwriters in the distribution of the
MOPPRS may be deemed to be Underwriters, and any discounts or commissions
received by them and any profit on the resale of MOPPRS by them may be deemed
to be underwriting compensation.
The MOPPRS are a new issue of securities with no established trading market.
The Company has been advised by the Underwriters that the Underwriters intend
to make a market in the MOPPRS, but they are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be
given as to the liquidity of the trading market for the MOPPRS.
The Underwriters are permitted to engage in certain transactions that
maintain or otherwise affect the price of the MOPPRS. Such transactions may
include over-allotment transactions and purchases to cover short positions
created by the Underwriters in connection with the offering. If the
Underwriters create a short position in the MOPPRS in connection with the
offering, i.e., if they sell MOPPRS in an aggregate principal amount exceeding
that set forth on the cover page of this Prospectus Supplement, the
Underwriters may reduce that short position by purchasing MOPPRS in the open
market.
In general, purchases of a security to reduce a short position could cause
the price of the security to be higher than it might be in the absence of such
purchases.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the
transactions described above may have on the price of the MOPPRS. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Underwriters will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.
In the ordinary course of business, the Underwriters and their affiliates
have engaged and may in the future engage in investment banking transactions
with the Company and certain of its affiliates. Mr. William P. Powell, a
director of the Company, is a Managing Director of SBC Warburg Dillon Read
Inc.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Act, or to make contribution to
certain payments in respect thereof.
S-18
<PAGE>
LEGAL MATTERS
The validity of the MOPPRS offered hereby will be passed on for the Company
by Cravath, Swaine & Moore, New York, New York and for the Underwriters by
Shearman & Sterling, New York, New York. Shearman & Sterling has acted and may
hereafter act as counsel to the Company.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedules of the Company as of December 31, 1997 and 1996, and for each of the
years in the three-year period ended December 31, 1997, have been incorporated
by reference in this Prospectus Supplement in reliance upon the reports of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference in this Prospectus Supplement, and upon the authority of said
firm as experts in accounting and auditing.
The audited consolidated financial statements of Fiberite Holdings, Inc. as
of December 31, 1996, and for the year ended December 31, 1996 appearing in
the Company's Current Report on Form 8-K dated September 30, 1997,
incorporated by reference in this Prospectus Supplement and elsewhere in the
Registration Statement, have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm
as experts in giving such reports.
S-19
<PAGE>
PROSPECTUS
LOGO
CYTEC INDUSTRIES INC.
$300,000,000
DEBT SECURITIES
Cytec Industries Inc., a Delaware corporation ("Cytec"), may offer from time
to time, in one or more series, up to $300,000,000 aggregate principal amount
of unsecured and unsubordinated debt securities (the "Debt Securities") that
will rank pari passu with Cytec's other outstanding unsecured and
unsubordinated indebtedness. When a particular series of Debt Securities is
offered, a supplement to this Prospectus (the "Prospectus Supplement") will be
delivered with this Prospectus. The Prospectus Supplement will set forth the
specific terms of the Debt Securities, including the designation and principal
amount offered; the rate (or method of calculation) and time of payment of
interest, if any; the authorized denominations; the maturity or maturities;
the terms for a sinking, purchase or analogous fund, if any; the terms for
redemption or early repayment, if any; the currency or currencies or currency
unit or currency units in which principal, premium, if any, or interest, if
any, is payable; the purchase price and other terms of the offering; and any
listing on a securities exchange.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
The Debt Securities may be sold (i) through underwriting syndicates
represented by managing underwriters or through one or more underwriters
without a syndicate; (ii) through agents or dealers designated from time to
time; or (iii) directly by Cytec. See "Plan of Distribution". The names of any
such underwriters, agents or dealers involved in the sale of the Debt
Securities in respect of which this Prospectus is being delivered and any
applicable commissions or discounts will be set forth in the Prospectus
Supplement. The net proceeds to Cytec from such sale will also be set forth in
the Prospectus Supplement.
This Prospectus may not be used to consummate any sale of Debt Securities
unless accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS APRIL 8, 1997.
<PAGE>
AVAILABLE INFORMATION
Cytec is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy materials and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
materials and other information concerning Cytec and the Registration
Statement (as defined below) can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 (Room 1024) or at its Regional Offices located at 500
West Madison Street, Chicago, Illinois 60661 (Suite 1400) and 7 World Trade
Center, New York, New York 10048 (13th Floor). Copies of such materials can be
obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549 at prescribed rates. In addition,
reports, proxy materials and other information concerning Cytec may also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005, on which the Company's common stock is
listed.
Cytec has filed with the Commission a registration statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Debt Securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain parts of which have been omitted in accordance with the
rules and regulations of the Commission. For further information with respect
to Cytec and the Debt Securities, reference is made to the Registration
Statement, including the exhibits filed as a part thereof and otherwise
incorporated therein. Statements made in this Prospectus as to the contents of
any contract, agreement or other document referred to are necessarily
summaries of such contract, agreement or other document. With respect to each
such contract, agreement or other document filed as an exhibit to the
Registration Statement, reference is made to such exhibit for a more complete
description of the matter involved and each such statement is qualified in its
entirety by such reference. Copies of the Registration Statement and the
exhibits thereto may be inspected, without charge, at the offices of the
Commission, or obtained at prescribed rates from the Public Reference Section
of the Commission at the address set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Cytec hereby incorporates by reference into the Registration Statement, of
which this Prospectus is a part, Cytec's Annual Report on Form 10-K for the
year ended December 31, 1996 previously filed with the Commission pursuant to
the Exchange Act which shall be deemed to be part hereof.
In addition, all reports and other documents filed by Cytec pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of any Debt
Securities shall be deemed to be incorporated by reference in, and to be a
part of, this Prospectus from the date of filing of such reports and
documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein, in any Prospectus Supplement or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Cytec hereby undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus has been delivered,
upon the written or oral request of such person, a copy (without exhibits
other than exhibits specifically incorporated by reference) of any or all
documents incorporated by reference into this Prospectus. Requests for such
copies should be directed to Cytec Industries Inc., Investor Relations, Five
Garret Mountain Plaza, West Paterson, New Jersey 07424, telephone number (201)
357-3100.
2
<PAGE>
THE COMPANY
Unless indicated otherwise, the term "Company", with respect to periods
beginning on or after December 17, 1993, the effective date of the transfer of
substantially all of the assets and liabilities of the chemicals business of
American Cyanamid Company ("Cyanamid") to the Company (the "Spin-off"), refers
collectively to Cytec and its subsidiaries, and with respect to periods prior
to the Spin-off, the term refers to the chemicals business of Cyanamid.
Cyanamid was acquired by American Home Products Corporation in November 1994.
The Company is a vertically integrated industrial chemicals company which
focuses on value-added specialty products. The Company's products serve a
broad group of end users, including the water treatment, paper, mining,
coatings, plastics, aerospace and automotive industries. The Company's primary
strategic focus is on value-added specialty chemicals and specialty materials,
a significant portion of which utilize building block chemicals manufactured
by the Company.
The Company develops, manufactures and markets products in three general
product categories: specialty chemicals, specialty materials and building
block chemicals. Specialty chemicals include water treating, paper and mining
chemicals, coatings and resin products and polymer additives. Specialty
materials include aerospace adhesives and advanced composites. Building block
chemicals include acrylonitrile, acrylamide, melamine and methanol. The
Company has manufacturing facilities in six countries and sells its products
worldwide.
Cytec was incorporated under the laws of Delaware in 1993. Cytec's executive
offices are located at Five Garret Mountain Plaza, West Paterson, New Jersey
07424, telephone number (201) 357-3100.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for the Company is set forth below
for the periods indicated.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
13.4 19.3 15.2 --(1) 4.3
</TABLE>
- --------
(1) Earnings were insufficient to cover fixed charges for the year ended
December 31, 1993 by $154.4 million.
For purposes of computing the ratio of earnings to fixed charges (a)
earnings consist of earnings (loss) before income tax (benefit) expense and
cumulative effect of accounting changes plus the Company's share of pre-tax
equity in earnings of associated companies plus fixed charges less capitalized
interest and (b) fixed charges consist of interest on long-term debt plus the
portion of rentals representative of an interest factor plus the Company's
share of such charges of associated companies.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus Supplement, the net
proceeds from the sale of the Debt Securities will be used for general
corporate purposes, which may include acquisitions, repayment of indebtedness
and other liabilities, share repurchases, additions to working capital and
capital expenditures.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement
and the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating
to such Debt Securities. Accordingly, for a description of the terms of a
particular issue of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and to the following description.
The Debt Securities will be issued under an Indenture (the "Indenture"),
between the Company and PNC Bank, National Association, as Trustee (the
"Trustee"). A copy of the form of the Indenture has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part. The
following discussion of certain provisions of the Indenture is a summary only
and does not purport to be a complete description of the terms and provisions
of the Indenture. Accordingly, the following discussion is qualified in its
entirety by reference to the provisions of the Indenture, including the
definitions therein of capitalized terms used below and not defined in this
Prospectus.
GENERAL
The Debt Securities may be issued in one or more series as may be authorized
from time to time by the Company. Reference is made to the applicable
Prospectus Supplement for a description of the following terms of the Debt
Securities of the series with respect to which such Prospectus Supplement is
being delivered: (a) the title of the Debt Securities of the series; (b) any
limit on the aggregate principal amount of the Debt Securities of the series
that may be authenticated and delivered under the Indenture; (c) the date or
dates on which the principal and premium, if any, with respect to the Debt
Securities of the series are payable; (d) the rate or rates (which may be
fixed or variable) at which the Debt Securities of the series will bear
interest, if any, or the method of determining such rate or rates, the date or
dates from which such interest will accrue, the interest payment dates on
which such interest will be payable, or the method by which such dates will be
determined, the record dates for the determination of holders thereof to whom
such interest is payable, the person to whom any interest on any Debt Security
of the series will be payable, if other than the person in whose name such
Debt Security (or one or more predecessor Debt Securities) is registered at
the close of business on the record date for such interest, and the basis upon
which interest will be calculated if other than that of a 360-day year of
twelve 30-day months; (e) the place or places, if any, in addition to or
instead of the corporate trust office of the Trustee, where the principal,
premium, if any, and interest, if any, with respect to the Debt Securities of
the series will be payable and where the Debt Securities of the series may be
surrendered for registration of transfer or exchange; (f) the price or prices
at which, the period or periods within which and the terms and conditions upon
which the Debt Securities of the series may be redeemed, in whole or in part,
at the option of the Company or otherwise; (g) the obligation, if any, of the
Company to redeem, purchase or repay the Debt Securities of the series
pursuant to any sinking fund or analogous provisions or at the option of a
holder thereof and the price or prices at which and the period or periods
within which and the terms and conditions upon which the Debt Securities of
the series will be redeemed, purchased or repaid, in whole or in part,
pursuant to such obligations; (h) if other than denominations of $1,000 or any
integral multiple thereof, the denominations in which the Debt Securities of
the series will be issuable; (i) if the amount of principal, premium, if any,
or interest, if any, with respect to the Debt Securities of the series may be
determined with reference to an index or pursuant to a formula, the manner in
which such amounts will be determined; (j) if the principal amount payable at
the stated maturity of the Debt Securities of the series will not be
determinable as of any one or more dates prior to such stated maturity, the
amount that will be deemed to be such principal amount as of any such date for
any purpose, including the principal amount thereof that will be due and
payable upon any maturity other than the stated maturity or that will be
deemed to be outstanding as of any such date (or, in any such case, the manner
in which such deemed principal amount is to be determined); (k) any changes or
additions to the provisions of the Indenture dealing with defeasance,
including the addition of additional covenants that may be subject to the
Company's covenant defeasance option; (l) if other than such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts, the coin or currency or currencies or
unit or units of two or more
4
<PAGE>
currencies in which payment of the principal, premium, if any, and interest,
if any, with respect to the Debt Securities of the series will be payable, and
the manner of determining the equivalent thereof in the currency of the United
States of America; (m) if the principal, premium, if any, and interest, if
any, with respect to the Debt Securities of the series are to be payable, at
the election of the Company or a holder therof, in coin or currency or
currencies or unit or units of two or more currencies, other than that or
those in which the Debt Securities are stated to be payable, the coin or
currency or currencies or unit or units of two or more currencies in which
payment of the principal, premium, if any, and interest, if any, with respect
to the Debt Securities of such series as to which such election is made will
be payable, and the periods within which and the terms and conditions upon
which such election may be made; (n) if other than the principal amount
thereof, the portion of the principal amount of the Debt Securities of the
series that will be payable upon declaration of acceleration of the maturity
thereof or provable in bankruptcy; (o) the terms, if any, of the transfer,
mortgage, pledge or assignment as security for the Debt Securities of the
series of any properties, assets, monies, proceeds, securities or other
collateral, including whether certain provisions of the Trust Indenture Act of
1939, as amended, are applicable and whether any corresponding changes will be
made to provisions of the Indenture as then in effect; (p) any addition to or
change in the Events of Default with respect to the Debt Securities of the
series and any change in the right of the Trustee or the holders to declare
the principal, premium, if any, and interest, if any, with respect to such
Debt Securities due and payable; (q) if the Debt Securities of the series will
be issued in whole or in part in the form of a Global Security, the terms and
conditions, if any, upon which such Global Security may be exchanged in whole
or in part for other individual Debt Securities in definitive registered form
if other than as provided for in the Indenture, the depositary for such Global
Security and the form of any legend or legends to be borne by any such Global
Security in addition to or in lieu of the legend referred to in the Indenture;
(r) the Trustee and any authenticating or paying agents, transfer agents or
registrars; (s) the applicability of, and any addition to or change in, the
covenants and definitions then set forth in the Indenture or in the terms then
set forth in the Indenture relating to permitted consolidations, mergers or
sales of assets; (t) the terms, if any, of any guarantee of the payment of
principal, premium, if any, and interest, if any, with respect to the Debt
Securities of the series and any corresponding changes to the provisions of
the Indenture as then in effect; (u) with regard to the Debt Securities of the
series that do not bear interest, the dates for delivery of lists of holders
to the Trustee; and (v) any other terms of the Debt Securities of the series
(which terms are not expressly prohibited by the provisions of the Indenture).
The Prospectus Supplement will also describe any material United States
Federal income tax consequences or other special considerations applicable to
the series of Debt Securities to which such Prospectus Supplement relates,
including those applicable to (a) Debt Securities with respect to which
payments of principal, premium or interest are determined with reference to an
index or formula (including changes in prices of particular securities,
currencies or commodities), (b) Debt Securities with respect to which
principal, premium or interest is payable in a foreign or composite currency,
(c) Debt Securities that are issued at a discount below their stated principal
amount, bearing no interest or interest at a rate that at the time of issuance
is below market rates and (d) variable rate Debt Securities that are
exchangeable for fixed rate Debt Securities.
RANKING
The Debt Securities will be unsecured and unsubordinated obligations of the
Company and will rank pari passu with the Company's other outstanding
unsecured and unsubordinated indebtedness.
CERTAIN COVENANTS
Set forth below are certain covenants contained in the Indenture:
Limitation on Liens
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, incur, issue, assume or guarantee any Debt secured
by a Lien on any Principal Property of the Company or any Restricted
Subsidiary, or on any shares of stock of any Restricted Subsidiary, without
effectively providing that the Debt Securities (together with, if the Company
will so determine, any other Debt of the Company or such
5
<PAGE>
Restricted Subsidiary then existing or thereafter created which is not
subordinate to the Debt Securities) will be secured equally and ratably with
(or prior to) such secured Debt, so long as such secured Debt will be so
secured; provided, however, that this covenant will not apply to Debt
convertible into shares of Capital Stock of a Restricted Subsidiary (to the
extent that such Debt is secured by such Capital Stock) or Debt secured by:
(1) Liens on property or shares of stock existing as of the date of the
Indenture; (2) Liens securing only the Debt Securities; (3) Liens on property
of, or on any shares of stock of any person, which Liens are existing at the
time (i) such property becomes a Principal Property or (ii) (A) such person
becomes a Restricted Subsidiary, (B) such person is merged into or
consolidated with the Company or any subsidiary of the Company or (C) another
subsidiary of the Company merges into or consolidates with such person (in a
transaction in which such person becomes a Restricted Subsidiary) and which
Liens were not incurred in anticipation of such transaction and were
outstanding prior to such transaction; (4) Liens in favor of the Company or
any Restricted Subsidiary; (5) Liens in favor of any governmental body to
secure progress, advance or other payments pursuant to any contract or
provision of any statute; (6) Liens on property or shares of stock existing at
the time of acquisition thereof (including acquisition through merger or
consolidation); (7) Liens on property or shares of stock to secure the payment
of all or any part of the purchase price or construction cost thereof, or to
secure any Debt incurred prior to, at the time of or within 180 days after the
acquisition of such property or shares of stock, the completion of any such
construction or the commencement of full operation, for the purpose of
financing all or any part of the purchase price or construction cost thereof,
provided that such Liens will be limited to all or a part of such property or
shares of stock (plus improvements on such property); (8) any extension,
renewal or replacement (or successive extensions, renewals or replacements),
as a whole or in part, of any Lien referred to in the foregoing clauses (1) to
(7), inclusive, provided that such extension, renewal or replacement Lien will
be limited to all or a part of the same property or shares of stock that
secured the Lien extended, renewed or replaced (plus improvements on such
property); and (9) Liens securing Debt the aggregate principal amount of which
Debt, when added to (A) the aggregate amount of all Attributable Debt of the
Company and its Restricted Subsidiaries in respect of Sale/Leaseback
Transactions existing at such time which would not otherwise be permitted
under the covenant described under "--Limitation on Sale/Leaseback
Transactions" below but for the second paragraph thereof and (B) the aggregate
outstanding principal amount of all other Debt of the Company and its
Restricted Subsidiaries secured by Liens on any Principal Property or on any
shares of stock of any Restricted Subsidiary which Debt would not otherwise be
permitted under this covenant but for this clause (9), does not exceed 10% of
Consolidated Net Tangible Assets.
Limitation on Sale/Leaseback Transactions
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, enter into a Sale/Leaseback Transaction with respect
to any Principal Property unless: (1) the lease has a term of three years or
less; (2) the lease is between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries; (3) the Company or a Restricted Subsidiary
under any of clauses (1) through (8) of the covenant described under "--
Limitation on Liens" above could create a Lien on the property to secure Debt
at least equal in amount to the Attributable Debt for the lease; or (4) the
Company or a Restricted Subsidiary within 180 days of the effective date of
the lease retires Long-Term Debt of the Company (other than Debt subordinate
to the Debt Securities) or a Restricted Subsidiary at least equal in amount to
the Attributable Debt for the lease. A Debt is retired when it is paid,
cancelled or defeased.
Notwithstanding the provisions of the foregoing paragraph, the Company or
any Restricted Subsidiary may enter into any Sale/Leaseback Transaction (which
would otherwise be subject to the foregoing restrictions) if the amount of the
Attributable Debt of the Company and its Restricted Subsidiaries in respect of
such Sale/Leaseback Transaction, when added to (i) the aggregate outstanding
principal amount of all Debt of the Company and its Restricted Subsidiaries
secured by Liens on Principal Property or on any shares of stock of any
Restricted Subsidiary which Debt would not otherwise be permitted under the
covenant described under "--Limitation on Liens" above but for clause (9)
thereof and (ii) the aggregate amount of all other Attributable Debt in
respect of Sale/Leaseback Transactions existing at such time which would not
otherwise be permitted under this covenant but for this paragraph, does not at
the time exceed 10% of Consolidated Net Tangible Assets.
6
<PAGE>
Except for the covenants described above, the Indenture does not contain any
covenants or provisions that may afford holders of the Debt Securities
protection in the event of a highly leveraged transaction.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge with or into, or convey,
transfer or lease all or substantially all its assets to, any person, unless:
(i) the resulting, surviving or transferee person (if not the Company) is a
person organized and existing under the laws of the United States of America,
any State thereof or the District of Columbia and such person expressly
assumes by a supplemental indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under the
Indenture and the Debt Securities; (ii) immediately after giving effect to
such transaction, no Default has occurred and is continuing; and (iii) the
Company delivers to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and such supplemental indenture (if any) comply with the Indenture. The
resulting, surviving or transferee person will succeed to, and be substituted
for, and may exercise every right and power of, the Company under the
Indenture, and thereafter the Company or any other predecessor to such
resulting, surviving or transferee person will be relieved of all obligations
and covenants under the Indenture and the Debt Securities.
EVENTS OF DEFAULT
An Event of Default with respect to Debt Securities of any series is defined
in the Indenture as (i) a default in any payment of interest, if any, on any
Debt Securities of such series when due and payable, continued for 30 days,
(ii) a default in the payment of principal of or premium, if any, on any Debt
Securities of such series when due and payable at the stated maturity or upon
redemption, declaration, required repurchase or otherwise, (iii) a default in
any payment in respect of a sinking, purchase or analogous fund, if any, with
respect to any Debt Securities of such series when the same becomes due and
payble, (iv) the failure by the Company to comply for 60 days after notice
with any covenants or agreements on the part of the Company contained in the
Debt Securities of such series or in the Indenture with respect to the Debt
Securities of such series, (v) certain events of bankruptcy, insolvency or
reorganization of the Company (the "bankruptcy provisions") or (vi) any other
Event of Default provided with respect to Debt Securities of such series.
However, a Default under clause (iv) with respect to Debt Securities of a
series will not constitute an Event of Default with respect to Debt Securities
of such series until the Trustee or the holders of 25% in principal amount of
the outstanding Debt Securities of such series notify the Company of the
Default, and the Company does not cure such Default within the time specified
after receipt of such notice. Any Event of Default with respect to one series
of Debt Securities is not necessarily an Event of Default for another series.
If an Event of Default (other than an Event of Default relating to the
bankruptcy provisions) with respect to Debt Securities of any series occurs
and is continuing, the Trustee or the holders of at least 25% in principal
amount of the outstanding Debt Securities of such series may declare the
principal of (or, if the Debt Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of such series) and accrued but unpaid interest on all the Debt
Securities of such series to be due and payable. Upon such a declaration, such
principal and interest with respect to such series will be due and payable
immediately. If an Event of Default relating to the bankruptcy provisions with
respect to Debt Securities of any series occurs, the principal of (or, if the
Debt Securities of such series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of such
series) and accrued but unpaid interest on all the Debt Securities of such
series will ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any holders of the Debt
Securities of such series. Under certain circumstances, the holders of a
majority in principal amount of the outstanding Debt Securities of any series
may rescind any such acceleration with respect to the Debt Securities of such
series and its consequences.
If an Event of Default with respect to Debt Securities of any series occurs
and is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of and accrued but unpaid interest on the Debt Securities
of such series or to enforce the performance of any provision of the Debt
Securities of such series
7
<PAGE>
or of the Indenture with respect to such series. Subject to certain
restrictions, the holders of a majority in principal amount of the outstanding
Debt Securities of any series may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee with respect to Debt
Securities of such series. The Trustee, however, may refuse to follow any
direction that conflicts with law or the Indenture or that the Trustee
determines is unduly prejudicial to the rights of any other holder of a Debt
Security of such series or that would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such direction.
Prior to taking any action under the Indenture, the Trustee is entitled to
indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action. Except to enforce the
right to receive payment of principal of and premium, if any, and interest, if
any, on the Debt Securities held by such holder, no holder of a Debt Security
of any series may pursue any remedy with respect to the Indenture or the Debt
Securities of such series unless (i) such holder has previously given the
Trustee notice that an Event of Default with respect to the Debt Securities of
such series is continuing, (ii) holders of at least 25% in principal amount of
the outstanding Debt Securities of such series have requested the Trustee to
pursue the remedy, (iii) such holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense, (iv) the Trustee
has not complied with such request within 60 days after the receipt thereof
and the offer of security or indemnity and (v) the holders of a majority in
principal amount of the outstanding Debt Securities of such series have not
given the Trustee a direction inconsistent with such request within such 60-
day period.
The Indenture provides that if a Default with respect to Debt Securities of
any series occurs and is continuing and is known to the Trustee, the Trustee
must mail to each holder of Debt Securities of such series notice of the
Default within 90 days after it occurs. Except in the case of a Default in the
payment of principal of or premium, if any, or interest, if any, on any Debt
Security of any series, the Trustee may withhold such notice if and so long as
a committee of officers of the Trustee in good faith determines that
withholding notice is in the interest of the holders of the Debt Securities of
such series; provided, that in the case of any Default of the character
specified in clause (iv) of the first paragraph under the heading "--Events of
Default" with respect to Debt Securities of such series, no such notice to
holders will be given until at least 30 days after the occurrence therof.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the consent
of the holders of a majority in principal amount of the Debt Securities of any
series then outstanding, and any existing Default with respect to Debt
Securities of any series and its consequences may be waived with the consent
of the holders of a majority in principal amount of the Debt Securities of
such series then outstanding. However, without the consent of each holder of
an outstanding Debt Security of any series, no amendment may, among other
things, (i) reduce the amount of Debt Securities of such series whose holders
must consent to an amendment or to a waiver of any Default under the Indenture
and its consequences as provided therein, (ii) reduce the rate of or extend
the time for payment of interest on any Debt Security of such series, (iii)
reduce the principal of any Debt Security of such series or extend the
maturity of any Debt Security of such series, (iv) reduce the premium payable
upon the redemption of any Debt Security of such series or change the time at
which any Debt Security of such series may or will be redeemed; (v) impair the
right to institute suit for the enforcement of any payment of principal of or
premium, if any, or interest, if any, on any Debt Security of such series
after the stated maturity thereof (or, in the case of redemption, on or after
the redemption date); or (vi) make any Debt Security of such series payable in
money other than that stated in such Debt Security.
Without the consent of any holder of Debt Securities, the Company and the
Trustee may amend the Indenture or the Debt Securities of any series to cure
any ambiguity, omission, defect or inconsistency, to provide for the
assumption by a successor of the obligations of the Company under the
Indenture, to provide for uncertificated Debt Securities in addition to or in
place of certificated Debt Securities (provided that the uncertificated Debt
Securities are issued in registered form for purposes of Section 163(f) of the
Internal Revenue Code of 1986, as amended (the "Code"), or in a manner such
that the uncertificated Debt Securities are
8
<PAGE>
described in Section 163(f)(2)(B) of the Code), to add guarantees with respect
to the Debt Securities of such series, to secure the Debt Securities of such
series, to add to the covenants of the Company for the benefit of the holders
of the Debt Securities of such series or to surrender any right or power
conferred upon the Company, to make any change that does not adversely affect
the rights of any holder of Debt Securities of such series, to comply with any
requirements of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended, or to evidence
and provide for the acceptance of appointment under the Indenture by a
successor or separate Trustee with respect to the Debt Securities of one or
more series and to add to or change any of the provisions of the Indenture as
will be necessary to provide for or facilitate the administration of the
trusts under the Indenture by more than one Trustee.
The consent of the holders of the Debt Securities of any series is not
necessary under the Indenture to approve the particular form of any proposed
amendment. It is sufficient if such consent approves the substance of the
proposed amendment.
BOOK-ENTRY SYSTEM
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities held in book-entry form. A "Global
Security" is a Debt Security that represents, and is denominated in an amount
equal to the aggregate principal amount of, all the outstanding Debt
Securities of a series or any portion thereof, in either case having the same
terms, including, without limitation, the same original issue date, date or
dates on which principal is due and interest rate or method of determining
interest. The Global Security or Securities, if any, will be deposited with,
or on behalf of, a depositary (the "Depositary"), which will be identified in
the applicable Prospectus Supplement. Unless and until it is exchanged in
whole or in part for the individual Debt Securities represented thereby, a
Global Security may not be transferred except as a whole by the Depositary to
a nominee of the Depositary, by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any nominee of
the Depositary to a successor Depositary or any nominee of such successor
Depositary.
The specific terms of the depositary arrangement with respect to any series
of Debt Securities will be described in the Prospectus Supplement relating to
such series of Debt Securities. The Company anticipates that the following
provisions will generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary or its nominee will
credit the accounts of persons holding through it with the respective
principal amounts of the Debt Securities represented by such Global Security
purchased by such persons. Ownership of beneficial interests in a Global
Security will be limited to persons that have accounts with the Depositary
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests by participants in a Global Security will be
shown on, and the transfer of that ownership interest will be effected only
through, records maintained by the Depositary for such Global Security.
Ownership of beneficial interests in such Global Security by persons that hold
through participants will be shown on, and the transfer of that ownership
interest within such participant will be effected only through, records
maintained by such participant. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
Payment of principal, premium, if any, and interest, if any, with respect to
Debt Securities represented by any Global Security will be made to the
Depositary or its nominee, as the case may be, as the sole registered owner
and the sole holder of the Debt Securities represented thereby for all
purposes under the Indenture. None of the Company, the Trustee, any Registrar,
the Paying Agent or any agent of the Company or the Trustee will have any
responsibility or liability for (a) any aspect of the records relating to or
payments made by the Depositary, its nominee or any of its participants on
account of beneficial interests in the Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial interests,
(b) the payment to the owners of beneficial interests in the Global Security
of amounts paid to the Depositary or its nominee or (c) any other matter
relating to the actions and practices of the Depositary, its nominee or its
participants. None of the
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<PAGE>
Company, the Trustee, any Registrar, the Paying Agent or any agent of the
Company or the Trustee will be liable for any delay by the Depositary, its
nominee or any of its participants in identifying the owners of beneficial
interests in the Global Security, and the Company and the Trustee may
conclusively rely on, and will be protected in relying on, instructions from
the Depositary or its nominee for all purposes.
The Company expects that the Depositary or its nominee, upon receipt of any
payment of principal, premium, if any, or interest, if any, with respect to
any Global Security, will immediately credit, on its book-entry registration
and transfer system, the accounts of participants with payments in amounts
proportionate to their respective beneficial interests in the principal or
face amount of such Global Security as shown on the records of the Depositary
or its nominee. The Company also expects that payments by participants to
owners of beneficial interests in a Global Security held through such
participants will be governed by standing instructions and customary practices
as is now the case with securities held for customer accounts registered in
"street name" and will be the sole responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary, the Company will appoint a
successor depositary. If a successor depositary is not appointed by the
Company within 90 days, the Company will issue individual Debt Securities of
such series in exchange for the Global Security representing such series of
Debt Securities. In addition, the Company may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Debt Securities, determine no longer to have Debt Securities
of a series represented by a Global Security and, in such event, will issue
individual Debt Securities of such series in exchange for the Global Security
representing such series of Debt Securities. Furthermore, if the Company so
specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of such
series may, on terms acceptable to the Company, the Trustee and the Depositary
for such Global Security, receive individual Debt Securities of such series in
exchange for such beneficial interests, subject to any limitations described
in the Prospectus Supplement relating to such Debt Securities. In any such
instance, an owner of a beneficial interest in a Global Security will be
entitled to physical delivery of individual Debt Securities of the series
represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name.
DEFEASANCE
Subject to the conditions described below, the Company at any time may
terminate with respect to Debt Securities of any series all its obligations
under the Debt Securities of such series and under the Indenture with respect
to Debt Securities of such series ("legal defeasance"), except for certain
obligations, including those respecting the defeasance trust and obligations
to register the transfer or exchange of Debt Securities of such series, to
replace mutilated, destroyed, lost or stolen Debt Securities of such series
and to maintain a registrar and paying agent in respect of Debt Securities of
such series, or the Company at any time may terminate with respect to Debt
Securities of any series its obligations with respect to Debt Securities of
such series under the covenants described under "--Certain Covenants" above
("covenant defeasance").
The Company may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Company exercises its
legal defeasance option with respect to Debt Securities of any series, payment
of the Debt Securities of such series may not be accelerated because of an
Event of Default. If the Company exercises its covenant defeasance option with
respect to Debt Securities of any series, payment of the Debt Securities of
such series may not be accelerated because of an Event of Default specified in
clause (iv) in the first paragraph under "--Events of Default" above (to the
extent it relates to a covenant described under "--Certain Covenants" above)
with respect to Debt Securities of such series.
In order to exercise either defeasance option with respect to a series of
Debt Securities, the Company must irrevocably deposit in trust with the
Trustee money or U.S. Government Obligations sufficient to pay and discharge
the principal of and premium, if any, and interest, if any, on the Debt
Securities of such series to maturity or redemption, as the case may be, and
must comply with certain other conditions, including delivering
10
<PAGE>
to the Trustee an Opinion of Counsel to the effect that holders of the Debt
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and defeasance and will be
subject to Federal income tax on the same amount and in the same manner and at
the same times as would have been the case if such deposit and defeasance had
not occurred (and, in the case of legal defeasance only, such Opinion of
Counsel must be based on a ruling of the Internal Revenue Service or other
change in applicable Federal income tax law).
THE TRUSTEE
The Company may appoint a separate Trustee for any series of Debt
Securities. As used herein in the description of a series of Debt Securities,
the term "Trustee" refers to the Trustee appointed with respect to such series
of Debt Securities.
The Company may maintain banking and other commercial relationships with the
Trustee and its affiliates in the ordinary course of business, and the Trustee
may own Debt Securities.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York without giving effect to
applicable principles of conflicts of law to the extent that the application
of the laws of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as of
the date of determination, the lesser of (i) the present value of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended) or (ii) the present value of the total
obligations of the lessee for rental payments from the date of determination
until the first possible termination date of the lease included in such
Sale/Leaseback Transaction, plus the present value of the termination payment
then due, if any. For purposes of this definition, (x) the present value of
the total obligations of the lessee for rental payments and for any
termination payment will be discounted at a rate of 100 basis points above the
yield to maturity (as of the date of determination) on 10-year United States
Treasury securities and (y) rental payments will not include (A) amounts due
for maintenance, repairs, utilities, insurance, taxes, assessments and similar
charges or (B) contingent rent, such as that based on sales.
"Consolidated Net Tangible Assets" means total assets (net of applicable
reserves) as determined in accordance with GAAP, less (i) total current
liabilities, except for (A) notes and loans payable, (B) current maturities of
Long-Term Debt and (C) current maturities of obligations under capital leases,
and (ii) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as reflected in the
Company's most recent consolidated balance sheet preceding the date of a
determination.
"Debt" means any notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed.
"GAAP" means generally accepted accounting principles in the United States
as in effect and applied by the Company from time to time.
"Lien" means any mortgage, pledge, security interest, conditional sale or
other title retention agreement or other similar lien.
"Long-Term Debt" means Debt that by its terms matures on a date more than 12
months after the date it was created or Debt that the obligor may extend or
renew without the obligee's consent to a date more than 12 months after the
date the Debt was created.
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<PAGE>
"Principal Property" means any manufacturing plant or facility (together
with the land upon which it is erected and fixtures comprising a part thereof)
located in the United States of America (excluding territories and
possessions) now owned or hereafter acquired by the Company or any Restricted
Subsidiary the net book value of which, as of the date of determination,
exceeds 1.5% of Consolidated Net Tangible Assets, except any such plant or
facility which is a pollution control or other facility financed by
obligations issued by a state or local governmental unit and described in
Sections 141(a), 142(a)(5), 142(a)(6), 142(a)(10) or 144(a) of the Internal
Revenue Code of 1986, as amended, or any successor provision thereof, or which
in the opinion of the Board of Directors of the Company is not of material
importance to the total business conducted by the Company and its subsidiaries
as a whole. The net book value of any manufacturing plant or facility shall
mean the gross cost of the assets of such plant or facility less the
accumulated depreciation with respect to such assets, calculated in accordance
with GAAP and in the case of composite depreciation allocated in accordance
with the Company's accounting policies.
"Restricted Subsidiary" means (i) any subsidiary of the Company which has
substantially all of its assets located in the United States of America
(excluding territories and possessions) and which owns a Principal Property
and (ii) any subsidiary of the Company which owns stock or indebtedness of a
Restricted Subsidiary; provided, however, that the term "Restricted
Subsidiary" will not mean any subsidiary of the Company (x) engaged primarily
in financing receivables, making loans, extending credit or other activities
of a character conducted by a finance company or (y) which conducts
substantially all of its business outside the United States of America
(excluding its territories or possessions) or the principal assets of which
are stock or indebtedness of corporations which conduct substantially all of
their business outside the United States of America (excluding territories and
possessions).
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a subsidiary of the Company
transfers such property to a person and the Company or a subsidiary of the
Company leases it from such person.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities through underwriters, dealers or
agents or directly to one or more purchasers. Any such underwriter, dealer or
agent may be deemed to be an underwriter within the meaning of the Securities
Act. The Prospectus Supplement with respect to each series of Debt Securities
will set forth the terms of the offering of the Debt Securities of such
series, including the name or names of any underwriters, the purchase price
and the proceeds to the Company from such sale, any underwriting discounts and
other items constituting underwriters' compensation, the initial public
offering price and any discounts or concessions allowed or reallowed or paid
to dealers, and any securities exchanges on which the Debt Securities of such
series may be listed.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale,
which may be changed, at market prices prevailing at the time of sale or at
negotiated prices. The Debt Securities may be offered to the public either
through underwriting syndicates represented by managing underwriters or
through one or more underwriters without a syndicate. Unless otherwise set
forth in the Prospectus Supplement, the obligations of the underwriters to
purchase Debt Securities will be subject to certain conditions precedent, and
the underwriters will be obligated to purchase all the Debt Securities of a
series if any are purchased. Any initial public offering price and any
discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
If dealers are utilized in the sale of any Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealers, as principals. The dealers may then resell such Debt
Securities to the public at varying prices to be determined by such dealers at
the time of resale. The names of the dealers and the terms of any such sales
will be set forth in the Prospectus Supplement relating thereto.
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<PAGE>
Debt Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of the Debt Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Debt Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future. Such contracts will be subject only to those conditions set forth
in the Prospectus Supplement, and the Prospectus Supplement will set forth the
commissions payable for solicitation of such contracts.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be customers
of, engage in transactions with, or perform services for, the Company in the
ordinary course of business.
LEGAL MATTERS
Certain legal matters in connection with the Debt Securities will be passed
upon for the Company by Cravath, Swaine & Moore, New York, New York, and for
any underwriters or agents, if any, by a firm named in the Prospectus
Supplement relating to a particular issue of Debt Securities.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedules of the Company as of December 31, 1996 and 1995, and for each of the
years in the three-year period ended December 31, 1996, have been incorporated
by reference in this Prospectus in reliance upon the reports of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by
reference in this Prospectus, and upon the authority of said firm as experts
in accounting and auditing.
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<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information ..................................................... S-2
The Company................................................................ S-3
Recent Developments........................................................ S-3
Use of Proceeds............................................................ S-4
Selected Historical Consolidated Financial Data............................ S-5
Summary Pro Forma Financial Data........................................... S-7
Capitalization............................................................. S-8
Description of the MOPPRS.................................................. S-9
Certain United States Federal Income Tax Considerations.................... S-13
ERISA Considerations....................................................... S-17
Underwriting............................................................... S-18
Legal Matters.............................................................. S-19
Experts.................................................................... S-19
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
The Company................................................................ 3
Ratio of Earnings to Fixed Charges......................................... 3
Use of Proceeds............................................................ 3
Description of Debt Securities............................................. 4
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
Experts.................................................................... 13
</TABLE>
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$120,000,000
CYTEC INDUSTRIES INC.
6.846% MANDATORY PAR PUT
REMARKETED SECURITIES SM
("MOPPRS SM")
DUE MAY 11, 2025
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PROSPECTUS SUPPLEMENT
---------------
MERRILL LYNCH & CO.
SBC WARBURG DILLON READ INC.
MORGAN STANLEY DEAN WITTER
SALOMON SMITH BARNEY
MAY 6, 1998
"MANDATORY PAR PUT REMARKETED SECURITIES SM"
AND "MOPPRS SM" ARE SERVICE MARKS OWNED BY
MERRILL LYNCH & CO., INC.
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