<PAGE> 1
As filed with the Securities and Exchange Commission on August 31, 1998
REGISTRATION NO. 333- -
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
EASTMAN CHEMICAL COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware 62-1539359
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
100 North Eastman Road
Kingsport, Tennessee 37660
(423) 229-2000
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
----------------------
HAROLD L. HENDERSON, ESQ.
Senior Vice President and General Counsel
Eastman Chemical Company
100 North Eastman Road
Kingsport, Tennessee 37660
(423) 229-2000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
with copies to:
BRIAN L. HENRY, ESQ. ANN BAILEN FISHER, ESQ.
Eastman Chemical Company Sullivan & Cromwell
100 North Eastman Road 125 Broad Street
Kingsport, Tennessee 37660 New York, New York 10004
(423) 229-2000 (212) 559-4000
---------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement, as
determined in light of market and other conditions.
---------------------------
IF THE ONLY SECURITIES BEING REGISTERED ON THIS FORM ARE BEING OFFERED
PURSUANT TO DIVIDEND OR INTEREST REINVESTMENT PLANS, PLEASE CHECK THE FOLLOWING
BOX. [ ]
IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON
A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF
1933, OTHER THAN SECURITIES OFFERED ONLY IN CONNECTION WITH DIVIDEND OR INTEREST
REINVESTMENT PLANS, CHECK THE FOLLOWING BOX. [X]
IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING
PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX
AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER
EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING. [ ] __________________
IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C)
UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT
REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT
FOR THE SAME OFFERING. [ ] ________________
IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,
PLEASE CHECK THE FOLLOWING BOX. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================================================
Proposed Maximum Proposed
Title of Each Class of Amount to be Aggregate Price Maximum Aggregate Amount of
Securities to be Registered Registered Per Unit Offering Price Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (par value $0.01 per share) ..... (1)(2) (1) (1)(2) N/A
Preferred Stock (par value $0.01 per share) .. (1) (1) (1) N/A
Debt Securities .............................. (1) (1) (1) N/A
Total .................................... $1,000,000,000 (1) $1,000,000,000 $295,000(3)
============================================================================================================================
</TABLE>
<PAGE> 2
(1) There are being registered hereunder such indeterminate number of shares of
Common Stock and Preferred Stock and such indeterminate principal amount of
Debt Securities of the Registrant as shall have an aggregate initial
offering price not to exceed $1,000,000,000. If any Debt Securities are
issued at an original issue discount, then the securities registered shall
include such additional Debt Securities as may be necessary such that the
aggregate initial public offering price of all securities issued pursuant to
this Registration Statement will equal $1,000,000,000. If any Debt
Securities are issued with an initial offering price denominated in a
foreign currency or foreign currency unit, then the securities registered
shall include such additional Debt Securities as may be necessary such that
aggregate initial offering price of all securities issued pursuant to this
Registration Statement will be equivalent to $1,000,000,000. Any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder. The proposed maximum initial offering price
per unit will be determined, from time to time, by the Registrant in
connection with the issuance by the Registrant of the securities registered
hereunder. There are also being registered hereunder an indeterminate number
of shares of Common Stock and Preferred Stock as shall be issuable upon
conversion or exchange of convertible or exchangeable Preferred Stock
registered hereby.
(2) Each share of Common Stock includes a right to purchase shares of a
participating series of Preferred Stock of the Registrant (the "Rights").
Prior to the occurrence of certain events, none of which have occurred as of
the date hereof, the Rights will not be exercisable or evidenced separately
from the Common Stock.
(3) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such state.
SUBJECT TO COMPLETION, DATED AUGUST 31, 1998
[EASTMAN LOGO]
$1,000,000,000
EASTMAN CHEMICAL COMPANY
COMMON STOCK, PREFERRED STOCK AND DEBT SECURITIES
---------------------------
The Company may from time to time offer (i) Common Stock, (ii) Preferred
Stock or (iii) Debt Securities consisting of debentures, notes and/or other
unsecured evidences of indebtedness in one or more series (collectively, the
"Securities") at an aggregate initial offering price not to exceed
$1,000,000,000, or its equivalent in such other currency or in composite
currencies as may be designated by the Company at the time of offering. The
Securities may be offered separately or together, in separate series, in
amounts, at prices and on terms to be determined at the time of sale. The
accompanying Prospectus Supplement sets forth with regard to the particular
Securities with respect to which this Prospectus is being delivered, the terms
of the offering thereof, including (i) in the case of Common Stock, the number
of shares, (ii) in the case of Preferred Stock, with respect to the relevant
class or series, the title, maximum number of shares, rate, if any (which may be
fixed or variable), time of payment, and relative priority of any dividends, any
terms for redemption at the option of the Company or the holder, any terms for
sinking fund payments, any terms for conversion or exchange into other
securities, any voting rights, any restrictions on further issuances, and any
other terms of the Preferred Stock, and (iii) in the case of Debt Securities,
the title, aggregate principal amount, denominations (which may be in United
States dollars, in any other currency or in composite currencies), maturity,
rate, if any (which may be fixed or variable), and time of payment of any
interest, any terms for redemption at the option of the Company or the holder,
any terms for sinking fund payments, any listing on a securities exchange and
the initial public offering price and any other terms in connection with the
offering and sale of such Debt Securities.
The Company may sell Securities to or through underwriters or dealers, and
also may sell Securities directly to other purchasers or through agents. The
accompanying Prospectus Supplement sets forth the names of any underwriters,
dealers or agents employed by the Company in the sale of the Securities in
respect of which this Prospectus is being delivered, the principal amounts or
number of shares, if any, to be purchased by such underwriters or dealers and
the compensation, if any, of such underwriters, dealers or agents. If the
Company, directly or through agents, solicits offers to purchase Securities, the
Company reserves the sole right to accept and, together with its agents, to
reject in whole or in part any proposed purchase of Securities. See "Plan of
Distribution". Any underwriters, dealers or agents participating in the offering
may be deemed "underwriters" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"). See "Plan of Distribution" for possible
indemnification arrangements for such underwriters, dealers, agents and their
controlling persons.
---------------------------
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.
---------------------------
This Prospectus may not be used to consummate the sale of any Securities unless
accompanied by a Prospectus Supplement.
---------------------------
The date of this Prospectus is August 31, 1998.
<PAGE> 4
CERTAIN PERSONS PARTICIPATING IN AN OFFERING OF SECURITIES MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING
TRANSACTIONS IN SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN
CONNECTION WITH SUCH OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN
OF DISTRIBUTION".
AVAILABLE INFORMATION
Eastman Chemical Company (the "Company") has filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Securities offered hereby. This Prospectus, which forms a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement and the exhibits and schedules thereto,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information about the Company and the Securities,
reference is hereby made to the Registration Statement and to such exhibits and
schedules. Statements contained herein concerning the provisions of any document
filed as an exhibit to the Registration Statement or otherwise filed with the
Commission are not necessarily complete, and in each instance reference is made
to the copy of such document so filed. Each such statement is qualified in its
entirety by such reference.
In addition, the Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Commission. Reports, proxy and information statements and other information
filed by the Company with the Commission pursuant to the informational
requirements of the Exchange Act may be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Northeast Regional Office, Seven World Trade Center, Suite 1300,
New York, New York 10048, and Midwest Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material or
any part thereof may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Certain of such reports, proxy statements and other information are also
available over the Internet at http://www.sec.gov. The Company's Common Stock is
listed and traded on the New York Stock Exchange, Inc. (the "NYSE"). Reports,
proxy and information statements and other information concerning the Company
can also be inspected at the offices of the NYSE, 20 Broad Street, New York, New
York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company has filed the following documents with the Commission and
hereby incorporates such documents by reference in this Prospectus:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997 (the "Form 10-K");
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998 (the "Form 10-Q"); and
(3) The description of the Company's capital stock in the Company's
Form 10/A, filed with the Commission on December 9, 1993 (the "Form 10/A").
Each document or report subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the termination of the offering of the Securities shall be deemed
-2-
<PAGE> 5
to be incorporated by reference into this Prospectus and to be a part of this
Prospectus from the date of filing of such document. Any statement contained
herein, or in a document all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of the Registration Statement and this Prospectus to the
extent that a statement contained herein 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 the Registration Statement or this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the foregoing documents incorporated by reference, other than
certain exhibits to such documents. Written requests should be directed to:
Eastman Chemical Company, P.O. Box 431, Kingsport, Tennessee 37662-5371,
Attention: Corporate Information Center (telephone: (423) 229-1150).
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds from the sale of the Securities will be used for general corporate
purposes, which may include additions to working capital, refinancing existing
indebtedness, capital expenditures, and possible acquisitions. The Company has
not allocated a specific portion of the net proceeds for any particular use at
this time. Specific information concerning the use of proceeds from the sale of
any Securities may be included in the Prospectus Supplement relating to such
Securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratios of earnings
to fixed charges and earnings to combined fixed charges and preferred stock
dividends for the indicated periods:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED
JUNE 30, 1998 1997 1996 1995 1994 1993
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges ....... 4.2x 3.7x 6.1x 9.7x 6.3x 11.2x
Ratio of earnings to fixed charges and
preferred stock dividends ................ 4.2x 3.7x 6.1x 9.7x 6.3x 11.2x
</TABLE>
For purposes of computing these ratios, earnings represents income from
continuing operations before income taxes plus interest expense, the interest
component of rental expense and amortization of capitalized interest. Fixed
charges consist of interest expense, one-third of rent expense, which
approximates the interest portion of rent expense, and capitalized interest. At
this time, no preferred stock dividends are being paid as there are no shares of
preferred stock outstanding.
The historical information for 1993, as presented above, was determined
during the period when the Company was a wholly owned chemical business of
Eastman Kodak Company ("Kodak"). Pro forma ratio of earnings to fixed charges,
giving effect to the spin-off of the Company from Kodak as of December 31, 1993,
would approximate 3.7x, reflecting the assumption of $1.8 billion of new
borrowings at a 6% annual interest rate, and adjustments for pension,
post-retirement and certain other employee benefit costs. These costs were not
allocated to the Company by Kodak during 1993 and therefore are not reflected in
the historical information presented above.
-3-
<PAGE> 6
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL STOCK
The Company is authorized to issue up to 400,000,000 shares of capital
stock, of which 50,000,000 may be shares of preferred stock, par value $.01 per
share ("Preferred Stock"), and 350,000,000 may be shares of common stock, par
value $.01 per share ("common stock" and, together with attached Rights, as
defined below, "Common Stock"). As of August 28, 1998, 79,246,594 shares of
Common Stock and no shares of Preferred Stock were issued and outstanding.
The following descriptions of the capital stock of the Company are
summaries, and as such do not purport to be complete and are subject, and
qualified in their entirety by reference, to the more complete descriptions
contained in (i) the Amended and Restated Certificate of Incorporation of the
Company (the "Certificate of Incorporation"), (ii) the Amended and Restated
By-laws of the Company (the "By-laws"), and (iii) the Company's Stockholder
Protection Rights Agreement (the "Rights Agreement"), copies of each of which
are incorporated by reference as exhibits to the Registration Statement of which
this Prospectus is a part.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share on all
matters voted on by stockholders. Holders of Common Stock do not have cumulative
voting rights in the election of directors. Holders of Common Stock do not have
any preemptive right to subscribe for or purchase any securities of any class or
kind of the Company.
Holders of Common Stock do not have any subscription, redemption or
conversion privileges. Subject to the preferences or other rights of any
Preferred Stock that may be issued from time to time, holders of Common Stock
are entitled to participate ratably in dividends on the Common Stock as declared
by the Board of Directors. Holders of Common Stock are entitled to share ratably
in all assets available for distribution to stockholders in the event of
liquidation or dissolution of the Company, subject to distribution of the
preferential amount, if any, to be distributed to holders of Preferred Stock.
PREFERRED STOCK
The Certificate of Incorporation authorizes the Board of Directors, without
any vote or action by the holders of Common Stock, to issue up to 50,000,000
shares of Preferred Stock from time to time in one or more classes or series.
Other than the participating Preferred Stock relating to the Rights described in
"--Rights Plan" below, no class or series of Preferred Stock has been
established, and no shares of Preferred Stock have been issued.
Subject to limitations prescribed by law, the Board of Directors is
authorized to determine the rights, preferences, limitations and other terms of
any class or series of Preferred Stock. Issuances of Preferred Stock would be
subject to the applicable rules of the NYSE or other organizations on whose
systems the stock of the Company may then be quoted or listed. Depending upon
the terms of Preferred Stock established by the Board of Directors, any or all
classes or series of Preferred Stock may have preference over the Common Stock
with respect to dividends and other distributions and upon liquidation of the
Company. Issuance of any such shares with voting powers would dilute the voting
power of the outstanding Common Stock. Except as otherwise provided in an
applicable Prospectus Supplement, holders of Preferred Stock will not have any
preemptive right to subscribe for or purchase any securities of any class or
kind of the Company.
A Prospectus Supplement relating to any class or series of Preferred Stock
offered thereby will describe the following terms of such class or series of
Preferred Stock: (i) the designation of such class or series and the number
-4-
<PAGE> 7
of shares offered; (ii) the initial public offering price at which such shares
will be issued; (iii) the dividend rate of such class or series, the conditions
and dates upon which such dividends shall be payable, and whether such dividends
shall be cumulative or noncumulative; (iv) the relative ranking and preferences
of such class or series as to dividend rights and rights upon any liquidation,
dissolution or winding up of the affairs of the Company; (v) any redemption or
sinking fund provisions; (vi) any conversion or exchange rights of the holder or
the Company; (vii) any voting rights; (viii) any restrictions on further
issuances; (ix) any listing of such class or series on any securities exchange;
and (x) any other terms of such class or series.
RIGHTS PLAN
Each share of the Company's common stock has attached to it one right
("Right") issued pursuant to the Rights Agreement. Each Right entitles its
registered holder to purchase one one-hundredth of a share of a participating
Preferred Stock, designed to have economic and voting terms similar to those of
one share of common stock, for $120.00 (the "Exercise Price"), subject to
adjustment, after the earlier of (i) the tenth business day (subject to
extension) after commencement of a tender or exchange offer which, if
consummated, would result in a person becoming the beneficial owner of 15
percent or more of the outstanding shares of Common Stock (an "Acquiring
Person"), and (ii) the tenth business day (subject to prior adjustment) after
the first date (the "Flip-in Date") of a public announcement by the Company that
a person has become an Acquiring Person, other than as a result of a Flip-over
Transaction or Event (as defined below) (in either such case, the "Separation
Time"). The Rights will not trade separately from the shares of common stock
unless and until the Separation Time. Until a Right is exercised or exchanged
pursuant to the terms of the Rights Agreement, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The Rights will not be exercisable until the business day following the
Separation Time. The Rights will expire on the earliest of (i) the Exchange Time
(as defined below), (ii) the close of business on December 13, 2003, (iii) the
date on which the Rights are redeemed or terminated as described below and (iv)
the merger of the Company into another corporation pursuant to an agreement
entered into when there is no Acquiring Person (in any such case, the
"Expiration Time"). The Exercise Price and the number of Rights outstanding, or
in certain circumstances the securities purchasable upon exercise of the Rights,
are subject to adjustment upon the occurrence of certain events.
In the event that prior to the Expiration Time a Flip-in Date occurs, the
Company will take such action as shall be necessary to ensure and provide that
each Right (other than Rights beneficially owned by an Acquiring Person or any
affiliate, associate or transferee thereof, which Rights shall become void)
shall constitute the right to purchase from the Company that number of shares of
common stock having an aggregate market price equal to twice the Exercise Price
for an amount in cash equal to the then current Exercise Price. In addition, the
Board of Directors of the Company may, at its option, at any time after a
Flip-in Date and prior to the time that an Acquiring Person becomes the
beneficial owner of more than 50 percent of the outstanding shares of Common
Stock, elect to exchange all of the then outstanding Rights for shares of common
stock at an exchange ratio of one share of common stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of the Separation Time (the "Exchange Ratio").
Immediately upon such action by the Board of Directors (the "Exchange Time"),
the right to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive a number of shares of common stock equal to
the Exchange Ratio. If the Company becomes obligated to issue shares of common
stock upon exercise of or in exchange for Rights, the Company, at its option,
may substitute therefor shares of Participating Preferred Stock, at a rate of
one one-hundredth of a share of Participating Preferred Stock for each share of
common stock so issuable.
In the event that prior to the Expiration Time the Company enters into,
consummates or permits to occur a transaction or series of transactions after
the time an Acquiring Person has become such in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a binding share
exchange with any other Person if, at the time of the consolidation, merger or
share exchange or at the time the Company enters into an agreement with respect
to such consolidation, merger or share exchange, the Acquiring Person controls
the Board
-5-
<PAGE> 8
of Directors of the Company and any term of or arrangement concerning the
treatment of shares of capital stock in such merger, consolidation or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of Common Stock or (ii) the Company shall
sell or otherwise transfer (or one or more of its subsidiaries shall sell or
otherwise transfer) assets (A) aggregating more than 50% of the assets (measured
by either book value or fair market value) or (B) generating more than 50% of
the operating income or cash flow, of the Company and its subsidiaries (taken as
a whole) to any other Person (other than the Company or one or more of its
wholly owned subsidiaries) or to two or more such Persons which are affiliated
or otherwise acting in concert, if, at the time of such sale or transfer of
assets or at the time the Company (or any such subsidiary) enters into an
agreement with respect to such sale or transfer, the Acquiring Person controls
the Board of Directors of the Company (a "Flip-over Transaction or Event"), the
Company shall take such action as shall be necessary to ensure, and shall not
enter into, consummate or permit to occur such Flip-over Transaction or Event
until it shall have entered into a supplemental agreement with the Person
engaging in such Flip-over Transaction or Event or the parent corporation
thereof (the "Flip-over Entity"), for the benefit of the holders of the Rights,
providing, that upon consummation or occurrence of the Flip-over Transaction or
Event (i) each Right shall thereafter constitute the right to purchase from the
Flip-over Entity, upon exercise thereof in accordance with the terms of the
Rights Agreement, that number of shares of common stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the then current Exercise Price and (ii) the Flip-over
Entity shall thereafter be liable for, and shall assume, by virtue of such
Flip-over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to the Rights Agreement. For
purposes of the foregoing description, the term "Acquiring Person" shall include
any Acquiring Person and its Affiliates and Associates counted together as a
single Person.
The Rights are redeemable by the Company at $0.01 per Right, subject to
adjustment upon the occurrence of certain events, at any date prior to the date
they become exercisable, and, in certain events, may be canceled and terminated
without any payment to holders. The Rights have no voting rights and are not
entitled to dividends.
The Rights will not prevent a takeover of the Company. The Rights, however,
may cause substantial dilution to a person or group that acquires 15 percent or
more of the Common Stock unless the Rights are first redeemed or terminated by
the Board of Directors of the Company. Nevertheless, the Rights should not
interfere with a transaction that is in the best interests of the Company and
its stockholders because the Rights can be redeemed or terminated as hereinabove
described, before the consummation of such transaction.
The complete terms of the Rights are set forth in the Rights Agreement. The
Rights Agreement is incorporated by reference as an exhibit to the Registration
Statement of which this Prospectus is a part. A copy of the Rights Agreement can
be obtained from the Company as described under "Incorporation of Certain
Documents By Reference" or upon written request to the Rights Agent, First
Chicago Trust Company of New York, Suite 4660, 525 Washington Boulevard, Jersey
City, New Jersey 07310, Attn: Corporate Actions Department.
CERTAIN PROVISIONS AFFECTING CONTROL OF THE COMPANY
General
The provisions of the Certificate of Incorporation, the Company's Bylaws and
Delaware statutory law described in this section may delay or make more
difficult acquisitions or changes of control of the Company not approved by the
Company's Board of Directors. See also "--Rights Plan" above. Such provisions
could have the effect of discouraging third parties from making proposals
involving an acquisition or change of control of the Company, although such
proposals, if made, might be considered desirable by a majority of the Company's
stockholders. Such provisions may also have the effect of making it more
difficult for third parties to cause the replacement of the current management
of the Company without the concurrence of the Board of Directors.
-6-
<PAGE> 9
Number of Directors; Removal; Vacancies
The Certificate of Incorporation and the Bylaws provide that the number of
directors shall be determined from time to time exclusively by a vote of a
majority of the Company's Board of Directors then in office. The Certificate of
Incorporation also provides that the Company's Board shall have the exclusive
right to fill vacancies, including vacancies created by expansion of the Board.
The Certificate of Incorporation further provides that directors may be removed
only for cause and only by the affirmative vote of the holders of at least
66 2/3% of the voting power of all of the shares of the Company's capital stock
then entitled to vote in the election of directors. This provision, in
conjunction with the provision of the Certificate of Incorporation authorizing
the Board to fill vacant directorships, could prevent stockholders from removing
incumbent directors without cause and filling the resulting vacancies with their
own nominees.
Classified Board of Directors
The Certificate of Incorporation provides for the Company's Board of
Directors to be divided into three classes of directors serving staggered
three-year terms. As a result, approximately one third of the Company's Board of
Directors are elected each year. This provision could prevent a party who
acquires control of a majority of the outstanding voting stock from obtaining
control of the Company's Board of Directors until the second annual stockholders
meeting following the date the acquiror obtains the controlling stock interest,
could have the effect of discouraging a potential acquiror from making a tender
offer or otherwise attempting to obtain control of the Company and could thus
increase the likelihood that incumbent directors will retain their positions.
No Stockholder Action by Written Consent; Special Meetings
The Certificate of Incorporation provides that stockholder action can be
taken only at an annual or special meeting of stockholders and cannot be taken
by written consent in lieu of a meeting. The Certificate of Incorporation also
provides that special meetings of the stockholders can only be called pursuant
to a resolution approved by a majority of the Company's Board of Directors then
in office. Stockholders are not permitted to call a special meeting or to
require the Company's Board of Directors to call a special meeting of
stockholders. These provisions could delay a stockholder vote on certain
matters, such as business combinations and removal of directors, and could have
the effect of discouraging a potential acquiror from making a tender offer.
Advance Notice for Raising Business or Making Nominations at Meetings
The Bylaws establish an advance notice procedure for stockholder proposals
to be brought before a meeting of stockholders of the Company and for
nominations by stockholders of candidates for election as directors at an annual
meeting or a special meeting at which directors are to be elected. As described
more fully in the Bylaws, only such business may be conducted at a meeting of
stockholders as has been brought before the meeting by, or at the direction of,
the Company's Board of Directors, or by a stockholder who has given to the
Secretary of the Company timely written notice, in proper form, of the
stockholder's intention to bring that business before the meeting. The presiding
officer at such meeting has the authority to make such determinations. Only
persons who are nominated by, or at the direction of, the Company's Board of
Directors, or who are nominated by a stockholder who has given timely written
notice, in proper form, to the Secretary prior to a meeting at which directors
are to be elected will be eligible for election as directors of the Company.
To be timely, notice of nominations or other business to be brought before
an annual meeting must be received by the Secretary of the Company not later
than 60 days prior to the date of such annual meeting. The notice of any
nomination by a stockholder of any individual for election as a director must
set forth certain specified information, as required by the Bylaws, and must
contain the consent of each such person to serve as a director if elected. The
-7-
<PAGE> 10
person submitting the notice of nomination, and any person acting in concert
with such person, must provide their names and business addresses and certain
other information.
These provisions could make it more difficult for stockholders to raise
matters affecting control of the Company, including tender offers, business
combinations or the election or removal of directors, for stockholder vote.
Amendments to Bylaws
The Certificate of Incorporation provides that the Board of Directors or the
holders of at least 66 2/3% of the voting power of all shares of the Company's
capital stock then entitled to vote generally in the election of directors have
the power to amend or repeal the Company's Bylaws. This provision could make it
difficult for stockholders to amend or repeal any provisions of the Bylaws
adopted by the Board of Directors of the Company or to adopt any Bylaws
provisions opposed by the Board of Directors.
Amendment of the Certificate of Incorporation
Any proposal to amend, alter, change or repeal any provision of the
Certificate of Incorporation requires approval by the affirmative vote of both a
majority of the members of the Company's Board of Directors then in office and a
majority vote of the voting power of all of the shares of the Company's capital
stock entitled to vote generally in the election of directors. This provision
could make it difficult for stockholders to adopt, amend or repeal any provision
of the Certificate of Incorporation, including a provision affecting control of
the Company.
Preferred Stock and Additional Common Stock
Under the Certificate of Incorporation, the Company's Board of Directors has
the authority to provide by Board resolution for the issuance of shares of one
or more classes or series of preferred stock. The Company's Board of Directors
is authorized to fix by resolution the terms and conditions of each such other
class or series. See "--Preferred Stock." The authorized shares of the Company's
Preferred Stock, as well as authorized but unissued shares of Common Stock of
the Company, are available for issuance without further action by the Company's
stockholders, unless stockholder action is required by applicable law or the
rules of the New York Stock Exchange or any other stock exchange on which any
class or series of the Company's stock may then be listed.
These provisions give the Company's Board of Directors the power to approve
the issuance of a class or series of Preferred Stock, or additional shares of
Common Stock, of the Company that could, depending on its terms, either impede
or facilitate the completion of a merger, tender offer or other takeover
attempt. For example, the issuance of new shares might impede a business
combination if the terms of those shares include voting rights which would
enable a holder to block business combinations; the issuance of new shares might
facilitate a business combination if those shares have general voting rights
sufficient to cause an applicable percentage vote requirement to be satisfied.
Constituency or Stakeholder Provision
The Certificate of Incorporation authorizes the Board of Directors in its
discretion in determining what is in the best interests of the Company and its
stockholders to consider, in addition to the long-term and short-term interests
of the stockholders, (i) the social and economic effects of the matter being
considered on employees, customers, creditors and communities in which the
Company operates and (ii) in evaluating a potential business combination such
matters as the business and financial condition of the acquiror, the competence
and integrity of the acquiror's management, and prospects for successful
conclusion of the business combination being considered.
-8-
<PAGE> 11
This provision gives the Company's Board of Directors the authority to take into
account factors other than the financial interests of the stockholders and could
result in the rejection of a business combination or tender offer even if
proposed at a price exceeding market value.
Delaware Business Combination Statute
Section 203 of the Delaware General Corporation Law, as amended ("Section
203"), provides that, subject to certain exceptions specified therein, an
"interested stockholder" of a Delaware corporation shall not engage in any
business combination with the corporation for a three-year period following the
time that such stockholder becomes an "interested stockholder" unless (i) prior
to such time, the board of directors of the corporation approved either the
business combination or the transaction which resulted in the stockholder
becoming an "interested stockholder," (ii) upon consummation of the transaction
which resulted in the stockholder becoming an "interested stockholder," the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding certain shares), or
(iii) on or subsequent to such time, the business combination is approved by the
board of directors of the corporation and authorized at an annual or special
meeting of stockholders by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the "interested stockholder."
Except as otherwise specified in Section 203, an "interested stockholder" is
defined to include (x) any person that is the owner of 15% or more of the
outstanding voting stock of the corporation, or is an affiliate or associate of
the corporation and was the owner of 15% or more of the outstanding voting stock
of the corporation at any time within three years immediately prior to the
relevant time and (y) the affiliates and associates of any such person.
Under certain circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period, although the
stockholders may elect to exclude a corporation from the restrictions imposed
thereunder. The Company's Certificate of Incorporation does not exclude the
Company from the restrictions imposed under Section 203. The provisions of
Section 203 may encourage companies interested in acquiring the Company to
negotiate in advance with the Company's Board of Directors, since the
stockholder approval requirement would be avoided if a majority of the directors
then in office approve either the business combination or the transaction which
results in the stockholder becoming an interested stockholder. Such provisions
also may have the effect of preventing changes in the management of the Company.
It is possible that such provisions could make it more difficult to accomplish
transactions which stockholders may otherwise deem to be in their best
interests.
Copies of the Certificate of Incorporation and the Bylaws are included in
the Registration Statement of which this Prospectus is a part and are
incorporated herein by reference. The foregoing description of certain
provisions of the Certificate of Incorporation and the Bylaws does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, the Certificate of Incorporation and the Bylaws, including the definitions
of certain terms in each respective document.
TRANSFER AGENT AND REGISTRAR
First Chicago Trust Company of New York is the transfer agent and registrar
for the shares of the Common Stock.
-9-
<PAGE> 12
DESCRIPTION OF DEBT SECURITIES
Any debt securities offered hereby (the "Debt Securities") are to be issued
under an indenture, dated as of January 10, 1994 (the "Indenture"), between the
Company and The Bank of New York, as Trustee (the "Trustee"), a copy of which is
incorporated by reference as an exhibit to the Registration Statement of which
this Prospectus is a part. The following summaries of certain provisions of the
Indenture do not purport to be complete and are subject, and are qualified in
their entirety by reference, to all the provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular sections or
defined terms of the Indenture are referred to herein, such sections or defined
terms are incorporated by reference herein.
The following sets forth certain general terms and provisions of any Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Debt Securities") will be described
in the Prospectus Supplement relating to such Offered Debt Securities (the
"Applicable Prospectus Supplement").
GENERAL
The Indenture provides that Debt Securities in separate series may be issued
thereunder from time to time without limitation as to aggregate principal
amount. The Company may specify a maximum aggregate principal amount for the
Debt Securities of any series. (Section 301). Such Debt Securities may have such
terms and provisions which are not inconsistent with the Indenture, including as
to maturity, principal and interest, as the Company may determine. All Debt
Securities issued under the Indenture will be unsecured senior obligations of
the Company and will rank on a parity with all other unsecured and
unsubordinated indebtedness of the Company.
The Applicable Prospectus Supplement will describe the following terms of
the Offered Debt Securities: (1) the title of the Offered Debt Securities; (2)
any limit on the aggregate principal amount of the Offered Debt Securities; (3)
the Person to whom any interest on the Offered Debt Securities will be payable,
if other than the person in whose name that Debt Security (or one or more
Predecessor Debt Securities) is registered at the close of business on the
Regular Record Date for such interest; (4) the date or dates on which the
principal of and premium, if any, on the Offered Debt Securities is payable or
the method of determination thereof; (5) the rate or rates at which the Offered
Debt Securities will bear interest, if any, the date or dates from which any
such interest will accrue or the method by which such date or dates shall be
determined, the Interest Payment Dates on which any such interest will be
payable and the Regular Record Date for interest payable on any Interest Payment
Date; (6) the place or places where the principal of, premium, if any, and
interest on the Offered Debt Securities will be payable; (7) the period or
periods within which, the price or prices at which, the currency or currencies
(including currency units) in which and the other terms and conditions upon
which the Offered Debt Securities may be redeemed, in whole or in part, at the
option of the Company; (8) the obligation, if any, of the Company to redeem or
purchase the Offered Debt Securities pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods within
which, the price or prices at which and the other terms and conditions upon
which the Offered Debt Securities will be redeemed or purchased, in whole or in
part, pursuant to such obligation; (9) if other than denominations of $1,000 and
any integral multiple thereof, the denominations in which the Offered Debt
Securities will be issuable; (10) the currency, currencies or currency units in
which payment of the principal of and any premium and interest on any Offered
Debt Securities will be payable if other than the currency of the United States
of America; (11) if the amount of payments of principal of or any premium or
interest on any Offered Debt Securities may be determined with reference to an
index, formula or other method, the index, formula or other method by which such
amounts will be determined; (12) if the principal of or any premium or interest
on any Offered Debt Securities is to be payable, at the election of the Company
or a Holder thereof, in one or more currencies or currency units other than that
or those in which the Debt Securities are stated to be payable, the currency,
currencies or currency units in which payment of the principal of and any
premium and interest on the Offered Debt Securities as to which such election is
made will be payable, and the periods within which and the other terms and
conditions upon which such election is to be made; (13) if other than the
principal amount thereof, the portion of the principal amount of the Offered
Debt Securities that will be payable upon declaration of acceleration of the
Maturity thereof or the method by which such portion may be determined;
-10-
<PAGE> 13
(14) the applicability of the provisions described under "Defeasance and
Covenant Defeasance"; (15) if the Offered Debt Securities will be issuable only
in the form of a Global Security as described under "Book-Entry Securities", the
depositary or its nominee with respect to the Offered Debt Securities, if other
than The Depository Trust Company, and the circumstances under which the Global
Security may be registered for transfer or exchange or authenticated and
delivered in the name of a Person other than the depositary or its nominee; and
(16) any other terms of the Offered Debt Securities. (Section 301).
The Debt Securities may be offered and sold at a substantial discount below
their stated principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities will be
described in the Applicable Prospectus Supplement.
FORM, EXCHANGE AND TRANSFER
The Debt Securities of each series will be issued in fully registered form,
without coupons, and, unless otherwise specified in the Applicable Prospectus
Supplement, in denominations of $1,000 and any integral multiple thereof.
(Section 302). At the option of the Holder, subject to the terms of the
Indenture, Debt Securities of any series will be exchangeable for other Debt
Securities of such series of any authorized denomination and of a like tenor and
aggregate principal amount. Subject to the terms of the Indenture and the limits
applicable to Global Securities, Debt Securities may be presented for exchange
as provided above or for registration of transfer (duly endorsed or with the
form of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Section 305). Such transfer or exchange will be effected upon the
Security Registrar or such transfer agent, as the case may be, being satisfied
with the documents of title and identity of the person making the request. The
Company has appointed the Trustee as Security Registrar. The Company may at any
time designate additional transfer agents or rescind the designation of any
transfer agent or approve a change in the office through which any transfer
agent acts, except that the Company will be required to maintain a transfer
agent in each place of payment for the Debt Securities of each series. (Section
1002).
If the Debt Securities of any series are to be redeemed in part, the Company
will not be required to (i) issue, register the transfer of or exchange any Debt
Security of such series during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption of any such Debt
Security that may be selected for redemption and ending at the close of business
on the day of such mailing or (ii) register the transfer of or exchange the Debt
Security selected for redemption, in whole or in part, except the unredeemed
portion of the Debt Security being redeemed in part. (Section 305).
NOTICES
Notices to Holders of Debt Securities will be given by mail to the addresses
of such Holders as they may appear in the Security Register. (Sections 101 and
106).
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the purpose
of making payment and for all other purposes. (Section 308).
-11-
<PAGE> 14
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the law of the State of New York. (Section 112).
BOOK-ENTRY SYSTEM
Some or all of the Debt Securities of any series may be represented by one
or more global securities (each, a "Global Security") registered in the name of
The Depository Trust Company, New York, New York ("DTC") or its nominee, as
depositary. Upon the issuance of a Global Security, DTC or its nominee will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global Security to
the accounts of the participants. The accounts to be credited shall be
designated by the Underwriters. Ownership of beneficial interests in such Global
Securities will be limited to institutions that have accounts with DTC or its
nominee ("participants") and to persons that may hold interests through
participants. Ownership of beneficial interests by participants in such Global
Securities will be shown on, and the transfer of those ownership interests will
be effected only through, records maintained by such participants. The laws of
some jurisdictions may require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such limits and laws
may impair the ability to transfer beneficial interests in a Global Security.
Notwithstanding any provision of the Indentures or of any series of Debt
Securities, no Global Security may be exchanged in whole or in part for Debt
Securities registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than DTC or any nominee of
DTC unless (i) DTC has notified the Company that it is unwilling or unable to
continue as depositary for such Global Security or has ceased to be qualified to
act as such as required by the Indenture, (ii) there shall have occurred and be
continuing an Event of Default with respect to the Debt Securities represented
by such Global Security or (iii) there shall exist such other circumstances, in
addition to or in lieu of those described above, as may be described in the
applicable Prospectus Supplement. All Debt Securities issued in exchange for a
Global Security or any portion thereof will be registered in such names as DTC
may direct.
As long as DTC or its nominee is a registered holder and owner of such
Global Security, DTC or such nominee, as the case may be, will be considered the
sole owner and holder of the related Debt Securities for all purposes of such
Debt Securities and for all purposes under the Indenture. Except in the limited
circumstances referred to above, owners of beneficial interests in any such
Global Securities will not be entitled to have the Debt Securities represented
by such Global Securities registered in their names, will not receive or be
entitled to receive physical delivery of certificated Debt Securities in
definitive form and will not be considered to be the owners or holders of any
Debt Securities under the Indenture or the Debt Securities. Payment of principal
of, interest, if any, and premium, if any, on Debt Securities represented by a
Global Security registered in the name of or held by DTC or its nominee will be
made to DTC or its nominee, as the case may be, as the registered owner or
holder of such Global Security.
Payments, transfers, exchanges and other matters relating to beneficial
interests in a Global Security may be subject to various policies and procedures
adopted by DTC from time to time. Neither the Company nor the Trustee will have
any responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in a Global Security
for any Debt Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other aspect of the
relationship between DTC and its participants or the relationship between such
participants and the owners of beneficial interests in a Global Security owning
through such participants.
-12-
<PAGE> 15
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the Applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
Person in whose name such Debt Security (or one or more Predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest. (Section 307).
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Security
Register. Unless otherwise indicated in the Applicable Prospectus Supplement,
the corporate trust office of the Trustee in The City of New York will be
designated as the Company's sole Paying Agent for payments with respect to Debt
Securities of each series. Any other Paying Agents initially designated by the
Company for the Debt Securities of a particular series will be named in the
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that
the Company will be required to maintain a Paying Agent in each Place of Payment
for the Debt Securities of a particular series. (Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of the
principal of or any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest has
become due and payable will be repaid to the Company, and the Holder of such
Debt Security thereafter may look only to the Company for payment thereof.
(Section 1003).
COVENANTS
The Indenture contains, among others, the following covenants:
Maintenance of Properties
The Company will cause all properties material to the conduct of its
business or the business of any Subsidiary (as defined below) to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times. However,
this covenant will not prohibit the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the holders of the
Debt Securities.
Restrictions on Secured Debt
If the Company or any Restricted Subsidiary (as defined below) shall incur
or guarantee any Debt (as defined) secured by a Mortgage (as defined) on any
Principal Property (as defined below) or on any shares of stock of or Debt of
any Restricted Subsidiary, the Company will secure the Debt Securities equally
and ratably with (or prior to) such secured Debt, unless after giving effect
thereto, the aggregate amount of all such Debt so secured, together with all
Attributable Debt (as defined below) in respect of sale and leaseback
transactions involving Principal Properties (see "Restrictions on Sales and
Leasebacks" below), would not exceed 10% of the Consolidated Net Tangible Assets
of the Company and its consolidated Subsidiaries. This restriction will not
apply to, and there will be excluded from secured Debt in any computation under
such restriction, Debt secured by (a) Mortgages on property, shares of stock or
Debt existing on the date of the Indenture, (b) Mortgages securing only Debt
Securities issued under the Indenture, (c) Mortgages on property of, or on any
shares of stock of or Debt of, any Person,
-13-
<PAGE> 16
which Mortgages are existing at the time (i) such Person became a Restricted
Subsidiary, (ii) such Person is merged into or consolidated with the Company or
any Subsidiary or (iii) another Subsidiary merges into or consolidates with such
Person (in a transaction in which such Person becomes a Restricted Subsidiary),
which Mortgage was not incurred in anticipation of such transaction and was
outstanding prior to such transaction, (d) Mortgages in favor of the Company or
a Subsidiary, (e) Mortgages in favor of governmental bodies to secure progress
or advance payments, (f) Mortgages of property, shares of stock or Debt existing
at the time of acquisition thereof (including acquisition through merger or
consolidation), (g) certain purchase money Mortgages and Mortgages to secure the
construction cost of property, and (h) any extension, renewal or replacement of
any Mortgage referred to in the foregoing clauses (a) through (g), inclusive.
(Section 1008).
Restrictions on Sales and Leasebacks
Neither the Company nor any Restricted Subsidiary may enter into any sale
and leaseback transaction involving any Principal Property, completion of
construction and commencement of full operation of which has occurred more than
180 days prior thereto, unless (a) the Company or such Restricted Subsidiary
could create Debt secured by a Mortgage on such property as provided for above
under the caption "Restrictions on Secured Debt" in an amount equal to the
Attributable Debt with respect to the sale and leaseback transaction without
equally and ratably securing the Debt Securities of each series issued under the
Indenture, or (b) the net proceeds of the sale or transfer of the Principal
Property leased pursuant to such arrangement exceeds the fair market value of
such Principal Property and the Company, within 180 days, applies to the
retirement of its Funded Debt (as defined) an amount not less than the greater
of (i) the net proceeds of the sale of the Principal Property leased pursuant to
such arrangement or (ii) the fair market value of the Principal Property so
leased (subject to credits for certain voluntary retirements of Funded Debt).
This restriction will not apply to any sale and leaseback transaction (a)
between the Company and a Restricted Subsidiary or between Restricted
Subsidiaries or (b) involving the taking back of a lease for a period, including
renewals, of less than three years. (Section 1009).
Restrictions on Subsidiary Debt
The Company may not permit any Restricted Subsidiary to incur or assume any
Debt except (a) Debt that is or could be secured by a Mortgage permitted
pursuant to the restrictions described above under the caption "Restrictions on
Secured Debt"; (b) Debt that is outstanding on the date of the Indenture; (c)
Debt that is issued to and held by the Company or another Restricted Subsidiary;
(d) Debt incurred by a Person prior to the time (i) such person became a
Restricted Subsidiary, (ii) such Person is merged into or consolidated with the
Company or any Subsidiary or (iii) another Subsidiary merges into or
consolidates with such Person (in a transaction in which such Person becomes a
Restricted Subsidiary), which Debt was not incurred in anticipation of such
transaction and was outstanding prior to such transaction; (e) Debt that is
incurred in the ordinary course of business and that matures within one year;
and (f) extensions, renewals or replacements of any of the foregoing. The
Company may permit a Restricted Subsidiary to incur Debt as described in clauses
(b) through (f) of the preceding sentence only to the extent that the aggregate
amount of all such Debt of all Restricted Subsidiaries does not exceed 10% of
Consolidated Net Tangible Assets. (Section 1010).
The Company does not currently have any Restricted Subsidiaries that would
be subject to this limitation.
CONSOLIDATION, MERGER AND CERTAIN SALES OF ASSETS
The Company, without the consent of the Holders of any Outstanding Debt
Securities, may consolidate with or merge into, or convey, transfer or lease its
properties and assets substantially as an entirety to, any Person, and may
permit any Person to merge into, or convey, transfer or lease its properties and
assets substantially as an entirety to, the Company, provided that (i) any
successor Person must be a corporation, partnership, trust or other entity
organized and validly existing under the laws of any domestic jurisdiction and
must assume the Company's obligations on the Debt Securities and under the
Indenture, (ii) after giving effect to the transaction no Event of
-14-
<PAGE> 17
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing and (iii) certain
other conditions are met. (Article Eight).
CERTAIN DEFINITIONS
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable, at any date as of which the amount thereof is to
be determined, the total net amount of rent required to be paid by such Person
under such lease during the remaining term thereof, discounted from the
respective due dates thereof to such date at the weighted average rate per annum
borne by the Debt Securities compounded annually. The net amount of rent
required to be paid under any such lease for any such period shall be the
aggregate amount of the rent payable by the lessee with respect to such period
after excluding amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of penalty,
such net amount shall also include the amount of such penalty, but no rent shall
be considered as required to be paid under such lease subsequent to the first
date upon which it may be so terminated.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities, except for (i) notes and loans payable,
(ii) current maturities of long-term debt and (iii) current maturities of
obligations under capital leases and (b) goodwill and other intangibles.
"Principal Property" means any single parcel of real estate, any
manufacturing plant or warehouse owned or leased by the Company or any
Subsidiary which is located within the United States and the gross book value
(without reduction of any depreciation reserves) of which on the date as of
which the determination is being made exceeds 1% of Consolidated Net Tangible
Assets, other than any manufacturing plant or warehouse or portion thereof (a)
which is a pollution control or other facility financed by obligations issued by
a state or local government unit, or (b) which, in the good faith opinion of the
Board of Directors of the Company as evidenced by a resolution 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 an entirety.
"Restricted Subsidiary" means any wholly owned Subsidiary of the Company
substantially all of the assets of which are located in the United States
(excluding territories or possessions) and which owns a Principal Property,
except for a Subsidiary that is principally engaged in the business of
financing, of owning, buying, selling, leasing, dealing in or developing real
property, or of exporting goods or merchandise from or importing goods or
merchandise into the United States.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock that ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to the Debt Securities of any series: (a) failure to pay
principal of or any premium on any Debt Security of the same series when due;
(b) failure to pay any interest on any Debt Securities of that series when due,
continued for 30 days; (c) failure to perform any other covenant of the Company
in the Indenture, continued for 90 days after written notice has been given by
the Trustee, or the Holders of at least 10% in principal amount of the
Outstanding Debt Securities of that series, as provided in the Indenture; and
(d) certain events in bankruptcy, insolvency or reorganization. (Section 501).
-15-
<PAGE> 18
If an Event of Default (other than an Event of Default described in clause
(d) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Debt Securities of
such series by notice as provided in the Indenture may declare the principal
amount of the Debt Securities of such series to be due and payable immediately.
If an Event of Default described in clause (d) above with respect to the Debt
Securities of such series at the time Outstanding shall occur, the principal
amount of all the Debt Securities of such series will automatically, and without
any action by the Trustee or any Holder, become immediately due and payable.
After any such acceleration, but before a judgment or decree based on
acceleration, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of such series may, under certain circumstances,
rescind and annul such acceleration if all Events of Default in respect of such
series, other than the non-payment of accelerated principal (or other specified
amount), have been cured or waived as provided in the Indenture. (Section 502).
For information as to waiver of defaults, see "Modification and Waiver".
Subject to the provisions of the Indenture relating to the duties of the
Trustee if an Event of Default occurs and is continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee reasonable indemnity. (Section 603). Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
aggregate principal amount of the Outstanding Debt Securities of any series will
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Debt Securities of that series.
(Section 512).
No Holder of a Debt Security will have any right to institute any proceeding
with respect to the Indenture, or for the appointment of a receiver or a
trustee, or for any other remedy thereunder, unless (i) such Holder has
previously given to the Trustee written notice of a continuing Event of Default
with respect to the Debt Securities of such series, (ii) the Holders of at least
25% in aggregate principal amount of the Outstanding Debt Securities of such
series have made written request, and such Holder or Holders have offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee and
(iii) the Trustee has failed to institute such proceeding, and has not received
from the Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of such series a direction inconsistent with such request,
within 60 days after such notice, request and offer. (Section 507). However,
such limitations do not apply to a suit instituted by a Holder of a Debt
Security for the enforcement of payment of the principal of or any premium or
interest on such Debt Security on or after the applicable due date specified in
such Debt Security. (Section 508).
The Indenture does not contain any provisions that would provide protection
to holders of Debt Securities against a sudden and dramatic decline in credit
quality resulting from a takeover, recapitalization or similar restructuring of
the Company.
The Company will be required to furnish to the Trustee annually a statement
by certain of its officers as to whether or not the Company, to their knowledge,
is in default in the performance or observance of any of the terms, provisions
and conditions of the Indenture and, if so, specifying all such known defaults.
(Section 1004).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debt Securities of each series
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on, any Debt
Security, (b) reduce the principal amount of, or any premium or interest on, any
Debt Security, (c) change the place or currency of payment of principal of, or
any premium or interest on, any Debt Security, (d) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt Security,
(e) reduce the percentage in principal amount
-16-
<PAGE> 19
of Outstanding Debt Securities, the consent of whose Holders is required for
modification or amendment of the Indenture, (f) reduce the percentage in
principal amount of Outstanding Debt Securities of any series necessary for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults or (g) modify such provisions with respect to modification and
waiver. (Section 902).
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series may waive compliance by the Company
with certain restrictive provisions of the Indenture with respect to such
series. (Section 1011). The Holders of a majority in principal amount of the
Outstanding Debt Securities of such series may waive any past default under the
Indenture, except a default in the payment of principal, premium or interest and
certain covenants and provisions of the Indenture which cannot be amended
without the consent of the Holder of each Outstanding Debt Security affected.
(Section 513).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities of any series have
given or taken any direction, notice, consent, waiver or other action under the
Indenture as of any date, certain Debt Securities, including those for whose
payment or redemption money has been deposited or set aside in trust for the
Holders and those that have been fully defeased pursuant to Section 1302, will
not be deemed to be Outstanding. (Section 101).
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Debt Securities entitled to give or take any direction, notice,
consent, waiver or other action under the Indenture, in the manner and subject
to the limitations provided in the Indenture. In certain limited circumstances,
the Trustee also will be entitled to set a record date for action by Holders. If
a record date is set for any action to be taken by Holders, such action may be
taken only by persons who are Holders of Outstanding Debt Securities on the
record date. To be effective, such action must be taken by Holders of the
requisite principal amount of the Debt Securities within a specified period
following the record date. For any particular record date, this period will be
180 days or such shorter period as may be specified by the Company (or the
Trustee, if it set the record date), and may be shortened or lengthened (but not
beyond 180 days) from time to time. (Section 104).
DEFEASANCE AND COVENANT DEFEASANCE
The Company may elect, at its option at any time, to have the provisions of
Section 1302, relating to defeasance and discharge of indebtedness, or Section
1303, relating to defeasance of certain restrictive covenants in the Indenture,
applied to any series of Debt Securities, or to any specified part of a series.
(Section 1301).
Defeasance and Discharge
The Indenture provides that, upon the Company's exercise of its option to
have Section 1302 applied to any Debt Securities, the Company will be discharged
from all its obligations with respect to such Debt Securities (except for
certain obligations to exchange or register the transfer of Debt Securities, to
replace stolen, lost or mutilated Debt Securities, to maintain paying agencies
and to hold moneys for payment in trust) upon the deposit in trust for the
benefit of the Holders of such Debt Securities of money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such Debt
Securities on the respective Stated Maturities in accordance with the terms of
the Indenture and such Debt Securities. Such defeasance or discharge may occur
only if, among other things, the Company has delivered to the Trustee an Opinion
of Counsel to the effect that the Company has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that Holders of such Debt
Securities will not recognize gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge were not to occur.
(Sections 1302 and 1304).
-17-
<PAGE> 20
Defeasance of Certain Covenants
The Indenture provides that, upon the Company's exercise of its option to
have Section 1303 applied to any Debt Securities, the Company may omit to comply
with certain restrictive covenants, including those described above under the
caption "Covenants" and certain of the conditions referred to in clause (iii)
under the caption "Consolidation, Merger and Certain Sales of Assets", and the
occurrence of certain Events of Default, which are described above in clause (c)
under the caption "Events of Default", will be deemed not to be or result in an
Event of Default with respect to such Debt Securities. The Company, in order to
exercise such option, will be required to deposit, in trust for the benefit of
the Holders of such Debt Securities, money or U.S. Government Obligations, or
both, which, through the payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities in accordance with the terms of the Indenture and
such Debt Securities. The Company will also be required, among other things, to
deliver to the Trustee an Opinion of Counsel to the effect that Holders of such
Debt Securities will not recognize gain or loss for federal income tax purposes
as a result of such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and defeasance were not
to occur. In the event the Company exercised this option with respect to any
Debt Securities and such Debt Securities were declared due and payable because
of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations so deposited in trust would be sufficient to pay amounts
due on such Debt Securities at the time of their respective Stated Maturities
but may not be sufficient to pay amounts due on such Debt Securities upon any
acceleration resulting from such Event of Default. In such case, the Company
would remain liable for such payments. (Sections 1303 and 1304).
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
A summary of the material United States federal income tax consequences to
persons investing in Securities may be set forth in an applicable Prospectus
Supplement. Such summary will be presented for information purposes only,
however, and will not be intended as legal or tax advice to prospective
purchasers. Prospective purchasers of Securities are urged to consult their own
tax advisors prior to any acquisition of Securities.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby through agents,
through underwriters and through dealers, and Securities may be sold to other
purchasers directly or through agents. The distribution of the Securities may be
effected from time to time in one or more transactions at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices.
Offers to purchase Securities may be solicited by agents designated by the
Company from time to time. Any such agent involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by the Company to such agent set forth, in the
applicable Prospectus Supplement. Agents may be entitled under agreements that
may be entered into with the Company to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and such
agents or their affiliates may be customers of, extend credit to or engage in
transactions with or perform services for the Company in the ordinary course of
business.
If any underwriters are utilized in the sale, the Company will enter into an
underwriting agreement with such underwriters at the time of sale to them and
the names of the underwriters and the terms of the transaction will be set forth
in the applicable Prospectus Supplement that will be used by the underwriters to
make resales of the Securities in respect of which this Prospectus is delivered
to the public. The underwriters may be entitled, under
-18-
<PAGE> 21
the relevant underwriting agreement, to indemnification by the Company against
certain liabilities, including liabilities under the Securities Act, and such
underwriters or their affiliates may be customers of, extend credit to or engage
in transactions with or perform services for the Company in the ordinary course
of business.
If dealers are utilized in the sale of the Securities in respect of which
this Prospectus is delivered, the Company will sell such Securities to such
dealers, as principal. The dealers may then resell such Securities to the public
at varying prices to be determined by such dealers at the time of resale.
Dealers may be entitled to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, and such dealers or
their affiliates may be customers of, extend credit to or engage in transactions
with or perform services for the Company in the ordinary course of business.
In connection with the sale of Securities, underwriters, dealers or agents
may receive compensation from the Company or from purchasers of Securities for
whom they may act as agents in the form of discounts, concessions or
commissions. Underwriters may sell securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions from the purchasers for
whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Securities by them, may be deemed to be underwriting discounts and
commissions under the Securities Act.
In connection with an offering of Securities, the underwriters may purchase
and sell such Securities in the open market. These transactions may include
over-allotment and stabilizing transactions and purchases to cover short
positions created by the underwriters in connection with the offering.
Stabilizing transactions consist of certain bids or purchases for the purpose of
preventing or retarding a decline in the market price of the securities; and
short positions created by the underwriters involve the sale by the underwriters
of a greater number of Securities than they are required to purchase from the
Company in the offering. The underwriters also may impose a penalty bid, whereby
selling concessions allowed to broker-dealers in respect of the Securities sold
in the offering may be reclaimed by the underwriters if such Securities are
repurchased by the underwriters in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Securities, which may be higher than the price that might otherwise prevail in
the open market; and these activities, if commenced, may be discontinued at any
time. These transactions may be effected on the New York Stock Exchange, in the
over-the-counter market or otherwise.
The Preferred Stock and Debt Securities will be new issues of securities
with no established trading market. If so indicated in the applicable Prospectus
Supplement, any underwriters, dealers or agents to or through whom such
Securities are sold by the Company for public offering and sale may make a
market in such Securities, but such underwriters and agents will not be
obligated to do so and may discontinue any market-making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any such Securities.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Company by Harold
L. Henderson, Senior Vice President and General Counsel of the Company, and for
the Underwriters by Sullivan & Cromwell, New York, New York. As of August 28,
1998, Mr. Henderson held 914 shares of the Company's Common Stock, as well as
options to purchase 50,000 shares of the Company's Common Stock under a Company
stock option plan.
EXPERTS
The consolidated financial statements incorporated in the Prospectus by
reference to the Annual Report on Form 10-K for the year ended December 31,
1997, have been so incorporated in reliance on the report of
-19-
<PAGE> 22
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
-20-
<PAGE> 23
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration fee ........ $295,000
Printing and Engraving Fees ................................ 100,000*
Blue Sky Fees and Expenses ................................. 30,000*
Rating Agency Fees ......................................... 150,000*
Fees of Trustee, Registrar and Transfer Agent............... 75,000*
Legal Fees and Expenses .................................... 100,000*
Accounting Fees and Expenses ............................... 50,000*
Miscellaneous .............................................. 50,000*
--------
Total.................................................... $850,000*
========
</TABLE>
- ----------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Limitation on Liability of Directors
Pursuant to authority conferred by Section 102 of the Delaware General
Corporation Law (the "DGCL"), Article VIII of the Company's Certificate of
Incorporation ("Article VIII") eliminates the personal liability of the
Company's directors to the Company or its stockholders for monetary damages for
breach of fiduciary duty. Directors remain liable for (i) any breach of the duty
of loyalty to the Company or its stockholders, (ii) any act or omission not in
good faith or which involves intentional misconduct or a knowing violation of
law, (iii) any violation of Section 174 of the DGCL, which proscribes the
payment of dividends and stock purchases or redemptions under certain
circumstances, and (iv) any transaction from which directors derive an improper
personal benefit.
Article VIII further provides that any future repeal or amendment of
its terms will not adversely affect any rights of directors existing thereunder
with respect to acts or omissions occurring prior to such repeal or amendment.
Article VIII also incorporates any future amendments to Delaware law which
further eliminate or limit the liability of directors.
Indemnification and Insurance
In accordance with Section 145 of the DGCL, which allows and, in some
cases, requires the indemnification of directors and officers under certain
circumstances, Article VII of the Company's Certificate of Incorporation
("Article VII") and certain provisions of the Company's Bylaws grant the
Company's directors and officers a right to indemnification for all expenses
relating to civil, criminal, administrative or investigative procedures to which
they are a party (i) by reason of the fact that they are or were directors or
officers of the Company or (ii) by reason of the fact that, while they are or
were directors or officers of the Company, they are or were serving at the
request of the Company as directors, trustees, officers, employees or agents of
another enterprise. Section VI of the Bylaws further provides that an
advancement for any such expenses shall only be made upon delivery to the
Company by the indemnitee of an undertaking to repay all amounts so advanced if
it is ultimately determined by final judicial decision from which there is no
further right to appeal that such indemnitee is not entitled to be indemnified
under Article VII or otherwise.
In addition, Article VII provides that directors and officers therein
described shall be indemnified to the fullest extent not prohibited by Section
145 of the DGCL, or any successor provisions or amendments thereunder. In the
event that any such successor provisions or amendments provide indemnification
rights broader than
II-1
<PAGE> 24
permitted prior thereto, Article VII allows such broader indemnification rights
to apply retroactively with respect to any predating alleged action or inaction
and also allows the indemnification to continue after an indemnitee has ceased
to be a director or officer of the corporation and to inure to the benefit of
the indemnitee's heirs, executors and administrators.
If a claim for indemnification under Article VII is not paid in full
by the Company or an advancement of expenses is not made by the Company within a
prescribed period of time and a suit is filed in relation thereto, the Company's
Bylaws entitle the indemnitee to recover the expense of prosecuting or defending
such suit, if the indemnitee is successful in whole or in part. The Company's
Bylaws also entitle the indemnitee to recover the expense of defending a suit
brought by the Company to recover an advancement of expenses pursuant to the
terms of an undertaking, if the indemnitee is successful in whole or in part.
The Bylaws also entitle the Company to recover advanced expenses upon final
adjudication that the indemnitee has not met the applicable standard of conduct
set forth in Section 145 of the DGCL. Under the Company's Bylaws, the burden of
proving that the indemnitee is not entitled to be indemnified lies with the
Company.
Article VII further provides that the right to indemnification is not
exclusive of any other right which any indemnitee may have or thereafter acquire
under any statute, the Company's Certificate of Incorporation or Bylaws, any
agreement or vote of stockholders or disinterested directors or otherwise, and
permits, but does not require, the Company to indemnify and advance expenses to
its agents and employees to the same (or any lesser or greater) extent as
directors and officers. The Bylaws provide that the Corporation shall indemnify
and advance expenses to employees to the same extent as to directors and
officers.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted for directors and officers and controlling
persons pursuant to the foregoing provisions, the Company has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
The Company's Bylaws authorize the Company to purchase insurance for
directors, officers, trustees, employees, or agents of the Company or another
enterprise against any expense, liability or loss, whether or not the Company
would have the power to indemnify such persons against such expense or liability
under the DGCL. The Company intends to maintain insurance coverage for its
officers and directors as well as insurance coverage to reimburse the Company
for potential costs of its corporate indemnification of directors and officers.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<S> <C>
1(a) Form of Underwriting Agreement for Common Stock and Preferred Stock.
1(b) Form of Underwriting Agreement for Debt Securities.
4(a) Amended and Restated Certificate of Incorporation of Eastman
Chemical Company (incorporated herein by reference to Exhibit
3.01 to Eastman Chemical Company's Registration Statement on
Form S-1, File No. 33-72364, as amended).
4(b) Amended and Restated By-laws of Eastman Chemical Company, as
amended February 3, 1998 (incorporated by reference to Exhibit
3.02 to Eastman Chemical Company's Annual Report on Form 10-K
for the year ended December 31, 1997).
</TABLE>
II-2
<PAGE> 25
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<S> <C>
4(c) Form of Eastman Chemical Company Common Stock certificate
(incorporated herein by reference to Exhibit 3.02 to Eastman
Chemical Company's Annual Report on Form 10-K for the year
ended December 31, 1993).
4(d) Stockholder Protection Rights Agreement dated as of December
13, 1993, between Eastman Chemical Company and First Chicago
Trust Company of New York, as Rights Agent (incorporated
herein by reference to Exhibit 4.4 to Eastman Chemical
Company's Registration Statement on Form S-8 relating to the
Eastman Investment Plan, File No. 33-73810).
4(e) Indenture, dated as of January 10, 1994, between Eastman
Chemical Company and The Bank of New York, as Trustee (the
"Indenture") (incorporated herein by reference to Exhibit 4(a)
to Eastman Chemical Company's Current Report on Form 8-K dated
January 10, 1994).
5 Opinion as to the legality of the Securities.
12 Statements re Computation of Ratios of Earnings to Fixed
Charges and Ratios of Earnings to Fixed Charges and Preferred
Stock Dividends (incorporated herein by reference to Exhibit
12.01 to Eastman Chemical Company's Annual Report on Form 10-K
for the year ended December 31, 1997 and to Exhibit 12.01 to
Eastman Chemical Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1998).
23(a) Consent of Counsel (included in Exhibit 5).
23(b) Consent of General Counsel.
23(c) Consent of Independent Accountants.
24 Power of Attorney (included in signature page).
25 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The Bank of New York.
</TABLE>
ITEM 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of
the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20% change in the maximum
II-3
<PAGE> 26
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-4
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Eastman Chemical Company certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Kingsport, State of Tennessee, as of
the 31st day of August, 1998.
EASTMAN CHEMICAL COMPANY
By: /s/ Earnest W. Deavenport, Jr.
-------------------------------------------------
Earnest W. Deavenport, Jr.
Chairman of the Board and Chief Executive Officer
Each person whose signature appears below constitutes and appoints
Earnest W. Deavenport, Jr. and Allan R. Rothwell, and each of them, as his or
her true and lawful attorneys-in-fact and agent, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) thereto and any related Rule 462(b) registration statement under the
Securities Act of 1933, as amended, and all documents related thereto, and to
file the same, with all exhibits thereto and all other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing necessary or advisable to be done as
fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
PRINCIPAL EXECUTIVE OFFICER:
/s/ Earnest W. Deavenport, Jr. Chairman of the Board and Chief
------------------------------ Executive Officer
EARNEST W. DEAVENPORT, JR.
PRINCIPAL FINANCIAL OFFICER:
/s/ Allan R. Rothwell Senior Vice President and Chief
------------------------------ Financial Officer
ALLAN R. ROTHWELL
PRINCIPAL ACCOUNTING
OFFICER:
</TABLE>
II-5
<PAGE> 28
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Patrick R. Kinsey Vice President and Comptroller
------------------------------
PATRICK R. KINSEY
DIRECTORS:
/s/ H. Jesse Arnelle Director
------------------------------
H. JESSE ARNELLE
/s/ R. Wiley Bourne, Jr. Vice Chairman of the Board and
------------------------------ Executive Vice President
R. WILEY BOURNE, JR.
/s/ Calvin A. Campbell, Jr. Director
------------------------------
CALVIN A. CAMPBELL, JR.
/s/ Jerry E. Dempsey Director
------------------------------
JERRY E. DEMPSEY
/s/ John W. Donehower Director
------------------------------
JOHN W. DONEHOWER
/s/ Lee Liu Director
------------------------------
LEE LIU
/s/ Marilyn R. Marks Director
------------------------------
MARILYN R. MARKS
/s/ Gerald B. Mitchell Director
------------------------------
GERALD B. MITCHELL
/s/ John A. White Director
------------------------------
JOHN A. WHITE
</TABLE>
Dated: August 31, 1998.
<PAGE> 1
EXHIBIT 1(a)
FORM OF AGREEMENT
EASTMAN CHEMICAL COMPANY
------------
UNDERWRITING AGREEMENT
________ __, 199_
To the Underwriters Named
in Schedule I Hereto:
Eastman Chemical Company, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of _________ shares of [Common Stock of the Company
("Common Stock")], [name of Series Preferred Stock ("Preferred Stock")] [and, at
the election of the Underwriters, up to _________ additional shares of [Common
Stock] [Preferred Stock]]. The __________ shares of [Common Stock] [Preferred
Stock] to be sold are herein called the "Firm Shares" and the _______ additional
shares of [Common Stock] [Preferred Stock] to be sold are herein called the
"Optional Shares". The Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 2 hereof are herein collectively called
the "Shares".
1. The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-________) (the "Initial Registration Statement") in respect of the
Shares has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendments thereto, each in the form heretofore
delivered to the Underwriters, including all documents incorporated by
reference therein, has been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement") filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement or any document
incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission (other than prospectuses
filed pursuant to Rule 424 of the rules and regulations of the
Commission under the Act , each in the form heretofore delivered to the
Underwriters); and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included
<PAGE> 2
in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) under the Act being hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial Registration
Statement and the Rule 462(b) Registration Statement, if any, including
all exhibits thereto and (i) the information, if any, contained in the
form of final prospectus filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 4(a) hereof and deemed
by virtue of Rule 430A under the Act to be part of such Initial
Registration Statement at the time it was declared effective and (ii)
the documents incorporated by reference in the prospectus contained in
such registration statement at the time such part of such registration
statement became effective, but excluding Form T-1, each as amended at
the time such part of such registration statement became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, being hereinafter collectively called the
"Registration Statement"; such final prospectus, in the form first
filed pursuant to Rule 424(b) under the Act, being hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to the applicable form under
the Act, as of the date of such Preliminary Prospectus or Prospectus,
as the case may be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act
after the effective date of the Initial Registration Statement that is
incorporated by reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented shall be deemed
to refer to the Prospectus as amended or supplemented in relation to
the Securities in the form in which it is filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 4(a)
hereof, including any documents incorporated by reference therein as of
the date of such filing);
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through you expressly for use therein;
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents
-2-
<PAGE> 3
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through you expressly for use therein;
(d) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter
through you expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree which would be
reasonably likely to have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company and its subsidiaries taken as a whole or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
(f) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as are not material and do not
interfere with the use made and proposed to be made of such property by
the Company and its subsidiaries; and any real property and buildings
held under lease by the Company and its subsidiaries
-3-
<PAGE> 4
are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the
Company and its subsidiaries;
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued shares of capital
stock of each subsidiary of the Company are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims and all of the issued shares of capital stock of
each subsidiary of the Company that is a significant subsidiary, within
the meaning of such term as set forth in Rule 1-02 of Regulation S-X,
have been duly and validly authorized and issued, are fully paid and
non-assessable (except for directors' qualifying shares);
[(i) Insert if Common Stock--The Firm Shares and any
Optional Shares have been duly and validly authorized and, when the
Firm Shares are issued and delivered pursuant to this Agreement and in
the case of any Optional Shares, pursuant to Over-allotment Options (as
defined in Section 2 hereof) with respect to such Shares, such Shares
will be duly and validly issued and fully paid and nonassessable; and
the Shares conform to the description thereof contained in the
Registration Statement and Prospectus;]
[(i) Insert if Preferred Stock--The Firm Shares and any
Optional Shares have been duly and validly authorized and, when the
Firm Shares are issued and delivered pursuant to this Agreement and in
the case of any Optional Shares, pursuant to Over-allotment Options (as
defined in Section 2 hereof) with respect to such Shares, such Shares
will be duly and validly issued and fully paid and nonassessable and
will have the rights set forth in the Company's Certificate of
Incorporation, as amended, including the applicable certificate of
designations filed under Section 151 of the General Corporation Law of
the State of Delaware (the "Certificate of Designations") and which
will be timely filed; and the Shares will conform to the description
thereof in the Prospectus;]
[Insert if Shares are convertible into or exchangeable for
Common Stock--The shares of Common Stock issuable upon [conversion]
[exchange] of such Preferred Stock have been duly and validly
authorized and reserved for issuance upon such [conversion] [exchange],
and, when issued and delivered upon such [conversion] [exchange], will
be
-4-
<PAGE> 5
duly and validly issued and will be fully paid and nonassessable; the
stockholders of the Company have no preemptive rights with respect to
such Common Stock issuable upon [conversion] [exchange] of such
Preferred Stock; and such shares of Common Stock conform to the
description of the Common Stock contained in the Registration Statement
and the Prospectus;]
(j) The issue and sale of the Shares [and any shares of
________________ issuable upon conversion, exchange or exercise of the
Shares] and the compliance by the Company with all of the provisions of
this Agreement and each Over-allotment Option and the consummation of
the transactions contemplated herein and therein will not conflict with
or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject except, in
each case, for such breaches, violations and defaults that would not,
individually or in the aggregate, be reasonably likely to have a
material adverse effect on the financial position, stockholders'
equity, results of operations or business prospects of the Company and
its subsidiaries taken as a whole, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Shares [and any Shares of
_______________ issuable upon conversion, exchange or exercise of the
Shares] or the consummation by the Company of the transactions
contemplated by this Agreement or the Over-allotment Options, except
such as have been, or will have been prior to the Time of Delivery (as
defined in Section 3 hereof), obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares and any shares of the
___________ issuable upon conversion, exchange, or exercise of the
Shares by the Underwriters;
(k) Neither the Company nor any of its subsidiaries (i)
has received notice or has actual knowledge of any claim, demand,
obligation, cause of action, accusation, allegation, order, violation,
damage, injury, judgment, penalty or fine which would, individually or
in the aggregate, be reasonably likely to have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole
resulting from (A) the violation or alleged violation of any laws
relating to air pollution, water pollution, noise control and/or
handling discharge, disposal or recovery of on-site or off-site
hazardous substances or materials, (B) any noncompliance with or
violation of the requirements of any environmental law, (C) the release
or threatened release of any toxic or hazardous waste, substance or
constituent or (D) any other Environmental Matter (as hereinafter
defined), or (ii) is or will be liable in connection with the release
or threatened release of any toxic or hazardous waste, substance or
constituent, which liability would, individually or in the aggregate,
be reasonably likely to have a material adverse effect on the financial
position, stockholders'
-5-
<PAGE> 6
equity or results of operations of the Company and its subsidiaries
taken as a whole, or (iii) has received notice or has actual knowledge
of any governmental investigation seeking remedial action in connection
with a release or threatened release of any toxic or hazardous waste,
substance or constituent for which the Company or any of its
subsidiaries may be liable and which (if the Company or any of its
subsidiaries were so liable) would be reasonably likely to have a
material adverse effect on the financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole; "Environmental Matter" means (I) the release of any amount of
toxic or hazardous waste or substances, pollutant or contaminant into
the environment, (II) the management, including the generation,
handling, treatment, storage, transport, discharge or disposal or
recovery, whether on-site or off-site, of any solid wastes, toxic or
hazardous wastes, hazardous substances, pollutants or contaminants,
(III) the past and present use of surface waters or groundwater and
(IV) the construction or maintenance of any dams or levees;
(l) The Company and its subsidiaries own or possess the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "patent and
proprietary rights") presently employed by them in connection with the
business now operated by them, and the patent and proprietary rights
necessary in connection with the business proposed to be operated by
them, as described in the Prospectus, and neither the Company nor any
of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any patent or proprietary rights referred to above, or of
any facts which would render any such patent and proprietary rights
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, would, individually or in the aggregate, be reasonably
likely to result in any material adverse change in the financial
position, stockholders' equity, results of operations or business
prospects of the Company and its subsidiaries taken as a whole;
(m) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which would,
individually or in the aggregate, be reasonably likely to have a
material adverse effect on the financial position, stockholders'
equity, results of operations or business prospects of the Company and
its subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
(n) [PricewaterhouseCoopers LLP], who have certified
certain financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
-6-
<PAGE> 7
(o) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
(p) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida
Statutes.
2. Subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the purchase price and on the other terms set forth in Schedule II hereto, the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and, (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares, as provided below, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company at
the purchase price to the Underwriters set forth in Schedule II hereto that
portion of the number of Optional Shares as to which such election shall have
been exercised.
The Company hereby grants to each of the Underwriters the right (an
"Over-allotment Option") to purchase at their election up to the number of
Optional Shares set forth opposite the name of such Underwriter in Schedule I
hereto on the terms referred to in the paragraph above for the sole purpose of
covering over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from you to the
Company given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by
you, but in no event earlier than the First Time of Delivery (as defined in
Section 3 hereof) or, unless you and the Company otherwise agree in writing, no
earlier than two or later than ten business days after the date of such notice.
3. Certificates for the Firm Shares and the Optional Shares to
be purchased by each Underwriter hereunder, in definitive form to the extent
practicable, and in such authorized denominations and registered in the name of
[a nominee of The Depository Trust Company] [other name] as described in the
Prospectus, shall be delivered by or on behalf of the Company to you for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by [wire transfer of immediately available
funds] [other method to be specified], (i) with respect to the Firm Shares, all
at the office set forth on Schedule II hereto on the date set forth therein or
at such other time and date as you and the Company may agree upon in writing,
such time and date being herein called the "First Time of Delivery" and (ii)
with respect to the Optional Shares, if any, in the manner and at the time and
date specified by you in the written notice given by your election to purchase
such Optional Shares, or at such other time and date as you and the Company may
agree upon in writing, such time and date, if not the First Time of Delivery,
herein called the "Second Time of Delivery". Each such time and date for
delivery is herein called a "Time of Delivery". [Such certificates will be made
available for checking and
-7-
<PAGE> 8
packaging at least twenty-four hours prior to such Time of Delivery at the
office of [The Depository Trust Company, 55 Water Street, New York, New York]].
4. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement, or, if
applicable, such other time as may be required by Rule 430A(a)(3) under
the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to any Time of Delivery for
such Shares which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice
thereof, of the time when the Registration Statement, or any amendment
thereto, has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you
with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of such Shares; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus relating to the Shares [and any
shares of _____________ issuable upon conversion, exercise or exchange
of the Shares], of the suspension of the qualification of such Shares
[and any shares of ____________ issuable upon conversion, exercise or
exchange of the Shares] for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Preliminary
Prospectus or Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify such Shares [and any shares of
____________ issuable upon conversion, exercise or exchange of the
Shares] for offering and sale under the securities laws of such
jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Shares [and any shares of ____________ issuable
upon conversion, exercise or exchange of the Shares], provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time on the New
York Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriters with copies of the Prospectus
in New York City, in such quantities as you may reasonably request,
and, if the delivery of a prospectus is required at any time prior to
the expiration of nine months after the time of issue of the Prospectus
in connection with
-8-
<PAGE> 9
the offering or sale of the Shares and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to amend
or supplement the Prospectus or to file under the Exchange Act any
document incorporated by reference in the Prospectus in order to comply
with the Act or the Exchange Act, to notify you and upon your request
to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Prospectus or a
supplement to the Prospectus which will correct such statement or
omission or effect such compliance; in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Shares
at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter,
to prepare and deliver to such Underwriter as many copies as you may
request of an amended or supplemented Prospectus complying with Section
10(a)(3) of the Act; and "New York Business Day" shall mean each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in New York are generally authorized or
obliged by law or executive order to close;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c)), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at
the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and
continuing to the later of (i) the termination of trading restrictions
for the Shares, as notified to the Company by you and (ii) the last
Time of Delivery, not to offer, sell, contract to sell or otherwise
dispose of any securities of the Company that are substantially similar
to the Shares, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to
receive stock or any such substantially similar securities (other than
pursuant to employee stock option plans existing on, or upon the
conversion of convertible or exchangeable securities outstanding as of,
the date hereof) without your prior written consent;
(f) During a period of five years from the effective date
of the Registration Statement, to furnish to you copies of all reports
or other communications (financial or other) furnished to stockholders,
and deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which the Shares or
any class of securities of the Company is listed; and (ii) such
additional non-confidential information concerning the business and
financial condition of the Company as you may from time to time
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the
-9-
<PAGE> 10
Company and its subsidiaries are consolidated in reports furnished to
its stockholders generally or to the Commission); [and]
[(g) Insert if Shares are convertible into Common Stock--
To reserve and keep available at all times, free of preemptive rights,
shares of Common Stock for the purpose of enabling the Company to
satisfy any obligations to issue shares of Common Stock upon conversion
of the Preferred Stock]; [and]
[(h) To use its best efforts to list, subject to notice of
issuance, the Shares [and shares of Common Stock issuable upon
conversion of the Shares] on the New York Stock Exchange or such other
exchange on which the Company's Common Stock is then listed; and]
(i) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the Act.
5. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, any Blue Sky Memorandum,
closing documents (including compilations thereof), and any other documents in
connection with the offering, purchase, sale and delivery of the Shares [and any
shares of ____________ issuable upon conversion, exercise or exchange of the
Shares]; (iii) all expenses in connection with the qualification of the Shares
[and any shares of ____________ issuable upon conversion, exercise or exchange
of the Shares] for offering and sale under state securities laws as provided in
Section 4(b) hereof, including the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in connection
with the Blue Sky and legal investment surveys; [(iv) any filing fees incident
to, and the fees and disbursements of counsel for the Underwriters in connection
with, any required reviews by the National Association of Securities Dealers,
Inc. of the terms of the sale of the Shares;] (v) the cost of preparing the
certificates for the Shares [and any shares of ____________ issuable upon
conversion, exercise or exchange of the Shares]; (vi) the fees and expenses of
any Registrar, any Transfer Agent, Dividend Disbursing Agent, or any Calculation
Agent and any agent of any Registrar, Transfer Agent, Dividend Disbursing Agent,
or Calculation Agent and the fees and disbursements of counsel for any such
persons in connection with any Calculation Agent Agreement and the Shares; (vii)
all other costs and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, Section 7 and Section 10 hereof, the
Underwriters will pay all of their own costs and expenses,
-10-
<PAGE> 11
including the fees of their counsel, transfer taxes on resale of any of the
Securities by them, and any advertising expenses connected with any offers they
may make.
6. The obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of each
Time of Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 4(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 p.m., Washington, D.C. time, on the date
of this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) [Sullivan & Cromwell], counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to the incorporation of the Company, the
validity of the Shares [and any shares of __________________ issuable
upon conversion, exchange or exercise of the Shares], if any, the
Registration Statement, the Prospectus, and other related matters as
you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to
pass upon such matters;
(c) [Harold L. Henderson, General Counsel of the Company],
shall have furnished to you his written opinion (a draft of each such
opinion is attached as Annex II hereto), dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, with power and authority (corporate and
other) to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
and the Shares conform to the description thereof in the
Prospectus as amended or supplemented;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as
-11-
<PAGE> 12
to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so
qualified in any such jurisdiction (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and
certificates);
(iv) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which would,
individually or in the aggregate, be reasonably likely to have
a material adverse effect on the financial position,
stockholders' equity, results of operations or business
prospects of the Company and its subsidiaries taken as a
whole, and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi)[(-) Insert if Common Stock--The Shares have been
duly authorized and, when issued and delivered to and paid for
by the Underwriters in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
nonassessable; and the Shares conform in all material respects
to the description thereof contained in the Registration
Statement and in the Prospectus;]
[(-) Insert if Preferred Stock--The Shares have been duly
authorized and, when issued and delivered to and paid for by
the Underwriters in accordance with the terms of the
Underwriting Agreement, will be validly issued, fully paid and
nonassessable and will have the rights set forth in the
Company's Certificate of Incorporation, as amended, including
the Certificate of Designations; the Shares conform in all
material respects to the description thereof contained in the
Registration Statement and Prospectus;]
[(-) The Certificate of Designations has been filed with
the Secretary of State of the State of Delaware in accordance
with Delaware General Corporation Law;]
[Insert if Shares are convertible into or exchangeable
for Common Stock--The shares of Common Stock issuable upon
[conversion] [exchange] of such Shares in accordance with the
terms of the Certificate of Designations and the Shares have
been duly authorized and reserved for issuance upon such
[conversion] [exchange], and, when issued and delivered upon
such [conversion] [exchange], will be duly authorized and
validly issued and will be fully paid and non-assessable; the
stockholders of the Company have no preemptive rights with
respect to such Common Stock issuable upon [conversion]
[exchange] of such Shares; and such shares of Common Stock
conform in all material respects to the
-12-
<PAGE> 13
description of the Common Stock contained in the Registration
Statement and the Prospectus and the Shares will conform in
all material respects to the description thereof contained in
the Registration Statement and Prospectus;]
(vii) The issue and sale of the Shares and the compliance
by the Company with all of the provisions of the Shares and
this Agreement and the Over-allotment Options and the
consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject except, in each case,
for such breaches, violations and defaults that would not,
individually or in the aggregate, be reasonably likely to have
a material adverse effect on the financial position,
stockholders' equity, results of operations or business
prospects of the Company and its subsidiaries taken as a
whole, nor will such actions result in any violation of the
provisions of the Certificate of Incorporation or By-laws of
the Company or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its
properties;
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Shares [and shares of ___________ issuable upon
conversion, exercise or exchange of the Shares] or the
consummation by the Company of the transactions contemplated
by this Agreement, except such as have been obtained under the
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Shares by the Underwriters;
(ix) Neither the Company nor any of its subsidiaries (a)
has received notice or has actual knowledge of any claim,
demand, obligation, cause of action, accusation, allegation,
order, violation, damage, injury, judgment, penalty or fine
which would, individually or in the aggregate, be reasonably
likely to have a material adverse effect on the financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole resulting from
(w) the violation or alleged violation of any laws relating to
air pollution, water pollution, noise control and/or handling
discharge, disposal or recovery of on-site or off-site
hazardous substances or materials, (x) any noncompliance with
or violation of the requirements of any environmental law, (y)
the release or threatened release of any toxic or hazardous
waste, substance or constituent or (z) any other Environmental
Matter, or (b) is or will be liable in connection with the
release or threatened release of any toxic or hazardous waste,
substance or constituent, which liability would, individually
or in the aggregate, be reasonably likely to have a material
adverse effect on the financial position, stockholders'
-13-
<PAGE> 14
equity or results of operations of the Company and its
subsidiaries taken as a whole, or (c) has received notice or
has actual knowledge of any governmental investigation seeking
remedial action in connection with a release or threatened
release of any toxic or hazardous waste, substance or
constituent for which the Company or any of its subsidiaries
may be liable and which (if the Company or any of its
subsidiaries were so liable) would be reasonably likely to
have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole;
(x) The Company and its subsidiaries own or possess the
patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
(collectively, "patent and proprietary rights") presently
employed by them in connection with the business now operated
by them, and the patent and proprietary rights necessary in
connection with the business proposed to be operated by them,
as described in the Prospectus, and neither the Company nor
any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any patent or
proprietary rights referred to above, or of any facts which
would render any such patent and proprietary rights invalid or
inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the
aggregate, would be reasonably likely to result in any
material adverse change in the financial condition,
stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole;
(xi) The Company is not an "Investment Company" or an
entity "controlled" by an "Investment Company", as such terms
are defined in the Investment Company Act;
(xii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the
financial statements and financial data and related schedules
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any
of such documents, when such documents became effective or
were so filed, as the case may be, contained, in the case of
a registration statement which became effective under the Act,
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of
other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein,
-14-
<PAGE> 15
in the light of the circumstances under which they were made
when such documents were so filed, not misleading; and
(xiii) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the
financial statements and financial data and related schedules
therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Act and the rules and regulations
thereunder; such counsel has no reason to believe that, as of
its effective date, the Registration Statement or any further
amendment thereto made by the Company prior to the Time of
Delivery (other than the financial statements and financial
data and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading or that, as of its date, the Prospectus or any
further amendment or supplement thereto made by the Company
prior to the Time of Delivery (other than the financial
statements and financial data and related schedules therein,
as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in
light of the circumstances in which they were made, not
misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus or any further
amendment or supplement thereto made by the Company prior to
the Time of Delivery (other than the financial statements and
financial data and related schedules therein, as to which such
counsel need express no opinion) contains an untrue statement
of a material fact or omits to state a material fact necessary
to make the statements therein, in light of the circumstances
in which they were made not misleading; and such counsel does
not know of any amendment to the Registration Statement
required to be filed or of any contracts or other documents of
a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by
reference into the Prospectus or required to be described in
the Registration Statement or the Prospectus which are not
filed or incorporated by reference or described as required;
which opinion may be limited to the federal laws of the United States,
the General Corporation Law of the State of Delaware, and the laws of
the States of New York and Tennessee;
(d) On each of the date hereof and at the Time of
Delivery, [PricewaterhouseCoopers LLP] shall have furnished to you a
letter, dated the date of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto (the
executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
is attached as Annex I(b) hereto);
-15-
<PAGE> 16
(e) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in Clause (i) or (ii), is in your
judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the
Prospectus;
(f) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities or preferred stock;
(g) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange; (ii)
a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; or (iii) the
outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war, if
the effect of any such event specified in this clause (iii) in your
judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Firm Shares or Optional Shares
or both on the terms and in the manner contemplated by the Prospectus;
[(-) The Shares at each Time of Delivery shall have been
duly listed;]
(h) The Company shall have complied with the provisions of
Section 4(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of the Agreement;
and
(i) The Company shall have furnished or caused to be
furnished to you at each Time of Delivery certificates of officers of
the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of each
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to each Time of
Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as you may reasonably
request.
-16-
<PAGE> 17
7. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you expressly
for use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection
-17-
<PAGE> 18
with the defense thereof other than reasonable costs of investigation. Unless an
indemnifying party elects not to assume or participate in the defense of an
action, such indemnifying party shall not be liable for any settlement of such
action by an indemnified party without the prior written consent of the
indemnifying party. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability or claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in this Section 7
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Shares underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
-18-
<PAGE> 19
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 7
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 7 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
(including any person who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company) and to each person, if
any, who controls the Company within the meaning of the Act.
8. (a) If any Underwriter shall default in its obligation to
purchase the Firm Shares or Optional Shares which it has agreed to purchase
hereunder, you may in your discretion arrange for you or another party or other
parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Firm Shares or Optional Shares, as the case may be, then
the Company shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties satisfactory to you to purchase
such Shares on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Shares, or the Company notifies you that it has so arranged for the
purchase of such Shares, you or the Company shall have the right to postpone the
Time of Delivery for such Shares for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by you and the Company as provided in
subsection (a) above, the aggregate number of Firm Shares or Optional Shares, as
the case may be, which remains unpurchased does not exceed one-eleventh of the
aggregate number of Firm Shares or Optional Shares, as the case may be, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Shares or Optional Shares, as the case may be, which
such Underwriter agreed to purchase hereunder and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Firm Shares or Optional Shares, as the case may be, which such Underwriter
agreed to purchase hereunder) of the Firm Shares or Optional Shares, as the case
may be, of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by you and the Company as provided in
subsection (a) above, the aggregate number of Firm Shares or Optional Shares, as
the case may be, which remains unpurchased exceeds one-eleventh of the
-19-
<PAGE> 20
aggregate number of Firm Shares or Optional Shares, as the case may be, or if
the Company shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Shares or Optional Shares,
as the case may be, of a defaulting Underwriter or Underwriters, then this
Agreement shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and the Underwriters as provided in Section 5 hereof and the
indemnity and contribution agreements in Section 7 hereof; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
9. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Shares.
10. If this Agreement or any Over-allotment Option shall be
terminated pursuant to Section 8 hereof, the Company shall not then be under any
liability to any Underwriter except as provided in Section 5 and Section 7
hereof; but, if for any other reason, the Shares are not delivered by or on
behalf of the Company as provided herein, the Company will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of such
Shares, but the Company shall then be under no further liability to any
Underwriter except as provided in Section 5 and Section 7 hereof.
11. In all dealings hereunder, you shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you at the address for notices set
forth in Schedule I; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 7(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
12. This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, the Company and, to the extent provided in
Section 7 and Section 9 hereof, the officers and directors of the Company and
each person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser
-20-
<PAGE> 21
of any of the Shares from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
13. Time shall be of the essence of this Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us [ONE FOR THE COMPANY AND ONE FOR EACH OF THE
REPRESENTATIVES PLUS ONE FOR EACH COUNSEL] counterparts hereof, and upon the
acceptance hereof by you, on behalf of each of the Underwriters, this letter and
such acceptance hereof shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Eastman Chemical Company
By:
-----------------------------------
Name:
Title:
Accepted as of the date hereof:
By:
----------------------------
Name:
Title:
For itself and as Representative of the other
Underwriters named in Schedule I hereto
-21-
<PAGE> 22
SCHEDULE I
<TABLE>
<CAPTION>
MAXIMUM
NUMBER OF
NUMBER OF OPTIONAL SHARES
FIRM SHARES TO WHICH MAY BE
BE PURCHASED PURCHASED
-------------- ---------------
UNDERWRITER
-----------
<S> <C> <C>
Total
============== ===============
</TABLE>
-22-
<PAGE> 23
SCHEDULE II
[Insert if Preferred Stock--
Title: .
[Number of Firm Shares:]
[Number of Optional Shares:]
Purchase Price to public (include accrued dividends, if any):
$ per share of Preferred Stock
Purchase Price to Underwriters (include accrued dividends, if any):
$ per share of Preferred Stock
Liquidation preference: $ per share of Preferred Stock
Annual Dividend: % of liquidation preference, payable [annually]
[semi-annually] [quarterly] on [ , ] [ and] , commencing
[Conversion rate: .]
[Sinking fund provisions: [None] [ ].]
[Redemption provisions: [None] [ ].]
[Other provisions*:]]
[Insert if Common Stock--
[Number of Firm Shares:]
[Number of Optional Shares:]
Purchase price per share to the public: $ per share [Formula].
Purchase price per share to the Underwriters: $ per share.] [Formula]
[Commission Payable to Underwriters: $ per share]
VOTING RIGHTS:
TIME OF DELIVERY:
-23-
<PAGE> 24
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[BLACKOUT PROVISIONS
During the period beginning from the date hereof and continuing to and
including the date [ ] [days] [years] after the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of any securities of the
Company (other than pursuant to employee stock option plans existing, or on the
conversion or exchange of convertible or exchangeable securities outstanding on
the date of this Agreement) which are substantially similar to the Shares [or
the] [shares of _________________ issuable upon conversion, exercise or exchange
of the Shares, without your prior written consent].
[OTHER TERMS*]:
[Specified Funds For Payment of Purchase price:]
* A description of particular tax, accounting or other unusual features
(including any event risk provisions) of the Shares should be set forth, or
referenced to an attached and accompanying description, if necessary to ensure
agreement as to the terms of the Shares to be purchased and sold. Such a
description might appropriately be in the form in which such features will be
described in the Prospectus Supplement for the offering.
-24-
<PAGE> 25
ANNEX I
Pursuant to Section 6(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter,
copies of which have been furnished to the Underwriters;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Company's quarterly
reports on Form 10-Q incorporated by reference into the Prospectus; and
on the basis of specified procedures including inquiries of officials
of the Company who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (v)(A) comply with the
applicable accounting requirements of the [ACT AND THE EXCHANGE] Act
and the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
[ACT AND THE EXCHANGE] Act and the related published rules and
regulations;
(iv) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K
and on the basis of limited procedures specified in such letter nothing
came to their attention as a result of the foregoing procedures that
caused them to believe that this information does not conform
I-1
<PAGE> 26
in all material respects with the Company's accounting records and
audited financial statements; and
(v) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations thereunder, or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with the basis for the audited
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements; and
(D) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
I-2
<PAGE> 27
rights, upon earn-outs of performance shares and upon
conversions of convertible Shares, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or net assets or other items specified by the
Underwriters or any increases in any items specified by the
Underwriters, in each case as compared with amounts shown in
the latest balance sheet included in the Prospectus; except in
each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter.
I-3
<PAGE> 1
EXHIBIT 1(b)
FORM OF AGREEMENT
EASTMAN CHEMICAL COMPANY
------------
DEBT SECURITIES
UNDERWRITING AGREEMENT
________ __, 199__
To the Underwriters Named
in Schedule I Hereto:
Eastman Chemical Company, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of [$___________] principal amount of the
securities (the "Securities"), as described in and on the terms set forth in,
Schedule II hereto.
1. The Company represents and warrants to, and agrees with,
each of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-__________) (the "Initial Registration Statement") in respect of
the Securities has been filed with the Securities and Exchange
Commission (the "Commission"); such Initial Registration Statement and
any post-effective amendments thereto, each in the form heretofore
delivered to the Underwriters, including all documents incorporated by
reference therein, has been declared effective by the Commission in
such form; other than a registration statement, if any, increasing the
size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Act"), which became effective upon filing, no other document with
respect to the Initial Registration Statement or any document
incorporated by reference therein has heretofore been filed or
transmitted for filing with the Commission (other than prospectuses
filed pursuant to Rule 424 of the rules and regulations of the
Commission under the Act, each in the form heretofore delivered to the
Underwriters); and no stop order suspending the effectiveness of the
Initial Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any
-1-
<PAGE> 2
preliminary prospectus included in the Initial Registration Statement
or filed with the Commission pursuant to Rule 424(a) under the Act
being hereinafter called a "Preliminary Prospectus"; the various parts
of the Initial Registration Statement and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and (i) the
information, if any, contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A under the
Act to be part of the Initial Registration Statement at the time it was
declared effective and (ii) the documents incorporated by reference in
the prospectus contained in the Initial Registration Statement at the
time such part of the Initial Registration Statement became effective
or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, but excluding Form T-1, each as amended
at the time such part of such registration statements became effective,
being hereinafter collectively called the "Registration Statement";
such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, being hereinafter called the "Prospectus"; any reference
herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to the applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may be; any reference
to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary Prospectus or Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the Securities in the form in which it
is filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
rules and regulations of the Commission thereunder, and did not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through you expressly for use therein;
(c) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all
-2-
<PAGE> 3
material respects to the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through you
expressly for use therein;
(d) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the Registration Statement
or the Prospectus will conform, in all material respects to the
requirements of the Act and the Trust Indenture Act and the rules and
regulations of the Commission thereunder and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company
by an Underwriter through you expressly for use therein;
(e) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree which would be
reasonably likely to have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or
long-term debt of the Company and its subsidiaries taken as a whole or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectus;
(f) The Company and its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as are not material and do not
interfere with the
-3-
<PAGE> 4
use made and proposed to be made of such property by the Company and
its subsidiaries; and any real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries;
(g) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; and each subsidiary of the Company
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of its jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; and all of the issued shares of capital
stock of each subsidiary of the Company are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims and all of the issued shares of capital stock of
each subsidiary of the Company that is a significant subsidiary, within
the meaning of such term as set forth in Rule 1-02 of Regulation S-X,
have been duly and validly authorized and issued, are fully paid and
non-assessable (except for directors' qualifying shares);
(i) The Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement, will have been duly
executed, authenticated, issued and delivered and will constitute valid
and legally binding obligations of the Company entitled to the benefits
provided by the Indenture, dated as of January 10, 1994 (the
"Indenture"), between the Company and The Bank of New York, as Trustee
(the "Trustee"), under which they are to be issued, which is
substantially in the form filed as an exhibit to the Registration
Statement; the Indenture has been duly authorized and duly qualified
under the Trust Indenture Act and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture conforms,
and the Securities will conform, to the descriptions thereof in the
Prospectus as amended or supplemented;
(j) The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the Securities,
the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the
-4-
<PAGE> 5
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject
except, in each case, for such breaches, violations and defaults that
would not, individually or in the aggregate, be reasonably likely to
have a material adverse effect on the financial position, stockholders'
equity, results of operations or business prospects of the Company and
its subsidiaries taken as a whole, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this
Agreement or the Indenture, except the registration under the Act of
the Securities, such as have been obtained under the Trust Indenture
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Underwriters;
(k) Neither the Company nor any of its subsidiaries (i)
has received notice or has actual knowledge of any claim, demand,
obligation, cause of action, accusation, allegation, order, violation,
damage, injury, judgment, penalty or fine which would, individually or
in the aggregate, be reasonably likely to have a material adverse
effect on the financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole
resulting from (A) the violation or alleged violation of any laws
relating to air pollution, water pollution, noise control and/or
handling discharge, disposal or recovery of on-site or off-site
hazardous substances or materials, (B) any noncompliance with or
violation of the requirements of any environmental law, (C) the release
or threatened release of any toxic or hazardous waste, substance or
constituent or (D) any other Environmental Matter (as hereinafter
defined), or (ii) is or will be liable in connection with the release
or threatened release of any toxic or hazardous waste, substance or
constituent, which liability would, individually or in the aggregate,
be reasonably likely to have a material adverse effect on the financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, or (iii) has received notice or
has actual knowledge of any governmental investigation seeking remedial
action in connection with a release or threatened release of any toxic
or hazardous waste, substance or constituent for which the Company or
any of its subsidiaries may be liable and which (if the Company or any
of its subsidiaries were so liable) would be reasonably likely to have
a material adverse effect on the financial position, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole; "Environmental Matter" means (I) the release of any
amount of toxic or hazardous waste or substances, pollutant or
contaminant into the environment, (II) the management, including the
generation, handling, treatment, storage, transport, discharge or
disposal or recovery, whether on-site or off-site, of any solid wastes,
toxic or hazardous wastes, hazardous substances, pollutants or
contaminants, (III) the past and present use of surface waters or
groundwater and (IV) the construction or maintenance of any dams or
levees;
-5-
<PAGE> 6
(l) The Company and its subsidiaries own or possess the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, "patent and
proprietary rights") presently employed by them in connection with the
business now operated by them, and the patent and proprietary rights
necessary in connection with the business proposed to be operated by
them, as described in the Prospectus, and neither the Company nor any
of its subsidiaries has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any patent or proprietary rights referred to above, or of
any facts which would render any such patent and proprietary rights
invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, would, individually or in the aggregate, be reasonably
likely to result in any material adverse change in the financial
position, stockholders' equity, results of operations or business
prospects of the Company and its subsidiaries taken as a whole;
(m) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which would,
individually or in the aggregate, be reasonably likely to have a
material adverse effect on the financial position, stockholders'
equity, results of operations or business prospects of the Company and
its subsidiaries taken as a whole; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others; and
(n) [PricewaterhouseCoopers LLP], who have certified
certain financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder.
2. Subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
the purchase price and on the other terms set forth in Schedule II hereto, the
principal amount of Securities set forth opposite the name of such Underwriter
in Schedule I hereto.
3. Upon the authorization by you of the release of the
Securities, the several Underwriters propose to offer the Securities for sale
upon the terms and conditions set forth in the Prospectus.
4. Securities to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in the
name of a nominee of The Depository Trust Company as described in the
Prospectus, shall be delivered by or on behalf of the Company to you for the
account of such Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by wire transfer of immediately available
funds, all at the office set forth on Schedule II hereto on the date set forth
therein or at such other time and date as you and
-6-
<PAGE> 7
the Company may agree upon in writing, such time and date being herein called
the "Time of Delivery." Such certificates will be made available for checking
and packaging at least twenty-four hours prior to such Time of Delivery at the
office of The Depository Trust Company, 55 Water Street, New York, New York.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you
and to file such Prospectus pursuant to Rule 424(b) under the Act not
later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement, or, if
applicable, such other time as may be required by Rule 430A(a)(3) under
the Act; to make no further amendment or any supplement to the
Registration Statement or Prospectus prior to the Time of Delivery
which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of
the time when the Registration Statement, or any amendment thereto, has
been filed or becomes effective or any supplement to the Prospectus or
any amended Prospectus has been filed and to furnish you with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise you, promptly after it
receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions as you may request and
to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Securities, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process
in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriters with copies of the Prospectus
in New York City in such quantities as you may from time to time
reasonably request, and, if the delivery of a prospectus is required at
any time prior to the expiration of nine months after the time of issue
of the Prospectus in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented would
-7-
<PAGE> 8
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act, the
Exchange Act or the Trust Indenture Act, to notify you and upon your
request to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as
you may from time to time reasonably request of an amended Prospectus
or a supplement to the Prospectus which will correct such statement or
omission or effect such compliance; in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of issue of
the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Act; and "New York Business Day" shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not
a day on which banking institutions in New York are generally
authorized or obliged by law or executive order to close;
(d) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c)), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including at
the option of the Company Rule 158);
(e) During the period beginning from the date hereof and
continuing to the Time of Delivery, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company which
mature more than one year after the Time of Delivery and which are
substantially similar to the Securities, without your prior written
consent;
(f) During a period of five years from the effective date
of the Registration Statement, to furnish to you copies of all reports
or other communications (financial or other) furnished to stockholders,
and deliver to you (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which the Securities
or any class of securities of the Company is listed; and (ii) such
additional non-confidential information concerning the business and
financial condition of the Company as you may from time to time
reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries
are consolidated in reports furnished to its stockholders generally or
to the Commission); and
(g) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the
time of filing either pay to the Commission the filing fee for the Rule
462(b)
-8-
<PAGE> 9
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
6. The Company covenants and agrees with the several
Underwriters that the Company will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Securities under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or producing
any Agreement among Underwriters, this Agreement, the Indenture, the Blue Sky
Memorandum and any other documents in connection with the offering, purchase,
sale and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) any fees charged by securities rating services for rating the Securities;
(vi) the cost of preparing the Securities; (vii) the fees and expenses of the
Trustee and any agent of the Trustee and the fees and disbursements of counsel
for the Trustee in connection with the Indenture and the Securities; and (viii)
all other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section. It
is understood, however, that, except as provided in this Section, Section 8 and
Section 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of the Time
of Delivery, true and correct, the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; if the Company has elected
to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall
have become effective by 10:00 p.m., Washington, D.C. time, on the date
of this agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened
by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) [Sullivan & Cromwell], counsel for the Underwriters,
shall have furnished to you such opinion or opinions, dated the Time of
Delivery, with respect to the incorporation of the Company, the
validity of the Indenture, the Securities, the Registration Statement,
the Prospectus, and other related matters as you may reasonably
-9-
<PAGE> 10
request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) [Harold L. Henderson, General Counsel of the Company],
shall have furnished to you his written opinion (a draft of each such
opinion is attached as Annex II hereto), dated the Time of Delivery, in
form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of Delaware, with power and authority (corporate and
other) to own its properties and conduct its business as
described in the Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable;
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it
owns or leases properties, or conducts any business, so as to
require such qualification, or is subject to no material
liability or disability by reason of the failure to be so
qualified in any such jurisdiction (such counsel being
entitled to rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters of fact
upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and
they are justified in relying upon such opinions and
certificates);
(iv) To the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject which would,
individually or in the aggregate, be reasonably likely to have
a material adverse effect on the financial position,
stockholders' equity, results of operations or business
prospects of the Company and its subsidiaries taken as a
whole, and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(v) This Agreement has been duly authorized, executed and
delivered by the Company;
(vi) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and
legally binding obligations of the Company entitled to the
benefits provided by the Indenture; and the Securities and the
Indenture conform to the descriptions thereof in the
Prospectus;
-10-
<PAGE> 11
(vii) The Indenture has been duly authorized, executed
and delivered by the parties thereto and constitutes a valid
and legally binding instrument, enforceable in accordance with
its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to general equity principles; and the Indenture has been duly
qualified under the Trust Indenture Act;
(viii) The issue and sale of the Securities and the
compliance by the Company with all of the provisions of the
Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject except, in each case,
for such breaches, violations and defaults that would not,
individually or in the aggregate, be reasonably likely to have
a material adverse effect on the financial position,
stockholders' equity, results of operations or business
prospects of the Company and its subsidiaries taken as a
whole, nor will such actions result in any violation of the
provisions of the Certificate of Incorporation or By-laws of
the Company or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its
properties;
(ix) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement or the Indenture,
except such as have been obtained under the Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase
and distribution of the Securities by the Underwriters;
(x) Neither the Company nor any of its subsidiaries (a)
has received notice or has actual knowledge of any claim,
demand, obligation, cause of action, accusation, allegation,
order, violation, damage, injury, judgment, penalty or fine
which would, individually or in the aggregate, be reasonably
likely to have a material adverse effect on the financial
position, stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole resulting from
(w) the violation or alleged violation of any laws relating to
air pollution, water pollution, noise control and/or handling
discharge, disposal or recovery of on-site or off-site
hazardous substances or materials, (x) any noncompliance with
or violation of the requirements of any environmental law, (y)
the release or threatened release of any toxic or hazardous
waste, substance or constituent or (z) any other Environmental
Matter, or (b) is or will be liable in connection with
-11-
<PAGE> 12
the release or threatened release of any toxic or hazardous
waste, substance or constituent, which liability would,
individually or in the aggregate, be reasonably likely to have
a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, or (c) has received
notice or has actual knowledge of any governmental
investigation seeking remedial action in connection with a
release or threatened release of any toxic or hazardous waste,
substance or constituent for which the Company or any of its
subsidiaries may be liable and which (if the Company or any of
its subsidiaries were so liable) would be reasonably likely to
have a material adverse effect on the financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole; and
(xi) The Company and its subsidiaries own or possess the
patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
(collectively, "patent and proprietary rights") presently
employed by them in connection with the business now operated
by them, and the patent and proprietary rights necessary in
connection with the business proposed to be operated by them,
as described in the Prospectus, and neither the Company nor
any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with
asserted rights of others with respect to any patent or
proprietary rights referred to above, or of any facts which
would render any such patent and proprietary rights invalid or
inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict
(if the subject of any unfavorable decision, ruling or
finding) or invalidity or inadequacy, individually or in the
aggregate, would be reasonably likely to result in any
material adverse change in the financial condition,
stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole;
(xii) The documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the
financial statements and financial data and related schedules
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any
of such documents, when such documents became effective or
were so filed, as the case may be, contained, in the case of
a registration statement which became effective under the Act,
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of
other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein,
-12-
<PAGE> 13
in the light of the circumstances under which they were made
when such documents were so filed, not misleading; and
(xiii) The Registration Statement and the Prospectus and
any further amendments and supplements thereto made by the
Company prior to the Time of Delivery (other than the
financial statements and financial data and related schedules
therein, as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Act and the Trust Indenture Act and the
rules and regulations thereunder; such counsel has no reason
to believe that, as of its effective date, the Registration
Statement or any further amendment thereto made by the Company
prior to the Time of Delivery (other than the financial
statements and financial data and related schedules therein,
as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its
date, the Prospectus or any further amendment or supplement
thereto made by the Company prior to the Time of Delivery
(other than the financial statements and financial data and
related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements therein, in light of the circumstances in
which they were made, not misleading or that, as of the Time
of Delivery, either the Registration Statement or the
Prospectus or any further amendment or supplement thereto made
by the Company prior to the Time of Delivery (other than the
financial statements and financial data and related schedules
therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in light of the circumstances in which they were made
not misleading; and such counsel does not know of any
amendment to the Registration Statement required to be filed
or of any contracts or other documents of a character required
to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus
or required to be described in the Registration Statement or
the Prospectus which are not filed or incorporated by
reference or described as required;
which opinion may be limited to the federal laws of the United States,
the General Corporation Law of the State of Delaware, and the laws of
the States of New York and Tennessee;
(d) On each of the date hereof and at the Time of
Delivery, [PricewaterhouseCoopers LLP] shall have furnished to you a
letter, dated the date of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto (the
executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
is attached as Annex I(b) hereto);
-13-
<PAGE> 14
(e) (i) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus, and (ii) since the
respective dates as of which information is given in the Prospectus
there shall not have been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries or any change, or any
development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of
which, in any such case described in Clause (i) or (ii), is in your
judgment so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities on the terms and in the manner contemplated in the
Prospectus;
(f) On or after the date hereof (i) no downgrading shall
have occurred in the rating accorded the Company's debt securities by
any "nationally recognized statistical rating organization," as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities;
(g) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material limitation
in trading in securities generally on the New York Stock Exchange; (ii)
a general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; or (iii) the
outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war, if
the effect of any such event specified in this clause (iii) in your
judgment makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities on the terms and in
the manner contemplated by the Prospectus;
(h) The Company shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses on
the New York Business Day next succeeding the date of this Agreement;
and
(i) The Company shall have furnished or caused to be
furnished to you at the Time of Delivery certificates of officers of
the Company satisfactory to you as to the accuracy of the
representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as you may reasonably
request.
-14-
<PAGE> 15
8. (a) The Company will indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities to which the Company
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you expressly
for use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection
-15-
<PAGE> 16
with the defense thereof other than reasonable costs of investigation. Unless an
indemnifying party elects not to assume or participate in the defense of an
action, such indemnifying party shall not be liable for any settlement of such
action by an indemnified party without the prior written consent of the
indemnifying party. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability or claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Securities. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters'
-16-
<PAGE> 17
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon the
same terms and conditions, to each officer and director of the Company
(including any person who, with his or her consent, is named in the Registration
Statement as about to become a director of the Company) and to each person, if
any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties to purchase
such Securities on the terms contained herein. If within thirty-six hours after
such default by any Underwriter you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of thirty-six
hours within which to procure another party or other parties satisfactory to you
to purchase such Securities on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for a period of not more than seven days,
in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subsection (a) above, the aggregate principal
amount of such Securities which remains unpurchased does not exceed one-eleventh
of the aggregate principal amount of all the Securities, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the
principal amount of Securities which such Underwriter agreed to purchase
hereunder and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the principal amount of Securities which
such Underwriter agreed to purchase hereunder) of the Securities of such
defaulting Underwriter or Underwriters for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
(c) If, after giving effect to any arrangements for the
purchase of the Securities of a defaulting Underwriter or Underwriters by you
and the Company as provided in subsection (a) above, the aggregate principal
amount of Securities which remains unpurchased exceeds one-eleventh of the
aggregate principal amount of all the Securities, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Securities of a defaulting Underwriter or Underwriters,
then this Agreement shall
-17-
<PAGE> 18
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the Company
and the Underwriters as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Underwriters, as
set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, or any officer or director or controlling person of the Company, and
shall survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section
9 hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Section 6 and Section 8 hereof; but, if for any other
reason, the Securities are not delivered by or on behalf of the Company as
provided herein, the Company will reimburse the Underwriters through you for all
out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Securities, but the
Company shall then be under no further liability to any Underwriter except as
provided in Section 6 and Section 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each
of the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you at the address for notices set
forth in Schedule I; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to
the benefit of, the Underwriters, the Company and, to the extent provided in
Section 8 and Section 10 hereof, the officers and directors of the Company and
each person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Securities from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
-18-
<PAGE> 19
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such respective counterparts shall together constitute
one and the same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us _____ counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Underwriters and the Company. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in a form of Agreement among Underwriters, the form of which shall be
submitted to the Company for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
Eastman Chemical Company
By:
----------------------------
Name:
Title:
Accepted as of the date hereof:
By:
By:
-----------------------------------
Name:
Title:
For itself and as Representative of the other
Underwriters named in Schedule I hereto
-19-
<PAGE> 20
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
SECURITIES TO BE
PURCHASED
---------
UNDERWRITER
-----------
<S> <C>
Total.................................
=============
</TABLE>
-20-
<PAGE> 21
SCHEDULE II
TITLE OF SECURITIES:
AGGREGATE PRINCIPAL AMOUNT:
PRICE TO PUBLIC:
PURCHASE PRICE BY THE UNDERWRITERS:
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
[Immediately available funds through The Depository Trust Company]
INDENTURE:
Indenture dated as of January 10, 1994, between the Company and The Bank
of New York, as Trustee.
MATURITY:
INTEREST RATE:
INTEREST PAYMENT DATES:
REDEMPTION PROVISIONS:
-21-
<PAGE> 22
SINKING FUND PROVISIONS:
CLOSING DATE AND TIME OF DELIVERY:
OFFICE FOR DELIVERY OF SECURITIES:
OFFICE FOR PAYMENT FOR SECURITIES:
ADDRESS FOR NOTICES, ETC.:
-22-
<PAGE> 23
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included in the Prospectus or the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of the Act and the related
published rules and regulations thereunder; and, if applicable, they
have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial
statements of the Company for the periods specified in such letter,
copies of which have been furnished to the Underwriters; and
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Company and its subsidiaries,
inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in
the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter,
nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related published rules and
regulations thereunder, or are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with the basis for the audited
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus;
I-1
<PAGE> 24
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) any unaudited pro forma consolidated condensed
financial statements included in the Prospectus do not comply
as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the
compilation of those statements; and
(D) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock (other than issuances of
capital stock upon exercise of options and stock appreciation
rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest financial statements
included in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current
assets or net assets or other items specified by the
Underwriters or any increases in any items specified by the
Underwriters, in each case as compared with amounts shown in
the latest balance sheet included in the Prospectus; except in
each case for changes, increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter.
I-2
<PAGE> 1
EXHIBIT 5
August 31, 1998
Board of Directors
Eastman Chemical Company
100 North Eastman Road
Kingsport, Tennessee 37660
Gentlemen:
I am the Associate General Counsel and Corporate Secretary of
Eastman Chemical Company, a Delaware corporation (the "Company"), and am
rendering this opinion in connection with the Registration Statement on Form S-3
(the "Registration Statement") being filed by the Company with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Act"), with respect to $1,000,000,000 aggregate initial offering price of the
Company's (i) common stock, $0.01 par value per share, including rights attached
thereto to purchase shares of participating Preferred Stock pursuant to the
Company's Stockholder Protection Rights Agreement (collectively, the "Common
Stock"), (ii) preferred stock, par value $0.01 per share ("Preferred Stock") and
(iii) debt securities (the "Debt Securities"), which may be issued from time to
time pursuant to Rule 415 under the Act. The Common Stock, Preferred Stock and
Debt Securities are hereinafter referred to collectively as the "Securities".
I have examined such documents, corporate records and other
instruments as I have deemed necessary for the purposes of this opinion. Based
upon the foregoing, I am of the opinion as follows:
(1) The Company has been duly incorporated and is a validly
existing corporation under the laws of the State of Delaware.
(2) The Common Stock has been duly authorized and, when the
Registration Statement has become effective under the Act, the terms of the
issue and sale of the Common Stock have been duly established in conformity with
the resolutions of the board of directors of the Company and the Company's
Certificate of Incorporation so as not to violate any applicable law or result
in a default under or breach of any agreement or instrument binding on the
Company and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Company, and the Common
Stock has been duly issued and sold as contemplated by the Registration
<PAGE> 2
Statement, the Common Stock will be validly issued, fully paid and
nonassessable.
(3) The Preferred Stock has been duly authorized and, when the
Registration Statement has become effective under the Act, appropriate
Certificate of Designations amending the Company's Certificate of Incorporation
relating to the Preferred Stock have been duly authorized and adopted and filed
with the Secretary of State of the State of Delaware, the terms of the Preferred
Stock and of their issuance and sale have been duly established in conformity
with the resolutions of the board of directors of the Company and the Company's
Certificate of Incorporation so as not to violate any applicable law or result
in a default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Company, and the
Preferred Stock has been duly issued and sold as contemplated by the
Registration Statement, the Preferred Stock will be validly issued, fully paid
and nonassessable.
(4) With respect to the Debt Securities, when the Registration
Statement has become effective under the Act, the terms of the Debt Securities
and of their issue and sale have been duly established in conformity with the
resolutions of the board of directors of the Company and have been duly
established in conformity with the Indenture, dated as of January 10, 1994,
between the Company and The Bank of New York, as Trustee, as amended from time
to time (the "Indenture"), so as not to violate any applicable law or result in
a default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the Company, and the Debt
Securities have been duly executed and authenticated in accordance with such
Indenture and issued and sold as contemplated in the Registration Statement, the
Debt Securities will constitute valid and legally binding obligations of the
Company, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors's rights and to general equity principles.
I note that, as of the date of this opinion, a judgment for
money in an action based on a Debt Security denominated in a foreign currency or
currency unit in a federal or state court in the United States ordinarily would
be enforced in the United States only in United States dollars. The date used to
determine
-2-
<PAGE> 3
the rate of conversion of the foreign currency or currency unit in which a
particular Debt Security is denominated into United States dollars will depend
upon various factors, including which court renders the judgment. In the case of
a Debt Security denominated in a foreign currency, a state court in the State of
New York rendering a judgment on such Debt Security would be required under
Section 27 of the New York Judiciary Law to render such judgment in the foreign
currency in which the Debt Security is denominated, and such judgment would be
converted into United States dollars at the exchange rate prevailing on the date
of entry of the judgment.
I am licensed to practice law in the State of Tennessee. The
foregoing opinion is limited to the federal laws of the United States, the laws
of the States of Tennessee and New York, and the General Corporation Law of the
State of Delaware, and I express no opinion as to the effect of the laws of any
other jurisdiction. In rendering the foregoing opinion, with respect to all
matters of New York law, I have relied on the opinion of New York counsel dated
the date hereof, and my opinion is subject to the same assumptions,
qualifications and limitations with respect to such matters as are contained in
such opinion.
Also, I have relied as to certain matters on information
obtained from public officials, officers of the Company and other sources
believed by me to be responsible, and I have assumed that the related Indenture
has been duly authorized, executed and delivered by the Trustee thereunder,
assumptions which I have not independently verified.
I hereby consent to the use of this opinion for filing with
the Registration Statement, including any and all amendments (including
post-effective amendments) thereto and any related Rule 462(b) registration
statements, as Exhibit (5) thereto. In giving such consent, I do not thereby
admit that I am in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
/s/ Theresa K. Lee
3--
<PAGE> 1
EXHIBIT 23(b)
August 31, 1998
Board of Directors
Eastman Chemical Company
100 North Eastman Road
Kingsport, Tennessee 37660
Gentlemen:
I am the General Counsel of Eastman Chemical Company, a Delaware
corporation (the "Company"). I hereby consent to the use of my name under the
heading "Validity of Securities" in the Prospectus forming a part of the
Registration Statement on Form S-3 (including any and all amendments, including
post-effective amendments, thereto and any related Rule 462(b) registration
statements) being filed by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with respect to
$1,000,000,000 aggregate initial offering price of the Company's (i) common
stock, $0.01 par value per share, including rights attached thereto to purchase
shares of participating Preferred Stock pursuant to the Company's Stockholder
Protection Rights Agreement, (ii) preferred stock, par value $0.01 per share,
and (iii) debt securities, which may be issued from time to time pursuant to
Rule 415 under the Act. In giving such consent, I do not thereby admit that I am
in the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Harold L. Henderson
<PAGE> 1
EXHIBIT 23(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report
dated January 27, 1998 appearing on page 33 of Eastman Chemical Company's
Annual Report on Form 10-K for the year ended December 31, 1997. We also
consent to the reference to us under the heading "Experts" in such Prospectus.
/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
New York, New York
August 31, 1998
<PAGE> 1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
- ------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- -------------------------------------------------
EASTMAN CHEMICAL COMPANY
(Exact name of obligor as specified in its charter)
Delaware 62-1539359
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
100 North Eastman Road
Kingsport, Tennessee 37660
(Address of principal executive offices) (Zip code)
----------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- ---------------------------------------------
Name Address
- ---------------------------------------------
<TABLE>
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
New York
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 20th day of August, 1998.
THE BANK OF NEW YORK
By: /S/ REMO J. REALE
--------------------------------
Name: REMO J. REALE
Title: ASSISTANT VICE PRESIDENT
<PAGE> 4
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ..................... $ 6,397,993
Interest-bearing balances .............. 1,138,362
Securities:
Held-to-maturity securities ............ 1,062,074
Available-for-sale securities .......... 4,167,240
Federal funds sold and Securities pur-
chased under agreements to resell....... 391,650
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ......................36,538,242
LESS: Allowance for loan and
lease losses ...................631,725
LESS: Allocated transfer risk
reserve...............................0
Loans and leases, net of unearned
income, allowance, and reserve 35,906,517
Assets held in trading accounts .......... 2,145,149
Premises and fixed assets (including
capitalized leases) .................... 663,928
Other real estate owned .................. 10,895
Investments in unconsolidated
subsidiaries and associated
companies .............................. 237,991
Customers' liability to this bank on
acceptances outstanding ................ 992,747
Intangible assets ........................ 1,072,517
Other assets ............................. 1,643,173
-----------
Total assets ............................. $55,830,236
===========
LIABILITIES
Deposits:
In domestic offices .................... $24,849,054
Noninterest-bearing ..........10,011,422
Interest-bearing .............14,837,632
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ....... 15,319,002
Noninterest-bearing .............707,820
Interest-bearing .............14,611,182
Federal funds purchased and Securities
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
sold under agreements to repurchase...... 1,906,066
Demand notes issued to the U.S.
Treasury ................................ 215,985
Trading liabilities ....................... 1,591,288
Other borrowed money:
With remaining maturity of one year
or less ............................... 1,991,119
With remaining maturity of more than
one year through three years........... 0
With remaining maturity of more than
three years ........................... 25,574
Bank's liability on acceptances exe-
cuted and outstanding ................... 998,145
Subordinated notes and debentures ......... 1,314,000
Other liabilities ......................... 2,421,281
-----------
Total liabilities ......................... 50,631,514
-----------
EQUITY CAPITAL
Common stock .............................. 1,135,284
Surplus ................................... 731,319
Undivided profits and capital
reserves ................................ 3,328,050
Net unrealized holding gains
(losses) on available-for-sale
securities .............................. 40,198
Cumulative foreign currency transla-
tion adjustments ........................ (36,129)
------------
Total equity capital ...................... 5,198,722
------------
Total liabilities and equity
capital ................................. $55,830,236
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Renyi )
Alan R. Griffith ) Directors
J. Carter Bacot )
- -------------------------------------------------------------------------------
