<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1998
REGISTRATION NO. 333-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM S-3
Registration Statement under the Securities Act of 1933
____________________
STILLWATER MINING COMPANY
(Exact name of registrant as specified in its charter)
____________________
DELAWARE 81-0480654
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
717 SEVENTEENTH STREET, SUITE 1480
Denver, Colorado 80202
(303) 978-2525
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
____________________
WILLIAM E. NETTLES
Chairman and Chief Executive Officer
Stillwater Mining Company
717 Seventeenth Street, Suite 1480
Denver, Colorado 80202
(303) 978-2525
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
PAUL HILTON, ESQ.
Davis, Graham & Stubbs LLP
370 Seventeenth Street
Denver, Colorado 80202
(303) 892-9400
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by the Registrant.
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 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, 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,
check the following box. [_]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================================
Proposed maximum Proposed maximum Amount of
Title of each class of Amount to be offering price per aggregate registration
securities to be registered registered /(1)/ unit /(2)/ offering price /(1)(3)/ fee /(1)(3)/
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities /(4)/
Preferred Stock, par value $.01 per share /(5)/
Depositary Shares /(6)/
Common Stock, par value $.01 per share /(7)/
Warrants /(8)/
Total $200,000,000 100% $200,000,000 $59,000
===============================================================================================================================
</TABLE>
(1) In U.S. dollars or the equivalent thereof in one or more foreign currencies
or currency units or composite currencies, including the European Currency
Unit.
(2) The proposed maximum initial offering price per unit will be determined,
from time to time, by the Registrant.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). In no event will the aggregate initial offering
price of all securities issued from time to time pursuant to this
Registration Statement exceed $200,000,000.
(4) Subject to Footnote (3), there are being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold from time
to time by the Registrant. If any such Debt Securities are issued at an
original issue discount, then the offering price shall be in such greater
principal amount as shall result in an aggregate initial offering price of
up to $200,000,000.
(5) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold from time
to time by the Registrant.
(6) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of Depositary Shares as may be sold from time to time
by the Registrant.
(7) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of shares of Common Stock as may be sold from time to
time by the Registrant. There are also being registered hereunder an
indeterminate number of shares of Common Stock as may be issued upon
conversion of Debt Securities or Preferred Stock.
(8) Subject to Footnote (3), there are being registered hereunder an
indeterminate number of warrants to purchase Debt Securities, Common Stock
or Preferred Stock as may be sold from time to time by the Registrant.
____________________
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.
-2-
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ 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 any State. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION
JULY 1, 1998
PROSPECTUS
STILLWATER MINING COMPANY
LOGO
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
COMMON STOCK
WARRANTS
Stillwater Mining Company (the "Company" or "Stillwater") may offer from
time to time (i) debt securities ("Debt Securities"), consisting of debentures,
notes, bonds and/or other unsecured evidences of indebtedness in one or more
series, (ii) shares of preferred stock, par value $.01 per share ("Preferred
Stock"), in one or more series, (iii) depositary shares, (iv) shares of common
stock, par value $.01 per share ("Common Stock"), and (v) warrants ("Warrants")
to purchase Debt Securities, Preferred Stock or Common Stock. The Debt
Securities, Preferred Stock, Depositary Shares, Common Stock and Warrants
(collectively, the "Securities") may be offered either together or separately in
amounts, at prices and on terms to be determined at the time of offering. The
Securities offered pursuant to this Prospectus will be limited to an aggregate
initial offering price not to exceed U.S.$200,000,000 (or the equivalent in
foreign currency or currency units).
The accompanying Prospectus Supplement sets forth with regard to the
particular Securities in respect of which this Prospectus is being delivered (i)
in the case of Debt Securities, the title, aggregate principal amount,
denominations (which may be in United States dollars, in any other currency,
currencies or currency unit, including the European Currency Unit), maturity,
rate, if any (which may be fixed or variable) or method of calculation thereof,
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 conversion
or exchange rights, any modification of the covenants, any listing of such Debt
Securities 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, (ii) in the case of Preferred Stock, the designation, aggregate
principal amount, and stated value and liquidation preference per share, initial
public offering price, dividend rate (or method of calculation), dates on which
dividends shall be payable, any redemption or sinking fund provisions, any
conversion or exchange rights, whether the Company has elected to offer the
Preferred Stock in the form of depositary shares, any listing of such Preferred
Stock on a securities exchange, and any other terms in connection with the
offering and sale of such Preferred Stock; (iii) in the case of Common Stock,
the number of shares of Common Stock and the terms of the offering and sale
thereof; and (iv) in the case of Warrants, the number and terms thereof, the
number of shares of Common Stock or Preferred Stock, or amount of Debt
Securities, issuable upon their exercise, the exercise price, the periods during
which the Warrants are exercisable, the terms of the Preferred Stock or Debt
Securities issuable upon exercise, any listing of such Warrants on a securities
exchange and any other terms in connection with the offering, sale and exercise
of such Warrants. If so specified in the applicable Prospectus Supplement,
Securities may be issued in whole or in part in the form of one or more
temporary or permanent global securities. The Prospectus Supplement will also
contain information, as applicable, about certain United States federal income
tax considerations relating to the Securities in respect of which this
Prospectus is being delivered.
<PAGE>
SEE "RISK FACTORS" COMMENCING ON PAGE 7 FOR CERTAIN CONSIDERATIONS RELEVANT
TO AN INVESTMENT IN THE SECURITIES.
The Company's outstanding Common Stock is listed on the American Stock
Exchange (the "AMEX") under the symbol "SWC." Each Prospectus Supplement will
indicate if the Securities offered thereby will be listed on any securities
exchange.
The Company may sell Securities to or through one or more underwriters, 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 involved in the sale of the Securities in respect of which
this Prospectus is being delivered, the principal amounts, if any, to be
purchased by such underwriters and the compensation, if any, of such
underwriters or agents. See "Plan of Distribution" herein.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is _____________, 1998.
-2-
<PAGE>
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
IN THE PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, ANY UNDERWRITER, AGENT, DEALER OR OTHER PERSON. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES IN RESPECT OF WHICH THIS PROSPECTUS AND THE
ACCOMPANYING PROSPECTUS SUPPLEMENT ARE DELIVERED OR AN OFFER OF ANY SECURITIES
IN ANY JURISDICTION TO ANY PERSON WHERE SUCH AN OFFER WOULD BE UNLAWFUL.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices
located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511,
and 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can be obtained at prescribed rates from the Public Reference Section
of the Commission, 450 Fifth Street, N.W. Plaza, Washington, D.C. 20549. The
Common Stock is listed on the AMEX. Such reports, proxy statements and other
information can also be inspected and copied at the office of this exchange at
the American Stock Exchange, 86 Trinity Place, New York, New York 10006. The
Commission maintains a web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission. The address of the Commission's web site is
http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the Securities offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement, certain
parts of which have been omitted in accordance with the rules and regulations of
the Commission. Reference is hereby made to the Registration Statement and the
exhibits thereto for further information with respect to the Company and the
Securities. The Registration Statement and the exhibits thereto can be obtained
from or inspected and copied at the public reference facilities maintained by
the Commission as described in the prior paragraph.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed by the Company with the
Commission pursuant to the Exchange Act are incorporated herein by reference:
1. Annual Report on Form 10-K for the year ended December 31, 1997, filed
with the Commission on March 31, 1998.
2. Quarterly Report on Form 10-Q for the quarter ended March 31, 1998,
filed with the Commission on April 29, 1998.
3. Current Report on Form 8-K dated April 8, 1998, filed with the
Commission on April 22, 1998.
-3-
<PAGE>
4. The description of the Common Stock and Preferred Stock contained in
the Registration Statements on Form 8-A, filed with the Commission on November
3, 1994 and October 30, 1995.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of filing of such documents. 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 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 or in the Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner of Securities, to whom this Prospectus is delivered, upon the
written or oral request of such person, a copy of any and all of the documents
incorporated by reference herein, except for the exhibits to such documents
(unless such exhibits are specifically incorporated by reference into such
documents). Requests should be directed to Investor Relations, 717 Seventeenth
Street, Suite 1480, Denver, Colorado 80202. Telephone requests may be directed
to Investor Relations at (303) 978-2525.
FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION
Some statements contained in this Prospectus are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore,
involve uncertainties or risks that could cause actual results to differ
materially. Such statements include comments regarding expansion plans, costs,
reserves, grade, dilution, production and recovery rates, processing of
secondary materials, permitting, anticipated cash flows, hedging, financing
needs and capital expenditures, increases in processing capacity, cost reduction
measures, safety, timing for feasibility studies, environmental permitting and
exploration work, compliance with laws and regulations, and the palladium and
platinum market. Factors that could cause actual results to differ materially
include (i) economic and political events affecting supply and demand of
palladium and platinum, (ii) price volatility of platinum group metals ("PGMs"),
(iii) amounts and prices of the Company's forward metals sales, (iv)
fluctuations in ore grade, tons mined, crushed or milled, (v) variations in
concentrator, smelter or refinery operations, (vi) geological, technical,
permitting, mining or processing problems, (vii) availability of experienced
employees, (viii) financial market conditions and (ix) the other factors
discussed under "Risk Factors" and the Company's filings with the Commission.
Many of such factors are beyond the Company's ability to control or predict.
Readers are cautioned not to put undue reliance on forward-looking statements.
The Company disclaims any intent or obligation to update publicly these forward-
looking statements, whether as a result of new information, future events or
otherwise.
-4-
<PAGE>
THE COMPANY
Stillwater Mining Company is engaged in the development, extraction,
processing and refining of palladium, platinum, and associated metals from the
J-M Reef, a geological formation located in Stillwater and Sweet Grass Counties,
Montana. Associated by-product metals include rhodium, gold, silver, nickel and
copper. The Company conducts its current mining operations at the Stillwater
Mine, in Nye, Montana. Future expansion is planned at the Stillwater Mine and
at the East Boulder site, located at the western end of the J-M Reef (the "East
Boulder Project").
The J-M Reef is the only significant primary source of PGMs outside the
Republic of South Africa and Russia. The J-M Reef is an extensive mineralized
zone containing PGMs, which has been traced over a strike length of
approximately 28 miles and which extends downward over one mile to an unknown
depth. The Company holds the rights to claims covering substantially all of the
presently identified PGM mineralized zone of the J-M Reef.
Palladium and platinum were discovered in the J-M Reef by Manville
Corporation ("Manville") geologists in the early 1970s. In 1979, a Manville
subsidiary entered into a joint venture agreement with Chevron U.S.A. Inc.
("Chevron") to develop PGMs discovered in the J-M Reef. Manville and Chevron
explored and developed the Stillwater property and commenced underground mining
in 1986. In 1992, the Company was incorporated in Delaware, and in 1993,
Chevron and Manville transferred substantially all assets, liabilities and
operations at Stillwater to the Company. In September 1994, the Company
redeemed Chevron's entire 50% ownership, and Manville also sold shares reducing
its ownership of record to approximately 27%. In August 1995, Manville sold its
remaining ownership interest in the Company to institutional investors.
At December 31, 1997, Stillwater had proven and probable reserves of
approximately 29.5 million tons of ore, with an average grade of 0.79 ounces per
ton containing approximately 23.4 million ounces of PGMs (approximately 19.4
million gold equivalent ounces). Based upon existing ore reserves and current
production levels, the J-M Reef has an estimated mine life in excess of fifty
years. Because of this long mine life, the Company has been implementing a
series of expansion programs since 1994 to increase its annual production. In
1997, PGM production increased to 355,000 ounces from 255,000 in 1996 and is
expected to increase further to between approximately 450,000 and 500,000 ounces
in 1998. The Company recently announced a long term goal to triple PGM
production over the next five years. The Company is proceeding with the
additional investment designed to increase production at the Stillwater Mine
from 2,000 tons per day to 3,000 tons per day and to develop the East Boulder
Project over the next five years (the "1998 Expansion Plan").
The following table sets forth the Company's PGM production, cash operating
costs, total cash costs and total production costs per ounce of metal produced,
ounces of palladium and platinum sold and average realized prices for the period
indicated.
-5-
<PAGE>
PGM PRODUCTION COST/(1)/ AND SALES DATA
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------
1997 1996 1995
------------- ------------- -------------
<S> <C> <C> <C>
Production (thousand ounces)
Palladium 271 196 169
Platinum 84 59 51
------------- ------------- -------------
Total production 355 255 220
Cash production costs per ounce/(1)/ $ 174 $ 184 $ 215
Depreciation and amortization 33 35 25
------------- ------------- -------------
Total production costs per ounce/(1)/ $ 207 $ 219 $ 240
Sales (thousand ounces)
Palladium 288 214 180
Platinum 91 62 54
------------- ------------- -------------
Combined 379 276 234
Average Realized Price Per Ounce
Palladium $ 144 $ 144 $ 157
Platinum $ 388 $ 410 $ 425
Combined/(2)/ $ 203 $ 204 $ 219
Average Market Price Per Ounce
Palladium $ 178 $ 128 $ 151
Platinum $ 395 $ 397 $ 424
Combined $ 230 $ 191 $ 216
</TABLE>
/(1)/ Cash costs of production include cash costs of mining, processing and
general and administrative expenses at the mine site (including overhead,
taxes other than on income, royalties and credits for metals produced
other than palladium and platinum). Total costs of production include
cash costs plus depreciation and amortization. Corporate expenses, income
taxes and interest income and expense are not included in either total or
cash costs per ounce produced. Cash costs per ounce are based upon
combined production of palladium and platinum at the same ratio as ounces
are produced from the Base Metals Refinery, i.e., 3.2:1.
/(2)/ Stillwater Mining reports a combined realized price of palladium and
platinum at the same ratio as ounces are produced from the Base Metals
Refinery, i.e., 3.2:1. The same ratio is applicable to the market price.
-6-
<PAGE>
RISK FACTORS
Prospective purchasers of Securities should carefully read this Prospectus,
any Prospectus Supplement delivered herewith, and the documents incorporated by
reference herein and therein. Ownership of Securities involves certain risks.
In determining whether to purchase Securities, prospective investors should
consider carefully the following risk factors and the other information
contained in this Prospectus, in addition to the other risk factors and
information set forth in any Prospectus Supplement delivered herewith.
METAL PRICE VOLATILITY, BACKWARDATION AND HEDGING
Since the Company's sole source of revenue is the sale of PGMs, the
profitability of the Company's operations can be significantly affected by
changes in the market prices of PGMs. PGM prices fluctuate widely and are
influenced by numerous factors beyond the Company's control, including such
factors as expectations for inflation, global demand, consumption patterns,
speculative activities, international political and economic conditions and
production amounts and costs in the other PGM producing countries, including the
Republic of South Africa and Russia. This volatility was evident during 1997,
when apparent tightness in PGM markets led to multi-year highs for current
delivery contracts and "backwardation," a condition in which delivery prices for
metals in the near term are higher than delivery prices for metals to be
delivered in the future. Since some of the world supply of palladium and
platinum is a by-product of the mining of nickel and copper, a portion of the
worldwide production of palladium and platinum is unrelated to the demand for
such metals. As a result, ordinary market balancing mechanisms may be less
effective. The market prices of PGMs could fall below the Company's production
costs and remain at such levels for a sustained period, causing the Company to
experience operating losses and to curtail or suspend some or all of its mining
activities.
The following table shows the annual high, low and average per ounce prices
of palladium and platinum for the periods indicated:
<TABLE>
<CAPTION>
PLATINUM PALLADIUM
----------------------------- -----------------------------
Year High Low Average High Low Average
- -------------------------------- ------ ------- --------- ------ ------- ---------
<S> <C> <C> <C> <C> <C> <C>
1993......................... $414 $345 $376 $142 $100 $123
1994......................... 431 380 406 163 124 144
1995......................... 459 403 424 178 128 151
1996......................... 433 368 398 146 116 130
1997......................... 525 340 395 245 115 178
</TABLE>
Source: Johnson Matthey (1993-1996 closing prices) and Rothschild Denver Inc.
(1997 bid prices).
The Company enters into hedging contracts from time to time to manage the
effect of price changes in palladium and platinum on the Company's cash flow.
Hedging activities typically have consisted of spot deferred contracts for
future deliveries of specific quantities of PGMs at specific prices, the sale of
call options and the purchase of put options. During the first quarter of 1997,
the Company entered into significant hedging positions, particularly in
palladium, for both 1997 and 1998 sales. The Company delivered against these
hedge contracts throughout 1997, incurring substantial palladium hedging losses
of
-7-
<PAGE>
approximately $10.1 million in 1997 and $5.1 million in the first quarter of
1998, due to the sharp rise in palladium spot prices and backwardation of future
delivery prices that started in mid-1997. Thus, while hedging transactions are
intended to reduce the negative effects of volatility of prices, hedging can
limit potential gains from increases in prices and could again expose the
Company to material losses in certain events. These below market hedge
contracts will mature and be closed out during the remainder of 1998. The
Company's hedging policy in the future will have the objective of capturing
upward price movements while providing floor prices to reduce the Company's
exposure to downside price movements.
EXPANSION PLAN RISKS
The Company's achievement of its long term expansion goal depends upon its
ability to increase production substantially at the Stillwater Mine and related
facilities and to complete exploration and development successfully and to meet
its production targets at the East Boulder Project. Although the Company
believes its goals and its preliminary estimates are based upon reasonable
assumptions, at this time there can be no assurance that these goals can be
realized. See "Business--1998 Expansion Plans."
Based upon engineering studies, the Company intends to increase production
at the Stillwater Mine from 2,000 tons per day to 3,000 tons per day. Actual
results may differ materially from preliminary production and cost analyses
conducted by the Company. To increase production at the Stillwater Mine, the
Company must receive permit approval to increase tons processed, which is
subject to the completion of environmental impact analyses and public review
processes. Although the environmental impact analyses and public comment period
have been completed and a record of decision is expected in the fourth quarter
of 1998, there can be no assurance that such decision will not be appealed.
Other facilities, including the concentrator, smelter and base metals refinery
("BMR"), will also have to be expanded or modified. In addition, design,
construction and operation at full capacity of new and expanded facilities must
be achieved, each of which can be expected to be time-consuming and complex and
to involve important elements that are beyond the Company's control.
The Company has also not yet completed a final engineering study or cost
estimate for the East Boulder Project. When an 18,500 foot tunnel has been
completed, geologic and process analyses, capital expenditures, cash operating
costs and recovery rates will be used to confirm the feasibility of proceeding
with the East Boulder Project. The project's capital costs, operating costs and
economic returns may differ materially from the Company's current analysis. The
Company will proceed with further development of the East Boulder Project as the
engineering studies are completed and the grade and continuity of the reef are
confirmed.
Based on the complexity and uncertainty involved in these projects,
estimates of time and funding required at this early stage are extremely
difficult to provide with certainty. No assurance can be given that either
project will be completed on time or at all, that the expanded operations will
achieve the anticipated production capacity, that the construction costs
associated with the 1998 Expansion Plan will not be higher than anticipated,
that the expected operating cost reductions will be achieved or that funding
will be available from internal and external sources in necessary amounts or on
acceptable terms. The anticipated timing and production results of the 1998
Expansion Plan assume, among other things, (i) the identification and
development of sufficient proven reserves and (ii) the recruitment of sufficient
numbers of individuals skilled in underground mining. Finally, the Company's
pursuit of its expansion goals and its ability to finance them could be
adversely affected by changes in PGM prices.
-8-
<PAGE>
The construction of expanded mining operations involves a number of
uncertainties, including factors beyond the Company's control. Failure to
complete the 1998 Expansion Plan on a timely basis or unexpected cost increases
could have a material adverse effect on the Company's future results of
operations and financial condition. If the capital expenditures required to
complete the 1998 Expansion Plan or to achieve the anticipated production
capacity are significantly higher than expected, there is no assurance that the
Company's capital resources would be sufficient to cover such costs or that the
Company would be able to obtain alternative sources of financing to cover such
costs.
COMPETITION; SUPPLY AND DEMAND
The Company competes with other suppliers of PGMs, some of which are
significantly larger than the Company and have access to greater mineral
reserves and financial and commercial resources. These suppliers include Anglo
American Platinum Corporation, Ltd., Western Platinum, Ltd. and Impala Platinum
Holdings, Ltd., which mine the Bushveld Complex in the Republic of South Africa,
the world's principal source of PGMs. The vast majority of the world's 1997
supply of PGMs came from the Republic of South Africa and Russia. Palladium and
platinum are also produced in Canada principally as a by-product of nickel and
copper mining.
In the past, Russia, the primary producer of palladium, has been estimated
to have supplied over 60% of what is now a seven and one-half million ounce
world market. Russia is believed to produce roughly 2.0 million ounces a year
as a by-product of a nickel mine, and the remaining supply has come from
stockpiles accumulated over the years. The general consensus in the western
markets is that the Russian stockpiles of both palladium and platinum have
declined significantly and will be exhausted within the next few years.
However, if Russian stockpiles of palladium and platinum were more extensive
than believed and if Russian producers dispose of their stockpiles in the
market, the supply scenario would improve drastically, with the likely effect of
lowering prices substantially. Additional mines may open in the Republic of
South Africa or elsewhere over the next several years, including the Hartley
Platinum and Mimosa projects on the Great Dyke in Zimbabwe, resulting in
increased global production.
Furthermore, in certain industrialized countries, an industry has developed
for the recovery of PGMs from scrap sources, mostly from spent automotive and
industrial catalysts. There can be no assurance that the Company will be
successful in competing with these existing and emerging PGM producers.
Moreover, there can be no assurance that a less expensive alternative alloy or
synthetic material which has the same characteristics as PGMs will not be
developed to replace PGMs in a number of key technological or industrial
applications. Development of alternative alloys or materials could have an
adverse effect on the Company.
DEVELOPMENT RISKS
The Company's operations will be affected by the costs and results of its
continued exploration and development programs. The Company is seeking to
expand its reserves only through exploration and development within its
controlled claims which are located along the 28-mile J-M Reef. There can be no
assurance that the Company's mineral exploration efforts will be successful.
Even where mineralization has been discovered, it usually takes a number of
years from the initial phases of exploration until production is possible,
during which time the economic feasibility of production may change.
Substantial expenditures are required to establish ore reserves through
drilling, to confirm metallurgical processes to extract the metal from the ore
and, in the case of new mines, to construct mining and processing facilities.
As a result of these uncertainties, no assurance can be given that the Company's
exploration programs will result in the replacement of existing reserves, some
of which are being depleted by current production.
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The Company has restarted its development of the East Boulder Project. New
development projects have no operating history upon which to base estimates of
future cash operating costs. Particularly for development projects, estimates
of reserves and cash operating costs are, to a large extent, based upon the
interpretation of geologic data obtained from drill holes and other sampling
techniques, and engineering studies which derive estimates of cash operating
costs based upon anticipated tonnage and grades of ore to be mined and
processed, the configuration of the ore body, expected recovery rates of the
PGMs from the ore, facility and equipment operating costs and other factors. As
a result, it is possible that actual cash operating costs and economic returns
may differ significantly from those currently estimated or those established in
future studies and estimates. It is not unusual in new mining operations to
experience unexpected problems during the development and start-up phases, which
can result in substantial delay in reaching commercial production.
There are a number of uncertainties inherent to any PGM development
program, including the location of the PGM vein in the reef, receipt of
necessary governmental permits and the construction of mining and processing
facilities. In addition, substantial expenditures may be required to pursue
such development activities.
MINING RISKS AND LIMITS OF INSURANCE COVERAGE
Underground mining and the Company's milling, smelting and refining
operations involve a number of risks and hazards, including environmental
hazards, industrial accidents, labor disputes, unusual and unexpected rock
formations, ground or slope failures, cave-ins, flooding and periodic
interruptions due to inclement or hazardous weather conditions or other acts of
God. Such risks could result in damage to, or destruction of, mineral
properties or production facilities, personal injury or death, environmental
damage, delays in mining, monetary losses and possible legal liability.
Fatalities have occurred at the Company's mine since operations began in 1986.
There can be no assurance that industrial accidents will not have a material
adverse effect on the Company's business and operations. Although the Company
believes that it maintains insurance within ranges of coverage consistent with
industry practice, there can be no assurance that this insurance will cover the
risks associated with mining or that the Company will be able to maintain
insurance to cover these risks at economically feasible premiums. The Company
might also become subject to liability for pollution or other hazards which it
cannot insure against or which it may elect not to insure against because of
premium costs or other reasons. Losses from such events could have a material
adverse effect on the Company.
GOVERNMENTAL REGULATIONS
The Company's business is subject to extensive Federal, state and local
environmental controls and regulations, including the regulation of discharge of
materials into the environment, disturbance of lands, threatened or endangered
species and other environmental matters. These laws are continually changing
and, as a general matter, are becoming more restrictive. Generally, compliance
with these regulations requires the Company to obtain permits issued by Federal,
state and local regulatory agencies. Certain permits require periodic renewal
or review of their conditions. The Company cannot predict whether it will be
able to renew such permits or whether material changes in permit conditions will
be imposed. Nonrenewal of permits or the imposition of additional conditions
could have a material adverse effect on the Company's financial condition or
results of operations.
Compliance with existing and future environmental laws and regulations may
require additional control measures and expenditures which cannot be estimated
at this time. Environmental compliance requirements for new mines may require
substantial additional control measures that could materially affect
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permitting and proposed construction schedules for such facilities. Under
certain circumstances, facility construction may be delayed pending regulatory
approval. Expansion will require new environmental permitting at the Stillwater
Mine and mining and processing facilities at the East Boulder Project. See "--
Expansion Plan Risks."
The Company's activities are also subject to extensive Federal, state and
local laws and regulations governing matters relating to mine safety,
occupational health, labor standards, prospecting, exploration, production,
exports and taxes. The Company has not experienced any material difficulty
emanating from these extensive laws and regulations in the past, nor does it
have any basis to expect any material difficulty relating to existing laws and
regulations in the future. The Company believes that it has successfully
complied in all material respects with all Federal, state and local requirements
for the current operations and planned expansion of its mining activities at the
Stillwater Mine. Compliance with these and other laws and regulations could
require significant capital outlays.
New laws and regulations, amendments to existing laws and regulations, or
more stringent enforcement of existing laws and regulations could have a
material adverse impact on the Company's results of operations and financial
condition and, in the worst case, could render the Company's mining operations
uneconomic. During the 1997 legislative session, legislation was introduced
into the United States Congress which proposed a number of modifications to the
General Mining Law, which governs the location and maintenance of unpatented
mining claims and related activities on federal lands. Among those
modifications were proposals which would have (i) imposed a royalty on
production from unpatented mining claims, (ii) increased the cost of holding
such claims, and (iii) imposed more specific federal reclamation requirements on
operations on such claims. None of those proposed modifications were enacted
into law. The same or similar proposals may be considered by Congress in 1998
as well. The potential impact on the Company as a result of congressional
action is difficult to predict, but legislation amending the General Mining Law
could adversely affect the Company's ability to economically develop the J-M
Reef, virtually all of which is comprised of unpatented mining claims on federal
lands.
DEPENDENCE ON A SINGLE MINE
All of the Company's revenues are currently derived from its mining and
operations at the Stillwater Mine. Although the Company has not experienced any
serious production interruption since production began in 1987, if the
operations at the Stillwater Mine or at any of the Company's processing
facilities were to be reduced, interrupted or curtailed, the Company's ability
to generate revenues and profits in the future would be materially adversely
affected.
TITLE TO PROPERTIES
The validity of unpatented mining claims on public lands, which constitute
most of the property holdings of the Company, is often uncertain and may be
contested and subject to title defects. Unpatented mining claims may be located
on U.S. federal public lands open to appropriation, and are generally considered
to be subject to greater title risk than other real property interests because
the validity of unpatented mining claims is often uncertain and is always
subject to challenges of third parties or contests by the federal government.
The validity of an unpatented mining claim, in terms of its location and its
maintenance, is dependent on strict compliance with a complex body of federal
and state statutory and decisional law. In addition, there are few public
records that definitively control the issues of validity and ownership of
unpatented mining claims. While the Company has obtained various reports,
opinions and certificates of title with respect to certain of the claims it owns
or to which it has the rights in accordance with
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what the Company believes is industry practice, there can be no assurance that
the title to any of its claims may not be defective.
RESERVE ESTIMATES
While the Company's 1997 ore reserves have been affirmed and verified by
independent consultants, the ore reserve estimates incorporated by reference in
this Prospectus are necessarily imprecise and depend to some extent on
statistical inferences drawn from limited drilling, which may, on occasion,
prove unreliable. Reserve estimates are expressions of judgment based on
knowledge, experience and industry practice. Although the Company believes its
estimated ore reserves are well established, there can be no assurance that its
estimated ore reserves are accurate, and future production experience could
differ materially from such estimates. Should the Company encounter
mineralization or formations at any of its mines or projects different from
those predicted by drilling, sampling and similar examinations, reserve
estimates may have to be adjusted and mining plans may have to be altered in a
way that might adversely affect the Company's operations. Declines in the
market prices of PGMs may render the mining of some or all of the Company's ore
reserves uneconomic. No assurance can be given that any particular level of
PGMs may be recovered from the ore reserves and the grade of ore may vary
significantly from time to time. Moreover, short-term factors relating to the
ore reserves, such as the need for additional development of the ore body or the
processing of new or different grades, may impair the profitability of the
Company in any particular accounting period.
LABOR AVAILABILITY AND RELATIONS
The operations of the Company are significantly dependent on the
availability of qualified miners. Historically, the Company has experienced
high turnover with respect to its miners. In addition, the Company must compete
for individuals skilled in the operation and development of PGM mining
properties. The number of such persons is limited, and significant competition
exists to obtain their skills. There can be no assurance that the Company will
be able to maintain an adequate supply of miners and other personnel or the that
the Company's labor expenses will not increase as a result of a shortage in
supply of such workers. Failure to maintain an adequate supply of miners could
adversely effect the Company's expansion plans and results of operations. The
Company currently has approximately 735 employees, approximately 600 of whom are
covered by a collective bargaining agreement with the Oil, Chemical and Atomic
Workers Union (the "OCAW"), expiring June 30, 1999. The Company's inability to
negotiate an acceptable contract with the OCAW or with a new union could result
in work stoppages by the affected employees and increased operating costs as a
result of higher wages or benefits paid. In the event the Company's employees
were to engage in a strike or other work stoppage, the Company could experience
a significant disruption of its operations and higher ongoing labor costs, which
could have a material adverse effect on the Company's business, financial
condition and results of operations.
COMPLEXITY OF PROCESSING
Compared to gold and silver producers, as a PGM producer Stillwater is
required to conduct additional processing procedures and construct and operate
additional facilities. In addition to concentration facilities at the mine
site, the Company also operates its own smelting and base metals refining
facilities in Columbus, Montana to produce a PGM filter cake shipped for final
refining by a third party refiner. The operations of a smelter and refinery by
the Company require environmental steps and operational expertise not required
of most other precious metals producers. Though no material adverse effects
have been experienced to date, this additional complexity of operations poses
additional operational and environmental risks.
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<PAGE>
LIMITED NUMBER OF REFINERS
Currently, the Company is shipping approximately 70% of its filter cake to
Union Miniere ("UM") in Belgium and approximately 30% to Johnson Matthey ("JM")
in New Jersey for refining. [UM and JM are the two principal refiners
worldwide.] The Company has no control over the refining operations of UM and
JM. If the refining capacity available to the Company was significantly reduced
because of a deterioration in the Company's relationship with UM or JM,
environmental requirements or otherwise, the Company's operations could be
adversely affected.
CERTAIN ANTI-TAKEOVER EFFECTS
In October 1995, the Board of Directors adopted a stockholder rights plan
and, pursuant thereto, issued preferred stock purchase rights to holders of its
common stock. The Rights have certain anti-takeover effects. If triggered, the
Rights would cause substantial dilution to a person or group of persons who
acquires more than 15% of the Common Stock on terms not approved by the Board of
Directors. See "Description of Capital Stock--Rights Agreement."
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<PAGE>
USE OF PROCEEDS
Unless a Prospectus Supplement indicates otherwise, the Company intends to
use the net proceeds to be received from the sale of the Securities to finance
the Company's operations, for continued expansion and development activities and
for other general corporate purposes.
RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges and the ratio of earnings to
combined fixed charges and preferred stock dividends for the Company were as
follows for the years ended December 31, 1997, 1996, 1995, 1994, and 1993:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............... (a) (b) 1.2 4.7 11.8
Ratio of Earnings to Combined Fixed Charges
and Preferred Stock Dividends.................... (a) (b) 1.2 4.7 11.8
</TABLE>
_______________
(a) Earnings for the year ended December 31, 1997 were inadequate to cover
fixed charges by $10,196.
(b) Earnings for the year ended December 31, 1996 were inadequate to cover
fixed charges by $6,796.
For purposes of calculating the ratio of earnings to fixed charges and the
ratio of earnings to combined fixed charges and preferred stock dividends,
earnings consist of income before income taxes and fixed charges (exclusive of
preferred stock dividends). For the purpose of calculating both ratios, fixed
charges include interest expense and capitalized interest. Because the Company
did not pay any preferred stock dividends during the years indicated, the ratios
are identical.
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BUSINESS AND PROPERTIES
GENERAL
Stillwater Mining Company ("Stillwater" or the "Company") is engaged in the
exploration, development, extraction, processing and refining of palladium,
platinum and associated metals from the J-M Reef located in Stillwater and Sweet
Grass Counties, Montana. Associated by-product metals include rhodium, gold,
silver, nickel and copper. The Company conducts its current operations at the
Stillwater Mine in Nye, Montana. Future expansion is planned at the Stillwater
Mine and at the East Boulder site located at the western end of the J-M Reef.
The J-M Reef is the only significant primary source of platinum group
metals ("PGMs") outside the Republic of South Africa and Russia. The J-M Reef
is an extensive mineralized zone containing PGMs, which has been traced over a
strike length of approximately 28 miles and which extends downward over one mile
to unknown depths. The Company holds the rights to claims covering
substantially all of the property identified as PGM mineralized zone or the J-M
Reef.
GEOLOGY AND RESERVES
The J-M Reef is located in the Beartooth Mountains in southern Montana. It
is situated along the northern edge of the Beartooth Plateau, which rises to
elevations of over 10,000 feet in places. This plateau is deeply dissected by
several rivers and their tributaries including the Stillwater River, towards the
eastern end and the Boulder River, near the western end of the known reef
horizon. Both of these rivers have eroded their valley floors resulting in deep
valleys cut into the gently undulating elevated plateau.
Geologically, the J-M Reef is composed of an assemblage of basic and
ultrabasic rocks derived from a single, large, buried magma body emplaced an
estimated 2.7 billion years ago. The molten rock was sufficiently fluid at the
time of emplacement to allow individual minerals to crystallize sequentially,
the heavier, more basic, darker minerals crystallizing first, sinking towards
the bottom, and leaving the lighter, more siliceous light-colored minerals to
crystallize out later to produce bands of norite, gabbro and anorthosite which
can be traced across most of the strike length of the complex. Over time the
original horizontal orientation of the reef was changed as the reef was tilted
at an angle of 50 to 90 degrees to the north. The upper portion of the reef was
eroded away to produce the essentially lenticular-shaped exposure of the reef
evident today, which has been identified for 28 miles in an east-southeasterly
direction and has a maximum width of nearly 4.5 miles near the East Boulder
valley.
The PGMs, consisting of palladium, platinum and rhodium, and a small amount
of nickel, copper, silver and gold, are concentrated in one principal layer.
The J-M Reef appears to form a continuous layer which is exposed from the
highest ridges over 9,500 feet above sea level to the deepest valleys almost a
mile below the surface of the plateau. Geological and geophysical evidence
suggests that the J-M Reef extends downward beyond the limits of currently
available mining practice. Geological mapping and gravity surveys also suggest
that the dip of the J-M Reef flattens gently and may extend 30 miles or more to
the north.
The following table sets forth the Company's proven and probable palladium
and platinum ore reserves and platinum and gold equivalent reserves as of
December 31, 1997. The reserves reflected below are based on a cut-off grade of
0.40 ounces of palladium plus platinum per ton, and assume the following prices
for economic production: $155 and $375 per ounce for palladium and platinum,
respectively. Proven and probable reserves are after average mining dilution of
10% at zero grade based on actual mining experience.
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The ore reserves were affirmed and verified by Behre Dolbear & Company,
Inc. ("Behre Dolbear"), independent consultants, who are experts in mining,
geology and ore reserve determination. The Company primarily has utilized Behre
Dolbear to carry out independent reviews and inventories of the Company's ore
reserves since 1990. The ore reserves have been affirmed and verified by Behre
Dolbear in alternating years.
PROVEN AND PROBABLE RESERVES*
<TABLE>
<CAPTION>
December 31, 1997
--------------------------------------------
Average Contained
Tons/(1)/ Grade/(2)/ Ounces/(2)/
(000's) (Ounces/Ton) (000's)
----------- -------------- -----------
<S> <C> <C> <C>
Proven Reserves 1,379 0.86 1,184
Probable Reserves 28,130 0.79 22,183
----------- -------------- -----------
Total Proven and Probable Reserves 29,509 0.79 23,367
----------- -------------- -----------
Total Platinum Equivalent Proven and
Probable Reserves/(2)/ 15,462
-----------
Total Gold Equivalent Proven and
Reserves/(3)/ 19,354
-----------
</TABLE>
* Reserves are defined as that part of a mineral deposit that can be
economically and legally extracted or produced at the time of
determination and is customarily stated in terms of "ore" when dealing
with metals. The probable reserves are computed from information similar
to that used for proven reserves, but the sites for inspection, sampling
and measurement are between 50 and 1,000 feet apart. The degree of
assurance, although lower than that for proven reserves, is sufficient to
predict the geological regularity of the reef between points of
observation. See "Risk Factors."
/(1)/ Total proven and probable reserves include 11,510,000 tons in the area of
East Boulder. Significant capital investments will be required to access
the East Boulder reserves. See "-- 1998 Expansion Plan."
/(2)/ Expressed as palladium plus platinum ounces per ton at a ratio of 3.3
parts palladium to one part platinum, before processing losses of
approximately ten percent (10%).
/(3)/ Platinum and gold equivalent ounces of proven and probable reserves at
December 31, 1997 are presented solely for purposes of illustration and
are calculated using the London P.M. Fix of $363 per ounce of platinum,
$290 per ounce of gold and $203 per ounce of palladium on December 30,
1997.
Reserves are consumed during mining operations and the Company generally
replaces reserves by drilling mineralized material on a close-spaced pattern.
Prior to establishment as reserves, this mineralized material has been confirmed
to contain PGMs but has not yet been established as proven and probable
reserves. Because of the expense of the close-spaced drilling necessary to
generate proven reserves estimates, the Company generally attempts to establish
sufficient reserves to support its mine development objective of approximately
18 months of production.
MINING
The Stillwater Mine accesses only a small segment of the J-M Reef,
approximately five miles long, between the elevations of 6,700 and 3,100 feet
above sea level. Deep exploration drill holes have confirmed the structure and
mineralization of the J-M Reef down to the 2,000-foot elevation, but currently
is open at depth to be further verified by additional drilling. Access to the
ore at the Stillwater Mine is by means of horizontal adits and drifts driven
parallel to the strike of the J-M Reef. Prior to 1994, almost all of the
Company's mining activities utilized "cut-and-fill" stoping methods. This
method extracts the ore in ten-foot high horizontal cuts. The open space
created by the extraction of each cut is filled with waste rock and coarse
concentrator tailings and becomes the floor for the next level of mining as the
process moves upward.
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<PAGE>
Since 1994, the Company has introduced two mechanized mining methods:
"ramp-and-fill" and "sub-level" stoping. Ramp-and-fill is a mining method in
which a succession of horizontal cuts are extracted from the ore body using
mobile equipment. Access to the ore body is from ramps driven in or adjacent to
the ore body allowing the use of hydraulic drills and load haul dump (LHD)
equipment. Sublevel stoping is a mining method in which horizontal slices of
the reef are extracted in 30-foot vertical intervals utilizing mobile electric
hydraulic long-hole drills and remote control rubber tired LHD's. The reef is
mined in a retreat sequence along strike and up dip and mined out areas are
filled with development waste. The Company believes that mechanized mining
methods are safer, less expensive and more productive than traditional "cut and
fill" stoping. Mechanized mining increased from 60% in 1996 to 80% in 1997.
Currently, direct costs per ton mined for ramp-and-fill stoping is 40% less than
cut-and-fill stoping and is more productive by one ton per man-hour. However,
not all areas of the reef are amenable to ramp-and-fill mining, and the Company
will continue to select the appropriate mining method on a stope-by-stope basis.
The 1,950-foot vertical shaft, which was commissioned in 1997 as part of
the Company's prior expansion program, commenced in 1994, to double output from
1,000 TPD to 2,000 TPD (the "1994 Expansion Plan"), was sunk adjacent to the
concentrator. Development is continuing on two levels at 3,200 and 3,800 feet
above sea level, both of which are only accessible for the shaft. The crushing
station was commissioned during 1997 and is located on the 3,100-foot level.
All ore hoisted up the shaft is crushed. The commissioning of the production
shaft and underground crushing station has reduced haulage time and costs,
improved the material handling of ore and waste and improved the grinding
capabilities of the concentrator. During the fourth quarter of 1997,
approximately 56% of ore production was crushed and hoisted up the shaft. The
Company expects this percentage to increase as more stopes are developed off the
shaft. The portion of waste that cannot be used for backfill in underground
excavations is hauled to the surface or hoisted up the shaft, depending on its
location, and used in the rock embankment of the tailings dam or is placed in
the permitted waste disposal site.
PRODUCTION
During 1997, the Company produced 355,000 ounces of palladium and platinum,
up from 255,000 ounces in 1996. In the fourth quarter of 1997, the Company
attained its 1994 Expansion Plan production goals: by increasing production by
46% from approximately 1,370 TPD in the fourth quarter of 1996 to approximately
2,000 TPD in the fourth quarter of 1997. Variations in production above and
below 2,000 TPD can be expected in future periods. In conjunction with the 1994
Expansion Plan, the Company invested in new mobile mining equipment, reduced the
number of sizes and types of equipment used in the mine, formed an additional
maintenance crew to permit maintenance activities to be carried out on a 24-
hour, seven day per week basis and constructed additional surface facilities.
The 1994 Expansion Plan began to impact positively the Company's cash costs
of production in 1996. Cash costs of production were $215 per ounce in 1995,
$184 per ounce in 1996 and $174 per ounce in 1997. During 1994 through 1997,
the Company's total capital expenditures for the expansion of the Stillwater
Mine and facilities were approximately $70 million, excluding capital costs for
sustaining and rehabilitating the existing mine.
The Company has announced plans to triple production over five years. See
"--1998 Expansion Plan."
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<PAGE>
CONCENTRATION
The Company maintains a concentrator plant adjacent to the Stillwater Mine.
Ore is defined as material with a PGM content above a 0.40 cut-off grade. Ore
is fed into the concentrator, mixed with water and ground to a slurry in a mill
circuit to liberate the PGM-bearing sulfide minerals from the rock matrix.
Various reagents are added to the slurry to separate the valuable sulfides from
the waste rock in a flotation circuit. In the flotation circuit, the sulfide
minerals are floated, recycled, reground and refloated to produce a concentrate
suitable for further processing. The flotation concentrate, which represents
approximately 1% of the original ore weight, is filtered, dried and transported
in trailers approximately 46 miles to the Company's metallurgical complex in
Columbus, Montana. Approximately 60% of the material discarded from this
process is used for backfill in the mine, with the balance stored in an onsite
tailings containment area.
As part of the 1994 Expansion Plan, the capacity of the concentrator was
expanded with the addition of a large ball mill grinding unit, additional
flotation capacity and ancillary equipment.
During 1997, the Company continued to improve the recovery performance from
the new flotation circuit. Recovery improved to 90% at December 31, 1997 from
86% at December 31, 1996. During the first half of 1998, the Company installed
twenty additional 300 cubic foot flotation cells, which helped to increase the
concentrator's recovery to approximately 92%. These cells also increased the
concentrate grade, which should result in potential cost reductions in
downstream processing.
Currently, the concentrator has a capacity of 2,000 TPD. In the first half
of 1998, the Company modified the concentrator by installing metal lifters and
grates in the semi-autogenous (SAG) grinding mill and installing a particle size
monitor (PSM), to control the particle size in the grinding circuit. The PSM
provides a more uniform sized product for the flotation circuit and reduces
labor requirements. The Company expects that the modification of the SAG mill
and the installation of the PSM should provide the concentrator with increased
capacity.
In 1996, the Company submitted an application to the Montana Department of
Environmental Quality requesting an amendment to its Operating Permit. The
Company's proposal contemplates the construction of a lined tailings impoundment
that would serve the Stillwater Mine for the next thirty years.
SMELTING
The Company's metallurgical complex is located in Columbus, Montana, and
consists of the precious metals smelter and base metals refinery (BMR).
Concentrate from the mine site is fed to a 1.5 megawatt electric furnace, where
it is melted and separated into a silica oxide rich slag and a PGM rich furnace
matte. The slag is drained through the side of the furnace, cooled and provided
to outside parties for use as road base. PGM matte is tapped from the furnace
and granulated.
The furnace matte is remelted in one of two top blown rotary converters
(TBRC), which separate iron from the matte. The converter matte is poured from
the TBRC, granulated and transferred to the BMR in two ton bags. The matte,
approximately 10% of the original smelter feed weight, is primarily copper and
nickel sulfides containing about 2% PGMs.
The gases released from the smelting operations are routed through a
gas/liquid scrubbing system, which removes approximately 99.8% of the sulfur
dioxide. Spent scrubbing solution is treated in a process
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that converts the sulfur dioxide to gypsum, or calcium sulfate, and regenerates
clean scrubbing solution. The gypsum is used by local farmers as a soil
amendment.
The smelter's expansion was completed in 1997, increasing the daily
smelting capacity from 22 TPD to 32 TPD. Feed and power control systems for the
existing furnace were modified, a second TBRC was added and the gas handling and
solution regeneration systems were upgraded. Additionally during 1997, the
furnace was rebricked, a process that occurs every two to three years. The
furnace modifications resulted in significant power savings due to increased
efficiency. At 2,000 TPD of mine production, the smelter processes
approximately 25-30 TPD of concentrate.
REFINING
In 1996, the Company constructed and commissioned the BMR, which utilizes
the patented Sherritt Process, whereby sulfuric acid is used to dissolve the
nickel, copper, cobalt and iron from the smelter matte. This process upgrades
the smelter product over 25-30 times (from 2% Pd+Pt to 55-60% Pd+Pt). The BMR
has a capacity equivalent to more than 4,000 tons per day of mine production.
The present plant now operates two shifts per day, five days per week.
The iron is precipitated out of the solution and returned to the smelter to
be processed and removed in the slag. The dissolved nickel, copper and cobalt
is shipped via truck, as a sulfate solution, to an outside refiner located in
Canada. The Company is paid for a portion of the nickel and cobalt content of
the solution. During the first half of 1998, the Company began construction of
a copper/nickel refinery to process the sulfate solution.
The resulting PGM rich filter cake is shipped to Union Miniere ("UM") in
Belgium, or Johnson Matthey ("JM") in New Jersey, and is returned to the account
of the Company after 20 days (UM), or 35 days (JM), as 99.95% PGM sponge.
Currently, the Company is shipping approximately 70% of its filter cake to UM
and approximately 30% to JM and should remain at these levels through the
expiration of the refining contracts on December 31, 2000 and February 5, 2001,
respectively. The Company pays UM and JM a refining charge in United States
dollars per ounce for the toll processing of the BMR filter cake.
SECONDARY MATERIALS PROCESSING
A sampling facility for secondary materials was completed in late 1997.
The facility was designed to accept spent catalysts that can be crushed and
added to the electric furnace. Several test lots were processed during 1997,
and it was determined that spent auto catalysts are suitable for processing at
the Company's facilities. Processing of secondary materials was suspended in
mid-1997 to assess the results of the test lots and to improve the performance
of the system. The Company expects to process shipments of spent auto catalysts
during 1998.
EXPLORATION ACTIVITIES
Major portions of the J-M Reef have yet to be exposed to drilling and
development sufficient to allow for the delineation of additional reserves.
However, given the magnitude of its current proven and probable reserves, the
Company's exploration activities are limited. The Company's current plans are
to continue to focus on its current PGM reserves at the Stillwater Mine and East
Boulder Project rather than exploring for or attempting to acquire additional
developed or undeveloped ore reserves. Consequently, exploration does not
represent a significant expenditure for the Company.
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<PAGE>
1998 EXPANSION PLAN
The Company has adopted a long-term goal to triple production in five years
and is currently establishing the steps necessary to achieve this goal. The two
key components include increasing output at the Stillwater Mine from 2,000 to
3,000 TPD and moving the East Boulder Project through development and into
production. Detailed engineering is underway and a comprehensive plan for the
expansion, including a timetable for construction and a cost estimate, is
expected in the second half of 1998. The Company continues to refine its
preliminary cost estimate of $325 million for the 1998 Expansion Plan, including
$75 million for expansion of the Stillwater Mine and $250 million for
development of the East Boulder Project.
EXPANSION AT STILLWATER MINE. An engineering study on the expansion of the
Stillwater Mine was completed by MRDI Canada in the second quarter of 1998. The
MRDI study, in addition to the Company's internal analysis, indicates the most
economically attractive alternative is to expand the current mill throughput at
the Stillwater Mine from 2,000 to 3,000 tons per day and to develop
simultaneously the East Boulder project. Detailed engineering is underway, and
a comprehensive plan for the expansion including a timetable for construction
and a cost estimate is expected in the second half of 1998. When completed,
incremental production from the Stillwater expansion is expected to be in the
range of 250,000 ounces of palladium and platinum.
DEVELOPMENT OF THE EAST BOULDER PROJECT. The East Boulder Project provides
western access to the J-M Reef, from Sweet Grass County, Montana, and is the
second fully permitted access to the J-M Reef. In 1996, the Company began work
on the initial exploration phase of the East Boulder Project, including site
preparation, construction of a power line and procurement of a tunnel boring
machine ("TBM"). During 1996, the Company invested $7.8 million in the East
Boulder Project. These capital investments were primarily for construction of
the TBM and providing electrical power supply to the mine portal site. In
October 1996, the project was deferred, primarily due to a downturn in palladium
and platinum prices. However, permitting and environmental activities continued
at the East Boulder Project with approximately $1.1 million expended during
1997. In November 1997, with the achievement of the 1994 Expansion Plan's
production goals and higher prices for palladium and platinum, the Company
restarted the East Boulder Project. The TBM, which will provide access to the
western section of the J-M Reef, was completed in the second quarter of 1998 and
development work began in the second quarter of 1998. Independent contractors
have been engaged to work with the Company to drive the 18,500-foot long, 15-
foot diameter tunnel. This is expected to take approximately 18 months and cost
approximately $20 million. During this period, the Company will complete its
engineering and cost estimate for the East Boulder Project. The Company will
proceed with further development of the East Boulder Project as engineering is
completed and the grade and continuity of the reef have been confirmed. A
preliminary feasibility study, completed in 1992, estimated the total cost of
the project to be $250 million, including $50 million for contingencies.
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DESCRIPTION OF DEBT SECURITIES
The Convertible Debt Securities may be issued from time to time in one or
more series under an indenture between the Company, as issuer, and the trustee
specified in the applicable Prospectus Supplement. The following statements
with respect to the Convertible Debt Securities are subject to the detailed
provisions of the indenture, the form of which is filed as an exhibit to the
Registration Statement. Parenthetical references below are to the indenture (or
the form of security contained therein if so specified) and, whenever any
particular provision of the indenture or any term used therein is referred to,
such provision or term is incorporated by reference as a part of the statement
in connection with which such reference is made, and the statement in connection
with which such reference is made is qualified in its entirety by such
reference.
The Convertible Debt Securities will constitute either indebtedness
designated as Senior Indebtedness ("Senior Debt Securities"), indebtedness
designated as Senior Subordinated Indebtedness ("Senior Subordinated Debt
Securities") or indebtedness designated as Subordinated Indebtedness
("Subordinated Debt Securities"). Senior Debt Securities, Senior Subordinated
Debt Securities and Subordinated Debt Securities will each be issued under a
separate indenture (individually an "Indenture" and collectively the
"Indentures") to be entered into prior to the issuance of such Convertible Debt
Securities. The Indentures will be substantially identical, except for
provisions relating to subordination. See "Subordination of Senior Subordinated
Debt Securities and Subordinated Debt Securities." There will be a separate
trustee (individually a "Trustee" and collectively the "Trustees") under each
Indenture. Information regarding the Trustee under an Indenture will be
included in any Prospectus Supplement relating to the Convertible Debt
Securities issued thereunder.
The particular terms of each series of Convertible Debt Securities, as well
as any modification or addition to the general terms of the Convertible Debt
Securities as herein described, which may be applicable to a particular series
of Convertible Debt Securities, will be described in the Prospectus Supplement
relating to such series of Convertible Debt Securities and set forth in a filing
with the Commission. Accordingly, for a description of the terms of a
particular series of Convertible Debt Securities, reference must be made to both
the Prospectus Supplement relating to such series and to the description of
Convertible Debt Securities set forth in this Prospectus.
GENERAL
The Convertible Debt Securities offered pursuant to this Prospectus will be
limited to $200,000,000 aggregate principal amount (or (i) its equivalent (based
on the applicable exchange rate at the time of sale), if Convertible Debt
Securities are issued with principal amounts denominated in one or more foreign
currencies, composite currencies or currency units as shall be designated by the
Company, or (ii) such greater amount, if Convertible Debt Securities are issued
at an original issue discount, as shall result in aggregate proceeds of
$200,000,000 to the Company). The Indenture provides that additional
convertible debt securities may be issued thereunder up to the aggregate
principal amount, which is not limited by the Indenture, authorized from time to
time by the Company's Board of Directors or any duly authorized committee
thereof. So long as a single Trustee is acting for the benefit of the holders
of all the Convertible Debt Securities offered hereby and any such additional
convertible debt securities issued under the Indenture, the Convertible Debt
Securities and any such additional convertible debt securities are herein
collectively referred to as the "Indenture Securities." The Indenture also
provides that there may be more than one Trustee under the Indenture, each with
respect to one or more different series of Indenture Securities. At any time
when two or more Trustees are acting, each with respect to only certain series,
the term "Indenture Securities" as used herein shall mean the one or more series
with respect to which each respective Trustee is acting and the powers and the
trust obligations of each such Trustee as described herein shall extend only to
the one or
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more series of Indenture Securities for which it is acting as trustee. If there
is more than one Trustee acting for different series of Indenture Securities,
then those Indenture Securities (whether of one or more than one series) for
which each Trustee is acting would be treated as if issued under a separate
Indenture.
The applicable Prospectus Supplement will set forth a description of the
particular series of Convertible Debt Securities being offered thereby,
including but not limited to: (1) the designation or title of such Convertible
Debt Securities; (2) the aggregate principal amount of such Convertible Debt
Securities; (3) the percentage of their principal amount at which such
Convertible Debt Securities will be offered; (4) the date or dates on which the
principal of such Convertible Debt Securities will be payable and on which such
Convertible Debt Securities will mature; (5) the rate or rates (which may be
fixed or variable) at which such Convertible Debt Securities shall bear
interest, or the method of determination of such rate or rates at which such
Convertible Debt Securities shall bear interest, if any; (6) the date or dates
from which interest will accrue or the method of determination of such date or
dates, and the date or dates on which any such interest shall be payable; (7)
the currencies or currency units in which such Convertible Debt Securities are
issued or payable; (8) the terms for redemption, extension or early repayment of
such Convertible Debt Securities, if any; (9) if other than denominations of
$1,000 and any integral multiple thereof, the denominations in which such
Convertible Debt Securities are authorized to be issued; (10) the terms and
conditions upon which conversion will be effected, including the conversion
price, the conversion period and other conversion provisions; (11) the
provisions for a sinking fund, if any; (12) whether such Convertible Debt
Securities are issuable as a Global Security or Securities; (13) any index or
formula to be used to determine the amount of payments of principal, premium, if
any, and interest on such Convertible Debt Securities, and any commodities,
currencies, currency units or indices, or value, rate or price, relevant to such
determination; (14) if the principal of, premium, if any, or interest on such
Convertible 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 such Convertible Debt Securities are stated to be payable, the
currencies or currency units in which payment of the principal of, premium, if
any, and interest on such Convertible Debt Securities as to which election is
made shall be payable, and the periods within which and the terms and conditions
upon which such election is to be made; (15) if other than the principal amount
thereof, the portion of the principal amount of such Convertible Debt Securities
of the series which will be payable upon acceleration of the Maturity thereof;
(16) whether such Convertible Debt Securities are subordinate in right of
payment to any Senior Indebtedness of the Company and, if so, the terms and
conditions of such subordination and the aggregate principal amount of such
Senior Indebtedness outstanding as of a recent date; (17) any covenants to which
the Company may be subject with respect to such Convertible Debt Securities;
(18) the applicability of the provisions described under "Defeasance" below;
(19) United States income tax consequences, if any; (20) the provisions for the
payment of additional amounts with respect to any withholding taxes in certain
cases; (21) any term or provision relating to such Convertible Debt Securities
which is not inconsistent with the provisions of the Indenture; (22) the
Trustee; and (23) any other special terms pertaining to such Convertible Debt
Securities. Unless otherwise specified in the applicable Prospectus Supplement,
the Convertible Debt Securities will not be listed on any securities exchange.
One or more series of Convertible Debt Securities may be sold at a
substantial discount below their stated principal amount, bearing no interest or
interest at a rate which at the time of issuance is below market rates. Any
material federal income tax consequences and other special considerations with
respect to any series of Convertible Debt Securities will be described in the
Prospectus Supplement relating to any such series of Convertible Debt
Securities.
If the purchase price of any series of Convertible Debt Securities is
denominated in a foreign currency or currencies or a foreign currency unit or
units or if the principal of, premium, if any, and interest on any series of
Convertible Debt Securities are payable in a foreign currency or currencies or a
foreign currency unit
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or units, the restrictions, elections, general tax considerations, specific
terms and other information with respect to such series of Convertible Debt
Securities will be set forth in the applicable Prospectus Supplement.
Convertible Debt Securities may be issued from time to time with payment
terms which are calculated by reference to the value, rate or price of one or
more commodities, currencies, currency units or indices. Holders of such
Convertible Debt Securities may receive a principal amount (including premium,
if any) on any principal payment date, or a payment of interest on any interest
payment date, that is greater than or less than the amount of principal
(including premium, if any) or interest otherwise payable on such dates,
depending upon the value, rate or price on the applicable dates of the
applicable currency, currency unit, commodity or index. Information as to the
methods for determining the amount of principal, premium, if any, or interest
payable on any date, the currencies, currency units, commodities or indices to
which the amount payable on such date is linked and any additional tax
considerations will be set forth in the applicable Prospectus Supplement.
Except as may be set forth in the applicable Prospectus Supplement, Holders
of Convertible Debt Securities will not have the benefit of any specific
covenants or provisions in the applicable Indenture or such Convertible Debt
Securities in the event that the Company engages in or becomes the subject of a
highly leveraged transaction, other than the limitations on mergers,
consolidations and transfers of substantially all of the Company's properties
and assets as an entirety to any person as described below under "Consolidation,
Merger and Sale of Assets."
The Convertible Debt Securities will be general unsecured obligations of
the Company.
Except as otherwise provided in the applicable Prospectus Supplement,
principal, premium, if any, and interest, if any, will be payable at an office
or agency to be maintained by the Company in New York, New York, except that at
the option of the Company interest may be paid by check mailed to the person
entitled thereto.
The Convertible Debt Securities will be issued only in fully registered
form without coupons and may be presented for the registration of transfer or
exchange at the corporate trust office of the Trustee. Not all Convertible Debt
Securities of any one series need be issued at the same time, and, unless
otherwise provided, a series may be reopened for issuances of additional
Convertible Debt Securities of such series.
SENIOR DEBT SECURITIES
The Senior Debt Securities will rank pari passu with all other unsecured
and unsubordinated debt of the Company and senior to the Senior Subordinated
Debt Securities and Subordinated Debt Securities.
SUBORDINATION OF SENIOR SUBORDINATED DEBT SECURITIES AND SUBORDINATED DEBT
SECURITIES
The payment of the principal of, premium, if any, and interest on the
Senior Subordinated Debt Securities and the Subordinated Debt Securities will,
to the extent set forth in the respective Indentures and Indenture Supplements
governing such Senior Subordinated Debt Securities and Subordinated Debt
Securities, be subordinated in right of payment to the prior payment in full of
all Senior Indebtedness. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding up, reorganization,
assignment for the benefit of creditors, marshalling of assets or any
bankruptcy, insolvency or similar proceedings of the Company, the holders of all
Senior Indebtedness will be entitled to receive payment in full of all amounts
due or to become due thereon before the Holders of the Senior Subordinated Debt
Securities or the Subordinated Debt Securities will be entitled to receive any
payment in respect of the
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principal of, premium, if any, or interest on such Senior Subordinated Debt
Securities or Subordinated Debt Securities, as the case may be. In the event of
the acceleration of the maturity of any Senior Subordinated Debt Securities or
Subordinated Debt Securities, the holders of all Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due thereon
before the Holders of the Senior Subordinated Debt Securities or Subordinated
Debt Securities, as the case may be, will be entitled to receive any payment
upon the principal of, premium, if any, or interest on such Senior Subordinated
Debt Securities or Subordinated Debt Securities, as the case may be. No payments
on account of principal, premium, if any, or interest in respect of the Senior
Subordinated Debt Securities or Subordinated Debt Securities may be made if
there shall have occurred and be continuing in a default in the payment of
principal of (or premium, if any) or interest on any Senior Indebtedness beyond
any applicable grace period, or a default with respect to any Senior
Indebtedness permitting the holders thereof to accelerate the maturity thereof,
or if any judicial proceedings shall be pending with respect to any such
default. For purposes of the subordination provisions, the payment, issuance or
delivery of cash, property or securities (other than stock, and certain
subordinated securities, of the Company) upon conversion or exchange or a Senior
Subordinated Debt Security or Subordinated Debt Security will be deemed to
constitute payment on account of the principal of such Senior Subordinated Debt
Security or Subordinated Debt Security, as the case may be.
By reason of such provisions, in the event of insolvency, holders of Senior
Subordinated Debt Securities and Subordinated Debt Securities may recover less,
ratably, than holders of Senior Indebtedness with respect thereto.
The term "Senior Indebtedness," when used with respect to any series of
Senior Subordinated Debt Securities or Subordinated Debt Securities, is defined
to include all amounts due on and obligations in connection with any of the
following, whether outstanding at the date of execution of the Indenture or
thereafter incurred, assumed, guaranteed or otherwise created (including,
without limitation, interest accruing on or after a bankruptcy or other similar
event, whether or not an allowed claim therein):
(a) indebtedness, obligations and other liabilities (contingent or
otherwise) of the Company for money borrowed or evidenced by bonds, debentures,
notes or similar instruments;
(b) reimbursement obligations and other liabilities (contingent or
otherwise) of the Company with respect to letters of credit or bankers'
acceptances issued for the account of the Company and interest rate protection
agreements and currency exchange or purchase agreements;
(c) obligations and liabilities (contingent or otherwise) of the Company
related to capitalized lease obligations;
(d) indebtedness, obligations and other liabilities (contingent or
otherwise) of the Company related to agreements or arrangements designed to
protect the Company against fluctuations in commodity prices, including without
limitation, commodity futures contracts or similar hedging instruments;
(e) indebtedness of others of the kinds described in the preceding clauses
(a) through (d) that the Company has assumed, guaranteed or otherwise assured
the payment of, directly or indirectly;
(f) indebtedness of another Person of the type described in the preceding
clauses (a) through (e) secured by any mortgage, pledge, lien or other
encumbrance on property owned or held by the Company; and
(g) deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability
described in the preceding clauses (a) through (f)
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whether or not there is any notice to or consent of the Holders of such series
of Senior Subordinated Debt Securities or Subordinated Debt Securities, as the
case may be; except that, with respect to the Senior Subordinated Debt
Securities, any particular indebtedness, obligation, liability, guaranty,
assumption, deferral, renewal, extension or refunding shall not constitute
"Senior Indebtedness" if it is expressly stated in the governing terms, or in
the assumption or guarantee, thereof that the indebtedness involved is not
senior in right of payment to the Senior Subordinated Debt Securities or that
such indebtedness is pari passu with or junior to the Senior Subordinated Debt
Securities and, with respect to Subordinated Debt Securities, any particular
indebtedness, obligation, liability, guaranty, assumption, deferral, renewal,
extension or refunding shall not constitute "Senior Indebtedness" if it is
expressly stated in the governing terms, or in the assumption or guarantee,
thereof that the indebtedness involved is not senior in right of payment to the
Subordinated Debt Securities or that such indebtedness is pari passu with or
junior to the Subordinated Debt Securities.
In certain circumstances, such as the bankruptcy or insolvency of the
Company, bankruptcy or insolvency legislation may be applicable and the
application of such legislation may lead to different results with respect to,
for example, payments to be made to Holders of Convertible Debt Securities, or
priorities between Holders of the Convertible Debt Securities and holders of
Senior Indebtedness, than those provided for in the applicable Indenture.
If this Prospectus is being delivered in connection with a series of Senior
Subordinated Debt Securities or Subordinated Debt Securities, the accompanying
Prospectus Supplement or the information incorporated herein by reference will
set forth the approximate amount of Senior Indebtedness outstanding as of the
end of the Company's most recent fiscal quarter.
FORM, EXCHANGE, REGISTRATION, CONVERSION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, the
Convertible Debt Securities will be issued only in fully registered form in
denominations of U.S.$1,000 or integral multiples thereof. Unless otherwise
indicated in the applicable Prospectus Supplement, payment of principal,
premium, if any, and interest on the Convertible Debt Securities will be
payable, and the exchange, conversion and transfer of Convertible Debt
Securities will be registerable, at the office or agency of the Company
maintained for such purposes. No service charge will be made for any
registration of a transfer or exchange of the Convertible Debt Securities, but
the Company may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith.
All monies paid by the Company to a Paying Agent for the payment of
principal of, premium, if any, or interest on any Convertible Debt Security
which remain unclaimed for two years after such principal, premium or interest
has become due and payable may be repaid to the Company and thereafter the
holder of such Convertible Debt Security may look only to the Company for
payment thereof.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture with respect to
Convertible Debt Securities of any series: (a) failure to pay principal (or
premium, if any) on any Convertible Debt Security of that series at its
maturity, whether or not such failure is a result of the subordination
provisions of the Indenture with respect to such series; (b) failure to pay any
interest on any Convertible Debt Security of that series when due, continued for
30 days, whether or not such failure is a result of the subordination provisions
of the Indenture with respect to such series; (c) failure to make any sinking
fund payment, when due, in respect of any Convertible Debt Security of that
series; (d) failure to perform any other covenant of the Company in the
applicable Indenture or any other covenant to which the Company may be subject
with
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respect to Convertible Debt Securities of that series (other than a covenant
solely for the benefit of a series of Convertible Debt Securities other than
that series), continued for 90 days after written notice as provided in the
applicable Indenture; (e) failure to pay when due on final maturity (after the
expiration of any applicable grace period), or upon acceleration, any
indebtedness for money borrowed by the Company in excess of U.S. $10 million;
(f) certain events of bankruptcy, insolvency or reorganization; and (g) any
other Event of Default provided with respect to Convertible Debt Securities of
that series.
If an Event of Default with respect to outstanding Convertible Debt
Securities of any series shall occur and be continuing, either the Trustee or
the Holders of at least 25% in principal amount of the outstanding Convertible
Debt Securities of that series, by notice as provided in the applicable
Indenture, may declare the principal amount (or, if the Convertible Debt
Securities of that series are original issue discount securities, such portion
of the principal amount as may be specified in the terms of that series) of all
Convertible Debt Securities of that series to be due and payable immediately,
except that upon the occurrence of an Event of Default specified in (f) above,
the principal amount (or in the case of original issue discount securities, such
portion) of all Convertible Debt Securities shall be immediately due and payable
without notice. However, at any time after a declaration of acceleration with
respect to Convertible Debt Securities of any series has been made, but before
judgment or decree based on such acceleration has been obtained, the Holders of
a majority in principal amount of the outstanding Convertible Debt Securities of
that series may, under certain circumstances, rescind and annul such
acceleration. For information as to waiver of defaults, see "Modification and
Waiver" below.
The Indentures will provide that, subject to the duty of the respective
Trustees thereunder during an Event of Default to act with the required standard
of care, each such Trustee will be under no obligation to exercise any of its
rights or powers under the respective Indentures at the request or direction of
any of the Holders, unless such Holders shall have offered to such Trustee
reasonable security or indemnity. Subject to certain provisions, including
those requiring security or indemnification of the applicable Trustee, the
Holders of a majority in principal amount of the outstanding Convertible 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 such Trustee, or
to exercise any trust or power conferred on such Trustee, with respect to the
Convertible Debt Securities of that series.
No Holder of a Convertible Debt Security of any series will have any right
to institute any proceeding with respect to the applicable Indenture or for any
remedy thereunder, unless such Holder shall have previously given to the
applicable Trustee written notice of a continuing Event of Default and unless
also the Holders of at least 25% in aggregate principal amount of the
outstanding Convertible Debt Securities of the same series shall have made
written requests, and offered reasonable indemnity, to such Trustee to institute
such proceeding as trustee, and the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of the outstanding
Convertible Debt Securities of the same series a direction inconsistent with
such request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a Holder of a
Convertible Debt Security for enforcement of payment of the principal of and
interest on such Convertible Debt Security on or after the respective due dates
expressed in such Convertible Debt Security.
The Company will be required to furnish to the Trustees annually a
statement as to the performance by the Company of its obligations under the
respective Indentures and as to any default in such performance.
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MODIFICATION AND WAIVER
Without the consent of any Holder of outstanding Convertible Debt
Securities, the Company and the Trustees may amend or supplement the Indentures
or the Convertible Debt Securities to cure any ambiguity, defect or
inconsistency, or to make any change that does not adversely affect the rights
of any Holder of Convertible Debt Securities. Other modifications and
amendments of the respective Indentures may be made by the Company and the
applicable Trustee with the consent of the Holders of not less than a majority
in aggregate principal amount of the outstanding Convertible Debt Securities of
each series affected thereby; provided, however, that no such modification or
amendment may, without the consent of the Holder of each outstanding Convertible
Debt Security affected thereby: (a) change the stated maturity of the principal
of, or any installment of principal of, or premium, if any, or interest on any
Convertible Debt Security; (b) reduce the principal amount of, the rate of
interest on, or the premium, if any, payable upon the redemption of, any
Convertible Debt Security; (c) reduce the amount of principal of an original
issue discount security payable upon acceleration of the maturity thereof; (d)
change the place or currency of payment of principal of, premium, if any, or
interest on any Convertible Debt Security; (e) impair the right to institute
suit for the enforcement of any payment on or with respect to any Convertible
Debt Security on or after the stated maturity or redemption date thereof; (f)
modify the conversion provisions in a manner adverse to the Holders thereof; (g)
modify the subordination provisions applicable to Senior Subordinated Debt
Securities or Subordinated Debt Securities in a manner adverse to the Holders
thereof; (h) reduce the percentage in principal amount of outstanding
Convertible Debt Securities of any series, the consent of the Holders of which
is required for modification or amendment of the applicable Indenture or for
waiver of compliance with certain provisions of the applicable Indenture or for
waiver of certain defaults or (i) modify any of the provisions of certain
sections as specified in the Indenture including the provisions summarized in
this paragraph, except to increase any such percentage or to designate
additional provisions of the Indenture, which, with respect to such series,
cannot be modified or waived without the consent of the Holder of each
outstanding Convertible Debt Security affected thereby.
The Holders of at least a majority in principal amount of the outstanding
Convertible Debt Securities of any series may, on behalf of the Holders of all
Convertible Debt Securities of that series, waive, insofar as that series is
concerned, compliance by the Company with certain covenants of the applicable
Indenture. The Holders of not less than a majority in principal amount of the
outstanding Convertible Debt Securities of any series may, on behalf of the
Holders of all Convertible Debt Securities of that series, waive any past
default under the applicable Indenture with respect to that series, except a
default in the payment of the principal of, premium, if any, or interest on, any
Convertible Debt Security of that series or in respect of a provision which
under the applicable Indenture cannot be modified or amended without the consent
of the Holder of each outstanding Convertible Debt Security of that series
affected.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of any series of
outstanding Convertible Debt Securities, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety (treating the Company
and each of its Subsidiaries as a single consolidated entity) to, any
corporation, and any other corporation may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, the Company,
provided that (a) the corporation (if other than the Company) formed by such
consolidation or into which the Company is merged or which acquires or leases
the assets of the Company substantially as an entirety is organized and existing
under the laws of the United States of America, a state thereof or the District
of Columbia, and assumes the Company's obligations under each series of
outstanding Convertible Debt Securities and the Indentures applicable thereto;
(b) the Trustee is satisfied that the transaction will not result in the
successor being required to make any deduction or withholding on account
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of certain taxes from any payments in respect of the Securities; (c) after
giving effect to such transaction, no Event of 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 (d) the Trustee shall have received an
officer's certificate and an opinion of counsel with respect to compliance with
the foregoing requirements.
DEFEASANCE
If so indicated in the applicable Prospectus Supplement with respect to the
Convertible Debt Securities of a series, the Company at its option will be
released from its obligations to comply with certain covenants specified in the
applicable Prospectus Supplement with respect to the Convertible Debt Securities
of such series, and the occurrence of an event described in clause (d) under
"Events of Default" above with respect to any defeased covenants, and clauses
(e) and (g) under "Events of Default" above shall no longer be an Event of
Default, if the Company irrevocably deposits with the applicable Trustee, in
trust, money, government obligations of the government issuing the currency in
which the Convertible Debt Securities of the relevant series are denominated, or
a combination thereof that through the payment of interest thereon and principal
thereof in accordance with the terms will provide money in an amount sufficient
to pay all the principal of and premium, if any, and interest on the Securities
of such series on the dates such payments are due (up to the stated maturity
date, or the redemption date, as the case may be) in accordance with the terms
of such Convertible Debt Securities. Such a trust may only be established if,
among other things, (a) no Event of Default described under "Events of Default"
above or event that, after notice or lapse of time, or both, would become an
Event of Default under the applicable Indenture, shall have occurred and be
continuing on the date of such deposit, or, with regard to an Event of Default
described under clause (f) under "Events of Default" above or an event that,
after notice or lapse of time, or both, would become an Event of Default
described under such clause (f), shall have occurred and be continuing at any
time during the period ending on the 123rd day following such date of deposit,
(b) the Company shall have delivered an opinion of counsel to the effect that
the Holders of the Convertible Debt Securities will not recognize gain or loss
for United States Federal income tax purposes as a result of such deposit or
defeasance and will be subject to United States Federal income tax in the same
manner as if such defeasance had not occurred, and (c) such covenant defeasance
will not result in the trust being in violation of the Investment Company Act of
1940. In the event the Company omits to comply with its remaining obligations
under the applicable Indenture after a defeasance of such Indenture with respect
to the Convertible Debt Securities of any series as described above and the
Convertible Debt Securities of such series are declared due and payable because
of the occurrence of any undefeased Event of Default, the amount of money and
government obligations on deposit with the applicable Trustee may be
insufficient to pay amounts due on the Convertible Debt Securities of such
series at the time of the acceleration resulting from such Event of Default.
However, the Company will remain liable in respect to such payments.
Notwithstanding the description set forth under "Subordination of Senior
Subordinated Debt Securities and Subordinated Debt Securities" above, in the
event that the Company deposits money or government obligations in compliance
with the Indenture that governs any Senior Subordinated Debt Securities or
Subordinated Debt Securities, as the case may be, in order to defease all or
certain of its obligations with respect to the applicable series of Convertible
Debt Securities, the money or government obligations so deposited will not be
subject to the subordination provisions of the applicable Indenture and the
indebtedness evidenced by such series of Convertible Debt Securities will not be
subordinated in right of payment to the holders of applicable Senior
Indebtedness to the extent of the money or government obligations so deposited.
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GOVERNING LAW
The Indentures and the Convertible Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York.
REGARDING THE TRUSTEES
The Indenture contains certain limitations on the right of each Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. Each Trustee will be
permitted to engage in certain other transactions with the Company; however, if
the Trustee acquires any conflicting interest and there is a default under the
Convertible Debt Securities issued under the applicable Indenture, the Trustee
must eliminate such conflict or resign.
BOOK-ENTRY SYSTEM
The Convertible Debt Securities of a Series may be issued in the form of
one or more global certificates representing the Convertible Debt Securities
(the "Global Securities") that will be deposited with a depository (the
"Depository") or with a nominee for the Depository identified in the applicable
Prospectus Supplement and will be registered in the name of the Depository or a
nominee thereof. In such a case one or more Global Securities will be issued in
a denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Convertible Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Convertible Debt Securities in definitive
certificated form, a Global Security may be transferred, in whole but not in
part, only to another nominee of the Depository for such series, or to a
successor Depository for such series selected or approved by the Company, or to
a nominee of such successor Depository.
The specific depository arrangement with respect to any series of
Convertible Debt Securities to be represented by a Global Security will be
described in the applicable Prospectus Supplement. The Company expects that the
following provisions will apply to depository arrangements.
Upon the issuance of any Global Security, and the deposit of such Global
Security with or on behalf of the Depository for such Global Security, the
Depository will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Convertible Debt Securities represented by
such Global Security to the accounts of institutions ("participants") that have
accounts with the Depository or its nominee. The accounts to be credited will
be designated by the underwriters or agents engaging in the distribution of such
Convertible Debt Securities or by the Company, if such Convertible Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests by participants in such Global Security will be shown on, and the
transfer of such beneficial interests will be effected only through, records
maintained by the Depository for such Global Security or by its nominee.
Ownership of beneficial interests in such Global Security by persons that hold
through participants will be shown on, and the transfer of such beneficial
interests within such participants 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 certificated form. The foregoing limitations and such laws may impair the
ability to own, pledge or transfer beneficial interests in such Global
Securities.
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So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Convertible
Debt Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus Supplement
and except as specified below, owners of beneficial interests in such Global
Security will not be entitled to have Convertible Debt Securities of the series
represented by such Global Security registered in their names, will not receive
or be entitled to receive physical delivery of Convertible Debt Securities of
such series in certificated form and will not be considered the holders thereof
for any purposes under the Indenture. Accordingly, each person owning a
beneficial interest in such Global Security must rely on the procedures of the
Depository and, if such person is not a participant, on the procedures of the
participant through which such person owns its interest, to exercise any rights
of a Holder under the Indenture. The Company understands that, under existing
industry practices, if the Company requests any action of Holders or an owner of
a beneficial interest in such Global Security desires to give any notice or take
any action a Holder is entitled to give or take under the Indenture, the
Depository would authorize the participants to give such notice or take such
action, and participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise act upon
the instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable Prospectus Supplement,
payments with respect to principal, premium, if any, and interest, if any, on
Convertible Debt Securities represented by a Global Security registered in the
name of a Depository or its nominee will be made to such Depository or its
nominee, as the case may be, as the registered owner of such Global Security.
The Company expects that the Depository for any Convertible Debt Securities
represented by a Global Security, upon receipt of any payment of principal,
premium or interest in respect of such Global Security, will immediately credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Security
as shown on the records of such Depository. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in "street names," and will be the
responsibility of such participants. None of the Company, the Trustee or any
agent of the Company or the Trustee shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. If the Depository for any Convertible Debt Securities represented by
a Global Security is at any time unwilling or unable to continue as Depository
or ceases to be registered or in good standing under the Securities Exchange Act
of 1934, as amended, and a successor Depository is not appointed by the Company
within 90 days after the Company receives notice or becomes aware of such
condition, the Company will issue such Convertible Debt Securities in definitive
certificated form in exchange for such Global Security. In addition, the
Company may at any time and in its sole discretion determine not to have any of
the Convertible Debt Securities of a series represented by one or more Global
Securities and, in such event, will issue Convertible Debt Securities of such
series in definitive certificated form in exchange for all of the Global
Security or Securities representing such Convertible Debt Securities.
7% CONVERTIBLE SUBORDINATED NOTES DUE 2003
In 1996, the Company sold $51.5 million of 7% Convertible Subordinated
Notes Due 2003 (the "Notes"), maturing on May 1, 2003. The Notes are unsecured,
subordinated obligations and will be redeemable, in whole or in part, at the
option of the Company beginning on May 1, 1999. The Notes are convertible,
subject to prior redemption or repurchase, at the option of holders prior to
maturity, into shares of the Company's common stock at a conversion price of
$26.80 per share.
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DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of the terms of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's articles of Incorporation
relating to each series of Preferred Stock, which will be filed as an exhibit to
or incorporated by reference in this Prospectus at or prior to the time of
issuance of any such series of Preferred Stock.
The board of Directors of the company is authorized to approve the issuance
of one or more series of Preferred Stock without further authorization of the
stockholders of the company and to fix the number of shares, the designations,
rights, privileges, restrictions and conditions of any such series.
The applicable Prospectus Supplement will set forth the number of shares,
particular designation, relative rights and preferences and the limitations of
any series of Preferred Stock in respect of which this Prospectus is deliverer.
The particular terms of any such series will include the following:
(i) the maximum number of shares to constitute the series and the
designation thereof;
(ii) the annual dividend rate, if any, on shares of the series, whether
such rate is fixed or variable or both, the date or dates from which dividends
will begin to accrue or accumulate, whether dividends will be cumulative and
whether such dividends shall be paid in cash, Common Stock or otherwise;
(iii) whether the shares of the series will be redeemable and, if so, the
price at and the terms and conditions on which the shares of the series may be
redeemed, including the time during which shares of the series may be redeemed
and any accumulated dividends thereon that the holders of shares of the series
shall be entitled to receive upon the redemption thereof;
(iv) the liquidation preference, if any, applicable to shares of the
series;
(v) whether the shares of the series will be subject to operation of a
retirement or sinking fund and, if so, the extent and manner in which any such
fund shall be applied to the purchase or redemption of the shares of the series
for retirement or for other corporate purposes, and the terms and provisions
relating to the operation of such fund;
(vi) the terms and conditions, if any, on which the shares of the series
shall be convertible into, or exchangeable for, shares of any other class or
classes of capital stock of the Company or any series of any other class or
classes, or of any other series of the same class, including the price or prices
or the rate or rates of conversion or exchange and the method, if any, of
adjusting the same;
(vii) the voting rights, if any, of the shares of the series;
(viii) the currency or units based on or relating to currencies in which
such series is denominated and/or in which payments will or may be payable;
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(ix) the methods by which amounts payable in respect of such series may be
calculated and any commodities, currencies or indices, or price, rate or value,
relevant to such calculation;
(x) any other preferences and relative, participating, optional or other
rights or qualifications, limitations or restrictions thereof.
Any material United States or Canadian federal income tax consequences and
other special considerations with respect to any offered shares of Preferred
Stock will be described in the Prospectus Supplement relating to the offering
and sale of such shares of Preferred Stock.
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DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of certain
provisions of the Deposit Agreement (as defined below) and of the Depositary
Shares and Depositary Receipts does not purport to be complete and is subject to
and qualified in its entirety by reference to the forms of Deposit Agreement and
Depositary Receipts relating to each series of the Preferred Stock which have
been or will be filed with the Commission at or prior to the time of the
offering of such series of the Preferred Stock.
GENERAL
The Company may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, the Company will provide for the issuance by a
Depositary to the public of receipts for Depositary Shares, each of which will
represent a fractional interest (to be set forth in the Prospectus Supplement
relating to a particular series of the Preferred Stock which will be filed with
the Commission at or prior to the time of the offering of such series of the
Preferred Stock as described below).
The shares of any series of the Preferred Stock underlying the Depositary
Shares will be deposited under a separate Deposit Agreement (the "Deposit
Agreement") between the Company and a bank or trust Company selected by the
Company having its principal office in the United States and having a combined
capital and surplus of at least $50,000 (the "Depositary"). The Prospectus
Supplement relating to a series of Depositary Shares will set forth the name and
address of the Depositary. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Share will be entitled, in proportion to the applicable
fractional interest in a share of Preferred Stock underlying such Depositary
Shares, to all the rights and preferences of the Preferred Stock underlying such
Depositary Share (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of the Company, issue temporary
Depositary Receipts substantially identical to (and entitling the holders
thereof to al the rights pertaining to) the definitive Depositary Receipts but
not in definitive form. Definitive Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at the Company's expense.
Upon surrender of Depositary Receipts at the office of the Depositary and
upon payment of the charges provided in the Deposit Agreement and subject to the
terms thereof, a holder of Depositary Shares is entitled to have the Depositary
deliver to such holder the whole shares of Preferred Stock underlying the
Depositary Shares evidenced by the surrendered Depositary Receipts.
DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a fraction of
one cent, and any balance not so distributed shall be added to and treated as
part of the next sum received by the Depositary for distribution to record
holders of Depositary Shares.
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In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
the Company, sell such property and distribute the net proceeds from such sale
to such holders.
The Deposit Agreement will also contain provisions relating to the manner
in which any subscription or similar rights offered by the Company to holders of
the Preferred Stock shall be made available to holders of Depositary Shares.
REDEMPTION OF DEPOSITARY SHARES
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect to
such series of the Preferred Stock. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same redemption date the number of Depositary Shares relating to shares of
Preferred Stock so redeemed. If less than all of the Depositary Shares are to
be redeemed, the Depositary Shares to be redeemed will be selected by lot or pro
rata as may be determined by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will not longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
VOTING THE PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of the Preferred
Stock are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Shares
relating to such Preferred Stock. Each record holder of such Depositary Shares
on the record date (which will be the same date as the record date for the
Preferred Stock) will be entitled to instruct the Depositary as to the exercise
of the voting rights pertaining to the number of shares of Preferred Stock
underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and the
Company will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock.
AMENDMENT AND TERMINATION OF THE DEPOSITARY AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and the
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and aversely alters the rights of the existing holders of Depositary Shares will
not be effective unless such amendment has been approved by the record holders
of at least a majority
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of the Depositary Shares then outstanding. A Deposit Agreement may be terminated
by the Company or the Depositary only if (i) all outstanding Depositary Shares
relating thereto have been redeemed or (ii) there has been a final distribution
in respect of the Preferred Stock of the relevant series in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
bene distributed to the holders of the related Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of
Depositary Shares will pay other transfer and other taxes and governmental
charges and such other charges as are expressly provided in the Deposit
Agreement to be for their accounts.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Shares all reports
and communications from the Company which are delivered to the Depositary and
which the Company is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice
of its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States and having a combined capital and surplus of at
least $50,000,000.
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DESCRIPTION OF WARRANTS
The Company may issue Warrants to purchase shares of Common Stock, shares
of Preferred Stock or Debt Securities. Warrants may be issued, subject to
regulatory approvals, independently or together with any Common Stock, Preferred
Stock or Debt Securities, as the case may be, and may be attached to or separate
from such Common Stock, Preferred Stock or Debt Securities. Each series of
Warrants will be issued under a separate warrant Agreement (each a "Warrant
Agreement") to be entered into between the Company and a warrant agent (the
"Warrant Agent"). The Warrant Agent will act solely as an agent of the Company
in connection with the Warrants of such series and will not assume any
obligation or relationship of agency or trust for or with any holders or
beneficial owners of Warrants. The following sets forth certain general terms
and provisions of the Warrants offered hereby. Further terms of the Warrants
and the applicable Warrant Agreement will be set forth in the applicable
Prospectus Supplement.
The applicable Prospectus Supplement will describe the following terms of
any Warrants in respect of which this Prospectus is delivered: (i) the title of
such Warrants; (ii) a description of the securities (which may include shares of
Common Stock, shares of Preferred Stock or Debt Securities) for which such
Warrants are exercisable; (iii) the price or prices at which such Warrants will
be issued; (iv) the periods during which the Warrants are exercisable; (v) the
number of shares of Common Stock or Preferred Stock or the amount of Debt
Securities for which each Warrant is exercisable; (vi) the exercise price for
such Warrants, including any changes to or adjustments in the exercise price;
(vii) the currency or currencies, including composite currencies, in which the
exercise price of such Warrants may be payable; (viii) if applicable, the
designation and terms of the shares of Preferred Stock with which such Warrants
are issued; (ix) if applicable, the terms of the Debt Securities with which such
Warrants are issued; (x) if applicable, the number of Warrants issued with each
share of Common Stock or Preferred Stock or Debt Security; (xi) if applicable,
the date on and after which such Warrants and the related shares of Common Stock
or Preferred Stock or Debt Securities will be separately transferable; (xii) if
applicable, a discussion of certain United States federal income tax
considerations; (xiii) any listing of the Warrants on a securities exchange; and
(xiv) any other terms of such Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Warrants.
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DESCRIPTION OF CAPITAL STOCK
The Company is authorized by its Certificate of Incorporation to issue 50.0
million shares of Common Stock and 1.0 million shares of Preferred Stock. As of
December 31, 1997 there were 20,377,623 shares of Common Stock issued and
outstanding and no shares of the Preferred Stock issued and outstanding.
COMMON STOCK
A summary of the terms and provisions of the Common Stock is set forth
below.
Dividends. The holders of Common Stock are entitled to receive dividends
when, as and if declared by the Board out of funds legally available therefor,
provided that if any shares of Preferred Stock, issued under this Prospectus and
any accompanying Prospectus Supplement, or any other shares of preferred stock
are at the time outstanding, the payment of dividends on Common Stock or other
distributions (including Company repurchases of Common Stock) will be subject to
the declaration and payment of all cumulative dividends on outstanding shares of
the Preferred Stock, and any Preferred Stock issued under this Prospectus and
any accompanying Prospectus Supplement and any other shares of preferred stock
which are then outstanding.
Liquidation. In the event of the dissolution, liquidation or winding up of
the Company, holders of Common Stock are entitled to share ratably in any assets
remaining after the satisfaction in full of the prior rights of creditors,
including holders of the Company's indebtedness, and the payment of the
aggregate liquidation preference of the Preferred Stock, and any Preferred Stock
issued under this Prospectus and any accompanying Prospectus Supplement and any
other shares of preferred stock then outstanding.
Voting. The Company's stockholders are entitled to one vote for each share
on all matters voted on by stockholders, including election of directors.
Shares of Common Stock held by the Company or any entity controlled by the
Company do not have voting rights and are not counted in determining the
presence of a quorum. Directors are elected annually. Holders of Common Stock
have no cumulative voting rights.
No Other Rights. The holders of Common Stock do not have any conversion,
redemption or preemptive rights.
Transfer Agent. The transfer agents for the Common Stock are Harris Trust
and Savings Bank, 1601 Elm Street, Thanksgiving Tower, Suite 2320, Dallas, Texas
75201.
Listing. Shares of the Company's outstanding Common Stock are listed on
the AMEX.
PREFERRED STOCK
The Company's Certificate of Incorporation currently authorizes the
issuance of 1,000,000 shares of Preferred Stock, par value $.01 per share,
issuable in series, the designations, the relative rights and preferences and
the limitations of any such series. No shares of Preferred Stock have been
issued prior to the filing of this Prospectus.
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RIGHTS AGREEMENT
In October 1995, the Board of Directors of the Company adopted a Rights
Agreement under which Stillwater shareholders of record as of November 15, 1995
received a dividend in the form of Preferred Stock Purchase Rights (the
"Rights"). The Rights permit the holder to purchase one one-thousandth of a
share (a unit) of Series A Preferred Stock at an initial exercise price of $80
per share under certain circumstances. The purchase price, the number of units
of Preferred Stock and the type of securities issuable upon exercise of the
Rights are subject to adjustment. The Rights expire on October 26, 2005 unless
earlier redeemed or exchanged. Until a Right is exercised, the holder thereof
has no rights as a shareholder of the Company, including the right to vote or
receive dividends. Subject to certain conditions, the Rights become exercisable
ten business days after a person or group acquires or commences a tender or
exchange offer to acquire a beneficial ownership of 15% or more of the Company's
outstanding common stock.
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PLAN OF DISTRIBUTION
The Company may offer Securities to or through underwriters, through agents
or directly to other purchasers. Such underwriters may include Salomon Smith
Barney.
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 from time
to time), at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities offered
therein.
The Company may sell Securities directly, through agents designated from
time to time, through underwriting syndicates led by one or more managing
underwriters or through one or more underwriters acting alone. Each Prospectus
Supplement will set forth the terms of the Securities to which such Prospectus
Supplement relates, including the name or names of any underwriters or agents
with whom the Company has entered into arrangements with respect to the sale of
such Securities, the public offering or purchase price of such Securities and
the net proceeds to the Company from such sale, any underwriting discounts and
other items constituting underwriters' compensation, any discounts and
commissions allowed or paid to dealers, if any, any commissions allowed or paid
to agents, and the securities exchange or exchanges, if any, on which such
Securities will be listed. Dealer trading may take place in certain of the
Securities, including Securities not listed on any securities exchange.
Securities may be purchased to be reoffered to the public through
underwriting syndicates led by one or more managing underwriters, or through one
or more underwriters acting alone. The underwriter or underwriters with respect
to each underwritten offering of Securities will be named in the Prospectus
Supplement relating to such offering and, if an underwriting syndicate is used,
the managing underwriter or underwriters will be set forth on the cover page of
such Prospectus Supplement. Unless otherwise set forth in the applicable
Prospectus Supplement, the obligations of the underwriters to purchase the
Securities will be subject to certain conditions precedent and each of the
underwriters with respect to a sale of Securities will be obligated to purchase
all of its Securities if any are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Securities may be offered and sold by the Company through agents designated
by the Company from time to time. Any agent involved in the offer and sale of
any Securities will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement relating to such offering.
Unless otherwise indicated in such Prospectus Supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
Offers to purchase Securities may be solicited directly by the Company and
sales thereof may be made by the Company directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act with respect to any resale thereof. The terms of any such sales will be
described in the Prospectus Supplement relating thereto.
The Company may also issue contracts under which the counterparty may be
required to purchase Securities. Such contracts would be issued for Securities
in amounts, at prices and on terms to be set forth in a Prospectus Supplement.
The anticipated place and time of delivery of Securities will be set forth
in the applicable Prospectus Supplement.
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If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Securities from the Company pursuant to delayed delivery contracts
providing for payment and delivery at a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. Unless otherwise set forth in the applicable Prospectus
Supplement, the obligations of any purchaser under any such contract will not be
subject to any conditions except that (i) the purchase of the Securities shall
not at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject, and (ii) if the Securities are also being sold
to underwriters acting as principals for their own account, the underwriters
shall have purchased such Securities not sold for delayed delivery. The
underwriters and such other persons will not have any responsibility in respect
of the validity or performance of such contracts.
Any underwriter or agent participating in the distribution of the
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Securities so offered and sold and any discounts or
commissions received by them from the Company and any profit realized by them on
the sale or resale of the Securities may be deemed to be underwriting discounts
and commissions under the Securities Act.
Underwriters and agents may be entitled, under agreements entered into with
the Company, to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which such underwriters or agents may be required to
make in respect thereof. Certain of such underwriters and agents, including
their associates, may be customers of, engage in transactions with and perform
services for, the Company and its subsidiaries in the ordinary course of
business.
LEGAL MATTERS
The validity of the Securities offered will be passed upon for the Company
by Davis, Graham & Stubbs LLP, Denver, Colorado.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the year ended
December 31, 1997, have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The Company's ore reserves set forth in the table under the heading "Ore
Reserves" have been verified by Behre Dolbart & Company, Inc., and such
information has been included herein in reliance upon the authority of such firm
as experts in mining, geology and ore reserve determination.
-40-
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations, other than those contained in or
incorporated by reference in this Prospectus or the accompanying Prospectus
Supplement, in connection with the offer made by this Prospectus and the
accompanying Prospectus Supplement and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or any underwriter or dealer. Neither the delivery of this Prospectus or the
accompanying Prospectus Supplement nor any sale made hereunder shall, under any
circumstances, create an implication that there has been no change in the facts
set forth in this Prospectus and the accompanying Prospectus Supplement, or in
the affairs of the Company since the dates hereof. This Prospectus and the
accompanying Prospectus Supplement do not constitute an offer or solicitation by
anyone in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to anyone to whom it is unlawful to make such offer or solicitation.
---------------------
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION ................................................... 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......................... 3
THE COMPANY.............................................................. 5
RISK FACTORS............................................................. 7
USE OF PROCEEDS.......................................................... 14
RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED
FIXED CHARGES AND PREFERRED STOCK DIVIDENDS............................. 14
BUSINESS AND PROPERTIES.................................................. 15
DESCRIPTION OF DEBT SECURITIES .......................................... 21
DESCRIPTION OF PREFERRED STOCK........................................... 31
DESCRIPTION OF DEPOSITARY SHARES......................................... 33
DESCRIPTION OF WARRANTS.................................................. 36
DESCRIPTION OF CAPITAL STOCK ............................................ 37
PLAN OF DISTRIBUTION..................................................... 39
LEGAL MATTERS ........................................................... 40
EXPERTS ................................................................. 40
</TABLE>
STILLWATER
MINING COMPANY
Dated: ___________, 1998
-41-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following sets forth expenses, other than underwriting fees and commissions,
expected to be borne by the Registration, in connection with the distribution of
the Securities being registered:
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission registration fee... $ 59,000
NASD filing fee....................................... 16,000
Blue Sky fees and expenses............................ 25,000
Stock exchange listing fees........................... 35,000
Rating agency fees.................................... 60,000
Transfer agent fees................................... 40,000
Trustee's and warrant agent's fees.................... 30,000
Legal................................................. 250,000
Printing.............................................. 300,000
Accounting............................................ 100,000
Miscellaneous......................................... 35,000
--------
TOTAL............................................ $950,000
</TABLE>
All amounts listed above, except for the registration fee, are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102 of the Delaware General Corporation Law (the "DGCL") allows a
corporation to eliminate the personal liability of a director of a corporation
to the corporation or to any of its stockholders for monetary damage for a
breach of his fiduciary duty as a director, except in the case where the
director breached his duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of Delaware corporate law
or obtained an improper persona benefit. Article 9 of the Company's
Certificate of Incorporation eliminates directors' personal liability in
accordance with such Section 102 of the DGCL.
Section 145 of the Delaware Law authorizes corporations to indemnify
directors, officers and other employees against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement reasonably incurred in
connection with civil, criminal, administrative, or investigative actions, suits
or proceedings to which such persons are parties or threatened to be made a
party by reason of their corporate position (other than actions by or in the
right of the corporation to procure a judgment in its favor--so called
"derivative suits") if such persons acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. With respect to
derivative suits, Section 145 prescribes a similar standard of care but limits
the available indemnification to expenses (including attorneys' fees) reasonably
incurred in connection with the defense or settlement of such action or suit and
further provides that if the derivative suit results in a judgment that the
person seeking indemnification is liable to the corporation, no such
indemnification is to be made without court approval. Section 145(f) of the
DGCL also specifically permits corporations to provide their officers,
directors, employees and agents with indemnification and advancement of expenses
in addition to those specifically required and/or permitted to be provided
pursuant to other provisions of such Section 145.
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<PAGE>
Article 6 of the Company's Bylaws provides indemnification in accordance
with Section 145 of the DGCL. Under the provisions of Article 6, each person
who was or is made a party to, or is threatened to be made a party to or is
involved in, any action, suit or other legal proceeding (whether civil,
criminal, administrative or investigative) by reason of the fact that such
person is or was a director or officer of the Company, or is or was performing
services at the Company's request for another entity, including service with
respect to employee benefit plans, shall be indemnified to the full extent
permitted by the DGCL as in effect or as it may be amended, against all costs,
liabilities and losses (including attorney's fees) actually and reasonably
incurred by such person in connection with such proceeding. In addition,
Article 6 of the Bylaws authorizes the Company to provide other permissible
indemnification. Finally, Article 6 provides that the Company may (and it does)
maintain insurance to protect such persons against any expense or liability,
even if the Company would not have the power itself to indemnify such person
against such liability or expense under the DGCL.
ITEM 16. EXHIBITS
1.1 Form of Underwriting Agreement--Equity*
1.2 Form of Underwriting Agreement--Debt*
4.1 Amended and Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.4 to the 1994 S-1) dated
December 2, 1995.
4.2 Amended and Restated By-Laws of the Registrant (incorporated by
reference to Exhibit 3.4 to the 1994 S-1).
4.3 Form of Indenture for Debt Securities
4.4 Form of Debt Security (included in Exhibit 4.3)
4.5 Form of Common Stock Warrant Agreement*
4.6 Form of Common Stock Warrant Certificate (included in Exhibit 4.7)
4.7 Form of Preferred Stock Warrant Agreement*
4.8 Form of Preferred Stock Warrant Certificate (included in Exhibit 4.9)
4.9 Form of Debt Securities Warrant Agreement*
4.10 Form of Debt Securities Warrant Certificate (included in Exhibit 4.11)
4.11 Form of Deposit Agreement, including form of Depositary Receipt for
Depositary Shares*
5.1 Opinion of Davis, Graham & Stubbs LLP*
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Price Waterhouse LLP
II-2
<PAGE>
23.2 Consent of Behre Dolbear & Company, Inc.
24 Powers of Attorney (included on signature pages)
25 Form T-1 -- Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939*
* To be filed by amendment or incorporated by reference herein
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes that, for the 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 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes:
a. 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 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 end of the
estimated maximum offering range may be reflected in the form of the prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
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)(i) and (a)(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.
b. That for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of a Registration Statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the Registration pursuant to Rule 424(b)(1) or
II-3
<PAGE>
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of
this Registration Statement as of the time it was declared effective.
c. That 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 herein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
d. 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.
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 Securities Act of
1933 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant 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 Denver, Colorado on the 26th day of June, 1998.
STILLWATER MINING COMPANY
By: WILLIAM E. NETTLES
------------------------------------------
William E. Nettles
Chairman and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below hereby constitutes and appoints Michael A. Shea, William E.
Nettles and James A. Sabala, and each of them, his or her true and lawful agent,
proxy and attorney-in-fact, each acting alone, 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 (i) act on, sign and file with the Securities and
Exchange Commission any and all amendments (including post-effective amendments)
to this registration statement together with all schedules and exhibits thereto
and any subsequent registration statement filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended, together with all schedules and exhibits
thereto, (ii) act on, sign and file such certificates, instruments, agreements
and other documents as may be necessary or appropriate in connection therewith,
(iii) act on and file any supplement to any prospectus included in this
registration statement or any such amendment or any subsequent registration
statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended, and (iv) take any and all actions which may be necessary or appropriate
in connection therewith, granting unto such agents, proxies and attorneys-in-
fact, and each of them, full power and authority to do and perform each and
every act and thing necessary or appropriate to be done, as fully for all
intents and purposes as he or she might or could do in person, hereby approving,
ratifying and confirming all that such agents, proxies and attorneys-in-fact,
any of them or any of his or her or their substitutes may lawfully do or cause
to be done by virtue thereof.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
William E. Nettles Chairman of the Board, Chief June 26, 1998
- -------------------------- Executive Officer and Director
William E. Nettles (principal executive officer)
James A. Sabala Vice President and Chief Financial June 26, 1998
- -------------------------- Officer (principal financial and
James A. Sabala accounting officer)
Ray W. Ballmer Director June 26, 1998
- --------------------------
Ray W. Ballmer
Douglas D. Donald Director June 26, 1998
- --------------------------
Douglas D. Donald
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
John W. Eschenlohr Director June 26, 1998
- --------------------------
John W. Eschenlohr
Lawrence M. Glaser Director June 26, 1998
- --------------------------
Lawrence M. Glaser
Pete Ingersoll Director June 26, 1998
- --------------------------
Pete Ingersoll
Ted Schwinden Director June 26, 1998
- --------------------------
Ted Schwinden
Peter Steen Director June 26, 1998
- --------------------------
Peter Steen
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
4.3 Form of Indenture for Debt Securities
4.4 Form of Debt Security (included in Exhibit 4.3)
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Behre Dolbear & Company, Inc.
II-7
<PAGE>
EXHIBIT 4.3
STILLWATER MINING COMPANY
ISSUER
TO
_____________________________________
TRUSTEE
INDENTURE
DATED AS OF _________________
CONVERTIBLE DEBT SECURITIES
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.........................................1
1.1 DEFINITIONS............................................................................1
1.2 COMPLIANCE CERTIFICATES AND OPINIONS...................................................9
1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.................................................9
1.4 ACTS OF HOLDERS; RECORD DATES.........................................................10
1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.................................................12
1.6 NOTICE TO HOLDERS: WAIVER.............................................................12
1.7 CONFLICT WITH APPLICABLE LEGISLATION..................................................12
1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS..............................................13
1.9 SUCCESSORS AND ASSIGNS................................................................13
1.10 SEPARABILITY CLAUSE...................................................................13
1.11 BENEFITS OF INDENTURE.................................................................13
1.12 GOVERNING LAW.........................................................................13
1.13 LEGAL HOLIDAYS........................................................................13
ARTICLE 2 SECURITY FORMS.................................................................................14
2.1 FORMS GENERALLY.......................................................................14
2.2 FORM OF FACE OF SECURITY..............................................................14
2.3 FORM OF REVERSE OF SECURITY...........................................................16
2.4 FORM OF LEGEND FOR GLOBAL SECURITIES..................................................22
2.5 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.......................................23
ARTICLE 3 THE SECURITIES.................................................................................23
3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES..................................................23
3.2 DENOMINATIONS.........................................................................27
3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING........................................27
3.4 TEMPORARY SECURITIES..................................................................28
3.5 REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE.............................................................................29
3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES......................................30
3.7 PAYMENT OF INTEREST: INTEREST RIGHTS PRESERVED........................................31
3.8 PERSONS DEEMED OWNERS.................................................................32
3.9 CANCELLATION..........................................................................33
3.10 COMPUTATION OF INTEREST...............................................................33
3.11 PAYMENT OF ADDITIONAL AMOUNTS.........................................................33
ARTICLE 4 SATISFACTION AND DISCHARGE.....................................................................35
4.1 SATISFACTION AND DISCHARGE OF INDENTURE...............................................35
4.2 APPLICATION OF TRUST MONEY............................................................36
</TABLE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE 5 REMEDIES.......................................................................................36
5.1 EVENTS OF DEFAULT.....................................................................36
5.2 ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT.............................................................................38
5.3 SUITS FOR ENFORCEMENT BY TRUSTEE......................................................39
5.4 TRUSTEE MAY FILE PROOFS OF CLAIM......................................................40
5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF SECURITIES.........................................................................40
5.6 APPLICATION OF MONEY COLLECTED........................................................40
5.7 LIMITATION ON SUITS...................................................................41
5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST.......................................................41
5.9 RESTORATION OF RIGHTS AND REMEDIES....................................................42
5.10 RIGHTS AND REMEDIES CUMULATIVE........................................................42
5.11 DELAY OR OMISSION NOT WAIVER..........................................................42
5.12 CONTROL BY HOLDERS....................................................................42
5.13 WAIVER OF PAST DEFAULTS...............................................................43
5.14 UNDERTAKING FOR COSTS.................................................................43
5.15 WAIVER OF STAY OR EXTENSION LAWS......................................................43
5.16 WAIVER OF CERTAIN COVENANTS...........................................................44
ARTICLE 6 THE TRUSTEE....................................................................................44
6.1 CERTAIN DUTIES AND RESPONSIBILITIES...................................................44
6.2 NOTICE OF DEFAULTS....................................................................44
6.3 CERTAIN RIGHTS OF TRUSTEE.............................................................44
6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES............................................................................45
6.5 MAY HOLD SECURITIES...................................................................46
6.6 MONEY HELD IN TRUST...................................................................46
6.7 COMPENSATION AND REIMBURSEMENT........................................................46
6.8 DISQUALIFICATION; CONFLICTING INTERESTS...............................................47
6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY...............................................47
6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.............................................................................47
6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR................................................49
6.12 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS................................................................50
6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY...............................................................................50
6.14 APPOINTMENT OF AUTHENTICATING AGENT...................................................50
ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY..............................................52
7.1 COMPANY TO FURNISH TRUSTEE NAMES AND
ADDRESSES OF HOLDERS..................................................................52
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS
TO HOLDERS............................................................................52
7.3 REPORTS BY TRUSTEE....................................................................53
7.4 REPORTS BY COMPANY....................................................................53
ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...........................................53
8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON
CERTAIN TERMS.........................................................................53
8.2 SUCCESSOR SUBSTITUTED.................................................................54
ARTICLE 9 SUPPLEMENTAL INDENTURES........................................................................55
9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
HOLDERS...............................................................................55
9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF
HOLDERS...............................................................................56
9.3 EXECUTION OF SUPPLEMENTAL INDENTURES..................................................57
9.4 EFFECT OF SUPPLEMENTAL INDENTURES.....................................................57
9.5 CONFORMITY WITH APPLICABLE LEGISLATION................................................58
9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL
INDENTURES............................................................................58
ARTICLE 10 COVENANTS......................................................................................58
10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST............................................58
10.2 MAINTENANCE OF OFFICE OR AGENCY.......................................................58
10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN
TRUST.................................................................................59
10.4 STATEMENT BY OFFICERS AS TO DEFAULT...................................................60
10.5 EXISTENCE.............................................................................60
10.6 MAINTENANCE OF PROPERTIES.............................................................60
10.7 PAYMENT OF TAXES AND OTHER CLAIMS.....................................................61
10.8 LIMITATION ON SUBORDINATED INDEBTEDNESS...............................................61
ARTICLE 11 REDEMPTION OF SECURITIES.......................................................................61
11.1 APPLICABILITY OF ARTICLE..............................................................61
11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.................................................61
11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.....................................62
11.4 NOTICE OF REDEMPTION..................................................................62
11.5 DEPOSIT OF REDEMPTION PRICE...........................................................64
11.6 SECURITIES PAYABLE ON REDEMPTION DATE.................................................64
11.7 SECURITIES REDEEMED IN PART...........................................................64
ARTICLE 12 SINKING FUNDS..................................................................................65
12.1 APPLICABILITY OF ARTICLE..............................................................65
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH
SECURITIES............................................................................65
12.3 REDEMPTION OF SECURITIES FOR SINKING FUND.............................................65
ARTICLE 13 COVENANT DEFEASANCE............................................................................66
13.1 COMPANY'S OPTION TO EFFECT COVENANT DEFEASANCE........................................66
13.2 COVENANT DEFEASANCE...................................................................66
13.3 CONDITIONS TO COVENANT DEFEASANCE.....................................................66
13.4 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS......................................68
13.5 REINSTATEMENT.........................................................................69
ARTICLE 14 CONVERSION OF SECURITIES.......................................................................69
14.1 CONVERSION PRIVILEGE AND CONVERSION PRICE.............................................69
14.2 EXERCISE OF CONVERSION PRIVILEGE......................................................69
14.3 FRACTIONS OF SHARES...................................................................70
14.4 ADJUSTMENT OF CONVERSION PRICE........................................................71
14.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.............................................75
14.6 NOTICE OF CERTAIN CORPORATION ACTION..................................................76
14.7 COMPANY TO RESERVE COMMON SHARES......................................................77
14.8 TAXES ON CONVERSION...................................................................77
14.9 COVENANT AS TO COMMON SHARES..........................................................77
14.10 CANCELLATION OF CONVERTED SECURITIES..................................................77
14.11 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR
SALE OF ASSETS........................................................................77
14.12 RESPONSIBILITY OF TRUSTEE AND CONVERSION AGENT........................................78
ARTICLE 15 SUBORDINATION..................................................................................79
15.1 SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS.........................................79
15.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC........................................79
15.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON
ACCELERATION OF SECURITIES............................................................80
15.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT........................................81
15.5 PAYMENT PERMITTED IF NO DEFAULT.......................................................82
15.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS..........................................................................82
15.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS AND
SUBJECT TO APPLICABLE LAWS............................................................82
15.8 TRUSTEE TO EFFECTUATE SUBORDINATION...................................................83
15.9 NO WAIVER OF SUBORDINATION PROVISIONS.................................................83
15.10 NOTICE TO TRUSTEE.....................................................................83
15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT.....................................................................84
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
15.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS..........................................................................84
15.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR
INDEBTEDNESS; PRESERVATION OF TRUSTEE'S RIGHTS........................................84
15.14 ARTICLE APPLICABLE TO PAYING AGENTS...................................................85
15.15 SUBSIDIARIES..........................................................................85
15.16 RESCISSION............................................................................85
15.17 CERTAIN CONVERSIONS OR EXCHANGES DEEMED
PAYMENT...............................................................................85
</TABLE>
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<PAGE>
INDENTURE, dated as of _________________, between STILLWATER MINING
COMPANY, a corporation duly incorporated and existing under the laws of
Delaware, having its registered office at 717 Seventeenth Street, Suite 1480,
Denver, Colorado 80202 (herein called the "Company"), and
________________________________, a ________________ corporation, as Trustee
hereunder (herein called the "Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of convertible unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities") to be issued by the Company, unlimited as to principal amount, to
bear such rates of interest, to mature at such time or times, to be issued in
one or more series and to have such other provisions as shall be fixed as
hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of a series thereof, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
1.1 DEFINITIONS
For all purposes of this Indenture and of any indenture supplemental
hereto, except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the TRUST
INDENTURE ACT, either directly or by reference herein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
<PAGE>
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACT," when used with respect to any Holder, has the meaning specified in
Section 1.4.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"APPLICABLE LEGISLATION" means, with respect to any series of Securities
which was required to be registered under the SECURITIES ACT, the TRUST
INDENTURE ACT.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"BOARD OF DIRECTORS" means, when used with reference to the Company, the
board of directors of the Company or any committee of the board of directors of
the Company empowered to act for the Company with respect to this Indenture.
"BOARD RESOLUTION" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BUSINESS DAY" means, when used with respect to any Place of Payment, each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close, except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the TRUST INDENTURE ACT, then the body performing such duties at such time.
"COMMON SHARES" or "COMMON SHARES OF THE COMPANY" means the Common Shares
of the Company and the shares of any other class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. However, subject to the
provisions of 3.1(s) and Section 14.11, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Shares in
the
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articles of the Company at the date of this instrument or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company; PROVIDED,
HOWEVER, that if at any time there shall be more than one such resulting class,
the shares of each such class then so issuable shall be substantially in the
proportion which the total number of shares of such class resulting from all
such reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture and thereafter "Company" shall mean such
successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, President or a
Vice President, and by its Treasurer, Assistant Treasurer, Controller, Secretary
or Assistant Secretary, and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee in , at
which at any particular time its corporate trust business shall be conducted.
"CORPORATION" means a corporation, association, company, joint-stock
company, business trust or similar organization.
"COVENANT DEFEASANCE" has the meaning specified in Section 13.2.
"DEFAULTED INTEREST" has the meaning specified in Section 3.7.
"DEFEASIBLE SERIES" has the meaning specified in Section 13.1.
"DEPOSITARY" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
designated to act as Depositary for such Securities as contemplated by Section
3.1, that is registered under the EXCHANGE ACT if the Securities of such series
were required to be registered under the EXCHANGE ACT, and that has been
designated as a recognized clearing agency under applicable Canadian securities
legislation if the Securities of such series were distributed by the Company
pursuant to a prospectus filed with Canadian securities regulatory authorities.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the United States SECURITIES EXCHANGE ACT of 1934, as
amended from time to time, and any statute successor thereto.
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"GLOBAL SECURITY" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"GOVERNMENT OBLIGATIONS" means securities which are (i) direct full faith
and credit obligations of the government which issued the currency in which the
Securities of a particular series are denominated and in which payment of
principal and interest are to be made or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of such government,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by such government, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the United
States SECURITIES ACT of 1933, as amended) as custodian with respect to any such
Government Obligation or a specific payment of principal of or interest on
account of the holder of such depository receipt from any amount received by the
custodian in respect of such Government Obligation or the specific payment of
principal of or interest on such Government Obligation evidenced by such
depository receipt.
"HOLDER" means a Person in whose name a Security is registered in the
Security Register.
"INTERNAL REVENUE CODE" means the Internal Revenue Code as in force as at
the date as of which this instrument was executed; PROVIDED, HOWEVER, that in
the event the Internal Revenue Code is amended after such date, "INTERNAL
REVENUE CODE" means, to the extent required by such amendment, the Internal
Revenue Code, as so amended.
"INDENTURE" means this instrument as originally executed, as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument and any such supplemental indenture, the
provisions of the TRUST INDENTURE ACT that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of any particular series of Securities
established as contemplated by Section 3.1.
"INTEREST PAYMENT DATE" means, when used with respect to any Security, the
Stated Maturity of an instalment of interest on such Security.
"MATURITY" means, when used with respect to any Security, the date on which
the principal of such Security or an instalment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"NOTICE OF DEFAULT" means a written notice of the kind specified in Section
5.1(d).
"OFFICERS' CERTIFICATE" means, when used with reference to the Company, a
certificate signed on behalf of the Company by any one of the Chairman of the
Board, the President
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or any Vice President of the Company, and by any one of the Treasurer, the
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 10.4 shall be the principal
executive, chief financial or principal accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel (who may be counsel
for the Company and who may be an employee of the Company, except as otherwise
expressly provided in this Indenture) and who shall be acceptable to the
Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"OUTSTANDING," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, EXCEPT:
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated in
trust by the Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; PROVIDED THAT, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(c) Securities as to which Defeasance has been effected pursuant to
Section 13.2; and
(d) Securities which have been replaced pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; PROVIDED, HOWEVER, that in
determining whether the Holders of the requisite principal amount of the
Outstanding Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or are present at a meeting of Holders for
quorum purposes, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof (excluding premium or penalty, if any) that would be due and payable as
of the date of such determination upon acceleration of the Maturity thereof
pursuant to Section 5.2, (ii) the principal amount of a Security denominated in
one or more foreign currencies or currency units shall be the U.S. dollar
equivalent, determined in the manner provided as contemplated by Section 3.1 on
the date of original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the U.S. dollar equivalent on
the date of original issuance of such Security of the amount determined as
provided in (i) above) of such Security, (iii) if the principal amount
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payable at Stated Maturity of any Security is not determinable upon original
issuance, the principal amount of such Security that shall be deemed to be
Outstanding shall be the amount as specified or determined as contemplated by
Section 3.1, and (iv) Securities owned by the Company, or any other obligor upon
the Securities or any Affiliate of the Company, or of such other obligor shall
be disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver or upon any such
determination as to the presence of a quorum, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company, or any
other obligor upon the Securities or any Affiliate of the Company, or of such
other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, association, company, joint-stock company, business trust, unincorporated
organization or government or any agency or political subdivision thereof.
"PLACE OF PAYMENT" means, when used with respect to the Securities of any
series, the place or places where the principal of and any premium and interest
on the Securities of that series are payable as specified as contemplated by
Section 3.1.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
[IF APPLICABLE, INSERT -- "PROCEEDING" has the meaning specified in Section
15.2].
"REDEMPTION DATE" means, when used with respect to any Security to be
redeemed, the date fixed for such redemption by or pursuant to this Indenture;
"REDEMPTION PRICE" means, when used with respect to any Security to be
redeemed, the price at which it is to be redeemed pursuant to this Indenture.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 3.1.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, the
chairman, or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice
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president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"SECURITIES ACT" means the United States SECURITIES ACT of 1933 as in force
at the date as of which this instrument was executed; PROVIDED, HOWEVER, that in
the event the United States Securities Act of 1933 is amended after such date,
"SECURITIES ACT" means, to the extent required by any such amendments, the
United States Securities Act of 1933, as so amended.
[IF APPLICABLE, INSERT -- "SECURITIES PAYMENT" has the meaning specified in
Section 15.2].
"SECURITY" or "SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any Security or Securities
authenticated and delivered under this Indenture.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings
specified in Section 3.5.
[IF APPLICABLE, INSERT -- "SENIOR INDEBTEDNESS" means, unless otherwise
defined in the applicable indenture supplement, all amounts due on and
obligations in connection with any of the following, whether outstanding at the
date of execution of the Indenture, or thereafter incurred, assumed, guaranteed
or otherwise created (including, without limitation, interest accruing on or
after a bankruptcy or other similar event, whether or not an allowed claim
therein): (a) indebtedness, obligations and other liabilities (contingent or
otherwise) of the Company for money borrowed, or evidenced by bonds, debentures,
notes or similar instruments; (b) reimbursement obligations and other
liabilities (contingent or otherwise) of the Company with respect to letters of
credit or banker's acceptances issued for the account of the Company and
interest rate protection agreements and currency exchange or purchase
agreements; (c) obligations and liabilities (contingent or otherwise) related to
capitalized lease obligations; (d) indebtedness, obligations and other
liabilities (contingent or otherwise) of the Company related to agreements or
arrangements designed to protect the Company or any of its Subsidiaries against
fluctuations in commodity prices, including, without limitation, commodity
futures contracts or similar hedging instruments; (e) indebtedness of others of
kinds described in the preceding clauses (a) through (d) that the Company has
assumed, guaranteed or otherwise assured the payment of directly or indirectly;
(f) any indebtedness of another Person of the type described in the preceding
clauses (a) through (e) secured by any mortgage, pledge, lien or other
encumbrance on property owned or held by the Company; and (g) any and all
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any indebtedness, obligation or liability described in
clauses (a) through (f) whether or not there is any notice to or consent of the
Holders of such series of Securities; unless,
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in any case, in the instrument creating or evidencing such indebtedness,
obligation, liability, guaranty, assumption, deferral, renewal, extension or
refunding, it is expressly stated that such indebtedness, obligation, liability,
guarantee, assumption, deferral, renewal, extension or refunding is not senior
in right of payment to the Securities or that such indebtedness is PARI PASSU
with or junior to the Securities; [IF SUBORDINATED INDEBTEDNESS, INSERT --
PROVIDED, HOWEVER, that any series of Securities designated as Senior
Subordinated Indebtedness shall constitute Senior Indebtedness to any series of
Securities designated as Subordinated Indebtedness].
[IF APPLICABLE, INSERT -- "SENIOR SUBORDINATED INDEBTEDNESS" means the
Securities and any other indebtedness, guarantee or obligation of the Company
that specifically provides that such indebtedness, guarantee or obligation is to
rank PARI PASSU with other Senior Subordinated Indebtedness of the Company and
is not subordinated by its terms to any indebtedness, guarantee or obligation of
the Company which is not Senior Indebtedness.]
[IF APPLICABLE, INSERT -- "SUBORDINATED INDEBTEDNESS" means the Securities
and any other indebtedness, guarantee or obligation of the Company that
specifically provides that such indebtedness, guarantee or obligation is to rank
PARI PASSU with other Subordinated Indebtedness of the Company and is not
subordinated by its terms to any indebtedness, guarantee or obligation of the
Company which is not Senior Indebtedness or Senior Subordinated Indebtedness].
"SIGNIFICANT SUBSIDIARY" shall mean any Subsidiary as shall be designated a
Significant Subsidiary pursuant to the provisions of Section 3.1(y).
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"STATED MATURITY" means, when used with respect to any Security or any
instalment of principal thereof or interest thereon, the date specified in such
Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
"SUBSIDIARY" means any 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 which 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.
"TRUST INDENTURE ACT" means the United States TRUST INDENTURE ACT of 1939
as in force at the date as of which this instrument was executed; PROVIDED,
HOWEVER, that in the event the Trust Indenture Act of 1939 is amended after such
date, "TRUST INDENTURE ACT" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939, as so amended.
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"TRUSTEE" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"VICE PRESIDENT" means, when used with respect to the Company or the
Trustee, any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
1.2 COMPLIANCE CERTIFICATES AND OPINIONS
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and, where required or if requested, an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (including certificates provided for in
Section 10.4) shall include:
(a) a statement that each individual signing such certificate or
opinion has read and understood such covenant or condition and the definitions
herein related thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other
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such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters has been provided by the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
1.4 ACTS OF HOLDERS; RECORD DATES
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder
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of every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
(e) The Company may, in the circumstances permitted by the TRUST
INDENTURE ACT, where the series of Securities was required to be registered
under the SECURITIES ACT, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action, or to vote on any action, authorized or permitted to be given
or taken by Holders of Securities of such series. If not set by the Company
prior to the first solicitation of a Holder of Securities of such series made by
any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 7.1) prior to such first solicitation or vote,
as the case may be. With regard to any record date for action to be taken by the
Holders of one or more series of Securities, only the Holders of Securities of
such series on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action. With regard to any record date
set pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to give or take the relevant action, whether or
not such Holders remain Holders after such record date. With regard to any
action that may be given or taken hereunder by Holders of a requisite principal
amount of Outstanding Securities of any series (or their duly appointed agents)
and for which a record date is set pursuant to this paragraph, the Company may,
at its option, set an expiration date after which no such action purported to be
given or taken by any Holder shall be effective hereunder unless given or taken
on or prior to such expiration date by Holders of the requisite principal amount
of Outstanding Securities of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any expiration
date, any action identical to, or, at any time, contrary to or different from,
any action given or taken, or purported to have been given or taken, hereunder
by a Holder on or prior to such date, in which event the Company may set a
record date in respect thereof pursuant to this paragraph. Notwithstanding the
foregoing or the TRUST INDENTURE ACT, the Company shall not set a record date
for, and the provisions of this paragraph shall not apply with respect to, any
action to be given or taken by Holders pursuant to Sections 5.1, 5.2 or 5.12.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal amount.
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1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention:
_____________________________; or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company, addressed to it
at the address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to the
Trustee by the Company.
1.6 NOTICE TO HOLDERS: WAIVER
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
1.7 CONFLICT WITH APPLICABLE LEGISLATION
If any provision hereof limits, qualifies or conflicts with a provision of
any Applicable Legislation that is required under such legislation to be a part
of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of any Applicable
Legislation that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
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1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
1.9 SUCCESSORS AND ASSIGNS
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
1.10 SEPARABILITY CLAUSE
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
1.11 BENEFITS OF INDENTURE
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any Authenticating Agent, Paying Agent, Security Registrar and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
1.12 GOVERNING LAW
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York, but without regard to
principles of conflicts of laws.
1.13 LEGAL HOLIDAYS
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or the Securities
(other than a provision of the Securities of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, or at the Stated Maturity, PROVIDED THAT no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
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ARTICLE 2
SECURITY FORMS
2.1 FORMS GENERALLY
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
Board Resolutions of the Board of Directors of the Company or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities of
any series is established by action taken pursuant to such Board Resolutions, a
copy of an appropriate record of such action shall be certified by the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
2.2 FORM OF FACE OF SECURITY
[INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]
STILLWATER MINING COMPANY
__________________________________
No. _______ U.S. $____________
STILLWATER MINING COMPANY, a corporation duly incorporated and existing
under the laws of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _________________________________, or
registered assigns, the principal sum of _____________________________________
[United States] Dollars on ________________________ [IF THE SECURITY IS TO BEAR
INTEREST PRIOR TO MATURITY, INSERT -- , and to pay interest thereon from
_________________________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on ________________
and _______________ in each year, commencing
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_________________, at the rate of ____________% per annum, until the principal
hereof is paid or made available for payment [IF APPLICABLE, INSERT -- , and (to
the extent that the payment of such interest shall be legally enforceable) at
the rate of _____% per annum on any overdue principal and premium and on any
overdue instalment of interest], from the dates such amounts are due until they
are paid or made available for payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest, which shall be the _________ or
__________ (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.]
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of _________% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such principal has been made or
duly provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of ___% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of principal of (and premium, if any) and [IF APPLICABLE, INSERT --
any such] interest on this Security will be made at the office or agency of the
Company maintained for that purpose in ______________, in such coin or currency
of the United States of America as at the time of payment is legal tender for
payment of public and private debts [IF APPLICABLE, INSERT --]; PROVIDED,
HOWEVER, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.]
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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Unless the certificate of authentication hereof has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
STILLWATER MINING COMPANY
By:____________________
Attest:
2.3 FORM OF REVERSE OF SECURITY
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of __________________ (herein called the
"Indenture"), among the Company and _____________, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [, limited in aggregate amount to U.S. $__________].
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time on or before the
close of business on, or in case this Security or a portion hereof is called for
redemption, then in respect of this Security or such portion hereof until and
including, but (unless the Company defaults in making the payment due upon
redemption) not after, the close of business on the 10th calendar day before the
Redemption Date, to convert this Security (or any portion of the principal
amount hereof which is U.S. $1,000 or an integral multiple thereof), at the
principal amount hereof, or of such portion, into fully paid and non-assessable
Common Shares (calculated as to each conversion to the nearest 1/100 of a share)
at an initial Conversion Price per Common Share equal to U.S. $_________ per
each Common Share (or at the current adjusted Conversion Price if an adjustment
has been made as provided in the Indenture) by surrender of this Security, duly
endorsed or assigned to the Company or in blank, to the Company at its office or
agency in ______________________, accompanied by written notice to the Company
that the Holder hereof elects to convert this Security, or if less than the
entire principal amount hereof is to be converted, the portion hereof to be
converted, and, in such case such
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surrender shall be made during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date (unless this
Security or the portion thereof being converted has been called for redemption
on a Redemption Date within such period), also accompanied by payment in New
York Clearing House or other funds acceptable to the Company of an amount equal
to the interest payable on such Interest Payment Date on the principal amount of
this Security then being converted. Subject to the aforesaid requirement for
payment and, in the case of a conversion after the Regular Record Date next
preceding any Interest Payment Date and on or before such Interest Payment Date,
to the right of the Holder of this Security (or any Predecessor Security) of
record at such Regular Record Date to receive an instalment of interest (with
certain exceptions provided in the Indenture), no payment or adjustment is to be
made on conversion for interest accrued hereon or for dividends on the Common
Shares issued on conversion. No fractions or shares or scrip representing
fractions of shares will be issued on conversion, but instead of any fractional
interest the Company shall pay a cash adjustment as provided in the Indenture.
The Conversion Price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the transfer of substantially all of
the assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this Security, if then outstanding, will
be convertible thereafter, during the period this Security shall be convertible
as specified above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or transfer by a holder of
the number of Common Shares into which this Security might have been converted
immediately prior to such consolidation, merger or transfer (assuming such
holder of Common Shares failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-electing
shares). Adjustments in the Conversion Price of less than one percent of such
price will not be required, but any adjustment that would otherwise be required
to be made will be carried forward and taken into account in the computation of
any subsequent adjustment.
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [IF APPLICABLE, INSERT --
(1) on __________ in any year commencing with the year _____ and ending with the
year _____ through operation of the sinking fund for this series at a Redemption
Price equal to 100% of the principal amount, and (2)] at any time [IF
APPLICABLE, INSERT -- on or after ________________], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): if redeemed [IF APPLICABLE, INSERT -- on
or before ________, __%, and if redeemed] during the 12 month period beginning
_____ of the years indicated,
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated
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Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant record dates referred to on the face hereof,
all as provided in the Indenture.]
[IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on _____ in any year
commencing with the year _____ and ending with the year _____ through operation
of the sinking fund for this series at the Redemption Prices for redemption
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below, and (2) at any time [IF APPLICABLE, INSERT
- --on or after _____], as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: if redeemed during the 12-month period beginning _____ of the years
indicated,
Year Redemption Price for Redemption Price for Redemption Through Redemption
Otherwise Operation of the Than Through Operation Sinking Fund of the Sinking
Fund and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such securities, or one or more
Predecessor securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[IF APPLICABLE, INSERT -- The sinking fund for this series provides for the
redemption on _____ in each year beginning with the year _____ and ending with
the year _____ of [IF APPLICABLE, INSERT -- not less than U.S. $_____
("mandatory sinking fund") and not more than] U.S. $_____ aggregate principal
amount of Securities of this series. Securities of this series acquired or
redeemed by the Company otherwise than through [IF APPLICABLE, INSERT --
mandatory] sinking fund payments may be credited against subsequent [IF
APPLICABLE, INSERT -- mandatory] sinking fund payments otherwise required to be
made [IF APPLICABLE, INSERT -- in the inverse order in which they become due].]
[IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT -- In the
event of redemption or conversion of this Security in part only, a new Security
or Securities of this series and of like tenor for the unredeemed or unconverted
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.]
[IF SENIOR INDEBTEDNESS, INSERT -- The indebtedness evidenced by this
Security has been designated as Senior Indebtedness, and, to the extent provided
in the Indenture, is PARI PASSU with all other Senior Indebtedness].
[IF SENIOR SUBORDINATED INDEBTEDNESS, INSERT -- The indebtedness evidenced
by this Security is, to the extent provided in the Indenture, (i) subordinate
and subject in right of payment to the prior payment in full of all Senior
Indebtedness and (ii) PARI PASSU with all other
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Senior Subordinated Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.]
[IF SUBORDINATED INDEBTEDNESS, INSERT -- The indebtedness evidenced by this
Security is, to the extent provided in the Indenture, (i) subordinate and
subject in right of payment to the prior payment in full of all Senior
Indebtedness and (ii) PARI PASSU with all other Subordinated Indebtedness, and
this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.]
[IF APPLICABLE, INSERT -- The Indenture contains provisions for defeasance
at any time of certain restrictive covenants and Events of Default with respect
to this Security, in each case upon compliance with certain conditions set forth
in the Indenture.]
[IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of Securities of such series, to waive compliance by the Company with
certain past provisions of the Indenture and certain defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security
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issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
[IF THE SECURITY IS ISSUED ON A SUBORDINATED OR SENIOR SUBORDINATED BASIS,
INSERT -- Subject to the rights of holders of Senior Indebtedness, as set forth
in the Indenture, no other reference herein to the Indenture and no other
provision of this Security or of the Indenture shall alter or impair the
obligations of the Company, which are unconditional, to pay the principal of and
any premium and interest on this Security at the times, place and rate, and in
the coin and currency, herein prescribed or to convert this Security as so
provided in the Indenture.]
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of U.S. $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
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Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company, or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
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[FORM OF CONVERSION NOTICE]
To: STILLWATER MINING COMPANY
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion hereof (which is U.S. $1,000 or
an integral multiple thereof) below designated, into Common Shares of Stillwater
Mining Company, in accordance with the terms of the Indenture referred to in
this Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities, representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:
Fill in for registration of Common Shares and Securities if to be issued
otherwise than to the registered holder.
Principal Amount to be converted (in an integral Name multiple of U.S. $1,000,
if less than all): U.S. $
Address (Please print name and address, including signature zip/postal code
number)
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFYING
[SIGNATURE GUARANTEED -- required only if Common NUMBER Shares and Securities
are to be issued and delivered to other than the registered holder]
2.4 FORM OF LEGEND FOR GLOBAL SECURITIES
Unless otherwise specified as contemplated by Section 3.1 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee thereof. This Security may not be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other than the
Depositary or a nominee thereof and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in exchange for
or in lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.
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2.5 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
The Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
________________________________
As Trustee
By:_____________________________
Authorized Officer
ARTICLE 3
THE SECURITIES
3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more series. All
Securities of each series under this Indenture shall in all respects be equally
and ratably entitled to the benefits hereof with respect to such series without
preference, priority or distinction on account of the actual time of the
authentication and delivery or Stated Maturity of the Securities of such series.
There shall be established in or pursuant to Board Resolutions of the Company
and, subject to Section 3.3, set forth, or determined in the manner provided, in
an Officers' Certificate of the Company, or established in one or more
indentures supplemental hereto, prior to the issuance of Securities of any
series:
(a) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(b) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for any Securities which, pursuant
to section 3.3, are deemed never to have been authenticated and delivered
hereunder);
(c) if the Securities will be issuable at a premium over or discount
from their stated principal amount, specification of such premium or discount,
as applicable;
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(d) whether any Securities of the series are to be listed for trading
on a securities exchange or otherwise;
(e) the Person to whom any interest on a Security of the series shall
be payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest;
(f) the date or dates on which the principal of the Securities of the
series is payable and on which the Securities will mature;
(g) the rate or rates (which may be fixed or variable) at which the
Securities of the series shall bear interest, if any, or the method by which
such rate or rates are determined, the date or dates from which such interest
shall accrue or the method of determination of such date or dates, the Interest
Payment Dates on which any such interest shall be payable on any Securities and
the Regular Record Date for any interest payable on any Interest Payment Date,
and the basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(h) the place or places where the principal of and any premium and
interest on the Securities of the series shall be payable;
(i) the period or periods within which, the price or prices at which,
and the terms and conditions upon which Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other than
by a Board Resolution, the manner in which any election by the Company to redeem
the Securities shall be evidenced;
(j) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund, purchase fund or
analogous obligation or at the option of a Holder thereof and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Securities of the series shall be redeemed or purchased, in whole or
in part, pursuant to such obligation;
(k) if other than denominations of U.S. $1,000 and any integral
multiple thereof, the denominations in which Securities of the series shall be
issuable;
(l) the currency, currencies or currency unit or units in which the
Securities of such series shall be denominated and in which payment of the
principal of and any premium and interest on any Securities of such series shall
be payable if other than the currency of the United States of America and the
manner of determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of "Outstanding" in Section
1.1;
(m) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined by reference to an
index, formula or other method, including, without limitation, such method based
on (i) currency, currencies or currency units other
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than that in which the Securities of such series are payable, (ii) changes in
the price of one or more other securities or groups or indices of securities, or
(iii) changes in the prices of one or more commodities or groups or indexes of
commodities or any combination of the foregoing, the manner in which such
amounts shall be determined and any commodities, currencies, currency units or
indices, value, rate or price relevant to such determination;
(n) if the principal of or any premium or interest on any Securities
of the series are 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 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 Securities of such series as to which such election is made shall be payable,
and the period or periods within which, and the terms and conditions upon which,
such election is to be made and the amount so payable for the manner in which
such amount shall be determined;
(o) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2;
(p) if the principal amount payable at the Stated Maturity of any
Securities of the series is not determinable upon original issuance thereof, the
amount which shall be deemed to be the principal amount of such Securities for
any other purpose hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated Maturity or which
shall be deemed to be Outstanding as of any date (or, in any such case, the
manner in which such principal amount shall be determined);
(q) if applicable, that the Securities of the series shall be subject
to Covenant Defeasance as provided in Article 13;
(r) if and as applicable, that the Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities and,
in such case, the respective Depositaries for such Global Securities, the form
of any legend or legends which shall be borne by any such Global Security in
addition to or in lieu of that set forth in Section 2.4 and any circumstances
other than those set forth in Section 3.5 in which any such Global Security may
be transferred to, and registered and exchanged for Securities registered in the
name of, a Person other than the Depositary for such Global Security or a
nominee thereof and in which any such transfer may be registered;
(s) the terms and conditions pursuant to which the Securities are
convertible into or exchangeable at the option of the Holders thereof or the
Company, for or into new Securities of a different series, other Securities of
the same series of the same aggregate principal amount of a different kind or
different authorized denomination or denominations, or other securities or other
property, including shares in the capital of the Company or any subsidiaries of
the Company or securities directly or indirectly convertible into or
exchangeable for such shares;
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(t) if applicable, any covenants in addition to those set forth in
Article 10 to which the Company may be subject with respect to Securities of
such series; or any other additions, deletions or changes to the provisions of
Article 10 or any definitions relating to such Article that shall be applicable
to the Securities of the series (including a provision making any Section of
such Article inapplicable to the Securities of such series);
(u) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other changes
to the Events of Default set forth herein that shall be applicable to the
Securities of such series (including a provision making any Event of Default set
forth herein inapplicable to the Securities of that series);
(v) provisions, if any, regarding the appointment by the Trustee of an
Authenticating Agent in one or more places other than the location of the office
of the Trustee with power to act on behalf of the Trustee and subject to its
direction in the authentication and delivery of the Securities of any one or
more series in connection with such transactions as shall be specified in the
provisions of this Indenture or in or pursuant to the Board Resolution or other
supplemental indenture creating such series;
(w) the provisions for the payment of any additional amounts, to the
extent not set forth herein;
(x) designation of the series of Securities as Senior Indebtedness,
Senior Subordinated Indebtedness or Subordinated Indebtedness, and any
additions, deletions or changes to the provisions of Article 15 or any
definition relating to such Article that shall be applicable to the Securities
of the series defining the rights of holders of Senior Indebtedness in respect
of the Securities of such series;
(y) any addition to or deletion from the definition of Significant
Subsidiary; and
(z) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 9.1).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to the
Board Resolutions of the Company referred to above and (subject to Section 3.3)
set forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened for issuances of additional Securities of
such series.
If any of the terms of the series are established by action taken pursuant
to Board Resolutions of the Company, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificates setting forth the terms of the series.
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3.2 DENOMINATIONS
The Securities of each series shall be issuable in registered form without
coupons in such denominations and in such currencies as shall be specified as
contemplated by Section 3.1. In the absence of any such provisions with respect
to the Securities of any series, the Securities of such series shall be issuable
in denominations of U.S. $1,000 and any integral multiple thereof.
3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING
The Securities shall be executed on behalf of the Company by its President,
one of its Vice Presidents or its Treasurer, under its corporate seal reproduced
thereon attested by its Secretary. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order (which may provide that Securities that are the subject
thereof will be authenticated and delivered by the Trustee upon the telephonic
or written order of Persons designated in said Company Order and that such
Persons are authorized to determine such terms and conditions of said Securities
as are specified in the Company Order) shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions of the Company as
permitted by Sections 2.1 and 3.1, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) if the form of such Securities has been established by or pursuant
to Board Resolutions of the Company as permitted by Section 2.1, that such form
has been established in conformity with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolutions of the Company as permitted by Section 3.1, that
such terms have been established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company enforceable in accordance with their terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization,
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moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles and to such other matters as
counsel may specify.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued and contemplate issuance of all Securities
of such series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
3.4 TEMPORARY SECURITIES
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities, which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 10.2 in a Place
of Payment for that series for the purpose of exchanges of Securities of such
series, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of any series the Company shall
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execute and the Trustee shall authenticate and deliver in exchange therefor one
or more definitive Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor. Until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series and tenor.
3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security or of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series of any authorized denominations and of a
like aggregate principal amount and tenor, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required to (a) issue or register the transfer or
exchange of Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 11.3 and ending
at the close of business on the day of such mailing, or (b) register the
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transfer or exchange of any Security so selected for redemption in whole or in
part, except in the case of any Security to be redeemed in part, the portion
thereof not to be redeemed.
Notwithstanding any other provision in this Indenture, no Global Security
may be transferred to, or registered or exchanged for Securities registered in
the name of, any Person other than the Depositary for such Global Security or
any nominee thereof, and no such transfer may be registered, unless (a) such
Depositary (i) notifies the Company and the Trustee that it is unwilling or
unable to continue as Depositary for such Global Security or (ii) ceases to be a
clearing agency registered under the Exchange Act and a successor Depositary is
not appointed by the Company within 90 days after the Company receives the
notice referred to in subclause (i) or becomes aware of the condition specified
in subclause (ii), (b) the Company executes and delivers to the Trustee a
Company Order that such Global Security shall be so transferable, registrable
and exchangeable, and such transfers shall be registrable, (c) there shall have
occurred and be continuing an Event of Default with respect to the Securities
evidenced by such Global Security or (d) there shall exist such other
circumstances, if any, as have been specified for this purpose as contemplated
by Section 3.1. Notwithstanding any other provision in this Indenture, a Global
Security to which the restriction set forth in the preceding sentence shall have
ceased to apply may be transferred only to, and may be registered and exchanged
for Securities registered only in the name or names of, such Person or Persons
as the Depositary for such Global Security shall have directed and no transfer
thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration of transfer
of, or in exchange for or in lieu of, a Global Security to which the restriction
set forth in the first sentence of the preceding paragraph shall apply, whether
pursuant to this Section, Sections 3.4, 3.6, 9.6 or 11.7 or otherwise, shall be
authenticated and delivered in the form of, and shall be, a Global Security.
3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a) evidence to
their satisfaction of the destruction, loss or theft of any Security and (b)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion, may,
instead of issuing a new Security and subject to the above provisions regarding
security or indemnity, pay such Security.
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Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
exchange for any mutilated Security or in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
3.7 PAYMENT OF INTEREST: INTEREST RIGHTS PRESERVED
Except as otherwise provided as contemplated by Section 3.1 with respect to
any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
In the case of Securities represented by a Global Security registered in
the name of or held by a Depositary or its nominee, unless otherwise specified
by Section 3.1, payment of principal, premium, if any, and interest, if any,
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or Holder of such Global Security. None of the Company, the
Trustee, any Paying Agent, any Authenticating Agent nor the Security Registrar
for such Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interest in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, on
such date, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security of such series
and
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the date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such series at his
address as it appears in the Security Register, not less than 10 days prior to
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the Securities of
such series (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice is
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee.
At the option of the Company, interest on Securities of any series that
bear interest may be paid by mailing a check to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
3.8 PERSONS DEEMED OWNERS
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee shall treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and (except
as otherwise specified as contemplated by Section 3.1(e) and subject to Section
3.7) any interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
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In the case of a Global Security, so long as the Depositary for such Global
Security, or its nominee, is the registered owner of such Global Security, such
Depositary or such nominee, as the case may be, will be considered the sole
owner or Holder of the Securities represented by such Global Security for all
purposes under this Indenture. Except as provided in Section 3.5, owners of
beneficial interests in a Global Security will not be entitled to have
Securities that are represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or Holders
thereof under this Indenture.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall (a) prevent the Company, the Trustee, or any agent of the Company
or the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or (b) impair, as between a Depositary
and holders of beneficial interests in any Global Security, the operation of
customary practices governing the exercise of the rights of the Depositary as
Holder of such Global Security.
3.9 CANCELLATION
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
3.10 COMPUTATION OF INTEREST
Except as otherwise specified as contemplated by Section 3.1 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a 360-day year of twelve 30-day months.
3.11 PAYMENT OF ADDITIONAL AMOUNTS
All payments made by the Company under or with respect to the Securities
will be made free and clear of and without withholding or deduction for or on
account of any present or future tax, duty, levy, impost, assessment or other
governmental charge imposed or levied by or on behalf of the Government of the
United States, any state thereof or the District of Columbia, or by any
authority or agency therein or thereof having power to tax (hereinafter
"Taxes"), unless the Company is required to withhold or deduct Taxes by law or
by the interpretation or administration
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thereof. If the Company is so required to withhold or deduct any amount for or
on account of Taxes from any payment made under or with respect to the
Securities, the Company will pay such additional amounts ("Additional Amounts")
as may be necessary so that the net amount received by each Holder (including
Additional Amounts) after such withholding or deduction will not be less than
the amount the Holder would have received if such Taxes had not been withheld or
deducted; PROVIDED THAT no Additional Amounts will be payable with respect to a
payment made to a Holder (an "Excluded Holder") (i) with which the Company does
not deal at arm's length (within the meaning of the INTERNAL REVENUE CODE) at
the time of making such payment or (ii) which is subject to such Taxes by reason
of its being connected with the United States, any state thereof or the District
of Columbia, otherwise than by the mere holding of Securities or the receipt of
payments thereunder. The Company will also (i) make such withholding or
deduction and (ii) remit the full amount deducted or withheld to the relevant
authority in accordance with applicable law. The Company will furnish to the
Holders of the Securities, within 30 days after the date the payment of any
Taxes is due pursuant to applicable law, certified copies of tax receipts
evidencing such payment by the Company. The Company will indemnify and hold
harmless each Holder (other than an Excluded Holder) and upon written request
reimburse each such Holder for the amount of (i) any Taxes so levied or imposed
and paid by such Holder as a result of payments made under or with respect to
the Securities, (ii) any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto, and (iii) any Taxes imposed with
respect to any reimbursement under (i) or (ii), but excluding any such Taxes on
such Holders' net income.
At least 30 days prior to each date on which any payment under or with
respect to the Securities is due and payable, if the Company will be obligated
to pay Additional Amounts with respect to such payment, the Company will deliver
to the Trustee an Officers' Certificate stating the fact that such Additional
Amounts will be payable, stating the amounts so payable and setting forth such
other information as is necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date. Whenever in this Indenture there is
mentioned, in any context, the payment of principal (and premium, if any),
Redemption Price, interest or any other amount payable under or with respect to
any Security, such mention shall be deemed to include mention of the payment of
Additional Amounts provided for in this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made (if applicable).
The obligations of the Company under this Section 3.11 survive the
termination of the Indenture and the payment of all amounts under or with
respect to the Securities.
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ARTICLE 4
SATISFACTION AND DISCHARGE
4.1 SATISFACTION AND DISCHARGE OF INDENTURE
This Indenture shall, upon Company Request, cease to be of further effect
(except as to any surviving rights or registration of transfer or exchange of
Securities herein expressly provided for) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when:
(a) either,
(i) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.6 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation, or
(ii) all such Securities not theretofore delivered to the Trustee
for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (A), (B) or (C) above, has deposited or caused
to be deposited with the Trustee, as trust funds in trust for the purpose, money
in the currency in which the Securities of such series are denominated or
Government Obligations of the government issuing the currency in which the
Securities of such series are denominated which through the payment of interest
and principal in respect thereof in accordance with their terms will provide
lawful money not later than one day before the due dates of principal (and
premium, if any) or interest, or any combination thereof, in an amount
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or Redemption Date,
as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
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(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to the
Securities of all series to which it is Trustee and if the other conditions
thereto are met. In the event there are two or more Trustees hereunder, then the
effectiveness of any such instrument shall be conditioned upon receipt of such
instruments from all Trustees hereunder.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, and the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
4.2 APPLICATION OF TRUST MONEY
Subject to the provisions of the penultimate paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee. [IF
APPLICABLE, INSERT -- any shall not be subject to the claims of the holders of
Senior Indebtedness].
ARTICLE 5
REMEDIES
5.1 EVENTS OF DEFAULT
"Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless such event is either inapplicable to a particular series or it is
specifically deleted or modified in the Board Resolutions or supplemental
indenture creating such series of Securities or in the form of Security for such
series:
(a) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for a
period of 30 days (whether or not such failure is a result of the subordination
provisions relating to such series); or
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(b) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity (whether or not such failure is
a result of the subordination provisions relating to such series); or
(c) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(d) default in the performance, or breach of any covenant or warranty
of the Company in this Indenture or of any other covenant to which the Company
or any Significant Subsidiary is subject with respect to such series of
Securities by virtue of Section 3.1(t) (other than a covenant or warranty a
default in whose performance or whose breach is specifically dealt with
elsewhere in this Section or which has expressly been included in this Indenture
or in the applicable Board Resolutions or supplemental indenture with respect to
such series of Securities solely for the benefit of a series of Securities other
than that series or which has been included in this Indenture or in the
applicable Board Resolutions or supplemental indenture with respect to such
series of Securities but not made applicable to the Securities of such series)
and continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series, a written notice specifying
such default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any Significant Subsidiary
(including a default with respect to Securities of any series other than that
series) having an aggregate principal amount outstanding of at least U.S.
$10,000,000 or under any mortgage, indenture or instrument (including this
Indenture) under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company or any Significant
Subsidiary having an aggregate principal amount outstanding of at least U.S.
$10,000,000, whether such indebtedness now exists or shall hereafter be created,
after the expiration of any applicable grace period with respect thereto; or
(f) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under the any applicable Federal
or State bankruptcy, insolvency, reorganization or similar law, or (ii) a decree
or order adjudging the Company or any Significant Subsidiary bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Significant Subsidiary or of any
substantial part of its respective property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order for
relief specified in this clause (ii) unstayed and in effect for a period of 60
consecutive days; or
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(g) the commencement by the Company or any Significant Subsidiary of
a voluntary case or proceeding under the any applicable Federal or State
COMPANIES' CREDITORS bankruptcy, insolvency, reorganization or similar law, or
of any other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by the Company or any Significant Subsidiary to the entry of a
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any applicable Federal or
State bankruptcy, insolvency, reorganization or similar law, or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company or any Significant Subsidiary or the filing by the Company or any
Significant Subsidiary of a petition or answer or consent seeking reorganization
or relief under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignees, trustee, sequestrator or other
similar official of the Company or any Significant Subsidiary or of any
substantial part of its property, or the making by the Company or any
Significant Subsidiary of an assignment for the benefit of creditors, or the
admission by the Company or any Significant Subsidiary in writing its inability
to pay its debts generally as they become due, or the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of any such action;
or
(h) any other Event of Default provided in the supplemental indenture
or Board Resolution of the Company under which such series of Securities is
issued or in the form of Security for such series.
5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT
(a) If an Event of Default with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case, the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
any of the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount of such Securities as may be specified in
the terms thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders) and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable, except that if the Event of
Default is an event described in clause 5.1(f) or 5.1(g) above, the principal
amount (or in the case of Original Issue Discount Securities, such portion
thereof) of all Securities shall become due and payable immediately, without
notice of further action of any kind whatsoever.
(b) At any time after such a declaration of acceleration with respect
to Securities of any series has been made, but before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
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(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or
rates prescribed therefore in such Securities, to the extent that
payment of such interest is lawful,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(ii) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of
that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
5.3 SUITS FOR ENFORCEMENT BY TRUSTEE
The Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of any sums due and unpaid as
a consequence of the action set froth in Section 5.2(a), and may prosecute such
proceedings to judgment or final decrees, and may enforce the same against the
Company or any other obligor upon the Securities of such series and collect the
money adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
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5.4 TRUSTEE MAY FILE PROOFS OF CLAIM
In case of any judicial proceeding relative to the Company or any other
obligor upon the Securities, its property or its creditors, the Trustee shall be
entitled and empowered, by intervention in such proceeding or otherwise, to take
any and all actions authorized under Applicable Legislation in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
5.6 APPLICATION OF MONEY COLLECTED
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
(a) first, to the payment of all amounts due the Trustee under Section
6.7;
(b) second, to the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal and any premium and interest, respectively; and
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(c) third, the balance, if any, to the Company or any other Person or
Persons entitled thereto.
5.7 LIMITATION ON SUITS
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that series;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request;
(d) the Trustee for 60 days after receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST
Notwithstanding any other provision of this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of, any premium and (except as specified as
contemplated by Section 3.1(e) and subject to Section 3.7) any interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment and such rights shall not be impaired without
the consent of such Holder.
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5.9 RESTORATION OF RIGHTS AND REMEDIES
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
5.10 RIGHTS AND REMEDIES CUMULATIVE
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
3.6, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
5.11 DELAY OR OMISSION NOT WAIVER
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
5.12 CONTROL BY HOLDERS
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or to
exercise any trust or power conferred on the Trustee, with respect to the
Securities of such series, PROVIDED THAT:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) the Trustee shall not determine that the action so directed would
be unjustly prejudicial to Holders of Securities of that series, or any other
series not taking part in such direction; and
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
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5.13 WAIVER OF PAST DEFAULTS
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(a) in the payment of the principal of or any premium or interest on
any Security of such series; or
(b) in respect of a covenant or provision hereof which under Article
9 cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
5.14 UNDERTAKING FOR COSTS
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; PROVIDED THAT
this Section shall not be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company,
or to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of any
series.
5.15 WAIVER OF STAY OR EXTENSION LAWS
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company hereby expressly waives (to the
extent that it may lawfully do so) all benefit or advantage of any such law and
each covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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5.16 WAIVER OF CERTAIN COVENANTS
The Company may omit in any particular instance to comply with any term,
provision or condition to which the Company is subject with respect to the
Securities of any series by virtue of Section 3.1(t), or any covenant provided
pursuant to Section 9.1(b) for the benefit of Holders of such series, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
ARTICLE 6
THE TRUSTEE
6.1 CERTAIN DUTIES AND RESPONSIBILITIES
The duties and responsibilities of the Trustee shall be as provided by
Applicable Legislation. Notwithstanding the foregoing (but subject to Section
1.7), no provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
6.2 NOTICE OF DEFAULTS
If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by Applicable Legislation and in the
manner provided in Section 1.6. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
6.3 CERTAIN RIGHTS OF TRUSTEE
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
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(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (unless other
evidence in respect thereof be herein specifically prescribed) and any
resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities, except that the Trustee
represents that it is duly authorized to execute and deliver this Indenture,
authenticate the Securities and perform its obligations hereunder and, if the
series of Securities was required to be registered under the SECURITIES ACT,
that the statements made by it in a Statement of Eligibility on Form T-1
supplied to the Company are true and accurate, subject to the qualifications set
forth
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therein. The Trustee or any Authenticating Agent shall not be accountable for
the use or application by the Company of Securities or the proceeds thereof.
6.5 MAY HOLD SECURITIES
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, or the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 6.8 and 6.13, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
6.6 MONEY HELD IN TRUST
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company in writing.
6.7 COMPENSATION AND REIMBURSEMENT
The Company covenants and agrees:
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except to the extent any such expense,
disbursement or advance may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such expense, disbursement or advance may be
attributable to its negligence or bad faith.
"Trustee," for purposes of this Section 6.7, includes any predecessor
Trustee, PROVIDED THAT the negligence or bad faith of any Trustee shall not
affect the rights under this Section 6.7 of any other Trustee.
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6.8 DISQUALIFICATION; CONFLICTING INTERESTS
If the Trustee has or shall acquire a conflicting interest within the
meaning of Applicable Legislation, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, Applicable Legislation and this Indenture, and the Company
shall take prompt action to have a successor Trustee appointed in the manner
provided herein. To the extent permitted by such legislation, the Trustee shall
not be deemed to have a conflicting interest by virtue of being a trustee under
[LIST ANY PRIOR INDENTURES BETWEEN THE COMPANY AND THE TRUSTEE THAT HAVE NOT
BEEN SATISFIED AND DISCHARGED AND THAT MAY BE EXCLUDED BY THE PROVISO TO SECTION
310(B)(1) OF THE TRUST INDENTURE ACT.]
6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY
There shall at all times be a Trustee hereunder with respect to the
Securities of each series and the Trustee shall be a Person that is eligible
pursuant to the TRUST INDENTURE ACT to act as such, has a combined capital and
surplus of at least U.S. $50,000,000 and is subject to supervision or
examination by United States Federal, Territorial, District of Columbia or State
authority. If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then, for the purposes of this Section and to the extent permitted by
the TRUST INDENTURE ACT, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and the
Company.
(d) If at any time:
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(i) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months; or
(ii) the Trustee shall cease to be eligible under Section 6.9
and shall fail to resign after written request therefor by the Company
or by any such Holder; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation of liquidation,
then, in any such case, (A) the Company by a Board Resolution, may remove the
Trustee with respect to all Securities, or (B) subject to Section 5.14, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
6.11, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 6.11, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders of Securities of such series in the manner provided in Section
1.6. Each notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust Office.
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6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (ii)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(iii) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of
the same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In the
event any Securities shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such
Securities, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY
If and when the Trustee with respect to any series of Securities which was
required to be registered under the EXCHANGE ACT shall be or become a creditor
of the Company (or any other obligor upon the Securities), the Trustee shall be
subject to the provisions of the TRUST INDENTURE ACT regarding the collection of
claims against the Company (or any such other obligor).
6.14 APPOINTMENT OF AUTHENTICATING AGENT
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and, if such Authenticating Agent is appointed with
respect to any series of Securities which was required to be registered under
the EXCHANGE ACT, shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than U.S. $50,000,000
and subject to supervision or examination by Federal or State authority. If such
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Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
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_______________________________
As Trustee
By:____________________________
As Authenticating Agent
By:____________________________
Authorized Officer
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record
Date for each series of Securities, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders of Securities as
of such Regular Record Date, or if there is no Regular Record Date for interest
for such series of Securities, semi-annually, upon such dates as are set forth
in the Board Resolution or indenture supplemental hereto authorizing such
series; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
PROVIDED, HOWEVER, that so long as the Trustee is the Security Registrar,
no such list shall be required to be furnished.
7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 7.1 and (ii) received by the Trustee for each series in the capacity as
Security Registrar if the Trustee is acting in such capacity. The Trustee may
destroy any list furnished to it as provided in Section 7.1 upon receipt of a
new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of
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the Trustee, shall be as provided by Applicable Legislation and any other
relevant provisions of United States securities laws.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
Applicable Legislation.
7.3 REPORTS BY TRUSTEE
(a) The Trustee shall transmit to Holders of Securities, as their
names and addresses appear in the Security Register, such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to
Applicable Legislation at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
7.4 REPORTS BY COMPANY
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the TRUST INDENTURE ACT at the times and
in the manner provided pursuant to such Act; PROVIDED THAT any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the EXCHANGE ACT shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission. The
provisions of this section shall not require the Company to make any filing with
the Commission with respect to any series of Securities to which the EXCHANGE
ACT and the TRUST INDENTURE ACT are not applicable.
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS
The Company shall not consolidate with or merge into any other corporation
(other than a wholly-owned Subsidiary of the Company) or convey, transfer, sell
or lease its properties and assets substantially as an entirety (treating the
Company and each Subsidiary of the Company as a single consolidated entity and
treating any sale by a Subsidiary or of a Subsidiary (including by merger) as a
sale by the Company for such purpose) to any corporation (other than a wholly-
owned Subsidiary of the Company), and the Company shall not permit any
corporation (other than a wholly
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owned Subsidiary of the Company) to consolidate with or merge into the Company
or convey, transfer or lease its properties and assets substantially as an
entirety to the Company, unless:
(a) the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and assets substantially
as an entirety (treating the Company and each Subsidiary or of a Subsidiary
(including by merger)) of the Company as a single consolidated entity and
treating any sale by a Subsidiary or of a Subsidiary (including by merger) as a
sale by the Company for such purpose) to any corporation, where the corporation
formed by such consolidation or into which the Company is merged or the
corporation which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety (treating the
Company and each Subsidiary of the Company as a single consolidated entity and
treating any sale by a Subsidiary or of a Subsidiary (including by merger) as a
sale by the Company for such purpose), shall be organized and existing under the
laws of the United States of America or a state thereof or the District of
Columbia, and such corporation shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of and any premium
and interest on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
(b) the Trustee shall have received an Opinion of Counsel to the
effect that the transaction will not result in the successor being required to
make any deduction or withholding on account of any present or future tax, duty,
levy, impost, assessment or other governmental charge imposed or levied by or on
behalf of the Government of the United States, any state thereof or the District
of Columbia, or by any authority or agency therein or thereof having power to
tax from any payments in respect of the Securities, which deduction or
withholding is greater than any deduction or withholding to which the Company
was subject prior to the transaction;
(c) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company, or any Subsidiary,
as a result of such transaction as having been incurred by the Company, or such
Subsidiary, at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing; and
(d) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
8.2 SUCCESSOR SUBSTITUTED
Upon any consolidation of the Company with, or merger of the Company into,
any other corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
8.1, the successor corporation formed by such
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consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor corporation had been named as the Company
herein, and thereafter the predecessor corporation shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE 9
SUPPLEMENTAL INDENTURES
9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(a) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(b) to add to the covenants of the Company or to surrender any right
or power herein conferred upon the Company for the benefit of the Holders of all
or any series of Securities (and if such covenants or the surrender of such
right or power are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the benefit
of such series); or
(c) to add any additional Events of Default with respect to the
Securities of any or all series (and if such additional Events of Default are to
be for the benefit of less than all series of Securities, stating that such
additional Events of Default are expressly being included solely for the benefit
of one or more specified series); or
(d) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Securities
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons, or to permit or facilitate the issuance of Securities
in uncertificated form; or
(e) to add, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities, PROVIDED THAT any such
addition, change or elimination (i) shall neither (A) apply to any Security of
any series created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Security with respect to such provision or (ii) shall become
effective only when there is no such Security Outstanding of such series; or
(f) to secure the Securities; or
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(g) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or
(h) to evidence and provide for the acceptance of appointment
hereunder by another corporation as a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 6.11(b); or
(i) to comply with the requirements of the Commission in connection
with the qualification of this Indenture under the TRUST INDENTURE ACT; or
(j) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture, PROVIDED THAT such action pursuant to this clause 9.1(j) shall not
adversely affect the interests of the Holders of Outstanding Securities of any
series.
9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture or indentures, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of each such series under this Indenture; PROVIDED,
HOWEVER, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(a) change the Maturity or the Stated Maturity of the principal of, or
any instalment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2, or
change the method of computing the amount of principal thereof or interest
thereon on any date, or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is payable,
or impair the right to institute suit for the enforcement of any such payment on
or after the Maturity or the Stated Maturity, as the case may be, thereof (or,
in the case of redemption, on or after the Redemption Date); or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences, provided for in this Indenture; or
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(c) modify any of the provisions of this Section, Section 5.13 or
Section 5.16, except to increase any such percentage, or to designate, in any
supplemental indenture, additional provisions of this Indenture which, with
respect to such series, cannot be modified or waived without the consent of the
Holder of each Outstanding Security affected thereby; PROVIDED, HOWEVER, that
this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes in
this Section and Section 5.16, or the deletion of this proviso, in accordance
with the requirements of Sections 6.11(b) and 9.1(h); or
(d) modify the provisions of Article 14 hereof relating to conversion
of Securities of a series in a manner adverse to the Holders of Securities of
such series; or
(e) [IF APPLICABLE, INSERT -- modify the provisions of Article 15
hereof as it relates to Outstanding Securities of a series in a manner adverse
to the Holders of Securities of such series;]
A supplemental indenture which changes or eliminates any covenants or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
9.3 EXECUTION OF SUPPLEMENTAL INDENTURES
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustees's own rights, duties or immunities under this Indenture or otherwise.
9.4 EFFECT OF SUPPLEMENTAL INDENTURES
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby to the extent provided therein.
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9.5 CONFORMITY WITH APPLICABLE LEGISLATION
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of Applicable Legislation.
9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Company and the Trustee, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE 10
COVENANTS
10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of such series in accordance with the terms of
the Securities and this Indenture and will duly comply with all the other terms,
agreements and conditions contained in, or made in this Indenture for the
benefit of, the Securities of such series.
10.2 MAINTENANCE OF OFFICE OR AGENCY
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of such series may be presented
or surrendered for payment, where Securities of such series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of such series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, Attention: Corporate Trust Department, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; PROVIDED, HOWEVER, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain
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an office or agency in each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of, or any premium or interest on, any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and the Company will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of, or any premium
or interest on, any Securities of such series, deposit with any such Paying
Agent a sum sufficient to pay such principal, premium (if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium (if any) or interest thereon and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities,
other than the Trustee, to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will: (a) hold all sums held by it for
the payment of the principal of (and premium, if any) or interest on Securities
in trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided; (b) give
the Trustee notice of any default by the Company (or any other obligor upon the
Securities) in the making of any payment of principal (and premium, if any) or
interest on the Securities of such series; and (c) at any time during the
continuance of any such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent for
payment in respect of such series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture with respect to any series of Securities or for
any other purpose, pay, or the Company may by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by the Company or such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, or any premium or
interest on, any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and payable shall be
paid to the Company on Company Request (including interest income accrued on
such funds, if any), or (if then held by the Company) shall be discharged from
such trust; and the
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Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once in the WALL STREET
JOURNAL or other daily newspaper of national circulation in the United States or
mail to each Holder of the Securities for which the money to be repaid is held
in trust, as their names and addresses appear in the Security Register, a notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication or
mailing, any unclaimed balance of such money then remaining will be repaid to
the Company.
The Company initially authorizes the Trustee to act as Paying Agent for the
Securities on its behalf. The Company may at any time and from time to time
authorize one or more Persons to act as Paying Agent in addition to or in place
of the Trustee with respect to any series of Securities issued under this
Indenture.
10.4 STATEMENT BY OFFICERS AS TO DEFAULT
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company, is in default in the performance and observance of any of the
terms, provisions and conditions of this Indenture (without regard to any period
of grace or requirement of notice provided hereunder) and, if the Company shall
so be in default, specifying all such defaults and the nature and status thereof
of which they may have knowledge. Such statement need not include reference to
any default which has been fully cured prior to the date as of which such
statement speaks.
10.5 EXISTENCE
Subject to Article 8, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence,
rights (charter and statutory) and franchises; PROVIDED, HOWEVER, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.
10.6 MAINTENANCE OF PROPERTIES
The Company will cause all material properties used or useful in the
conduct of its business or the business of any Subsidiary 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 (and to the extent)
in the judgment of the Company may be necessary or appropriate in connection
with its business; PROVIDED, HOWEVER, that nothing in this Section shall prevent
the Company from
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discontinuing the operation or maintenance of any 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.
10.7 PAYMENT OF TAXES AND OTHER CLAIMS
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (b)
all lawful claims for labour, materials and supplies which, if unpaid, might by
law become a material lien upon the property of the Company or any Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
[IF, PURSUANT TO A BOARD RESOLUTION, THE SECURITIES ARE DESIGNATED AS
SENIOR SUBORDINATED INDEBTEDNESS, THE FOLLOWING COVENANT SHOULD BE INSERTED.]
10.8 LIMITATION ON SUBORDINATED INDEBTEDNESS
The Company shall not issue, assume, guarantee, incur or otherwise become
liable, directly or indirectly, for any indebtedness which is subordinate or
junior in right of payment to any Senior Indebtedness unless such indebtedness
constitutes Securities or is PARI PASSU or expressly subordinated in right of
payment to any Securities.
ARTICLE 11
REDEMPTION OF SECURITIES
11.1 APPLICABILITY OF ARTICLE
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 3.1 for Securities of any series) in
accordance with this Article.
11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or in another manner specified as contemplated by Section 3.1
for such Securities. In case of any redemption at the election of the Company of
less than all the Securities of any series of the same tenor, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed and, if applicable, of the tenor of the Securities to be redeemed,
which notice shall be irrevocable. In the
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case of any redemption of Securities prior to the expiration of any restriction
on such redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED
If less than all the Securities of any series are to be redeemed (unless
all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. Unless
otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series.
If any convertible or exchangeable Security selected for partial redemption
is converted in part before the termination of the conversion or exchange right
with respect to the portion of the Security so selected, the converted or
exchanged portion of such Security shall be deemed (so far as may be) to be the
portion selected for redemption.
Upon any redemption of fewer than all of the Securities of any given
series, the Company and the Trustee may treat as Outstanding any Securities
surrendered for conversion or exchange during the period of 15 days next
preceding the mailing of a notice of redemption, and need not treat as
Outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part to the portion of
the principal amount of such Securities which has been or is to be redeemed.
11.4 NOTICE OF REDEMPTION
Notice of redemption shall be given by first-class mail, postage prepared,
mailed not less than 30 nor more than 60 days prior to the Redemption Date,
unless a shorter period is specified in
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the Securities to be redeemed, to each Holder of Securities to be redeemed, at
his address appearing in the Security Register.
Any notice that is mailed to the Holder of any Securities in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not such Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(c) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption of any
Securities, the principal amounts) of the particular Securities to be redeemed;
(d) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the Holder of such Security will receive,
without charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(e) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date;
(f) in the case of any Securities that are convertible pursuant to
Article 14, the Conversion Price, the date on which the right to convert the
principal of the Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion;
(g) the place or places where such Securities are to be surrendered
for payment of the Redemption Price; and
(h) that the redemption is for a sinking or purchase fund or other
analogous obligation, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
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11.5 DEPOSIT OF REDEMPTION PRICE
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money in same day funds (or New York Clearing House funds if such deposit is
made prior to the applicable Redemption Date) sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
11.6 SECURITIES PAYABLE ON REDEMPTION DATE
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant record dates according to their terms and the
provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security and each Security shall remain convertible into Common Shares until the
principal of such Security shall have been paid or fully provided for.
11.7 SECURITIES REDEEMED IN PART
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
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ARTICLE 12
SINKING FUNDS
12.1 APPLICABILITY OF ARTICLE
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 12.2. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.
12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES
The Company (a) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (b) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to the Securities of such series required to be made pursuant to the terms of
such Securities as provided for by the terms of such Series; PROVIDED THAT such
Securities have not been previously so credited. Such Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be reduced accordingly.
12.3 REDEMPTION OF SECURITIES FOR SINKING FUND
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering the crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
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ARTICLE 13
COVENANT DEFEASANCE
13.1 COMPANY'S OPTION TO EFFECT COVENANT DEFEASANCE
The Company may elect, at its option by Board Resolution, at any time, to
have Section 13.2 applied to the Outstanding Securities of any series designated
pursuant to Section 3.1 as being defeasible pursuant to this Article 13
(hereinafter called a "Defeasible Series"), upon compliance with the conditions
set forth below in this Article 13.
13.2 COVENANT DEFEASANCE
Upon the exercise by the Company of the option provided in Section 13.1 to
have this Section 13.2 applied to the Outstanding Securities of any Defeasible
Series, (a) the Company shall be released from its obligations under Sections
10.5 through 10.8, inclusive, and under any other covenant to which the Company
is subject with respect to such series of Securities by virtue of Section 3.1(t)
and Article 8 and (b) the occurrence of any event specified in Sections 5.1(d)
(with respect to any of Section 10.5 through 10.8 inclusive and any other
covenant to which the Company is subject with respect to such series of
Securities by virtue of Section 3.1(t) and Article 8), 5.1(e) and 5.1(h) shall
be deemed not to be or result in an Event of Default, in each case with respect
to the Outstanding Securities of such series as provided in this Section on and
after the date the conditions set forth in Section 13.3 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section (to the extent so specified in the case of Section 5.1(d)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Securities of such series shall be unaffected thereby. [IF APPLICABLE,
INSERT --; provided, however, that notwithstanding the provisions of Article
15, in the event that the Company deposits money or government obligations in
compliance with this Article 13, the money or government obligations so
deposited will not be subject to the subordination provisions of Article 15 and
the indebtedness evidenced by such Outstanding Securities of any Defeasible
Series will not be subordinated in right of payment to the holders of applicable
Senior Indebtedness to the extent of the money or government obligations so
deposited.]
13.3 CONDITIONS TO COVENANT DEFEASANCE
The following shall be the conditions to application of Section 13.2 to the
Outstanding Securities of any Defeasible Series:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies the requirements
contemplated by Section 6.9 and agrees to comply with the provisions of this
Article 13 applicable to it) and conveyed all right, title and interest to the
Trustee for the benefit of the Holders of the Securities of such series, under
the terms
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of an irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust for the purpose of making the following
payments, specifically pledged to the Trustee as security for, and dedicated
solely to, the benefit of the Holders of Outstanding Securities of such series,
(i) an amount in the currency in which the Securities of such series are
denominated and in which payments of principal, premium (if any) and interest
are to be made, or (ii) the equivalent in Government Obligations denominated in
the currency in which the Securities of such series are denominated and in which
payments of principal, premium (if any), or interest are to be made, issued by
the government that issued such currency, through the scheduled payment of
principal and interest in respect thereof in accordance with their terms, not
later than one day before the due date of any payment, money in an amount, or
(iii) a combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants or chartered
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, without consideration of the reinvestment of such
interest and after payment of all federal, state, provincial and local taxes or
other charges and assessments in respect thereof payable by the Trustee and
which shall be applied by the Trustee (or any such other qualifying trustee) to
pay and discharge each instalment of principal (including mandatory sinking fund
payments) of, and premium (not relating to optional redemption), if any, and
interest on, the Outstanding Securities of such series on the dates such
installments of principal of, and premium (not relating to optional redemption),
if any, or interest are due up to the Stated Maturity Date, or the Redemption
Date, as the case may be (PROVIDED THAT in the case of redemption, before such
deposit, the Company must give to the Trustee, in accordance with Section 11.2
hereof, a notice of its election to redeem the Outstanding Securities at a
future date in accordance with Article 11 hereof, which notice shall be
irrevocable).
(b) In the case of an election under Section 13.2 with respect to any
series of Securities required to be registered under the SECURITIES ACT, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities of such series will not recognize
income, gain or loss for United States Federal income tax purposes as a result
of the deposit and Covenant Defeasance to be effected with respect to the
Securities of such series and will be subject to United States Federal income
tax on the same amount, in the same manner and at the same times as would be the
case if such deposit and Covenant Defeasance were not to occur.
(c) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities of such series, if then listed on
any securities exchange, will not be delisted as a result of such deposit.
(d) No Event of Default or event that (after notice of lapse of time
or both) would become an Event of Default shall have occurred and be continuing
at the time of such deposit or, with regard to any Event of Default or any such
event specified in Sections 5.1(f) and 5.1(g), at any time on or prior to the
123rd day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 123rd day).
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(e) Such Covenant Defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of Applicable Legislation (assuming, in
the case of the TRUST INDENTURE ACT, that all Securities are in default within
the meaning of such Act).
(f) Such Covenant Defeasance shall not result in a breach or violation
of, or constitute a default under, any other agreement or instrument to which
the Company is a party or by which it is bound.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Covenant Defeasance have been complied with.
(h) With respect to any series of Securities required to be registered
under the SECURITIES ACT, such Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the meaning
of the United States INVESTMENT COMPANY ACT of 1940, as amended, unless such
trust shall be qualified under such Act or exempt from regulation thereunder.
13.4 DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER
MISCELLANEOUS PROVISIONS
Subject to the provisions of the last paragraph of Section 10.3, all money
and Government Obligations (including the proceeds thereof) deposited with the
Trustee or other qualifying trustee (solely for purposes of this Section and
Section 13.5, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 13.3 in respect of the
Securities of any Defeasible Series shall be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities of such series and
this Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and to
become due thereon in respect of principal and any premium and interest, but
money so held in trust need not be segregated from other funds except to the
extent required by law [IF APPLICABLE, INSERT -- and shall not be subject to the
claims of the holders of Senior Indebtedness.]
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 13.3 or the principal and interest received in respect
thereof other than any such tax, fee or other charge that by law is for the
account of the Holders of Outstanding Securities.
Notwithstanding anything in this Article 13 to the contrary, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations held by it as provided in Section 13.3 with
respect to Securities of any Defeasible Series that, in the opinion of a
nationally recognized firm of independent public accountants or chartered
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount
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thereof that would then be required to be deposited to effect an equivalent
Covenant Defeasance with respect to the Securities of such series.
13.5 REINSTATEMENT
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article 13 with respect to the Securities of any series by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 13 with respect to Securities of such series and monies so
deposited shall be returned to the Company.
ARTICLE 14
CONVERSION OF SECURITIES
14.1 CONVERSION PRIVILEGE AND CONVERSION PRICE
The conversion of Securities of any series into Common Shares of the
Company shall be in accordance with the terms of such Securities and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series)
in accordance with this Article.
Subject to and upon compliance with the provisions of this Article, at the
option of the Holder thereof, any Security or any portion of the principal
amount thereof which is U.S. $1,000 or an integral multiple of U.S. $1,000
(unless otherwise specified in a Board Resolution or supplemental indenture with
respect to the Securities of the relevant series), may be converted at the
principal amount thereof, or of such portion thereof, into fully paid and non-
assessable Common Shares (calculated as to each conversion to the nearest 1/100
of a share) of the Company, at the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall
expire at the close of business on the date specified for Securities of such
series. In case a Security or portion thereof is called for redemption, such
conversion right in respect of the Security or portion so called shall expire at
the close of business on the Redemption Date, unless the Company defaults in
making the payment due upon redemption.
The price at which Common Shares shall be delivered upon conversion (the
"Conversion Price") shall initially be the price per Common Share at which the
Securities of the relevant series are convertible as set forth in any Board
Resolution with respect to such series (or any supplemental indenture with
respect thereto). The Conversion Price shall be adjusted in certain instances as
provided in Section 14.4.
14.2 EXERCISE OF CONVERSION PRIVILEGE
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security, duly endorsed or assigned to the
Company or in blank, at any office or agency of the Company maintained for that
purpose pursuant to Section 10.2, accompanied by
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written notice to the Company (which shall be substantially in the form set
forth in Section 2.3) at such office or agency or, if applicable, by notice in
accordance with the procedures of the Depositary, that the Holder elects to
convert such Security or, if less than the entire principal amount thereof is to
be converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within such
period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Securities being
surrendered for conversion; PROVIDED, HOWEVER, that a Security surrendered for
conversion on an Interest Payment Date need not be accompanied by a payment and
interest on the principal amount of the Securities being converted will be paid
on such Interest Payment Date to the Holder of such Security on the immediately
preceding Record Date. Except as provided in the Securities and subject to the
last paragraph of Section 3.7, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities surrendered for
conversion or on account of any dividends on the Common Shares issued upon
conversion.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Shares issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Shares at such
time. As promptly as practicable on or after the date of conversion, the Company
shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full Common Shares issuable upon conversion,
together with payment in lieu of any fraction of a share, as provided in Section
14.3.
All Securities converted in accordance with the provisions of this Article
14 are, and shall be deemed to have been, transferred to or for the account of
the Company.
In the case of any Security which is converted in part only, upon such
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
14.3 FRACTIONS OF SHARES
No fractional Common Shares or other such securities shall be issued upon
conversion of Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional Common Share which would otherwise be
issuable upon conversion of any Security or Securities (or specified portions
thereof), the Company shall pay a
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cash adjustment in respect of such fraction in an amount equal to the same
fraction of the closing price per Common Share at the close of business on the
day prior to the day of conversion on the American Stock Exchange or, if the
Common Shares are not listed or admitted to trading on such exchange, on the
principal (as determined by the Company's Board of Directors) U.S. national
securities exchange on which the Common Shares are listed or admitted to trading
or, if not listed or admitted to trading on any U.S. national securities
exchange, on the National Association of Securities Dealers Automated Quotations
National Market System or, if the Common Shares are not listed or admitted to
trading on any U.S. national securities exchange or quoted on such National
Market System, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for that purpose.
14.4 ADJUSTMENT OF CONVERSION PRICE
The Conversion Price with respect to any Security which is convertible into
for Common Shares shall be subject to adjustment from time to time as follows:
(a) If the Company shall pay or make a dividend or other distribution
on any class of equity capital of the Company which is payable in Common Shares,
the Conversion Price in effect at the opening of business on the day following
the date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction of which (i) the numerator shall be the number of Common
Shares outstanding at the close of business on the date fixed for such
determination and (ii) the denominator shall be the sum of such number of shares
referred to in the preceding clause and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date fixed
for such determination.
(b) If the Company shall issue rights or warrants to all holders of
its Common Shares entitling them to subscribe for or purchase Common Shares at a
price per share less than the current market price per Common Share (determined
as provided in paragraph 14.4(h)) on the date fixed for the determination of
shareholders entitled to receive such rights or warrants, the Conversion Price
in effect at the opening of business on the day following the date fixed for
such determination shall be reduced by multiplying such Conversion Price by a
fraction of which (i) the numerator shall be the number of Common Shares
outstanding at the close of business on the date fixed for such determination
plus the number of Common Shares which the aggregate of the offering price of
the total number of Common Shares so offered for subscription or purchase would
purchase at such current market price and (ii) the denominator shall be the
number of Common Shares outstanding at the close of business on the date fixed
for such determination plus the number of Common Shares so offered for
subscription or purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed for such
determination.
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(c) If outstanding Common Shares shall be subdivided into a greater
number of Common Shares, the Conversion Price in effect at the opening of
business on the day following the day upon which subdivision becomes effective
shall be proportionately reduced, and, conversely, in case outstanding Common
Shares shall be consolidated into a smaller number of Common Shares, the
Conversion Price in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effectively
immediately after the opening of business on the day following the day upon
which such subdivision or consolidation becomes effective.
(d) If the Company shall, by dividend or otherwise, at any time
distribute (other than periodic dividends declared or paid in accordance with
the Company's practice as established from time to time) to all holders of its
Common Shares cash (excluding any cash that is distributed as part of a
distribution referred to in paragraph 14.4(f)) in an aggregate amount that,
together with (i) the aggregate amount of any other distribution (other than
periodic dividends declared or paid in accordance with the Company's practice as
established from time to time) to all holders of its Common Shares made
exclusively in cash within the 12 months preceding the date of payment of such
distribution and in respect of which no Conversion Price adjustment pursuant to
this paragraph 14.4(d) has been made and (ii) the aggregate of any cash plus the
fair market value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive and described in a Board Resolution) of
consideration payable in respect of any tender offer or other offer to purchase
by the Company or any Subsidiary for all or any portion of the Company's Common
Shares concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no Conversion Price adjustment pursuant to
paragraph 14.4(e) has been made, exceeds [______]% of the Company's Aggregate
Market Capitalization (determined as provided in paragraph 14.4(i)), the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the effectiveness of the Conversion Price reduction contemplated by this
paragraph 14.4(d) by a fraction of which (i) the numerator shall be the current
market price per Common Share (determined as provided in paragraph 14.4(h)) on
such date less the amount of cash so distributed applicable to one Common Share
and (ii) the denominator shall be such current market price per Common Share,
such reduction to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such cash dividend; PROVIDED, HOWEVER, that no adjustment
shall be made with respect to any distribution of rights to purchase securities
of the Company if a Holder of Securities would otherwise be entitled to receive
such rights upon conversion or exchange at any time of such Securities into
Common Shares or other such securities unless such rights are subsequently
redeemed by the Company, in which case such redemption shall be treated for
purposes of this Section as a dividend on the Common Shares or other such
securities. Such adjustment shall become effective retroactively immediately
after the record date for the determination of shareholders or holders of other
such securities entitled to receive such distribution; and in the event that
such distribution is not so made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such record date had
not been fixed.
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(e) If an issuer bid, tender offer or other offer to purchase made by
the Company or any Subsidiary for all or any portion of the Common Shares of the
Company shall be consummated and such issuer bid, tender offer or other offer to
purchase shall involve an aggregate consideration having a fair market value (as
determined by the Board of Directors of the Company, whose determination shall
be conclusive and described in a Board Resolution) on the last time (the
"Expiration Time") tenders may be made pursuant to such bid or offer (as it may
be amended) or Common Shares may be deposited pursuant to such other offer to
purchase that, together with (i) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors of the Company, whose
determination shall be conclusive and described in a Board Resolution), as of
the Expiration Time, of consideration payable in respect of any issuer bid,
tender offer or other offer to purchase by the Company or any Subsidiary for all
or any portion of the Common Shares of the Company consummated within the 12
months preceding the Expiration Time and in respect of which no Conversion Price
adjustment pursuant to paragraph 14.4(d) or this paragraph 14.4(e) has been made
and (ii) the aggregate amount of any distributions (other than periodic
dividends declared or paid in accordance with the Company's practice as
established from time to time) to all holders of the Common Shares of the
Company made exclusively in cash within the 12 months preceding the Expiration
Time and in respect of which no Conversion Price adjustment pursuant to
paragraph 14.4(d) or this paragraph 14.4(e) has been made, exceeds [_____]% of
the product of the current market price per Common Share (determined as provided
in paragraph 14.4(h)) on the Expiration Time times the number of Common Shares
outstanding (including any tendered or deposited shares) on the Expiration Time,
the Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the Expiration Time by a fraction of which the numerator shall be (i) the
product of the current market price per Common Share (determined as provided in
paragraph 14.4(h)) on the Expiration Time times the number of Common Shares
outstanding (including any tendered or deposited shares) on the Expiration Time
minus (ii) the fair market value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender offer or other offer to purchase) of all
shares validly tendered or deposited and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and the denominator shall be the product of (i) such current
market price per share on the Expiration Time times (ii) such number of
outstanding shares on the Expiration Time minus the number of Purchased Shares,
such reduction to become effective immediately prior to the opening of business
on the day following the Expiration Time.
(f) If the Company shall, by dividend or otherwise, distribute to all
holders of its Common Shares evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in paragraph
14.4(b), any cash dividends referred to in paragraph 14.4(d) and any dividends
or distributions referred to in paragraph 14.4(a)), the Conversion Price shall
be adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on the
date fixed for the determination of shareholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per Common Share (determined as provided in paragraph 14.4(h)) on the date
fixed for such determination less the then fair market value (as determined by
the Board of Directors of the Company, whose determination shall be conclusive
and described in a Board Resolution) of
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the portion of the assets or evidences of indebtedness so distributed applicable
to one Common Share and the denominator shall be such current market price per
Common Share, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution. For the purposes of this
paragraph 14.4(f), the distribution of a security which is distributed not only
to the holders of the Common Shares on the date fixed for the distribution of
such security, but also is distributed with each Common Share delivered to a
Holder exercising the conversion privilege subsequent to such distribution date,
shall not require an adjustment of the Conversion Price pursuant to this
paragraph 14.4(f); PROVIDED THAT on the date, if any, on which a Holder
exercising the conversion or exchange privilege would no longer be entitled to
receive such security with a Common Share (other than as a result of the
termination of all such securities), a distribution of such securities shall be
deemed to have occurred and the Conversion Price shall be adjusted as provided
in this paragraph 14.4(f) (and such day shall be deemed to be "the date fixed
for the determination of the shareholders entitled to receive such distribution"
and "the date fixed for such determination" within the meaning of the
immediately preceding sentence).
(g) The reclassification of Common Shares into securities including
securities other than Common Shares (other than any reclassification upon a
consolidation or merger to which Section 14.11 applies) shall be deemed to
involve (i) a distribution of such securities other than Common Shares to all
holders of Common Shares (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of shareholders entitled
to receive such distribution" and "the date fixed for such determination" within
the meaning of paragraph 14.4(f)), and (ii) a subdivision or consolidation, as
the case may be, of the number of Common Shares outstanding immediately prior to
such reclassification into the number of Common Shares outstanding immediately
thereafter (and the effective date of such reclassification shall be deemed to
be "the day upon which such subdivision becomes effective" or "the day upon
which such combination becomes effective," as the case may be, and "the day upon
which such subdivision or combination becomes effective" within the meaning of
paragraph 14.4(c)).
(h) For the purpose of any computation under paragraphs 14.4(b),
14.4(d), 14.4(e) and 14.4(f), the current market price per Common Share on any
date shall be deemed to be the average of the daily closing prices for the 20
trading days before, and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The closing price for each day shall be
the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the American Stock Exchange or, if the
Common Shares are not listed or admitted to trading on such exchange, on the
principal (as determined by the Company's Board of Directors) U.S. national
securities exchange on which the Common Shares are listed or admitted to trading
or, if not listed or admitted to trading on any U.S. national securities
exchange, on the National Association of Securities Dealers Automated Quotations
National Market System or, if the Common Shares are not listed or admitted to
trading on any U.S. national securities exchange or quoted on such National
Market System, the average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for that purpose. For
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purposes of this paragraph, the term "ex date," when used with respect to any
issuance or distribution, means the first date on which the Common Shares trade
regular way on such exchange or in such market without the right to receive such
issuance or distribution.
(i) For purposes of any computation under paragraph 14.4(d), the
Aggregate Market Capitalization shall be deemed to be the product of (i) the
current market price (as determined in paragraph 14.4(h) above) on the most
recent date practically obtainable prior to the record date for determining the
shareholders entitled to the distribution and (ii) the number of Common Shares
outstanding on such date.
(j) The Company may make such reductions in the Conversion Price, in
addition to those required by paragraphs 14.4(a) through 14.4(g), as it
considers to be advisable in order that any event treated for United States
federal income tax purposes as a dividend of stock or stock rights shall not be
taxable to the recipients. The Company shall have the power to resolve any
ambiguity or correct any error in this paragraph 14.4(j) and its actions in so
doing shall be final and conclusive.
(k) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least one percent in
such price; PROVIDED, HOWEVER, that any adjustments which by reason of this
paragraph 14.4(k) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
shall be made to the nearest cent or to the nearest one-hundredth of a share, as
the case may be.
(l) For the purpose of this Section, each Holder of Securities shall
be deemed to have failed to exercise any right to elect the kind or amount of
securities receivable upon the payment of any such dividend, subdivision,
consolidation or reclassification (PROVIDED THAT if the kind or amount of
securities receivable upon such dividend, subdivision, consolidation or
reclassification is not the same for each non-electing share, then the kind and
amount of securities or other property receivable upon such dividend,
subdivision, combination or reclassification for each non-electing share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the non-electing shares).
14.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 14.4 and shall prepare a certificate signed by a
responsible officer of the Company setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed at the Corporate Trust Office of
the Trustee and at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2; and
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(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be required, and as
soon as practicable after it is required, such notice shall be mailed by the
Company to all holders at their last addresses as they shall appear in the
Security Register.
14.6 NOTICE OF CERTAIN CORPORATION ACTION
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Shares; or
(b) the Company shall authorize the granting to the holders of its
Common Shares of rights or warrants to subscribe for or purchase any shares of
equity capital of any class or of any other rights; or
(c) of any reclassification of the Common Shares of the Company (other
than a subdivision or consolidation of its outstanding Common Shares), or of any
consolidation or merger to which the Company is a party and for which approval
of any shareholders of the Company is required, or of the sale or transfer of
all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then the Company shall cause to be filed at the Corporate Trust Office of the
Trustee and at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 10.2, and shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Security Register, at least
20 days (or 10 days in any case specified in clause (a) or (b) above) prior to
the applicable record, effective or expiration date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Shares of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined, (ii) the date on which such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Shares
of record shall be entitled to exchange their Common Shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up, or (iii) the date on
which such tender offer or other offer to purchase commenced, the date on which
such tender offer or other offer to purchase is scheduled to expire unless
extended, the consideration offered and the other material terms thereof (or the
material terms of any amendment thereto). Neither the failure to give any such
notice nor any defect therein shall affect the legality or validity of any
action described in clauses (a) through (e) of this Section 14.6.
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14.7 COMPANY TO RESERVE COMMON SHARES
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Shares, for the
purpose of effecting the conversion of Securities, such number of its duly
authorized Common Shares then issuable upon the conversion of all Outstanding
Securities; PROVIDED THAT this Section shall not require the Company to make any
reservation of authorized but unissued Common Shares for so long as the
Company's authorized share capital includes an unlimited number of Common
Shares.
14.8 TAXES ON CONVERSION
The Company will pay any and all taxes that may be payable in respect of
the issue or delivery of Common Shares on conversion of Securities pursuant
hereto. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of Common
Shares in a name other than that of the Holder of the Security or Securities to
be converted, and no such issue or delivery shall be made unless and until the
Person requesting such issue has paid to the Company the amount of any such tax,
or has established to the satisfaction of the Company that such tax has been
paid.
14.9 COVENANT AS TO COMMON SHARES
The Company covenants that all Common Shares which may be issued upon
conversion of Securities will upon issue be fully paid and non- assessable and,
except as provided in Section 14.8, the Company will pay all taxes, liens and
charges with respect to the issue thereof.
14.10 CANCELLATION OF CONVERTED SECURITIES
All Securities surrendered for conversion pursuant to Section 14.2 shall be
delivered to the Company and shall be cancelled concurrently with such
conversion.
14.11 PROVISIONS IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS
In case of any consolidation of the Company with, or merger of the Company
into, any other corporation (other than a wholly-owned Subsidiary of the
Company), any merger of another corporation (other than a wholly- owned
Subsidiary of the Company) into the Company (other than a merger which does not
result in any reclassification, conversion, exchange or cancellation of
outstanding Common Shares of the Company) or any sale or transfer of all or
substantially all of the assets of the Company to any other corporation (other
than a wholly-owned Subsidiary of the Company) (treating the Company and each of
its Subsidiaries as a single consolidated entity and treating any sale by a
Subsidiary as a sale by the Company for such purpose), the corporation formed by
such consolidation or resulting from such merger or which acquires such assets,
as the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right thereafter, during the period such Security shall be convertible as
specified in Section 14.1, to convert such Security only into the kind and
amount
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of securities, cash and other property receivable upon such consolidation,
merger, sale or transfer by a holder of the number of Common Shares of the
Company into which such Security might have been converted immediately prior to
such consolidation, merger, sale or transfer, assuming such holder of Common
Shares of the Company (i) is not a Person with which the Company consolidated or
into which the Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be ("constituent Person"), or an
Affiliate of a constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer (PROVIDED
THAT if the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer is not the same for each
Common Share of the Company held immediately prior to such consolidation,
merger, sale or transfer by others than a constituent Person or an Affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this Section the kind
and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article. The Trustee shall not be under any
responsibility to determine the correctness of any provision contained in such
supplemental indenture relating to either the kind or amount of shares, other
securities, cash or property receivable by Holders upon the conversion of their
Securities after any such consolidation, merger, sale or transfer. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
14.12 RESPONSIBILITY OF TRUSTEE AND CONVERSION AGENT
Neither the Trustee nor any agent appointed to effect conversions shall at
any time be under any duty or responsibility to any Holder of Securities to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or herein or in any
supplemental indenture provided to be employed, in making the same. Neither the
Trustee nor any such conversion agent shall be accountable with respect to the
validity or value (or the kind or amount) of any Common Shares or of any
securities or property which may at any time be issued or delivered upon the
conversion of any Security; and neither the Trustee nor any such conversion
agent makes any representation with respect thereto. Neither the Trustee nor any
such conversion agent shall be responsible for any failure of the Company to
issue, transfer or deliver any Common Shares or stock certificates or other
securities or property or to make any cash payment upon the delivery of any
Security for the purpose of conversion or to comply with any of the covenants
contained in this Article.
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ARTICLE 15
SUBORDINATION
[THIS ARTICLE SHALL BE RESERVED, UNLESS PURSUANT TO A BOARD RESOLUTION WITH
RESPECT TO THE SECURITIES OF ANY SERIES, THE SECURITIES OF SUCH SERIES ARE
DESIGNATED AS SENIOR SUBORDINATED INDEBTEDNESS OR SUBORDINATED INDEBTEDNESS, IN
WHICH CASE THE FOLLOWING PROVISIONS SHOULD BE INSERTED].
15.1 SECURITIES SUBORDINATE TO SENIOR INDEBTEDNESS
The Company covenants and agrees, and each Holder of Securities of each
series, by his acceptance thereof, likewise covenants and agrees, that the
indebtedness represented by the Securities of such series, including the
principal of (and premium, if any) and interest thereon, shall be subordinate
and subject in right of payment, to the extent and in the manner hereinafter set
forth, to the prior payment in full of all Senior Indebtedness of the Company
with respect thereto, whether outstanding on the date of original issuance of
Securities of such series or thereafter incurred; PROVIDED, HOWEVER, that each
series of Securities designated as Senior Indebtedness shall in all respects
rank PARI PASSU with all other series of Securities designated as Senior
Indebtedness; that each series of Securities designated as Senior Subordinated
Indebtedness shall in all respects rank PARI PASSU with all other series of
Securities designated as Senior Subordinated Indebtedness; and that each series
of Securities designated as Subordinated Indebtedness shall in all respects rank
PARI PASSU will all other series of Securities designated as Subordinated
Indebtedness.
15.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
In the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its assets, or (b) any
liquidation, dissolution or other winding up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshalling of the assets
and liabilities of the Company, then and in any such event specified in (a), (b)
or (c) above (each such event, if any, herein sometimes referred to as a
"Proceeding"), the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made in money or money's worth before
the Holders of the Securities are entitled to receive any payment or
distribution of assets of the Company, of any kind or character, whether in
cash, property or securities, on account of principal of (or premium, if any) or
interest on the Securities or on account of any purchase or other acquisition of
Securities by the Company or any Subsidiary of the Company (all such payments,
distributions, purchases and acquisitions by the Company herein referred to,
individually and collectively, as a "Securities Payment"), and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to
the payment thereof, any Securities Payment which may be payable or deliverable
in respect of the Securities in any such Proceeding.
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In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
Securities Payment before all Senior Indebtedness is paid in full or payment
thereof provided for, and if such fact shall, at or prior to the time of such
Securities Payment, have been made known to a Responsible Officer of the Trustee
or, as the case may be, such Holder, then and in such event such Securities
Payment shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company, for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares or other securities of the Company
provided for by a plan or reorganization or readjustment as reorganized or
readjusted, or securities of the Company or any other corporation which are
subordinated in right of payment to all then outstanding Senior Indebtedness to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance, transfer,
sale or lease of its properties and assets substantially as an entirety to
another corporation upon the terms and conditions set forth in Article 8 shall
not be deemed a Proceeding for the purposes of this Section if the corporation
formed by such consolidation or into which the Company is merged or the
corporation which acquires by conveyance, transfer, sale or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer, sale or lease,
comply with the conditions set forth in Article 8.
15.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF SECURITIES
In the event that any Securities are declared due and payable before their
Stated Maturity (an "Acceleration of Securities"), the holders of the Senior
Indebtedness outstanding at the time of such Acceleration of Securities shall be
entitled to receive payment in full of all amounts due or which become due as a
result of such Acceleration of Securities on or in respect of all such Senior
Indebtedness, or provision shall be made for such payment in money or money's
worth, before the Holders of the Securities are entitled to receive any
Securities Payment.
In the event that, notwithstanding the foregoing, the Company shall make
any Securities Payment to the Trustee or any Holder prohibited by the foregoing
provisions of this Section, and if such fact shall, at or prior to the time of
such Securities Payment, have been made known to a Responsible Officer of the
Trustee or such Holder, as the case may be, then and in such event such
Securities Payment shall be paid over and delivered forthwith to the Company,
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full, after giving effect
to any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
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The provisions of this Section shall not apply to any Securities Payment
with respect to which Section 15.2 would be applicable.
15.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on or other monetary
obligation with respect to any Senior Indebtedness beyond any applicable grace
period with respect thereto or, with respect to any series of Securities
designated as Subordinated Indebtedness, in the event that any event of default
with respect to any Senior Indebtedness shall have occurred and be continuing
permitting the holders of such Senior Indebtedness (or a trustee or other
representative on behalf of the holders thereof) to declare such Senior
Indebtedness due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and, if any such Senior
Indebtedness shall have been accelerated, such acceleration shall have been
rescinded or annulled, or (b) in the event any judicial proceeding shall be
pending with respect to any such default, then no Securities Payment shall be
made to the Trustee or any Holder in respect of the Securities.
(b) In addition and notwithstanding the foregoing, with respect to any
series of Securities designated as Senior Subordinated Indebtedness or
Subordinated Indebtedness, during the continuance of any event of default other
than the payment of principal of (or premium, if any) or interest on or other
monetary obligation with respect to any Senior Indebtedness, no payment may be
made by the Company upon or in respect of any series of Securities designated as
Senior Subordinated Indebtedness or Subordinated Indebtedness for a payment
blockage period ("Payment Blockage Period") commencing on the date the Company
shall have received a notice from a holder of Senior Indebtedness or a trustee
or other representative thereof and ending 179 days thereafter (unless such
event of default shall have been cured or waived or such Payment Blockage Period
shall have been terminated by written notice to the Company from such holder,
trustee or representative thereof). Notwithstanding anything to the contrary
herein, in no event shall any one Payment Blockage Period extend beyond 179
days. Notwithstanding anything to the contrary herein, Payment Blockage Periods
aggregating more than 179 days may not be commenced with respect to any series
of Securities designated as Senior Subordinated Indebtedness or Subordinated
Indebtedness during any period of 360 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company
shall make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such Securities Payment, have been made known to a Responsible Officer
of the Trustee or, as the case may be, such Holder then and in such event such
Securities Payment shall be paid over and delivered forthwith to the Company for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
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(d) The provisions of this Section 15.4 shall not apply to any
Securities Payment with respect to which Section 15.2 would be applicable.
15.5 PAYMENT PERMITTED IF NO DEFAULT
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company at any time except during the
pendency of any Proceeding referred to in Section 15.2 or under the conditions
described in Section 15.3 or 15.4, from making at any time Securities Payments,
or (b) the application by the Trustee of any money deposited with it hereunder
to Securities Payments or the retention of such Securities Payment by the
Holders, if, at the time of such application by the Trustee, it did not have
actual knowledge that such Securities Payment would have been prohibited by the
provisions of this Article.
15.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS
Subject to the payment in full of all Senior Indebtedness, the Holders of
the Securities shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holder of the
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, creditors other than holders of Senior Indebtedness
and the Holders of the Securities, be deemed to be a payment or distribution by
the Company to or on account of the Senior Indebtedness.
15.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS AND SUBJECT TO APPLICABLE
LAWS
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand and are subject to all
applicable laws, including, in the case of the bankruptcy or insolvency of the
Company, the potential application of Canadian legislation. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, the creditors of the Company, other
than holders of Senior Indebtedness and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest on the Securities as and
when the same shall become due and payable in accordance with their terms; or
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company, other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
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15.8 TRUSTEE TO EFFECTUATE SUBORDINATION
Each Holder of a Security, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
15.9 NO WAIVER OF SUBORDINATION PROVISIONS
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company,
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or the time of payment of, or renew or alter Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company or any other Person.
15.10 NOTICE TO TRUSTEE
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any trustee therefor or
representative thereof, and prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.1, shall be entitled in all
respects to assume that no such facts exist; PROVIDED, HOWEVER, that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of
the principal of (and premium, if any) or interest on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was
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received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to the date such amounts may be
payable.
Subject to the provisions of Section 6.1, the Trustee shall be entitled to
rely on the delivery to it of a written notice, and proof of ownership
acceptable to the Trustee, by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee therefor or representative thereof) to
establish that such notice has been given by a holder of Senior Indebtedness (or
a trustee therefor or representative thereof). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
15.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
good faith and absent gross negligence or willful misconduct, mistakenly pays
over or distributes to Holders of Securities or to the Company or to any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.
15.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS; PRESERVATION OF
TRUSTEE'S RIGHTS
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
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Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
15.14 ARTICLE APPLICABLE TO PAYING AGENTS
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; PROVIDED, HOWEVER, that
Sections 15.10 and 15.13 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
15.15 SUBSIDIARIES
No payment, distribution of assets or other action may be taken by any
Subsidiary of the Company with respect to the Securities if the Company would be
prohibited by this Article 15 from taking such action.
15.16 RESCISSION
The provisions of this Article 15 shall continue to be effective or be
reinstated, as the case may be, if at any time any payment in respect of any of
the Senior Indebtedness is rescinded or must otherwise be returned by the holder
thereof upon the insolvency, bankruptcy or reorganization of the Company or
otherwise, all as though such payment had not been made.
15.17 CERTAIN CONVERSIONS OR EXCHANGES DEEMED PAYMENT
For purposes of this Article only, (a) the issuance and delivery of junior
securities upon conversion or exchange of Securities in accordance with their
terms shall not be deemed to constitute a Securities Payment, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute a Securities Payment. For the purposes of this Section, the term
"junior securities" means (i) shares of any class of the Company and (ii) other
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness which may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the right
which is absolute and unconditional, of the Holder of any Security to convert or
exchange such Security in accordance with its terms.
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
STILLWATER MINING COMPANY
By:__________________________
Name:________________________
Title:_______________________
ATTEST:
______________, as Trustee
By:__________________________
Name:________________________
Title:_______________________
ATTEST:
By:__________________________
Name:________________________
Title:_______________________
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EXHIBIT 12.1
STILLWATER MINING COMPANY
STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(in thousands, except ratios)
<TABLE>
<CAPTION>
Year ended December 31
-----------------------------------------------------------------------------
1997 1996 1995 1994 1993
----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Income (Loss) before Income Taxes
Extraordinary Loss and Cumulative
Effect of Accounting Change $ (8,743) $ (4,515) $ 112 $ 2,794 $ 2,384
Capitalized Interest (1,535) (2,281) - (306) -
Amortization of Capitalized Interest 82 - - - -
----------- ----------- ------------ ------------ ------------
(10,196) (6,796) 112 2,488 2,384
----------- ----------- ------------ ------------ ------------
Fixed Charges
Interest 5,148 3,684 471 664 221
Amortization of Debt Expense 280 186 - - -
----------- ----------- ------------ ------------ ------------
Total Fixed Charges 5,428 3,870 471 664 221
----------- ----------- ------------ ------------ ------------
Earnings (Loss) Before Fixed Charges (4,768) (2,926) 583 3,152 2,605
=========== =========== ============ ============ ============
Ratio of Earnings to Fixed Charges (b) (a) 1.2 4.7 11.8
=========== =========== ============ ============ ============
</TABLE>
a) Earnings for the year ended December 31, 1996 were inadequate to cover fixed
charges by $6,796.
b) Earnings for the year ended December 31, 1997 were inadequate to cover fixed
charges by $10,196.
<PAGE>
EXHIBIT 23.1
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
February 28, 1998 appearing on page 31 of Stillwater Mining 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.
PRICE WATERHOUSE LLP
Denver, Colorado
July 1, 1998
<PAGE>
EXHIBIT 23.2
[LETTERHEAD OF BEHRE DOLBEAR & COMPANY, INC.]
June 26, 1998
Stillwater Mining Company
717 Seventeenth Street
Suite 1480
Denver, CO 80202
Ladies and Gentlemen:
We hereby authorize the reference to Behre Dolbear & Company, Inc. ("Behre
Dolbear") and the Mineral Inventory of Stillwater Mining Company as of January
1, 1998 prepared by Behre Dolbear, in the Registration Statement on Form S-3 of
Stillwater Mining Company, to be filed with the United States Securities and
Exchange Commission.
We also confirm that we have read the description of the Stillwater Mining
Company ore reserves as contained in the Registration Statement on Form S-3 and
have no reason to believe that there is any misrepresentation in the information
contained therein that is derived from our report or known to us as a result of
services we performed in connection with the preparation of such report.
Sincerely,
BEHRE DOLBEAR & COMPANY, INC.
/s/ BERNARD J. GUARNERA
Bernard J. Guarnera
President, Chief Executive Officer and
Chief Operating Officer
