Filed Pursuant to Rule 424(b)(2)
File No. 333-50902
No. 333-38367
P R O S P E C T U S S U P P L E M E N T
(TO PROSPECTUS DATED DECEMBER 19, 2000)
[LOGO]
$575,000,000
Ingersoll-Rand Company
6.25% Notes due 2006
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The notes will bear interest at the rate of 6.25% per year. We will pay
interest on the notes twice a year on May 15 and November 15, beginning
November 15, 2001. The notes will mature on May 15, 2006. We may redeem the
notes in whole or in part at any time at the redemption price set forth on page
S-3.
Your right to payment under the notes will be equal to the rights of holders
of our other unsecured and unsubordinated debt, whether current or future. We do
not intend to list the notes on any securities exchange.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
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PER NOTE TOTAL
------------ ------------
Public Offering Price 99.884% $574,333,000
Underwriting Discount 0.500% $ 2,875,000
Proceeds to Ingersoll-Rand Company (before expenses) 99.384% $571,458,000
Interest on the notes will accrue from May 23, 2001.
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The underwriters are offering the notes subject to various conditions. The
underwriters expect to deliver the notes in book-entry form through the
facilities of The Depository Trust Company, Clearstream Banking and Euroclear
against payment in New York, New York on May 23, 2001.
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Joint Book-Running Managers
Deutsche Banc Alex. Brown Salomon Smith Barney
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JPMorgan
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Tokyo-Mitsubishi International plc
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Banc of America Securities LLC
Barclays Capital
BNP PARIBAS
Credit Suisse First Boston
Fleet Securities, Inc.
HSBC
Scotia Capital
Wachovia Securities, Inc.
May 16, 2001
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. NEITHER
WE NOR THE UNDERWRITERS HAVE AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH
ADDITIONAL OR DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT OR
INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. NEITHER WE NOR THE
UNDERWRITERS ARE MAKING AN OFFER TO SELL THESE SECURITIES IN ANY JURISDICTION
WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION
APPEARING IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS IS
ACCURATE ONLY AS OF THE DATE ON THE FRONT COVER OF THIS PROSPECTUS SUPPLEMENT
AND THAT THE INFORMATION WE PREVIOUSLY FILED WITH THE SEC AND INCORPORATED BY
REFERENCE IS ACCURATE ONLY AS OF THE DATE OF THE DOCUMENT INCORPORATED BY
REFERENCE. OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND
PROSPECTS MAY HAVE CHANGED SINCE THOSE DATES.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
--------
Our Company................................................. S-1
Use of Proceeds............................................. S-2
Ratio of Earnings to Fixed Charges.......................... S-2
Description of Notes........................................ S-2
Certain United States Federal Income Tax Considerations..... S-7
Underwriting................................................ S-10
Legal Matters............................................... S-11
Experts..................................................... S-11
PROSPECTUS
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
About Us.................................................... 2
About the Trusts............................................ 3
Ratio of Earnings to Fixed Charges.......................... 4
Use of Proceeds............................................. 5
Description of the Debt Securities.......................... 5
Description of Securities Warrants.......................... 15
Description of Trust Preferred Securities................... 15
Description of Trust Preferred Guarantees................... 17
Description of Capital Stock................................ 19
Description of Depositary Shares............................ 27
Description of Stock Purchase Contracts and Stock Purchase
Units..................................................... 30
Plan of Distribution........................................ 30
i
OUR COMPANY
We are a leading provider of security and safety, climate control,
industrial productivity and infrastructure products. In each of these markets,
we offer a diverse product portfolio that includes well-recognized industrial
and commercial brands.
SECURITY AND SAFETY--We market architectural hardware and access-control
products and services for residential, commercial and institutional buildings.
Led by the familiar Schlage brand, products include locks and locksets, door
closers, exit devices, steel doors and frames, power-operated doors,
architectural columns and biometric and electronic access control technologies.
CLIMATE CONTROL--We offer a range of temperature-control products for
protecting food and other perishables. Products include: Thermo King transport
temperature control units for truck trailers, small trucks, seagoing containers
and air conditioning for buses; and Hussmann refrigerated display cases for
supermarkets, delicatessens and other commercial and institutional refrigeration
applications.
INDUSTRIAL PRODUCTIVITY--We have a diverse group of businesses offering
products and services to enhance industrial efficiency. These products and
services include: Ingersoll-Rand air compressors and components for
compressed-air systems, tools and material handling equipment, and fluid
handling products; Club Car golf cars and utility vehicles; and Torrington
bearings, components and motion-control technologies.
INFRASTRUCTURE--We are a major supplier of products and services for all
types of construction projects and industrial and commercial development,
including Bobcat compact equipment and Ingersoll-Rand road pavers, compactors,
portable-power products and drilling equipment.
We have approximately 100 manufacturing locations, roughly half of which are
outside North America. Approximately 34% of our revenues are derived from
outside the United States and due to our diverse businesses, no end market
represents more than 15% of our revenues.
Over the past five years we have pursued an aggressive acquisition and
divestiture program focused on: building and maintaining leadership in our four
major global markets; enhancing revenue growth and profitability; and reducing
the effect of economic cycles on our financial performance.
Our principal executive offices are at 200 Chestnut Ridge Road, Woodcliff
Lake, New Jersey 07677 (telephone 201-573-0123).
S-1
USE OF PROCEEDS
Our net proceeds from this offering are estimated to be approximately
$571.0 million after deducting the underwriting discounts and estimated offering
expenses that we will have paid. We will use these net proceeds to reduce our
outstanding commercial paper borrowings, which amounted to approximately
$1.4 billion as of March 31, 2001, and for general corporate purposes. Those
borrowings had an effective weighted average interest rate of 5.70%. Certain of
the underwriters participating in this offering are dealers on our commercial
paper program and may receive proceeds from this offering as a result of their
ownership of some of our commercial paper.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
the three months ended March 31, 2001 and for each of the years in the five year
period ended December 31, 2000. We do not presently have any preference stock
outstanding. For the purpose of computing the ratios of earnings to fixed
charges, earnings consist of earnings from continuing operations before income
taxes and fixed charges, excluding our proportionate share in the undistributed
earnings (losses) of less than fifty-percent-owned affiliates (accounted for
using the equity method), minority interests and capitalized interest. Fixed
charges consist of interest (including capitalized interest), equity-linked
securities charges, amortization of debt discount and expense and that portion
(one-third) of rental expense deemed to be representative of an interest factor
included therein.
THREE MONTHS ENDED YEAR ENDED DECEMBER 31,
------------------ ----------------------------------------------------
MARCH 31, 2001 2000 1999 1998 1997 1996
------------------ -------- -------- -------- -------- --------
Ratio of earnings to fixed charges........... 1.93 3.44 4.28 3.59 4.44 4.79
DESCRIPTION OF NOTES
The following description of the notes supplements, and to the extent
inconsistent therewith replaces, the description of the general terms and
provisions of the senior debt securities set forth in the accompanying
prospectus, to which description reference is hereby made. We will issue the
notes as a separate series of senior debt securities under the indenture dated
as of August 1, 1986, as supplemented, that we have entered into with The Bank
of New York, as trustee, which is more fully described in the accompanying
prospectus. The statements under this caption relating to the notes, and the
indenture are brief summaries only, are not complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
indenture and the notes, forms of which are available from us.
GENERAL
The notes will be limited to $575,000,000 in aggregate principal amount and
will mature on May 15, 2006. The notes will bear interest from May 23, 2001, at
the annual rate for such series set forth on the cover page of this prospectus
supplement. We will pay interest semiannually on May 15 and November 15 of each
year, commencing November 15, 2001, to the holders of record of the notes at the
close of business on the preceding May 1 or November 1, whether or not such day
is a business day. All payments of interest and principal will be payable by us
in United States dollars. We will issue the notes only in book-entry form. The
notes will be subject to redemption as described below.
The notes will be senior unsecured obligations and will rank equally in
right of payment to all our other unsecured and unsubordinated indebtedness,
whether current or future. The notes will rank senior in right of payment to our
subordinated indebtedness, if any, and will be effectively junior in right of
payment to our future secured indebtedness, if any, and to all our existing and
future indebtedness and other liabilities of subsidiaries. As of March 31, 2001,
as adjusted to give effect to the issuance of the notes and the anticipated use
of proceeds therefrom, we would have had an aggregate of $3,825.7 million of
consolidated indebtedness.
S-2
The notes have been accepted for clearance through DTC, Clearstream Banking
and Euroclear.
REDEMPTION AT OUR OPTION
We may at our option, redeem the notes in whole or in part at any time at a
redemption price equal to the greater of:
- 100% of the principal amount of the notes to be redeemed, plus accrued
interest to the redemption date, or
- as determined by the Quotation Agent, the sum of the present values of the
remaining scheduled payments of principal and interest on the notes to be
redeemed (not including any portion of payments of interest accrued as of
the redemption date) discounted to the redemption date on a semi-annual
basis at the Adjusted Treasury Rate plus 20 basis points, plus accrued
interest to the redemption date.
The redemption price will be calculated assuming a 360-day year consisting
of twelve 30-day months.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per year equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for that redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the notes that would be used, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of the notes.
"Comparable Treasury Price" means, with respect to any redemption date:
- the average of the Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and lowest of the Reference
Treasury Dealer Quotations, or
- if the trustee obtains fewer than three Reference Treasury Dealer
Quotations, the average of the Reference Treasury Dealer Quotations so
received.
"Quotation Agent" means the Reference Treasury Dealer appointed by us.
"Reference Treasury Dealer" means (i) each of J.P. Morgan Securities Inc.,
Salomon Smith Barney Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and their respective successors, unless any of them ceases to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), in
which case we shall substitute another Primary Treasury Dealer; and (ii) any
other Primary Treasury Dealer selected by us.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
Treasury Dealer and any redemption date, the average, as determined by the
trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by that Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third business day preceding that redemption date.
We will mail notice of any redemption at least 30 days but not more than
60 days before the redemption date to each holder of the notes to be redeemed.
Unless we default in payment of the redemption price, on and after the
redemption date, interest will cease to accrue on the notes or portions of the
notes called for redemption.
S-3
BOOK-ENTRY SYSTEM
We will issue the notes in the form of one or more global notes in fully
registered form initially in the name of Cede & Co., as nominee of The
Depository Trust Company, or such other name as may be requested by an
authorized representative of DTC. The global notes will be deposited with DTC
and may not be transferred except as a whole by DTC to a nominee of DTC or by a
nominee of DTC to DTC or another nominee of DTC or by DTC or any nominee to a
successor of DTC or a nominee of such successor.
DTC has advised us and the underwriter as follows:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934, as amended.
- DTC holds securities that its participants deposit with DTC and
facilitates the settlement among direct participants of securities
transactions, such as transfers and pledges, in deposited securities,
through electronic computerized book-entry changes in direct participants'
accounts, thereby eliminating the need for physical movement of securities
certificates.
- Direct participants include securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations.
- DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc.
- Access to the DTC system is also available to others such as securities
brokers and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a direct participant, either
directly or indirectly.
- The rules applicable to DTC and its direct and indirect participants are
on file with the Securities and Exchange Commission.
Purchases of notes under the DTC system must be made by or through direct
participants, which will receive a credit for the notes on DTC's records. The
ownership interest of each actual purchaser of notes is in turn to be recorded
on the direct and indirect participants' records. Beneficial owners of the notes
will not receive written confirmation from DTC of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owner entered into the
transaction. Transfers of ownership interests in the notes are to be
accomplished by entries made on the books of direct and indirect participants
acting on behalf of beneficial owners. Beneficial owners will not receive
certificates representing their ownership interests in the notes, except in the
event that use of the book-entry system for the notes is discontinued.
To facilitate subsequent transfers, all notes deposited by direct
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. or such other name as may be requested by an authorized
representative of DTC. The deposit of notes with DTC and their registration in
the name of Cede & Co. or such other nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual beneficial owners of
the notes; DTC's records reflect only the identity of the direct participants to
whose accounts such notes are credited, which may or may not be the beneficial
owners. The direct and indirect participants will remain responsible for keeping
account of their holdings on behalf of their customers.
S-4
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote
with respect to the global notes. Under its usual procedures, DTC mails an
omnibus proxy to the issuer as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.'s consenting or voting rights to those direct
participants to whose accounts the notes are credited on the record date
(identified in the listing attached to the omnibus proxy).
Principal and interest payments on the global notes will be made to Cede &
Co., or such other nominee as may be requested by an authorized representative
of DTC. DTC's practice is to credit direct participants' accounts upon DTC's
receipt of funds and corresponding detail information from us or the trustee on
payment dates in accordance with their respective holdings shown on DTC's
records. Payments by participants to beneficial owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such participant and not of DTC, us or
the trustee, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal and interest to Cede & Co. (or
such other nominee as may be requested by an authorized representative of DTC)
shall be the responsibility of us or the trustee. Disbursement of such payments
to direct participants shall be the responsibility of DTC, and disbursement of
such payments to the beneficial owners shall be the responsibility of direct and
indirect participants.
DTC may discontinue providing its service as securities depositary with
respect to the notes at any time by giving reasonable notice to us or the
trustee. In addition, we may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities depositary). Under
such circumstances, in the event that a successor securities depositary is not
obtained, note certificates in fully registered form are required to be printed
and delivered to beneficial owners of the global notes representing such notes.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that we believe to be reliable (including DTC),
but we take no responsibility for the accuracy thereof.
Neither we, the trustee nor the underwriters will have any responsibility or
obligation to direct participants, or the persons for whom they act as nominees,
with respect to the accuracy of the records of DTC, its nominee or any direct
participant with respect to any ownership interest in the notes, or payments to,
or the providing of notice to direct participants or beneficial owners.
So long as the notes are in DTC's book-entry system, secondary market
trading activity in the notes will settle in immediately available funds. All
applicable payments of principal and interest on the notes issued as global
notes will be made by us in immediately available funds.
CLEARSTREAM BANKING AND EUROCLEAR
Links have been established among DTC, Clearstream Banking and Euroclear,
which are two European book-entry depositaries similar to DTC, to facilitate the
initial issuance of the notes sold outside of the United States and cross-market
transfers of the notes associated with secondary market trading.
Although DTC, Clearstream Banking and Euroclear have agreed to the
procedures provided below in order to facilitate transfers, they are under no
obligation to perform these procedures, and these procedures may be modified or
discontinued at any time.
S-5
Clearstream Banking and Euroclear will record the ownership interests of
their participants in much the same way as DTC, and DTC will record the total
ownership of each of the U.S. agents of Clearstream Banking and Euroclear, as
participants in DTC.
When notes are to be transferred from the account of a DTC participant to
the account of a Clearstream Banking participant or a Euroclear participant, the
purchaser must send instructions to Clearstream Banking or Euroclear through a
participant at least one day prior to settlement. Clearstream Banking or
Euroclear, as the case may be, will instruct its U.S. agent to receive notes
against payment. After settlement, Clearstream Banking or Euroclear will credit
its participant's account. Credit for the notes will appear on the next day
(European time).
Because settlement is taking place during New York business hours, DTC
participants will be able to employ their usual procedures for sending notes to
the relevant U.S. agent acting for the benefit of Clearstream Banking or
Euroclear participants. The sale proceeds will be available to the DTC seller on
the settlement date. As a result, to the DTC participant, a cross-market
transaction will settle no differently than a trade between two DTC
participants.
When a Clearstream Banking or Euroclear participant wishes to transfer notes
to a DTC participant, the seller will be required to send instructions to
Clearstream Banking or Euroclear through a participant at least one business day
prior to settlement. In these cases, Clearstream Banking or Euroclear will
instruct its U.S. agent to transfer these notes against payment for them. The
payment will then be reflected in the account of the Clearstream Banking or
Euroclear participant the following day, with the proceeds back-valued to the
value date, which would be the preceding day, when settlement occurs in New
York. If settlement is not completed on the intended value date, that is, the
trade fails, proceeds credited to the Clearstream Banking or Euroclear
participant's account will instead be valued as of the actual settlement date.
S-6
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain U.S. federal income tax consequences
of the purchase, ownership and disposition of notes as of the date hereof.
Except where noted, this summary deals only with notes that are held as capital
assets.
The discussion below is based upon the provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations, rulings and judicial
decisions as of the date of this prospectus supplement. Those authorities may be
changed, perhaps retroactively, so as to result in U.S. federal income tax
consequences different from those summarized below. This summary does not
represent a detailed description of the federal income tax consequences to you
in light of your particular circumstances. In addition, it does not represent a
detailed description of the U.S. federal income tax consequences applicable to
you if you are subject to special treatment under the U.S. federal income tax
laws (including if you are a "controlled foreign corporation," "passive foreign
investment company," "foreign personal holding company," a dealer in securities
or currencies, a financial institution, a bank, a thrift, a regulated investment
company, a real estate investment trust, an insurance company, a tax exempt
organization, a person holding the notes as part of a hedging, integrated or
conversion transaction, constructive sale or straddle, a trader in securities
that has elected the mark-to-market method of accounting for your securities, a
person liable for alternative minimum tax or a U.S. person whose "functional
currency" is not the U.S. dollar). We cannot assure you that a change in law
will not alter significantly the tax considerations that we describe in this
summary.
If a partnership holds our notes, the tax treatment of a partner will
generally depend upon the status of the partner and the activities of the
partnership. If you are a partner of a partnership holding our notes, you should
consult your tax advisors.
IF YOU ARE CONSIDERING THE PURCHASE OF NOTES, YOU SHOULD CONSULT YOUR OWN
TAX ADVISORS CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES TO YOU OF THE
OWNERSHIP OF THE NOTES, AS WELL AS THE CONSEQUENCES TO YOU ARISING UNDER THE
LAWS OF ANY OTHER TAXING JURISDICTION.
U.S. HOLDERS
The following is a summary of certain U.S. federal tax considerations that
will apply to you if you are a U.S. holder of notes.
A "U.S. holder" means a person that is:
- a citizen or resident of the United States;
- a corporation, an entity taxable as a corporation or a partnership created
or organized in or under the laws of the United States or any political
subdivision of the United States;
- an estate the income of which is subject to United States federal income
taxation regardless of its source; or
- a trust that (a) is subject to the primary supervision of a court within
the United States and one or more U.S. persons has the authority to
control all of the trust's substantial decisions or (b) has a valid
election in effect under applicable United States Treasury regulations to
be treated as a United States person.
A "non-U.S. holder" is a beneficial owner of a note that is not a U.S.
holder.
PAYMENTS OF INTEREST
Interest on a note will generally be taxable to you as ordinary income from
domestic sources at the time it is paid or accrued in accordance with your
method of accounting for tax purposes.
S-7
SALE, EXCHANGE AND RETIREMENT OF NOTES
Your tax basis in a note will, in general, be your cost for that note. Upon
the sale, exchange, retirement or other disposition of a note, you will
recognize gain or loss equal to the difference between the amount you realize
upon the sale, exchange, retirement or other disposition (less an amount equal
to any accrued but unpaid interest, which will be taxable as such) and the
adjusted tax basis of the note. Such gain or loss will be capital gain or loss.
Capital gains of individuals derived in respect of capital assets held for more
than one year are eligible for reduced rates of taxation. The deductibility of
capital losses is subject to limitations.
NON-U.S. HOLDERS
The following is a summary of certain U.S. federal income tax considerations
that will apply to you if you are a non-U.S. holder of notes.
U.S. FEDERAL WITHHOLDING TAX
The 30% U.S. federal withholding tax will not apply to any payment of
principal or interest on notes provided that:
- you do not actually or constructively own 10% or more of the total
combined voting power of all classes of our voting stock within the
meaning of the Code and United States Treasury Regulations;
- you are not a controlled foreign corporation that is related to us through
stock ownership;
- you are not a bank whose receipt of interest on the notes is described in
section 881(c)(3)(A) of the Code; and
- either (a) you provide your name and address on an IRS Form W-8BEN (or
successor form), and certify, under penalty of perjury, that you are not a
U.S. person or (b) you hold your notes through certain foreign
intermediaries and you satisfy the certification requirements of
applicable U.S. Treasury regulations. Special certification rules apply to
certain non-U.S. holders that are entities rather than individuals.
If you cannot satisfy the requirements described above, payments of premium
and interest made to you will be subject to the 30% U.S. federal withholding tax
unless you provide us with a properly executed:
- IRS Form W-8BEN (or successor form) claiming an exemption from, or
reduction in, withholding under the benefit of an applicable tax treaty;
or
- IRS Form W-8ECI (or successor form) stating that interest paid on the
notes is not subject to withholding tax because it is effectively
connected with your conduct of a trade or business in the United States.
The 30% U.S. federal withholding tax will not apply to any gain that you
realize on the sale, exchange, retirement or other disposition of notes.
U.S. FEDERAL INCOME TAX
If you are engaged in a trade or business in the United States and interest
on the notes is effectively connected with the conduct of that trade or
business, you will be subject to U.S. federal income tax on that interest on a
net income basis (although exempt from the 30% withholding tax) in the same
manner as if you were a U.S. person. In addition, if you are a foreign
corporation, you may be subject to a branch profits tax equal to 30% (or lower
applicable treaty rate) of your earnings and profits for the taxable year,
subject to adjustments that are effectively connected with the conduct by
S-8
you of a trade or business in the United States. For this purpose, interest on
the notes will be included in earnings and profits.
Any gain realized on the disposition of a note will generally not be subject
to United States federal income tax unless:
- the gain is effectively connected with your conduct of a trade or business
in the United States;
- you are an individual who is present in the United States for 183 days or
more in the taxable year of that disposition, and certain other conditions
are met; or
- you are an individual subject to tax pursuant to provisions of the Code
regarding the taxation of U.S. expatriates.
U.S. FEDERAL ESTATE TAX
Your estate will not be subject to U.S. federal estate tax on notes
beneficially owned by you at the time of your death, provided that (a) you do
not own 10% of more of the total combined voting power of all classes of our
voting stock (within the meaning of the Code and the U.S. Treasury Regulations)
and (b) interest on the notes would not have been, if received at the time of
your death, effectively connected with the conduct by you of a trade or business
in the United States.
INFORMATION REPORTING AND BACKUP WITHHOLDING
U.S. HOLDERS
In general, information reporting requirements will apply to certain
payments of principal and interest paid on notes and to the proceeds of sale of
a note made to you (unless you are an exempt recipient such as a corporation). A
31% backup withholding tax will apply to such payments if you fail to provide a
taxpayer identification number, a certification of exempt status, or fail to
report in full dividend and interest income.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the IRS.
NON-U.S. HOLDERS
In general, you will not be subject to information reporting and backup
withholding with respect to payments that we make to you provided that we do not
have actual knowledge that you are a U.S. person and we have received from you
the statement described above under "U.S. Federal Withholding Tax."
In addition, you will not be subject to information reporting and backup
withholding with respect to the proceeds of the sale of a note made within the
United States or conducted through certain U.S. related financial
intermediaries, if the payor receives the statement described above and does not
have actual knowledge that you are a U.S. person or you otherwise establish an
exemption.
Any amounts withheld under the backup withholding rules will be allowed as a
refund or a credit against your U.S. federal income tax liability provided the
required information is furnished to the IRS.
S-9
UNDERWRITING
Deutsche Banc Alex. Brown Inc. and Salomon Smith Barney Inc. are acting as
representatives of the underwriters named below.
Subject to the terms and conditions stated in the underwriting agreement
dated the date of this prospectus supplement, each underwriter named below has
agreed to purchase, and we have agreed to sell to that underwriter, the
principal amount of notes set forth opposite the underwriter's name.
PRINCIPAL
AMOUNT OF
UNDERWRITERS NOTES
------------ ------------
Deutsche Banc Alex. Brown Inc.......................... $201,250,000
Salomon Smith Barney Inc............................... 201,250,000
J.P. Morgan Securities Inc............................. 36,800,000
Tokyo-Mitsubishi International plc..................... 25,300,000
Banc of America Securities LLC......................... 13,800,000
Barclays Capital Inc................................... 13,800,000
BNP Paribas Securities Corp............................ 13,800,000
Credit Suisse First Boston Corporation................. 13,800,000
Fleet Securities, Inc.................................. 13,800,000
HSBC Securities (USA) Inc.............................. 13,800,000
Scotia Capital (USA) Inc............................... 13,800,000
Wachovia Securities, Inc............................... 13,800,000
------------
Total.......................................... $575,000,000
============
The underwriting agreement provides that the obligations of the underwriters
to purchase the notes included in this offering are subject to approval of legal
matters by counsel and to other conditions. The underwriters are obligated to
purchase all the notes if they purchase any of the notes.
The underwriters propose to offer some of the notes directly to the public
at the public offering price set forth on the cover page of this prospectus
supplement and some of the notes to dealers at the public offering price less a
concession not to exceed 0.30% of the principal amount of the notes. The
underwriters may allow, and dealers may reallow a concession not to exceed 0.15%
of the principal amount of the notes on sales to other dealers. After the
initial offering of the notes to the public, the representatives may change the
public offering price and concessions.
The following table shows the underwriting discounts and commissions that we
are to pay to the underwriters in connection with this offering (expressed as a
percentage of the principal amount of the notes).
PAID BY INGERSOLL-RAND
COMPANY
----------------------
Per note.......................................... 0.500%
In connection with the offering, Deutsche Banc Alex. Brown Inc. and Salomon
Smith Barney Inc. on behalf of the underwriters, may purchase and sell notes in
the open market. These transactions may include over-allotment, syndicate
covering transactions and stabilizing transactions. Over-allotment involves
syndicate sales of notes in excess of the principal amount of notes to be
purchased by the underwriters in the offering, which creates a syndicate short
position. Syndicate covering transactions involve purchases of the open market
after the distribution has been completed in order to cover Syndicate short
positions. Stabilizing transactions consist of certain bids or purchases of
notes made for
S-10
the purpose of preventing or retarding a decline in the market price of the
notes while the offering is in progress.
The underwriters also may impose a penalty bid. Penalty bids permit the
underwriters to reclaim a selling concession from a syndicate member when
Deutsche Banc Alex. Brown Inc. or Salomon Smith Barney Inc., in covering
syndicate short positions or making stabilizing purchases, repurchases notes
originally sold by that syndicate member.
Any of these activities may have the effect of preventing or retarding a
decline in the market price of the notes. They may also cause the price of the
notes to be higher than the price that otherwise would exist in the open market
in the absence of these transactions. The underwriters may conduct these
transactions in the over-the counter market or otherwise. If the underwriters
commence any of these transactions, they may discontinue them at any time.
We estimate that our total expenses for this offering will be $500,000.
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribute to
payments the underwriters may be required to make because of any of those
liabilities.
We expect that delivery of the notes will be made against payment on or
about the date specified in the last paragraph of the cover page of this
prospectus supplement, which is the fifth business day following the date of
this prospectus supplement. Under Rule 15c6-1 of the Commission under the
Exchange Act, trades in the secondary market generally are required to settle in
three business days, unless the parties to any such trade expressly agree
otherwise. Accordingly, underwriters who wish to trade the notes on the date of
this prospectus supplement will be required, by virtue of the fact that the
notes initially will settle on the fifth business day following the date of this
prospectus supplement, to specify an alternate settlement cycle at the time of
any such trade to prevent a failed settlement. Underwriters of the notes who
wish to trade the notes on the date of this prospectus supplement should consult
their own advisor.
The underwriters have performed investment banking and commercial banking
for us from time to time. The underwriters may, from time to time, engage in
transactions with and perform services for us in the ordinary course of their
business. Certain of the underwriters participating in this offering are dealers
under our commercial paper program, and may receive proceeds from this offering
as a result of their ownership of some of our commercial paper. This offering is
being conducted pursuant to NASD Conduct Rule 2710(c)(8).
LEGAL MATTERS
Certain legal matters in connection with the notes offered hereby will be
passed upon for us by Patricia Nachtigal, Esq., Senior Vice President and
General Counsel of the Company, and for the underwriters by Simpson Thacher &
Bartlett, New York, New York.
EXPERTS
The financial statements incorporated in this prospectus by reference to our
annual report on Form 10-K for the year ended December 31, 2000 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
S-11
PROSPECTUS
[LOGO]
$1,438,600,000
INGERSOLL-RAND COMPANY
DEBT SECURITIES
PREFERENCE STOCK
DEPOSITARY SHARES
COMMON STOCK
STOCK PURCHASE CONTRACTS OR UNITS
STOCK PURCHASE CONTRACTS
WARRANTS
------------------
INGERSOLL-RAND FINANCING II
INGERSOLL-RAND FINANCING III
TRUST PREFERRED SECURITIES
GUARANTEED BY
INGERSOLL-RAND COMPANY
------------------
WE WILL PROVIDE THE SPECIFIC TERMS OF THESE SECURITIES IN SUPPLEMENTS TO
THIS PROSPECTUS. WE CAN ONLY USE THIS PROSPECTUS TO OFFER AND SELL ANY SPECIFIC
SECURITY BY ALSO INCLUDING A PROSPECTUS SUPPLEMENT FOR THAT SECURITY. YOU SHOULD
READ THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENTS CAREFULLY BEFORE YOU INVEST.
THESE SECURITIES HAVE NOT BEEN APPROVED BY THE SEC OR ANY STATE SECURITIES
COMMISSION, NOR HAVE THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.
December 19, 2000
WE HAVE NOT AUTHORIZED ANYONE TO TELL YOU ANYTHING ABOUT US OR THE SECURITIES
COVERED BY THIS PROSPECTUS EXCEPT WHAT IS INCLUDED OR INCORPORATED IN THIS
PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. DO NOT ASSUME THAT THERE
HAS BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE OF THIS PROSPECTUS. FINALLY,
EVEN THOUGH YOU MAY HAVE THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT, WE ARE NOT MAKING ANY OFFER OR ENCOURAGING YOUR INTEREST IN ANY
SECURITIES IF IT IS NOT LEGAL AND PROPER FOR US TO DO SO.
AVAILABLE INFORMATION
This prospectus is part of a registration statement on Form S-3 relating to
the securities covered by this prospectus. The prospectus does not include all
of the information in the registration statement. We refer you to the
registration statement and its exhibits for further information about us and the
securities.
We are subject to the Securities Exchange Act of 1934, and file reports and
other information with the SEC as required by the Exchange Act. You can inspect
and copy our reports and filings by contacting the SEC at these offices:
Public Reference Room 7 World Trade Center Northwestern Atrium Center
Judiciary Plaza New York, NY 10048 500 West Madison Street
450 Fifth Street, NW Chicago, IL 60661
Washington, DC 20549
You can also get copies of these materials from the SEC's web site
(http://www.sec.gov), or view them at the offices of the New York Stock
Exchange, 20 Broad Street, New York, NY 10005.
We have not included any separate financial statements for the trusts. They
were omitted because the trusts are our wholly owned subsidiaries with no
independent operations, we guarantee the fee obligations relating to the trust
securities and the SEC has exempted these types of trusts from filing
obligations for as long as we continue to file our information with the SEC.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Our Annual Report on Form 10-K for the fiscal year ended December 31, 1999,
our Quarterly Reports on Form 10-Q dated as of May 5, 2000, August 14, 2000 and
November 14, 2000 and our Current Reports on Form 8-K dated as of June 13, 2000
and September 30, 2000, are incorporated by reference in this prospectus. All
future filings that we make under Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act until we sell all of the securities we are offering are deemed
incorporated into and part of this prospectus once filed. Any statement in this
prospectus, in any prospectus supplement, or in any document incorporated by
reference that is different from any statement contained in any later-filed
document should be regarded as changed by that later statement. Once so changed,
the earlier statement is no longer considered part of this prospectus or any
prospectus supplement.
If you ask us by phone or in writing, we will give you a copy of any of the
materials incorporated (other than exhibits, unless the exhibits are themselves
specifically incorporated). Please make your request to R.G. Heller, Secretary,
P.O. Box 8738, Woodcliff Lake, New Jersey 07677, telephone 201-573-0123.
ABOUT US
We were organized in 1905 under the laws of the State of New Jersey as a
consolidation of Ingersoll-Sergeant Drill Company and the Rand Drill Company,
whose businesses were established in the early 1870s. Over the years, we have
supplemented our original business, which consisted primarily
2
of the manufacture and sale of rock drilling equipment, with additional products
which have been developed internally or obtained through acquisitions.
We are a diversified, multinational manufacturer of industrial and
commercial equipment and components. Our product lines include air compressors,
architectural hardware products, bearing and components, construction equipment,
golf cars and utility vehicles, tools, and transport and stationary temperature
control systems. We serve four global growth market sectors: security and
safety; infrastructure; industrial productivity and climate control.
Our principal executive offices are at 200 Chestnut Ridge Road, Woodcliff
Lake, New Jersey 07677 (telephone 201-573-0123).
ABOUT THE TRUSTS
Each trust is a Delaware business trust which exists for the exclusive
purpose of issuing the trust preferred securities and common securities
representing undivided beneficial interests in the assets of the trust in
exchange for our debt securities.
All of the trust common securities will be directly or indirectly owned by
us. The trust common securities will rank equally, and payments will be made
proportionately, with the trust preferred securities, except that, upon an event
of default, the rights of the holders of the trust common securities to payment
of distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the trust preferred securities. We
will acquire trust common securities in an aggregate liquidation amount equal to
3% of the total capital of each trust, and we will sell the trust preferred
securities to the public.
Each trust's business and affairs will be conducted by its trustees,
including a property trustee, a Delaware trustee and three individual trustees
(which we refer to as the "regular trustees") who are our employees or officers
appointed by us. The holder of the trust common securities of a trust, or the
holders of a majority in liquidation amount of the related trust preferred
securities if an event of default has occurred and is continuing, will be
entitled to appoint, remove or replace the property trustee and/or the Delaware
trustee for such trust. In no event will the holders of the trust preferred
securities have the right to vote to appoint, remove or replace the regular
trustees. One trustee of each trust will be a financial institution that is not
affiliated with us, which shall act as property trustee and as indenture trustee
for the purposes of the Trust Indenture Act. In addition, unless the property
trustee maintains a principal place of business in the State of Delaware, one
trustee of each trust will have a principal place of business or reside in the
State of Delaware. We will pay all fees and expenses related to the trusts and
the offering of the trust securities.
The office of the Delaware trustee for each trust is c/o The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. The address for
each trust is c/o Ingersoll-Rand Company, at 200 Chestnut Ridge Road, Woodcliff
Lake, New Jersey 07677.
3
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our ratio of earnings to fixed charges for
each of the years in the five year period ended December 31, 1999 and for the
nine month period ended September 30, 2000. We do not presently have any
preference stock outstanding. For the purpose of computing the ratios of
earnings to fixed charges, earnings consist of earnings from continuing
operations before income taxes and fixed charges, excluding our proportionate
share in the undistributed earnings (losses) of less than fifty-percent-owned
affiliates (accounted for using the equity method), minority interests and
capitalized interest. Fixed charges consist of interest (including capitalized
interest), amortization of debt discount and expense and that portion
(one-third) of rental expense deemed to be representative of an interest factor
included therein.
NINE MONTH
PERIOD ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------- ----------------------------------------------------
2000 1999 1998 1997 1996 1995
------------- -------- -------- -------- -------- --------
Ratio of earnings to fixed charges(a)............... 3.56 4.28 3.59 4.44 4.79 4.34
- ------------------------
(a) All amounts have been restated to reflect a reclassification of a portion of
discontinued operations to continuing operations for Dresser-Rand Company
4
USE OF PROCEEDS
We plan to add the proceeds we receive from sales of securities to our
general funds and to use them for general corporate purposes. These could
include capital expenditures, repayment or purchase of our already issued
long-term debt, investment in subsidiaries, additions to working capital,
repayment of short-term commercial paper notes or other short term debt,
acquisitions and other business opportunities.
DESCRIPTION OF THE DEBT SECURITIES
The following description of debt securities sets forth certain general
terms and provisions of debt securities. The particular terms of the debt
securities offered will be described in the prospectus supplement relating to
the securities.
We may issue debt securities either separately, or together with, or upon
the conversion of or in exchange for, other securities. The debt securities may
be:
- senior unsecured obligations issued in one or more series under a senior
indenture dated as of August 1, 1986, as supplemented, between us and The
Bank of New York, as trustee, or
- subordinated unsecured obligations issued in one or more series under a
subordinated indenture to be entered into between us and a trustee.
The following description only summarizes the terms of the indentures and
the debt securities. For more information you should read the indentures.
GENERAL
The indentures do not limit the amount of debt securities which we may issue
and provide that debt securities may be issued thereunder from time to time in
one or more series up to the aggregate principal amount which we may authorize
from time to time.
You should review the prospectus supplement for the following terms of the
debt securities being offered:
- the designation, aggregate principal amount and authorized denominations
of the debt securities;
- the purchase price of the debt securities;
- the date or dates on which the debt securities will mature;
- the rate or rates per annum, if any (which may be fixed or variable), at
which the debt securities will bear interest or the method by which such
rate or rates will be determined;
- the dates on which the interest will be payable and the record dates for
payment of interest, if any;
- the coin or currency in which payment of the principal of (and premium, if
any) or interest, if any, on the debt securities will be payable;
- the terms of any mandatory or optional redemption (including any sinking
fund) or any obligation of us to repurchase the debt securities;
- whether the debt securities are to be issued in whole or in part in the
form of one or more temporary or permanent global debt securities and, if
so, the identity of the depositary, if any, for such note or notes;
- whether the debt securities will be senior debt securities or subordinated
debt securities;
5
- the terms, if any, upon which such debt securities may be convertible into
or exchangeable for other securities; and
- any other additional provisions or specific terms which may be applicable
to that series of debt securities.
Unless otherwise indicated in the prospectus supplement, the debt securities
will be issued only in fully registered form without coupons in denominations of
$1,000 or multiples of $1,000. No service charge will be made for any
registration of, transfer or exchange of the debt securities, but we may require
a payment by the holder to cover any tax or other governmental charge.
The debt securities may be issued as discounted debt securities (bearing no
interest or interest at a rate which at the time of issuance is below market
rates) to be sold at a substantial discount below their stated principal amount.
Federal income tax consequences and other special considerations applicable to
any of these discounted debt securities will be described in the applicable
prospectus supplement.
RANKING OF DEBT SECURITIES
The senior debt securities will be unsecured unsubordinated obligations and
will rank equally in right of payment with all of our unsecured and
unsubordinated indebtedness. The subordinated debt securities will be unsecured
subordinated obligations and will be subordinated in right of payment to all of
our existing and future senior indebtedness (as defined in the related
prospectus supplement), including the senior debt securities. See
"--Subordination of Subordinated Debt Securities."
CONVERSION AND EXCHANGE
The terms, if any, on which debt securities of any series are convertible
into or exchangeable for common stock, preference stock or other debt securities
will be set forth in the related prospectus supplement. The terms may include
provisions for conversion or exchange, either mandatory, at the option of the
holders or at our option.
GLOBAL NOTES
The debt securities of a series may be issued in whole or in part in the
form of one or more global notes that will be deposited with or on behalf of a
depositary located in the United States identified in the prospectus supplement
relating to the applicable series.
The specific terms of the depositary arrangement with respect to any debt
securities of a series will be described in the prospectus supplement relating
to the series. We anticipate that the following provisions will apply to all
depositary arrangements.
Unless otherwise specified in an applicable prospectus supplement, debt
securities which are to be represented by a global note to be deposited with or
on behalf of a depositary will be represented by a global note registered in the
name of such depositary or its nominee. Upon the issuance of a global note in
registered form, the depositary for the global note will credit, on its
book-entry registration and transfer system, the principal amounts of the debt
securities represented by the global note to the accounts of institutions that
have accounts with the depositary or its nominee ("participants"). The accounts
to be credited shall be designated by the underwriters or agents of the debt
securities or by us, if the debt securities are offered and sold directly by us.
Ownership of beneficial interests in the global notes will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests by participants in the global notes will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the depositary or its nominee for the global notes.
Ownership of beneficial interests in global notes by persons that hold the
6
beneficial interests through participants will be shown on, and the transfer of
that ownership interest within such participant will be effected only through,
records maintained by the participant.
So long as the depositary for a global note in registered form, or its
nominee, is the registered owner of the global note, the depositary or the
nominee, as the case may be, will be considered the sole owner or holder of the
debt securities represented by the global note for all purposes under the
applicable indenture governing the debt securities. Except as described below,
owners of beneficial interests in the global notes will not be entitled to have
debt securities of the series represented by the global notes registered in
their names, will not receive or be entitled to receive physical delivery of
debt securities of the series in definitive form and will not be considered the
owners or holders thereof under the applicable indenture.
Payment of principal of, premium, if any, and any interest on debt
securities registered in the name of or held by a depositary or its nominee will
be made to the depositary or its nominee, as the case may be, as the registered
owner or the holder of the global note representing the debt securities. We will
not, nor will the trustee, any paying agent or the security registrar for the
debt securities have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a global note for the debt securities or for maintaining,
supervising or reviewing any records relating to the beneficial ownership
interests.
We expect that the depositary for debt securities of a series, upon receipt
of any payment of principal, premium or interest in respect of a permanent
global note, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the global note as shown on the records of the depositary. We also
expect that payments by participants to owners of beneficial interests in the
global note held through the participants will be governed by customary
practices, as is now the case with securities held for the accounts of customers
in bearer form or registered in "street name," and will be the responsibility of
the participants.
A global note may not be transferred except as a whole by the depositary for
the global note to a nominee of the depositary or by a nominee of the depositary
to the depositary or another nominee of the depositary or by the depositary or
any nominee to a successor of the depositary or a nominee of the successor. If a
depositary for debt securities of a series is at any time unwilling or unable to
continue as a depositary and a successor depositary is not appointed by us
within ninety days, we will issue debt securities in definitive registered form
in exchange for the global note or notes representing the debt securities. In
addition, we may at any time and in our sole discretion determine not to have
any debt securities in registered form represented by one or more global notes
and, in that event, we will issue debt securities in definitive form in exchange
for the global note or notes representing the debt securities.
CERTAIN COVENANTS OF THE DEBT SECURITIES
SENIOR DEBT SECURITIES. The senior debt securities will include the
following covenants:
LIMITATION ON LIENS. Unless otherwise indicated in the prospectus
supplement relating to a series of senior debt securities, we will not, and will
not permit any restricted subsidiary to, create, assume or guarantee any
indebtedness for money borrowed, secured by any mortgage, lien, pledge, charge
or other security interest or encumbrance of any kind (hereinafter referred to
as a "mortgage" or "mortgages") on any principal property of ours or a
restricted subsidiary or on any shares or funded indebtedness of a restricted
subsidiary (whether such principal property, shares or funded indebtedness are
now owned or hereafter acquired) without, in any such case, effectively
providing concurrently with the creation, assumption or guaranteeing of such
indebtedness that the senior debt securities (together, if we shall so
determine, with any other indebtedness then or thereafter existing, created,
assumed or guaranteed by us or such restricted subsidiary ranking equally with
the senior debt securities) shall be
7
secured equally and ratably with or prior to such indebtedness. The senior
indenture excludes, however, from the foregoing any indebtedness secured by a
mortgage (including any extension, renewal or replacement of any mortgage
hereinafter specified or any indebtedness secured thereby, without increase of
the principal of such indebtedness):
- on property, shares or funded indebtedness of any corporation existing at
the time such corporation becomes a restricted subsidiary;
- on property existing at the time of acquisition of such property, or to
secure indebtedness incurred for the purpose of financing the purchase
price of such property or improvements or construction thereon which
indebtedness is incurred prior to or within 180 days after the later of
such acquisition, completion of such construction or the commencement of
commercial operation of such property;
- on property, shares or funded indebtedness of a corporation existing at
the time such corporation is merged into or consolidated with us or a
restricted subsidiary, or at the time of a sale, lease or other
disposition of the properties of a corporation as an entirety or
substantially as an entirety to us or a restricted subsidiary;
- on property of a restricted subsidiary to secure indebtedness of such
restricted subsidiary to us or another restricted subsidiary;
- on our property or property of a restricted subsidiary in favor of the
United States or any State thereof, or any department, agency or
instrumentality or political subdivision of the United States or any State
thereof, to secure partial, progress, advance or other payments pursuant
to any contract or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price or the cost of
constructing or improving the property subject to such mortgage; or
- existing at the date of the senior indenture.
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS. Unless otherwise indicated
in the prospectus supplement relating to a series of senior debt securities,
sale and leaseback transactions (which are defined in the senior indenture to
exclude leases expiring within three years of making, leases between us and a
restricted subsidiary or between restricted subsidiaries and any lease of part
of a principal property, which has been sold, for use in connection with the
winding up or termination of the business conducted on such principal property)
by us or any restricted subsidiary of any principal property are prohibited,
unless (a) we would be entitled to incur indebtedness secured by a mortgage on
such principal property (see "Limitations on Liens" above) or (b) an amount
equal to the fair value of the principal property so leased (as determined by
our board of directors) is applied within 180 days to the retirement (otherwise
than by payment at maturity or pursuant to mandatory sinking funds) of our
senior debt securities or funded indebtedness of any restricted subsidiary on a
parity with the senior debt securities or to purchase, improve or construct
principal properties.
EXEMPTED INDEBTEDNESS. Notwithstanding the limitations on mortgages and
sale and leaseback transactions described above, we or any restricted subsidiary
may, in addition to amounts permitted under such restrictions, create, assume or
guarantee secured indebtedness or enter into sale and leaseback transactions
which would otherwise be prohibited, provided that at the time of such event,
and after giving effect thereto, the sum of such outstanding secured
indebtedness plus the attributable debt in respect of such sale and leaseback
transactions (other than sale and leaseback transactions entered into prior to
the date of the senior indenture and sale and leaseback transactions whose
proceeds have been applied in accordance with clause (b) under "Limitation on
Sale and Leaseback Transactions") does not exceed 5% of our and our consolidated
subsidiaries shareholders' equity. "Attributable debt" means, as of any
particular time, the then present value of the total net amount of rent required
to be paid under such leases during the remaining terms thereof (excluding any
renewal
8
term unless the renewal is at the option of the lessor), discounted at the
actual interest factor included in such rent, or, if such interest factor is not
readily determinable, then at the rate of 8 3/8% per annum.
RESTRICTIONS UPON MERGER AND SALES OF ASSETS. Upon any consolidation or
merger of us with or into any other corporation or any sale, conveyance or lease
of all or substantially all of our property to any other corporation, the
corporation (if other than us) formed by such consolidation, or into which we
shall have been merged, or the corporation which shall have acquired or leased
such property (which corporation shall be a solvent corporation organized under
the laws of the United States or a State thereof or the District of Columbia)
shall expressly assume the due and punctual payment of the principal of and
premium, if any, and interest, if any, on all of the senior debt securities. We
will not consolidate or merge, or make any such sale, lease or other
disposition, and we will not permit any other corporation to merge into us,
unless immediately after giving effect thereto, we or such successor
corporation, as the case may be, will not be in default under the senior
indenture.
If, upon any such consolidation, merger, sale, conveyance or lease, or upon
any consolidation or merger of any restricted subsidiary, or upon the sale,
conveyance or lease of all or substantially all the property of any restricted
subsidiary to any other corporation, any principal property or any shares or
funded indebtedness of any restricted subsidiary would become subject to any
mortgage, we will secure the due and punctual payment of the principal of,
premium, if any, and interest, if any, on the senior debt securities (together
with, if we shall so determine, any other indebtedness of or guarantee by us or
such restricted subsidiary ranking equally with the senior debt securities) by a
mortgage, the lien of which will rank prior to the lien of such mortgage of such
other corporation on all assets owned by us or such restricted subsidiary.
CERTAIN DEFINITIONS. The term "principal property" means any manufacturing
plant or other manufacturing facility of ours or any restricted subsidiary,
which plant or facility is located within the United States, except any such
plant or facility which the board of directors by resolution declares is not of
material importance to the total business conducted by us and our restricted
subsidiaries. The term "funded indebtedness" means indebtedness created, assumed
or guaranteed by a person for money borrowed which matures by its terms, or is
renewable by the borrower to a date, more than one year after the date of its
original creation, assumption or guarantee. The term "restricted subsidiary"
means any subsidiary which owns a principal property excluding, however, any
corporation the greater part of the operating assets of which are located or the
principal business of which is carried on outside the United States. The term
"subsidiary" means any corporation of which at least a majority of the
outstanding stock having voting power under ordinary circumstances to elect a
majority of the board of directors of the corporation shall at the time be owned
by us or by us and one or more subsidiaries or by one or more subsidiaries.
SENIOR DEBT SECURITIES ISSUED TO A TRUST. In the case of senior debt
securities issued to a trust, any such transaction must also be permitted under
the related trust agreement and guarantee and must not give rise to any breach
or violation of the related trust agreement and guarantee.
Unless otherwise provided in the applicable prospectus supplement, if senior
debt securities are issued to a trust or a trustee of such trust in connection
with the issuance of trust securities by such trust and:
- there shall have occurred an event that would constitute an event of
default,
- we shall be in default with respect to its payment of any obligations
under the related trust preferred guarantee or trust common guarantee, or
- we shall have given notice of our election to defer payments of interest
on such senior debt securities by extending the interest payment period as
provided in the senior indenture and such period, or any extension
thereof, shall be continuing,
9
then (a) we shall not declare or pay any dividend on, make any distribution with
respect to, or redeem, purchase or make a liquidation payment with respect to,
any of our capital stock, and (b) we shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities which rank equally with or junior to such senior debt securities;
provided that the foregoing restriction does not apply to any stock dividends
paid by us where the dividend stock is of the same class as that of the stock
held by the holders receiving the dividend.
If provided in the applicable prospectus supplement, we will have the right
at any time and from time to time during the term of any series of senior debt
securities to defer payment of interest for up to such number of consecutive
interest payment periods as may be specified in the applicable prospectus
supplement, subject to the terms, conditions and covenants, if any, specified in
such prospectus supplement, provided that the extension period may not extend
beyond the stated maturity of such series of senior debt securities.
In the senior indenture, we will agree to pay to each trust all debts and
other obligations (other than with respect to the trust securities) and all
costs and expenses of such trust (including costs and expenses relating to the
organization of such trust, the fees and expenses of the related trustees and
the costs and expenses relating to the operation of such trust) and the offering
of the trust preferred securities, and to pay any and all taxes, duties,
assessments or other similar governmental charges (other than United States
withholding taxes), and all costs and expenses with respect to the foregoing, to
which such trust might become subject.
SUBORDINATED DEBT SECURITIES. The subordinated debt securities will include
those covenants which may be set forth in the prospectus supplement to which
such debt securities relate, including the following:
RESTRICTIONS UPON MERGER AND SALES OF ASSETS. Upon any consolidation or
merger of us with or into any other corporation or any sale, conveyance or lease
of all or substantially all the property of us to any other corporation, the
corporation (if other than us) formed by such consolidation, or into which we
shall have been merged, or the corporation which shall have acquired or leased
such property (which corporation shall be a solvent corporation organized under
the laws of the United States or a State thereof or the District of Columbia)
shall expressly assume the due and punctual payment of the principal of and
premium, if any, and interest, if any, on all of the subordinated debt
securities. We will not consolidate or merge, or make any such sale, lease or
other disposition, and we will not permit any other corporation to merge into
us, unless immediately after giving effect thereto, we or such successor
corporation, as the case may be, will not be in default under the subordinated
indenture.
SUBORDINATED DEBT SECURITIES ISSUED TO A TRUST. In the case of subordinated
debt securities issued to a trust, any such transaction must also be permitted
under the related trust agreement and guarantee and must not give rise to any
breach or violation of the related trust agreement and guarantee.
Unless otherwise provided in the applicable prospectus supplement, if
subordinated debt securities are issued to a trust or a trustee of such trust in
connection with the issuance of trust securities by such trust and:
- there shall have occurred an event that would constitute an event of
default,
- we shall be in default with respect to its payment of any obligations
under the related trust preferred guarantee or trust common guarantee, or
- we shall have given notice of our election to defer payments of interest
on such subordinated debt securities by extending the interest payment
period as provided in the subordinated indenture and such period, or any
extension thereof, shall be continuing,
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then (a) we shall not declare or pay any dividend on, make any distribution with
respect to, or redeem, purchase or make a liquidation payment with respect to,
any of our capital stock, and (b) we shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities which rank equally with or junior to such subordinated debt
securities; provided that the foregoing restriction does not apply to any stock
dividends paid by us where the dividend stock is of the same class as that of
the stock held by the holders receiving the dividend.
If provided in the applicable prospectus supplement, we will have the right
at any time and from time to time during the term of any series of subordinated
debt securities to defer payment of interest for up to such number of
consecutive interest payment periods as may be specified in the applicable
prospectus supplement, subject to the terms, conditions and covenants, if any,
specified in such prospectus supplement, provided that the extension period may
not extend beyond the stated maturity of such series of subordinated debt
securities.
In the subordinated indenture, we will agree to pay to each trust all debts
and other obligations (other than with respect to the trust securities) and all
costs and expenses of such trust (including costs and expenses relating to the
organization of such trust, the fees and expenses of the related trustees and
the costs and expenses relating to the operation of such trust) and the offering
of the trust preferred securities, and to pay any and all taxes, duties,
assessments or other similar governmental charges (other than United States
withholding taxes), and all costs and expenses with respect to the foregoing, to
which such trust might become subject.
EVENTS OF DEFAULT
As to each series of debt securities, an event of default is defined in each
indenture as being:
- default in payment of any interest or any sinking fund payment on such
series which continues for 30 days (subject to the deferral of any
interest payment in the case of an extension period);
- default in payment of any principal or premium, if any, on such series;
- default after written notice in performance of any other covenant in such
indenture (other than a covenant included solely for the benefit of debt
securities of another series) which continues for 90 days;
- certain events in bankruptcy, insolvency or reorganization; or
- other events of default specified in or pursuant to a board resolution or
in a supplemental indenture. Each indenture provides that the trustee may
withhold notice to the holders of debt securities of such series of any
default (except in payment of principal, interest, if any, or premium, if
any, on such series or in payment of any sinking fund installment on such
series) if the trustee considers it in the interest of such holders to do
so.
In case an event of default shall occur and be continuing with respect to
the debt securities of any series, the trustee or the holders of not less than
25% in aggregate principal amount of the debt securities then outstanding of
that series may declare the principal of the debt securities of such series (or,
if the debt securities of that series were issued as discounted debt securities,
such portion of the principal as may be specified in the terms of that series)
to be due and payable and, in the case of debt securities issued to a trust,
should the trustee or the holders of such debt securities fail to make such
declaration, the holders of at least 25% in aggregate liquidation amount of the
related trust preferred securities shall have such right. Any event of default
with respect to the debt securities of any series (except defaults in payment of
principal or premium, if any, or interest, if any, on the debt securities of
such series) may be waived by the holders of a majority in aggregate principal
amount of the debt securities of that series then outstanding. In the case of
debt securities issued to a trust, should the holders of such debt securities
fail to annul a declaration or waive such default, the holders of a
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majority in aggregate liquidation amount of the series of related trust
preferred securities affected shall have such right.
Subject to the provisions of each indenture relating to the duties of the
trustee in case an event of default shall occur and be continuing, the trustee
is under no obligation to exercise any of the rights or powers under such
indenture at the request, order or direction of any of the holders of debt
securities, unless such holders shall have offered to the trustee reasonable
security or indemnity. Subject to such provisions for the indemnification of the
trustee and certain limitations contained in each indenture, the holders of a
majority in principal amount of the debt securities of any series then
outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee, or exercising
any trust or power conferred on the trustee, with respect to the debt securities
of such series. In case an event of default shall occur and be continuing as to
a series of debt securities, the property trustee will have the right to declare
the principal of and the interest on such debt securities, and any other amounts
payable under the indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to such debt securities. We are required
annually to deliver to the trustee an officers' certificate stating whether or
not the signers have knowledge of any default in performance by us of the
covenants described above.
If an event of default with respect to a series of debt securities issued to
a trust has occurred and is continuing and such event is attributable to the
failure of us to pay interest, premium (if any) or principal on such debt
securities on the date such interest, premium (if any) on principal is due and
payable, a holder of related trust preferred securities may institute a legal
proceeding directly against us for enforcement of payment to such holder of the
principal of or interest or premium (if any) on such debt securities having a
principal amount equal to the aggregate liquidation amount of the related trust
preferred securities of such holder (a "direct action"). We may not amend the
related indenture to remove the foregoing right to bring a direct action without
the prior written consent of the holders of all of the trust preferred
securities outstanding.
DEFEASANCE
Both indentures provide that we, at our option, need not comply with certain
restrictive covenants of such indenture as to any series of debt securities (in
the case of senior debt securities as described above under "Certain Covenants
of the Debt Securities--Limitation on Liens", "Limitation on Sale and Leaseback
Transactions" and the second paragraph of "Restrictions Upon Merger and Sales of
Assets"), upon the deposit with the trustee, in trust, of money, or U.S.
government obligations, or a combination thereof, which, through the payment of
interest thereon and principal thereof in accordance with their terms, will
provide money, in an amount sufficient to pay all the principal (including any
mandatory sinking fund payments, if any) of, and interest, if any, or premium,
if any, on the debt securities of such series on the dates such payments are due
in accordance with the terms of such debt securities to their stated maturities
or to and including a redemption date which has been irrevocably designated by
us for redemption of such debt securities.
To exercise any such option, we are required to meet certain conditions,
including delivering to the trustee an opinion of counsel to the effect that the
deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for federal income tax purposes.
MODIFICATION OF THE INDENTURES
Each indenture contains provisions permitting us and the trustee, with the
consent of the holders of not less than 66 2/3% in principal amount of the
outstanding debt securities of all series affected by such modification (voting
as one class), to modify such indenture or the rights of the holders of the
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debt securities, except that no such modification shall, without the consent of
the holder of each debt security so affected:
- change the maturity of any debt security, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount
thereof (including, in the case of a discounted debt security, the amount
payable thereon in the event of acceleration) or any redemption premium
thereon, or change the place or medium of payment of such debt security,
or impair the right of any holder to institute suit for payment thereof,
or
- reduce the percentage of debt securities, the consent of the holders of
which is required for any such modification or for certain waivers under
such indenture,
provided that, in the case of debt securities issued to a trust, so long as any
related trust preferred securities remain outstanding, (a) no such modification
may be made that adversely affects the holders of such trust preferred
securities in any material respect, and no termination of the related indenture
may occur, and no waiver of any event of default or compliance with any covenant
under the related indenture may be effective, without the prior consent of the
holders of at least a majority of the aggregate liquidation amount of all
related trust preferred securities affected unless and until the principal of
the debt securities and all accrued and unpaid interest thereon have been paid
in full and certain other conditions have been satisfied, and (b) where a
consent under the related indenture would require the consent of each holder of
debt securities and the debt securities were issued to a trust, no such consent
shall be given by the property trustee without the prior consent of each holder
of related trust preferred securities.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
The payment of the principal of, premium, if any, and interest, if any, on
the subordinated debt securities will be subordinated, to the extent and in the
manner set forth in the subordinated indenture, and as may be further described
in the applicable prospectus supplement, in right of payment to the prior
payment in full in cash or cash equivalents of all senior indebtedness which may
at any time and from time to time be outstanding.
Unless otherwise provided in the applicable prospectus supplement with
respect to an issue of subordinated debt securities, in the event of any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relating to our assets, or any liquidation, dissolution or other winding-up,
whether voluntary or involuntary, or any assignment for the benefit of creditors
or other marshalling of our assets or liabilities, all senior indebtedness must
be paid in full or such payment must be provided for before any payment or
distribution (excluding the distribution of certain permitted equity or
subordinated securities) is made on account of the principal, premium, if any,
sinking fund, if any, or interest, if any, on any subordinated debt securities.
In addition, the applicable prospectus supplement may provide that no
payment on account of the subordinated debt securities offered thereby shall be
made during the continuance of certain defaults with respect to our senior
indebtedness or certain of our designated senior indebtedness.
In the event that, notwithstanding the foregoing, any payment or
distribution of our assets (excluding the distribution of certain permitted
equity or subordinated securities) is received by the subordinated trustee or
the holders of any of the subordinated debt securities, under the circumstances
described above and before all senior indebtedness is paid in full, such payment
or distribution will be paid over to the holders of such senior indebtedness or
on their behalf for application to the payment of all such senior indebtedness
remaining unpaid until all such senior indebtedness has been paid in full or
such payment provided for, after giving effect to any concurrent payment or
distribution to the holders of such senior indebtedness.
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If this prospectus is being delivered in connection with the offering of a
series of subordinated debt securities, the accompanying prospectus supplement
or the information incorporated by reference will set forth the definitions of
senior indebtedness and designated senior indebtedness applicable to that
series, any payment blockage provisions and the approximate amount of such
senior indebtedness outstanding as of a recent date.
CONCERNING THE TRUSTEE
The Company may from time to time maintain lines of credit and have other
customary banking relationships with each trustee and its affiliated banks.
DEBT SECURITIES ISSUED TO TRUSTS
The debt securities may be issued in one or more series under the related
indenture with terms corresponding to the terms of a series of related trust
preferred securities. In that event, we will issue such series of debt
securities to the relevant trust in exchange for the related trust preferred
securities and trust common securities. We will then sell the trust preferred
securities to the public. Each series of debt securities issued to a trust will
be in the principal amount equal to the aggregate stated liquidation amount of
the related trust preferred securities and the trust common securities of such
trust and will rank equally with all other series of debt securities. Holders of
the related trust preferred securities for a series of debt securities will have
the rights, in connection with modifications to the related indenture or upon
occurrence of events of default, as described above under "--Modification of the
Indentures" and "--Events of Default," unless provided otherwise in the
prospectus supplement for such related trust preferred securities.
We will agree, as to each series of debt securities issued to a trust:
- to maintain directly or indirectly 100% ownership of the trust common
securities of the trust to which such debt securities have been issued,
provided that certain successors which are permitted pursuant to the
related indenture may succeed to our ownership of the trust common
securities,
- not to voluntarily terminate, wind up or liquidate any trust, except
(a) in connection with a distribution of debt securities to the holders of
the trust preferred securities in exchange therefor upon liquidation of
such trust, or (b) in connection with certain mergers or consolidations
permitted by the related trust agreement, and
- to use our reasonable efforts, consistent with the terms and provisions of
the related trust agreement, to cause such trust to remain classified as a
grantor trust and not as an association or publicly traded partnership
taxable as a corporation for United States federal income tax purposes.
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DESCRIPTION OF SECURITIES WARRANTS
GENERAL
We may issue warrants to purchase our securities or rights (including rights
to receive payment in cash or securities based on the value, rate or price of
one or more specified commodities, currencies or indices) or securities of other
issuers or any combination of the foregoing. Warrants may be issued
independently or together with any securities and may be attached to or separate
from such securities. Each series of warrants will be issued under a separate
warrant agreement to be entered into between us and a warrant agent we select.
You should review the applicable prospectus supplement for the specific
terms of any warrants that may be offered, including:
- the title of the warrants;
- the aggregate number of the warrants;
- the price or prices at which the warrants will be issued;
- the currency or currencies, including composite currencies, in which the
price of the warrants may be payable;
- our securities or rights (including rights to receive payment in cash or
securities based on the value, rate or price of one or more specified
commodities, currencies or indices) or securities of other issuers or any
combination of the foregoing purchasable upon exercise of such warrants;
- the price at which and the currency or currencies, including composite
currencies, in which the securities purchasable upon exercise of the
warrants may be purchased;
- the date on which the right to exercise the warrants will commence and the
date on which that right will expire;
- if applicable, the minimum or maximum amount of the warrants that may be
exercised at any one time;
- if applicable, the designation and terms of the securities with which the
warrants are issued and the number of warrants issued with each such
security;
- if applicable, the date on and after which the warrants and the related
securities will be separately transferable;
- information with respect to book-entry procedures, if any;
- if applicable, a discussion of certain United States federal income tax
considerations; and
- any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants.
DESCRIPTION OF TRUST PREFERRED SECURITIES
Each trust may issue only one series of trust preferred securities having
terms described in the applicable prospectus supplement. The trust agreement of
each trust authorizes the regular trustees of each trust to issue on behalf of
such trust one series of trust preferred securities. The trust agreement will be
qualified as an indenture under the Trust Indenture Act.
The trust preferred securities will have such terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or such restrictions, as shall be set forth in
the trust agreement or made part of the trust agreement by the Trust Indenture
Act.
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Reference is made to any prospectus supplement relating to the trust preferred
securities for specific terms including:
- the distinctive designation of such trust preferred securities,
- the number of trust preferred securities issued,
- the annual distribution rate (or method of determining such rate) for
trust preferred securities and the date or dates upon which such
distributions shall be payable,
- whether distributions on trust preferred securities shall be cumulative,
and, in the case of trust preferred securities having such cumulative
distribution rights, the date or dates or method determining the date or
dates from which distributions on trust preferred securities shall be
cumulative,
- the amount or amounts which shall be paid out of the assets of such trust
to the holders of trust preferred securities upon voluntary or involuntary
dissolution, winding-up or termination of such trust,
- the obligation, if any, of such trust to purchase or redeem trust
preferred securities and the price or prices at which, the period or
periods within which and the terms and conditions upon which trust
preferred securities issued by such trust shall be purchased or redeemed,
in whole or in part, pursuant to such obligation,
- the voting rights, if any, of trust preferred securities issued by such
trust in addition to those required by law, including the number of votes
per trust preferred security and any requirement for the approval by the
holders of trust preferred securities, or of trust preferred securities
issued by both trusts, as a condition to specified action or amendments to
the trust agreement of such trust,
- whether the trust preferred securities will be issued in the form of one
or more global securities, and
- any other relevant rights, preferences, privileges, limitations or
restrictions of trust preferred securities issued by such trust consistent
with the trust agreement of such trust or with applicable law.
All trust preferred securities offered hereby will be guaranteed by us to the
extent set forth below under "Description of Trust Preferred Guarantees."
In connection with the issuance of trust preferred securities, each trust
will issue one series of trust common securities. The trust agreement of each
trust authorizes the regular trustees to issue on behalf of such trust one
series of trust common securities having such terms including distributions,
redemption, voting, liquidation rights or such restrictions as shall be set
forth therein. The terms of the trust common securities issued by a trust will
be substantially identical to the terms of the trust preferred securities issued
by such trust and the trust common securities will rank equally, and payments
will be made thereon proportionately, with the trust preferred securities except
that, upon the occurrence and during the continuation of an event of default
under the trust agreement, the rights of the holders of the trust common
securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the trust preferred securities. Except in certain limited circumstances, the
trust common securities will also carry the right to vote and to appoint, remove
or replace any of the trustees. All of the trust common securities will be
directly or indirectly owned by us.
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DESCRIPTION OF TRUST PREFERRED GUARANTEES
Set forth below is a summary of information concerning the trust preferred
guarantees that will be executed and delivered by us for the benefit of the
holders, from time to time, of trust preferred securities. Each trust preferred
guarantee agreement under which trust preferred guarantees are issued will be
qualified as an indenture under the Trust Indenture Act. The trustee under each
trust preferred guarantee will be identified in the relevant prospectus
supplement. The terms of each trust preferred guarantee will be those set forth
in such trust preferred guarantee and those made part of such trust preferred
guarantee by the Trust Indenture Act.
Because the following is only a summary of the guarantees, it does not
contain all the information that you may find useful. For more information, you
should read the form of trust preferred guarantee, which is filed as an exhibit
to the registration statement of which this prospectus forms a part, and the
Trust Indenture Act. Each trust preferred guarantee will be held by the
guarantee trustee for the benefit of the holders of the trust preferred
securities of the applicable trust.
GENERAL
Pursuant to each trust preferred guarantee, we will unconditionally agree,
to the extent set forth herein, to pay in full to the holders of the trust
preferred securities issued by each trust, the guarantee payments (as described
below) (except to the extent paid by such trust), as and when due, regardless of
any defense, right of set-off or counterclaim which such trust may have or
assert. The following payments (which we refer to as the "guarantee payments")
with respect to trust preferred securities issued by each trust, to the extent
not paid by such trust, will be subject to the trust preferred guarantee:
- any accumulated and unpaid distributions that are required to be paid on
such trust preferred securities, but if and only to the extent that in
each case we have made a payment to the property trustee of interest,
principal and premium, if any, on the debt securities held in such trust
as trust assets,
- the redemption price, including all accrued and unpaid distributions, but
if and only to the extent that in each case we have made a payment to the
related property trustee of interest and principal on the debt securities
held in such trust as trust assets with respect to any trust preferred
securities called for redemption by such trust, and
- upon a voluntary or involuntary dissolution, winding-up or termination of
such trust (other than in connection with the distribution of debt
securities to the holders of trust preferred securities or the redemption
of all of the trust preferred securities), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid distributions on such
trust preferred securities to the date of payment to the extent such trust
has funds available therefor or (b) the amount of assets of such trust
remaining available for distribution to holders of such trust preferred
securities in liquidation of such trust. Our obligation to make a
guarantee payment may be satisfied by direct payment of the required
amounts by us to the holders of trust preferred securities or by causing
the applicable trust to pay such amounts to such holders.
Each trust preferred guarantee will be a guarantee with respect to the trust
preferred securities issued by the applicable trust from the time of issuance of
such trust preferred securities but will not apply to any payment of
distributions except to the extent we have made a payment to the related
property trustee of interest or principal on the debt securities held in such
trust as trust assets. If we do not make interest payments on the debt
securities purchased by a trust, such trust will not pay distributions on the
trust preferred securities issued by such trust and will not have funds
available therefor and such payment obligation will therefore not be guaranteed
by us under the guarantee.
Our obligations under the trust agreement for each trust, the guarantee
issued with respect to trust preferred securities issued by that trust, the debt
securities purchased by that trust and the related
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indenture in the aggregate will provide a full and unconditional guarantee on a
junior subordinated basis by us of payments due on the trust preferred
securities issued by that trust.
We have also agreed to unconditionally guarantee the obligations of the
trusts with respect to the trust common securities to the same extent as the
trust preferred guarantees, except that, upon an event of default under the
related indenture, holders of trust preferred securities under the trust
preferred guarantees shall have priority over holders of trust common securities
under the trust common guarantee with respect to distributions and payments on
liquidation, redemption or otherwise.
CERTAIN COVENANTS OF INGERSOLL-RAND
In each trust preferred guarantee, we will covenant that, so long as any
trust preferred securities issued by the applicable trust remain outstanding, if
there shall have occurred any event that would constitute an event of default
under such trust preferred guarantee or the declaration of such trust, then:
- we shall not declare or pay any dividend on, or make any distribution with
respect to, or redeem, purchase, acquire or make a liquidation payment
with respect to, any of our capital stock, and
- we shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities issued by us which
rank equally or junior to such debt securities.
However, each trust preferred guarantee will except from the foregoing any
stock dividends paid by us, or any of our subsidiaries, where the dividend stock
is of the same class as that on which the dividend is being paid.
MODIFICATION OF THE TRUST PREFERRED GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of trust preferred securities in any material respect (in which case
no vote will be required), each trust preferred guarantee may be amended only
with the prior approval of the holders of not less than a majority in
liquidation amount of the outstanding trust preferred securities issued by the
applicable trust. The manner of obtaining any such approval of holders of such
trust preferred securities will be set forth in an accompanying prospectus
supplement.
EVENTS OF DEFAULT
An event of default under the trust preferred guarantee will occur upon our
failure to perform any of our payments or other obligations thereunder. The
holders of a majority in liquidation amount of the trust preferred securities to
which a trust preferred guarantee relates have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
guarantee trustee in respect of the trust preferred guarantee or to direct the
exercise of any trust or power conferred upon the guarantee trustee under the
trust preferred guarantee.
If the guarantee trustee fails to enforce such trust preferred guarantee,
any holder of trust preferred securities relating to such trust preferred
guarantee may institute a legal proceeding directly against us to enforce the
guarantee trustee's rights under such trust preferred guarantee without first
instituting a legal proceeding against the relevant trust, the guarantee trustee
or any other person or entity.
TERMINATION OF TRUST PREFERRED GUARANTEES
Each trust preferred guarantee will terminate as to the trust preferred
securities issued by the applicable trust upon full payment of all distributions
relating to the trust preferred securities or the redemption price of all trust
preferred securities of such trust, upon distribution of the debt securities
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held by such trust to the holders of the trust preferred securities of such
trust or upon full payment of the amounts payable in accordance with the
declaration of such trust upon liquidation of such trust. Each trust preferred
guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of trust preferred securities issued by the
applicable trust must restore payment of any sums paid under such trust
preferred securities or such trust preferred guarantee.
STATUS OF TRUST PREFERRED GUARANTEES
Each trust preferred guarantee will constitute our unsecured obligation and
will have the rank described in the prospectus supplement.
The guarantee trustee shall enforce the trust preferred guarantee on behalf
of the holders of the trust preferred securities issued by the applicable trust.
The holders of not less than a majority in aggregate liquidation amount of the
trust preferred securities issued by the applicable trust have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of the related trust preferred guarantee, including the
giving of directions of the guarantee trustee. If the guarantee trustee fails to
enforce such trust preferred guarantee, any holder of trust preferred securities
issued by the applicable trust may institute a legal proceeding directly against
us, as guarantor, to enforce its rights under such trust preferred guarantee,
without first instituting a legal proceeding against the applicable trust or any
other person or entity.
Each trust preferred guarantee will constitute a guarantee of payment and
not of collection (that is, the guaranteed party may institute a legal
proceeding directly against the guarantor to enforce its rights under a trust
preferred guarantee without instituting a legal proceeding against any other
person or entity).
DESCRIPTION OF CAPITAL STOCK
The following description of our capital stock summarizes certain provisions
of our restated certificate of incorporation, as amended, the rights agreement,
between us and The Bank of New York, as rights agent and the New Jersey Business
Corporation Act and is subject to and is qualified in its entirety by reference
to such documents and provisions.
GENERAL
Our authorized capital stock consists of 600,000,000 shares of common stock
and 10,000,000 shares of preference stock, of which 161,659 shares of series A
preference stock have been reserved for issuance. At June 30, 2000, no shares of
the authorized preference stock were issued and outstanding and 161,658,867
shares of the authorized common stock were issued and outstanding. We also had
outstanding, as of such date, 161,658,867 series A preference stock purchase
rights.
COMMON STOCK
DIVIDENDS. Subject to the rights of holders of preference stock, the board
of directors may, in its discretion, out of funds legally available for the
payment of dividends and at such times and in such manner as determined by the
board of directors, declare and pay dividends on the common stock.
LIQUIDATION, DISSOLUTION AND WINDING UP. In the event of any liquidation,
dissolution or winding up of us, whether voluntary or involuntary, after payment
in full has been made to the holders of preference stock of the amounts to which
they are respectively entitled or sufficient sums have been set apart for the
payment thereof, the holders of common stock shall be entitled to receive
ratably any and all assets remaining to be paid or distributed, and the holders
of preference stock shall not be entitled to share therein.
VOTING. Except as otherwise expressly provided in the certificate of
incorporation or as may be required by law, the holders of our common stock
shall be entitled at all meetings of stockholders to
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one vote for each share of such stock held by them respectively and shall vote
together with the holders of preference stock as one class. At all elections of
directors, each holder of common stock shall be entitled to as many votes as
shall equal the number of votes which such holder would be entitled to cast,
multiplied by the number of directors to be elected, and such holder may cast
all such votes for a single director, or may distribute them, among the number
to be voted for or any two or more of such directors.
PREEMPTIVE RIGHTS. No holder of shares of our common stock shall have any
preemptive or preferential rights to subscribe to or purchase any shares of any
class or series of stock, now or hereafter authorized, or any series convertible
into, or warrants or other evidences of optional rights to purchase or subscribe
to, shares of any class or series, now or hereafter authorized.
All the outstanding shares of common stock are fully paid and
non-assessable.
The registrar and transfer agent for the common stock is The Bank of New
York.
PREFERENCE STOCK
The certificate of incorporation provides for preference stock which may be
issued, from time to time, in one or more series with certain rights and
limitations as may be fixed by our board of directors. We have no present plan
to issue any preference stock other than in accordance with our rights plan.
However, our board of directors, without stockholder approval, may issue
preference stock that could adversely affect the voting power of holders of the
common stock. Issuance of preference stock could be utilized, under certain
circumstances, in an attempt to prevent a takeover of us.
The following description sets forth certain general terms and provisions of
the preference stock to which a prospectus supplement may relate. Certain terms
of a series of the preference stock offered by a prospectus supplement will be
described in such prospectus supplement. If so indicated in the prospectus
supplement and if permitted by the certificate of incorporation and by law, the
terms of any such series may differ from the terms set forth below. The
following description of the preference stock summarizes certain provisions of
the certificate of incorporation and is subject to and qualified in its entirety
by reference to the certificate of incorporation and the certificate of
amendment thereto which will be filed with the SEC promptly after any offering
of such series of preference stock. The following description, together with any
description of the terms of a series of preference stock set forth in the
related prospectus supplement, summarizes all of the material terms of such
series of preference stock.
GENERAL. Our board of directors may cause preference stock to be issued
from time to time in one or more series and is expressly authorized to fix:
- the distinctive designation of such series and the number of shares which
shall constitute such series, which number may be increased (except as
otherwise provided by the board of directors in creating such series) or
decreased (but not below the number of shares thereof then outstanding)
from time to time by the board of directors;
- the rate of dividends payable on shares of such series and the date or
dates from which dividends shall accumulate;
- the terms, if any, on which shares of such series may be redeemed,
including, without limitation, the redemption price or prices for such
series, which may consist of a redemption price or scale of redemption
prices applicable only to redemption in connection with a sinking fund
(which term as used herein shall include any fund or requirement for the
periodic purchase or redemption of shares), and the same or a different
redemption price or scale of redemption prices applicable to any other
redemption;
- the terms and amount of any sinking fund provided for the purchase or
redemption of shares of such series;
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- the amount or amounts which shall be paid to the holders of shares of such
series in case of liquidation, dissolution or winding up of us, whether
voluntary or involuntary;
- the terms, if any, upon which the holders of shares of such series may
convert shares thereof into stock of any other class or classes or of any
one or more series of the same class or of another class or classes; and
- such other rights, preferences and limitations as may be permitted to be
fixed by our board of directors under the laws of the State of New Jersey
as in effect at the time of the creation of such series.
All shares of preference stock, irrespective of series, shall be of equal
rank, and shall be identical in all respects except to the terms fixed by the
board of directors as permitted in the certificate of incorporation. Our board
of directors is authorized to change the designation, rights, preferences and
limitations of any series of preference stock theretofore established, no shares
of which have been issued. Our board of directors is authorized to amend the
certificate of incorporation to set forth the designation, number of shares,
rights, preferences and limitations of any series of preference stock fixed by
the board of directors, or to reflect any change therein made by the board of
directors, as permitted in the certificate of incorporation.
DIVIDENDS. The holders of preference stock shall be entitled to receive,
when, as and if declared by the board of directors out of funds legally
available for the payment of dividends, cumulative dividends in cash at the
annual rate for each particular series theretofore fixed by the board of
directors, payable in respect of each series on the date or dates which shall be
fixed by the board of directors with respect to each particular series.
If at any time there are two or more series of preference stock outstanding,
any dividend paid upon shares of preference stock in an amount less than all
dividends accrued and unpaid on all outstanding shares of preference stock shall
be paid ratably among all series of preference stock in proportion to the full
amount of dividends accrued and unpaid on each such series.
So long as any preference stock is outstanding, no dividend shall be paid or
declared, nor any distribution made, on the common stock or any of our other
stock ranking junior to the preference stock in the payment of dividends (other
than a dividend payable in stock of junior rank), nor shall any shares of common
stock or any other stock of junior rank be acquired for consideration by us or
by any subsidiary except in exchange for shares of stock of junior rank unless:
- full dividends on the preference stock for all past dividend periods shall
have been paid or shall have been declared and a sufficient sum set apart
for the payment thereof, and
- all of our obligations, if any, with respect to the redemption or purchase
of shares of preference stock in accordance with the requirements of any
sinking fund have been met.
Subject to the foregoing provisions, such dividends (payable in cash, stock
or otherwise) as may be determined from time to time by the board of directors
may be declared and paid on the common stock or any other stock of junior rank
out of our remaining funds legally available for the payment of dividends; and
the preference stock shall not be entitled to participate in any such dividends,
whether payable in cash, stock or otherwise.
REDEMPTION. If so provided by the board of directors, we may, at the option
of the board of directors, or in accordance with the requirements of any sinking
fund for the preference stock or any series thereof, redeem the whole or any
part of the preference stock at any time outstanding, or the whole or any part
of any series thereof, at such time or times and from time to time and at such
redemption price or prices as may be fixed by the board of directors pursuant to
the certificate of incorporation, together in each case with an amount equal to
all unpaid dividends accrued thereon to the date fixed for such redemption, and
otherwise upon the terms and conditions fixed by the board of
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directors for any such redemption; provided, however, that no optional
redemption of less than all of the preference stock shall take place unless:
- full dividends on the preference stock for all past dividend periods shall
have been paid or declared and a sufficient sum set apart for the payment
thereof, and
- all of our obligations, if any, with respect to the redemption or purchase
of shares of preference stock in accordance with the requirements of any
sinking fund have been met.
If at any time there are two or more series of preference stock outstanding,
any amount expended in purchasing or redeeming shares of preference stock
pursuant to the provisions of sinking funds therefor which is less than the
amount then required to be so expended under all such funds shall be expended
ratably among all series of preference stock in proportion to the full amount of
expenditures of such funds then required in respect of each such series.
LIQUIDATION, DISSOLUTION AND WINDING UP. In the event of any liquidation,
dissolution or winding up of us, whether voluntary or involuntary, the holders
of each series of preference stock then outstanding shall be entitled to receive
out of our assets, before any distribution or payment shall be made to the
holders of the common stock or any of our other stock ranking junior to the
preference stock with respect to the distribution of assets, the amount
determined by the board of directors in creating such series, plus in each case
an amount equal to all unpaid dividends accrued thereon to the date fixed for
such payment to the holders of the preference stock. If upon any such
liquidation, dissolution or winding up, two or more series of preference stock
are outstanding, any distribution to holders of preference stock in an aggregate
amount less than the total payable with respect to all outstanding preference
stock shall be made ratably among all series of preference stock in proportion
to the full amount payable upon such liquidation, dissolution or winding up in
respect of each such series.
VOTING. The holders of preference stock shall have the voting rights set
forth below:
- Except as otherwise expressly provided in the certificate of incorporation
or as may be required by law, the holders of preference stock shall be
entitled at all meetings of stockholders to three votes for each five
shares of such stock held by them respectively (a holder of less than five
shares being entitled to no vote) and the holders of all series of
preference stock shall vote together with the holders of common stock as
one class. At all elections of directors, each holder of preference stock
shall be entitled to as many votes as shall equal the number of votes
which such holder would be entitled to cast, multiplied by the number of
directors to be elected, and such holder may cast all such votes for a
single director, or may distribute them among the number to be voted for
or any two or more of them as such holder may see fit.
- If and whenever dividends on the preference stock shall be in arrears in
an amount equivalent to six quarterly dividends or mandatory sinking fund
payments shall be in arrears in an amount equal to the aggregate of all
such payments required during one year, then, at any ensuing annual
meeting of stockholders at which at least a majority of the outstanding
shares of preference stock are represented, the holders of preference
stock of all series thereof then outstanding, voting separately as a
class, shall be entitled to elect two directors. Such right of the holders
of preference stock shall continue to be exercisable until all dividends
in arrears on preference stock shall have been paid in full or declared
and a sum sufficient for the payment thereof set apart and all mandatory
sinking fund payments in arrears shall have been paid in full, whereupon
such right shall cease. During any time that the holders of preference
stock are entitled to elect two such directors, they shall also be
entitled to participate with the common stock in the election of any other
directors.
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- Notwithstanding any other provision of the certificate of incorporation:
- the affirmative approval of the holders of at least two-thirds in interest
of preference stock of all series thereof then outstanding present and
voting at a meeting, acting as a single class without regard to series,
shall be required for any amendment of the certificate of incorporation
altering materially and adversely any existing provision of the preference
stock or for the creation, or an increase in the authorized amount, of any
class of stock ranking, as to dividends or assets, prior to the preference
stock; and
- the affirmative approval of the holders of at least a majority in interest
of preference stock of all series thereof then outstanding present and
voting at a meeting, acting as a single class without regard to series,
shall be required for an increase in the authorized amount of preference
stock, or for the creation, or an increase in the authorized amount, of
any class of stock ranking, as to dividends or assets, on a parity with
the preference stock;
provided, however, that if any amendment to the certificate of incorporation
shall affect adversely the rights or preferences of one or more, but not all, of
the series of preference stock at the time outstanding, or shall unequally
adversely affect the rights or preferences of different series of preference
stock at the time outstanding, the affirmative approval of the holders of at
least two-thirds in interest of the shares of each such series so adversely or
unequally adversely affected present and voting at a meeting shall be required
in lieu of or (if such affirmative approval is required by law) in addition to
the affirmative approval of the holders of at least two-thirds in interest of
the shares of Preference Stock as a class present and voting at such meeting.
PREEMPTIVE RIGHTS. No holder of shares of any series of preference stock
shall have any preemptive or preferential rights to subscribe to or purchase
shares of any class or series of stock, now or hereafter authorized, or any
securities convertible into, or warrants or other evidences of optional rights
to purchase or subscribe to, shares of any series, now or hereafter authorized.
OTHER PROVISIONS. Subject to the requirements above, but notwithstanding
any other provisions of the certificate of incorporation, the board of
directors, in the resolution or resolutions providing for the issue of any
series of preference stock, may determine, to the extent that the board of
directors may be permitted to do so under the laws of the State of New Jersey as
in effect at the time of the creation of such series:
- the voting rights, full or limited, if any, of the shares of such series;
and whether or not and under what conditions the shares of such series
(alone or together with the shares of one or more other series having
similar provisions) shall be entitled to vote separately as a single
class, for the election of one or more of our additional directors in case
of dividend arrearages or other specified events, or upon other matters;
- whether or not and upon what conditions dividends on shares of such series
shall be cumulative and, if cumulative, the date or dates from which
dividends shall accumulate;
- whether or not the holders of shares of such series shall have any
preemptive or preferential rights to subscribe to or purchase shares of
any class or series of our stock, now or hereafter authorized, or any
securities convertible into, or warrants or other evidences of optional
rights to purchase or subscribe to, shares of any class or series, now or
hereafter authorized; and
- whether or not the issuance of additional shares of such series, or of any
shares of any other series, shall be subject to restrictions as to
issuance, or as to the preferences, rights and qualifications of any such
other series.
VOTING REQUIREMENTS
MAJORITY VOTING REQUIREMENTS. Subject to the provisions described below
under "--Greater Voting Requirements" and except as otherwise expressly provided
in the certificate of incorporation or as may
23
be required by law, the majority voting requirements prescribed in subsections
14A:10-3(2) and 14A:12-4(4) and in paragraphs 14A:9-2(4)(c) and 14A:10-11(1)(c)
of the NJBCA shall apply to us. As a result, in the case of each of:
- a plan of merger or consolidation,
- a dissolution of us,
- an amendment to the certificate of incorporation, and
- a sale, lease, exchange or other disposition of all, or substantially all,
of our assets,
any such action shall be approved upon receiving the affirmative vote of a
majority of the votes cast by the holders of our shares entitled to vote
therein, and, in addition, if any class or series is entitled to vote thereon as
a class, the affirmative vote of a majority of the votes cast in each class
vote. Such voting requirements shall generally be subject to such greater
requirements as are provided in the NJBCA for specific amendments or as may be
provided in the certificate of incorporation.
GREATER VOTING REQUIREMENTS. The affirmative vote of the holders of
four-fifths of our outstanding shares of all classes of stock entitled to vote,
considered for the purposes of this paragraph as one class, shall be required to
authorize:
- our merger or consolidation or a subsidiary with or into any other
corporation, person or other entity,
- any sale, lease, exchange or other disposition of all or any material part
of our assets or of any subsidiary to or with any other corporation,
person or other entity, or
- any issuance or transfer of our securities upon conversion of or in
exchange for the securities or assets of any other corporation, person or
entity,
if (as of the date of any action taken by the board of directors with respect to
such transaction or as of any record date for the determination of stockholders
entitled to notice and to vote with respect thereto or immediately prior to the
consummation of such transaction) such other corporation, person or other entity
referred to in the above clauses is the beneficial owner, directly or
indirectly, of more than 10% of any class of our capital stock. For the purposes
hereof, any corporation, person or other entity shall be deemed to be the
beneficial owner of any shares of our capital stock, (x) which it has the right
to acquire pursuant to any agreement, or upon exercise of conversion rights,
warrants or options, or otherwise, or (y) which are beneficially owned, directly
or indirectly (including shares deemed owned through application of clause (x)
above) by any other corporation, person or other entity with which it has any
agreement, arrangement or understanding with respect to the acquisition,
holding, voting or disposition of stock or of any material part of our assets or
of it, or which is its "affiliate" or "associate" as those terms are defined in
Rule 12b-2 of the General Rules and Regulations under the 1934 Act, as in effect
on January 1, 1970. Any determination made in good faith by the board of
directors, on the basis of information at the time available to it, as to
whether any corporation, person or other entity is the beneficial owner of more
than 10% of any class of our capital stock, or is an "affiliate" or "associate,"
as above defined, shall be conclusive and binding for all purposes of this
paragraph. The provisions described in this paragraph shall not apply to any
agreement for the merger of any of our subsidiaries with us or with another of
our subsidiaries where we or such other subsidiary shall be the surviving
corporation and where the provisions described in this paragraph shall not be
changed or otherwise affected by or by virtue of the merger.
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DIRECTORS
The board of directors shall be divided as equally as may be into three
classes, each of which shall consist of such number as the by-laws may from time
to time provide, but no class shall consist of less than two members. At each
annual election, the successors of the directors of the class whose terms expire
in that year are elected to hold office for the term of three years, so that the
term of office of one class of directors shall expire in each year. If the
number of directors is changed, any newly created directorships or decrease in
directorships shall be so apportioned among the classes as to make all classes
as nearly equal in number as possible. In case of any increase in the number of
directors of any class or classes, the additional directors may be elected by
the board of directors, but any such director so elected shall hold office only
until the next succeeding annual meeting of stockholders and until his successor
shall have been elected and qualified. No decrease in the number of directors
shall shorten the term of any incumbent director. Directors may be removed
without cause only upon the affirmative vote of the holders of at least
four-fifths of the shares of capital stock entitled to vote for the election of
directors. Directors may be removed for cause upon the affirmative vote of
two-thirds of the entire board. The affirmative vote of the holders of at least
four-fifths of the shares of capital stock entitled to vote for the election of
the directors shall be required for any amendment or deletion of this provision,
unless such amendment or deletion shall have been approved by the unanimous vote
of the directors then in office, in which case the majority voting requirements
of the NJBCA described above shall apply thereto.
The provisions of the certificate of incorporation relating to directors
shall have no application to any directors who may be elected by the holders of
preference stock or any series thereof, voting as a class or series, as the case
may be, pursuant to a right to elect directors conferred upon such holders by
reason of default in the payment of dividends, failure to discharge sinking fund
obligations or otherwise. Any such directors shall be in addition to the
directors to be elected pursuant to the paragraph immediately above and shall be
elected in the manner, and serve for such term, as may be provided in the
certificate of incorporation.
RIGHTS PLAN
On November 4, 1998, our board of directors declared a dividend of one right
to purchase one one-thousandth of a share of series A preference stock for $200
(the "purchase price") on each outstanding share of our common stock, payable on
December 22, 1998 to stockholders of record as of December 22, 1998.
The rights will be evidenced by the common stock certificates until the
earlier to occur of:
- 10 days following a public announcement that a person or group of
affiliated or associated persons (an "acquiring person") have acquired
beneficial ownership of 15% or more of the outstanding shares of common
stock, or
- 10 business days (or such later date as may be determined by action of the
board of directors prior to such time as any person or group of affiliated
persons becomes an acquiring person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person
or group of 15% or more of the outstanding shares of common stock (the
earlier of such dates being called the "distribution date").
Until the distribution date (or earlier redemption or expiration of the
rights), the rights will be transferred with and only with the common stock.
Until the distribution date (or earlier redemption or expiration of the rights),
new common stock certificates issued upon transfer or new issuances of common
stock will contain a notation incorporating the rights agreement by reference.
Until the distribution date (or earlier redemption or expiration of the rights),
the surrender for transfer of any
25
certificates for shares of common stock outstanding, even without such notation
or a copy of the summary of rights, will also constitute the transfer of the
rights associated with the shares of common stock represented by such
certificate. As soon as practicable following the distribution date, separate
certificates evidencing the rights will be mailed to holders of record of the
common stock as of the close of business on the distribution date and such
separate right certificates alone will evidence the rights.
The rights are not exercisable until the distribution date. The rights will
expire on December 22, 2008 (the "final expiration date"), unless the final
expiration date is extended or unless the rights are earlier redeemed or
exchanged by us, in each case as described below.
The purchase price payable, and the number of shares of preference stock or
other securities or property issuable, upon exercise of the rights are subject
to adjustment from time to time to prevent dilution (a) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
preference stock, (b) upon the grant to holders of the preference stock of
certain rights or warrants to subscribe for or purchase preference stock at a
price, or securities convertible into preference stock with a conversion price,
less than the then-current market price of the preference stock or (c) upon the
distribution to holders of the preference stock for evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
preference stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding rights are also subject to adjustment in the event
of a stock split of the common stock or a stock dividend on the common stock
payable in shares of common stock or subdivisions, consolidation or combinations
of the common stock occurring, in any such case, prior to the distribution date.
Shares of preference stock purchasable upon exercise of the rights will not
be redeemable. Each share of preference stock will be entitled, when, as and if
declared, to a minimum preferential quarterly dividend payment of $1 per share
but will be entitled to an aggregate dividend of 1000 times the dividend
declared per share of common stock. In the event of liquidation, the holders of
the preference stock will be entitled to a minimum preferential liquidation
payment of $100 per share (plus any accrued but unpaid dividends) but will be
entitled to an aggregate payment of 1000 times the payment made per share of
common stock. Each share of preference stock will have 1000 votes, voting
together with the common stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of common stock are converted
or exchanged, each share of preference stock will be entitled to receive 1000
times the amount received per share of common stock. These rights are protected
by customary antidilution provisions.
Because of the nature of the preference stock's dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a share of
preference stock purchasable upon exercise of each right should approximate the
value of one share of common stock.
In the event that any person or group of affiliated or associated persons
becomes an acquiring person, each holder of a right, other than rights
beneficially owned by the acquiring person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a right at the then
current exercise price of the right, that number of shares of common stock
having a market value of two times the exercise price of the right.
In the event that, after a person or group has become an acquiring person,
we are acquired in a merger or other business combination transaction or 50% or
more of our consolidated assets or earning power are sold, proper provision will
be made so that each holder of a right (other than rights beneficially owned by
an acquiring person which will have become void) will thereafter have the right
to receive, upon the exercise thereof at the then current exercise price of the
right, that number of shares of common stock of the person with whom we engaged
in the foregoing transaction (or its
26
parent), which number of shares at the time of such transaction will have a
market value of two times the exercise price of the right.
At any time after any person or group becomes an acquiring person and prior
to the acquisition by such person or group of 50% or more of the outstanding
shares of common stock or the occurrence of an event described in the prior
paragraph, our board of directors may exchange the rights (other than rights
owned by such person or group which will have become void), in whole or in part,
at an exchange ratio of one share of common stock, or one one-thousandth of a
share of preference stock (or of a share of a class or series of our preference
stock having equivalent rights, preferences and privileges), per right (subject
to adjustment).
At any time prior to the time an acquiring person becomes such, our board of
directors may redeem the rights in whole, but not in part, at a price of $.01
per right.
The terms of the rights may be amended by our board of directors without the
consent of the holders of the rights, including an amendment to lower the 15%
threshold for an acquiring person described above to not less than the greater
of (a) the sum of .001% and the largest percentage of the outstanding shares of
common stock then known to be beneficially owned by any person or group of
affiliated or associated persons and (b) 10%, except that from and after such
time as any person or group of affiliated or associated person becomes an
acquiring person no such amendment may adversely affect the interests of the
holders of the rights.
Until a right is exercised, the holder thereof, as such, will have no rights
as a stockholder, including, without limitation, the right to vote or to receive
dividends.
The rights have certain anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire us on terms
not approve by our board of directors, except pursuant to an offer conditioned
on a substantial number of rights being acquired. The rights should not
interfere with any merger or other business combination approved by the board of
directors since the rights may be redeemed by us at the redemption price prior
to the time that a person or group has acquired beneficial ownership of 15% or
more of the shares of common stock.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below and in any prospectus supplement of certain
provisions of any deposit agreement and any related depositary shares and
depositary receipts summarizes the material terms of that deposit agreement and
of the depositary shares and depositary receipts. This summary does not contain
all of the information that you may find useful. For more information, please
review the form of deposit agreement and form of depositary receipts relating to
each series of the preference stock, which will be filed with the SEC promptly
after the offering of that series of preference stock.
GENERAL
We may elect to have shares of preference stock represented by depositary
shares. The shares of any series of the preference stock underlying the
depositary shares will be deposited under a separate deposit agreement between
us and a bank or trust company we select. The prospectus supplement relating to
a series of depositary shares will set forth the name and address of this
preference stock depositary. Subject to the terms of the deposit agreement, each
owner of a depositary share will be entitled, proportionately, to all the
rights, preferences and privileges of the preference stock represented by such
depositary share (including dividend, voting, redemption, conversion, exchange
and liquidation rights).
The depositary shares will be evidenced by depositary receipts issued
pursuant to the deposit agreement, each of which will represent the applicable
interest in a number of shares of a particular series of the preference stock
described in the applicable prospectus supplement.
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A holder of depositary shares will be entitled to receive the shares of
preference stock (but only in whole shares of preference stock) underlying those
depositary shares. If the depositary receipts delivered by the holder evidence a
number of depositary shares in excess of the whole number of shares of
preference stock to be withdrawn, the depositary will deliver to that holder at
the same time a new depositary receipt for the excess number of depositary
shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The preference stock depositary will distribute all cash dividends or other
cash distributions in respect of the preference stock to the record holders of
depositary receipts in proportion, insofar as possible, to the number of
depositary shares owned by those holders.
If there is a distribution other than in cash in respect of the preference
stock, the preference stock depositary will distribute property received by it
to the record holders of depositary receipts in proportion, insofar as possible,
to the number of depositary shares owned by those holders, unless the preference
stock depositary determines that it is not feasible to make such a distribution.
In that case, the preference stock depositary may, with our approval, adopt any
method that it deems equitable and practicable to effect the distribution,
including a public or private sale of the property and distribution of the net
proceeds from the sale to the holders.
The amount distributed in any of the above cases will be reduced by any
amount we or the preference stock depositary are required to withhold on account
of taxes.
CONVERSION AND EXCHANGE
If any preference stock underlying the depositary shares is subject to
provisions relating to its conversion or exchange as set forth in an applicable
prospectus supplement, each record holder of depositary shares will have the
right or obligation to convert or exchange those depositary shares pursuant to
those provisions.
REDEMPTION OF DEPOSITARY SHARES
Whenever we redeem a share of preference stock held by the preference stock
depositary, the preference stock depositary will redeem as of the same
redemption date a proportionate number of depositary shares representing the
shares of preference stock that were redeemed. The redemption price per
depositary share will be equal to the aggregate redemption price payable with
respect to the number of shares of preference stock underlying the depositary
shares. If fewer than all the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot or proportionately as
we may determine.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the depositary shares will cease, except the right to receive the
redemption price.
VOTING
Upon receipt of notice of any meeting at which the holders of any shares of
preference stock underlying the depositary shares are entitled to vote, the
preference stock depositary will mail the information contained in the notice to
the record holders of the depositary receipts. Each record holder of the
depositary receipts on the record date (which will be the same date as the
record date for the preference stock) may then instruct the preference stock
depositary as to the exercise of the voting rights pertaining to the number of
shares of preference stock underlying that holder's depositary shares. The
preference stock depositary will try to vote the number of shares of preference
stock underlying the depositary shares in accordance with the instructions, and
we will agree to take all reasonable
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action which the preference stock depositary deems necessary to enable the
preference stock depositary to do so. The preference stock depositary will
abstain from voting the preference stock to the extent that it does not receive
specific written instructions from holders of depositary receipts representing
the preference stock.
RECORD DATE
Whenever
- any cash dividend or other cash distribution becomes payable, any
distribution other than cash is made, or any rights, preferences or
privileges are offered with respect to the preference stock, or
- the preference stock depositary receives notice of any meeting at which
holders of preference stock are entitled to vote or of which holders of
preference stock are entitled to notice, or of the mandatory conversion of
or any election by us to call for the redemption of any preference stock,
the preference stock depositary will in each instance fix a record date (which
will be the same as the record date for the preferred stock) for the
determination of the holders of depositary receipts:
- who will be entitled to receive dividend, distribution, rights,
preferences or privileges or the net proceeds of any sale, or
- who will be entitled to give instructions for the exercise of voting
rights at any such meeting or to receive notice of the meeting or the
redemption or conversion, subject to the provisions of the deposit
agreement.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
We and the preference stock depositary may at any time agree to amend the
form of depositary receipt and any provision of the deposit agreement. However,
any amendment that materially and adversely alters the rights of holders of
depositary shares will not be effective unless the amendment has been approved
by the holders of at least a majority of the depositary shares then outstanding.
The deposit agreement may be terminated by us or by the preference stock
depositary only if all outstanding shares have been redeemed or if a final
distribution in respect of the underlying preference stock has been made to the
holders of the depositary shares in connection with the liquidation, dissolution
or winding up of us.
CHARGES OF PREFERENCE STOCK DEPOSITARY
We will pay all charges of the preference stock depositary including charges
in connection with the initial deposit of the preference stock, the initial
issuance of the depositary receipts, the distribution of information to the
holders of depositary receipts with respect to matters on which preference stock
is entitled to vote, withdrawals of the preference stock by the holders of
depositary receipts or redemption or conversion of the preference stock, except
for taxes (including transfer taxes, if any) and other governmental charges and
any other charges expressly provided in the deposit agreement to be at the
expense of holders of depositary receipts or persons depositing preference
stock.
MISCELLANEOUS
Neither we nor the preference stock depositary will be liable if either of
us is prevented or delayed by law or any circumstance beyond our control in
performing any obligations under the deposit agreement. The obligations of the
preference stock depositary under the deposit agreement are limited to
performing its duties under the agreement without negligence or bad faith. Our
obligations under the deposit agreement are limited to performing our duties in
good faith. Neither we nor the
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preference stock depositary is obligated to prosecute or defend any legal
proceeding in respect of any depositary shares or preference stock unless
satisfactory indemnity is furnished. We and the preference stock depositary may
rely on advice of or information from counsel, accountants or other persons that
they believe to be competent and on documents that they believe to be genuine.
The preference stock depositary may resign at any time or be removed by us,
effective upon the acceptance by its successor of its appointment. If we have
not appointed a successor preference stock depositary and the successor
depositary has not accepted its appointment within 60 days after the preference
stock depositary delivered a resignation notice to us, the preference stock
depositary may terminate the deposit agreement. See "Amendment and Termination
of the Deposit Agreement" above.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts representing contracts obligating
holders to purchase from us and us to sell to the holders a specified number of
shares of common stock or preference stock at a future date or dates. The price
per share of common stock or preference stock may be fixed at the time the stock
purchase contracts are issued or may be determined by reference to a specific
formula set forth in the stock purchase contracts.
The stock purchase contracts may be issued separately or as a part of units,
often known as stock purchase units, consisting of a stock purchase contract and
either
- senior debt securities,
- subordinated debt securities,
- debt obligations of third parties, including U.S. Treasury securities, or
- trust preferred securities of a trust,
securing the holder's obligations to purchase the common stock or preference
stock under the stock purchase contracts. The stock purchase contracts may
require us to make periodic payments to the holders of the stock purchase units
or vice versa, and such payments may be unsecured or prefunded on some basis.
The stock purchase contracts may require holders to secure their obligations in
a specified manner and in certain circumstances we may deliver newly issued
prepaid stock purchase contracts, often known as prepaid securities, upon
release to a holder of any collateral securing each holder's obligations under
the original stock purchase contract.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units and, if applicable, prepaid
securities. The description in the prospectus supplement will not contain all of
the information that you may find useful. For more information, you should
review the stock purchase contracts, the collateral arrangements and depositary
arrangements, if applicable, relating to such stock purchase contracts or stock
purchase units and, if applicable, the prepaid securities and the document
pursuant to which the prepaid securities will be issued, which will be filed
with the SEC promptly after the offering of such stock purchase contracts or
stock purchase units and, if applicable, prepaid securities.
PLAN OF DISTRIBUTION
We may sell the securities offered in this prospectus in any of, or any
combination of, the following ways:
- directly to purchasers,
- through agents,
- through underwriters, and
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- through dealers.
We or any of our agents may directly solicit offers to purchase these
securities. The applicable prospectus supplement will name any agent, who may be
deemed to be an underwriter as that term is defined in the Securities Act of
1933, involved in the offer or sale of the securities in respect of which this
prospectus is delivered, and will set forth any commissions payable by us to
that agent. Unless otherwise indicated in the prospectus supplement, any such
agency will be acting in a best efforts basis for the period of its appointment
(ordinarily five business days or less). Agents, dealers and underwriters may be
customers of, engage in transactions with, or perform services for us in the
ordinary course of business.
If we utilize an underwriter or underwriters in the sale, we will execute an
underwriting agreement with such underwriters at the time of sale to them and
will set forth in the applicable prospectus supplement the names of the
underwriters and the terms of the transaction. The underwriters will use the
prospectus supplement to make releases of the securities in respect of which
this prospectus is delivered to the public.
If we utilize a dealer in the sale of the securities in respect of which
this prospectus is delivered, we will sell the securities to the dealer, as
principal. The dealer may then resell the securities to the public at varying
prices to be determined by the dealer at the time of resale. The prospectus
supplement will set forth the name of the dealer and the terms of the
transaction.
Agents, underwriters, and dealers may be entitled under the relevant
agreements to indemnification by us against certain liabilities, including
liabilities under the Securities Act of 1933.
The applicable prospectus supplement will set forth the place and time of
delivery for the securities in respect of which this prospectus is delivered.
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$575,000,000
Ingersoll-Rand Company
6.25% Notes due 2006
[LOGO]
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P R O S P E C T U S S U P P L E M E N T
MAY 16, 2001
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Joint Book-Running Managers
Deutsche Banc Alex. Brown
Salomon Smith Barney
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JPMorgan
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Tokyo-Mitsubishi International plc
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Banc of America Securities LLC
Barclays Capital
BNP PARIBAS
Credit Suisse First Boston
Fleet Securities, Inc.
HSBC
Scotia Capital
Wachovia Securities, Inc.
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