FORM OF RESOLUTION CREATING 8% SENIOR NOTES DUE 1997
NOW, THEREFORE, BE IT RESOLVED: That the following resolutions are adopted
by the Special Committee effective March 6, 1987.
BE IT FURTHER RESOLVED: That there is hereby approved and established a
series of Securities under the Indenture, whose terms shall be as follows:
(1) The series of Securities established hereby to be issued pursuant to
the Indenture shall be known and designated as the "8% Senior Notes Due 1997"
(the "Notes").
(2) The aggregate principal amount of the Notes is limited to $100,000,000
(except as provided in Section 2.01(2) of the Indenture).
(3) The stated maturity of the principal of the Notes shall be March 15,
1997.
(4) The Notes shall bear interest at the rate of 8% per annum from March
15, 1987 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, as the case may be, payable on each September 15
and March 15, commencing September 15, 1987 until the principal amount thereof
is paid or made available for payment. Each September 15 and March 15 shall be
an "Interest Payment Date" for the Notes. The September 1 or March 1 (whether
or not a Business Day) next preceding an Interest Payment Date shall be the
"Regular Record Date" for the interest payable on such Interest Payment Date.
(5) The principal of and interest on the Notes shall be payable, and the
Notes shall be transferable and exchangeable, at the office or agency of the
Corporation maintained for that purpose in the City of Chicago, State of
Illinois; PROVIDED, HOWEVER, that at the option of the Corporation, payment of
interest may be made by check mailed to the address of the Holder entitled
thereto as such address shall appear in the Security Register.
(6) The Notes shall not be redeemable at the Corporation's option prior to
maturity.
(7) The Notes shall be issued only in denominations of $1,000 and integral
multiples thereof.
(8) The Notes shall be issued as Registered Securities only, in fully
registered form.
(9) The following additional covenants of the Corporation shall be added
for the benefit of the Notes:
DEFINITIONS APPLICABLE TO COVENANTS. The following definitions shall
be applicable to the covenants specified below:
(i) "Attributable Debt" means as to any particular lease under
which any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the
remaining term thereof (including any period for which such lease has
been extended or may, at the option of the lessor, be extended),
discounted from the respective due dates thereof to such date at a
rate per annum equal to one-fourth of one percent above the rate per
annum borne by the Notes compounded semi-annually. The net amount of
rent required to be paid under any such lease for any such period
shall be the aggregate amount of the rent payable by the lessee with
respect to such period after excluding amounts required to be paid on
account of maintenance and repairs, insurance, taxes, assessments,
water rates and similar charges. In the case of any lease which is
terminable by the lessee upon the payment of a penalty, such net
amount shall also include the amount of such penalty, but no rent
shall be considered as required to be paid under such lease subsequent
to the first date upon which it may be so terminated.
(ii) "Consolidated Net Tangible Assets" means the aggregate
amount of assets (including investments in Unrestricted Subsidiaries,
but less applicable reserves and other properly deductible items)
after deducting therefrom (a) all liabilities and liability items
except Funded Debt, deferred income taxes and stockholders' equity,
and (b) all goodwill, trade names, trademarks, patents, unamortized
debt discount and expense and other like intangibles, in each case
computed in accordance with generally accepted accounting principles,
which under generally accepted accounting principles would appear on a
consolidated balance sheet of the Corporation and its Restricted
Subsidiaries.
(iii) "Funded Debt" means any indebtedness for money borrowed
maturing on, or extendible at the option
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of the obligor to, a date more than one year from the date of the
determination thereof.
(iv) "Mortgage" means and includes any mortgage, pledge, lien,
security interest, conditional sale or other title retention agreement
or other similar encumbrance.
(v) "Principal Operating Property" means any principal
manufacturing plant, or distribution or research facility, and related
raw material and other facilities (other than facilities acquired
subsequent to the date hereof for the control or abatement of
atmospheric pollutants or contaminants, water pollution, noise, odor
or other pollution) which on the effective date hereof or at any time
subsequent thereto is located in the United States and has been owned
and operated by the Corporation or any Subsidiary for more than 90
days, provided, however, that any principal manufacturing plant, or
distribution or research facility, and related raw material and other
facilities (not theretofore owned by the Corporation or a Subsidiary)
owned and operated by a corporation which becomes a Subsidiary after
the effective date hereof shall not constitute a Principal Operating
Property unless owned and operated by such corporation for more than
90 days after it becomes a Subsidiary; and provided, further, that the
Board of Directors may by Board Resolution declare that any plant is
not of material importance to the business of the Corporation and its
Restricted Subsidiaries as a whole, in which case such plant shall not
be deemed to be a Principal Operating Property.
(vi) "Restricted Subsidiary" means as of the date of
determination any Subsidiary which owns any Principal Operating
Property.
(vii) "Senior Funded Debt" means all Funded Debt, and all
renewals, extensions and refundings of Funded Debt, except
Subordinated Funded Debt.
(viii) "Subordinated Funded Debt" means (i) the Corporation's 4.85%
Subordinated Sinking Fund Debentures due 1991 and (ii) any other
unsecured Funded Debt of the Corporation which is expressly made
subordinate and junior in rank and right of payment to the Notes in
the event of any insolvency or bankruptcy proceedings, and any
receivership, liquidation, reorganization or other similar proceedings
in connection therewith, relative to the Corporation or to its
creditors, as such, or to its property, and in the event of any
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proceedings for voluntary liquidation, dissolutions or other winding
up of the Corporation, whether or not involving insolvency or
bankruptcy.
(ix) "Subsidiary" of the Corporation means any corporation at
least a majority of the shares of the Voting Stock (or the equivalent
thereof, in the case of corporations organized outside the United
States of America) of which shall at the time be owned, directly or
indirectly, by the Corporation or by one or more Subsidiaries or by
the Corporation and one or more Subsidiaries.
(x) "Unrestricted Subsidiary" means any Subsidiary other than a
Restricted Subsidiary.
(xi) "Voting Stock", as applied to the stock of any corporation,
means stock of any class or classes (however designated) having
ordinary voting power for the election of a majority of the directors
of such corporation, other than stock having such power only by reason
of the happening of a contingency.
LIMITATION ON LIENS. So long as any Notes shall be Outstanding, the
Corporation will not itself, and will not permit any Restricted Subsidiary
to, incur, issue, assume, guarantee or suffer to exist any indebtedness for
money borrowed (indebtedness for money borrowed being hereinafter in this
paragraph called "Debt") secured by a Mortgage on any Principal Operating
Property of the Corporation or any Restricted Subsidiary, or any shares of
stock of or Debt of any Restricted Subsidiary, without effectively
providing that the Notes (together with, if the Corporation shall so
determine, any other Debt of the Corporation or such Restricted Subsidiary
then existing or thereafter created which is not subordinated Debt) shall
be secured equally and ratably with (or, at the option of the Corporation,
prior to) such secured Debt so long as such secured Debt shall be so
secured, unless, after giving effect thereto, the aggregate amount of all
such secured Debt plus all Attributable Debt of the Corporation and its
Restricted Subsidiaries in respect of sale and leaseback transactions (as
defined in the following paragraph, but excluding leases exempt from the
prohibition of the following paragraph by clauses (B) through (D),
inclusive, thereof) would not exceed 5% of Consolidated Net Tangible
Assets; provided, however, that this paragraph shall not apply to, and
there shall be excluded from secured Debt in any computation under this
paragraph. Debt secured by:
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(A) Mortgages on, and limited to, property of, or on any shares
of stock of or Debt of, any corporation existing at the time such
corporation becomes a Restricted Subsidiary;
(B) Mortgages in favor of the Corporation or any Restricted
Subsidiary;
(C) Mortgages in favor of any governmental body to secure
progress, advance or other payments pursuant to any contract or
provision of any statute;
(D) (i) if made and continuing in the ordinary course of
business, any Mortgage as security for the performance of any contract
or undertaking not directly or indirectly in connection with the
borrowing of money or the securing of Debt, or (ii) any Mortgage with
any governmental agency required or permitted to qualify the
Corporation or any Restricted Subsidiary to conduct business, to
maintain self-insurance or to obtain the benefits of any law
pertaining to workmen's compensation, unemployment insurance, old age
pensions, social security or similar matters;
(E) Mortgages for taxes, assessments or governmental charges or
levies if such taxes, assessments, governmental charges or levies
shall not at the time be due and payable, or if the same thereafter
can be paid without penalty, or if the same are being contested in
good faith by appropriate proceedings;
(F) Mortgages created by or resulting from any litigation or
legal proceeding which at the time is currently being contested in
good faith by appropriate proceedings; or Mortgages arising out of
judgments or awards as to which the time for prosecuting an appeal or
proceeding for review has not expired;
(G) Mortgages on, and limited to, property (including leasehold
estates), shares of stock or Debt existing at the time of acquisition
thereof (including acquisition through merger or consolidation) or to
secure the payment of all or any part of the purchase price thereof or
construction thereon or to secure any Debt incurred prior to, at the
time of, or within 120 days after the later of the acquisition, the
completion of construction or the commencement of full operation of
such property or within 120 days after the acquisition of such shares
or Debt for the purpose of financing all or any part of the purchase
price thereof or construction thereon; or
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(H) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any
Mortgage referred to in the foregoing clauses (A) through (G),
inclusive, provided, that (i) such extension, renewal or replacement
Mortgage shall be limited to all or a part of the same property,
shares of stock or Debt that secured the Mortgage extended, renewed or
replaced (plus improvements on such property) and (ii) the Debt
secured by such Mortgage at such time is not increased.
LIMITATION ON SALE AND LEASEBACK. So long as any Notes shall be
Outstanding, except as hereinafter provided, the Corporation will not
itself, and it will not permit any Restricted Subsidiary to, enter into any
transaction with any bank, insurance company or other lender or investor,
or to which any such bank, company, lender or investor is a party,
providing for the leasing by the Corporation or a Restricted Subsidiary of
any Principal Operating Property owned at March 15, 1987 which has been or
is to be sold or transferred by the Corporation or a Restricted Subsidiary
to such bank, company, lender or investor, or to any Person to whom funds
have been or are to be advanced by such bank, company, lender or investor
on the security of such Principal Operating Property (herein referred to as
a "sale and leaseback transaction"). This covenant shall not apply to any
sale and leaseback transaction if:
(A) the Corporation or such Restricted Subsidiary could create Debt
secured by a Mortgage pursuant to the preceding paragraph, without regard
to clauses (A) through (H) thereof, on the Principal Operating Property to
be leased in an amount equal to the Attributable Debt with respect to such
sale and leaseback transaction without equally and ratably securing the
Notes, or
(B) the Corporation or a Restricted Subsidiary, within 120 days after
the sale or transfer shall have been made by the Corporation or by a
Restricted Subsidiary, applies an amount equal to the greater of the net
proceeds from the sale of the Principal Operating Property leased pursuant
to such arrangement or the fair market value of the Principal Operating
Property so leased at the time of entering into such arrangement (as
determined in any manner approved by the Board of Directors) to the
retirement of Senior Funded Debt of the Corporation or Funded Debt of a
Restricted Subsidiary; provided, that the amount to be applied to the
retirement of Senior Funded Debt of the Corporation or Funded Debt of a
Restricted Subsidiary shall be reduced by (i) the principal amount of any
Notes (or other debentures or notes constituting Senior Funded Debt of the
Corporation
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or Funded Debt of a Restricted Subsidiary) delivered within 75 days after
such sale or transfer to the Trustee or other applicable trustee for
retirement and cancellation and (ii) the principal amount of Senior Funded
Debt of the Corporation or Funded Debt of a Restricted Subsidiary, other
than Funded Debt included under clause (i), voluntarily retired by the
Corporation or a Restricted Subsidiary within 75 days after such sale.
Notwithstanding the foregoing, no retirement referred to in this clause (B)
may be effected by payment at maturity or pursuant to any mandatory sinking
fund payment or any mandatory prepayment provision, or
(C) the lease in such sale and leaseback transaction is for a period,
including renewals, of no more than three years, or
(D) such arrangement is between the Corporation and a Restricted
Subsidiary or between Restricted Subsidiaries.
(10) The following additional Event of Default shall be added for the
benefit of the Notes:
any event of default or events of default as defined in any mortgages,
indentures or instruments, under which there may be issued, or by which
there may be secured or evidenced, any indebtedness for borrowed money of
the Corporation or any Subsidiary in excess of $50,000,000 principal amount
in the aggregate, whether such indebtedness now exists or shall hereafter
be created, which shall happen and shall result in such indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise become due and payable, and such acceleration or
accelerations shall not be rescinded or annulled for a period of ten days
after there has been given, by registered or certified mail, to the
Corporation by the Trustee or to the Corporation and the Trustee by the
Holders of at least 25% in principal amount of the Notes Outstanding, a
written notice specifying such event of default or events of default and
requiring the Corporation to cause such acceleration or accelerations to be
rescinded or annulled and stating that such notice is a "Notice of Default"
hereunder.
For all purposes of the Indenture, the foregoing Event of Default shall be
deemed to be an Event of Default described in (a), (b) or (c) of Section 6.01 of
the Indenture.
(11) The following additional provisions shall be added for the benefit of
the Notes:
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LIMITED MANDATORY REDEMPTION OBLIGATION.
(a) DEFINITIONS. For purposes of this provision, the following
definitions shall apply:
(i) "Affiliate" of a Person means any other Person controlling,
controlled by or under common control with such Person, either solely with
respect to the purchase or other acquisition of Common Shares or otherwise.
(ii) "Common Shares" means the shares of Common Stock, $4.00 par
value per share, of the Corporation.
(iii) "Designated Event" means any one or more of the following, which
occurs subsequent to December 15, 1986:
(A) (1) the Corporation shall consolidate with or merge into any
other corporation or convey, transfer or lease all or substantially
all of its assets to any Person, or (2) any Person shall consolidate
with or merge into the Corporation pursuant to a transaction in which
the Common Shares then outstanding are changed or exchanged;
(B) any Person (other than the Corporation or any Subsidiary)
shall purchase or otherwise acquire directly or indirectly the
beneficial ownership of Common Shares and immediately after such
purchase or acquisition such Person and its Affiliates shall directly
or indirectly beneficially own in the aggregate twenty percent or
more of the Common Shares then outstanding;
(C) the Corporation or any Subsidiary shall purchase or
otherwise acquire directly or indirectly in one or more transactions
an aggregate of thirty percent or more of the Common Shares
outstanding on the date immediately prior to the last such purchase
or other acquisition; or
(D) the Corporation shall make any distribution or distributions
of cash, property or securities (other than regular periodic cash
dividends at a rate which is substantially consistent with past
practice, including with respect to increases in dividends, and other
than Common Shares or rights to acquire Common Shares) to holders of
Common Shares, whether by means of dividend, reclassification,
recapitalization or otherwise.
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having an aggregate, fair market value (as determined in good faith
by the Board of Directors, whose determination shall be conclusive)
in excess of an amount equal to (1) thirty percent of the fair market
value (based on the closing last sale price of the Common Shares as
reported in the Midwest Edition of the WALL STREET JOURNAL) of all of
the Corporation's Common Shares outstanding on the date immediately
prior to the date of such distribution (or, if there be more than
one, the last such distribution), less (2) all amounts expended by
the Corporation and its Subsidiaries (the amount expended, if other
than in cash, to be determined in good faith by the Board of
Directors, whose determination shall be conclusive) to purchase or
otherwise acquire Common Shares subsequent to December 15, 1986 and
prior to the date of such distribution (or, if there be more than
one, the last such distribution).
(iv) "Person" means any Person as defined in the Indenture but shall
also include a group within the meaning of Section 13(d)(3) (or any
successor provision) of the Securities Exchange Act of 1934.
(v) For purposes of this paragraph (a), "beneficial ownership" shall
be determined in accordance with Rule 13d-3 (or any successor rule) of the
Securities and Exchange Commission under the Securities and Exchange Act of
1934.
(b) MANDATORY REDEMPTION. If,
(i) a Designated Event shall occur at any time prior to December 15,
1987 or a proposal to consummate a Designated Event shall be publicly
announced prior to December 15, 1987 and shall thereafter occur, and
(ii) the Prevailing Rating of the Notes by Standard & Poor's
Corporation or its successor ("S&P") or Moody's Investors Service, Inc. or
its successor ("Moody's") is less than BBB- the case of S&P or Baa3 in the
case of Moody's (A) on any date within 60 days following the occurrence of
such Designated Event or (B) on any date in the event that such Prevailing
Rating is the result of a downgrade which the relevant rating agency has
publicly announced to have been casued solely by the occurrence (or
proposed occurrence) of such Designated Event and related transactions,
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then the Corporation (or its successor) shall redeem the Notes in whole
(except as provided in paragraph (d) below), upon not less than 30 days'
notice given as provided in the Indenture, at a redemption price of 100% of
the principal amount of the Notes plus accrued interest to the date of
redemption (provided that instalments of interest, the stated maturity of
which is on or prior to the date of redemption, shall be payable to the
Holder of such Notes, registered as such as the close of business on the
relevant record dates, according to the terms and provisions of Section
2.04 and 3.03 of the Indenture). The date of redemption for any redemption
required by this paragraph (b) shall be not more than 75 days following the
earliest date on which the conditions specified in clause (i) and (ii)
above shall have been satisfied. Nothing contained in this paragraph (b)
shall require the Corporation to effect more than one redemption of the
Notes, irrespective of any elections made by Holders pursuant to paragraph
(d) below.
(c) PREVAILING RATING. The "Prevailing Rating" of the Notes on any
date shall be the rating of the Notes by S&P or Moody's as of the close of
business on such date. The Corporation shall take all reasonable action
necessary to enable S&P and Moody's to provide ratings for the Notes.
(d) ELECTION BY HOLDERS. Any Holder of Notes may elect not to have
redeemed all (but not less than all) the Notes held by such Holder by
delivering written notice of such election to the Corporation (or an agent
designated by the Corporation for such purpose in the notice of redemption)
by the close of business on the fifteenth day preceding the date of
redemption, which notice shall specify the name of such Holder and shall
identify the Notes which are not to be redeemed and their aggregate
principal amount. No such notice shall be deemed to have been delivered
until such notice is actually received by the Corporation (or its agent).
(12) The provisions of Article Twelve of the Indenture relating to
defeasance of Securities shall be applicable to the Notes, except that Section
12.02 of the Indenture as it relates to the Notes shall be replaced by the
following provision:
SATISFACTION, DISCHARGE AND DEFEASANCE OF NOTES. At the Corporation's
option, either (a) the Corporation shall be deemed to have paid and
discharged the entire indebtedness on all the Outstanding Notes and the
Trustee, at the expense of the corporation, shall execute proper
instruments acknowledging satisfaction and discharge of such indebtedness,
or (b) the Corporation shall cease to be under any obligation to comply
with any term, provision, condition
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or covenant applicable to the Notes of a series set forth in Section 11.01
of the Indenture, in item 9 of this Resolution (I.E., the covenants
regarding "Limitation on Liens" and "Limitation on Sale and Leaseback") and
in item 11 of this Resolution (I.E., the provisions regarding "Limited
Mandatory Repurchase Obligation") when
(1) with respect to all Outstanding Notes,
(A) the Corporation shall have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose an
amount sufficient to pay and discharge the entire indebtedness of all
Outstanding Notes for principal and interest to the stated maturity or
any redemption date (as contemplated by the penultimate paragraph
hereof), as the case may be; or
(B) the Corporation shall have deposited or caused to be
deposited with the Trustee as obligations in trust for the purpose
such amount of direct noncallable obligations of, or noncallable
obligations the payment of principal of and interest on which is fully
guaranteed by, the United States of America, or to the payment of
which obligations or guarantees the full faith and credit of the
United States of America is pledged, maturing as to principal and
interest in such amounts and at such times as will, together with the
income to accrue thereon (but without reinvesting any proceeds
thereof), be sufficient to pay and discharge the entire indebtedness
on all Outstanding Notes for principal and interest to the stated
maturity or any redemption date (as contemplated by the penultimate
paragraph hereof), as the case may be;
(2) the Corporation shall have paid or caused to be paid all other
sums payable with respect to the Outstanding Notes;
(3) if the Notes are then listed on any national securities
exchange, the Corporation shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Corporation's exercise of its option under
this provision would not cause such Notes to be delisted;
(4) no Event of Default or event (including such deposit) which with
notice or lapse of time would become an Event of Default with respect to
the Notes shall have occurred and be continuing on the date of such
deposit;
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(5) the Corporation shall have delivered to the Trustee an Opinion
of Counsel of nationally recognized tax counsel to the effect that Holders
of the Notes will not recognize income, gain or loss for Federal income tax
purposes as a result of the Corporation's exercise of its option under this
provision and will be subject to Federal income tax in the same amount and
in the same manner and at the same times as would have been the case if
such option had not been exercised;
(6) the Corporation shall have delivered to the Trustee an Opinion
of Counsel to the effect that the Corporation's exercise of its option
under this provision will not cause any violation of the Investment Company
Act of 1940, as amended, on the part of the Corporation, the trust, the
trust funds representing the Corporation's deposit or the Trustee; and
(7) the Corporation shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Corporation's exercise of its option under this
provision have been complied with.
Any deposits with the Trustee referred to above shall be
irrevocable and shall be made under the terms of an escrow trust agreement
in form and substance satisfactory to the Trustee. If any Outstanding
Notes are to be redeemed prior to their stated maturity, the applicable
escrow trust agreement shall provide therefor and the Corporation shall
make such arrangements as are satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Corporation.
For purposes of this provision, "discharged" means that the
Corporation shall be deemed to have paid and discharged the entire
indebtedness represented by, and obligations under, the Notes and to have
satisfied all the obligations under this Indenture relating to the notes
(and the Trustee, at the expense of the Corporation, shall execute proper
instruments acknowledging the same), except (x) the rights of Holders of
Notes to receive, from the trust fund described above, payment of the
principal of and interest on such Notes when such payments are due, (y) the
Corporation's obligations with respect to the Notes under Sections 2.05,
2.07, 4.02 and 12.03 of the Indenture and (z) the rights, powers, trusts,
duties and immunities of the Trustee hereunder.
BE IT FURTHER RESOLVED: That the form of the Note attached hereto is in
all respects approved, and that the execution and
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delivery of the Notes as provided in the Indenture is hereby authorized, with
such changes therein as the officer executing the same shall approve, such
execution to be conclusive evidence of such approval.
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Appendix to Exhibit 4(d)
The last two pages of the original of this exhibit is comprised of a photocopy
of a Note Certificate. Such certificate has been omitted from the EDGAR
submission and has been filed under Form SE.
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