-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Q0E3/Yg/r+GItueZhgRhui7DWSZK1XUIPDazQC6HTbzhQfPlx67FWRRj1MK/FhEm jijKnY59DdJjFlXa6YXD8g== 0000950123-95-001647.txt : 19950605 0000950123-95-001647.hdr.sgml : 19950605 ACCESSION NUMBER: 0000950123-95-001647 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19950602 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION CARBIDE CORP /NEW/ CENTRAL INDEX KEY: 0000100790 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, MATERIALS, SYNTH RESINS & NONVULCAN ELASTOMERS [2821] IRS NUMBER: 131421730 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 1933 Act SEC FILE NUMBER: 033-63412 FILM NUMBER: 95544759 BUSINESS ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 BUSINESS PHONE: 2037942000 MAIL ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE CORP DATE OF NAME CHANGE: 19890806 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE & CARBON CORP DATE OF NAME CHANGE: 19710317 424B5 1 PROSPECTUS SUPPLEMENT AND BASE PROSPECTUS 1 Filed pursuant to Rule 424(b)(5) Registration No. 33-63412 PROSPECTUS SUPPLEMENT (To Prospectus dated June 1, 1995) $400,000,000 Union Carbide Corporation $150,000,000 7.50% DEBENTURES DUE 2025 $250,000,000 6.79% DEBENTURES DUE 2025 ------------------------ Interest payable June 1 and December 1 ------------------------ THE 7.50% DEBENTURES DUE 2025 (THE "7.50% DEBENTURES") WILL MATURE ON JUNE 1, 2025 AND WILL NOT BE REDEEMABLE PRIOR TO MATURITY. THE 6.79% DEBENTURES DUE 2025 (THE "6.79% DEBENTURES") WILL MATURE ON JUNE 1, 2025 AND WILL NOT BE REDEEMABLE BY UNION CARBIDE CORPORATION (THE "COMPANY") PRIOR TO MATURITY. THE HOLDER OF EACH 6.79% DEBENTURE MAY ELECT TO HAVE THAT 6.79% DEBENTURE, OR ANY PORTION THEREOF WHICH IS A MULTIPLE OF $1,000, REDEEMED ON JUNE 1, 2005 AT 100% OF THE PRINCIPAL AMOUNT THEREOF TOGETHER WITH INTEREST PAYABLE TO THE REDEMPTION DATE. SUCH ELECTION, WHICH IS IRREVOCABLE WHEN MADE, MUST BE MADE WITHIN THE PERIOD COMMENCING ON APRIL 1, 2005 AND ENDING AT NOON ON MAY 1, 2005. THE 7.50% DEBENTURES AND THE 6.79% DEBENTURES ARE SOMETIMES COLLECTIVELY REFERRED TO HEREIN AS THE "OFFERED SECURITIES." THE OFFERED SECURITIES WILL BE ISSUED ONLY IN BOOK-ENTRY FORM THROUGH THE FACILITIES OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY"). SEE "DESCRIPTION OF THE OFFERED SECURITIES" HEREIN. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ 7.50% DEBENTURES DUE 2025 - PRICE 98.127% AND ACCRUED INTEREST 6.79% DEBENTURES DUE 2025 - PRICE 100.000% AND ACCRUED INTEREST ------------------------
UNDERWRITING PRICE TO DISCOUNTS AND PROCEEDS TO PUBLIC(1) COMMISSIONS(2) COMPANY(1)(3) ------------- ------------- ------------- Per 7.50% Debenture Due 2025...................... 98.127% .875% 97.252% Total........................................ $147,190,500 $1,312,500 $145,878,000 Per 6.79% Debenture Due 2025...................... 100.000% .650% 99.350% Total........................................ $250,000,000 $1,625,000 $248,375,000
- ------------ (1) Plus accrued interest from June 1, 1995. (2) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. (3) Before deducting expenses payable by the Company estimated at $150,000. ------------------------ The Offered Securities are offered, subject to prior sale, when, as and if accepted by the Underwriters named herein and subject to approval of certain legal matters by Davis Polk & Wardwell, counsel for the Underwriters. It is expected that delivery of the Offered Securities will be made on or about June 8, 1995 through the book-entry facilities of the Depositary against payment therefor in immediately available funds. ------------------------ MORGAN STANLEY & CO. CS FIRST BOSTON Incorporated June 1, 1995 2 IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE COMPANY The Company is engaged in the chemicals and plastics business. The Company uses state of the art process technologies to convert manufactured and purchased ethylene and propylene into the higher value chemicals and polymers it markets. In addition, the Company has specialty businesses outside the ethylene chain of chemicals, including technology licensing services. The Company was incorporated in 1917 under the laws of the State of New York. The principal executive offices of the Company are located at 39 Old Ridgebury Road, Danbury, Connecticut 06817-0001, telephone (203) 794-2000. USE OF PROCEEDS The net proceeds received by the Company from the sale of the Offered Securities, estimated at $394,103,000, will be used to repay short-term debt (expected to be approximately $210 million at the time the proceeds are received), for working capital, and otherwise for general corporate purposes. Pending such use, the proceeds will be invested in short-term investments. S-2 3 DESCRIPTION OF THE OFFERED SECURITIES The following description of the particular terms of the Offered Securities supplements, and to the extent inconsistent therewith replaces, the description of the general terms and provisions of the Offered Securities (referred to in the accompanying prospectus dated June 1, 1995 (the "Prospectus") as the "Debt Securities") set forth in the Prospectus, to which description reference is hereby made. The Offered Securities will be unsecured general obligations of the Company and will be issued as separate series of securities under an indenture dated as of June 1, 1995, as amended from time to time (the "Indenture"), between the Company and Chemical Bank, as Trustee (the "Trustee"). The 7.50% Debentures will be limited to $150,000,000 aggregate principal amount and will mature on June 1, 2025. Each 7.50% Debenture will bear interest at the rate of 7.50% per annum, computed on the basis of a 360-day year of twelve 30-day months, from June 1, 1995 or from the most recent interest payment date to which interest has been paid or provided for, payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 1995. Interest payable on any 7.50% Debentures which is punctually paid or duly provided for on any interest payment date shall be paid to the person in whose name such 7.50% Debenture is registered at the close of business on the May 15 and November 15, as the case may be, preceding such interest payment date. The 7.50% Debentures will not be redeemable prior to maturity. The 7.50% Debentures will be subject to defeasance under the conditions described in the Prospectus. The 6.79% Debentures will be limited to $250,000,000 aggregate principal amount and will mature on June 1, 2025. Each 6.79% Debenture will bear interest at the rate of 6.79% per annum, computed on the basis of a 360-day year of twelve 30-day months, from June 1, 1995 or from the most recent interest payment date to which interest has been paid or provided for, payable semiannually on June 1 and December 1 of each year, commencing on December 1, 1995. Interest payable on any 6.79% Debenture which is punctually paid or duly provided for on any interest payment date shall be paid to the person in whose name such 6.79% Debenture is registered at the close of business on the May 15 and November 15, as the case may be, preceding such interest payment date. The 6.79% Debentures will not be redeemable by the Company prior to maturity. The 6.79% Debentures will be subject to defeasance under the conditions described in the Prospectus. The 6.79% Debentures will be redeemable on June 1, 2005, at the option of the holders of the 6.79% Debentures, at 100% of their principal amount together with interest payable to the redemption date. Less than the entire principal amount of any 6.79% Debenture may be redeemed provided the principal amount which is to be redeemed is equal to $1,000 or an integral multiple of $1,000. The Depositary or its nominee, as registered holder of the 6.79% Debentures, will be entitled to tender the 6.79% Debentures on June 1, 2005 for repayment. During the period from and including April 1, 2005 to and including May 1, 2005 or, if such May 1, 2005 is not a business day, the next succeeding business day, the Depositary will receive instructions from its Participants (acting on behalf of owners of beneficial interests in the 6.79% Debentures) to tender the 6.79% Debentures for repayment under the Depositary's Procedures. Such tenders for repayment will be made by the Depositary, provided that the Depositary receives instructions from tendering Participants by Noon on May 1, 2005. The Depositary will notify the Paying Agent designated pursuant to the Indenture by the close of business on May 1, 2005 as to the aggregate principal amount of the 6.79% Debentures, if any, for which the Depositary shall have received instructions to tender for repayment. OWNERS OF BENEFICIAL INTERESTS IN 6.79% DEBENTURES WHO WISH TO EFFECTUATE THE TENDER AND REPAYMENT OF SUCH 6.79% DEBENTURES MUST INSTRUCT THEIR RESPECTIVE DEPOSITARY PARTICIPANT OR PARTICIPANTS A REASONABLE PERIOD OF TIME IN ADVANCE OF MAY 1, 2005. S-3 4 If at any time the use of a book-entry only system through the Depositary (or any successor securities depositary) is discontinued with respect to the 6.79% Debentures, tenders for repayment of such 6.79% Debentures on June 1, 2005 shall be made according to the following procedures. The Company must receive at the principal office of the Paying Agent, during the period from and including April 1, 2005 to and including May 1, 2005 or, if such May 1, 2005 is not a business day, the next succeeding business day, (i) the 6.79% Debenture with the form entitled "Option to Elect Repayment" on the reverse of the 6.79% Debenture duly completed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., or a commercial bank or a trust company in the United States of America, setting forth the name of the registered holder of the 6.79% Debenture, the principal amount of the 6.79% Debenture, the amount of the 6.79% Debenture to be repaid, a statement that the option to elect repayment is being exercised thereby and a guarantee that the 6.79% Debenture to be repaid with the form entitled "Option to Elect Repayment" on the reverse of the 6.79% Debenture duly completed will be received by the Company not later than five business days after the date of such telegram, telex, facsimile transmission or letter and such 6.79% Debenture and form duly completed are received by the Company by such fifth business day. Any such notice received by the Company during the period from and including April 1, 2005 to and including May 1, 2005 shall be irrevocable. All questions as to the validity, eligibility (including time of receipt) and the acceptance of any 6.79% Debenture for repayment will be determined by the Company, whose determination will be final and binding. BOOK-ENTRY PROCEDURES Upon issuance, the 7.50% Debentures and the 6.79% Debentures will be represented by global securities which will be deposited with, or on behalf of, the Depositary and will be registered in the name of the Depositary or a nominee of the Depositary. Upon the issuance of a global security, the Depositary for such global security or its nominee will credit the accounts of persons held with it with the respective principal or face amounts of the book-entry 7.50% Debentures or 6.79% Debentures represented by such global security. Such accounts shall be designated by the Underwriters. Ownership of beneficial interests in the global security will be limited to participants and to persons that have accounts with the Depositary ("Participants") or persons that may hold interests through Participants. Ownership interest in the global security 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 such global security (with respect to a Participant's interest) and records maintained by Participants (with respect to interests of persons other than Participants). Payment of principal of and any premium and interest on the book-entry 7.50% Debentures or 6.79% Debentures represented by global securities will be made to the Depositary or its nominee, as the case may be, as the sole registered owner and the sole holder of the 7.50% Debentures or 6.79% Debentures represented thereby for all purposes under the Indenture. Neither the Company or the Trustee, nor any agent of the Company or the Trustee, will have any responsibility or liability for any aspect of the Depositary's records relating to beneficial ownership interests or payments made on account of beneficial ownership interests in the global securities representing any book-entry 7.50% Debentures or 6.79% Debentures, for any acts or omissions of the Depositary or for any transactions between the Depositary and Participants or beneficial owners. The Company has been advised by the Depositary that upon receipt of any payment of principal of or any premium or interest on the global securities, the Depositary will immediately credit, on its book-entry registration and transfer system, the accounts of Participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global securities as shown on the records of the Depositary. Payments by Participants to owners of beneficial interests in the global securities held through such Participants will be governed by standing instructions and customary practices, as is now the case with securities held for customer accounts registered in "street name," and will be the sole responsibility of such Participants. S-4 5 The global securities may not be transferred except as a whole by the Depositary to a nominee of the Depositary. The global securities are exchangeable only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such global securities or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934 ("Exchange Act"), (ii) the Company in its sole discretion determines that such global securities shall be exchangeable for definitive 7.50% Debentures or 6.79% Debentures, as the case may be, in registered form, or (iii) an Event of Default (as defined in the Prospectus) with respect to the 7.50% Debentures or 6.79% Debentures, as the case may be, represented by such global securities has occurred and is continuing. Any global security that is exchangeable pursuant to the preceding sentence shall be exchangeable for 7.50% Debentures or 6.79% Debentures, as the case may be, issuable in denominations of $1,000 and integral multiples thereof and registered in such names as the Depositary holding such global security shall direct. Subject to the foregoing, none of the global securities is exchangeable, except for global securities of like denomination to be registered in the name of the Depositary or its nominee. If the 7.50% Debentures or 6.79% Debentures were subsequently issued in registered form, they would thereafter be transferred or exchanged without any service charge at the office of the Paying Agent and Transfer Agent, Union Carbide Corporation, 39 Old Ridgebury Road, Danbury, CT 06817-0001, or at any other office or agency maintained by the Company for such purpose. So long as the Depositary for the global securities, or its nominee, is the registered owner of such global securities, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the 7.50% Debentures or 6.79% Debentures represented by such global securities for the purposes of receiving payment on the 7.50% Debentures or 6.79% Debentures, as the case may be, receiving notices and for all other purposes under the Indenture and the 7.50% Debentures or 6.79% Debentures, as the case may be. Except as provided above, owners of beneficial interests in the global securities representing the 7.50% Debentures and 6.79% Debentures will not be entitled to receive physical delivery of 7.50% Debentures or 6.79% Debentures, as the case may be, in definitive form and will not be considered the holders thereof for any purpose under the Indenture. Accordingly, each person owning a beneficial interest in the global securities representing the 7.50% Debentures and 6.79% Debentures must rely on the procedures of the Depositary and, if such person is not a Participant, on the procedures of the Participant through which such person owns its interest, to exercise any rights of a holder of such securities under the Indenture. The Depositary may grant proxies and otherwise authorize Participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the Indenture. The Company understands that under existing industry practices, in the event that the Company requests any action of holders or that an owner of a beneficial interest in such a global security desires to give or take any action which a holder is entitled to give or take under the Indenture, the Depositary would authorize the Participants holding the relevant beneficial interests to give or take such action, and such Participants would authorize beneficial owners owning through such Participants to give or take such action or would otherwise act upon the instructions of beneficial owners owning through them. The Depositary has advised the Company that the Depositary is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered under the Exchange Act. The Depositary was created to hold the securities of its Participants and to facilitate the clearance and settlement of securities transactions among its Participants in such securities through electronic book-entry changes in accounts of the Participants, thereby eliminating the need for physical movement of securities certificates. The Depositary's Participants include securities brokers and dealers (including the Underwriters), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own the Depositary. Access to the Depositary's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant either directly or indirectly. S-5 6 UNDERWRITERS Under the terms and subject to the conditions of the Underwriting Agreement dated the date hereof between the Company and the Underwriters named below, the Underwriters have severally agreed to purchase, and the Company has agreed to sell to them, severally, the respective principal amounts of the Offered Securities set forth below:
PRINCIPAL AMOUNT OF PRINCIPAL AMOUNT OF NAME 7.50% DEBENTURES 6.79% DEBENTURES ------------------------------------------------- --------------------- ------------------- Morgan Stanley & Co. Incorporated................ $ 69,000,000 $ 115,000,000 CS First Boston Corporation...................... 69,000,000 115,000,000 Chemical Securities Inc. ........................ 6,000,000 10,000,000 J.P. Morgan Securities Inc....................... 6,000,000 10,000,000 ------------ ------------ Total.................................. $ 150,000,000 $ 250,000,000 ============ ============
The Underwriting Agreement provides that the obligations of the several Underwriters to pay for and accept delivery of the Offered Securities are subject to the approval of certain legal matters by their counsel and to certain other conditions. The Underwriters are committed to take and pay for all the Offered Securities if any are taken. The Underwriters are offering part of the 7.50% Debentures directly to the public at the public offering price set forth on the cover page of this Prospectus Supplement and part to certain dealers at a price which represents a concession not in excess of .500% of the principal amount of the 7.50% Debentures. The Underwriters may allow, and such dealers may reallow, a concession not in excess of .250% of the principal amount of the 7.50% Debentures to certain other dealers. The Underwriters are offering part of the 6.79% Debentures directly to the public at the public offering price set forth on the cover page of the Prospectus Supplement and part to certain dealers at a price which represents a concession not in excess of .400% of the principal amount of the 6.79% Debentures. The Underwriters may allow, and such dealers may reallow, a concession not in excess of .250% of the principal amount of the 6.79% Debentures to certain other dealers. After the initial public offering, the public offering prices and concessions for the Offered Securities may be changed by the Underwriters named on the cover page of this Prospectus Supplement. There is presently no trading market for the Offered Securities. The Company does not intend to apply for listing of the Offered Securities on any exchange. Although they are under no obligation to do so, the Underwriters presently intend to act as market makers for the Offered Securities in the secondary trading market; however, such market making may be discontinued without notice at any time in their sole discretion. Accordingly, no assurance can be given as to the liquidity of, or trading markets for, the 7.50% Debentures or the 6.79% Debentures. The Company has agreed to indemnify the Underwriters against certain liabilities, including certain liabilities under the Securities Act of 1933. Chemical Securities Inc. is an affiliate of Chemical Bank which is a lender to the Company and which is acting as Trustee under the Indenture relating to the Offered Securities. In addition, J.P. Morgan Securities Inc. is an affiliate of Morgan Guaranty Trust Company of New York which is a lender to the Company. S-6 7 PROSPECTUS UNION CARBIDE CORPORATION DEBT SECURITIES ------------------------ Union Carbide Corporation ("Company") may offer from time to time up to an aggregate initial offering price not to exceed $400,000,000 (or the equivalent in foreign denominated currency or units based on or relating to currencies) of its senior unsecured debt securities ("Debt Securities" or "Securities") in one or more series in amounts, at prices and upon terms to be determined in light of market conditions at the time of sale. The Securities may be sold directly by the Company, through agents designated from time to time, or to or through underwriters or dealers (see "Plan of Distribution"). The specific aggregate principal amount, maturity, rate and time of payment of interest, any redemption provisions, initial public offering price, proceeds to the Company, and any other specific terms in connection with the offering and sale of a series of Securities, including the names of the underwriters or agents, if any, and the terms of such offering, are set forth in the Prospectus Supplement accompanying this Prospectus. The Securities may be issued in registered form without coupons, in bearer form with coupons, in uncertificated form or in any combination thereof. Subject to certain exceptions, securities in bearer form may not be offered, sold or delivered in the United States or to United States persons. ------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The date of this Prospectus is June 1, 1995 8 NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS, INCLUDING ANY PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934 ("Exchange Act"), and, in accordance therewith, files reports and other information with the Securities and Exchange Commission ("Commission"). Reports, proxy statements, and other information filed by the Company may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York, New York 10048 and at the Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such information may be obtained by mail from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy statements, and other information concerning the Company may be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, the Chicago Stock Exchange, 440 South LaSalle Street, Chicago, Illinois 60605, and the Pacific Stock Exchange, 301 Pine Street, San Francisco, California 94104. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed with the Commission by the Company (File No. 1-1463) are incorporated herein by reference: (1) Annual Report on Form 10-K for the year ended December 31, 1994; (2) Quarterly Report on Form 10-Q for the quarter ended March 31, 1995; (3) current reports on Form 8-K filed on February 8, 1995 and on Form 8-K filed on April 10, 1995 as amended by Form 8-K/A on May 26, 1995; and (4) all other documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Securities. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon the request of such person, a copy of any or all of the documents which are incorporated by reference herein, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Written or telephone requests should be directed to Union Carbide Corporation, Investor Relations Department, 39 Old Ridgebury Road, Danbury, Connecticut 06817-0001, telephone (203) 794-6445. 2 9 THE COMPANY Union Carbide Corporation ("Company") is engaged in the chemicals and plastics business. On May 1, 1994, the parent of the Company was merged into the Company. The parent (formerly "Union Carbide Corporation") thereupon ceased to exist, and the Company (formerly "Union Carbide Chemicals and Plastics Company Inc.") took the name "Union Carbide Corporation." Accordingly, the Company is the successor to its former parent. For purposes of this Prospectus the term "Company" shall mean, for all purposes prior to May 1, 1994, the former parent and the Company. The Company uses state of the art process technologies to convert manufactured and purchased ethylene and propylene into the higher value chemicals and polymers it markets. In addition, the Company has specialty businesses outside the ethylene chain of chemicals, including technology licensing services. The Company was incorporated in 1917 under the laws of the State of New York. The principal executive offices of the Company are located at 39 Old Ridgebury Road, Danbury, Connecticut 06817-0001, telephone (203) 794-2000. USE OF PROCEEDS Unless otherwise indicated in an accompanying Prospectus Supplement, the Company intends to use the net proceeds from the sale of the Securities for the retirement of outstanding debt or general corporate purposes. Information concerning the interest rates and maturities of the Company's outstanding debt is set forth in the notes to the financial statements of the Company incorporated by reference herein. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of earnings to fixed charges of the Company for the periods indicated:
THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ------------ ---------------------------------------- 1995 1994 1993 1992 1991 1990 ------------ ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges(a)....... 10.5 4.9 2.9 1.7 (b ) 2.1
- --------------- (a) For the purpose of computing the ratio of earnings to fixed charges, earnings consist of income of consolidated companies from continuing operations before provision for income taxes, before fixed charges, plus dividends from less than 50%-owned companies carried at equity and the registrant's share of pre-tax income of 50%-owned companies carried at equity, less net capitalized interest and preferred stock dividend requirements of consolidated subsidiaries. Fixed charges comprise interest on long-term and short-term debt, capitalized interest, the portion of rentals representative of an interest factor, preferred stock dividend requirements of consolidated subsidiaries, interest on debt of a wholly-owned finance subsidiary carried at equity and the registrant's share of fixed charges of 50%-owned companies carried at equity. On June 30, 1992, the Company completed the spin-off of its industrial gas business. The industrial gas business has been treated as a discontinued operation in calculating the ratio of earnings to fixed charges of the Company for all periods. Accordingly, the components of the ratio do not reflect amounts attributable to the industrial gas business. (b) In 1991, the Company's operating results included a special charge of $209 million ($160 million after-tax). As a result, earnings were insufficient to cover historical fixed charges by $169 million. Excluding the effect of the special charge, earnings would have been sufficient to cover fixed charges by $40 million. 3 10 DESCRIPTION OF SECURITIES The Securities will be issued in one or more series under an indenture or indentures ("Indenture") between the Company and one or more trustees ("Trustee"). The following summaries of certain provisions of the Indenture do not purport to be complete and are qualified in their entirety by express reference to the Indenture which is incorporated herein by reference. GENERAL The Indenture does not limit the amount of Securities that can be issued thereunder and provides that the Securities may be issued in series up to the aggregate principal amount which may be authorized from time to time by the Company. The Securities will be unsecured and will rank on a parity with all other unsecured and unsubordinated debt of the Company. Reference is made to the Prospectus Supplement for the following terms, if applicable, of the Securities offered thereby: (1) the designation, aggregate principal amount, currency or composite currency and denominations; (2) the price at which such Securities will be issued and, if an index formula or other method is used, the method for determining amounts of principal or interest; (3) the maturity date and other dates, if any, on which principal will be payable; (4) the interest rate (which may be fixed or variable), if any; (5) the date or dates from which interest will accrue and on which interest will be payable, and the record dates for the payment of interest; (6) the manner of paying principal or interest; (7) the place or places where principal and interest will be payable; (8) the terms of any mandatory or optional redemption by the Company; (9) the terms of any redemption at the option of holders; (10) whether such Securities are to be issuable as registered Securities, bearer Securities, or both, and whether and upon what terms upon which any registered Securities may be exchanged for bearer Securities and vice versa; (11) whether such Securities are to be represented in whole or in part by a Security in global form and, if so, the identity of the depositary ("Depositary") for any global Security; (12) any tax indemnity provisions; (13) if the Securities provide that payments of principal or interest may be made in a currency other than that in which Securities are denominated, the manner for determining such payments; (14) the portion of principal payable upon acceleration of a Discounted Security (as defined below); (15) whether and upon what terms Securities may be defeased; (16) any events of default or restrictive covenants in addition to or in lieu of those set forth in the Indenture; (17) provisions for electronic issuance of Securities or for Securities in uncertificated form; and (18) any additional provisions or other special terms not inconsistent with the provisions of the Indenture, including any terms that may be required or advisable under United States or other applicable laws or regulations, or advisable in connection with the marketing of the Securities. Securities of any series may be issued as registered Securities, bearer Securities or uncertificated Securities, as specified in the terms of the series. Unless otherwise indicated in the Prospectus Supplement, registered Securities will be issued in denominations of $1,000 and whole multiples thereof and bearer Securities will be issued in denominations of $5,000 and whole multiples thereof. The Securities of a series may be issued in whole or in part in the form of one or more global Securities that will be deposited with, or on behalf of, a Depositary identified in the Prospectus Supplement relating to the series. Unless otherwise indicated in the Prospectus Supplement relating to a series, the terms of the depositary arrangement with respect to any Securities of a series specified in the Prospectus Supplement as being represented by global Securities will be as set forth below under "Global Securities." In connection with its original issuance, no bearer Security will be offered, sold, resold, or mailed or otherwise delivered to any location in the United States and a bearer Security in definitive form may be delivered in connection with its original issuance only if the person entitled to receive the bearer Security furnishes certification as described in United States Treasury regulation section 1.163-5(c)(2)(i)(D)(3). If there is a change in the relevant provisions or interpretation of United States laws, the foregoing restrictions will not apply to a series if the Company determines that such provisions no longer apply to the series or that failure to so comply would not have an adverse tax effect on the Company or on holders or cause the series to be treated as "registration-required" obligations under United States law. 4 11 For purposes of this Prospectus, unless otherwise indicated, "United States" means the United States of America (including the States and the District of Columbia), its territories and possessions and all other areas subject to its jurisdiction. "United States person" means a citizen or resident of the United States, any corporation, partnership or other entity created or organized in or under the laws of the United States or a political subdivision thereof or any estate or trust the income of which is subject to United States federal income taxation regardless of its source. Any special United States federal income tax considerations applicable to bearer Securities will be described in the Prospectus Supplement relating thereto. To the extent set forth in the Prospectus Supplement, except in special circumstances set forth in the Indenture, principal and interest on bearer Securities will be payable only upon surrender of bearer Securities and coupons at a paying agency of the Company located outside of the United States. During any period thereafter for which it is necessary in order to conform to United States tax law or regulations, the Company will maintain a paying agent outside the United States to which the bearer Securities and coupons may be presented for payment and will provide the necessary funds therefor to the paying agent upon reasonable notice. Registration of transfer of registered Securities may be requested upon surrender thereof at any agency of the Company maintained for that purpose and upon fulfillment of all other requirements of the agent. Bearer Securities and the coupons related thereto will be transferable by delivery. Securities may be issued under the Indenture as Discounted Securities to be offered and sold at a substantial discount from the principal amount thereof. Special United States federal income tax and other considerations applicable thereto will be described in the Prospectus Supplement relating to such Discounted Securities. "Discounted Security" means a Security where the amount of principal due upon acceleration is less than the stated principal amount. CERTAIN COVENANTS The Securities will not be secured by any properties or assets and will represent unsecured debt of the Company. Since secured debt ranks ahead of unsecured debt, the limitation on liens and the limitation on sale-leaseback transactions place some restrictions on the Company's ability to incur additional secured debt or its equivalent when the asset securing the debt is a material manufacturing facility in the United States. The limitations are subject to a number of qualifications and exceptions described below. There can be no assurance that a facility subject to the limitations at any time will continue to be subject to those limitations at a later time. Unless otherwise indicated in a Prospectus Supplement, the covenants contained in the Indenture and the Securities do not afford holders of the Securities protection in the event of a highly leveraged or other transaction involving the Company that may adversely affect holders of the Securities. Definitions. "Attributable Debt" for a lease means, as of the date of determination, the present value of net rent for the remaining term of the lease. Rent shall be discounted to present value at a discount rate that is compounded semi-annually. The discount rate shall be 10% per annum or, if the Company elects, the discount rate shall be equal to the weighted average Yield to Maturity of the Securities under the Indenture. Such average shall be weighted by the principal amount of the Securities of each series or, in the case of Discounted Securities, the amount of principal that would be due as of the date of determination if payment of the Securities were accelerated on that date. Rent is the lesser of (a) rent for the remaining term of the lease assuming it is not terminated or (b) rent from the date of determination until the first possible termination date plus the termination payment then due, if any. The remaining term of a lease includes any period for which the lease has been extended. Rent does not include (1) amounts due for maintenance, repairs, utilities, insurance, taxes, assessments and similar charges or (2) contingent rent, such as that based on sales. Rent may be reduced by the discounted present value of 5 12 the rent that any sublessee must pay from the date of determination for all or part of the same property. If the net rent on a lease is not definitely determinable, the Company may estimate it in any reasonable manner. "Consolidated Net Tangible Assets" means total assets less (a) total current liabilities (excluding Debt due within 12 months) and (b) goodwill, as reflected in the Company's most recent consolidated balance sheet preceding the date of a determination under clause (9) of the "Limitation on Liens" covenant. "Debt" means any debt for borrowed money or any guarantee of such a debt. "Lien" means any mortgage, pledge, security interest or lien. "Long-Term Debt" means Debt that by its terms matures on a date more than 12 months after the date it was created or Debt that the obligor may extend or renew without the obligee's consent to a date more than 12 months after the date the Debt was created. "Principal Property" means any manufacturing facility located in the United States (excluding territories and possessions), except any such facility that in the opinion of the board of directors of the Company or any authorized committee of the board is not of material importance to the total business conducted by the Company and its consolidated Subsidiaries. "Restricted Property" means any Principal Property or any shares of stock of a Restricted Subsidiary, in each case now owned or hereafter acquired by the Company or a Restricted Subsidiary. At March 31, 1995, "Restricted Property" includes manufacturing facilities of the Company at Taft, LA; Seadrift, TX; Texas City, TX; Institute, WV; and South Charleston, WV. "Restricted Subsidiary" means a Wholly-Owned Subsidiary that has substantially all of its assets located in the United States (excluding territories or possessions) or Puerto Rico and owns a Principal Property. "Sale-Leaseback Transaction" means an arrangement pursuant to which the Company or a Restricted Subsidiary now owns or hereafter acquires a Principal Property, transfers it to a person, and leases it back from the person. "Subsidiary" means a corporation a majority of whose Voting Stock is owned by the Company or a Subsidiary. "Voting Stock" means capital stock having voting power under ordinary circumstances to elect directors. "Wholly-Owned Subsidiary" means a corporation all of whose Voting Stock is owned by the Company or a Wholly-Owned Subsidiary. "Yield to Maturity" means the yield to maturity on a Security at the time of its issuance or at the most recent determination of interest on the Security. Limitation on Liens. The Company will not, and will not permit any Restricted Subsidiary to, incur a Lien on Restricted Property to secure a Debt unless: (1) the Lien equally and ratably secures the Securities and the Debt. The Lien may equally and ratably secure the Securities and any other obligation of the Company or a Subsidiary. The Lien may not secure an obligation of the Company that is subordinated to the Securities; (2) the Lien secures Debt incurred to finance all or some of the purchase price or the cost of construction or improvement of property of the Company or a Restricted Subsidiary. The Lien may not extend to any other Restricted Property owned by the Company or a Restricted Subsidiary at the time the Lien is incurred. However, in the case of any construction or improvement, the Lien may extend to unimproved real property used for the construction or improvement. The Debt secured by the Lien may not be incurred more than one year after the later of the (a) acquisition, (b) completion of construction or improvement or (c) commencement of full operation, of the property subject to the Lien; (3) The Lien is on property of a corporation at the time the corporation merges into or consolidates with the Company or a Restricted Subsidiary; 6 13 (4) the Lien is on property at the time the Company or a Restricted Subsidiary acquires the property; (5) the Lien is on property of a corporation at the time the corporation becomes a Restricted Subsidiary; (6) the Lien secures Debt of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary; (7) the Lien is in favor of a government or governmental entity and secures (a) payments pursuant to a contract or statute or (b) Debt incurred to finance all or some of the purchase price or cost of construction or improvement of the property subject to the Lien; (8) the Lien extends, renews or replaces in whole or in part a Lien ("existing Lien") permitted by any of clauses (1) through (7). The Lien may not extend beyond (a) the property subject to the existing Lien and (b) improvements and construction on such property. However, the Lien may extend to property that at the time is not Restricted Property. The Debt secured by the Lien may not exceed the Debt secured at the time by the existing Lien unless the existing Lien or a predecessor Lien was incurred under clause (1) or (6); or (9) the Debt plus all other Debt secured by Liens on Restricted Property at the time does not exceed 10% of Consolidated Net Tangible Assets. However, the following Debt shall be excluded from all other Debt in the determination: (a) Debt secured by a Lien permitted by any of clauses (1) through (8) and (b) Debt secured by a Lien incurred prior to the date of the Indenture that would have been permitted by any of those clauses if the Indenture had been in effect at the time the Lien was incurred. Attributable Debt for any lease permitted by clause (4) of the "Limitation on Sale and Leaseback" covenant must be included in the determination and treated as Debt secured by a Lien on Restricted Property not otherwise permitted by any of clauses (1) through (8). In general, clause (9) above, sometimes called a "basket" clause, permits Liens to be incurred that are not permitted by any of the exceptions enumerated in clauses (1) through (8) above if the Debt secured by all such additional Liens does not exceed 10% of Consolidated Net Tangible Assets at the time. At March 31, 1995, Consolidated Net Tangible Assets were $4,086,000,000. At that date, additional Liens securing Debt equal to 10% of that amount could have been incurred under clause (9). Limitation on Sale and Leaseback. The Company will not, and will not permit any Restricted Subsidiary to, enter into a Sale-Leaseback Transaction unless: (1) the lease has a term of three years or less; (2) the lease is between the Company and a Restricted Subsidiary or between Restricted Subsidiaries; (3) the Company or a Restricted Subsidiary under clauses (2) through (8) of the "Limitation on Liens" covenant could create a Lien on the property to secure Debt at least equal in amount to the Attributable Debt for the lease; (4) the Company or a Restricted Subsidiary under clause (9) of the "Limitation on Liens" covenant could create a Lien on the property to secure Debt at least equal in amount to the Attributable Debt for the lease; or (5) the Company or a Restricted Subsidiary within 180 days of the effective date of the lease retires Long-Term Debt of the Company or a Restricted Subsidiary at least equal in amount to the Attributable Debt for the lease. A Debt is retired when it is paid, cancelled or defeased. However, the Company or a Restricted Subsidiary may not receive credit for retirement of: Debt that is retired at maturity or through mandatory redemption; Debt of the Company that is subordinated to the Securities; or Debt, if paid in cash, that is owned by the Company or a Restricted Subsidiary. 7 14 In clauses (3) and (4) above, Sale-Leaseback Transactions and Liens are treated as equivalents. Thus, if the Company or a Restricted Subsidiary could create a Lien on a property, it may enter into a Sale-Leaseback Transaction to the same extent. SUCCESSOR OBLIGOR The Company will not consolidate with or merge into, or transfer all or substantially all of its assets to, any person, unless (1) the person is organized under the laws of the United States or a State thereof; (2) the person assumes by supplemental indenture all the obligations of the Company under the Indenture, the Securities and any coupons; (3) immediately after the transaction no Default (as defined) exists; and (4) if, as a result of the transaction, a Restricted Property would become subject to a Lien not permitted by the "Limitation on Liens" covenant, the Company or such person secures the Securities equally and ratably with or prior to all obligations secured by the Lien. The successor will be substituted for the Company, and thereafter all obligations of the Company under the Indenture, the Securities and any coupons shall terminate. EXCHANGE OF SECURITIES Registered Securities may be exchanged for an equal aggregate principal amount of registered Securities of the same series and date of maturity in such authorized denominations as may be requested upon surrender of the registered Securities at an agency of the Company maintained for such purpose and upon fulfillment of all other requirements of the agent. To the extent permitted by the terms of a series of Securities authorized to be issued in registered form and bearer form, bearer Securities may be exchanged for an equal aggregate principal amount of registered or bearer Securities of the same series and date of maturity in such authorized denominations as may be requested upon surrender of the bearer Securities with all unpaid coupons relating thereto (except as may otherwise be provided in the Securities) at an agency of the Company maintained for such purpose and upon fulfillment of all other requirements of the agent. As of the date of this Prospectus, it is expected that the terms of a series of Securities will not permit registered Securities to be exchanged for bearer Securities. DEFAULTS AND REMEDIES An "Event of Default" with respect to a series of Securities will occur if: (1) the Company defaults in any payment of interest on any Securities of the series when the same becomes due and payable and the Default continues for a period of 10 days; (2) the Company defaults in the payment of the principal of any Securities of the series when the same becomes due and payable at maturity or upon redemption, acceleration or otherwise; (3) the Company defaults in the performance of any of its other agreements applicable to the series and the Default continues for 90 days after the notice specified below; (4) the Company pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case, (B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian for it or for all or substantially all of its property, or (D) makes a general assignment for the benefit of its creditors; (5) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian for the Company or for all or substantially all of its property, or 8 15 (C) orders the liquidation of the Company; and the order or decree remains unstayed and in effect for 60 days; or (6) any other Event of Default provided for in the series occurs. The term "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or State law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator or a similar official under any Bankruptcy Law. A Default under clause (3) is not an Event of Default until the Trustee or the holders of at least 25% in principal amount of the series notify the Company of the Default and the Company does not cure the Default within the time specified after receipt of the notice. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities of the series. Subject to certain limitations, holders of a majority in principal amount of the Securities of the series may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders of the series notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interest. The Indenture does not have a cross-default provision. Thus, a default by the Company or a Subsidiary on any other debt would not constitute an Event of Default. AMENDMENTS AND WAIVERS Unless the bond resolution establishing the terms of a series otherwise provides, the Indenture and the Securities or any coupons of the series may be amended, and any default may be waived as follows: The Securities and the Indenture may be amended with the consent of the holders of a majority in principal amount of the Securities of all series affected voting as one class. As discussed above under "General," the Company has the right to issue an unlimited amount of Securities under the Indenture. A default on a series may be waived with the consent of the holders of a majority in principal amount of the Securities of the series. However, without the consent of each Securityholder affected, no amendment or waiver may (1) reduce the amount of Securities whose holders must consent to an amendment or waiver, (2) reduce the interest on or change the time for payment of interest on any Security, (3) change the fixed maturity of any Security, (4) reduce the principal of any non-Discounted Security or reduce the amount of principal of any Discounted Security that would be due on acceleration thereof, (5) change the currency in which principal or interest on a Security is payable or (6) waive any default in payment of interest on or principal of a Security. Without the consent of any Securityholder, the Indenture, the Securities or any coupons may be amended to cure any ambiguity, omission, defect or inconsistency; to provide for assumption of Company obligations to Securityholders in the event of a merger or consolidation requiring such assumption; to provide that specific provisions of the Indenture not apply to a series of Securities not previously issued; to create a series and establish its terms; to provide for a separate Trustee for one or more series; or to make any change that does not materially adversely affect the rights of any Securityholder. LEGAL DEFEASANCE AND COVENANT DEFEASANCE Securities of a series may be defeased in accordance with their terms and, unless the bond resolution establishing the terms of the series otherwise provides, as set forth below. The Company at any time may terminate as to a series all of its obligations (except for certain obligations with respect to the defeasance trust and obligations to register the transfer or exchange of a Security, to replace destroyed, lost or stolen Securities and coupons and to maintain agencies in respect of the Securities) with respect to the Securities of the series and any related coupons and the Indenture ("legal defeasance"). The Company at any time may terminate as to a series its obligations with respect to the Securities and coupons of the series under the covenants described under "Certain Covenants" ("covenant defeasance"). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, a series may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance option, a series may not be accelerated by reference to the covenants described under "Certain Covenants." 9 16 To exercise either option as to a series, the Company must deposit in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations for the payment of principal, premium, if any, and interest on the Securities of the series to redemption or maturity and must comply with certain other conditions. In particular, the Company must obtain an opinion of tax counsel that the defeasance will not result in recognition of any gain or loss to holders for Federal income tax purposes. "U.S. Government Obligations" are direct obligations of the United States of America which have the full faith and credit of the United States of America pledged for payment and which are not callable at the issuer's option, or certificates representing an ownership interest in such obligations. GLOBAL SECURITIES Global Securities may be issued in registered, bearer or uncertificated form and in either temporary or permanent form. If Securities of a series are to be issued as global Securities, one or more global Securities will be issued in a denomination or aggregate denominations equal to the aggregate principal amount of outstanding Securities of the series to be represented by such global Security or Securities. Ownership of beneficial interests in global Securities will be limited to persons that have accounts with the Depositary ("participants") or persons that may hold interests through participants. Ownership interests in global Securities 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 such global Securities (with respect to a participant's interest) and records maintained by participants (with respect to interests of persons other than participants). Unless otherwise indicated in a Prospectus Supplement, payment of principal of and any premium and interest on the book-entry Securities represented by a global Security will be made to the Depositary or its nominee, as the case may be, as the sole registered owner and the sole holder of the book-entry Securities represented thereby for all purposes under the Indenture. Neither the Company or the Trustee, nor any agent of the Company or the Trustee, will have any responsibility or liability for any acts or omissions of the Depositary, for any records of the Depositary relating to beneficial ownership interests in any global Security or for any transactions between the Depositary and beneficial owners. Upon receipt of any payment of principal of or any premium or interest on a global Security, the Depositary will immediately credit, on its book-entry registration and transfer system, the accounts of participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global Security as shown on the records of the Depositary. Payments by participants to owners of beneficial interests in global Securities held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for customer accounts registered in "street name," and will be the sole responsibility of such participants. Unless otherwise stated in a Prospectus Supplement, global Securities will not be transferred except as a whole by the Depositary to a nominee of the Depositary. Global Securities will be exchangeable only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such global Securities or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii) the Company in its sole discretion determines that such global Securities shall be exchangeable for definitive Securities in registered form, or (iii) an Event of Default with respect to the series of Securities represented by such global Securities has occurred and is continuing. Any global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Registered Securities issuable in denominations of $1,000 and integral multiples thereof and registered in such names as the Depositary holding such global Security shall direct. Subject to the foregoing, the global Security is not exchangeable, except for a global Security of like denomination to be registered in the name of the Depositary or its nominee. So long as the Depositary for global Securities of a series, or its nominee, is the registered owner of such global Securities, such Depositary or such nominee, as the case may be, will be considered the sole holder of Securities represented by such global Securities for the purposes of receiving payment on such global Securities, receiving notices and for all other purposes under the Indenture and such global Securities. Except as provided above, owners of beneficial interests in global Securities of a series will not be entitled to receive 10 17 physical delivery of Securities of such series in definitive form and will not be considered the holders thereof for any purpose under the Indenture. Accordingly, each person owning a beneficial interest in a global Security must rely on the procedures of the Depositary and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the Indenture. The Depositary may grant proxies and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the Indenture. The Company understands that under existing industry practices, in the event that the Company requests any action of holders or that an owner of a beneficial interest in such a global Security desires to give or take any action which a holder is entitled to give or take under the Indenture, the Depositary would authorize the participants holding the relevant beneficial interests to give or take such action, and such participants would authorize beneficial owners owning through such participants to give or take such action or would otherwise act upon the instructions of beneficial owners owning through them. Unless otherwise specified in a Prospectus Supplement relating to Securities of a series to be issued as global Securities, the Depositary will be The Depository Trust Company ("DTC"). DTC has advised the Company that it is a limited-purpose trust company organized under the law of the State of New York, 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 under the Exchange Act. DTC was created to hold the securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. DTC's participants include securities brokers and dealers (which may include the underwriters, dealers or agents with respect to the Securities), banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own DTC. Access to DTC's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant either directly or indirectly. TRUSTEE The Trustee for a series of Securities will be named in the Prospectus Supplement for the series. The Company may remove the Trustee if certain events occur. The Company also may remove the Trustee with or without cause if the Company so notifies the Trustee six months in advance and if no Default occurs during the six-month period. PLAN OF DISTRIBUTION The Company may sell Securities in any of the following ways: (1) through underwriters or dealers; (2) directly to one or more purchasers; or (3) through agents. The Prospectus Supplement with respect to the Securities being offered thereby will set forth the terms of the offering of such Securities, including the name or names of any underwriters or agents, the purchase price of such Securities and the proceeds to the Company from such sale, any underwriting discounts, commissions and other items constituting underwriters' compensation, any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which such Securities may be listed. Any underwriter or agent may be deemed to be an underwriter as that term is defined in the Securities Act of 1933 (the "Act"). If underwriters are used in the sale of Securities, such Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The Securities may be offered to the public either through underwriting syndicates (which may be represented by managing underwriters designated by the Company), or directly by one or more underwriters acting alone. Unless otherwise set forth in the Prospectus Supplement, the obligations of the underwriters to purchase the Securities offered thereby will be subject to certain conditions precedent, and the underwriters will be obligated to purchase all such Securities if any are purchased. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time. 11 18 The Securities may be sold directly by the Company or through agents designated by the Company from time to time. The Prospectus Supplement with respect to any Securities sold in this manner will set forth the name of any agent involved in the offer or sale of the Securities as well as any commissions payable by the Company to such agent. Unless otherwise indicated in the Prospectus Supplement, any such agent is acting on a best efforts basis for the period of its appointment. If dealers are utilized in the sale of any Securities, the Company will sell the Securities to the dealers, as principal. Any dealer may then resell the Securities to the public at varying prices to be determined by the dealer at the time of resale. The name of any dealer and the terms of the transaction will be set forth in the Prospectus Supplement with respect to the Securities being offered thereby. If so indicated in the Prospectus Supplement, the Company will authorize agents, underwriters or dealers to solicit offers by certain specified institutions to purchase Securities from the Company at the public offering price set forth in the Prospectus Supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the Prospectus Supplement and the Prospectus Supplement will set forth the commission payable for the solicitation of such contracts. It has not been determined whether any Securities will be listed on a securities exchange. Underwriters will not be obligated to make a market in any Securities. The Company cannot predict the activity of trading in, or liquidity of, any Securities. Agents, underwriters and dealers may be entitled, under agreements entered into with the Company, to indemnification by the Company against certain civil liabilities, including liabilities under the Act or to contribution with respect to payments which the agents, underwriters or dealers may be required to make in respect thereof. Agents, underwriters and dealers may be customers of, engage in transactions with, or perform services for the Company in the ordinary course of business. LEGAL OPINIONS Certain legal matters in connection with the Securities will be passed upon for the Company by Joseph E. Geoghan, a director and Vice-President, General Counsel and Secretary of the Company or by Phyllis Savage, Chief Finance and Securities Counsel of the Company, or by other counsel to be named in a Prospectus Supplement, and for the agents, underwriters and dealers by counsel to be named in a Prospectus Supplement. At April 30, 1995, Mr. Geoghan owned 24,847 shares of the Company's common stock and 3,049 shares of its ESOP Convertible Preferred Stock and Ms. Savage owned 449 shares of the Company's common stock and 1,457 shares of its ESOP Convertible Preferred Stock. At April 30, 1995, Mr. Geoghan held options to purchase 266,000 shares of the Company's common stock and Ms. Savage held options to purchase 23,400 shares of the Company's common stock. EXPERTS The financial statements and related schedule included or incorporated by reference in the Company's 1994 Annual Report on Form 10-K have been examined by KPMG Peat Marwick LLP, independent auditors and Price Waterhouse LLP, independent accountants, to the extent and for the periods indicated in their reports included therein, and are incorporated by reference in this Prospectus in reliance upon the authority of said firms as experts in accounting and auditing. The reports of KPMG Peat Marwick LLP refer to changes in accounting for postemployment benefits in 1993 and accounting for postretirement benefits other than pensions and accounting for income taxes in 1992. 12 -----END PRIVACY-ENHANCED MESSAGE-----