-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VfhTbE0G41EuT7bOiGU6kcA01J3u346Ew73z/1cEZaUQy4x/VR76gMSnaWYO9wJu 8HqINl0ifZwDigQTqHxYbw== 0000950134-96-007067.txt : 19961225 0000950134-96-007067.hdr.sgml : 19961225 ACCESSION NUMBER: 0000950134-96-007067 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19961224 EFFECTIVENESS DATE: 19961224 SROS: CSX SROS: NYSE SROS: PHLX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHEMFIRST INC CENTRAL INDEX KEY: 0001026601 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 640679456 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-18693 FILM NUMBER: 96685482 BUSINESS ADDRESS: STREET 1: P O BOX 1249 CITY: JACKSON STATE: MS ZIP: 39215 BUSINESS PHONE: 6019480218 MAIL ADDRESS: STREET 1: P O BOX 1249 CITY: JACKSON STATE: MS ZIP: 39215-1249 S-8 1 FORM S-8 1 File No. 333-_______, as filed with the Securities and Exchange Commission on December ___, 1996 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 CHEMFIRST INC. (Exact name of issuer as specified in its charter) MISSISSIPPI (State of Incorporation) 64-0679456 (I.R.S. Employer ID Number) 700 NORTH STREET, JACKSON, MISSISSIPPI 39202 (Address of Principal Executive Offices) (Zip Code) CHEMFIRST INC. 1980 LONG-TERM INCENTIVE PLAN CHEMFIRST INC. 1988 LONG-TERM INCENTIVE PLAN CHEMFIRST INC. 1995 LONG-TERM INCENTIVE PLAN (Full Title of the Plans) JAMES L. MCARTHUR, SECRETARY, CHEMFIRST INC. P. O. BOX 1249, JACKSON, MISSISSIPPI 39215-1249 (601) 948-7550 (Name, address and telephone number of agent for service) CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------- Amount to be Proposed Maximum Offering Proposed Maximum Amount of Title of Securities to be Registered Registered (1) Price Per Share (2) Aggregate Offering Price Registration Fee - ----------------------------------------------------------------------------------------------------------------------------------- Common Stock 1,520,422 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1987-A Series Convertible Preferred Stock 30,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1988-A Series Convertible Preferred Stock 66,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1988-1 Series Convertible Preferred Stock 5,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1989-A Series Convertible Preferred Stock 16,500 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1989-1 Series Convertible Preferred Stock 45,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1989-2 Series Convertible Preferred Stock 5,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1990-1 Series Convertible Preferred Stock 52,367 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1990-2 Series Convertible Preferred Stock 5,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1991-1 Series Convertible Preferred Stock 4,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1991-2 Series Convertible Preferred Stock 5,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1992-1 Series Convertible Preferred Stock 5,000 shares issuable upon conversion Not applicable Not applicable - ----------------------------------------------------------------------------------------------------------------------------------- 1987-A Convertible Subordinated Debentures $433,125.00 100% of face amount $433,125.00 131.25 - ----------------------------------------------------------------------------------------------------------------------------------- 1988-A Convertible Subordinated Debentures $1,051,875.00 100% of face amount $1,051,875.00 318.75 - ----------------------------------------------------------------------------------------------------------------------------------- 1988-1 Convertible Subordinated Debentures $80,625.00 100% of face amount $80,625.00 24.43 - ----------------------------------------------------------------------------------------------------------------------------------- 1989-A Convertible Subordinated Debentures $288,750.00 100% of face amount $288,750.00 87.50 - ----------------------------------------------------------------------------------------------------------------------------------- 1989-1 Convertible Subordinated Debentures $787,500.00 100% of face amount $787,500.00 238.64 - ----------------------------------------------------------------------------------------------------------------------------------- 1989-2 Convertible Subordinated Debentures $69,062.50 100% of face amount $69,062.50 20.93 - ----------------------------------------------------------------------------------------------------------------------------------- 1990-1 Convertible Subordinated Debentures $576,033.00 100% of face amount $576,033.00 174.56 - ----------------------------------------------------------------------------------------------------------------------------------- 1990-2 Convertible Subordinated Debentures $46,875.00 100% of face amount $46,875.00 14.20 - ----------------------------------------------------------------------------------------------------------------------------------- 1991-1 Convertible Subordinated Debentures $39,250.00 100% of face amount $39,250.00 11.89 - ----------------------------------------------------------------------------------------------------------------------------------- 1991-2 Convertible Subordinated Debentures $46,562.50 100% of face amount $46,562.50 14.11 - ----------------------------------------------------------------------------------------------------------------------------------- 1992-1 Convertible Subordinated Debentures $39,062.50 100% of face amount $39,062.50 11.84 - ----------------------------------------------------------------------------------------------------------------------------------- Total Fee $1,048.10
(1) Subject to anti-dilution increases permitted by Rule 416. (2) Estimated solely for calculation of the registration fee pursuant to Rule 457(i). 2 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. Incorporation of Documents by Reference The following documents filed with the Commission by ChemFirst Inc. (the "Company") are incorporated herein by reference: (1) the Company's Registration Statement on Form S-1, dated November 18, 1996 (the "S-1 Registration Statement"), and (2) the description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A filed on December 9, 1996 (which is incorporated by reference to the S-1 Registration Statement). All documents filed hereafter by the Company or the Plan pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 prior to the termination of the offering hereunder shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of filing of such documents. ITEM 4. Description of Securities The 1980 and 1988 Plans: See Item 3 for description of Common Stock (including any provision of the Company's Amended and Restated Articles of Incorporation or Bylaws having an effect on a change of control of the Registrant). 1980 Plan Debentures The Company has been assigned and has assumed all obligations under a total of three series of debentures for issuance pursuant to debenture options under the 1980 Plan, which have been designated as the Company's 1987-A Series Convertible Subordinated Debentures (the "1987-A Series Debentures"), 1988-A Series Convertible Subordinated Debentures (the "1988-A Series Debentures"), and the 1989-A Series Convertible Subordinated Debentures (the "1989-A Series Debentures"). These three debenture series will sometimes be referred to collectively as the "1980 Plan Debentures," and except as otherwise indicated, are subject to the same terms and conditions. They have been created for issuance pursuant to regular debenture options. The Company has authorized the issuance, pursuant to the exercise of debenture options, of an aggregate principal amount of $433,125 of 1987-A Series Debentures, $1,051,875 of 1988-A Series Debentures and $288,750 of 1989-A Series Debentures. Of these amounts, $255,000 of the 1988-A Series and $227,500 of the 1989-A Series has been purchased and is outstanding, but not yet converted. The 1987-A Series Debentures are governed by an Indenture dated as of August 10, 1987. The 1988-A Series Debentures are governed by an Indenture dated 3 as of August 30, 1988. The 1989-A Series Debentures are governed by an Indenture dated as of August 22, 1989. These Indentures were amended by Supplemental Indentures dated November 14, 1991 and December 23, 1996. Pursuant to the Supplemental Indentures dated December 23, 1996, the Company assumed the obligations of First Mississippi Corporation (the "Predecessor Corporation") in connection with the Predecessor Corporation's distribution of all of the Common stock of the Company to the shareholders of the Predecessor Corporation (the Spin-off"). The Indentures are all between the Company and Deposit Guaranty National Bank, as Trustee (the "Trustee"), One Deposit Guaranty Plaza, Jackson, Mississippi 39201. The Trustee also serves as a registrar for the Company's Common Stock and engages in commercial banking transactions with the Company in the ordinary course of business. The three series of debentures created for issuance pursuant to debenture options under the 1980 Plan have the following maturity dates:
Debenture Series Maturity Date ---------------- ------------- 1987-A August 9, 1997 1988-A August 29, 1998 1989-A August 21, 1999
In certain circumstances described below, the 1980 Plan Debentures may be redeemed prior to their maturity date. The three debenture series will be subordinated generally to the Company's other indebtedness, except that they will rank equally with each other and any other series of debentures created for issuance under the Plans. Interest on the 1980 Plan Debentures will be payable semi-annually on January 1 and July 1 of each year. Subject to the conditions described herein, at any time more than six months after the date of grant of the applicable 1980 Plan Debenture Option and prior to the redemption or payment thereof, each 1980 Plan Debenture will be convertible into fully paid and non-assessable shares of the Company's Preferred Stock at a conversion price as set forth in the following table:
Convertible into Conversion Price Debenture Series Preferred Stock Per Share ---------------- ---------------- ---------------- 1987-A 1987-A Series $ 8.9674 1988-A 1988-A Series 9.8991 1989-A 1989-A Series 10.8696
The Board of Directors is authorized to determine the appropriate adjustments, if any, in the number of shares of Common Stock issuable upon conversion of the Preferred Stock in the event of any reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants, rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend, including, without limitation, a distribution of the stock of a subsidiary, 3 4 combination or exchange of shares, repurchase of shares, or any other change of the Company's corporate structure, which in the judgment of the Board of Directors, materially affects the value of the Company's shares. Any such adjustments to the number of shares of Common Stock issuable upon conversion of the Preferred Stock would be subject to any required authorization of additional Common Stock for issuance upon conversion of the Preferred Stock. Each share of the Preferred Stock into which the 1980 Plan Debentures are convertible as described above was initially convertible into one share of Common Stock, is subject to adjustment into 1.61 shares of Common Stock by the Board of Directors of First Mississippi Corporation to reflect the distribution of Getchell Gold Common Stock (formerly, FirstMiss Gold Inc.) in 1995 and is subject to additional adjustment in certain events, including an adjustment due to the economic impact of the Spin-off. The adjustment for the Spin-off will be based on a formula which will be adopted by the Board of Directors of the Company in order to match the initial value of the Common stock issuable upon conversion to the value of the Common stock of FM that would have been issuable had the Spin-off not occurred. See also "Description of Convertible Preferred Stock." 1988 Plan Debentures The eight series of debentures created for issuance pursuant to debenture options under the 1988 Plan have been designated as the Company's 1988-1 Series Convertible Subordinated Debentures (the "1988-1 Series Debentures"), the Company's 1989-1 Series Convertible Subordinated Debentures (the "1989-1 Series Debentures"), the Company's 1989-2 Series Convertible Subordinated Debentures (the "1989-2 Series Debentures"), the Company's 1990-1 Series Convertible Subordinated Debentures (the "1990-1 Series Debentures"), the Company's 1990-2 Series Convertible Subordinated Debentures (the "1990-2 Series Debentures"), the Company's 1991-1 Series Convertible Subordinated Debentures (the "1991-1 Series Debentures"), the Company's 1991-2 Series Convertible Subordinated Debentures (the "1991-2 Series Debentures"), and the Company's 1992-1 Series Convertible Subordinated Debentures (the "1992-1 Series Debentures"). The 1988-1 Series Debentures, the 1989-1 Series Debentures, the 1989-2 Series Debentures, the 1990-1 Series Debentures, the 1990-2 Series Debentures, the 1991-1 Series Debentures, the 1991-2 Series Debentures, and the 1992-1 Series Debentures are hereinafter referred to collectively as the "1988 Plan Debentures." The Company has authorized the issuance, pursuant to the exercise of debenture options, of an aggregate principal amount of $80,625 of 1988-1 Series Debentures, $787,500 of 1989-1 Series Debentures, $69,062.50 of 1989-2 Series Debentures, $576,033 of 1990-1 Series Debentures, $46,875 of 1990-2 Series Debentures, $39,250 of 1991-1 Series Debentures, $ 46,562.50 of 1991-2 Series Debentures, and $39,062.50 of 1992-1 Series Debentures. Of these amounts, $81,033 of the 1990-1 Series has been purchased and is outstanding, but not yet converted. The 1988-1 Series Debentures are governed by an Indenture dated as of November 29, 1988, the 1989-1 Series Debentures are governed by an Indenture dated as of August 22, 1989, the 1989-2 Series Debentures are governed by an Indenture dated as of November 10, 1989, the 1990-1 Series Debentures are governed by an Indenture dated as of August 27, 1990, the 1990-2 Series Debentures are governed by an Indenture dated as of November 9, 1990, the 1991-1 Series 4 5 Debentures are governed by an Indenture dated as of August 27, 1991, the 1991-2 Series Debentures are governed by an Indenture dated as of November 15, 1991, and the 1992-1 Series Debentures are governed by an Indenture dated as of November 13, 1992, all between the Company and Deposit Guaranty National Bank, as Trustee (the "Trustee"), One Deposit Guaranty Plaza, Jackson, Mississippi 39201. In addition, the Trustee serves as a registrar for the Company's Common Stock and engages in commercial banking transactions with the Company in the ordinary course of business. The 1988-1 Indenture, 1989-1 Indenture, 1989-2 Indenture, 1990-1 Indenture, 1990-2 Indenture and 1991-1 Indenture were amended by Supplemental Indentures dated November 14, 1991 and December 23, 1996. Pursuant to the Supplemental Indentures dated December 23, 1996, the Company assumed the obligations of First Mississippi Corporation (the "Predecessor Corporation") in connection with the Predecessor Corporation's distribution of all of the Common stock of the Company to the shareholders of the Predecessor Corporation (the Spin-off").
Debenture Series Maturity Date ---------------- ------------- 1988-1 November 28, 1998 1989-1 August 21, 1999 1989-2 November 9, 1999 1990-1 August 26, 2000 1990-2 November 8, 2000 1991-1 August 26, 2001 1991-2 November 14, 2001 1992-1 November 12, 2002
In certain circumstances described below, the 1988 Plan Debentures may be redeemed prior to their due date. The 1988-1, 1989-1, 1989-2, 1990-1, 1990-2, 1991-1, 1991-2, and 1992-1 Series Debentures will be subordinated generally to the Company's other indebtedness, except that they will rank equally with each other and any other series of debentures created for issuance under the 1988. Interest on the 1988 Plan Debentures will be payable semiannually on January 1 and July 1 of each year. Subject to the conditions described herein, at any time more than six months after the date of grant of the applicable 1988 Plan Debenture Option and prior to the redemption or payment thereof, the 1988-1 Series Debentures will be convertible at the Conversion Price of $10.0155 per share into fully paid and non-assessable 1988-1 Series Convertible Preferred Stock, the 1989-1 Series Debentures will be convertible at the Conversion Price of $10.8696 per share into fully paid and non-assessable 1989-1 Series Convertible Preferred Stock, the 1989-2 Series Debentures will be convertible at the Conversion Price of $8.5792 per share into fully paid and non-assessable 1989-2 Series Convertible Preferred Stock, the 1990-1 Series Debentures will be convertible at the Conversion Price of $6.8323 per share into fully paid and non-assessable 1990-1 Series Convertible Preferred Stock, the 1990-2 Series Debentures will be convertible at 5 6 the Conversion Price of $5.8230 per share into fully paid and non-assessable 1990-2 Series Convertible Preferred Stock, the 1991-1 Series Debentures will be convertible at the Conversion Price of $6.0947 per share into fully paid and non-assessable 1991-1 Series Convertible Preferred Stock, the 1991-2 Series Debentures will be convertible at the Conversion Price of $5.7842 per share into fully paid and non-assessable 1991-2 Series Convertible Preferred Stock, and the 1992-1 Series Debentures will be convertible at the Conversion Price of $4.8525 per share into fully paid and non-assessable 1992-1 Series Convertible Preferred Stock. The Board of Directors is authorized to determine the appropriate adjustments, if any, in the number of shares of Common Stock issuable upon conversion of the Preferred Stock in the event of any reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants, rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend, including, without limitation, a distribution of the stock of a subsidiary, combination or exchange of shares, repurchase of shares, or any other change of the Company's corporate structure, which in the judgment of the Board of Directors, materially affects the value of the Company's shares. Any such adjustments to the number of shares of Common Stock issuable upon conversion of the Preferred Stock would be subject to any required authorization of additional shares of Common Stock for issuance upon conversion of the Preferred Stock. Each share of the Preferred Stock was initially convertible into one share of Common Stock, is subject to adjustment into 1.61 shares of Common Stock by the Board of Directors of First Mississippi Corporation to reflect the distribution of Getchell Gold Common Stock (formerly, FirstMiss Gold Inc.) in 1995 and is subject to adjustment in certain events, including an adjustment due to the economic impact of the Spin-off. The adjustment for the Spin-off will be based on a formula which will be adopted by the Board of Directors of the Company in order to match the initial value of the Common stock issuable upon conversion to the value of the Common stock of FM that would have been issuable had the Spin-off not occurred. See also "Description of Convertible Preferred Stock." Provisions Applicable to Both the 1980 Plan Debentures and the 1988 Plan Debentures The 1980 Plan Debentures and the 1988 Plan Debentures are hereinafter referred to collectively as the "Debentures." The following paragraphs discuss provisions applicable to Debentures issued under either Plan. The Debentures will bear interest at a floating rate of 1% less than the rate publicly announced as its prime rate by Deposit Guaranty National Bank in Jackson, Mississippi, but not more than the maximum legal rate permitted under the law. Mississippi usury law permits interest at 15% on Debentures with a principal amount exceeding $2,500 and 10% on Debentures in smaller amounts. Also, a provision of the Mississippi law permits interest on Debentures in any principal amounts at 5% above the Federal Reserve Bank's discount rate (4.75% at December 30, 1994). There is no usury limit on Debentures issued between July 1, 1986 and June 30, 1987 with a principal amount exceeding $125,000. There is no usury limit on Debentures issued between July 1, 1987 and June 30, 1988 with a principal amount exceeding $75,000. There is no usury limit on Debentures issued from and after July 1, 1988 with a principal amount exceeding $25,000. The Company expects that the formula interest rate of the Debentures will remain in compliance with the applicable usury rate, particularly in the case of Debentures in amounts exceeding $2,500, because of the usury ceilings 6 7 applicable to Deposit Guaranty National Bank in establishing its prime rate. The Company also believes that there is a sound legal basis for not treating the right to convert the Debentures into Common Stock as constituting additional interest for purposes of the Mississippi usury law. Accordingly, the Company intends to treat the conversion right as not being interest subject to the Mississippi usury law. A participant generally may not sell, assign, transfer, pledge or otherwise hypothecate a Debenture except by will or intestate succession. With the Company's consent, however, participants may pledge Debentures as security for loans which will provide all or a part of the financing necessary to purchase the Debentures. If a participant makes a permitted pledge of a Debenture, the conversion privilege will not be exercisable during such time as the Debenture is pledged. Upon notice from the participant and the lender to which the Debenture was pledged that the Debenture has been released from the pledge, the conversion privilege will again be exercisable. If a participant sells, assigns, transfers, pledges or otherwise hypothecates a Debenture in a manner not permitted under the Indenture or if a party forecloses on a permitted pledge, the conversion right will permanently cease to exist. Should the conversion right of a Debenture so terminate, the Company has the option, but not the obligation, to prepay that Debenture. Debentures may be converted in whole or in part but no partial conversion will be permitted if, following conversion, the remaining principal amount of the Debenture would be less than $1,000. Shares of Series Stock will be issued upon conversion of Debentures in whole shares only. If more than one Debenture of the same series is surrendered for conversion at one time by the same holder, the number of whole shares issuable upon conversion will be computed upon the basis of the aggregate principal amount of such Debentures (or portions thereof specified for conversion) so surrendered. Any fractional interest in a share otherwise deliverable upon conversion will be settled by payment in the form of a check or cash equal to the product obtained by multiplying the applicable Conversion Price per share times such fractional interest. The Company may redeem all or any part of the 1987-A, 1988-A, 1989-A, 1989-1, 1990-1, 1991-1 or 1992-1 Series Debentures on any January 1 or July 1 upon mailing a notice of redemption not less than 12 nor more than 18 months prior to the date fixed for such redemption to the holders of the Debentures to be redeemed at their last registered addresses. Except as provided below, if only a part of the 1987-A, 1988-A, 1989-A, 1989-1, 1990-1, 1991-1 or 1992-1 Series Debentures are redeemed, the Company will specify the amount to be redeemed, and the Trustee will select the particular Debentures to be redeemed, using a method the Trustee deems fair and appropriate, which may provide for the selection for redemption of portions of the principal amount of such Debentures. If a holder of a 1987-A, 1988-A, 1989-A, 1989-1, 1990-1, 1991-1 or 1992-1 Series Debenture is not employed by an Eligible Employer, the Company may designate for redemption any of such series of Debentures owned by such person, regardless of whether the Company redeems any other of such series of Debentures at the same time. If the Company calls for redemption the 1987-A, 1988-A, 1989-A, 1989-1, 1990-1, 1991-1 or 1992-1 Series Debentures issued pursuant to the 1988 Plan, the Company may also redeem all of the 1988-1, 1989-2, 1990-2, 1991-2, and 1992-1 Series Debentures held by Outside Directors on any January 1 or July 1 upon mailing a notice of redemption not less than 12 nor more than 18 7 8 months prior to the date fixed for such redemption to the holders of the 1988 Plan Debentures to be redeemed at their last registered addresses. Each Debenture is redeemable for its principal amount together with accrued interest to the date fixed for redemption. Purchasers may convert their Debentures at any time prior to the close of business on the redemption date, subject to the limitations on conversion privileges described above. A holder may redeem a Debenture at its principal amount plus accrued interest on any January 1 or July 1 more than one year after issuance of the Debenture. In the event that the Company enters into certain merger transactions, becomes a party to a consolidation, or transfers all or substantially all of its assets to another company, a supplemental Indenture will be executed to provide that the holder of each Debenture then outstanding may convert such Debenture into the kind and amount of shares of stock, cash or property receivable upon the merger, consolidation, or transfer by a holder of the number of shares of the applicable series of the Company's Convertible Preferred Stock issuable upon conversion of such Debenture if such shares of Preferred Stock had been outstanding immediately prior to such merger, consolidation or transfer. Each Indenture under the 1988 Plan and under the 1980 Plan may be amended to modify the rights of holders of the respective series of Debentures covered thereby or otherwise modify the terms of such Indenture with the consent of the Company, the Trustee and the holders of not less than 66 2/3% in aggregate principal amount of the respective series of Debentures covered thereby, except that the maturity date, the rate and time of payment for interest, the conversion rights and certain other specified terms may not be modified without the consent of all affected holders of the respective series of Debentures covered thereby. Each Indenture defines an "Event of Default" as: (a) any default in the payment of interest which continues for 30 days after the due date; (b) any default in the payment of principal when due on the Debentures covered thereby; (c) failure by the Company to observe or perform any of its other covenants and agreements in the Debentures covered thereby or in such Indenture which continues for 60 days after specific written notice of such failure has been given to the Company by the Trustee or to the Company and the Trustee by holders of at least 25% in principal amount of the Debentures covered thereby; (d) certain events of default that cause other indebtedness of the Company to be accelerated and which are not cured or otherwise remedied within specified times; and (e) certain events of bankruptcy of the Company. Upon the happening and during the continuance of an Event of Default, the Trustee or the holders of at least 25% in aggregate principal amount of the Debentures covered thereby may declare the principal and accrued interest on all Debentures covered thereby to be due and payable immediately. The holders of a majority in aggregate principal amount of the outstanding Debentures of the series so affected will have the right to direct the time, method and place of conducting any proceeding or any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, but the Trustee, subject to its obligation to exercise such of the rights and powers vested in it by each Indenture and to use the same degree of care and skill in their exercise or use as a prudent man would exercise or use under the circumstances in the conduct of his own affairs, may decline to follow any such direction if the Trustee in good faith determines that the proceedings so directed would involve it in a personal liability or be in 8 9 conflict with any law or provision of such Indenture. The Company is required by each Indenture to deliver annually to the Trustee a certificate from appropriate officers certifying that, to the best of their knowledge, the Company has satisfied all of its obligations under such Indenture during the preceding fiscal year. In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization, or other similar proceedings in connection therewith, relative to the Company or to its creditors, as such, or to its property, and in the event of any proceedings for voluntary liquidation, dissolution, or other winding up of the Company, whether or not involving insolvency or bankruptcy, or in the event that any Debenture is declared due and payable before its expressed maturity for any reason, then the holders of Senior Indebtedness (as defined below) then outstanding shall be entitled to receive payment in full of all such Senior Indebtedness before the holders of the Debentures are entitled to receive any payment on account of principal or interest upon the Debentures. No payment of principal or interest will be made on the Debentures during any period that any Senior Indebtedness has matured and has not been paid in full, refunded or replaced by new indebtedness. Senior Indebtedness is defined in each Indenture as the principal and unpaid interest on (a) indebtedness for money borrowed (other than the Debentures) for the payment of which the Company is responsible or liable, whether outstanding on the date of execution of such Indenture or thereafter created, incurred, assumed, or guaranteed, unless the instrument creating or evidencing the same or pursuant to which the same is created provides that such indebtedness is not superior in right of payment to the Debentures, and (b) renewals, extensions, and deferrals of any such indebtedness. The Indentures do not contain any limitations on the amount of Senior Indebtedness which may be hereafter incurred by the Company. At December 23, 1996, the Company had outstanding or guaranteed approximately $3,143,097 of indebtedness which would constitute Senior Indebtedness under the Indentures. By reason of such subordination, in the event of the Company's insolvency, certain general creditors of the Company may recover more ratably than holders of the Debentures. Description of Convertible Preferred Stock The Company is authorized to issue up to 20,000,000 shares of Preferred Stock in one or more series (the "Preferred Stock"), and the Board is authorized to determine the form, class, series and amounts in which the Preferred Stock shall be issued; the price or prices (not less than par) at which such stock shall be sold; the dividend rights, conversion rates, conversion prices, par value, voting privileges, redemption prices, maturity dates, and any other terms and conditions relative to the issuance of the Preferred Stock. Pursuant to this authority, the Board has established the 1987-A, 1988-A, 1988-1, 1989-A, 1989-1, 1989-2, 1990-1, 1990-2, 1991-1, 1991-2, and 1992-1 Series Convertible Preferred Stock for issuance in connection with the Plans, 9 10 and has authorized the issuance of up to the following amount of such Preferred Stock upon conversion of the respective Series Debentures:
Preferred Stock Series Number of Shares ---------------------- ---------------- 1987-A 30,000 1988-A 66,000 1988-1 5,000 1989-A 16,500 1989-1 45,000 1989-2 5,000 1990-1 52,367 1990-2 5,000 1991-1 4,000 1991-2 5,000 1992-1 5,000
The 1987-A, 1988-A, 1988-1, 1989-A, 1989-1, 1989-2, 1990-1, 1990-2, 1991-1, 1991-2, and 1992-1 Series Convertible Preferred Stock (sometimes referred to collectively as the "Series Stock") each has a par value of $1.00 per share and is entitled to a quarterly non-cumulative preferential dividend of $.05 per share, payable quarterly. Each share of Series Stock will be convertible immediately into one share of the Company's Common Stock, subject to adjustment in certain events, including an adjustment due to the economic impact of the Spin-off. The adjustment for the Spin-off will be based on a formula which will be adopted by the Board of Directors of the Company in order to match the initial value of the Common stock issuable upon conversion to the value of the Common stock of FM that would have been issuable had the Spin-off not occurred. The Board of Directors is authorized to determine the appropriate adjustments, if any, to the number of shares of the Company's Common Stock issuable upon conversion of the Series Stock in the event of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants, rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend, including, without limitation, a distribution of the stock of a subsidiary, combination or exchange of shares, repurchase of shares, or any other change of the Company's corporate structure, which, in the judgment of the Board of Directors materially affects the value of the Company's shares subsequent to the grant of a regular debenture option or subsequent to the conversion of a stock option into a special debenture option. The Company will not issue fractional shares of Common Stock upon conversion of Series Stock. In lieu of such fractions, the Company will pay to the holder of Series Stock requesting conversion an amount in cash equal to the market value of such fraction at the time of such conversion, as determined by the Board. Any or all of the Series Stock outstanding at any time may be redeemed at the option of the Company in whole or in part at any time upon not less than 20 nor more than 60 days notice to the record holders at their last addresses as shown in the stock transfer records of the Company. The conversion right with respect to any shares called for redemption will be lost 10 11 unless exercised no later than the day fixed for redemption. The redemption price per share (the "Redemption Price") for Series Stock will be as follows (plus in each case accrued and unpaid dividends per share on the respective series of stock to the date of redemption):
Redemption Series Stock Price Per Share ------------ --------------- 1987-A $ 8.9674 1988-A 9.8991 1988-1 10.0155 1989-A 10.8696 1989-1 10.8696 1989-2 8.5792 1990-1 6.8323 1990-2 5.8230 1991-1 6.0947 1991-2 5.7842 1992-1 4.8525
Under the Mississippi Business Corporation Act, no redemption could be made if the Company were insolvent or would be rendered insolvent by such redemption or if such redemption would reduce the Company's net assets below the aggregate amount payable to holders of shares having prior or equal rights to the Company's assets upon involuntary dissolution. Upon any voluntary or involuntary liquidation or dissolution of the Company, the holders of the Series Stock will be entitled to a liquidation preference equal to the Redemption Price for the appropriate series as set forth above, plus any declared but unpaid dividends on the respective series of stock, before any distribution of assets may be made to the holders of Common Stock or other shares junior to the Series Stock. After the holders of the Series Stock have received such amount, they may not participate in any remaining assets and surplus funds of the Company. If the amounts which holders of the Series Stock and any other series of Preferred Stock ranking equally as to distribution of assets are entitled to receive in any voluntary or involuntary liquidation or dissolution are not paid in full, the shares of Series Stock and such other series of Preferred Stock will share ratably in any distribution of assets in accordance with the amounts which would be payable on such distribution if all amounts to which the holders of each such series are entitled are paid in full. Additional series of Preferred Stock may be created and shares thereof may be issued by the Company without any approval or action by the holders of the Series Stock being necessary, and such additional series of stock may rank equally with the Series Stock as to distribution of the Company's assets in the event of liquidation or dissolution. 11 12 The holders of shares of Series Stock will not be entitled to vote except in certain circumstances as provided by the Mississippi Business Corporation Act. Holders of Series Stock do not have preemptive rights. 1995 Plan: Item 4 is not applicable to the 1995 Plan. See Item 3 for description of Common Stock (including any provision of the Company's Amended and Restated Articles of Incorporation or Bylaws having an effect on a change of control of the Registrant). ITEM 5. Interests of Named Experts and Counsel Legal matters, other than those relating to tax consequences, in connection with the securities covered by this Registration Statement have been passed upon by J. Steve Chustz, General Counsel of the Company. Mr. Chustz also serves as General Counsel for various subsidiaries of the Company. As of December 11, 1996, Mr. Chustz beneficially owned 32,772 shares of the Company's Common Stock which includes 31,501 shares of the Company's Common Stock which Mr. Chustz has the right to acquire through the exercise of Non-Qualified Stock Options. The consolidated financial statements and financial statement schedules of the Company and subsidiaries as of June 30, 1996 and 1995 and for each of the years in the three-year period ended June 30, 1996, which are incorporated herein by reference, have been incorporated herein in reliance upon the reports, also incorporated herein by reference, of KPMG Peat Marwick LLP, independent certified public accountants, and upon the authority of said firm as experts in accounting and auditing. To the extent that KPMG Peat Marwick LLP audits and reports on financial statements of the Company and subsidiaries issued at future dates, and consents to the use of their reports thereon, such financial statements also will be incorporated herein by reference in reliance upon their reports and said authority. ITEM 6. Indemnification of Directors and Officers Subarticle E of Article 8 of the Mississippi Business Corporation Act ("MBCA") empowers a Mississippi corporation to indemnify against liability an individual who is made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, formal or informal (a "Proceeding"), because such person is or was a director. To be eligible for indemnification, the director must have conducted himself in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. Liability indemnified against includes the obligation to pay a judgment, settlement, penalty, fine or reasonable expenses incurred with respect to a Proceeding. The MBCA 12 13 precludes a corporation from indemnifying a director in connection with a Proceeding by or in the right of the corporation in which the director was adjudged liable to the corporation or in connection with any other Proceeding charging improper personal benefit to a director, whether or not involving action in the director's official capacity, in which the director was adjudged liable on the basis that personal benefit was improperly received by the director. Subarticle E further provides that if a director is wholly successful, on the merits or otherwise, in the defense of any Proceeding to which he was a party because he is or was a director, the corporation must indemnify him against reasonable expenses incurred in connection with the Proceeding. Also, a court may order a company to indemnify a director if it determines the director is fairly and reasonably entitled to indemnification in view of all of the relevant circumstances. Subarticle E also allows corporations to indemnify officers, employees or agents to the same extent as directors, and provides for mandatory or court-ordered indemnification for these persons as described above. Finally, the MBCA allows corporations to purchase and maintain insurance on behalf of directors, officers, employees or agents against liability asserted against or incurred by him in that capacity or arising from his status as such, whether or not the corporation would have the power to indemnify such person against liability under Subarticle E. The Company's Bylaws provide for indemnification of Company's officers and directors to the fullest extent allowed by Mississippi law and further permit such indemnification with respect to other employees and agents. The Company entered into indemnification agreements with certain of its officers and its directors. The effect of these agreements is to add to the indemnification rights otherwise granted a contractual right to such indemnification. The Company will have directors' and officers' liability insurance which protects each director or officer from certain claims and suits, including shareholder derivative suits, even where the director may be determined to not be entitled to indemnification under the MBCA and claims and suits arising under the Securities Act. The policy may also afford coverage under circumstances where the facts do not justify a finding that the director or officer acted in good faith and in a manner that was in or not opposed to the best interests of the Registrant. The foregoing represents a summary of the general effect of the MBCA, the Company's Amended and Restated Articles of Incorporation and Bylaws and directors' and officers' liability insurance coverage for purposes of general description only. ITEM 7. Exemption from Registration Claimed Not applicable. 13 14 ITEM 8. Exhibits 4.1 Amended and Restated Articles of Incorporation of the Company are incorporated by reference to Exhibit 3.1 of the Company's S-1 Registration Statement (file number 333-15789). 4.2 Bylaws of the Company are incorporated by reference to Exhibit 3.2 of the Company's S-1 Registration Statement (file number 333-15789). 4.3 Rights Agreement dated as of October 30, 1996, by and between the Company and KeyCorp Shareholder Services, Inc. is incorporated by reference to Exhibit 4 of the Company's S-1 Registration Statement (file number 333-15789). 4.4 ChemFirst Inc. 1995 Long-Term Incentive Plan. 4.5 ChemFirst Inc. 1988 Long-Term Incentive Plan. 4.6 ChemFirst Inc. 1980 Long-Term Incentive Plan. 4.7 Indentures in the form of that Indenture dated November 14, 1994 have been entered into with regard to all series of Debentures registered under this Registration Statement. 4.8 Supplemental Indentures in the form of that Supplemental Indenture dated December 23, 1996 were entered into with regard to all series of Debentures registered under this Registration Statement. 5.1 Opinion of J. Steve Chustz as to legality of securities being registered. 23.1 Consent of J. Steve Chustz is contained within the opinion of counsel filed as Exhibit 5.1. 23.2 Consent of KPMG Peat Marwick LLP. 25.1 Statement of Eligibility of Trustee ITEM 9. Undertakings (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; 14 15 (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form F3 and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim 15 16 for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 16 17 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Jackson, State of Mississippi, on December 23, 1996. CHEMFIRST INC. BY: /s/ J. Kelley Williams ----------------------------- J. Kelley Williams, President Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. SIGNATURE TITLE DATE --------- ----- ---- /s/ J. Kelley Williams Chairman of the Board December 23, 1996 - ------------------------- of Directors, Chief Executive J. Kelley Williams Officer (Principal Executive Officer) /s/ Thomas G. Tepas President and December 23, 1996 - ------------------------- Chief Operating Officer Thomas G. Tepas /s/ R. Michael Summerford Vice President and Chief December 23, 1996 - ------------------------- Financial Officer R. Michael Summerford (Principal Financial Officer) /s/ Troy B. Browning Controller December 23, 1996 - ------------------------- (Principal Accounting Officer) Troy B. Browning /s/ Richard P. Anderson Director December 23, 1996 - ------------------------- Richard P. Anderson /s/ Paul A. Becker Director December 23, 1996 - ------------------------- Paul A. Becker 18 /s/ James W. Crook Director December 23, 1996 - ------------------------- James W. Crook /s/ Michael J. Ferris Director December 23, 1996 - ------------------------- Michael J. Ferris /s/ James E. Fligg Director December 23, 1996 - ------------------------- James E. Fligg /s/ Robert P. Guyton Director December 23, 1996 - ------------------------- Robert P. Guyton /s/ Charles P. Moreton Director December 23, 1996 - ------------------------- Charles P. Moreton /s/ Paul W. Murrill Director December 23, 1996 - ------------------------- Paul W. Murrill /s/ William A. Percy, II Director December 23, 1996 - ------------------------- William A. Percy, II /s/ Dan F. Smith Director December 23, 1996 - ------------------------- Dan F. Smith /s/ Leland R. Speed Director December 23, 1996 - ------------------------- Leland R. Speed /s/ R. Gerald Turner Director December 23, 1996 - ------------------------- R. Gerald Turner 19 Index to Exhibits
Exhibit No. Description ----------- ----------- 4.1 Amended and Restated Articles of Incorporation of the Company are incorporated by reference to Exhibit 3.1 of the Company's S-1 Registration Statement (file number 333-15789). 4.2 Bylaws of the Company are incorporated by reference to Exhibit 3.2 of the Company's S-1 Registration Statement (file number 333-15789) 4.3 Rights Agreement dated as of October 30, 1996, by and between the Company and KeyCorp Shareholder Services, Inc. is incorporated by reference to Exhibit 4 of the Company's S-1 Registration Statement (file number 333-15789) 4.4 ChemFirst Inc. 1995 Long-Term Incentive Plan 4.5 ChemFirst, Inc. 1988 Long-Term Incentive Plan. 4.6 ChemFirst, Inc. 1980 Long-Term Incentive Plan. 4.7 Indentures in the form of that Indenture dated November 14, 1994 have been entered into with regard to all series of Debentures registered under this Registration Statement. 4.8 Supplemental Indentures in the form of that Supplemental Indenture dated December 23, 1996 were entered into with regard to all series of Debentures registered under this Registration Statement. 5.1 Opinion of J. Steve Chustz as to legality of securities being registered. 23.1 Consent of J. Steve Chustz is contained within the opinion of counsel filed as Exhibit 5.1. 23.2 Consent of KPMG Peat Marwick LLP. 25.1 Statement of Eligibility of Trustee
EX-4.4 2 CHEMFIRST, INC. 1995 LONG-TERM INCENTIVE PLAN 1 EXHIBIT 4.4 CHEMFIRST INC. 1995 LONG TERM INCENTIVE PLAN 1. PURPOSE The purpose of this Plan is to further the growth in earnings and market appreciation of ChemFirst Inc. by providing long-term incentives to directors, officers, and employees of the Company and its subsidiaries, partnerships and joint ventures. The Company intends that the Plan will help attract, retain and motivate officers, directors and key employees of high caliber and good potential and promote the alignment of the participants' interests with that of the Company's shareholders. 2. DEFINITIONS For purposes of this Plan, the following terms shall have the meanings set forth below: "Annual Incentive" means an amount payable pursuant to any short term incentive compensation plan or sales incentive plan of the Company. "Award" means an award granted under this Plan. "Base Salary" means the regular salary paid to an employee. Base Salary shall not include bonuses or other forms of compensation which are not considered regular earnings by the Company. "Board" means the Board of Directors of the Company. "Cash Retainer" means the regular retainer payment paid to a Director. Cash Retainer shall not include meeting fees or committee fees or other forms of compensation which are not considered a regular component of a Director's retainer. "Change in Control" shall have the meaning set forth in Paragraph 19. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Committee" means the committee appointed by the Board to administer the Plan. The Committee shall consist of two or more members of the Board who are "disinterested persons" within the meaning of Rule 16b-3. "Company" means ChemFirst Inc. "Conversion Award" means an Award issued in place of cash compensation, pursuant to Paragraph 7 of the Plan. 2 "Director" means a member of the Board of Directors of the Company or a Subsidiary. "Employee" means any officer or other employee of the Company or a Subsidiary. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time. "Exchange Date" means the date upon which cash compensation is replaced by a Conversion Award. For purposes of: (a) base salary, that date shall be the first business day of January. (b) annual incentives, that date shall be the date on which the annual incentive is paid. (c) director retainer payments, that date shall be the first day each year that a retainer payment is made. "Fair Market Value" means, as of any date, the average of the highest and lowest prices at which the Stock is traded on such date on the principal market on which the Stock is traded, or if the Stock is not traded on such date, on the immediately preceding date on which the Stock is traded. "Incentive Stock Option" means an option meeting the requirements of Section 422 of the Code. "Nonemployee Director" means a member of the Board who is not an employee of the Company or any Subsidiary. "Nonqualified Stock Option" means an option that is not an Incentive Stock Option. "Participant" means an Employee or Director who has been selected by the Committee to receive an Award under the Plan. "Performance Period" means the period of time designated by the Committee in which an Award may be earned. "Performance Shares" means shares of Stock that may be earned under the Plan, subject to the satisfaction of certain performance criteria over a Performance Period. "Performance Units" means a dollar denominated unit that may be earned under the Plan, subject to the satisfaction of performance criteria over a Performance Period. "Plan" means this ChemFirst Inc. 1995 Long Term Incentive Plan, as amended from time to time. 2 3 "Restricted Stock" means shares of Stock which may be earned under the Plan, subject to continued employment or other vesting criteria. "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and Exchange Commission pursuant to the Exchange Act, as amended from time to time. "Share Unit" is the right to receive an amount of cash or Stock equal to the value of a share of Stock at a future date. "Stock" means the common stock of the Company. "Stock Option" means an option granted pursuant to the Plan, whether an Incentive Stock Option or a Nonqualified Stock Option. "Subsidiary" means any corporation, partnership, joint venture or other entity in which the Company has at least a fifty percent beneficial ownership interest. 3. ADMINISTRATION The Plan shall be administered by the Board and/or the Committee, as the Board shall determine in its sole discretion from time to time. In exercising its discretion with respect to the administration of the Plan, the Board shall have the option of administrating only certain aspects of the Plan, such as the determination and approval of Awards to be granted under the Plan, and delegating the administration of the remaining aspects of the Plan to the Committee. The Board and/or the Committee, as the case may be, shall have full and final authority in its discretion to conclusively interpret the provisions of the Plan and to decide all questions of fact arising in its application; to determine the Employees and Directors to whom Awards shall be made under the Plan; to determine the type of Award to be made and the amount, size and terms of each such Award; to determine the time when Awards will be granted to Employees and Directors; and to make all other determinations necessary or advisable for the administration of this Plan. Notwithstanding the above, the Company's Chief Executive Officer or some other officer designated by the Board or the Committee, as the case may be, shall have the authority to grant for purposes of Section 16 of the Exchange Act, Awards to newly hired employees who are not executive officers of the Company, subject to such limitations as may be established by the Board or the Committee, as the case may be. All provisions elsewhere in this Plan dealing with administration of and decisions under this Plan which refer to the Committee shall be deemed to refer to the Board whenever the Board is administrating, pursuant to this Section 3, the aspect of the Plan to which said provision relates. 4. PARTICIPATION The Committee, in its discretion, may grant Awards to any Employee or Director, subject to the provisions of the Plan. No Employee or Director shall be entitled as a matter of 3 4 right to receive an Award, nor shall the grant of an Award entitle an Employee or Director to receive any future Award. 5. SHARES SUBJECT TO THE PLAN (a) A maximum of 980,000 shares of Stock may be issued pursuant to the Plan provided, however, that no more than 240,000 shares may be granted in the form of Restricted Stock Awards. The total number of shares authorized and the number of shares which may be granted in the form of Restricted Stock Awards are subject to adjustment pursuant to Paragraph 16. Shares issued pursuant to the Plan shall be either authorized but unissued shares of Stock or shares of Stock held as treasury stock. (b) To the extent that any Award is canceled or forfeited, or terminates, expires, or lapses for any reason, any unissued shares of Stock subject to such Award shall again be available for grant under the Plan. (c) Any Awards granted in substitution for awards or rights issued by a company that is acquired by the Company or a Subsidiary shall not reduce the number of Shares available for grant under the Plan. (d) Subject to adjustment pursuant to Paragraph 16, the maximum number of shares of Stock with respect to which any Employee may be awarded Stock Options, Restricted Stock or Stock Appreciation Rights in any calendar year under Paragraph 6 shall be 60,000 shares. 6. AWARDS TO EMPLOYEES AND DIRECTORS As the Committee may determine, the following types of Awards may be granted under the Plan to Employees and Directors, either alone, in combination or an alternative basis: (a) Stock Options: Stock Options shall be Incentive Stock Options or Nonqualified Stock Options, as determined by the Committee. Stock Options shall be granted with an exercise price which shall not be less than one hundred percent of Fair Market Value on the date of grant. Incentive Stock Options shall comply with the provisions of Section 422 of the Code and to the extent the aggregate fair market value (determined as of the time the Incentive Stock Option is granted) of the stock with respect to which Incentive Stock Options are exercisable for the first time by any individual during any calendar year under all plans of the Company and its parent and Subsidiaries exceeds $100,000, such options shall be treated as Nonqualified Stock Options. A Stock Option may be exercised at such times as may be specified by the Committee at the time of grant, provided that no Stock Option granted under this Paragraph 6 shall be exercisable later than ten years after grant, or, in the case of 4 5 Participants subject to Section 16 of the Exchange Act, earlier than six months after grant and provided further that the Committee may at any time before complete termination of a stock option, accelerate the time or times at which such option may be exercised, if whole or in part. (b) Stock Appreciation Rights: Stock Appreciation Rights shall entitle a Participant to receive upon exercise, for each stock appreciation right exercised, (i) the excess of the Fair Market Value of a share of Stock at the time of exercise, over a price specified by the Committee, multiplied by (ii) the number of Stock Appreciation Rights exercised. The price specified by the Committee shall not be less than one hundred percent of Fair Market Value at the time the Stock Appreciation Right was granted, or, if connected with a previously issued stock option, the Fair Market Value at the time such previously issued stock option was granted. A Stock Appreciation Right may be granted in tandem with all or any portion of a previously or contemporaneously granted stock option (including, in addition to Stock Options granted under the Plan, options granted under other plans of the Company), or not in connection with a stock option. Payment pursuant to a Stock Appreciation Right may be made in the form of Stock, cash or a combination thereof, as the Committee may determine. A Stock Appreciation Right may be exercised at such times as may be specified by the Committee, either at the time of grant or thereafter, provided that no Stock Appreciation Right shall be exercisable earlier than six months after grant nor later than ten years after grant. (c) Performance Shares and Performance Units: An Award of Performance Shares or Performance Units shall entitle a Participant to receive Stock or a cash payment specified by the Committee, depending upon the attainment of performance criteria over a Performance Period. The Performance Period and performance criteria shall be specified by the Committee and may relate to the performance of the Company or one or more Subsidiaries or a combination thereof. Other than an Award intended to qualify under Section 162(m) of the Code, the Committee may adjust previously established performance criteria and other terms and conditions of an Award, at any time prior to the determination of the payment amount, to reflect major unforeseen events such as changes in laws, regulations or accounting policies or procedures, mergers, acquisitions or divestitures or extraordinary, unusual or non-recurring items or events, in each case in order to prevent dilution or enlargement of rights. Payment pursuant to an Award of Performance Shares or Performance Units shall be made following the Committee's determination of the extent to which the performance criteria were satisfied, and shall be made in the form of Stock, cash or a combination thereof, as the Committee may determine. Payment shall be made as promptly as practicable following the end of the Performance Period unless deferred subject to such terms and conditions as may be prescribed by the Committee. The Committee may authorize payments in Stock (in the form of any 5 6 Award available under the Plan) under any previously existing performance unit or performance share plans of the Company or any Subsidiary. (d) Restricted Stock: Awards of Restricted Stock shall be issued in the name of a Participant as soon as practicable following the date of grant by the Committee. Such Awards shall be subject to such conditions, terms and restrictions (including performance-based or employment-based vesting, forfeiture conditions and transfer restrictions) and shall be for such period or periods as shall be determined by the Committee or as expressly stated in the Plan. The Committee shall have the power to permit an acceleration of the expiration of the applicable restriction period with respect to all or part of the shares awarded to a Participant pursuant to a Restricted Stock Award. During the restricted period, a Participant holding shares of Restricted Stock shall have all the rights of a shareholder, including the right to vote and receive dividends, but shall not sell, assign, transfer, exchange, pledge, hypothecate or otherwise encumber such shares. Shares of Restricted Stock shall bear such legends as the Company may specify, until such time as the restrictions on the shares shall lapse, as determined by the Committee. (e) Supplemental Payments: Subject to the Committee's discretion, any Award under this Paragraph 6 may provide for a supplemental payment by the Company or a Subsidiary to a Participant after the exercise, payment or lapse of restrictions under the Award. Such supplemental payments shall be subject to such terms and conditions as shall be provided by the Committee at the time of grant, provided that in no event shall the amount of each payment exceed: (i) In the case of a Stock Option, the excess of Fair Market Value on the date of exercise over the Stock Option exercise price, multiplied by the number of shares for which such Stock Option is exercised, or (ii) In the case of a Stock Appreciation Right, Performance Unit, Performance Share or Restricted Stock Award, the value of the shares and other consideration issued in payment of such Award. 7. CONVERSION AWARDS - EMPLOYEES (a) Employees designated by the Committee may elect, subject to the following provisions and such terms and conditions as shall be determined by the Committee, to receive Share Units in exchange for cash compensation otherwise payable to such individuals by the Company: (i) Share Units may be acquired by an Employee at a per share exchange price of eighty-five percent of the Fair Market Value of a share of stock determined as of the Exchange Date. 6 7 (ii) Share Units issued to Employees shall be subject to those conditions, terms and restrictions as the Committee may require and which shall lapse with respect to twenty percent of such share units commencing on the first anniversary of the Exchange Date, with an additional forty percent becoming vested on the second anniversary date, and the remaining forty percent becoming vested on the third anniversary of the Exchange Date (the "Restricted Period"). (b) At a time specified by the Committee, Employees may, at least six months prior to the Exchange Date for base salary and prior to the commencement of the applicable fiscal year of the Company for annual incentives, make an irrevocable election to defer up to one year's base salary and/or annual incentive (for purposes of this Paragraph, the "Deferral Amount") and exchange it for Share Units in accordance with the following provisions and such other terms, conditions and limitations as shall be determined by the Committee from time to time: (i) An Employee's base salary may be exchanged for Share Units in the following manner: (1) If an Employee elects to receive Share Units, he or she shall receive that number of units equal in value to the Deferral Amount, as determined pursuant to Subparagraph (a)(i) above. The Deferral Amount shall be deducted from the Employee's base salary in equal installments beginning the month of the Exchange Date. (2) Except as otherwise determined by the Committee, if the Employee's employment with the Company or a Subsidiary is terminated for any reason by the Company or Subsidiary or the Employee during the Restricted Period, all such non-vested share units shall be forfeited and returned to the Company and the Employee shall receive a payment equal to, (x) the lower of the Fair Market Value of the Share Units on the date of termination or the Deferral Amount, multiplied by (y) the percentage of the Deferral Amount collected by the Company prior to the date of termination. (ii) An Employee's annual incentive may be exchanged on the Exchange Date for Share Units in the following manner: (1) If an Employee elects to receive Share Units, he or she shall receive that number of units equal in value to the Deferral Amount, as determined pursuant to Subparagraph (a)(i) above. (2) Except as otherwise determined by the Committee, if the Employee's employment with the Company or a Subsidiary is terminated for any reason by the Company or the Subsidiary or the 7 8 Employee during the Restricted Period, all such non-vested share units shall be forfeited and the Employee shall receive a payment equal to the lower of the Fair Market Value of the share units on the date of termination or the Deferral Amount. (c) Dividends earned pursuant to the Share Units issued in (a) and (b) above, shall be reinvested in the form of additional Share Units. (d) Once the Share Units become vested, the Company shall make payment in the form of cash or stock, as determined by the Committee, in an amount equal to the Fair Market Value of the Share Units, at a time designated by the Committee. 8. CONVERSION AWARDS - DIRECTORS Directors may make an irrevocable election, at least six months prior to the Exchange Date, to defer up to one year's cash retainer payments (for purposes of this Paragraph, the "Deferral Amount") in exchange for Share Units in accordance with the following provisions: (a) If a Director elects to receive Share Units, he or she shall receive, on the Exchange Date, that number of shares equal in value to the Deferral Amount using a per share exchange price of eighty-five percent of the Fair Market Value of a share of Stock determined as of the Exchange Date. The Deferral Amount shall be deducted in equal installments from the Director's retainer payments when such retainer payments are otherwise distributed, beginning the first quarter of the calendar year. (b) Share Units received by a Director shall be subject to the following restrictions for a period of five years (the "Restricted Period"): (i) the Share Units may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period, and (ii) the Director shall have remained in the service of the Company or a Subsidiary until the expiration of the Restricted Period. (c) Notwithstanding (b) (ii) above, in the event a Director's service with the Company or a Subsidiary is terminated after the Exchange Date but before the expiration of the Restricted Period, the following will occur: (i) if such termination is due to death or disability, all such Share Units shall immediately vest, or 8 9 (ii) if such termination is for normal retirement (as determined by the Committee), all such Share Units shall vest upon the expiration of the Restricted Period, or (iii) if such termination is for any other reason than specified in (c)(i) or (c)(ii) above, all such Share Units shall be forfeited and the Director shall receive a payment equal to (x) the lower of the Fair Market Value of the Share Units on the date of termination or the Deferral Amount, multiplied by (y) the percentage of the Deferral Amount collected by the Company prior to the date of termination. (d) Dividends earned pursuant to the Share Units issued in (a) above, shall be reinvested in the form of additional Share Units. (e) Once the Share Units become vested, the Company shall make payment in the form of Shares of Stock in an amount equal to the number of such Share Units. Payment shall be made within ninety days of vesting. 9. STOCK OPTION EXERCISE (a) The exercise price for Stock Options issued under the Plan shall be paid in full when the Stock Option is exercised. The exercise price may be paid (i) in cash, (ii) in whole shares of Stock owned by the option holder at least six months prior to exercise, valued at Fair Market Value on the date of exercise, or (iii) by a combination of such methods of payment. In addition, a Stock Option holder may exercise the Stock Option by providing assurance from a broker registered under the Exchange Act of the delivery of the proceeds of an imminent sale of the Stock to be issued pursuant to the exercise of the Stock Option, such sale to be made at the direction of the Stock Option holder. In the case of Employees and Directors, the foregoing shall be subject to such terms, conditions and limitations as the Committee may specify from time to time. (b) The holder of a Stock Option shall have none of the rights of a shareholder until exercise of the Option and the issuance of shares of Stock pursuant to it. 10. GENERAL RESTRICTIONS (a) The Committee may, in its sole discretion, elect to defer the exercise, vesting or payment of an Award (or any part thereof) granted under the Plan, except Awards granted to Nonemployee Directors under Paragraph 8 above, if necessary to avoid the loss of a deduction by the Company under Section 162(m) of the Code. 9 10 11. RIGHTS OF A PARTICIPANT A Participant receiving any Award under the Plan, unless otherwise provided by the Plan or decided by the Committee, shall have no rights as a shareholder unless and until certificates for shares of stock are issued to him. 12. TERMINATION OF EMPLOYMENT OR SERVICE (a) Except as provided in Paragraphs 7 and 8, the effect of termination of a Participant's employment or service with the Company upon any outstanding Awards shall be determined by the Committee in its sole discretion as specified in the documentation evidencing a particular award. (b) Nothing in the Plan or in any agreement entered into pursuant to the Plan shall confer upon any Participant the right to continue in the employment or service of the Company or its Subsidiaries as an Employee or Director, or affect any right which the Company or such Subsidiaries may have to terminate the employment or service of such Participant. For purposes of this Plan and notwithstanding anything to the contrary contained elsewhere in this Plan, no termination of a Participant's employment or Board service with the Company within the meaning of this Plan shall be deemed to have occurred by virtue of the Company entering into any agreement with respect to, the public announcement of, the approval by the Company's shareholders or directors of, or the consummation of, any transaction or series of integrated transactions, if, prior to the occurrence of such transaction or series of integrated transactions, a majority of the Continuing Directors (as defined in Section 19 hereof) then in office determine that such transaction or series of integrated transactions should not be treated as a termination of a Participant's employment or Board service with the Company within the meaning of this Plan. 13. WITHHOLDING The Company shall have the right to withhold from any payments made under this Plan, or to collect as a condition of payment, any taxes required by law to be withheld. At any time when a Participant is required to pay to the Company an amount required to be withheld under applicable income tax laws in connection with a distribution of shares of Stock pursuant to this Plan, the Participant may satisfy this obligation in whole or in part by electing to have the Company withhold from such distribution shares of Stock having a value equal to the amount required to be withheld. The value of the shares of Stock to be withheld shall be based on the Fair Market Value of the Stock on the date that the amount of tax to be withheld shall be determined. The rules governing such withholding elections, including the date or dates by which such an election must be made, shall be determined by the Committee as necessary and in compliance with Rule 16b-3. 10 11 14. RESTRICTIONS ON TRANSFER Except as otherwise provided in this Paragraph 14, no Stock Option or other Award under the Plan shall be assignable or transferable by the Participant other than by will or by the laws of descent and distribution and all Stock Options shall be exercisable during the Participant's lifetime only by the Participant. The Committee may, in its sole discretion, when and if permitted by Rule 16b-3, establish guidelines providing for the irrevocable transfer, without payment of consideration, of any Stock Option, other than Incentive Stock Options, by the Participant to a member of the Participant's immediate family or to a trust or partnership whose beneficiaries are members of the Participant's immediate family. For purposes of this Paragraph 14, the term "immediate family" shall include the Participant's spouse, children and grandchildren. 15. NON-UNIFORM DETERMINATIONS The Committee's determinations under the Plan (including without limitation determinations of the officers, Employees and Directors to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same, and the establishment of values and performance targets) need not be uniform and may be made by the Committee selectively among Employees or Directors who receive, or are eligible to receive, Awards under the Plan, whether or not such Employees or Directors are similarly situated. 16. ADJUSTMENTS IN STOCK AND RELATED ADJUSTMENTS In the event of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants or other rights, stock dividend, stock split or reverse stock split, cash dividend, property dividend, including, without limitation, a distribution of the stock of a Subsidiary, combination or exchange of shares, repurchase of shares, or any other change in the capital structure of the Company in order to prevent dilution or enlargement of rights, the Committee shall determine the appropriate adjustments, if any, to (a) the number of shares of stock which may be issued under the Plan, (b) the number of shares issuable and the exercise price per share pursuant to an outstanding Award theretofore granted under this Plan and, (c) the number and kind of shares which may underlie an Award granted pursuant to Paragraph 5(d). 17. AMENDMENT OR TERMINATION The Committee at any time and from time to time may suspend, terminate, modify or amend the Plan; provided, however, that an amendment which requires stockholder approval in order for the Plan to continue to comply with Rule 16b-3, Section 162(m), or Section 422 of the Code or any other law, regulation or stock exchange requirement shall not be effective unless approved by the requisite vote of stockholders. No suspension, termination, modification or amendment of the Plan may adversely affect any Award previously granted without the written consent of the Participant. 11 12 18. DURATION OF THE PLAN The Plan shall remain in effect until all Awards under the Plan have been satisfied by the issuance of Stock or the payment of cash, but no Award shall be granted more than ten years after the date the Plan is approved by the shareholders of the Company, which shall be the Plan's effective date. 19. CHANGE IN CONTROL For purposes of the Plan, a "Change of Control" shall have occurred if: (a) Any corporation, person or other entity (other than the Company) makes a tender or exchange offer for shares of Stock and shares are purchased pursuant thereto ("Offer"); (b) More than fifty percent of the Company Stock is acquired by any person or group; (c) During the period of two consecutive years, individuals who at the beginning of such period were members of the Board cease for any reason to constitute at least a majority thereof (unless the election, or the nomination for election by the Company's shareholders, of each new Director was approved by a vote of at least two-thirds of the Directors then still in office who were Directors at the beginning of the period); or (d) The shareholders of the Company approve a definitive agreement to merge the Company with another corporation where the Company is not the surviving corporation or survives only as a subsidiary of another corporation, to consolidate the Company with another corporation, or sell or otherwise dispose of substantially all of the Company's assets. In the event of the occurrence of a Change of Control, then from and after the date of the first purchase of Stock pursuant to the offer, or the date on which public announcement of the acquisition of such percentage of stock shall have been made, or the date on which such change in the composition of the Board shall have occurred, or the date of any such shareholder approval, all Stock Options and Stock Appreciation Rights and other Awards granted pursuant to the Plan which remain outstanding shall automatically become exercisable in full, whether or not otherwise exercisable, and all other Awards under the Plan shall be vested as determined by the Committee. Notwithstanding the foregoing, no "Change of Control" shall be deemed to have occurred by virtue of any of the events set forth above if, prior to the occurrence of such event, a majority of the Continuing Directors then in office determine that such event should not be treated as a "Change of Control" for purposes of this Plan. "Continuing Director" shall mean any member of the Board of Directors of the Company who is a member of the Board of Directors as of the date of this Agreement and any person who subsequently becomes a member of the 12 13 Board of Directors, if such person's nomination for election or election to the Board of Directors is recommended or approved by a majority of the Continuing Directors. 20. INTENT: SEPARABILITY All Incentive Stock Options granted hereunder are intended to comply with Section 422 of the Code and, to the extent applicable, Section 424 of the Code, and all provisions of this Plan and all Incentive Stock Options granted hereunder shall be construed in such manner as to effectuate that intent. This Plan and all Stock Options, stock appreciation rights, and other awards and rights granted hereunder are intended to satisfy the conditions of Rule 16b-3, as amended, and all provisions of this Plan and all Stock Options, Stock Appreciation Rights, and other awards and rights granted hereunder shall be construed in such manner as to effectuate that intent. If any of the terms or provisions of this Plan conflict with the requirements of Rule 16b-3 (as it may be amended from time to time) or Sections 422 and 424 of the Code (as they may be amended from time to time), then such terms or provisions shall be deemed inoperative to the extent that they so conflict with such requirements. 21. GOVERNING LAW To the extent that Federal laws do not otherwise control, this Plan shall be construed in accordance with and governed by the law of the state of Mississippi. 13 EX-4.5 3 CHEMFIRST, INC. 1988 LONG-TERM INCENTIVE PLAN 1 EXHIBIT 4.5 CHEMFIRST INC. 1988 LONG-TERM INCENTIVE PLAN 1. PURPOSE. The purpose of the CHEMFIRST INC. 1988 LONG-TERM INCENTIVE PLAN (the "PLAN") is to further the growth in earnings and market appreciation of CHEMFIRST INC. (the "COMPANY"). The PLAN provides long-term incentives to "Outside Directors" of the COMPANY (as defined in Paragraph 4 below) and those officers, "Subsidiary Directors" (as defined in Paragraph 4 below) and key employees of the COMPANY or its subsidiaries, partnerships or joint ventures who make substantial contributions to the COMPANY by their ability, loyalty, industry, and invention. The COMPANY intends that the PLAN will thereby facilitate securing, retaining and motivating officers, directors and key employees of high caliber and good potential. 2. ADMINISTRATION. The PLAN shall be administered by the Board of Directors (the "Board") of the COMPANY or by a Committee of the Board. Unless the Board consists solely of "disinterested persons" within the meaning of Rule 16b-3 of the Securities and Exchange Commission, a Committee (the "Committee") of two or more directors, each of whom is a "disinterested person" within the meaning of such rule, shall make any decisions regarding the selection of officers and directors for participation under the PLAN and any decisions concerning the timing, pricing, and amount of a grant or award under the PLAN, except for any grants or awards determined pursuant to a formula satisfying the provisions of Rule 16b-3(c)(2)(ii) of the Securities and Exchange Commission. The Board or the Committee, as the case may be, shall have full and final authority in its discretion to conclusively interpret the provisions of the PLAN and to decide all questions of fact arising in its application; to determine the employees, officers and Subsidiary Directors to whom awards shall be made under the PLAN; to determine the type of award to be made and the amount, size and terms of each such award; to determine the time when awards will be granted to employees, officers and Subsidiary Directors; and to make all other determinations necessary or advisable for the administration of this PLAN. All provisions elsewhere in this PLAN dealing with administration of and decisions under this PLAN which refer to the Board shall be deemed to refer to the Committee whenever the Committee is administering this PLAN pursuant to this Section 2. Notwithstanding the above, however, neither the Board nor the Committee shall have any discretion with respect to the determination of which Outside Directors are to receive awards, the number of shares of common stock or amount of debentures subject to any such awards to Outside Directors, the conversion or purchase price thereof, the type of awards so granted or the time of grant. 3. SHARES SUBJECT TO PLAN. Subject to the provisions of Paragraph 10(e) and Paragraph 18 hereof, the shares that may be issued under the PLAN shall not exceed in 2 the aggregate 1,000,000 shares of the common stock of the COMPANY. Except as otherwise provided herein, any share subject to an option or right which expires or is terminated unexercised, shall again be available under the PLAN. 4. PARTICIPANTS. Persons eligible to participate shall be limited to (a) those officers, key employees and Subsidiary Directors of the COMPANY or any of its subsidiaries, or a partnership or joint venture in which the COMPANY has at least a fifty (50%) percent ownership interest, who are in positions in which their decisions, actions and counsel significantly impact upon the performance of the COMPANY or its subsidiaries and (b) Outside Directors. However, awards of Incentive Stock Options as provided in Paragraph 6 shall be limited to employees of the COMPANY or any of its subsidiaries. The term "Outside Director" as used herein shall mean any director of the COMPANY who is not also an employee or officer of the COMPANY or any of its subsidiaries or a partnership or joint venture in which the COMPANY has at least a fifty percent (50%) ownership interest. The term "Subsidiary Director" as used herein shall mean any director of any subsidiary of the COMPANY (other than any subsidiary whose equity securities have been registered for a public offering under the Securities Act of 1933 or have been registered under the Securities Exchange Act of 1934) who is not also an Outside Director. The terms "employee" and "officer" as used herein (except as used in defining an Outside Director) shall not include any employee or officer of any subsidiary of the COMPANY whose equity securities have been so registered unless such individual is also an officer or employee of the COMPANY or of another subsidiary, whose equity securities have not been so registered. 5. AWARDS. (a) AWARDS TO OFFICERS, EMPLOYEES AND SUBSIDIARY DIRECTORS UNDER THE PLAN. Awards to officers, employees and Subsidiary Directors under the PLAN may be in the form of stock options, options to purchase debentures convertible into common or convertible preferred stock of the COMPANY, stock appreciation rights, performance units, restricted stock, supplemental cash and such other forms as the Board may in its discretion deem appropriate, including any combination of the above. The Board or the Committee, as the case may be, shall make the grant of the awards. No one employee or Subsidiary Director shall receive awards in the form of stock in excess of one-fifth (1/5) of the total shares subject to this PLAN. No fractional shares shall be issued under this PLAN, and the minimum value of any shares issued under this PLAN shall be the par value at the time of award. (b) AWARDS TO OUTSIDE DIRECTORS SERVING ON NOVEMBER 11, 1988. Awards under the PLAN to persons who are serving as Outside Directors on November 11, 1988 shall be in the form of debenture options (as described in 2 3 Paragraph 10), or if the condition described below is not satisfied, then such awards shall be in the form of Non-Statutory Stock Options (as defined in Paragraph 6 below). An annual award shall be made to each such Outside Director on the first day following the annual meeting of the COMPANY's stockholders in 1988 and on the first day following the Annual Meeting of the Company's Stockholder in each year thereafter to and including 1992 on which such Outside Director is then serving; provided, however, that if a response from the Securities and Exchange Commission ("SEC") to the request described below has not been received by November 11, 1988, then the 1988 grants shall be deferred until the day following receipt of (i) a favorable no-action letter from the SEC or (ii) indication from the SEC that a favorable letter will not be issued. If no definitive response (favorable or unfavorable) has been received from the SEC by December 31, 1988, then the 1988 grants to such Outside Directors shall occur on December 31, 1988. If a favorable no-action letter or a favorable opinion of counsel is received, then each such Outside Director serving on the Board on an annual grant date described above shall receive such annual grant date a debenture option which is exercisable to purchase debentures in a principal amount calculated by multiplying the fair market value of a share of the COMPANY's common stock on the date of grant of the debenture option by 1,000 shares in the case of debenture options granted in each of the five years beginning in 1988 and ending in 1992. Notwithstanding the foregoing the fair market value of a share of the COMPANY's common stock on November 11, 1988 shall be used pursuant to the foregoing formula to determine the amount of debentures covered by any 1988 debenture options granted to Outside Directors. Each debenture and debenture option referred to above shall have terms consistent with Paragraph 10 hereof and the Board shall have no authority to provide otherwise. In the event that the COMPANY fails to receive by December 31, 1988 either (i) a favorable no-action letter from the SEC staff expressing concurrence with the view of the COMPANY that the grant of debenture options to Outside Directors under the PLAN will not affect the Outside Directors' status as "disinterested persons" as defined in Rule 16b-3(d)(3) promulgated under the Securities Exchange Act of 1934, as amended, with respect to the COMPANY's employee benefit plans or (ii) an opinion of counsel addressed to the COMPANY stating that the grant of debenture options to Outside Directors under the PLAN will not affect such status, then each such Outside Director then serving on the Board shall receive on December 31, 1988, and on each subsequent annual grant date specified above, a Non-Statutory Stock Option in lieu of any debenture option which would otherwise be granted to directors as provided above. In such event, each such Outside Director shall receive an option to purchase 1,000 shares of common stock in each of the years 1988 through 1992. Such Non-Statutory Stock Options shall have terms, including option price, consistent with Paragraph 6 hereof, and the Board shall have no authority to provide 3 4 otherwise. The amounts of shares specified above to be used in determining the amount of debentures covered by debenture options or shares of common stock covered by Non-Statutory Stock Options to be granted to such Outside Directors shall be subject to adjustment as provided in Paragraph 18 below. However, if after the 1988 grants to such Outside Directors have been made, the Company receives a favorable no-action letter from the SEC staff expressing concurrence with the view of the COMPANY that the grant of debenture options to Outside Directors under the PLAN will not affect the Outside Directors' status as "disinterested persons" as described above, then all subsequent awards to such Outside Directors shall be in the form of debenture options as hereinabove described. No other types of awards shall be granted to such Outside Directors under the PLAN. (c) AWARDS TO OUTSIDE DIRECTORS ELECTED SUBSEQUENT TO NOVEMBER 11, 1988. Awards to Outside Directors, who are elected to serve during the term of the PLAN and subsequent to November 11, 1988, shall be in the form of debenture options (as described in Paragraph 10), or if the condition described below is not satisfied, then such awards shall be in the form of Non-Statutory Stock Options (as defined in Paragraph 6 below). An annual award shall be made to each such Outside Director serving on the first day following the first annual meeting of the COMPANY's stockholders at which he is elected to the Board and on the day following the Annual Meeting of the Company's Stockholders in each year of the four (4) immediately following years thereafter or such lesser number of years as may occur during the then remaining term of the PLAN. If a favorable no-action letter as described above or a favorable opinion of counsel as described above is received, then each such Outside Director serving on the Board on the annual grant date described above shall receive a debenture option which is exercisable to purchase debentures in a principal amount calculated by multiplying the fair market value of a share of the COMPANY's common stock on the date of grant of the debenture option by 1,000 shares. Each debenture and debenture option referred to above shall have terms consistent with Paragraph 10 hereof and the Board shall have no authority to provide otherwise. In the event that the COMPANY has not received prior to any applicable annual grant date either (i) a favorable no-action letter from the SEC staff expressing concurrence with the view of the COMPANY that the grant of debenture options to such Outside Directors under the PLAN will not affect the Outside Directors' status as "disinterested persons" as described above or (ii) an opinion of counsel stating that the grant of debenture options to Outside Directors under the PLAN will not affect such status, then each Outside Director then serving on the Board on each annual grant date specified above, shall receive a Non-Statutory Stock Option in lieu of any debenture option which would 4 5 otherwise be granted to such Outside Director as provided above. In such event, such Outside Director shall receive on each applicable annual grant date an option to purchase 1,000 shares of common stock. Such Non-Statutory Stock Options shall have terms, including option price, consistent with Paragraph 6 hereof, and the Board shall have no authority to provide otherwise. The amounts of shares specified above to be used in determining the amount of debentures covered by debenture options or shares of common stock covered by Non-Statutory Stock Options to be granted to such Outside Directors shall be subject to adjustment as provided in Paragraph 18 below. However, if at any time, the COMPANY receives a favorable no-action letter from the SEC staff expressing concurrence with the view of the COMPANY that the grant of debenture options to Outside Directors under the PLAN will not affect the Outside Directors' status as "disinterested person" as described above, then all subsequent awards to such Outside Directors shall be in the form of debenture options as hereinabove described. No other types of awards shall be granted to such Outside Directors under the PLAN. 6. STOCK OPTIONS. Stock options may be "Incentive Stock Options," as defined in Section 422A of the Internal Revenue Code of 1986, as amended (the "Code") or stock options not qualifying as Incentive Stock Options ("Non-Statutory Stock Options"). Any Incentive Stock Option granted to any person who, at the time such option is granted, owns (as defined in Sections 422A and 425 of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the COMPANY or one of its parent (if any) or subsidiary corporations shall comply with the applicable provisions of Section 422A of the Code. Non-Statutory Stock Options may be awarded to Outside Directors (subject to Paragraph 5 above). Stock Options may be awarded to officers, employees and Subsidiary Directors under the PLAN and shall be evidenced by stock option agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) OPTION PRICE. The purchase price per share of stock deliverable upon the exercise of an option shall be the fair market value of the COMPANY's common stock on the day the option is granted (except as provided below with respect to Outside Directors), but not less than the par value of the COMPANY's common stock. In the case of Stock Options granted to Outside Directors the option price shall be the fair market value of the COMPANY's common stock on the day the option is granted; provided, however, that the exercise price of any 1988 Stock Option granted to an Outside Director shall be the fair market value of the COMPANY's common stock on November 11, 1988, even though such option may be granted on a later date and even though the fair market value of the COMPANY's common stock may be higher or lower on such date. The fair market value per share of the COMPANY's common stock shall be the average 5 6 of the highest and lowest prices of the COMPANY's common stock traded on the principal market of the common stock on the day the option is granted. If no sale of the COMPANY's common stock shall have been made on the principal market for the stock on the day the option is granted, the fair market value shall be based upon the next preceding day on which there was a sale of the COMPANY's common stock. (b) TERMS OF OPTION. Each stock option agreement shall state the period or periods of time in which the option may be exercised by the participant, in whole or in part, which shall be such period or periods of time as may be determined by the Board, provided that the option period shall not commence earlier than six (6) months after the date of the grant of the option nor end later than ten (10) years after the date of the grant of the option. In the case of Outside Directors such exercise period shall begin six (6) months after the date of grant of the option and end ten (10) years after such grant. An option shall be outstanding until it is exercised in full or expires by reason of lapse of time. (c) PAYMENT FOR SHARES. Stock purchased pursuant to an option agreement shall be paid for in full at the time of purchase, either in the form of cash, common stock of the COMPANY at fair market value, or in a combination thereof, as the Board may determine. (d) RIGHTS UPON TERMINATION OF EMPLOYMENT. In the event that an officer or employee (1) dies or retires or becomes disabled or (2) terminates all positions held as an officer or employee of the COMPANY and any of its subsidiaries, and any partnership or joint venture in which the COMPANY has at least a fifty (50%) percent ownership interest, within six (6) months following a Change of Control (as defined in Paragraph 21) of the COMPANY prior to expiration of his option without having fully exercised his option, said officer or employee or his legal successor shall have the right to exercise the option during its term within a period of twelve (12) months after the date of such termination of employment, or such longer period as determined by majority decision of the Board. In the event of such termination of employment by the COMPANY and any such affiliated employers for cause (other than during such six (6) month period following a Change of Control), the officer or employee shall have the right to exercise the option during its term within a period of thirty (30) days after such termination. In the event of such termination of employment for any other reason (other than during such six (6) month period following a Change of Control), the optionee or his legal successor shall have the right to exercise the option during its term within a period of six (6) months after such termination. (e) RIGHTS UPON TERMINATION OF SERVICE ON THE BOARD. In the event that any Outside Director or Subsidiary Director who has received stock options hereunder shall cease to serve on the Board of Directors of the 6 7 COMPANY in the case of an Outside Director or the applicable subsidiary in the case of a Subsidiary Director due to death or retirement or within six (6) months following a Change of Control (as defined in Paragraph 21) of the COMPANY prior to expiration of the Stock Option without having fully exercised his stock option, then such option may be exercised within twelve (12) months after such death, retirement or termination due to change in control, but not later than the termination date of the option. In the event that any Outside Director or Subsidiary Director is removed from the Board of Directors of the COMPANY in the case of an Outside Director or the applicable subsidiary in the case of a Subsidiary Director for cause (other than during such a six (6) month period following a Change of Control) without having fully exercised his option then said director will have the right to exercise the option during its term within a period of thirty (30) days after such termination. In the event that any Outside Director or Subsidiary Director ceases to serve on the Board of Directors of the COMPANY in the case of an Outside Director or subsidiary in the case of a Subsidiary Director for any other reason (other than during such a six month period following a Change of Control) then such option may be exercised during its term within six (6) months after such cessation of service. (f) INCENTIVE STOCK OPTION LIMITATION. In the case of Incentive Stock Options, the aggregate fair market value (determined as of the time an Incentive Stock Option is granted) of the stock with respect to which Incentive Stock Options become exercisable for the first time by an individual during any calendar year under all plans of the COMPANY and its parent or subsidiary corporations shall not exceed ONE HUNDRED THOUSAND DOLLARS ($100,000). (g) DESIGNATION OF OPTIONS. At the time any option is granted to an officer, employee or Subsidiary Director under the PLAN, the Board shall determine whether or not the option is to be an Incentive Stock Option, and the option shall be clearly identified as to its status as an Incentive Stock Option or a Non-Statutory Stock Option (which is any option that is not an Incentive Stock Option). 7. STOCK APPRECIATION RIGHTS. Stock appreciation rights may be granted to officers, employees and Subsidiary Directors and shall be evidenced by stock appreciation right agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) AWARD. A stock appreciation right shall entitle the grantee to receive upon exercise the excess of (a) the fair market value of a specified number of shares of the COMPANY's common stock at the time of exercise over (b) a specified price which shall be the fair market value of the stock at the time the appreciation 7 8 right was granted, or, if connected with a previously issued stock option, the fair market value of the stock at the time such option was granted. A stock appreciation right may be granted in connection with all or any portion of a previously or contemporaneously granted stock option (including, in addition to options granted under the PLAN, options granted under other plans of the COMPANY), or not in connection with a stock option. (b) TERM. Stock appreciation rights shall be granted for a period of not less than one (1) year nor more than ten (10) years, and shall be exercisable in whole or in part, at such time or times and subject to such other terms and conditions as shall be prescribed by the Board at the time of grant, subject to all of the following: (i) No stock appreciation right shall be exercisable, in whole or in part, during the six (6) month period starting with the date of grant; and (ii) Stock appreciation rights will be exercisable only during officer's, employee's or Subsidiary Director's service with the COMPANY or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest, except that: (1) in the discretion of the Board a stock appreciation right may be made exercisable for up to thirty (30) days after the grantee's employment or service is terminated for any reason other than death, disability or retirement; and (2) in the event that a grantee dies or retires or becomes disabled prior to exercise of stock appreciation rights, the grantee or his legal successor shall have the right to exercise the rights during their term within a period of twelve (12) months after the date of termination due to death, disability or retirement, or such longer period as determined by majority decision of the Board. (c) PAYMENT. Upon exercise of a stock appreciation right, payment shall be made in the form of common stock of the COMPANY (at fair market value on the date of exercise), in cash, or in a combination thereof, as the Board may determine. 8. PERFORMANCE UNITS. Performance Units ("Units") may be granted to officers, employees and Subsidiary Directors and shall be evidenced by performance unit agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: 8 9 (a) PERFORMANCE PERIOD. The performance period for a Unit shall be established by the Board and shall be not more than five (5) years, nor less than two (2) years. (b) VALUATION OF UNITS. A value for each Unit shall be established by the Board, together with principal and minimum performance targets to be achieved in respect of the Unit during the performance period. The participant shall be entitled to receive one hundred (100%) percent of the value of the Unit, if the principal target is achieved during the performance period, but shall be entitled to receive nothing for such Unit if the minimum target is not achieved during the performance period. The participant shall be entitled to receive a stated portion of the value of the Unit for performance during the performance period which meets or exceeds the minimum target but fails to meet the principal target. (c) PERFORMANCE TARGETS. The performance targets established under the PLAN shall relate to the COMPANY's performance (or the performance of its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest, herein collectively referred to in this Paragraph (c) as "COMPANY's performance") over the performance period, and may be established in terms of growth in earnings or equity, ratio of earnings to shareholders' equity or to total capital, or other performance standards as determined by the Board in its discretion. Multiple targets may be used and may have the same or different weighting, and they may relate to absolute COMPANY's performance, or the COMPANY's performance as measured against the performance of other companies, or the COMPANY's performance as measured against other standards as determined by the Board in its discretion. (d) ADJUSTMENTS. At any time prior to payment of the Units, the Board may adjust previously established performance targets and other terms and conditions, including the COMPANY's (or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest) or other companies' financial performance for PLAN purposes, to reflect major unforeseen events such as changes in laws, regulations or accounting policies or procedures, mergers, acquisitions or divestitures or extraordinary, unusual or non-recurring items or events. (e) PAYMENTS OF UNITS. Following the conclusion of each performance period, the Board shall determine the extent to which performance targets have been attained for such period as well as the other terms and conditions established by the Board. The Board shall determine what, if any, payment is due on the Units and whether such payment shall be made in cash, in common stock of the COMPANY, or partially in cash and partially in common stock of the COMPANY. Any payments made in stock shall be calculated on the fair market value of the stock. Payment shall be made as promptly as practicable following 9 10 the end of the performance period unless deferred subject to such terms and conditions as may be prescribed by the Board. The Board may authorize payments in common stock under any previously existing Performance Unit Plans of the COMPANY. Any payments made in common stock of a previously existing Performance Unit Plan shall be calculated on the fair market value of the stock. (f) TERMINATION OF SERVICE. In the event that a participant holding a Unit award ceases to be an employee or Subsidiary Director of either the COMPANY or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest prior to the end of the applicable performance period by reason of death, disability or retirement, then with the consent of the Board his Units, to the extent earned under the applicable performance targets, shall be payable at the end of the performance period in proportion to the active service of the participant during the performance period, as determined by the Board. Upon any other termination of employment or service, participation shall terminate forthwith and all outstanding Units held by the participant shall be cancelled. (g) OTHER TERMS. The Unit agreements shall contain such other terms and provisions and conditions not inconsistent with this PLAN as shall be determined by the Board. 9. RESTRICTED STOCK AWARDS. Restricted stock awards may be granted to officers, employees and Subsidiary Directors and shall be evidenced by restricted stock agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) RESTRICTION PERIOD. Shares awarded pursuant to restricted stock awards shall be subject to such conditions, terms and restrictions (including performance achievement earnout, forfeiture and transfer) and shall be for such period or periods as shall be determined by the Board. The Board shall have the power to permit, in its discretion, an acceleration of the expiration of the applicable restriction period with respect to any part or all of the shares awarded to a participant. (b) RESTRICTIONS UPON TRANSFER. Shares awarded, and the right to vote such shares and to receive dividends thereon, may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered, except as herein provided, during the restriction period applicable to such shares. Notwithstanding the foregoing, and except as otherwise provided in the PLAN, 10 11 the participant shall have all the other rights of a stockholder including, but not limited to, the right to receive dividends and the right to vote such shares. (c) CERTIFICATES. Each certificate issued in respect of shares awarded to a participant shall be deposited with the COMPANY, or its designee, and shall bear the following legend: "This certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in the CHEMFIRST INC. 1988 Long-Term Incentive Plan and an Agreement entered into between the registered owner and CHEMFIRST INC. Release from such terms and conditions shall be obtained only in accordance with the provisions of the PLAN and Agreement, a copy of each of which is on file in the office of the Secretary of CHEMFIRST INC., Jackson, Mississippi. (d) LAPSE OF RESTRICTIONS. The Agreement shall specify the conditions and terms upon which any restrictions upon shares under the PLAN shall lapse, as determined by the Board. Upon the lapse of such restrictions, shares of common stock, free of any restrictive legend shall be issued to the participant or his legal representative. 10. DEBENTURE OPTIONS. Debenture options may be granted to officers, employees, Outside Directors and Subsidiary Directors and shall be evidenced by debenture option agreements in such form and not inconsistent with the PLAN as the Board shall approve from time to time, which agreements shall be subject to the following terms and conditions: (a) OPTION PROVISIONS. Debenture options will be granted to purchase debentures of a particular series. Debenture options will be exercisable at any time within ten (10) years after grant. The purchase price upon exercise of a debenture option will be par (that is, the principal amount of the debenture) and shall be paid in full in cash at the time of purchase. (b) RIGHTS UPON TERMINATION OF EMPLOYMENT. In the event that an employee or officer who holds a debenture option dies or retires or becomes disabled or terminates all positions as an officer or employee of the COMPANY and any of its subsidiaries, and any partnership or joint venture in which the COMPANY has at least a fifty (50%) percent ownership interest, within six (6) months following a Change of Control (as defined in Paragraph 21) of the COMPANY prior to expiration of the debenture option without having fully exercised his option, the holder of the debenture option or his legal successor shall have the right to exercise the debenture option during its term within a period of twelve (12) months after the date of such death, disability, retirement 11 12 or termination of employment or such longer period as determined by majority decision of the Board. In the event of such termination of employment by the COMPANY for cause other than during such six month period following a Change of Control, the optionee shall have the right to exercise a debenture option during its term within a period of thirty (30) days after such termination. In the event of such termination of employment for any other reason other than during such six month period following a Change of Control, the optionee or his legal successor shall have the right to exercise a debenture option during its term within a period of six (6) months after such termination. (c) RIGHTS UPON TERMINATION OF SERVICE ON THE BOARD. In the event that any Outside Director or Subsidiary Director who has received a debenture option hereunder shall cease to serve on the Board of Directors of the COMPANY in the case of an Outside Director or the applicable subsidiary in the case of a Subsidiary Director due to death or retirement or within six (6) months following a Change of Control (as defined in Paragraph 21) of the COMPANY prior to expiration of the debenture option without having fully exercised said option, then such person or his legal successor shall have the right to exercise such debenture option during its term within twelve (12) months after such death, retirement or termination due to change in control. In the event that any Outside Director or Subsidiary Director is removed from the Board of Directors of the COMPANY in the case of an Outside Director or the applicable subsidiary in the case of a Subsidiary Director for cause (other than during such six month period following a Change of Control) without having fully exercised his option then such person will have the right to exercise the option during its term within a period of thirty (30) days after such termination. In the event that any Outside Director or Subsidiary Director ceases to serve on the Board of Directors of the COMPANY in the case of an Outside Director or the applicable subsidiary in the case of a Subsidiary Director for any other reason (other than during such six month period following a Change of Control) then such person or his legal successor shall have the right to exercise such debenture option during its term within six (6) months after such cessation of service. (d) DEBENTURE TERMS. Debentures acquired upon exercise of a debenture option will mature ten (10) years after grant of the debenture option. The debentures will bear interest at the lesser of a floating rate of one (1%) percent less than the rate publicly announced as its prime rate by Deposit Guaranty National Bank or such other bank as is designated by the Board of Directors of the COMPANY or the maximum legal rate under applicable law. Interest on the debentures will be payable semi-annually on January 1 and July 1 of each year. Debentures may not be transferred or pledged without written consent of the COMPANY. The debentures will be subordinated generally to the COMPANY's other indebtedness. 12 13 (e) CONVERSION RIGHTS. Each debenture will contain conversion rights exercisable at any time more than six (6) months after the award of a debenture option and prior to maturity or redemption of the debenture (except while the debentures are pledged). Debentures of each series will be convertible into a special series of preferred stock of the COMPANY based on a price per share of the preferred stock equal to the fair market value of the COMPANY's common stock (determined as provided in Paragraph 6 above) on the date of grant of the option to purchase the debenture; provided, however, that the Conversion Price for any debentures issued pursuant to 1988 debenture options granted to Outside Directors shall be based on the fair market value of the COMPANY's stock on November 11, 1988 even though such option may be granted on a later date and even though the fair market value of the COMPANY's stock may be higher or lower on such date. Each share of preferred stock issued upon conversion of a debenture will in turn be immediately convertible into one (1) share of common stock of the COMPANY, subject to adjustment pursuant to the following sentence. In the event of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants, rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend, including, without limitation, a distribution of the stock of a subsidiary, combination or exchange of shares, repurchase of shares, or any other change in corporate structure which in the judgment of the Board materially affects the value of the COMPANY's shares subsequent to grant of a debenture option, the Board shall determine the appropriate adjustments, if any, to the number of shares of common stock of the COMPANY issuable upon conversion of preferred stock under the preceding sentence. (f) REDEMPTION AND CALL OF DEBENTURES. A debenture shall be redeemable by the holder at par on any interest payment date which is more than one (1) year after issuance of the debenture. Debentures other than those held by Outside Directors may be called by the COMPANY for repayment as of any interest payment date following twelve (12) months prior notice. Upon any redemption pursuant to call by the COMPANY, the debenture holder will be paid par plus interest to the date of redemption. Debentures held by Outside Directors may not be called prior to the expiration of their terms unless all debentures issued pursuant to the PLAN are called. (g) PLEDGE OF DEBENTURES. If any debenture is pledged by the holder for a loan with the consent of the COMPANY, the debenture will not be convertible while the debenture remains pledged. Upon any default on the loan for which a debenture is pledged with the consent of the COMPANY, the lender may redeem the debenture at par on any interest payment date. Upon notice to the COMPANY from the purchaser and the lender to which a debenture has been pledged that the debt has been discharged, the conversion right will automatically be restored. If a holder sells, assigns, transfers or pledges a debenture without 13 14 the COMPANY's consent, the conversion right with respect to the debenture will permanently cease to exist. 11. SUPPLEMENTAL CASH PAYMENTS. Subject to the Board's discretion, any options, stock appreciation rights, performance units or restricted stock agreements involving an officer, employee or Subsidiary Director may provide for the payment by the COMPANY of a supplemental cash payment to a participant promptly after the exercise of a stock option, debenture option or stock appreciation right, or at the time of payment of a performance unit or at the end of a restriction period of a restricted stock award. Such supplemental cash payments shall be subject to such terms and conditions as shall be provided by the Board at the time of grant, provided that in no event shall the amount of each payment exceed: (a) In the case of a stock option, the excess of the fair market value of a common share on the date of exercise over the option price multiplied by the number of shares for which such stock option is exercised, or (b) In the case of a stock appreciation right, performance unit or restricted stock award, the value of the shares and other consideration issued in payment of such award. (c) In the case of a debenture option, the excess of the fair market value of the debentures purchased upon exercise of the debenture option over the par value of the purchased debentures. 12. GENERAL RESTRICTIONS. Each award under the PLAN shall be subject to the requirement that, if at any time the Board shall determine that (i) the listing, registration or qualification of the shares of common stock subject or related thereto upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement by the recipient of an award with respect to the disposition of shares of common stock or other securities, is necessary or desirable as a condition of, or in connection with, the granting of such award or the issue or purchase of shares of common stock or other securities thereunder, such award may not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Board. 13. RIGHTS OF A PARTICIPANT. The recipient of any award under the PLAN, unless otherwise provided by the PLAN, shall have no rights as a shareholder with respect thereto unless and until certificates for shares of common stock or preferred stock, as the case may be, are issued to him. 14 15 14. RIGHT TO TERMINATE EMPLOYMENT OR SERVICE. Nothing in the PLAN or in any agreement entered into pursuant to the PLAN shall confer upon any participant the right to continue in the employment or service as a director of the COMPANY, or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest, or affect any right which the COMPANY, or such subsidiaries, partnerships or joint ventures, may have to terminate the employment or service as a director of such participant. For purposes of this Plan and notwithstanding anything to the contrary contained elsewhere in this Plan, no termination of a Participant's employment or Board service with the Company within the meaning of this Plan shall be deemed to have occurred by virtue of the Company entering into any agreement with respect to, the public announcement of, the approval by the Company's shareholders or directors of, or the consummation of, any transaction or series of integrated transactions, if, prior to the occurrence of such transaction or series of integrated transactions, a majority of the Continuing Directors (as defined in Section 21 hereof) then in office determine that such transaction or series of integrated transactions should not be treated as a termination of a Participant's employment or Board service with the Company within the meaning of this Plan. 15. WITHHOLDING. Whenever the COMPANY proposes or is required to issue or transfer shares of stock or debentures under the PLAN, the COMPANY shall have the right to require the recipient to remit to the COMPANY an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares or debentures. Whenever under the PLAN payments are to be made in cash, such payments shall be net of an amount sufficient to satisfy any federal, state and/or local withholding tax requirements. A recipient may elect with respect to any Non-Statutory Stock Option to surrender or authorize the COMPANY to withhold shares of common stock (valued at their fair market value on the date of surrender or withholding of such shares) in satisfaction of all such withholding requirements (a "Withholding Election"); provided, however, that: (a) Any Withholding Election shall be made by written notice to the COMPANY and thereafter shall be irrevocable by the recipient; (b) Any Withholding Election shall be subject to disapproval by the Board; (c) Any Withholding Election must be made prior to the date that the recipient recognizes income with respect to the stock options exercised (the "Tax Date"); and 15 16 (d) If a recipient is subject to Section 16 of the Securities Exchange Act of 1934, as amended, or any successor law and wishes to make a Withholding Election, such person must make any Withholding Election: (i) more than six months after the date of grant of the stock option with respect to which such election is made, except that this limitation shall not apply in the event of death or disability of the recipient prior to the expiration of the six month period; and (ii) at least six months prior to the Tax Date, unless the Withholding Election is made (or takes effect) during and the actual exercise of the Non-Statutory Stock Option occurs during a period beginning on the third business day following the release for publication of the COMPANY'S summary statement of sales and earnings for a quarter or fiscal year and ending on the twelfth business day following such statement. When the Tax Date falls after the exercise of a stock option and the recipient makes a Withholding Election, the full number of shares of stock subject to the option being exercised will be issued, but the recipient will be unconditionally obligated to deliver to the COMPANY on the Tax Date a number of shares of stock having a value equal to the recipient's federal, state and/or local withholding tax requirements. 16. NON-ASSIGNABILITY. No option or similar right (including a stock appreciation right) under the PLAN shall be assignable or transferable by the recipient thereof except by will or by the laws of descent and distribution. During the life of the recipient, such option or similar right shall be exercisable only by such person's guardian or legal representative. 17. NON-UNIFORM DETERMINATIONS. Except with respect to options granted to Outside Directors, the Board's determination under the PLAN (including without limitation determinations of the officers, employees and Subsidiary Directors to receive awards, the form, amount and timing of such awards, the terms and provisions of such awards and the agreements evidencing same, and the establishment of values and performance targets) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, awards under the PLAN, whether or not such persons are similarly situated. 18. ADJUSTMENTS IN STOCK AND RELATED ADJUSTMENTS. In the event of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants, rights or debenture, stock dividend, stock split or reverse stock split, cash 16 17 dividend, property dividend, including, without limitation, a distribution of the stock of a subsidiary, combination or exchange of shares, repurchase of shares, or any other change in corporate structure, which in the judgment of the Board, materially affects the value of the COMPANY's shares, the Board shall determine the appropriate adjustments, if any, to (a) the number of shares of common stock which may be issued under the PLAN and (b) the number of shares issuable and the exercise price per share pursuant to an outstanding award theretofore granted under this PLAN. 19. AMENDMENT OR TERMINATION. The Board may amend, modify, suspend or terminate the PLAN at any time, except that any modification or amendment which would (a) increase the aggregate number of shares which may be issued under the PLAN (other than an increase pursuant to Paragraph 10(e) or Paragraph 18 hereof), (b) materially modify the requirements as to eligibility for participation in the PLAN, or (c) materially increase the benefits accruing to participants in the PLAN within the meaning of Rule 16b-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"), shall be effective only if it is approved by the shareholders of the COMPANY at the next annual meeting of shareholders after the date of adoption by the Board of such modification or amendment; provided, however, that to the extent that Rule 16b-3 is amended hereafter to eliminate the requirement of shareholder approval with respect to any amendment described in clauses (a), (b) or (c) of this sentence, shareholder approval shall not be required under this Paragraph 19. The termination or any modification, suspension or amendment of the PLAN shall not, without the consent of a participant, adversely affect the participant's rights under an award previously granted. Further, the Board shall have no discretion without shareholder approval to alter the terms of this PLAN so as to increase the benefits to Outside Directors as a class or any Outside Director individually. In the event that the SEC as a condition to issuing a favorable no-action letter as contemplated by Paragraph 5 requests any additional restrictions or other clarifying changes with respect to the debenture options which may be granted to Outside Directors (or the related debentures or preferred stock), then the Board shall be authorized, to the extent consistent with the foregoing restrictions on its authority, to amend the PLAN in order to satisfy such condition. This paragraph is intended to give the Board flexibility to adjust to changing economic conditions or changes in the tax laws as well as other changes in circumstances not foreseeable at the time of its creation in keeping with the provisions and intent of the PLAN. In the event that the Board receives an opinion from a qualified expert that a change in the securities or tax laws or other laws renders the grant of debenture options impermissible or impractical, then the Board shall amend the PLAN to provide for the prospective grant of Non-Statutory Stock Options as provided in Paragraph 6 to Directors whenever Debenture Options would have been required to be granted to Outside Directors hereunder. Notwithstanding anything else to the contrary in this PLAN, none of the provisions contained in this PLAN defining the awards to be made to Outside Directors may be amended more than once every six months, except to 17 18 comport with changes in the Internal Revenue Code, as amended, the Employee Retirement Income Security Act, or the rules thereunder. 20. DURATION OF THE PLAN. The PLAN shall remain in effect until all awards under the PLAN have been satisfied by the issuance of shares or debentures or the payment of cash, but no award shall be granted more than ten (10) years after the date the PLAN is approved by the shareholders of the COMPANY which shall be its effective date. 21. CHANGE IN CONTROL. For purposes of the PLAN, a "Change of Control" shall have occurred if: (a) Any corporation, person or other entity (other than the COMPANY) makes a tender or exchange offer for shares of common stock and shares are purchased pursuant thereto ("Offer"); (b) More than fifty (50%) percent of the COMPANY's common stock is acquired by any person or group; (c) During any period of two (2) consecutive years, individuals who at the beginning of such period were members of the Board cease for any reason to constitute at least a majority thereof (unless the election, or the nomination for election by the COMPANY's shareholders, of each new director was approved by a vote of at least (2/3) two-thirds of the directors then still in office who were directors at the beginning of the period); or (d) The shareholders of the COMPANY approve a definitive agreement to merge the COMPANY into another corporation, to consolidate the COMPANY with another corporation, or to sell or otherwise dispose of substantially all of the COMPANY's assets. In the event of occurrence of a Change of Control, then from and after the date of the first purchase of common stock pursuant to such offer, or the date on which public announcement of the acquisition of such percentage of stock shall have been made, or the date on which such change in the composition of the Board shall have occurred, or the date of any such shareholder approval, all stock options, stock appreciation rights and other rights granted pursuant to the PLAN which remain outstanding shall automatically become exercisable in full, whether or not otherwise exercisable. Notwithstanding the foregoing, no "Change in Control" shall be deemed to have occurred by virtue of any of the events set forth above if, prior to the occurrence of such event, a majority of the Continuing Directors then in office determine that such event should not be treated as a "Change of Control" for purposes of this Plan. "Continuing Director" shall mean any member of the Board of Directors of the Company who is a member of the Board of 18 19 Directors as of the date of this Agreement and any person who subsequently becomes a member of the Board of Directors, if such person's nomination for election or election to the Board of Directors is recommended or approved by a majority of the Continuing Directors. 22. INTENT: SEPARABILITY. All Incentive Stock Options granted hereunder are intended to comply with Section 422A and, to the extent applicable, Section 425 of the Internal Revenue Code of 1986, as amended, and all provisions of this PLAN and all Incentive Stock Options granted hereunder shall be construed in such manner as to effectuate that intent. This PLAN and all stock options, stock appreciation rights, debenture options, and other rights granted hereunder are intended to satisfy the conditions of SEC Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and all provisions of this PLAN and all stock options, stock appreciation rights, debenture options, and other rights granted hereunder shall be construed in such manner as to effectuate that intent. If any of the terms or provisions of this PLAN conflict with the requirements of Rule 16b-3 (as it may be amended from time to time) and/or Sections 422A and 425 (as they may be amended from time to time), then such terms or provisions shall be deemed inoperative to the extent that they so conflict with such requirements. 23. SPECIAL PROCEDURE FOR CERTAIN CREDIT ASSISTED TRANS-ACTIONS. To the extent not inconsistent with the provisions of Section 422A of the Internal Revenue Code of 1986, as amended, or the provisions of Rule 16b-3 issued by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, any holder of a stock option issued under this PLAN desiring to obtain credit from a broker, dealer, or other "creditor" as defined in Regulation T issued by the Board of Governors of the Federal Reserve System (provided such broker, dealer or creditor has been approved by the Committee ("Approved Creditor")) to assist in exercising such stock option, may deliver to such Approved Creditor a written exercise notice executed by such holder with respect to such stock option, together with written instructions to the COMPANY to deliver the stock issued upon such exercise of the stock option holder; upon receipt of such exercise notice and instructions in a form acceptable to the COMPANY, the COMPANY shall confirm to the Approved Creditor that it will deliver to the Approved Creditor on behalf of the stock option holder the stock issued upon such exercise of the option and covered by such instructions promptly following receipt of the exercise price from the Approved Creditor. To the extent not inconsistent with Section 422A or Rule 16b-3, upon written request, the COMPANY may, in its discretion, but shall not be obligated to deliver to the Approved Creditor on behalf of the stock option holder shares of stock resulting from such a credit assisted exercise prior to receipt of the exercise price for such shares if the Approved Creditor has delivered to the COMPANY, in addition to the other documents contemplated by this Paragraph 23, the Approved Creditor's written agreement to pay the COMPANY such exercise price within five days after delivery of such shares. The credit assistance contemplated by this Paragraph 23 may include a margin loan by the Approved Creditor secured by the stock 19 20 purchased upon exercise of a stock option or, in the case of a stock option holder who is not subject to Section 16 of the Securities Exchange Act of 1934, as amended, an immediate sale of some or all of such stock by the Approved Creditor to obtain or recover the exercise price which the Approved Creditor has committed to pay to the COMPANY on behalf of the stock option holder. 20 EX-4.6 4 CHEMFIRST, INC. 1980 LONG-TERM INCENTIVE PLAN 1 EXHIBIT 4.6 CHEMFIRST INC. 1980 LONG-TERM INCENTIVE PLAN 1. PURPOSE. The purpose of the CHEMFIRST INC. 1980 LONG-TERM INCENTIVE PLAN (the "PLAN") is to further the growth in earnings and market appreciation of CHEMFIRST INC. (the "COMPANY"). The PLAN provides long-term incentives to those officers and key employees of the COMPANY or its subsidiaries, partnerships or joint ventures who make substantial contributions to the COMPANY by their ability, loyalty, industry, and invention. The COMPANY intends that the PLAN will thereby facilitate securing, retaining and motivating officers and key employees of high caliber and good potential. 2. ADMINISTRATION. The PLAN shall be administered by the Board of Directors (the "Board") of the COMPANY or by a Committee of the Board. Unless the board consists solely of "disinterested persons" within the meaning of Rule 16b-3 of the Securities and Exchange Commission, a Committee (the "Committee") of two or more directors, each of whom is a "disinterested person" within the meaning of such rule, shall make any decisions regarding the selection of officers and directors for participation under the PLAN and any decisions concerning the timing, pricing, and amount of a grant or award under the PLAN except for any grants or awards determined pursuant to a formula satisfying the provisions of Rule 16b-3(c)(ii) of the Securities and Exchange Commission. The Board or the Committee, as the case may be, shall have full and final authority in its discretion to conclusively interpret the provisions of the PLAN and to decide all questions of fact arising in its application; to determine the employees and officers to whom awards shall be made under the PLAN; to determine the type of award to be made and the amount, size and terms of each such award; to determine the time when awards will be granted; and to make all other determinations necessary or advisable for the administration of this PLAN. All provisions elsewhere in this PLAN dealing with administration of and decisions under this PLAN which refer to the Board shall be deemed to refer to the Committee whenever the Committee is administering this PLAN pursuant to this Section 2. 3. SHARES SUBJECT TO PLAN. Subject to the provisions of Paragraph 10(c) and Paragraph 18 hereof, the shares that may be issued under the PLAN shall not exceed in the aggregate 1,500,000 shares of the common stock of the COMPANY. Such shares may be authorized and unissued shares or treasury shares. Except as otherwise provided herein, any share subject to an option or right which for any reason expires or is terminated unexercised as to such shares shall again be available under the PLAN. 4. PARTICIPANTS. Persons eligible to participate shall be limited to those officers and key employees of the COMPANY or any of its subsidiaries, or a partnership or joint 2 venture in which the COMPANY has at least a fifty (50%) percent ownership interest, who are in positions in which their decisions, actions and counsel significantly impact upon the performance of the COMPANY or its subsidiaries. However, awards of Incentive Stock Options as provided in Paragraph 6 shall be limited to employees of the COMPANY or any of its subsidiaries. Directors of the COMPANY who are not otherwise salaried employees of the COMPANY shall not be eligible to participate in the PLAN. 5. AWARDS UNDER THE PLAN. Awards under the PLAN may be in the form of stock options, options to purchase debentures convertible into common or convertible preferred stock of the COMPANY, stock appreciation rights, performance units, restricted stock, supplemental cash and such other forms as the Board may in its discretion deem appropriate, including any combination of the above. The Board or Committee, as the case may be, shall make the grant of the awards. No one employee shall receive awards in the form of stock in excess of one-fifth (1/5) of the total shares subject to this PLAN. No fractional shares shall be issued under this PLAN, and the minimum value of any shares issued under this PLAN shall be the par value at the time of award. 6. STOCK OPTIONS. Options shall be evidenced by stock option agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) OPTION PRICE. The purchase price per share of stock deliverable upon the exercise of an option shall not be less than one hundred (100%) percent of the fair market value of the stock on the day the option is granted, as determined by the Board but in no event less than the par value of such stock. The fair market value per share of common stock shall be the average of the highest and lowest prices of common stock traded on the principal market of the stock on the day the option is granted. If no sale of the COMPANY's common stock shall have been made on the principal market for the stock on the day the option is granted, the fair market value shall be based upon the next preceding day on which there was a sale of such common stock. (b) EXERCISE OF OPTION. Each stock option agreement shall state the period or periods of time in which the option may be exercised by the participant, in whole or in part, which shall be such period or periods of time as may be determined by the Board, provided that the option period shall not commence earlier than six (6) months after the date of the grant of an Incentive Stock Option or six (6) months and one (1) day after the grant of a Non-Statutory Stock Option nor end later than ten (10) years after the date of the grant of an Incentive Stock Option or ten (10) years and one (1) day after the date of the grant of a 2 3 Non-Statutory Stock Option. No Incentive Stock Option granted before January 1, 1987 shall be exercisable while there is outstanding (as defined in Section 422A of the Internal Revenue Code as in effect with respect to such Incentive Stock Options) any Incentive Stock Option theretofore granted to the holder of such option to purchase stock in the COMPANY or any corporation which (at the time of the granting of such option) is a parent or a subsidiary corporation of the COMPANY, or any predecessor of any such corporations. An option shall be outstanding until it is exercised in full or expires by reason of lapse of time. No employee/optionee shall own stock possessing more than ten (10%) percent of the total combined voting power of all classes of stock of the COMPANY or a subsidiary at the time any option is granted to that employee/optionee. (c) PAYMENT FOR SHARES. Stock purchased pursuant to an option agreement should be paid for in full at the time of purchase, either in the form of cash, common stock of the COMPANY at fair market value, or in a combination thereof, as the Board may determine. (d) RIGHTS UPON TERMINATION OF EMPLOYMENT. In the event that an optionee dies or retires or becomes disabled or ceases to be an employee of either the COMPANY or one or more of its subsidiaries, or a partnership or joint venture in which the COMPANY has at least a fifty (50%) percent ownership interest, within six (6) months following a Change of Control (as defined in Paragraph 21) of the COMPANY prior to expiration of his option without having fully exercised his option, the optionee or his legal successor shall have the right to exercise the option during its term within a period of twelve (12) months (or three (3) months in the case of an Incentive Stock Option granted prior to August 1, 1984 or exercised other than by a disabled employee or the legal successor of a deceased employee) after the date of such termination of employment, or such longer period as determined by majority decision of the Board. In the event of such termination of employment by the COMPANY for cause, the optionee shall have the right to exercise the option during its term within a period of thirty (30) days after such termination. In the event of such termination of employment for any other reason, the optionee shall have the right to exercise the option during its term within a period of six (6) months (or thirty (30) days in the case of an Incentive Stock Option granted prior to August 1, 1984 or three (3) months in the case of an Incentive Stock Option granted on or after August 1, 1984) after such termination. (e) CERTAIN LIMITATIONS. In the case of Incentive Stock Options granted before January 1, 1987, the aggregate fair market value (determined as of the time an Incentive Stock Option is granted) of the stock for which an officer or employee may be granted Incentive Stock Options in any calendar year under all plans of the COMPANY and its parent or subsidiary corporations shall not exceed ONE HUNDRED THOUSAND DOLLARS ($100,000) plus any unused limit 3 4 carryover to such year computed in accordance with Section 422A(c) (4) of the Internal Revenue Code as in effect with respect to such Incentive Stock Options. In the case of Incentive Stock Options granted after December 31, 1986, the aggregate fair market value (determined as of the time an Incentive Stock Option is granted) of the stock with respect to which Incentive Stock Options become exercisable for the first time by an individual during any calendar year under all plans of the COMPANY and its parent or subsidiary corporations shall not exceed ONE HUNDRED THOUSAND DOLLARS ($100,000). (f) DESIGNATION OF OPTIONS. At the time any option is granted under the Plan, the Board shall determine whether or not the option is to be an Incentive Stock Option, and the option shall be clearly identified as to its status as an Incentive Stock Option or a Non-Statutory Stock Option (which is any option that is not an Incentive Stock Option). (g) AMENDMENT OF OPTIONS. The Board of Directors of the COMPANY shall be authorized to amend any or all stock options now or hereafter outstanding so that they can be exercised for the purchase of the COMPANY's convertible subordinated debentures in accordance with the terms of this Paragraph 6(g) and Paragraph 10 instead of common stock. A separate series of debentures and a separate series of preferred stock shall be established to correspond to each group of amended stock options having a particular grant date and exercise price. Each such series of debentures will be convertible into the corresponding series of preferred stock at a conversion price per share equal to the exercise price per share provided in the stock option agreement being amended, as determined immediately prior to such amendment. The term of the debenture option and the maturity date of the debentures subject thereto will be coextensive with the remaining term of the option agreement being amended. 7. STOCK APPRECIATION RIGHTS. Stock appreciation rights shall be evidenced by stock appreciation right agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) AWARD. A stock appreciation right shall entitle the grantee to receive upon exercise the excess of (a) the fair market value of a specified number of shares of the COMPANY's common stock at the time of exercise over (b) a specified price which shall not be less than one hundred (100%) percent of the fair market value of the stock at the time the appreciation right was granted, or, if connected with a previously issued stock option, not less than one hundred (100%) percent of the fair market value of the stock at the time such option was granted. A stock appreciation right may be granted in connection with all or any portion of a previously or contemporaneously granted stock option (including, in addition to 4 5 options granted under the PLAN, options granted under other plans of the COMPANY), or not in connection with a stock option. (b) TERM. Stock appreciation rights shall be granted for a period of not less than one (1) year nor more than ten (10) years, and shall be exercisable in whole or in part, at such time or times and subject to such other terms and conditions as shall be prescribed by the Board at the time of grant, subject to all of the following: (i) No stock appreciation right shall be exercisable, in whole or in part, during the six (6) month period starting with the date of grant; and (ii) Stock appreciation rights will be exercisable only during grantee's employment by the COMPANY or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest, except that in the discretion of the Board a stock appreciation right may be made exercisable for up to thirty (30) days after the grantee's employment is terminated for any reason other than death, disability or retirement. In the event that a grantee dies or retires or becomes disabled prior to exercise of stock appreciation rights, the grantee or his legal successor shall have the right to exercise the rights during their term within a period of twelve (12) months after the date of termination due to death, disability or retirement, or such longer period as determined by majority decision of the Board. (c) PAYMENT. Upon exercise of a stock appreciation right, payment shall be made in the form of common stock of the COMPANY (at fair market value on the date of exercise), in cash, or in a combination thereof, as the Board may determine. 8. PERFORMANCE UNITS. Performance Units ("Units") shall be evidenced by performance unit agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) PERFORMANCE PERIOD. The performance period for a Unit shall be established by the Board and shall be not more than five (5) years, nor less than two (2) years. (b) VALUATION OF UNITS. A value for each Unit shall be established by the Board, together with principal and minimum performance targets to be achieved in respect of the Unit during the performance period. The participant shall be entitled to receive one hundred (100%) percent of the value of the Unit, if the 5 6 principal target is achieved during the performance period, but shall be entitled to receive nothing for such Unit if the minimum target is not achieved during the performance period. The participant shall be entitled to receive a stated portion of the value of the Unit for performance during the performance period which meets or exceeds the minimum target but fails to meet the principal target. (c) PERFORMANCE TARGETS. The performance targets established under the PLAN shall relate to the COMPANY's performance (or the performance of its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest, herein collectively referred to in this Paragraph (c) as "COMPANY's performance") over the performance period, and may be established in terms of growth in earnings or equity, ratio of earnings to shareholders' equity or to total capital, or other performance standards as determined by the Board in its discretion. Multiple targets may be used and may have the same or different weighting, and they may relate to absolute COMPANY's performance, or the COMPANY's performance as measured against the performance of other companies, or the COMPANY's performance as measured against other standards as determined by the Board in its discretion. (d) ADJUSTMENTS. At any time prior to payment of the Units, the Board may adjust previously established performance targets and other terms and conditions, including the COMPANY's (or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest) or other companies' financial performance for PLAN purposes, to reflect major unforeseen events such as changes in laws, regulations or accounting policies or procedures, mergers, acquisitions or divestitures or extraordinary, unusual or non-recurring items or events. (e) PAYMENTS OF UNITS. Following the conclusion of each performance period, the Board shall determine the extent to which performance targets have been attained for such period as well as the other terms and conditions established by the Board. The Board shall determine what, if any, payment is due on the Units and whether such payment shall be made in cash, in common stock of the COMPANY, or partially in cash and partially in common stock of the COMPANY. Any payments made in stock shall be calculated on the fair market value of the stock. Payment shall be made as promptly as practicable following the end of the performance period unless deferred subject to such terms and conditions as may be prescribed by the Board. The Board may authorize payments in common stock under any previously existing Performance Unit Plans of the COMPANY. Any payments made in common stock of a previously existing Performance Unit Plan shall be calculated on the fair market value of the stock. 6 7 (f) TERMINATION OF EMPLOYMENT. In the event that a participant holding a Unit award ceases to be an employee of the COMPANY, or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest, prior to the end of the applicable performance period by reason of death, disability or retirement, with the consent of the Board his Units, to the extent earned under the applicable performance targets, shall be payable at the end of the performance period in proportion to the active service of the participant during the performance period, as determined by the Board. Upon any other termination of employment, participation shall terminate forthwith and all outstanding Units held by the participant shall be canceled. (g) OTHER TERMS. The Unit agreements shall contain such other terms and provisions and conditions not inconsistent with this PLAN as shall be determined by the Board. 9. RESTRICTED STOCK AWARDS. Restricted stock awards shall be evidenced by restricted stock agreements in such form and not inconsistent with this PLAN as the Board shall approve from time to time, which agreements shall contain in substance the following terms and conditions: (a) RESTRICTION PERIOD. Shares awarded pursuant to restricted stock awards shall be subject to such conditions, terms and restrictions (including performance achievement earnout, forfeiture and transfer) and for such period or periods as shall be determined by the Board. The Board shall have the power to permit, in its discretion, an acceleration of the expiration of the applicable restriction period with respect to any part or all of the shares awarded to a participant. (b) RESTRICTIONS UPON TRANSFER. Shares awarded, and the right to vote such shares and to receive dividends thereon, may not be sold, assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered, except as herein provided, during the restriction period applicable to such shares. Notwithstanding the foregoing, and except as otherwise provided in the PLAN, the participant shall have all the other rights of a stockholder including, but not limited to, the right to receive dividends and the right to vote such shares. (c) CERTIFICATES. Each certificate issued in respect of shares awarded to a participant shall be deposited with the COMPANY, or its designee, and shall bear the following legend: "This certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture and restrictions against transfer) contained in the CHEMFIRST INC. 1980 Long-Term Incentive Plan and an Agreement entered into between the registered owner and 7 8 CHEMFIRST INC. Release from such terms and conditions shall be obtained only in accordance with the provisions of the PLAN and Agreement, a copy of each of which is on file in the office of the Secretary of CHEMFIRST INC., Jackson, Mississippi. (d) LAPSE OF RESTRICTIONS. The Agreement shall specify the conditions and terms upon which any restrictions upon shares under the PLAN shall lapse, as determined by the Board. Upon the lapse of such restrictions, shares of common stock, free of any restrictive legend shall be issued to the participant or his legal representative. 10. DEBENTURE OPTIONS. Debenture options shall be evidenced by debenture option agreements in such form and not inconsistent with the PLAN as the Board shall approve from time to time, which agreements shall be subject to the following terms and conditions: (a) OPTION PROVISIONS. Regular debenture options will be granted to purchase debentures of a particular series. Special debenture options to purchase debentures of a particular series can be created upon the amendment of outstanding stock options to convert them into debenture options as authorized by Paragraph 6(g). Regular debenture options will be exercisable at any time within ten (10) years after grant. Special debenture options will be exercisable during the remaining term initially prescribed in the converted stock option. Debenture options will not be transferable except by operation of law and may be exercised during the optionee's lifetime only by the optionee. The purchase price upon exercise of a debenture option will be par (that is, the principal amount of the debenture) and shall be paid in full in cash at the time of purchase. In the event that the holder of a debenture option dies or retires or becomes disabled or ceases to be an employee of either COMPANY or one or more of its subsidiaries, or a partnership or joint venture in which the COMPANY has at least a fifty (50%) percent ownership interest, within six (6) months following a Change of Control (as defined in Paragraph 21) of the COMPANY prior to expiration of the debenture option without having fully exercised his option, the holder of the debenture option or his legal successor shall have the right to exercise the debenture option during its term within a period of twelve (12) months after the date of such death, disability, retirement or termination of employment or such longer period as determined by majority decision of the Board. In the event of such termination of employment by the COMPANY for cause, the optionee shall have the right to exercise a debenture option during its term within a period of thirty (30) days after such termination. In the event of such termination of employment for any other reason, the optionee shall have the right to exercise a debenture option during its term within a period of six (6) months after such termination. 8 9 (b) DEBENTURE TERMS. Debentures acquired upon exercise of a regular debenture option will mature ten (10) years after grant of the regular debenture option. Debentures acquired upon exercise of a special debenture option will mature on the date initially prescribed as the expiration date of the converted stock option. The debentures will bear interest at a floating rate of one (1%) percent less than the rate publicly announced as its prime rate by Deposit Guaranty National Bank or such other bank as is designated by the Board of Directors of the COMPANY or the maximum legal rate under applicable law. Interest on the debentures will be payable semi-annually on January 1 and July 1 of each year. Debentures may not be transferred or pledged without written consent of the COMPANY. The debentures will be subordinated generally to the COMPANY's other indebtedness. (c) CONVERSION RIGHTS. Each debenture will contain conversion rights exercisable at any time more than six (6) months after the award of the debenture option and prior to maturity or redemption of the debenture (except while the debentures are pledged). Debentures of each series will be convertible into a special series of preferred stock of the COMPANY based on a price per share of the preferred stock equal to (a) the fair market value of the COMPANY's common stock (determined as provided in Paragraph 6 above) on the date of grant of the option to purchase the debenture if the debenture is acquired under a regular debenture option or (b) the exercise price per share provided in the amended stock option immediately prior to its conversion into a debenture option if the debenture is acquired under a special debenture option. Each share of preferred stock issued upon conversion of a debenture will in turn be immediately convertible into one (1) share of common stock of the COMPANY, subject to adjustment pursuant to the following sentence. In the event of a reclassification, recapitalization,merger, consolidation, reorganization, issuance of warrants, rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend, including, without limitation, a distribution of the stock of a subsidiary, combination or exchange of shares, repurchase of shares, or any other change in corporate structure which in the judgment of the Board materially affects the value of the Company's shares subsequent to grant of a regular debenture option or subsequent to the conversion of a stock option into a special debenture option, the Board shall determine the appropriate adjustments, if any, to the number of shares of common stock of the Company issuable upon conversion of preferred stock under the preceding sentence. (d) REDEMPTION AND CALL OF DEBENTURES. A debenture shall be redeemable by the holder at par on any interest payment date which is more than one (1) year after issuance of the debenture. Debentures may be called by the COMPANY for repayment as of any interest payment date following twelve (12) months prior notice. Upon any redemption pursuant to call by the COMPANY, the debenture holder will be paid par plus interest to the date of redemption. 9 10 (e) PLEDGE OF DEBENTURES. If any debenture is pledged by the holder for a loan with the consent of the COMPANY, the debenture will not be convertible while the debenture remains pledged. Upon any default on the loan for which a debenture is pledged with the consent of the COMPANY, the lender may redeem the debenture at par on any interest payment date. Upon notice to the COMPANY from the purchaser and the lender to which a debenture has been pledged that the debt has been discharged, the conversion right will automatically be restored. If a holder sells, assigns, transfers or pledges a debenture without the COMPANY's consent, the conversion right with respect to the debenture will permanently cease to exist. 11. SUPPLEMENTAL CASH PAYMENTS. Subject to the Board's discretion, any options, stock appreciation rights, performance units or restricted stock agreements may provide for the payment by the COMPANY of a supplemental cash payment to a participant promptly after the exercise of a stock option, debenture option or stock appreciation right, or at the time of payment of a performance unit or at the end of a restriction period of a restricted stock award. Supplemental cash payments shall be subject to such terms and conditions as shall be provided by the Board at the time of grant, provided that in no event shall the amount of each payment exceed: (a) In the case of an option, the excess of the fair market value of a common share on the date of exercise over the option price multiplied by the number of shares for which such option is exercised, or (b) In the case of a stock appreciation right, performance unit or restricted stock award, the value of the shares and other consideration issued in payment of such award. (c) In the case of a debenture option, the excess of the fair market value of the debentures purchased upon exercise of the debenture option over the par value of the purchased debentures. 12. GENERAL RESTRICTIONS. Each award under the PLAN shall be subject to the requirement that, if at any time the Board shall determine that (i) the listing, registration or qualification of the shares of common stock subject or related thereto upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement by the recipient of an award with respect to the disposition of shares of common stock, is necessary or desirable as a condition of, or in connection with, the granting of such award or the issue or purchase of shares of common stock thereunder, such award may not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Board. 10 11 13. RIGHTS OF A SHAREHOLDER. The recipient of any award under the PLAN, unless otherwise provided by the PLAN, shall have no rights as a shareholder with respect thereto unless and until certificates for shares of common stock are issued to him. 14. RIGHT TO TERMINATE EMPLOYMENT. Nothing in the PLAN or in any agreement entered into pursuant to the PLAN shall confer upon any participant the right to continue in the employment of the COMPANY, or its subsidiaries, partnerships or joint ventures in which the COMPANY has at least a fifty (50%) percent ownership interest, or affect any right which the COMPANY, or such subsidiaries, partnerships or joint ventures, may have to terminate the employment of such participant. For purposes of this Plan and notwithstanding anything to the contrary contained elsewhere in this Plan, no termination of a Participant's employment with the Company within the meaning of this Plan shall be deemed to have occurred by virtue of the Company entering into any agreement with respect to, the public announcement of, the approval by the Company's shareholders or directors of, or the consummation of, any transaction or series of integrated transactions, if, prior to the occurrence of such transaction or series of integrated transactions, a majority of the Continuing Directors (as defined in Section 21 hereof) then in office determine that such transaction or series of integrated transactions should not be treated as a termination of a Participant's employment with the Company within the meaning of this Plan. 15. WITHHOLDING. Whenever the COMPANY proposes or is required to issue or transfer shares of common stock or debentures under the PLAN, the COMPANY shall have the right to require the recipient to remit to the COMPANY an amount sufficient to satisfy any federal, state and/or local withholding tax requirements prior to the delivery of any certificate or certificates for such shares or debentures. Whenever under the PLAN payments are to be made in cash, such payments shall be net of an amount sufficient to satisfy any federal, state and/or local withholding tax requirements. 16. NON-ASSIGNABILITY. No award under the PLAN shall be assignable or transferable by the recipient thereof except by will or by the laws of descent and distribution or by such other means as the Board may approve from time to time. During the life of the recipient, such award shall be exercisable only by such person's guardian or legal representative. 17. NON-UNIFORM DETERMINATIONS. The Board's determination under the PLAN (including without limitation determinations of the persons to receive awards, the form, amount and timing of such awards, the terms and provisions of such awards and the agreements evidencing same, and the establishment of values and performance targets) 11 12 need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, awards under the PLAN, whether or not such persons are similarly situated. 18. ADJUSTMENTS IN STOCK. In the event of a reclassification, recapitalization, merger, consolidation, reorganization, issuance of warrants, rights or debenture, stock dividend, stock split or reverse stock split, cash dividend, property dividend, including, without limitation, a distribution of the stock of a subsidiary, combination or exchange of shares, repurchase of shares, or any other change in corporate structure, which in the judgment of the Board, materially affects the value of the Company's shares, the Board shall determine the appropriate adjustments, if any, to (a) the number of shares of common stock which may be issued under the Plan and (b) the number of shares issuable and the exercise price per share pursuant to an outstanding award theretofore granted under this Plan. 19. AMENDMENT OR TERMINATION. The Board may amend, modify, suspend or terminate the PLAN at any time, except that any modification or amendment which would (a) increase the aggregate number of shares which may be issued under the PLAN (other than an increase pursuant to Paragraph 10(c) or Paragraph 18 hereof), (b) materially modify the requirements as to eligibility for participation in the PLAN, or (c) materially increase the benefits accruing to participants in the PLAN within the meaning of Rule 16B-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended ("Rule 16b-3"), shall be effective only if it is approved by the shareholders of the Company at the next annual meeting of shareholders after the date of adoption by the Board of such modification or amendment; provided, however, that to the extent that Rule 16b-3 is amended hereafter to eliminate the requirement of shareholder approval with respect to any amendment described in clauses (a), (b) or (c) of this sentence, shareholder approval shall not be required under this Paragraph 19. The termination or any modification, suspension or amendment of the PLAN shall not, without the consent of a participant, adversely affect the participant's rights under an award previously granted. 20. DURATION OF THE PLAN. The PLAN shall remain in effect until all awards under the PLAN have been satisfied by the issuance of shares or the payment of cash, but no award shall be granted more than ten (10) years after the date the PLAN is approved by the shareholders of the COMPANY which shall be its effective date. 21. CHANGE IN CONTROL. For purposes of the Plan, a "Change of Control" shall have occurred if: 12 13 (a) Any corporation, person or other entity (other than the COMPANY) makes a tender or exchange offer for shares of Common Stock and shares are purchased pursuant thereto ("Offer"); (b) More than fifty (50%) percent of the COMPANY's Common Stock is acquired by any person or group; (c) During any period of two (2) consecutive years, individuals who at the beginning of such period were members of the Board cease for any reason to constitute at least a majority thereof (unless the election, or the nomination for election by the COMPANY's shareholders, of each new director was approved by a vote of at least (2/3) two-thirds of the directors then still in office who were directors at the beginning of the period); or (d) The shareholders of the COMPANY approve a definitive agreement to merge or consolidate the COMPANY with or into another corporation or to sell or otherwise dispose of substantially all its assets. In the event of occurrence of a Change of Control, then from and after the date of the first purchase of common stock pursuant to such offer, or the date on which public announcement of the acquisition of such percentage of stock shall have been made, or the date on which such change in the composition of the Board shall have occurred, or the date of any such shareholder approval, all stock options granted pursuant to the Plan which remain outstanding (except Incentive Stock Options granted prior to August 1, 1984) shall automatically become exercisable in full, whether or not otherwise exercisable. Notwithstanding the foregoing, no "Change of Control" shall be deemed to have occurred by virtue of any of the events set forth above if, prior to the occurrence of such event, a majority of the Continuing Directors then in office determine that such event should not be treated as a "Change of Control" for purposes of this Plan. "Continuing Director" shall mean any member of the Board of Directors of the Company who is a member of the Board of Directors as of the date of this Agreement and any person who subsequently becomes a member of the Board of Directors, if such person's nomination for election or election to the Board of Directors is recommended or approved by a majority of the Continuing Directors. 13 EX-4.7 5 INDENTURES IN THE FORM OF THAT INDENTURE-11/15/91 1 EXHIBIT 4.7 ================================================================================ FIRST MISSISSIPPI CORPORATION DEPOSIT GUARANTY NATIONAL BANK Trustee --------------- INDENTURE DATED AS OF NOVEMBER 14, 1994 --------------- 1994-1 SERIES CONVERTIBLE SUBORDINATED DEBENTURES ================================================================================ 2 TABLE OF CONTENTS
Page ---- PARTIES ........................................................... 1 RECITALS .......................................................... 1 Purpose of Indenture ....................................... 1 Form of Debenture .......................................... 1 Form of Trustee's Certificate of Authentication ............ 7 Form of Conversion Notice .................................. 8 Compliance with Legal Requirements ......................... 8 Consideration for Indenture ................................ 9 ARTICLE ONE Definitions Section 1.01 Definitions .................................... 9 Authorized Newspaper ..................... 9 Board of Directors ....................... 9 Board Resolution ......................... 9 Common Stock ............................. 9 Company .................................. 10 Conversion Date .......................... 10 Corporation .............................. 10 Debenture or Debentures; Outstanding ..... 10 Debentureholder .......................... 11 Due Date ................................. 11 Event of Default ......................... 11 Indenture ................................ 11 Interest Payment Date .................... 11 Interest Rate ............................ 11 Issuance Date ............................ 11 Officers' Certificate .................... 11 Opinion of Counsel ....................... 11 Prime Interest Rate ...................... 12 Principal Office of the Trustee .......... 12 Record Date .............................. 12 Responsible Officer ...................... 12 Senior Indebtedness ...................... 13 1994-1 Series Stock ...................... 13 Subsidiary or Subsidiaries ............... 13 Trustee .................................. 14 Trust Indenture Act of 1939 .............. 14
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Page ---- ARTICLE TWO Issue, Description, Execution, Registration and Exchange of Debentures Section 2.01. Designation, Amount and Issue of Debentures .............................. 14 Section 2.02. Form of Debentures ......................... 15 Section 2.03. Denomination and Date of Debentures ........ 15 Section 2.04. Execution of Debentures .................... 16 Section 2.05. Registration, Registration of Transfer and Exchange of Debentures ................. 17 Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures ................................. 17 Section 2.07. Temporary Debentures ....................... 18 Section 2.08. Cancellation of Debentures ................. 19 Section 2.09. Benefits of Indenture Provisions ........... 19 Section 2.10. Maintenance of Office or Agency by Trustee .......................... 19 Section 2.11. Condition to Issuance of Debentures ........ 20 ARTICLE THREE Prepayment and Redemption of Debentures Section 3.01. Mandatory and Optional Prepayment of Debentures .............................. 20 Section 3.02. Redemption of Debentures ................... 20 Section 3.03. Deposit of Monies for Redemption of Prepayment .............................. 21 Section 3.04. Limitation on Prepayment ................... 22 Section 3.05. Holder's Right to Elect Redemption ......... 22 ARTICLE FOUR Subordination of Debentures Section 4.01. Agreement that Debentures be Subordinate ... 22 Section 4.02. Subordination to Senior Indebtedness ....... 22 Section 4.03. Payment to Holders of Senior Indebtedness of Certain Amounts Received by Debentureholders ........................... 24 Section 4.04. Notice to Trustee of Specified Events; Reliance on Certificate of Liquidating Agent ...................................... 25 Section 4.05. Subrogation ................................ 26 Section 4.06. Obligation to Pay Not Impaired ............. 26 Section 4.07. Reliance by Senior Indebtedness on Subordination Provisions ................... 26 Section 4.08. Certain Payments and Credits Permitted ..... 27 Section 4.09. Subordination Not to be Prejudiced by Certain Acts ............................... 27
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Page ---- Section 4.10. Trustee Authorized to Effectuate Subordination .............................. 27 Section 4.11. Trustee's Rights Regarding Senior Indebtedness Held by It, Etc. .............. 27 Section 4.12. Trustee and Paying Agents Not Chargeable with Knowledge Until Notice ................ 28 Section 4.13 1984-A, 1985-A, 1986-A, 1982-A, 1982-B, 1982-C, 1982-D, 1983-A, 1984-B, 1987-A, 1988-A, 1988-1, 1989-A, 1989-1, 1989-2, 1990-1, 1990-2, 1991-1 and 1991-2 Series Convertible Subordinated Debentures........... 28 ARTICLE FIVE Conversion of Debentures Section 5.01. Conversion Privilege; Conversion Price ..... 29 Section 5.02. Conversion Period; Limitation on Exercise .. 29 Section 5.03. Manner of Exercising Conversion Privilege .. 31 Section 5.04. Fractional Shares .......................... 32 Section 5.05. Notice of Certain Corporate Action ......... 32 Section 5.06. Company to Reserve Stock ................... 33 Section 5.07. Taxes on Conversions ....................... 33 Section 5.08. Covenant as to Stock ....................... 33 Section 5.09. Provision in Case of Consolidation, Merger or Sale ............................. 34 Section 5.10. Trustee's Disclaimer of Responsibility for Certain Matters ........................ 34 Section 5.11. Covenant as to Conversion Rights ........... 35 ARTICLE SIX Particular Covenants of the Company Section 6.01. Payment of Principal and Interest .......... 35 Section 6.02. Offices for Notices, Payments and Conversions ................................ 35 Section 6.03. Paying Agents .............................. 35 Section 6.04. Appointment to Fill a Vacancy in Office of Trustee ................................. 36 Section 6.05. Further Instruments and Acts ............... 36 Section 6.06. Payment of Taxes; Maintenance of Corporate Existence; Maintenance of Properties; Property Insurance ......................... 36 Section 6.07. Annual Review Certificate .................. 38 Section 6.08. No Lien Created ............................ 38 ARTICLE SEVEN Debentureholders' Lists and Reports by the Company and the Trustee Section 7.01. Debentureholders' Lists .................... 38 Section 7.02 Preservation and Disclosure of Lists ....... 39
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Page ---- Section 7.03. Reports by the Company ..................... 41 Section 7.04. Reports by the Trustee ..................... 42 ARTICLE EIGHT Remedies of the Trustee and Debentureholders on Event of Default Section 8.01. Events of Default .......................... 44 Section 8.02. Payment of Debentures on Default; Suit Therefor .............................. 46 Section 8.03. Application of Monies Collected by Trustee .................................... 48 Section 8.04. Proceedings by Debentureholders ............ 49 Section 8.05. Proceedings by Trustee ..................... 50 Section 8.06. Remedies Cumulative and Continuing ......... 50 Section 8.07. Direction of Proceedings and Waiver of Defaults by Majority of Debentureholders ... 50 Section 8.08. Notice of Defaults ......................... 51 Section 8.09. Undertaking to Pay Costs ................... 51 Section 8.10. Enforcement of Conversion Rights ........... 52 Section 8.11. Waiver of Stay, Extension or Usury Laws .... 52 ARTICLE NINE Concerning the Trustee Section 9.01. Duties and Liabilities of Trustee .......... 52 Section 9.02. Reliance on Documents and Counsel .......... 54 Section 9.03. No Responsibility for Recitals or Certain Other Matters ...................... 55 Section 9.04. Trustee, Paying Agent, Conversion Agent or Registrar May Own Debentures ............... 55 Section 9.05. Monies to be Held in Trust ................. 55 Section 9.06. Compensation and Expenses of Trustee ....... 565 Section 9.07. Officers' Certificate as Evidence .......... 56 Section 9.08. Conflicting Interest of the Trustee ........ 56 Section 9.09. Eligibility of Trustee ..................... 64 Section 9.10. Resignation or Removal of Trustee; Appointment of Successor Trustee ........... 64 Section 9.11. Acceptance by Successor Trustee ............ 66 Section 9.12. Succession by Merger and Certain Other Events ............................... 66 Section 9.13. Limitation on Rights of Trustee as a Creditor ................................. 67 Section 9.14. Records of Trustee ......................... 71
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Page ---- ARTICLE TEN Concerning the Debentureholders Section 10.01. Action by Debentureholders ................. 72 Section 10.02. Proof of Execution by Debentureholders; Evidence of Holdings ..... 72 Section 10.03. Who Deemed Absolute Owners ................. 73 Section 10.04. Company-owned Debentures Disregarded ....... 73 Section 10.05. Revocation of Consents; Future Holders Bound .............................. 74 Section 10.06. Transfer of Debentures ..................... 74 ARTICLE ELEVEN Debentureholders' Meetings Section 11.01. Purposes of Meetings ....................... 75 Section 11.02. Call of Meetings by Trustee ................ 75 Section 11.03. Call of Meetings by Company or Debentureholders ........................... 75 Section 11.04. Qualifications for Voting .................. 76 Section 11.05. Regulations ................................ 76 Section 11.06. Voting ..................................... 77 Section 11.07. No Delay of Rights by Meeting .............. 77 ARTICLE TWELVE Supplemental Indentures Section 12.01. Supplemental Indentures without Consent of Debentureholders ................ 77 Section 12.02. Supplemental Indentures with Consent of Debentureholders ................ 79 Section 12.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures .......... 80 Section 12.04. Notation on Debentures ..................... 80 Section 12.05. Evidence of Compliance of Supplemental Indenture to be Furnished Trustee .......... 81 ARTICLE THIRTEEN Consolidation, Merger and Sale by the Company Section 13.01. Consolidation, Merger or Sale of Assets Permitted ........................... 81 Section 13.02. Succession by Successor Corporation ........ 81 Section 13.03. Evidence to be Furnished Trustee ........... 82 ARTICLE FOURTEEN Satisfaction and Discharge of Indenture; Unclaimed Monies Section 14.01. Discharge of Indenture ..................... 82
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Page ---- Section 14.02. Deposited Monies to be Held in Trust by Trustee ........................... 83 Section 14.03. Paying Agent to Repay Monies Held .......... 83 Section 14.04. Unclaimed Monies ........................... 83 ARTICLE FIFTEEN Immunity of Incorporators, Stockholders, Officers and Directors Section 15.01. Indenture and Debentures Solely Corporate Obligations ...................... 84 ARTICLE SIXTEEN Miscellaneous Provisions Section 16.01. Provisions Binding on Company's Successors ................................. 84 Section 16.02. Official Acts by Successor Corporation ..... 84 Section 16.03. Notices .................................... 84 Section 16.04. Subscription ............................... 85 Section 16.05. Governing Law .............................. 85 Section 16.06. Evidence of Compliance with Conditions Precedent .................................. 85 Section 16.07. Legal Holidays ............................. 85 Section 16.08. Trust Indenture Act to Control ............. 86 Section 16.09. Table of Contents and Headings ............. 86 Section 16.10. Method of Publication or Other Notice When Indenture Provision for Publication or Notice Cannot be Followed ............... 86 Section 16.11. Invalidity of Some Provisions Shall Not Affect Others .......................... 86 Section 16.12. Execution in Counterparts .................. 86 - ---------------- Exhibit A. Form of Consent to Pledge (See Section 10.06)
vi 8 THIS INDENTURE ("Indenture"), is dated as of November 14, 1994, between FIRST MISSISSIPPI CORPORATION, a corporation duly organized and existing under the laws of the State of Mississippi (hereinafter sometimes referred to as the "Company"), and DEPOSIT GUARANTY NATIONAL BANK, a national banking association organized under the laws of the United States (hereinafter sometimes referred to as the "Trustee"). WITNESSETH: WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issue of its 1994-1 Series Convertible Subordinated Debentures (hereinafter sometimes referred to as the "Debentures"), in the aggregate principal amount of $21,312.50, and to provide the terms and conditions upon which the Debentures are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and WHEREAS, the text of the Debentures is to be substantially in the following form: [Face of Debentures] THIS DEBENTURE MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED, OR OTHERWISE HYPOTHECATED EXCEPT AS PERMITTED UNDER SECTION 10.06. OF THE INDENTURE REFERRED TO HEREIN. ANY ATTEMPTED SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER HYPOTHECATION OF THIS DEBENTURE NOT MADE IN ACCORDANCE WITH SUCH SECTION 10.06. AND ANY FORECLOSURE ON A PLEDGE OR HYPOTHECATION NOT MADE IN ACCORDANCE WITH SUCH SECTION 10.06., WILL RESULT IN TERMINATION OF THE CONVERSION RIGHT OF THIS DEBENTURE. SUCH CONVERSION RIGHT MAY NOT BE EXERCISED AT ANY TIME THAT THIS DEBENTURE IS PLEDGED OR OTHERWISE SERVES AS COLLATERAL FOR ANY LOAN. No._____________________________ $_____________________________ Issuance Date: _________________ Due Date: November 13, 2004 Conversion Price: $21.3125 per share 1 9 FIRST MISSISSIPPI CORPORATION 1994-1 SERIES CONVERTIBLE SUBORDINATED DEBENTURE FIRST MISSISSIPPI CORPORATION, a corporation duly organized and existing under the laws of the State of Mississippi (herein referred to as the "Company," which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to ________________________________________________________________, the principal sum of____________________________________________ Dollars at the office or agency of the Company in Jackson, Mississippi, on the Due Date referred to above, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest on said principal sum at a floating interest rate per annum (determined from time to time as provided in the Indenture) equal to 1% below the Prime Interest Rate (as defined in and pursuant to the Indenture) or the maximum legal rate under applicable law, if less, at either of said office or agency, from the Issuance Date referred to above, or from the most recent interest payment date to which interest has been paid or duly provided for; and such interest shall be payable (i) semi-annually on January 1 and July 1 of each year (each such date being referred to herein as an "Interest Payment Date"), commencing on the first Interest Payment Date following the date of original issuance, and (ii) on the Due Date referred to above, until payment of said principal sum has been made or duly provided for; and provided further, however, that payment of interest payable on any Interest Payment Date may be made by check mailed to the address of the person entitled thereto as such address shall appear on the register maintained by the Debenture registrar or to such other address as is designated by such holder in writing as provided below. The interest installment so payable on any Interest Payment Date will, subject to certain exceptions provided in the Indenture referred to on the reverse hereto, be paid to the person in whose name this Debenture (or any Debenture or Debentures evidencing the same debt) is registered at the close of business on the Record Date for such interest installment, at his address appearing on the Debenture register or such other address as is designated by such holder in writing received by the Company and the Debenture registrar prior to such Record Date, which Record Date shall be the day (whether or not a business day) next preceding such Interest Payment Date. The provisions of this Debenture are continued on the reverse hereof, and such continued provisions shall for all purposes have the same effect as though fully set forth at this time. 2 10 IN WITNESS WHEREOF, FIRST MISSISSIPPI CORPORATION has caused this Debenture to be executed in its corporate name by the manual or facsimile signature of its President or one of its Vice Presidents and impressed or imprinted with its corporate seal or facsimile thereof, attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries. FIRST MISSISSIPPI CORPORATION Attest: By: ------------------------------ ------------------------------- Secretary President [Corporate Seal] 3 11 [Reverse Side of Debenture] FIRST MISSISSIPPI CORPORATION 1994-1 SERIES CONVERTIBLE SUBORDINATED DEBENTURE This Debenture is one of a duly authorized issue of Debentures of the Company, designated as its 1994-1 Series Convertible Subordinated Debentures (herein referred to as the "Debentures"), limited to the aggregate principal amount of $21,312.50 all issued and to be issued under and pursuant to an Indenture dated as of November 14, 1994 (herein referred to as the "Indenture"), duly executed and delivered by the Company to Deposit Guaranty National Bank (herein referred to as the "Trustee," which term includes any Successor Trustee under the Indenture), to which Indenture and all indentures supplemental hereto reference is hereby made for a description of the respective rights thereunder of the Trustee, the Company and the holders of the Debentures. The indebtedness evidenced by the Debentures is, to the extent provided in the Indenture, subordinate and junior to the prior payment in full of the principal of and interest on all Senior Indebtedness, as defined in the Indenture, and this Debenture is issued subject to the provisions of the Indenture with respect thereto. Each holder of this Debenture, by accepting the same, agrees to be bound by such provisions of the Indenture and authorizes and directs the Trustee to take such action on his behalf as may be necessary or appropriate to acknowledge or effectuate the subordination of this Debenture as provided in the Indenture and appoints the Trustee his attorney-in-fact for any and all such purposes. Each holder of this Debenture, by accepting the same, agrees that each holder of Senior Indebtedness, whether created or acquired before or after the issuance of the Debentures, shall be deemed conclusively to have relied on such provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness. Subject to the provisions of the Indenture, at the option of the holder hereof, this Debenture or any portion hereof may, at any time more than six months after the date of the award of the debenture option pursuant to which the Debenture was purchased and at or before the close of business on the Due Date referred to on the face hereof, be converted at the principal amount hereof, or of such portion hereof, into fully paid and nonassessable shares of the Company's Series 1994-1 Convertible Preferred Stock (the "1994-1 Series Stock") at the Conversion Price per share set forth on the face hereof upon surrender of this Debenture to the Company at its office or agency in Jackson, Mississippi, accompanied by written notice of election to convert and, if so required by the Company, instruments of transfer in form satisfactory to the Company, duly executed by the registered 4 12 holder or by his duly authorized attorney. Fractional shares of 1992-1 Series Stock will not be issued upon any conversion, but an amount equal to the value of such fractional interest at the conversion price per share, will be paid in cash to the registered holder. Accrued interest on this Debenture through the day immediately preceding the date of conversion will be paid as provided in the Indenture. The Debentures may not be prepaid by the Company prior to the Due Date except as provided in Sections 3.01, 3.02, and 3.04 of the Indenture or at the election of the holder as provided in Section 3.05 of the Indenture. The Debentures are issuable as registered Debentures without coupons in denominations approved by the Company, such approval to be evidenced by the execution thereof. In the manner and subject to the limitations provided in the Indenture, Debentures are exchangeable, without charge except for any tax or other governmental charge imposed in connection therewith, for other Debentures of any other authorized denomination or denominations of an equal aggregate principal amount at the office or agency of the Company referred to on the face hereof. The Company, the Trustee, any paying agent, any conversion agent and any Debenture registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Debenture shall be overdue and notwithstanding any notation of ownership or other writing hereon by anyone other than the Company or any Debenture registrar), for the purpose of receiving payment of or on account of the principal hereof, and interest hereon, for the conversion hereof and for all other purposes, and neither the Company nor the Trustee nor any paying agent, conversion agent or Debenture registrar shall be affected by any notice to the contrary. In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture provides that in certain events such declaration and its consequences may be waived by the holders of a majority in aggregate principal amount of the Debentures then outstanding. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of the Debentures as the result of an Event of Default, the holders of a majority in aggregate principal amount of the Debentures at the time outstanding may on behalf of the holders of all of the Debentures waive any past default under the Indenture and its consequences except a default in the payment of the principal of or interest on any of the Debentures. Any such consent or waiver by the holder 5 13 of this Debenture (unless revoked as provided in the Indenture) shall be conclusive and binding upon such holder and upon all future holders and owners of this Debenture and any Debentures which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Debenture or such other Debentures. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less that 66-2/3% in aggregate principal amount of the Debentures at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Debentures; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Debentures, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof, or modify the provisions of the Indenture with respect to the subordination of the Debentures, or impair the right to convert the Debentures into 1994-1 Series Stock on the terms set forth in the Indenture, or change any place of payment where or the coin or currency in which any payment may be made, without the consent of the holder of each Debenture so affected, or (ii) reduce the aforesaid percentage of Debentures, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Debentures then outstanding. No reference herein to the Indenture and no provision of this Debenture or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Debenture at the time and place and at the rate and in the currency herein prescribed. No recourse for the payment of the principal of or interest on this Debenture, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any indenture supplemental thereto or in any Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. 6 14 This Debenture shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed by or on behalf of the Trustee. AND WHEREAS, the form of the Trustee's certificate of authentication to be endorsed on the face of said Debentures shall be substantially as follows: [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Debentures described in the within mentioned Indenture. DEPOSIT GUARANTY NATIONAL BANK, as Trustee By: ------------------------------------ Authorized Officer 7 15 AND WHEREAS, the form of conversion notice to appear on the reverse side of said Debenture shall be substantially as follows: [FORM OF CONVERSION NOTICE] To First Mississippi Corporation: The undersigned holder of this Debenture hereby irrevocably exercises the option to convert this Debenture or portion hereof below designated into shares of 1992-1 Series Stock of First Mississippi Corporation in accordance with the terms of the Indenture referred to in this Debenture, and directs that the shares and any payment for fractions thereof issuable and deliverable upon the conversion be issued in the name of and, unless otherwise indicated, delivered to the undersigned. Dated: --------------- - -------------------------------------------------------------------------------- Please print name and address (including zip code number) - -------------------------------------------------------------------------------- Signature of Debentureholder Please Insert Social Security or Other Identifying Number ----------------------- ----------------------- Portion to be converted (if less than all): $ --------------- AND WHEREAS, all acts and things necessary to make the Debentures, when executed by the Company and authenticated and delivered by the Trustee as in this Indenture provided, and issued, the valid, binding and legal obligations of the Company, and to constitute these presents a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issue hereunder of the Debentures have in all respects been duly authorized; 8 16 NOW, THEREFORE, THIS INDENTURE WITNESSETH: That in order to declare the terms and conditions upon which the Debentures are, and are to be, authenticated, issued and delivered, and in consideration of the premises, of the purchase and acceptance of the Debentures by the holders thereof and of the sum of One Dollar duly paid to it by the Trustee at the execution of these presents, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective holders from time to time of the Debentures, as follows: ARTICLE ONE DEFINITIONS SECTION 1.01. Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. All other terms used in this Indenture which are defined in the Trust Indenture Act of 1939 or which are by reference therein defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meaning assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this Indenture. Authorized Newspaper: The term "Authorized Newspaper" shall mean a newspaper printed in the English language, customarily published on each business day, of general circulation in Jackson, Mississippi. Board of Directors: The term "Board of Directors" shall mean the Board of Directors of the Company or the Executive Committee, if any, of such Board or such other committee of the Board of Directors as such Board shall designate. Board Resolution: A resolution adopted by the Board of Directors as certified by an officer of the Company. Common Stock: The term "Common Stock" shall mean the class of stock designated as Common Stock of the Company at the date of this 9 17 Indenture, or any other class of stock into which the Common Stock may hereafter be changed and into which the 1994-1 Series Stock is hereafter convertible. Company: The term "Company" shall mean First Mississippi Corporation, a Mississippi corporation, and, subject to the provisions of Article Thirteen, shall include its successors and assigns. Conversion Date: The term "Conversion Date" shall mean immediately prior to the close of business on the date on which notice of conversion provided in Section 5.03 hereof shall have been received in proper order for conversion by the Company and such Debenture shall have been surrendered as provided in Section 5.03 hereof. Corporation: The term "corporation" shall mean any corporation, voluntary association, joint stock association, business trust, or similar organization. Debenture or Debentures; Outstanding: The term "Debenture" or "Debentures" shall mean any debenture or debentures, as the case may be, authenticated and delivered under this Indenture. The term "outstanding," when used with reference to Debentures, shall, subject to the provisions of Section 10.04, mean, as of any particular time, all Debentures authenticated and delivered by the Trustee under this Indenture, except: (a) Debentures theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Debentures for the payment of which monies in the necessary amounts shall have been deposited in trust with the Trustee or with any paying agent (other than the Company), provided that, if such Debentures are to be redeemed or prepaid, notice of such redemption or prepayment has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (c) Debentures in lieu of or in substitution for which other Debentures shall have been authenticated and delivered pursuant to this Indenture. 10 18 Debentureholder: The term "Debentureholder," "holder of Debentures," or other similar terms, shall mean any person in whose name a particular Debenture shall be registered on the books of the Company kept for that purpose in accordance with the terms hereof. Due Date: The term "Due Date" shall mean November 13, 2004. Event of Default: The term "Event of Default" shall mean any event specified in Section 8.01, continued for the period of time, if any, therein designated. Indenture: The term "Indenture" shall mean this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented. Interest Payment Date: The term "Interest Payment Date" shall mean January 1 and July 1 of each year, commencing on July 1, 1995. Interest Rate: The term "Interest Rate" shall mean a percentage equal to 1% less than the Prime Interest Rate. Issuance Date: The term "Issuance Date" shall mean the date as of which a Debenture is issued to a Debentureholder. Officers' Certificate: The term "Officers' Certificate," when used with respect to the Company, shall mean a certificate signed by the Chairman of the Board of Directors or the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary of the Company. Each such certificate shall include the statements provided for in Section 16.06 if and to the extent required by the provisions of such Section. Opinion of Counsel: The term "Opinion of Counsel" shall mean an opinion in writing, signed by legal counsel who shall be satisfactory to the 11 19 Trustee and who may be an employee of, or of counsel to, the Company. Each such opinion shall include the statements provided for in Section 16.06 if and to the extent required by the provisions of such Section. Prime Interest Rate: The term "Prime Interest Rate" shall mean the rate of interest per annum publicly announced from time to time as its prime rate by Deposit Guaranty National Bank in Jackson, Mississippi, or, if such bank shall have ceased to publish a "prime rate," the term shall mean such other rate of interest per annum which such bank shall certify to the Company and the Trustee in writing is the interest rate per annum charged by such bank which is most closely equivalent to such "prime rate." Principal Office of the Trustee: The term "principal office of the Trustee," or other similar term, shall mean the principal office of the Trustee in Jackson, Mississippi, at which at any particular time its corporate trust business shall be administered. Record Date: The term "Record Date" shall mean the Record Date specified or determined as provided in Section 2.03 of this Indenture. Responsible Officer: The term "Responsible Officer," when used with respect to the Trustee, shall mean the Chairman or Vice-Chairman of the Board of Directors or Trustees, the Chairman or Vice-Chairman of the Executive Committee of the Board of Directors or Trustees, the President, the Chairman of the Trust Committee, any Vice President, the Secretary, the Treasurer, any Trust Officer, any Assistant Vice President, or any other officer or assistant officer of the Trustee customarily performing functions similar to those performed by the persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. The term "Responsible Officer," when used with respect to the Company, shall mean the Chairman of the Board of Directors, the President, any Vice President, the Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of the Company. 12 20 Senior Indebtedness: The term "Senior Indebtedness" shall mean all indebtedness for borrowed money (whether or not secured), heretofore or hereafter incurred by the Company (or heretofore or hereafter incurred by another person, including but not limited to a Subsidiary, and the repayment of which is guaranteed by the Company or which the Company is contingently obligated to repay, purchase, or otherwise acquire), unless the terms of this instrument evidencing such indebtedness specifically provide that such indebtedness is not superior in right of payment to the Debentures, and any deferrals, renewals or extensions of any such indebtedness; provided, however, that the term "indebtedness for borrowed money" shall not include indebtedness representing money borrowed by the Company from a Subsidiary; and provided, further, that the term "Senior Indebtedness" shall not include the Company's 1984-A Series Convertible Subordinated Debentures, its 1985-A Series Convertible Subordinated Debentures, its 1982-A Series Convertible Subordinated Debentures, its 1982-B Series Convertible Subordinated Debentures, its 1982-C Series Convertible Subordinated Debentures, its 1982-D Series Convertible Subordinated Debentures, its 1983-A Series Convertible Subordinated Debentures, its 1984-B Series Convertible Subordinated Debentures, its 1986-A Series Convertible Subordinated Debentures, its 1987-A Series Convertible Subordinated Debentures, its 1988-A Series Convertible Subordinated Debentures, its 1988-1 Series Convertible Subordinated Debentures, its 1989-A Series Convertible Subordinated Debentures, its 1989-1 Series Convertible Subordinated Debentures, its 1989-2 Series Convertible Subordinated Debentures, its 1990-1 Series Convertible Subordinated Debentures, its 1990-2 Series Convertible Subordinated Debentures, its 1991-1 Series Convertible Subordinated Debentures, its 1991-2 Series Convertible Subordinated Debentures, or its 1992-1 Series Convertible Subordinated Debentures. 1994-1 Series Stock: The term "1994-1 Series Stock" shall mean the series of the Company's preferred stock designated "1994-1 Series Convertible Preferred Stock," authorized at the date of execution of this Indenture, or any other class of stock resulting from successive changes or reclassifications of the 1994-1 Series Stock. The 1994-1 Series Stock is convertible into the Common Stock of the Company. Subsidiary or Subsidiaries: The term "Subsidiary" shall mean a corporation of which more than fifty percent of the issued and outstanding stock entitled to vote for the election of directors (otherwise than by 13 21 reason of default in dividends) is at the time owned or controlled, directly or indirectly, by the Company. Trustee: The term "Trustee" shall mean Deposit Guaranty National Bank, a national banking association organized under the laws of the United States and, subject to the provisions of Article Nine hereof, shall also include its successors and assigns as Trustee hereunder. Trust Indenture Act of 1939: The term "Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939 as it was in force at the date of execution of this Indenture and, with respect to each supplemental indenture hereto, as it was in force at the date of execution of such supplemental indenture. ARTICLE TWO ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF DEBENTURES SECTION 2.01. Designation, Amount and Issue of Debentures. The Debentures shall be designated as 1994-1 Series Convertible Subordinated Debentures. Debentures in the aggregate principal amount of $21,312.50 upon the execution of this Indenture, or from time to time thereafter, may be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Debentures to or upon the written order of the Company, signed by its Chairman of the Board, President or any Vice President and its Treasurer, Assistant Treasurer, Secretary or Assistant Secretary, without any further action by the Company hereunder. Interest on the unpaid principal amount of each Debenture shall be due and payable on each Interest Payment Date after the Issuance Date of such Debenture on an annualized basis at the Interest Rate in effect from time to time during the period or any part thereof as to which interest is payable on such Interest Payment Date. As soon as practicable after each Interest Payment Date occurring on or after the date of original issuance, the Company shall deliver an Officers' Certificate to the Trustee setting forth the Interest Rate or Interest Rates applicable to the interest payment period ending on such Interest Payment Date. As soon as practicable after each Interest Payment Date the Company will mail to the Debentureholders at their 14 22 addresses appearing on the Debenture register notice indicating the Interest Rate or Interest Rates applicable to the interest payment period ending on such Interest Payment Date. Interest shall be calculated on the basis of a 365 day year. Notwithstanding the foregoing, in no event will interest be payable on a Debenture to the extent it is in excess of the maximum allowable interest rate under applicable law. If the interest payable to any holder or holders of Debentures is to be calculated at a rate lower than the Interest Rate, the Company shall promptly deliver to the Trustee an Officers' Certificate certifying to the lower rate and an Opinion of Counsel that such interest rate is the maximum allowable interest rate under applicable law. Except as provided in Section 2.06, the aggregate principal amount of Debentures authorized by this Indenture is limited to the amount set forth in Section 2.01. Principal of and interest on the Debentures shall be payable in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts. SECTION 2.02. Form of Debentures. The Debentures and the certificate of authentication to be borne by the Debentures shall be substantially of the tenor and purport as in this Indenture above recited. Any of the Debentures may have imprinted thereon such legends or endorsements as the Board of Directors of the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation, or to conform to usage. SECTION 2.03. Denomination and Date of Debentures. The Debentures shall be issuable only as registered Debentures without coupons in such denominations as the Company shall approve, such approval to be evidenced by the execution thereof, and shall be numbered, lettered, or otherwise distinguished in such manner as the Company may deem appropriate and as is not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation, or to conform to usage. Every Debenture shall be dated the date of its authentication and shall bear interest from the Issuance Date or from the last Interest Payment Date to which interest has been paid. The interest installment on any Debenture which is payable on any Interest Payment date shall be paid to the person in whose name said Debenture (or any Debenture or Debentures 15 23 evidencing the same debt) is registered at the close of business on the Record Date for such interest installment at the address appearing on the Debenture register or to such other address as that person shall have notified the Company and the Debenture registrar in writing prior to such Record Date, except if and to the extent the Company shall default in the payment of the interest due on such Interest Payment Date, in which case such defaulted interest shall be paid to the persons in whose names outstanding Debentures are registered at the close of business on the business day next preceding the date of payment or at the option of the Company on a subsequent record date (which shall not be less than five business days preceding the date of payment of defaulted interest) established for such purpose by notice given by mail by or on behalf of the Company to the holders of the Debentures not less than fifteen days preceding such subsequent record date, provided that in the case of any defaulted interest on a Debenture converted subsequent to a Record Date, interest shall be paid to the registered holder of the converted Debenture on the date immediately prior to the Conversion Date. The term "Record Date" as used in this Indenture with respect to any Interest Payment Date shall mean the day (whether or not a business day) next preceding such Interest Payment Date. SECTION 2.04. Execution of Debentures. The Debentures shall be signed (manually or in facsimile) in the name and on behalf of the Company by its Chairman of the Board, President or one of its Vice Presidents under its corporate seal (which may be printed, engraved or otherwise reproduced thereon, by facsimile or otherwise) attested by the manual or facsimile signature of its Secretary or one of its Assistant Secretaries. Only such Debentures as shall bear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by manual signature by the Trustee, shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate upon any Debenture executed by the Company shall be conclusive evidence that the Debenture so authenticated has been duly authenticated and delivered hereunder and that the holder is entitled to the benefits of this Indenture. In case any officer of the Company who shall have signed any of the Debentures shall cease to be such officer before the Debentures so signed shall have been authenticated and delivered, or disposed of by the Company, such Debentures nevertheless may be authenticated and delivered or disposed of as though the person who signed such Debentures had not ceased to be such officer of the Company; and any Debenture may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Debenture, shall be the proper officers of the Company, although at the date of the execution of this Indenture any such person was not as officer. 16 24 At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Debentures executed by the Company to the Trustee for authentication; and the Trustee shall authenticate and deliver such Debentures as in this Indenture provided and not otherwise. SECTION 2.05. Registration, Registration of Transfer and Exchange of Debentures. The Company will keep at the office or agency to be maintained by the Company as provided in Section 6.02 a register or registers, in which, subject to such reasonable regulations as it may prescribe, it will register Debentures and any permitted transfers of Debentures. The Company shall serve as its own Debenture registrar until such time as another registrar may be appointed. Upon surrender for registration of any permitted transfer of any Debenture at any such office or agency, the Company shall execute and the Trustee shall authenticate and deliver in the name of the transferee or transferees a new Debenture or Debentures for a like aggregate principal amount of authorized denominations. Debentures may be exchanged for a like aggregate principal amount of other authorized denominations. Debentures to be exchanged shall be surrendered for that purpose at any office or agency to be maintained for such purpose by the Company as provided in Section 6.02, and the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor the Debenture or Debentures which the Debentureholder making the exchange shall be entitled to receive, bearing serial numbers not contemporaneously outstanding. All Debentures presented for registration of transfer, exchange, redemption or payment shall (if so required by the Company or the Trustee) be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company and to the Trustee duly executed by, the registered holder or his duly authorized attorney. Any registration of transfer or exchange shall be without charge, except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. The Company shall not be required to register the transfer of any Debenture not made in accordance with Section 10.06 hereof. SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In case any temporary or definitive Debenture shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon its request the Trustee shall 17 25 authenticate and deliver, a new Debenture, bearing a serial number not contemporaneously outstanding, in exchange and substitution for the mutilated Debenture or in lieu of and substitution for the Debenture so destroyed, lost or stolen. In every case, the applicant for a substituted Debenture shall furnish to the Company and to the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and to the Trustee evidence to their satisfaction of the destruction, loss or theft of such Debenture and of the ownership thereof. The Trustee shall authenticate any such substituted Debenture and deliver the same upon the written request or authorization of any Responsible Officer of the Company. Upon the issuance of any substituted Debenture, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses connected therewith. In case any Debenture which has matured or is about to mature shall have become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Debenture, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Debenture) if the applicant for such payment shall furnish the Company, the Trustee and any paying agent with such security or indemnity as they may require to save each of them harmless and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Debenture and of the ownership thereof. Every substituted Debenture issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Debenture shall be found at any time, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Debentures duly issued hereunder. All debentures shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Debentures and shall preclude (to the extent lawful) any and all other rights or remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Debentures. SECTION 2.07. Temporary Debentures. Pending the preparation of definitive Debentures, the Company may execute and the Trustee shall authenticate and deliver temporary Debentures. Temporary Debentures shall be issuable in any authorized denomination, and substantially in the form of the definitive Debentures but with such omissions, insertions and variations as 18 26 may be appropriate for temporary Debentures, all as may be determined by the officers of the Company, as evidenced by their execution thereof. Every such temporary Debenture shall be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with the same effect, as the definitive Debentures. Without unreasonable delay, the Company will execute and deliver to the Trustee definitive Debentures and thereupon any or all temporary Debentures may be surrendered in exchange therefor, at the principal office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Debentures an equal aggregate principal amount of definitive Debentures. Such exchange shall be made by the Company at its own expense and without any charge therefor except that the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Debenture shall in all respects be entitled to the same benefits under this Indenture as definitive Debentures authenticated and delivered hereunder. SECTION 2.08. Cancellation of Debentures. All Debentures surrendered for the purpose of payment, conversion, exchange or registration of transfer may, if surrendered to the Company or any paying or conversion agent, be delivered to the Trustee for cancellation or, if surrendered to the Trustee, shall be canceled by it, and no Debentures shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall, upon request of the Company, either deliver canceled Debentures or a certificate of destruction thereof to the Company. SECTION 2.09. Benefits of Indenture Provisions. Nothing in this Indenture or in the Debentures, expressed or implied, shall give or be construed to give any person, firm or corporation, other then the parties hereto and any paying agent, any conversion agent and the holders of Debentures and, to the extent provided in Article Four, the holders of Senior Indebtedness, any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all the covenants, conditions and provisions contained in this Indenture or in the Debentures being for the sole benefit of the parties hereto and any paying agent, any conversion agent and the holders of the Debentures and, to the extent provided in Article Four, the holders of Senior Indebtedness. SECTION 2.10. Maintenance of Office or Agency by Trustee. The Trustee will maintain an office or agency in Jackson, Mississippi where Debentures may be presented or 19 27 surrendered for payment of principal and interest or conversion and where notices and demands to or upon the Company in respect of the Debentures or of this Indenture may be served, which shall initially be located at One Deposit Guaranty Plaza, Jackson, Mississippi 39205. SECTION 2.11. Condition to Issuance of Debentures. The issuance of any Debenture hereunder upon exercise of a Debenture Option issued pursuant to the Company's 1988 Long Term Incentive Plan shall be conditioned upon the execution by the person who receives such Debenture of a written agreement agreeing that any of the Company's Convertible Preferred Stock issuable upon conversion of the Debenture shall not be transferable other than by will or the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Internal Revenue Code of 1986, as amended, or Title I of the Employee Retirement Income Security Act, or the rules thereunder. Such agreement may specifically provide that the designation of a beneficiary shall not constitute a prohibited transfer. ARTICLE THREE PREPAYMENT AND REDEMPTION OF DEBENTURES SECTION 3.01. Mandatory and Optional Prepayment of Debentures. (a) Upon termination of the conversion privilege of a particular Debenture pursuant to Section 5.02(a) hereof, the Company may at its sole option prepay such Debenture at any time thereafter, if the Company mails notice of prepayment not less than 30 nor more than 60 days prior to the date fixed for such prepayment to the Debentureholder at his last registered address, and the Trustee. Any Debenture which is prepaid pursuant to this Section 3.01(a) shall cease to bear interest from the date fixed for prepayment. Notice of prepayment pursuant to this Section 3.01(a) shall state (i) the prepayment date, (ii) the prepayment price, (iii) that the Debentures must be surrendered to the paying agent for payment and (iv) that interest on the Debentures ceases to accrue on and after the prepayment date. (b) Installments of interest which mature on or prior to the prepayment date shall be payable to the holders of such Debentures registered as such on the relevant Record Dates according to their terms and to the provisions of Section 2.03 hereof. SECTION 3.02. Redemption of Debentures. Providing all other debentures issued under the Plan are called on an Interest Payment Date the Debentures are redeemable at the Company's 20 28 option, on that same Interest Payment Date, in whole or in part, upon mailing a notice of redemption not less than 12 months prior to the date fixed for such redemption to the holder or holders of the Debentures to be redeemed at such holder's or holders' last registered addresses. Each Debenture is redeemable at a redemption price of 100% of the principal amount thereof, together with accrued interest to the date fixed for redemption. Installments of interest which mature on or prior to the redemption date shall be payable to the holders of such Debentures registered as such on the relevant Record Dates according to their terms and to the provisions of Section 2.03 hereof. The Debentureholder may convert its Debenture at any time prior to and on the redemption date, subject to the limitations on conversion privileges set forth in other provisions of this Indenture. At least 12 months but not more than 18 months before a redemption date, the Company shall mail a notice of redemption by first-class mail to each holder of the Debentures to be redeemed and to the Trustee. The notice shall state (i) the redemption date, (ii) the redemption price, (iii) if less than all outstanding Debentures are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Debentures to be redeemed, (iv) that the Debentures called for redemption may be converted at any time prior to and on the redemption date, (v) the conditions prerequisite to conversion of Debentures, (vi) that Debentures called for redemption must be surrendered to the paying agent to collect the redemption price, and (vii) that interest on the Debentures ceases to accrue on and after the redemption date. At the Company's request, the Trustee shall give notice of redemption in the Company's name and at its expense. Subject to the provisions of Section 3.01 hereof, once notice of redemption is mailed, the Debentures called for redemption become due and payable on the redemption date and at the redemption price, and upon surrender to the paying agent, such Debentures shall be paid at the redemption price, plus accrued interest to the redemption date. SECTION 3.03. Deposit of Monies for Redemption or Prepayment. Prior to any redemption or prepayment date, the Company shall deposit with the paying agent money sufficient to pay the redemption or prepayment price of and accrued interest on all Debentures to be redeemed or prepaid. The paying agent shall return to the Company any money not required for that purpose because of conversion of Debentures. If any Debenture called for redemption or prepayment shall not be so paid upon surrender thereof for redemption or prepayment, the principal shall, until paid, bear interest from 21 29 the redemption or prepayment date at the Interest Rate borne by the Debenture. SECTION 3.04. Limitation on Prepayment. Except as provided in Sections 3.01 and 3.02 hereof, no Debenture may be prepaid or redeemed by the Company prior to the Due Date without the written consent of the holder thereof. SECTION 3.05. Holder's Right to Elect Redemption. Commencing on the first Interest Payment Date occurring more than one year after the Issuance Date of any Debenture, the holder of such Debenture or such holder's legal successor may elect to have the Company redeem the Debenture on any Interest Payment Date, by surrender of the Debenture to the Company at least 10 days prior to such Interest Payment Date at the office of the Company, or at an office or agency established for such purpose, duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Company and accompanied by a written notice of election to receive payment of the Debenture. The amount of such payment shall be equal to the unpaid principal portion of the Debenture plus accrued but unpaid interest on the Debenture through the Interest Payment date. The Company shall hand deliver or mail by first class mail to the Debentureholder a check on the Interest Payment Date in payment of the amount due in redemption of the Debenture. ARTICLE FOUR SUBORDINATION OF DEBENTURES SECTION 4.01. Agreement That Debentures Be Subordinate. The Company covenants and agrees, and each holder of a Debenture issued hereunder by his acceptance thereof likewise covenants and agrees, that all Debentures issued hereunder shall be issued subject to the provisions of this Article Four; and each person holding any Debenture, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions. SECTION 4.02. Subordination to Senior Indebtedness. Anything in this Indenture or in any Debenture to the contrary notwithstanding, the indebtedness evidenced by each Debenture shall be subordinate and junior, to the extent and in the manner hereinafter set forth, to all Senior Indebtedness: (a) In the event of any insolvency or bankruptcy proceedings, and any receivership, liquidation, reorganization or other similar proceedings in connection therewith, relative to the Company or to its creditors, as such, or to its property, and in the event of any proceedings for voluntary liquidation, 22 30 dissolution, or other winding-up of the Company, whether or not involving insolvency or bankruptcy, then the holders of Senior Indebtedness shall be entitled to receive payment is full of all principal of and interest on all Senior Indebtedness, or to have provision made for such payment, before the holders of the Debentures are entitled to receive any payment on account of principal of or interest on the Debentures, and to that end (but subject to the power of a court of competent jurisdiction to make other equitable provisions reflecting the rights conferred by these subordination provisions upon the Senior Indebtedness and the holders thereof with respect to the subordinated indebtedness represented by the Debentures and the holders thereof by a lawful plan of reorganization under applicable bankruptcy law) the holders of Senior Indebtedness shall be entitled to receive for application in payment thereof any payment or distribution of any kind or character, whether in cash or property or securities, which may be payable or deliverable in any such proceedings in respect of the Debentures, except securities which are subordinate and junior in right or payment to the payment of all Senior Indebtedness then outstanding; (b) If any Senior Indebtedness matures by lapse of time, acceleration or otherwise, and is not immediately paid, refunded or replaced by new indebtedness, then all principal of, (and premium, if any) and interest on all such matured Senior Indebtedness shall first be paid in full, or such payment shall be duly provided for, before any payment on account of principal or interest is made upon, or acquisition is made of any of, the Debentures; (c) Each Debentureholder, by his acceptance of a Debenture issued hereunder (i) irrevocably authorizes and empowers (without imposing any obligation on) each holder of Senior Indebtedness (hereinafter in this clause (c) called a "Senior Holder") at the time outstanding and such Senior Holder's representatives to demand, sue for, collect, receive and receipt for such Debentureholder's ratable share of all payments and distributions in respect of the Debentures which are required to be paid or delivered to the Senior Holders as provided in clause (a) above, and to file and prove all claims therefor and take all such other action (including the right to vote such Debentureholder's ratable share of the Debentures) in the name of such Debentureholder or otherwise, as such Senior Holder or such Senior Holder's representatives may determine to be necessary or appropriate for the enforcement of clause (a) above, provided, however, that no action may be 23 31 taken by any Senior Holder or such Senior Holder's representatives pursuant to the authorization conferred by this item (i) of this clause (c) unless written notice shall have been given by such Senior Holder or such Senior Holder's representatives to a Debentureholder requesting such Debentureholder to take such action and such Debentureholder shall not have taken such action within 15 days after the giving of such notice; and (ii) agrees to execute and deliver to each Senior Holder and such Senior Holder's representatives all such further instruments confirming the above authorization, and all such powers of attorney, proofs of claim, assignments of claim and other instruments, and to take all such other action as may be requested by such Senior Holder or such Senior Holder's representatives in order to enable such Senior Holder to enforce all claims upon or in respect of such Debentureholder's ratable share of the Debentures. Notwithstanding any of the foregoing clauses (a) through (c) of this Section 4.02, nothing herein shall prevent the Company from prepaying any Debenture prior to the Due Date under circumstances when the provisions of clause (a) or clause (b) of this Section 4.02 shall not be applicable. SECTION 4.03. Payment to Holders of Senior Indebtedness of Certain Amounts Received by Debentureholders. In the event that, notwithstanding the provisions of Section 4.02 prohibiting such distribution or payment, any distribution of assets of the Company or payment by or on behalf of the Company of any kind or character, whether in cash, property or securities, to which the holders of the Debentures or the Trustee would be entitled but for the provisions of this Article Four prohibiting such distribution or payment, shall be received by the Trustee or the holders of the Debentures before the principal of and interest on all Senior Indebtedness is paid in full, or provision is made for its payment, such distribution or payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of such Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of the Senior Indebtedness held or represented by each, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay the principal of and interest on all such Senior Indebtedness in full, after giving effect to any concurrent distribution or payment, or provision therefor, from any source, to the holders of such Senior Indebtedness or their representatives or trustees. 24 32 SECTION 4.04. Notice to Trustee of Specified Events; Reliance on Certificate of Liquidating Agent. The Company shall give prompt written notice to the Trustee of any insolvency or bankruptcy proceeding in respect of the Company and of any proceedings for voluntary liquidation, dissolution or other winding up of the Company (whether or not involving insolvency or bankruptcy), within the meaning of Section 4.02(a), and of any event which pursuant to Section 4.02(b) would prevent payment by the Company on account of the principal of or interest on the Debenture. The Trustee, subject to the provisions of Section 9.01, shall be entitled to assume that no such event has occurred unless the Company, or a holder of Senior Indebtedness, or any trustee or representative therefor, has given such notice. The Trustee shall not be charged with knowledge of the curing of any event or of the elimination of the act or condition preventing any payment by the Company unless and until the Trustee shall have received an Officers' Certificate to such effect; and the Company shall deliver such an Officers' Certificate promptly after the curing of any such default or the elimination of any such act or condition. Upon any distribution of assets of the Company or payment by or on behalf of the Company referred to in this Article Four, the Trustee and the holders of the Debentures shall be entitled to rely upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 4.02(a) are pending, and the Trustee, subject to the provisions of Section 9.01 hereof, and the holders of the Debentures shall be entitled to rely upon a certificate of the liquidating trustee or agent or other person making any distribution to the Trustee or to the holders of the Debentures for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Four. In the event that the Trustee determines, in good faith, that further evidence is required with respect to the right of any person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article Four, the Trustee may request such person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such person, as to the extent to which such person is entitled to participate in such payment or distribution, and as to other facts pertinent to the rights of such person under this Article Four, and if such evidence is not furnished, the Trustee may defer any payment to such person pending judicial determination as to the right of such person to receive such payment. The Trustee, however, shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness but shall 25 33 have only such obligations to such holders as are expressly set forth in this Article Four. SECTION 4.05. Subrogation. Subject to the payment in full of the principal of and interest on all Senior Indebtedness, the holders of the Debentures (together with the holders of any other indebtedness of the Company which is subordinate in right of payment to the payment of other indebtedness of the Company, but is not subordinate in right of payment to the Debentures and by its terms grants such right of subrogation to the holders thereof) shall be subrogated to the rights of the holders of Senior Indebtedness to receive distributions of assets of the Company, or payments by or on behalf of the Company, made on the Senior Indebtedness, until the principal of and interest on the Debentures shall be paid in full; and, for the purpose of such subrogation, no distributions or payments to the holders of Senior Indebtedness of any cash, property or securities to which the holders of the Debentures or the Trustee would be entitled except for the provisions of this Article Four, and no payment over pursuant to the provisions of this Article Four to the holders of Senior Indebtedness by the holders of the Debentures or the Trustee shall, as between the Company, its creditors other than the holders of Senior Indebtedness and the holders of Debentures, be deemed to be a payment by the Company to or on account of Senior Indebtedness, it being understood that the provisions of this Article Four are, and are intended, solely for the purpose of defining the relative rights of the holders of the Debentures, on the one hand, and the holders of Senior Indebtedness, on the other hand. SECTION 4.06. Obligation to Pay Not Impaired. Nothing contained in this Article Four or elsewhere in this Indenture, or in the Debentures, is intended to or shall alter or impair, as between the Company, its creditors other than the holders of Senior Indebtedness, and the holders of the Debentures, the obligation of the Company, which is absolute and unconditional, to pay to the holders of the Debentures the principal of and interest on the Debentures at the time and place and at the rate and in the currency therein prescribed, or to affect the relative rights of the holders of the Debentures and creditors of the Company other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or the holder of any Debenture from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article Four of the holders of Senior Indebtedness to receive cash, property or securities otherwise payable or deliverable to the holders of the Debentures. SECTION 4.07. Reliance by Senior Indebtedness on Subordination Provisions. Each holder of any Debenture by his acceptance thereof acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an 26 34 inducement and a consideration to each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Debentures, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness, and such holder of Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness. SECTION 4.08. Certain Payments and Credits Permitted. Nothing contained in this Article Four or elsewhere in this Indenture, or in any of the Debentures, shall (a) affect the right of the Company to make or prevent the Company from making payment of the principal of or interest on the Debentures, or from depositing with the Trustee or any paying agent monies for such payments, not then contrary to the conditions described in Section 4.02, (b) prevent the application by the Trustee or any paying agent of any monies so deposited with it under this Indenture to the payment of or on account of the principal of or interest on the Debentures unless the Trustee has knowledge of a default on the Senior Indebtedness, or (c) prevent the retention by the holders of Debentures of monies so applied and paid to them on account of the principal of or interest on the Debentures, whether or not at the time of such application described in (b) or payment described in (c) payment of principal of or interest on the Debentures would then be precluded pursuant to Section 4.02. SECTION 4.09. Subordination Not to be Prejudiced by Certain Acts. No right of any present or future holder of any Senior Indebtedness of the Company to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act by any such holder, or by any noncompliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. SECTION 4.10. Trustee Authorized to Effectuate Subordination. Each holder of Debentures by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination as provided in this Article Four and appoints the Trustee his attorney-in-fact for any and all such purposes. SECTION 4.11. Trustee's Rights Regarding Senior Indebtedness Held By It, Etc. The Trustee shall be entitled to all the rights set forth in this Article Four in respect of any Senior Indebtedness at any time held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in Section 9.13 or elsewhere in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article Four 27 35 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 9.06 of this Indenture. SECTION 4.12. Trustee and Paying Agents Not Chargeable with Knowledge Until Notice. Notwithstanding any of the provisions of this Article Four or any other provision of this Indenture, the Trustee and any paying agent shall not at any time be charged with knowledge of the existence of any facts which would prohibit the making of any payment of monies to or by the Trustee or any paying agent, unless and until the Trustee or such paying agent, as the case may be, shall have received written notice thereof from the Company or a holder of Senior Indebtedness, or any trustee therefor; and, prior to the receipt of any such written notice, the Trustee, subject to the provisions of Section 9.01, and any paying agent shall be entitled to assume that no such facts exist. If at lease twenty-four hours prior to the date upon which by the terms hereof any such monies may become payable for any purpose (including, without limitations, the payment of either the principal of or the interest on any Debenture) the Trustee or paying agent, as the case may be, shall not have received with respect to such monies the notice provided for in this Section 4.12, then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such monies and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary which may be received by it on or after the commencement of such twenty-four hour period. SECTION 4.13. 1984-A, 1985-A, 1986-A, 1982-A, 1982-B, 1982-C, 1982-D, 1983-A, 1984-B, 1987-A, 1988-A, 1988-1, 1989-A, 1989-1, 1989-2, 1990-1, 1990-2, 1991-1, 1991-2 Series and 1992-1 Series Convertible Subordinated Debentures. Anything in this Indenture or in the Debentures to the contrary notwithstanding, the Debentures shall be neither subordinate nor superior in right of payment to the 1984-A Series Convertible Subordinated Debentures due 1994, issued by the Company under an Indenture dated as of August 17, 1984, or the 1985-A Series Convertible Subordinated Debentures due 1995, issued by the Company under an Indenture dated as of August 13, 1985, or the 1986-A Series Convertible Subordinated Debentures due 1996, issued by the Company under an Indenture dated as of August 11, 1986, or the 1982-A, 1982-B, 1982-C, 1982-D, 1983-A, 1984-B and 1987-A Series Convertible Subordinated Debentures due 1997, issued by the Company under an Indenture dated as of August 10, 1987, the 1988-A Series Convertible Subordinated Debentures due 1998, issued by the Company under an Indenture dated August 30, 1988, the 1988-1 Series Convertible Subordinated Debentures due 1998, issued by the Company under an Indenture dated November 29, 1988, the 1989-A Series Convertible Subordinated Debentures due 1999, issued by the Company under an Indenture dated August 22, 1989, or the 1989-1 Series Convertible Subordinated Debentures due 1999, issued by the Company under an Indenture dated August 22, 1989, or the 1989-2 28 36 Series Convertible Subordinated Debentures due 1999, issued by the Company under an Indenture dated November 10, 1989, or the 1990-1 Series Convertible Subordinated Debentures due 2000, issued by the Company under an Indenture dated August 27, 1990, or the 1990-2 Series Convertible Subordinated Debentures due 2000, issued by the Company under an Indenture dated November 9, 1990, or the 1991-1 Series Convertible Subordinated Debentures due 2001, issued by the Company under an Indenture dated August 27, 1991, the 1991-2 Series Convertible Subordinated Debentures due 2001, issued by the Company under an Indenture dated November 15, 1991 or the 1992-1 Series Convertible Subordinated Debentures due 2002, issued by the Company under an Indenture dated November 13, 1992, but shall rank pari passu in all respects with such 1984-A, 1985-A, 1986-A, 1982-A, 1982-B, 1982-C, 1982-D, 1983-A, 1984-B, 1987-A, 1988-A, 1988-1, 1989-A, 1989-1, 1989-2, 1990-1, 1990-2, 1991-1 and 1991-2 Series Convertible Subordinated Debentures. ARTICLE FIVE CONVERSION OF DEBENTURES SECTION 5.01. Conversion Privilege; Conversion Price. Subject to and upon compliance with the provisions of this Article Five, at the option of the holder thereof, any Debenture or portion thereof may, at any time more than six months after the date of the award of the debenture option pursuant to which the Debenture was purchased and at or before the close of business on the Due Date (or, in case such Debenture shall be called for redemption prior to the Due Date and the Company does not default in timely payment of the redemption price, then until the close of business on the date fixed for redemption) be converted at the principal amount thereof, or of such portion thereof, into fully paid and nonassessable whole shares of 1994-1 Series Stock, at the conversion price of $21.3125 per share (the "conversion price"). The conversion price shall not be subject to adjustment. Rights with respect to fractional share interests shall be governed by Section 5.04. SECTION 5.02. Conversion Period; Limitation on Exercise. The conversion privilege set forth in Section 5.01 shall also be limited as described below. (a) Pledge of Debentures. At any time that a Debenture is pledged or otherwise hypothecated as collateral for a loan to any person, the conversion privilege for that Debenture may not be exercised by any person. If such pledge or hypothecation is not made in compliance with Section 10.06 hereof, the conversion privilege for such Debenture shall simultaneously with such pledge or hypothecation wholly and permanently terminate. As soon as practicable, the Company shall give notice to the 29 37 Trustee and any conversion agent of such prohibited pledge or hypothecation. If such pledge or hypothecation is made in compliance with Section 10.06, the conversion privilege for that Debenture shall be exercisable upon receipt by the Company, the Trustee and the conversion agent from the Debentureholder and the person to whom the Debenture has been pledged or hypothecated of notice satisfactory to the Company that the pledge or hypothecation has been fully and completely discharged and released and no pledge or hypothecation of the Debenture has been substituted or has otherwise been created. If such pledge or hypothecation is made in compliance with Section 10.06 and the Debenture is transferred to a person foreclosing on such Debenture, the conversion privilege for such Debenture shall simultaneously with such foreclosure wholly and permanently terminate. Unless and until the Trustee and the conversion agent shall have received notice in writing of a prohibited pledge or hypothecation of the Debenture or a foreclosure, the Trustee and conversion agent shall be entitled in all respects to conclusively assume that no such pledge, hypothecation or foreclosure has taken place. (b) Suspension Pending Listing and/or Registration. Anything herein to the contrary notwithstanding, if at any time the Board of Directors determines, in its discretion, that the listing, registration, or qualification upon any securities exchange or under any state or Federal law of 1994-1 Series Stock into which the Debentures are convertible or of Common Stock into which the 1994-1 Series Stock is convertible, or that the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the issue of such shares, (1) the Company will in good faith and at its own expense as expeditiously as possible endeavor to secure such listing, registration, qualification, consent or approval, or take such other action, as the case may be, and (2) the conversion privilege of the Debentures may not be exercised in whole or in part until such listing, registration, qualification, consent or approval shall have been effected or obtained and the same shall have been free of any conditions not acceptable to the Board of Directors. In the case of any suspension of the conversion privilege pursuant to this Section 5.02(b) that occurs or will continue after the Debentures first become convertible, the Company shall promptly deliver to the Trustee and the conversion agent an Officers' Certificate stating that such suspension has occurred and the reason therefor and shall promptly mail notice of 30 38 such suspension and the reason therefor to the holders of the Debentures at their addresses as they appear on the Debenture register. Upon termination of any such suspension, the Company shall promptly deliver to the Trustee and the conversion agent an Officers' Certificate stating that such suspension has terminated and shall promptly mail notice thereof to the holders of the Debentures at their addresses as they appear on the Debenture register. (c) Effect of Suspension. Suspension of the right to exercise the conversion privilege shall not reduce any other rights under a Debenture. SECTION 5.03. Manner of Exercising Conversion Privilege. In order to exercise the conversion privilege, the holder of any Debenture to be converted shall surrender such Debenture to the Company at any office or agency maintained for that purpose pursuant to Section 2.10 or 6.02, accompanied by written notice to the Company at such office or agency that the holder elects to convert such Debenture or a specified portion thereof. Debentures surrendered for conversion shall, if so required by the Company or the Trustee, be duly endorsed by, or accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the registered holder or his duly authorized attorney. As promptly as practicable after the receipt of such notice and the surrender of such Debenture as aforesaid, the Company shall issue and shall deliver, at the office or agency at which such Debenture is surrendered or such other place as the holder designates in writing, to such holder (or, on his written order, in his name and for his benefit to some other person), a certificate or certificates for the number of shares of 1994-1 Series Stock issuable upon the conversion of such Debenture (or specified portion thereof), and a check in lieu of any fractional interest in accordance with the provisions of this Article Five. Such conversion shall be deemed to have been effected on the Conversion Date and at such time the rights of the holder of such Debenture as such Debentureholder shall cease and the person or persons in whose name or names any certificate or certificates for shares of 1994-1 Series Stock shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of the shares represented thereby. In the case of any Debenture which is converted in part only, upon such conversion the Company shall execute and the Trustee shall authenticate and deliver to or on the order of the holder thereof, at the expense of the Company, a new Debenture or Debentures of authorized denominations in principal amount equal to the unconverted portion of such Debenture. The conversion privilege of the Debenture converted in part shall apply to such new Debenture or Debentures. No partial conversion will be permitted if, following conversion, the remaining principal amount of the Debenture would be less than $1,000.00. 31 39 Interest will accrue on Debentures through the day immediately preceding the date of conversion and will be paid to the holder of the Debenture (or, on his written order, in his name and for his benefit to some other person) when his shares of 1992-1 Series Stock are delivered. SECTION 5.04. Fractional Shares. Shares of 1994-1 Series Stock shall be issued upon conversion of Debentures in whole shares only. If more than one Debenture shall be surrendered for conversion at one time by the same holder, the number of shares which shall be issuable upon conversion shall be computed on the basis of the aggregate principal amount of the Debentures (or specified portions thereof to the extent permitted hereby) so surrendered. If any fractional interest in a share would be deliverable upon conversion of any Debenture, the Company shall make an adjustment therefor by payment in the form of a check or cash equal in amount to the product obtained by multiplying the conversion price per share times such fractional interest. SECTION 5.05. Notice of Certain Corporate Action. In case: (a) the Company shall declare a dividend (or any other distribution) on its 1994-1 Series Stock or its Common Stock payable otherwise than in cash or other property out of its retained earnings; or (b) the Company shall authorize the granting to the holders of its 1994-1 Series Stock or its Common Stock of rights to subscribe for or purchase any shares of capital stock of any class or of any other rights; or (c) the Company shall authorize any reclassification of the 1992-1 Series Stock or the Common Stock of the Company (other than a subdivision or combination of its outstanding shares of Common Stock), or any consolidation or merger to which the Company is a party and for which approval of any stockholders of the Company is required, or the sale or transfer of all or substantially all of the assets of the Company; or (d) of the voluntary or involuntary dissolution, liquidation or winding up of the Company; then the Company shall cause to be filed at the office or offices or agency or agencies maintained for the purpose of conversion of Debentures pursuant to Section 2.10 and 6.02, and shall cause to be mailed to the Trustee and to holders of Debentures, at their last addresses as they shall appear upon the register provided for in Section 2.05, at least 20 days (or 10 days in any case specified in clause (a) or (b) above) prior to the applicable 32 40 record date hereinafter specified, a notice stating (i) the date on which a record is to be taken for the purpose of such dividend, distribution, rights or warrants, or, if a record is not to be taken, the date as of which the holders of its 1994-1 Series Stock or Common Stock, as the case may be, which are to be entitled to such dividend, distribution, rights or warrants are to be determined, or (ii) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that record holders of 1994-1 Series Stock or Common Stock, as the case may be, shall be entitled to exchange their shares of 1994-1 Series Stock or Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give notice or any defect therein shall not affect the legality or validity of any dividend, distribution, right, redistribution, charge, consolidation, merger, sale, or transfer. The Trustee shall have no duties with respect to any notice provided or given to it pursuant to this Section 5.05, except to exhibit the same to Debentureholders upon request. SECTION 5.06. Company to Reserve Stock. The Company shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued 1994-1 Series Stock, for the purpose of effecting the conversion of Debentures, the maximum number of shares of 1994-1 Series Stock then issuable upon the conversion of all outstanding Debentures, and if at any time the number of authorized but unissued shares of 1994-1 Series Stock shall not be sufficient to effect such conversions the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of 1994-1 Series Stock to such number of shares as shall be sufficient for such purpose. SECTION 5.07. Taxes on Conversions. The Company will pay any and all taxes (other than any income taxes) that may be payable in respect of the issue or delivery of shares of 1994-1 Series Stock on conversion of Debentures pursuant hereto. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of 1994-1 Series Stock in a name other than that of the holder of the Debenture or Debentures to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Company the amount of any such tax or has established, to the satisfaction of the Company, that such tax has been paid. SECTION 5.08. Covenant as to Stock. The Company covenants that all shares of 1994-1 Series Stock which may be issued upon conversion of Debentures, and all shares of Common Stock which may be issuable upon conversion of 1994-1 Series 33 41 Stock, will upon issue be duly and validly issued and fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof. SECTION 5.09. Provision in Case of Consolidation, Merger or Sale. In case of any consolidation of the Company with, or merger of the Company into, any other corporation or the merger of any other corporation into the Company (other than a merger in which the Company is the continuing corporation and in which no change is made in the outstanding 1994-1 Series Stock of the Company), or in case of any sale or transfer of all or substantially all of the assets of the Company, the corporation formed by such consolidation or the corporation which shall have acquired such assets or the Company (if another corporation shall have merged into the Company) as the case may be (the "Surviving Corporation"), shall execute and deliver to the Trustee a supplemental indenture providing that the holder of each Debenture then outstanding shall have the right thereafter (until the expiration of the conversion right of such Debenture) to convert such Debenture into the kind and amount of shares of stock, other securities, cash or other property receivable upon such consolidation, merger, sale or transfer by a holder of the number of shares of 1994-1 Series Stock of the Company into which such Debenture might have been converted immediately prior to such consolidation, merger, sale or transfer. The above provisions of this Section shall similarly apply to successive consolidations, mergers, sales or transfers. Notice of the execution of any such supplemental indenture shall be mailed by the Company at its cost and expense to the holders of the Debentures as soon as practicable after the execution of such supplemental indenture. Failure to give such notice, or any defects therein, shall not affect the legality or validity of any supplemental indenture. SECTION 5.10. Trustee's Disclaimer of Responsibility for Certain Matters. Neither the Trustee nor any conversion agent shall be accountable with respect to the validity or value (or the kind or amount) of any shares of 1994-1 Series Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any Debenture; and neither the Trustee nor any conversion agent makes any representation with respect thereto. Subject to the provisions of Section 9.01, neither the Trustee nor any conversion agent shall be responsible for any failure of the Company to issue, register or deliver any shares of 1994-1 Series Stock or stock certificates or other securities or property upon the surrender of any Debenture for the purpose of conversion or to comply with any of the covenants of the Company contained in this Article Five. Neither the Trustee nor the conversion agent has any duty to determine whether any provisions of a supplemental indenture pursuant to Section 5.09 are correct. 34 42 SECTION 5.11. Covenant as to Conversion Rights. The Company covenants and agrees that so long as any of the Debentures are outstanding, it will not amend its Certificate of Incorporation in any way which would adversely change the conversion rights of the 1994-1 Series Stock unless such amendment shall have been approved in writing by the holders of not less than sixty-six and two-thirds percent of all shares of 1994-1 Series Stock at the time outstanding and by the holders of not less than sixty-six and two-thirds percent of the aggregate principal amount of the Debentures at the time outstanding. ARTICLE SIX PARTICULAR COVENANTS OF THE COMPANY SECTION 6.01. Payment of Principal and Interest. The Company covenants and agrees that it will duly and punctually pay or cause to be paid the principal of and interest on each of the Debentures at the time and place and in the manner provided in the Debentures to or upon the written order of the holders thereof. SECTION 6.02. Office for Notices, Payments and Conversions. The Company covenants and agrees, so long as any of the Debentures remain outstanding, to maintain in Jackson, Mississippi, one or more offices or agencies where the Debentures may be presented for payment of principal and interest, for registration of transfer or exchange or for conversion and an office or agency where notices and demands to or upon the Company in respect of the Debentures or of this Indenture may be served. The Company will give to the Trustee notice of the location of any such offices or agencies and of any change of location thereof. In case the Company shall fail to maintain such office or agency or shall fail to give such notice of the location or of any change in the location thereof, presentations and demands may be made and notices may be served at the principal office of the Trustee. SECTION 6.03. Paying Agents. (a) Whenever the Company shall have one or more paying agents, it will, prior to each due date of the principal of or interest on any Debentures, deposit with such paying agent a sum sufficient to pay the principal or interest so becoming due. The Company will promptly notify the Trustee of its action or failure so to act. (b) Any paying agent appointed by the Company, other than the Trustee, shall be a bank or trust company of the character and with the qualifications set forth in Section 9.09, and the Company covenants and agrees to cause such paying agent to execute and deliver to the Trustee an instrument in which it shall agree with the Trustee, subject to the provisions of this Section, (1) 35 43 that such paying agent shall hold in trust for the benefit of the Debentureholders all sums held by such paying agent for the payment of the principal of or interest on any of the Debentures, (2) that such paying agent shall give to the Trustee notice of any failure by the Company (or any other obligor on the Debentures) to make any payment of the principal of or interest on the Debentures when the same shall be due and payable, and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent. (c) If the Company shall at any time act as its own paying agent, then on or before each due date of the principal of or interest on any of the Debentures, it will set aside and segregate and hold in trust for the benefit of the holders of the Debentures a sum sufficient to pay such principal or interest so becoming due, and will notify the Trustee of its action or of any failure to take such action. (d) Anything in this Section 6.03 to the contrary notwithstanding, the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay or cause to be paid to the Trustee all sums held in trust by it or any paying agent as required by this Section, such sums to be held by the Trustee upon the trusts herein contained. (e) Anything in this Section 6.03 to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 14.03 and 14.04 hereof. SECTION 6.04. Appointment to Fill a Vacancy in Office of Trustee. The Company, whenever necessary to avoid or fill a vacancy in the Office of Trustee, will appoint, in the manner provided in Section 9.10, a Trustee, so that there shall at all times be a Trustee hereunder. SECTION 6.05. Further Instruments and Acts. The Company will, upon request of the Trustee, execute and deliver such further instruments and do such further acts as may reasonably be necessary or proper to carry out more effectually the purposes of this Indenture. SECTION 6.06. Payment of Taxes; Maintenance of Corporate Existence; Maintenance of Properties; Property Insurance. (a) The Company will, and will cause each Subsidiary to, pay all taxes, assessments and governmental charges 36 44 lawfully levied or assessed upon it, upon its property or any part thereof, or upon its income or profits, or any part thereof, before the same shall become delinquent, and will duly observe and conform to all lawful requirements of any governmental authority relative to any of its property, and all covenants, terms and conditions upon or under which any of its property is held; and within four months after the accruing of any lawful claims or demands for labor, materials, supplies or other objects, which might become a lien or charge upon any of its property or the income therefrom, it will pay or cause to be discharged or make adequate provision to satisfy and discharge the same; provided that nothing in this Section 6.06 or elsewhere in this Indenture contained shall require the Company to observe or conform to any requirements of any governmental authority or to cause to be paid or discharged, or to make provision for, any such lien or charge or to pay any such tax, assessment or governmental charge so long as the validity thereof shall be contested in good faith; and provided further that neither the Company nor any Subsidiary shall be required to pay any such taxes, assessments or charges, if, in the judgment of the Board of Directors of the Company or such Subsidiary, such payment shall no longer be advantageous to the Company or such Subsidiary in the conduct of its business and nonpayment shall not be disadvantageous in any material respect to the Debentureholders. (b) Subject to the other provisions of this Indenture, the Company will, and will cause each Subsidiary to, maintain its corporate existence and right to carry on its business and duly procure all necessary renewals and extensions thereof and use its best efforts to maintain, preserve and renew all such rights, powers, privileges and franchises; provided, however, that nothing herein contained shall be construed to prevent the Company or Subsidiary from ceasing or omitting to exercise any right, power, privilege or franchise (including, in the case of a Subsidiary, the corporate existence thereof) which in the judgment of the Board of Directors of the Company or of such Subsidiary should not be exercised and which is not advantageous in any material respect to the Debentureholders. (c) The Company will, and will cause each Subsidiary to, keep and maintain all buildings, plants and other property owned or leased by it in such good condition, repair and working order and supplied with all such necessary equipment as in the judgment of the Company may be necessary, so that the business carried on in connection therewith may be properly and advantageously 37 45 conducted at all times; provided, however, that nothing in this Section 6.06 shall prevent the Company or a Subsidiary from selling, abandoning or otherwise disposing of any building, plant or property whenever in the opinion of the Company the retention thereof is inadvisable or not necessary to the business of the Company or such Subsidiary. (d) The Company will insure and keep insured, and will cause each Subsidiary to insure and keep insured, to a reasonable amount with reputable insurance companies, to the extent such insurance is reasonably available, so much of their respective properties as companies engaged in a similar business and to the extent such companies in accordance with good business practice customarily insure properties of a similar character against loss by fire and the extended coverage perils and other hazards. SECTION 6.07. Annual Review Certificate. The Company covenants and agrees to deliver to the Trustee, on or before a date not more than four months after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate, which shall conform to the provisions of Section 16.06, stating that a review of the activities of the Company and of its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such officer signing such certificate, that to the best of his knowledge the Company has kept, observed, performed and fulfilled each and every such covenant in this Indenture contained and is not in default in the performance and observance of any of the terms, provisions and conditions hereof (or, if the Company shall be in default, specifying all such defaults and the nature thereof of which he may have knowledge) and that to the best of his knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest on the Debentures is prohibited. SECTION 6.08. No Lien Created. This Indenture and the Debentures do not create a lien, charge, or encumbrance on any property of the Company or any Subsidiary. ARTICLE SEVEN DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE SECTION 7.01. Debentureholders' Lists. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee not more than 30 or less than 15 calendar days before an Interest Payment Date in each year and at such other 38 46 times as the Trustee may request in writing, within thirty days after receipt by the Company of any such request, a list in such form as the Trustee may reasonably require containing all information in the possession or control of the Company, and of any paying agents of the Company other than the Trustee, as to the names and addresses of the holders of Debentures obtained (in the case of each list other than the first list) since the date as of which the next previous list, if any, was furnished. Any such list may be dated as of a date not more than fifteen days prior to the time such information is furnished or caused to be furnished, and need not include information received after such date, but the list need not be furnished if the Trustee is the Debenture registrar. SECTION 7.02. Preservation and Disclosure of Lists. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Debentures (1) contained in the most recent list furnished to it as provided in Section 7.01 and (2) received by it in the capacity of Debenture registrar (if so acting) hereunder. The Trustee may (1) destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished, (2) destroy any information received by it as paying agent (if so acting) hereunder upon delivering to itself as Trustee, not earlier than forty-five days after an Interest Payment Date, a list containing the names and addresses of the holders of Debentures obtained from such information since the delivery of the next previous list, if any, and (3) destroy any list delivered to itself as Trustee which was compiled from information received by it as paying agent (if so acting) hereunder upon the receipt of a new list so delivered. (b) In case three or more holders of Debentures (hereinafter referred to as "applicants") apply in writing to the Trustee and furnish to the Trustee reasonable proof that each such applicant has owned a Debenture for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other holders of Debentures with respect to their rights under this Indenture or under the Debentures and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either 39 47 (1) afford such applicants access to the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 7.02, or (2) inform such applicants as to the approximate number of holders of Debentures whose names and addresses appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 7.02, and as to the approximate cost of mailing to such Debentureholders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Debentureholder whose name and address appears in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 7.02, a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender the Trustee shall mail to such applicants and file with the Securities and Exchange Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interests of the holders of Debentures or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If said Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, said Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such Debentureholders with reasonable promptness after the entry of such order and the renewal of such tender; if no such order is entered by said Commission, the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Each and every holder of the Debentures, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee 40 48 nor any paying agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the holders of Debentures in accordance with the provisions of subsection (b) of this Section 7.02, regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under said subsection (b). SECTION 7.03. Reports by the Company. (a) The Company covenants and agrees to file with the Trustee, within fifteen days after the Company is required to file the same with the Securities and Exchange Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as said Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with said Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and said Commission, in accordance with rules and regulations prescribed from time to time by said Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations. (b) The Company covenants and agrees to file with the Trustee and the Securities and Exchange Commission, in accordance with the rules and regulations prescribed from time to time by said Commission, any additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations. (c) The Company covenants and agrees to transmit by mail to all holders of Debentures, as the names and addresses of such holders appear upon the registry books of the Company, within thirty days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section 7.03 as may be required by rules and 41 49 regulations prescribed from time to time by the Securities and Exchange Commission, except insofar as such summaries, documents or reports have previously been furnished to such Debentureholder. (d) The Company covenants and agrees to transmit by mail to all holders of Debentures, as the names and addresses of such holders appear on the registry books of the Company, and to furnish to the Trustee annually within 120 days after the end of each fiscal year of the Company, beginning with the fiscal year ending June 30, 1988, a copy of the consolidated balance sheet of the Company and its consolidated subsidiaries as at the end of its annual accounting period and a consolidated profit and loss statement of the Company and its consolidated subsidiaries for such period, prepared in accordance with generally accepted accounting principles and accompanied by the certificate of a firm of independent public accountants. SECTION 7.04. Reports by the Trustee. (a) If this Indenture has been qualified under the Trust Indenture Act of 1939, then on or before July 15 in every year thereafter, so long as any Debentures are outstanding hereunder, the Trustee shall transmit to the Debentureholders as hereinafter in this Section 7.04 provided, a brief report dated as of May 15 of the year in which such report is made with respect to: (1) its eligibility under Section 9.09, and its qualification under Section 9.08, or in lieu thereof, if to the best of its knowledge it has continued to be eligible and qualified under such Sections, a written statement to such effect; (2) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report, and for the reimbursement of which it claims or may claim a lien or charge prior to that of the Debentures, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to state such advances if such advances so remaining unpaid aggregate not more than one-half of one per cent of the principal amount of the Debentures outstanding on the date of such report; 42 50 (3) the amount, interest rate, and maturity date of all other indebtedness owing by the Company (or by any other obligor on the Debentures) to the Trustee in its individual capacity, on the date of such report, with a brief description of any property held as collateral security therefor, except an indebtedness based upon a creditor relationship arising in any manner described in paragraphs (2), (3), (4) or (6) of subsection (b) of Section 9.13; (4) the property and funds, if any, physically in the possession of the Trustee, as such, on the date of such report; and (5) any action taken by the Trustee in the performance if its duties under this Indenture which it has not previously reported and which in its opinion materially affects the Debentures, except action in respect of a default, notice of which has been or is to be withheld by it in accordance with the provisions of Section 8.08. (b) If this Indenture has been qualified under the Trust Indenture Act of 1939, the Trustee shall transmit to the Debentureholders, as hereinafter provided, a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such), since the date of the last report transmitted pursuant to the provisions of subsection (a) of this Section 7.04 (or if no such report has yet been so transmitted, since the date of execution of this Indenture), for the reimbursement of which it claims or may claim a lien or charge prior to that of the Debentures on property or funds held or collected by it as Trustee, and which it has not previously reported pursuant to this subsection, except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate ten per cent or less of the principal amount of Debentures outstanding at such time, such report to be transmitted within ninety days after such time. (c) Reports pursuant to this Section 7.04 shall be transmitted by mail to all holders of Debentures, as the names and addresses of such holders appear upon the registry books of the Company. 43 51 (d) A copy of any such report shall, at the time of such transmission to Debentureholders, be filed by the Trustee with each stock exchange upon which the Debentures are listed and also with the Securities and Exchange Commission. The Company will notify the Trustee when the Debentures are listed on any stock exchange. ARTICLE EIGHT REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON EVENT OF DEFAULT SECTION 8.01. Event of Default. In case one or more of the following Events of Default shall have occurred and be continuing, that is to say: (a) default in the payment of any installment of interest upon any of the Debentures as and when the same shall become due and payable, whether or not such payment is prohibited by the provisions of Article Four, and continuance of such default for a period of thirty days; or (b) default in the payment of the principal of any of the Debentures as and when the same shall become due and payable either at maturity, by declaration or otherwise, and in each case whether or not such payment is prohibited by the provisions of Article Four; or (c) failure on the part of the Company duly to observe or perform any other of its covenants or agreements contained in the Debentures or in this Indenture for a period of sixty days after the date on which written notice of such failure, specifying such default and requiring the same to be remedied, shall have been given to the Company by the Trustee, or to the Company and the Trustee by the holders of at least twenty-five per cent in principal amount of the Debentures at the time outstanding; or (d) an event of default as defined in any indenture or instrument evidencing or under which the Company has at the date of this Indenture or shall hereafter have outstanding any indebtedness for money borrowed by the Company shall have happened and shall be continuing and such indebtedness shall have been accelerated so that the same shall be or become due and payable prior to the date on which the same would otherwise become due and payable, and such acceleration shall not be contested in good faith by the Company, and such acceleration shall 44 52 not be rescinded or annulled, or such indebtedness shall not have been discharged, or there shall not have been deposited in trust a sum of money sufficient to discharge in full such indebtedness, within ten days after written notice of such acceleration to the Company from the Trustee or to the Company and the Trustee from the holders of not less than twenty-five per cent in aggregate principal amount of the Debentures then outstanding hereunder; provided, however, that if such event of default under such indenture or instrument shall be remedied or cured by the Company or be waived by the holders of such indebtedness in any manner authorized by such indenture or instrument or shall otherwise cease to exist, then the Event of Default hereunder by reason thereof shall be deemed likewise to have been thereupon remedied, cured or waived without further action upon the part of either the Trustee or any of the Debentureholders; and provided further that the Trustee, subject to Section 9.01, shall not be charged with knowledge of any such default unless written notice of such default shall have been given to the Trustee by the Company, by the Trustee then acting under any indenture or other instrument under which such default shall have occurred, or by the holders of at least five per cent in aggregate principal amount of the Debentures at the time outstanding; or (e) the entry of a decree or order for relief by a court having jurisdiction in the premises in respect of the Company in an involuntary case under the Federal Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of sixty consecutive days; or (f) the commencement by the Company of a voluntary case under the Federal Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Company to the entry of an order for relief in an involuntary case under any such law, or the consent by the Company to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making 45 53 by the Company of an assignment for the benefit of creditors; then and in each and every such case, unless the principal of all of the Debentures shall have already become due and payable, either the Trustee or the holders of not less than twenty-five per cent in aggregate principal amount of the Debentures then outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by Debentureholders), may declare the principal of all the Debentures to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, notwithstanding anything to the contrary contained in this Indenture or in the Debentures. This provision, however, is subject to the condition that if at any time after the principal of the Debentures shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to pay all matured installments of interest upon all of the Debentures and the principal of any and all Debentures which shall have become due otherwise than by acceleration (with interest on such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the rate borne by the Debentures, through the day preceding the date of such payment or deposit) and such amount as shall be sufficient to cover reasonable compensation to the Trustee, its agents, attorneys and counsel, and all other expenses and liabilities incurred and all advances made by the Trustee, except as the result of its negligence or bad faith, and any and all defaults under this Indenture, other than the nonpayment of principal and accrued interest on Debentures which shall have become due by acceleration, shall have been remedied -- then and in every such case the holders of a majority in aggregate principal amount of the Debentures then outstanding, by written notice to the Company and to the Trustee, may waive all defaults and rescind and annul such declaration and its consequences; but no such waiver or rescission and annulment shall extend to or shall affect any subsequent default, or shall impair any right consequent thereon. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every case, subject to any determination in such proceeding, the Company, the Trustee and the Debentureholders shall be restored respectively to their several positions and rights hereunder, and thereafter all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceeding had been taken. 46 54 SECTION 8.02. Payment of Debentures on Default; Suit Therefor. The Company covenants that (1) in case default shall be made in the payment of any installment of interest upon any of the Debentures as and when the same shall become due and payable, and such default shall have continued for a period of thirty days, or (2) in case default shall be made in the payment of the principal of any of the Debentures as and when the same shall have become due and payable, whether at maturity of the Debentures or upon redemption or by declaration or otherwise -- then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Debentures, the whole amount that then shall have become due and payable on all such Debentures for principal or interest, or both, as the case may be, with interest upon the overdue principal and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate borne by the Debentures, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including a reasonable compensation to the Trustee, its agents, attorneys, and counsel, and any expenses or liabilities incurred by the Trustee hereunder other than through its negligence or bad faith. In case the Company shall fail forthwith to pay such amounts upon such demand, the Trustee, in its own name and as trustee of an express trust, shall then be entitled and empowered to institute any actions or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or any other obligor on the Debentures and collect in the manner provided by law out of the property of the Company or any other obligor on the Debentures wherever situated the monies adjudged or decreed to be payable. In case there shall be pending any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor on the Debentures, its or their creditors, as such, or its or their property, the Trustee, irrespective of whether the principal of the Debentures shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand pursuant to the provisions of this Section 8.02, shall be entitled and empowered, by the intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Debentures, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and of the Debentureholders allowed in such judicial proceedings relative to the Company or any other obligor on the Debentures, 47 55 its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of its charges and expenses; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the Debentureholders to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to the Debentureholders, to pay to the Trustee any amount due it for compensation and expenses, including counsel fees incurred by it up to the date of such distribution. To the extent that such payment of reasonable compensation, expenses and counsel fees out of the estate in any such proceedings shall be denied for any reason, payment of the same shall be secured by a lien on, and shall be paid out of, any and all distributions, dividends, monies, securities and other property which the holders of the Debentures may be entitled to receive in such proceedings, whether in liquidation or under any plan of reorganization or arrangement or otherwise. All rights of action and of asserting claims under this Indenture, or under any of the Debentures, may be enforced by the Trustee without the possession of any of the Debentures, or the production thereof on any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be bought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the holders of the Debentures, subject to the provisions of Article Four. SECTION 8.03. Application of Monies Collected by Trustee. Subject to the provisions of Article Four, any monies collected by the Trustee pursuant to Section 8.02 shall be applied in the order following, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Debentures, and stamping thereon the payment, if only partially paid, and upon surrender thereof if fully paid: First: To the payment of costs and expenses of collection and reasonable compensation to the Trustee, its agents, attorneys and counsel, and of all other expenses and liabilities incurred, and all advances made, by the Trustee except as a result of its negligence or bad faith; Second: In case the principal of the outstanding Debentures shall not have become due and be unpaid, to the payment of interest on the Debentures, in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee) upon the overdue installments of interest at the same rate as the rate borne by the 48 56 Debentures, such payments to be made ratably to the persons entitled thereto, without discrimination or preference; and Third: In case the principal of the outstanding Debentures shall have become due, by declaration or otherwise, to the payment of the whole amount then owing and unpaid upon the Debentures for principal and interest, with interest on the overdue principal; and (to the extent that such interest has been collected by the Trustee) upon overdue installments of interest at the rate borne by the Debentures; and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Debentures, then to the payment of such principal and interest without preference or priority of principal over interest, or of interest over principal, or of any installment of interest over any other installment of interest, or of any Debenture over any other Debenture, ratably to the aggregate of such principal and accrued and unpaid interest; and Fourth: To the payment of the remainder, if any, to the Company, its successors or assigns, or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. SECTION 8.04. Proceedings by Debentureholders. No holder of any Debenture shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless such holder previously shall have given to the Trustee written notice of default and of the continuance thereof, as hereinbefore provided, and unless also (i) the holders of not less than twenty-five per cent in aggregate principal amount of the Debentures then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and (ii) the holders making such request shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, (iii) the Trustee for sixty days after its receipt of such notice, request and offer of indemnity shall have neglected or refused to institute any such action, suit or proceeding, and (iv) no direction inconsistent with such written request shall have been given to the Trustee during such sixty day period by the holders of a majority in principal amount of the Debentures then outstanding; it being understood and intended,and being expressly covenanted by the taker and holder of every Debenture with every other taker and holder and the Trustee, that 49 57 no one or more holders of Debentures shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other holder of such Debentures, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Debentures. Notwithstanding any other provisions in this Indenture, but subject to the provisions of Article Four, the right of any holder of any Debenture to receive payment of the principal and interest on such Debenture, on or after the respective due dates expressed in such Debenture, or to institute suit for the enforcement of any such payment on or after such respective dates against the Company, shall not be impaired or affected without the consent of such holder; provided, however, that the provisions of this Section 8.04 are subject to the provisions of Article Four. SECTION 8.05. Proceedings by Trustee. In case of an Event of Default hereunder the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law. SECTION 8.06. Remedies Cumulative and Continuing. All powers and remedies given by this Article Eight to the Trustee or to the Debentureholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the holders of the Debentures by judicial proceedings or otherwise to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any holder of any of the Debentures to exercise any right or power accruing upon any default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or an acquiescence therein; and, subject to the provisions by Section 8.04, every power and remedy given by this Article Eight or by law to the Trustee or to Debentureholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Debentureholders. SECTION 8.07. Direction of Proceedings and Waiver of Defaults by Majority of Debentureholders. The holders of a 50 58 majority in aggregate principal amount of the Debentures at the time outstanding determined subject to the provisions of Section 10.04 shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee; provided, however, that the Trustee, subject to the provisions of Section 9.01, shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve it in a personal liability or would be in conflict with any rule of law or provision of this Indenture; and provided further, that nothing in this Indenture contained shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction by Debentureholders. Prior to any declaration accelerating the maturity of the Debentures, the holders of a majority in aggregate principal amount of the Debentures at the time outstanding determined subject to the provisions of Section 10.04 may on behalf of the holders of all of the Debentures waive any past default or Event of Default hereunder and its consequences, except by default in the payment of interest on the principal of any of the Debentures or in respect of a covenant or provision hereof which under Article Twelve cannot be modified or amended without the consent of the holder of each Debenture affected. Upon any such waiver, the Company, the Trustee and the holders of the Debentures shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. Whenever any default or Event of Default hereunder shall have been waived as permitted by this Section 8.07, said default or Event of Default shall for all purposes of the Debentures and this Indenture be deemed to have been cured and to be not continuing. SECTION 8.08. Notice of Defaults. The Trustee shall, within ninety days after the occurrence of a default, mail to all holders of Debentures, as the names and addresses of such holders appear upon the registry books of the Company, notice of all defaults known to the Trustee, unless such defaults shall have been cured or waived before the giving of such notice (the term "defaults" for the purposes of this Section 8.08 being hereby defined to be the events specified in clauses (a), (b), (c), (d), (e) and (f) of Section 8.01, not including any periods of grace provided for in said clauses (a), (c), (d) and (e) and irrespective of the giving of written notice provided for in said clauses (c) and (d)); provided, that, except in the case of default in the payment of the principal of or interest on any of the Debentures, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee, or a trust committee of directors and/or Responsible 51 59 Officers of the Trustee in good faith determine that the withholding of such notice is in the interests of the Debentureholders. SECTION 8.09. Undertaking to Pay Costs. All parties to this Indenture agree, and each holder of any Debenture by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 8.09 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Debentureholder, or group of Debentureholders, holding in the aggregate more than ten per cent in aggregate principal amount of the Debentures outstanding, or to any suit instituted by any Debentureholder for the enforcement of the payment of the principal of or interest on any Debenture against the Company on or after the due date expressed in such Debenture. SECTION 8.10. Enforcement of Conversion Rights. Anything in this Indenture to the contrary notwithstanding, the holder of any Debenture, without reference to and without the consent of either the Trustee or the holder of any other Debenture, in his own behalf and for his own benefit may enforce, and may institute and maintain any proceedings suitable to enforce, his right to convert his Debenture into 1994-1 Series Stock as provided in Article Five. SECTION 8.11. Waiver of Stay, Extension, or Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension, or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay, or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 52 60 ARTICLE NINE CONCERNING THE TRUSTEE SECTION 9.01. Duties and Liabilities of Trustee. The Trustee prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. No implied covenants or obligations shall be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured) the Trustee shall exercise such of the rights and powers invested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provisions of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct of its own affairs, except that (a) prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred: (1) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (b) The Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; and (c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith 53 61 in accordance with the direction of the holders of not less than a majority in principal amount of the Debentures at the time outstanding determined as provided in Section 10.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its right or powers, if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it. SECTION 9.02. Reliance on Documents and Counsel. Except as otherwise provided in Section 9.01: (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, coupon, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors of the Company may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company; (c) The Trustee may consult with counsel and any written advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Debentureholders, pursuant to the provisions of this Indenture, unless such Debentureholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; 54 62 (e) The Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (f) Prior to the occurrence of an Event of Default hereunder and after the curing of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, coupon or other paper or document, unless requested in writing so to do by the holders of a majority in aggregate principal amount of the Debentures then outstanding determined subject to the provisions of Section 10.04; provided, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is not, in the opinion of the Trustee, reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expense or liability as a condition to so proceeding; the reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys. The Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. SECTION 9.03. No Responsibility for Recitals or Certain Other Matters. The recitals contained herein and in the Debentures (except in the Trustee's certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Debentures. The Trustee shall not be accountable for the use or application by the Company of any Debentures or the proceeds of any Debenture. SECTION 9.04. Trustee, Paying Agent, Conversion Agent or Registrar May Own Debentures. The Trustee or any paying agent, conversion agent or Debenture registrar, in its individual or any other capacity, may become the owner or pledgee of Debentures with the same rights it would have if it were not Trustee, paying agent, conversion agent or Debenture registrar. 55 63 SECTION 9.05. Monies to be Held in Trust. Subject to the provisions of Article Four and Section 14.04 hereof, all monies received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. The Trustee shall be under no liability for interest on any monies received by it hereunder except such as it may agree with the Company to pay thereon. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. So long as no Event of Default shall have occurred and be continuing, all interest allowed on any such monies shall be paid from time to time upon the written order of the Company, signed by its President or any Vice President or its Treasurer or an Assistant Treasurer. SECTION 9.06. Compensation and Expenses of Trustee. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expense and disbursement of its counsel and of all persons not regularly in its employ) except any such expenses, disbursements or advance as may arise from its negligence or bad faith. The Company also covenants to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability in the premises. The obligations of the Company under this Section 9.06 to compensate the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder, and such additional indebtedness shall be secured by a lien prior to that of the Debentures upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of or interest on Debentures. SECTION 9.07. Officers' Certificate as Evidence. Except as otherwise provided in Section 9.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such Certificate, in the absence of 56 64 negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof. SECTION 9.08. Conflicting Interest of the Trustee. (a) If the Trustee has or shall acquire any conflicting interest, as defined in this Section 9.08, it shall, within ninety days after ascertaining that it has such conflicting interest, either eliminate such conflicting interest, or resign in the manner and with the effect specified in Section 9.10. (b) In the event that the Trustee shall fail to comply with the provisions of subsection (a) of this Section 9.08, the Trustee shall, within ten days after the expiration of such ninety-day period, transmit notice of such failure by mail to all holders of Debentures, as the names and addresses of such holders appear upon the registration books of the Company. (c) For the purposes of this Section 9.08, the Trustee shall be deemed to have a conflicting interest if (1) the Trustee is trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the Company are outstanding, unless such other indenture is a collateral trust indenture under which the only collateral consists of Debentures issued under this Indenture; provided, however, that there shall be excluded from the operation of this paragraph: (A) the Indenture dated as of August 17, 1984 with Deposit Guaranty National Bank, as Trustee, under which the Company's 1984-A Series Convertible Subordinated Debentures are outstanding, (B) the Indenture dated as of August 13, 1985 with Deposit Guaranty National Bank, as Trustee, under which the Company's 1985-A Series Convertible Subordinated Debentures are outstanding, (C) the Indenture dated as of August 11, 1986 with Deposit Guaranty National Bank, as Trustee, under which the Company's 1986-A Series Convertible Subordinated Debentures are outstanding and (D) the Indenture dated as of August 10, 1987 with Deposit Guaranty National Bank, as Trustee, under which the Company's 1982-A, 1982-B, 1982-C, 1982-D, 1983-A, 1984-B and 1987-A Series Convertible Subordinated Debentures are outstanding, (E) the Indenture dated as of August 30, 1988 with Deposit Guaranty National Bank as Trustee, under which 57 65 the Company's 1988-A Series Convertible Subordinated Debentures are outstanding, (F) the Indenture dated as of November 29, 1988 with Deposit Guaranty national Bank as Trustee, under which the Company's 1988-1 Series Convertible Subordinated Debentures are outstanding, (G) the Indenture dated as of August 22, 1989 with Deposit Guaranty National Bank as Trustee, under which the Company's 1989-A Series Convertible Subordinated Debentures are outstanding, (H) the Indenture dated as of August 22, 1989 with Deposit Guaranty National Bank as Trustee, under which the Company's 1989-1 Series Convertible Subordinated Debentures are outstanding, (I) the Indenture dated as of November 10, 1989 with Deposit Guaranty National Bank as Trustee, under which the Company's 1989-2 Series Convertible Subordinated Debentures are outstanding, (J) the Indenture dated as of August 27, 1990 with Deposit Guaranty National Bank as Trustee, under which the Company's 1990-1 Series Convertible Subordinated Debentures are outstanding, (K) the Indenture dated as of November 9, 1990 with Deposit Guaranty National Bank as Trustee, under which the Company's 1990-2 Series Convertible Subordinated Debentures are outstanding, (L) the Indenture dated as of August 27, 1991 with Deposit Guaranty National Bank as Trustee, under which the Company's 1991-1 Series Convertible Subordinated Debentures are outstanding, (M) the Indenture dated as of November 15, 1991, with Deposit Guaranty National Bank as Trustee, under which the Company's 1991-2 Series Convertible Subordinated Debentures are outstanding, (N) the Indenture dated as of November 13, 1992, with Deposit Guaranty National Bank as Trustee, under which the Company's 1992-1 Series Convertible Subordinated Debentures are outstanding, (O) any other indenture or indentures under which other securities, or certificates of interest or participation in other securities, of the Company are outstanding if (i) this Indenture and such other indenture or indentures are wholly unsecured and such other indenture or indentures are hereafter qualified under the Trust Indenture Act of 1939, unless the Securities and Exchange Commission shall have found and declared by order pursuant to subsection (b) of Section 305 or subsection (c) of Section 307 of the Trust Indenture Act of 1939 that differences exist between the provisions of this Indenture and the provisions of such other indenture or indentures which are so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as 58 66 such under this Indenture and such other indenture or indentures, or (ii) the Company shall have sustained the burden of proving, on application to the Securities and Exchange Commission and after opportunity for hearing thereon, that the trusteeship under this Indenture and such other indenture is not so likely to involve a material conflict of interest as to make it necessary in the public interest or for the protection of investors to disqualify the Trustee from acting as such under one of such indentures, or (iii) such other indenture or indentures contain substantially the same terms as this Indenture and such other indenture or indentures and this Indenture are exempt from qualification under the Trust Indenture Act of 1939. (2) The Trustee or any of its directors or executive officers is an obligor upon the Debentures issued under this Indenture or an underwriter for the Company; (3) the Trustee directly or indirectly controls or is directly or indirectly controlled by or is under direct or indirect common control with the Company or an underwriter for the Company; (4) the Trustee or any of its directors or executive officers is a director, officer, partner, employee, appointee, or representative of the Company, or of an underwriter (other than the Trustee itself) for the Company who is currently engaged in the business of underwriting, except that (A) one individual may be a director and/or an executive officer of the Trustee and a director and/or an executive officer of the Company, but may not be at the same time an executive officer of both the Trustee and the Company; (B) if and so long as the number of directors of the Trustee in office is more than nine, one additional individual may be a director and/or an executive officer of the Trustee and a director of the Company; and (C) the Trustee may be designated by the Company or by an underwriter for the Company to act in the capacity of transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent, or depositary, or in any other similar capacity, or, subject to the provisions of paragraph (1) of this subsection (c), to act as trustee whether under an indenture or otherwise; (5) ten per cent or more of the voting securities of Trustee is beneficially owned either by the Company or by any director, partner, or executive officer 59 67 thereof, or twenty per cent or more of such voting securities is beneficially owned, collectively, by any two or more of such persons; or ten per cent or more of the voting securities of the Trustee is beneficially owned either by an underwriter for the Company or by any director, partner, or executive officer thereof, or is beneficially owned collectively, by any two or more such persons; (6) the Trustee is the beneficial owner of, or holds collateral security for an obligation which is in default, (A) five per cent or more of the voting securities, or ten per cent or more of any other class of security, of the Company, not including the Debentures issued under this Indenture and securities issued under any other indenture under which the Trustee is also trustee, or (B) ten per cent or more of any class of security of an underwriter for the Company; (7) the Trustee is the beneficial owner of, or holds collateral security for an obligation which is in default, five per cent or more of the voting securities of any person who, to the knowledge of the Trustee, owns ten per cent or more of the voting securities of, or controls directly or indirectly or is under direct or indirect common control with, the Company; (8) the Trustee is the beneficial owner of, or holds collateral security for an obligation which is in default, ten per cent or more of any class of security of any person who, to the knowledge of the Trustee, owns fifty per cent or more of the voting securities of the Company; or (9) the Trustee owns on May 15 in any calendar year, in the capacity of executor, administrator, testamentary or inter vivos trustee, guardian, committee or conservator, or in any other similar capacity, an aggregate of twenty-five per cent or more of the voting securities, or of any class of security, of any person, the beneficial ownership of a specified percentage of which would have constituted a conflicting interest under paragraph (6), (7) or (8) of this subsection (c). As to any such securities of which the Trustee acquired ownership through becoming executor, administrator or testamentary trustee of an estate which included them, the provisions of the preceding sentence shall not apply for a period of two years from the date of such acquisition, to the extent 60 68 that such securities included in such estate do not exceed twenty-five per cent of such voting securities or twenty-five per cent of any such class of security. Promptly after May 15 in each calendar year, the Trustee shall make a check of its holdings of such securities in any of the above-mentioned capacities as of such May 15. If the Company fails to make payment in full of principal of or interest on any of the Debentures when and as the same become due and payable, and such failure continues for thirty days thereafter, the Trustee shall make a prompt check of its holdings of such securities in any of the above-mentioned capacities as of the date of the expiration of such thirty-day period, and after such date, notwithstanding the foregoing provisions of this paragraph (9), all such securities so held by the Trustee, with sole or joint control over such securities vested in it, shall, but only so long as such failure shall continue, be considered as though beneficially owned by the Trustee for the purposes of paragraphs (6), (7) and (8) of this subsection (c). The specifications of percentages in paragraphs (5) to (9), inclusive, of this subsection (c) shall not be construed as indicating that the ownership of such percentages of the securities of a person is or is not necessary or sufficient to constitute direct or indirect control for the purposes of paragraph (3) or (7) of this subsection (c). For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (c) only, (A) the terms "security" and "securities" shall include only such securities as are generally known as corporate securities, but shall not include any note or other evidence of indebtedness issued to evidence an obligation to repay monies lent to a person by one or more banks, trust companies or banking firms, or any certificate of interest or participation in any such note or evidence of indebtedness; (B) an obligation shall be deemed to be in default when a default in payment of principal shall have continued for thirty days or more and shall not have been cured; and (c) the Trustee shall not be deemed to be the owner or holder of (i) any security which it holds as collateral security (as trustee or otherwise) for an obligation which is not in default as defined in clause (B) above, or (ii) any security which it holds as collateral security under this Indenture, irrespective of any default hereunder, or (iii) any security which it holds as agent for collection, or as custodian, escrow agent, or depositary, or in any similar representative capacity. Except as provided in the next preceding paragraph hereof, the word "security" or "securities" as used in this Indenture 61 69 shall mean any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, pre-organization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas or other mineral rights, or, in general, any interest or instrument commonly known as a "security" or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. (d) For the purposes of this Section 9.08: (1) The term "underwriter" when used with reference to Company shall mean every person who, within three years prior to the time as of which the determination is made, has purchased from the Company with a view to, or has offered or sold for the Company in connection with, the distribution of any security of the Company outstanding at such time, or has participated or has had a direct or indirect participation in any such undertaking, or has participated or has had a participation in the direct or indirect underwriting of any such undertaking, but such term shall not include a person whose interest was limited to a commission from an underwriter or dealer not in excess of the usual and customary distributors' or sellers' commission. (2) The term "director" shall mean any director of a corporation or any individual performing similar functions with respect to any organization whether incorporated or unincorporated. (3) The term "person" shall mean an individual, a corporation, a partnership, an association, a joint-stock company, a trust, an unincorporated organization, or a government or political subdivision thereof. As used in this paragraph, the term "trust" shall include only a trust where the interest or interests of the beneficiary or beneficiaries are evidenced by a security. (4) The term "voting security" shall mean any security presently entitling the owner or holder thereof to vote in the direction or management of the affairs of a person, or any security issued under or pursuant to any trust agreement or arrangement whereby a trustee or trustees or agent or agents for the owner or holder 62 70 of such security are presently entitled to vote in the direction or management of the affairs of a person. (5) The term "Company" shall mean an obligor upon the Debentures. (6) The term "executive officer" shall mean the president, every vice president, every trust officer, the cashier, the secretary, and the treasurer of a corporation, and any individual customarily performing similar functions with respect to any organization whether incorporated or unincorporated, but shall not include the chairman of the board of directors. (e) The percentages of voting securities and other securities specified in this Section 9.08 shall be calculated in accordance with the following provisions: (1) A specified percentage of the voting securities of Trustee, the Company or any other person referred to in this Section 9.08 (each of whom is referred to as a "person" in this paragraph) means such amount of the outstanding voting securities of such person as entitles the holder or holders thereof to cast such specified percentage of the aggregate votes which the holders of all the outstanding voting securities of such person are entitled to cast in the direction or management of the affairs of such person. (2) A specified percentage of a class of securities of a person means such percentage of the aggregate amount of securities of the class outstanding. (3) The term "amount", when used in regard to securities means the principal amount if relating to evidences of indebtedness, the number of shares if relating to capital shares, and the number of units if relating to any other kind of security. (4) The term "outstanding" means issued and not held by or for the account of the issuer. The following securities shall not be deemed outstanding within the meaning of this definition: (i) Securities of an issuer held in a sinking fund relating to securities of the issuer of the same class; (ii) Securities of an issuer held in a sinking fund relating to another class of securities of the issuer, if the obligation evidenced by such 63 71 other class of securities is not in default as to principal or interest or otherwise; (iii) Securities pledged by the issuer thereof as security for an obligation of the issuer not in default as to principal or interest or otherwise; and (iv) Securities held in escrow if placed in escrow by the issuer thereof; provided, however, that any voting securities of an issuer shall be deemed outstanding if any person other than the issuer is entitled to exercise the voting rights thereof. (5) A security shall be deemed to be of the same class as another security if both securities confer upon the holder or holders thereof substantially the same rights and privileges; provided, however, that, in the case of secured evidences of indebtedness, all of which are issued under a single indenture, differences in the interest rates or maturity dates of various series thereof shall not be deemed sufficient to constitute such series different classes; and provided further, that, in the case of unsecured evidences of indebtedness, differences in the interest rates or maturity dates thereof shall not be deemed sufficient to constitute them securities of different classes, whether or not they are issued under a single indenture. SECTION 9.09. Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall at all times be a corporation organized and doing business under the laws of the United States or any State or Territory thereof or of the District of Columbia authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $10,000,000, subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 9.09, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 9.09, the Trustee shall resign immediately in the manner and with the effect specified in Section 9.10. SECTION 9.10. Resignation or Removal of Trustee; Appointment of Successor Trustee . 64 72 (a) The Trustee may at any time resign by giving written notice of such resignation to the Company and by mailing notice thereof to the holders of the Debentures at their addresses as they shall appear on the registry books of the Company. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors of the Company, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within sixty days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Debentureholder who has been a bona fide holder of a Debenture, or Debentures for at least six months may, subject to the provisions of Section 8.09, on behalf of himself and all other similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any of the following shall occur: (1) the Trustee shall fail to comply with the provisions of subsection (a) of Section 9.08 after written request therefor by the Company or by any Debentureholder who has been a bona fide holder of a Debenture or Debentures for at least six months, or (2) the Trustee shall cease to be eligible in accordance with the provisions of Section 9.09 and shall fail to resign after written request therefor by the Company or by any such Debentureholder, or (3) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors of the Company, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 8.09, any Debentureholder who has been a bona fide 65 73 holder of a Debenture or Debentures for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee. (c) The holders of a majority in aggregate principal amount of the Debentures at the time outstanding may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless within ten days after such nomination the Company shall object thereto, in which case the Trustee so removed or any Debentureholder, upon the terms and conditions and otherwise as in subdivision (a) of this Section 9.10 provided, may petition any court of competent jurisdiction for an appointment of a successor trustee. (d) No resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 9.10 shall be effective until acceptance of appointment by the successor trustee as provided in Section 9.11. SECTION 9.11. Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 9.10 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 9.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 9.06. No successor trustee shall accept appointment as provided in this Section 9.11 unless at the time of such acceptance such 66 74 successor trustee shall be qualified under the provisions of Section 9.08 and eligible under the provisions of Section 9.09. Upon acceptance of appointment by a successor trustee as provided in this Section 9.11, the Company shall mail notice of the succession of such trustee hereunder to the holders of Debentures at their addresses as they shall appear on the registry books of the Company. If the Company fails to mail such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company. SECTION 9.12. Succession by Merger and Certain Other Events. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the business of the Trustee, shall be the successor of the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Debentures shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Debentures so authenticated; and in case at that time any of the Debentures shall not have been authenticated, any successor to the Trustee may authenticate such Debentures either in the name of any predecessor trustee hereunder or in the name of such successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Debentures or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor trustee or authenticate Debentures in the name of any predecessor trustee shall apply only to its successor or successors by merger, conversion or consolidation. SECTION 9.13. Limitation on Rights of Trustee as a Creditor. (a) Subject to the provisions of subsection (b) of this Section 9.13, if the Trustee shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Company or of any other obligor on the Debentures within four months prior to a default, as defined in subsection (c) of this Section 9.13, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the 67 75 holders of the Debentures, and the holders of other indenture securities (as defined in subsection (c) of this Section 9.13): (1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor in respect of principal or interest, effected after the beginning of such four months' period and valid as against the Company and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in paragraph (2) of this subsection, or from the exercise of any right of set-off which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Company upon the date of such default; and (2) all property received by the Trustee in respect of any claim as such creditor, either as security therefor, or in satisfaction or composition therefor, or otherwise, after the beginning of such four months' period, or an amount equal to the proceeds of any such property, if disposed of, subject, however, to the rights, if any, of the Company and its other creditors in such property or such proceeds. Nothing herein contained, however, shall affect the right of the Trustee: (A) to retain for its own account (i) payments made on account of any such claim by any person (other than the Company) who is liable thereon, and (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third person, and (iii) distributions made in cash, securities or other property in respect of claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the federal bankruptcy laws, as now or hereafter constituted, or other applicable federal or state law; (B) to realize, for its own account, upon any property held by it as security for any such claim if such property was so held prior to the beginning of such four months' period; (C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such four months' period and such property was received as security therefor simultaneously with the creation 68 76 thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default, as defined in subsection (c) of this Section 9.13, would occur within four months; or (D) to receive payment on any claim referred to in paragraph (B) or (C), against the release of any property held as security for such claim as provided in such paragraph (B) or (C), as the case may be, to the extent of the fair value of such property. For the purposes of paragraphs (B), (C), and (D), property substituted after the beginning of such four months' period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any pre-existing claim of the Trustee as such creditor, such claim shall have the same status as such pre-existing claim. If the Trustee shall be required hereunder to maintain a special account, the funds and property held in such special account and the proceeds thereof shall be apportioned between the Trustee, the Debentureholders and the holders of other indenture securities in such manner that the Trustee, the Debentureholders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the federal bankruptcy laws, as now or hereafter constituted, or other applicable federal or state law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Company of the funds and property in such special account and before crediting to the respective claims of the Trustee, the Debentureholders and the holders of other indenture securities dividends on claims filed against the Company in bankruptcy or receivership or in proceedings for reorganization pursuant to the federal bankruptcy laws, as now or hereafter constituted, or other applicable federal or state law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to the federal bankruptcy laws, as now or hereafter constituted; or other applicable federal or state law, 69 77 whether such distribution is made in cash, securities, or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership, or proceeding for reorganization is pending shall have jurisdiction (i) to apportion between the Trustee, the Debentureholders, and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and the proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee, the Debentureholders and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any claim, or to make a specific allocation of such distributions as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any trustee who has resigned or been removed after the beginning of such four months' period shall be subject to the provisions of this subsection (a) as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such four months' period, it shall be subject to the provisions of this subsection (a) if and only if the following conditions exist: (i) the receipt of property or reduction of claim which would have given rise to the obligation to account, if such Trustee had continued as trustee, occurred after the beginning of such four months' period; and (ii) such receipt of property or reduction of claim occurred within four months after such resignation or removal. (b) There shall be excluded from the operation of subsection (a) of this Section 9.13 a creditor relationship arising from: (1) The ownership or acquisition of securities issued under any indenture, or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) advances authorized by a receivership or bankruptcy court of competent jurisdiction, or by this Indenture, for the purpose of preserving any property which shall at any time be subject to the lien of this 70 78 Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advance and of the circumstances surrounding the making thereof is given to the Debentureholders at the time and in the manner provided in Section 7.04 with respect to reports pursuant to subsections (a) and (b) thereof, respectively; (3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary, or other similar capacity; (4) an indebtedness created as a result of services rendered or premises rented; or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in subsection (c) of this Section 9.13; (5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Company; or (6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper as defined in subsection (c) of this Section 9.13. (c) As used in this Section 9.13: (1) The term "default" shall mean any failure to make payment in full of the principal of or interest upon any of the Debentures or upon the other indenture securities when and as such principal or interest becomes due and payable; (2) The term "other indenture securities" shall mean securities upon which the Company is an obligor (as defined in the Trust Indenture Act of 1939) outstanding under any other indenture (A) under which the Trustee is also trustee, (B) which contains provisions substantially similar to the provisions of subsection (a) of this Section 9.13, and (C) under which a default exists at the time of the apportionment of the funds and property held in said special account; 71 79 (3) The term "cash transaction" shall mean any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; (4) The term "self-liquidating paper" shall mean any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Company for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of, or a lien upon, the goods, wares or merchandise or the receivables or proceeds arising from the sale of goods, wares or merchandise previously constituting the security, provided the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Company arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation; and (5) The term "Company" shall mean any obligor upon the Debentures. SECTION 9.14. Records of Trustee. The Trustee shall retain in its possession so long as any of the Debentures shall remain outstanding all financial statements furnished to it pursuant to this Indenture. The Trustee shall at all times have access to those books and records of the Company which may be reasonably required by the Trustee to fulfill its duties and obligations hereunder, except that no such access shall be allowed to any books or records constituting restricted security information under any law or governmental regulation at the time applicable thereto. ARTICLE TEN CONCERNING THE DEBENTUREHOLDERS SECTION 10.01. Action by Debentureholders. Whenever in this Indenture it is provided that the holders of a specified percentage in aggregate principal amount of the Debentures may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the holders of such specified percentage have joined therein may 72 80 be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Debentureholders in person or by agent or proxy appointed in writing, or (b) by the record of the holders of Debentures voting in favor thereof at any meeting of Debentureholders duly called and held in accordance with the provisions of Article Eleven, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Debentureholders. SECTION 10.02. Proof of Execution by Debentureholders; Evidence of Holdings. Subject to the provisions of Section 9.01 and 11.05, proof of the fact and date of execution of any instrument by a Debentureholder or his agent or proxy and proof of the holding by any person of any of the Debentures shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Company if made in the following manner: (a) The fact and date of the execution by any such person of any instrument may be proved by the certificate of any notary public or other officer of any jurisdiction authorized to take acknowledgments of deeds or administer oaths that the person executing such instrument acknowledged to him the execution thereof, or by an affidavit of a witness to such execution sworn to before any such notary or other such officer and where such execution is by an officer of a corporation or association or a member of a partnership, on behalf of such corporation, association or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. (b) The ownership of Debentures shall be proved by the registers of such Debentures or by a certificate of the registrar thereof. The record of any Debentureholders' meeting shall be proved in the manner provided in Section 11.06. The Trustee may require such additional proof of any matter referred to in this Section 10.02 as it shall deem necessary. SECTION 10.03. Who Deemed Absolute Owners. The Company, the Trustee, any paying agent, any conversion agent and any Debenture registrar may deem and treat the person in whose name any Debenture shall be registered upon the books of the Company as the absolute owner of such Debenture (whether or not such Debenture shall be overdue and notwithstanding any notation of ownership or writing thereon by anyone other than the Company or any Debenture registrar) for the purpose of receiving payment of or on account of the principal of and interest on such Debenture 73 81 and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any conversion agent nor any Debenture registrar shall be affected by any notice to the contrary. Payment of or on account of the principal of and (subject to the provisions of Section 2.03) interest on such Debenture shall be made only to or upon the order in writing of the registered holder thereof. All such payments and all such conversions shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for monies payable upon any such Debenture. SECTION 10.04. Company-owned Debentures Disregarded. In determining whether the holders of the requisite aggregate principal amount of Debentures have concurred in any direction or consent under this Indenture, Debentures which are owned by the Company or any other obligor on the Debentures or by any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any other obligor on the Debentures shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction or consent only Debentures which the Trustee knows are so owned shall be so disregarded. The Company shall, immediately upon issuance of the Debentures, provide the Trustee with an Officers' Certificate and an Opinion of Counsel specifying which Debentures are so owned and that no other Debentures are so owned. The Company shall provide further Officers' Certificates and Opinions of Counsel as necessary to reflect changes in such information. Debentures so owned which have been pledged in good faith may be regarded as outstanding for the purposes of this Section 10.04, if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Debentures and that the pledgee is not a person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. SECTION 10.05. Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 10.01, of the taking of any action by the holders of the percentage in aggregate principal amount of the Debentures specified in this Indenture in connection with such action, any holder of a Debenture which is included in the Debentures the holders of which have consented to such action may, by filing written notice with the Trustee at its office and upon proof of holding as provided in Section 10.02, revoke such action so far as concerns such holder's Debenture. Absent a proper revocation, any consent to an action given by the holder of 74 82 any Debenture shall be conclusive and binding upon such holder and upon all future holders and owners of such Debenture, irrespective of whether or not any notation in regard thereto is made upon such Debenture or any Debenture issued in exchange or substitution therefor. Any action taken by the holders of the percentage in aggregate principal amount of the Debentures specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Debentures. SECTION 10.06. Transfer of Debentures. Except as provided herein, the Debentures may not be sold, assigned, transferred, pledged or otherwise hypothecated. A Debentureholder may pledge or hypothecate a Debenture for the purpose of borrowing money to buy the Debenture provided that the Company consents in writing to such intended pledge or hypothecation prior to consummation of such pledge or hypothecation. Any such consent shall be substantially in the form attached hereto as Exhibit A. Upon giving such consent, the Company shall furnish to the Trustee and any conversion agent an Officers' Certificate which shall identify the Debentures covered by such consent by stating the serial number, name of registered holder and principal amount of such Debentures. The duly authorized representative of the estate of a deceased Debentureholder may request that a Debenture held in that estate be registered in the name of the person or persons to whom such Debenture passed by will or the laws of intestate succession, provided that such representative shall have supplied proof satisfactory to the Company and the Trustee of his authority, and of any other matters which the Trustee or the Company may deem relevant. A person who has foreclosed on a pledge or hypothecation on a Debenture made in compliance with this Section 10.06 may request that such Debenture be registered in the name of such person. As used herein, the term "person" shall include any corporation, bank, savings and loan association, partnership and similar business entities. ARTICLE ELEVEN DEBENTUREHOLDERS' MEETINGS SECTION 11.01. Purpose of Meetings. A meeting of Debentureholders may be called at any time from time to time pursuant to the provisions of this Article Eleven for any of the following purposes: (1) to give any notice to the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any default hereunder and its consequences, or to take any other action 75 83 authorized to be taken by Debentureholders pursuant to any of the provisions of Article Eight; (2) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article Nine; (3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 12.02; or (4) to take any other action authorized to be taken by or on behalf of the holders of any specified aggregate principal amount of the Debentures under any other provision of this Indenture or under applicable law. SECTION 11.02. Call of Meetings by Trustee. The Trustee may at any time call a meeting of Debentureholders to take any action specified in Section 11.01, to be held at such time and at such place in the City of Jackson, Mississippi, as the Trustee shall determine. Notice of every meeting of the Debentureholders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed to the holders of Debentures at their addresses as they shall appear on the registry books of the Company. Such notice shall be mailed not less than twenty nor more than one hundred and eighty days prior to the date fixed for the meeting. SECTION 11.03. Call of Meetings by Company or Debentureholders. In case at any time the Company, pursuant to a resolution of its Board of Directors, or the holders of at least ten per cent in aggregate principal amount of the Debentures then outstanding, shall have requested the Trustee to call a meeting of Debentureholders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed the notice of such meeting within twenty days after receipt of such request, then the Company or such Debentureholders may determine the time and the place in the City of Jackson, Mississippi, for such meeting and may call such meeting to take any action authorized in Section 11.01, by mailing notice thereof as provided in Section 11.02. SECTION 11.04. Qualifications for Voting. To be entitled to vote at any meeting of Debentureholders a person shall (a) be a holder of one or more Debentures; or (b) be a person appointed by an instrument in writing as proxy by a holder of one or more Debentures. The only persons who shall be entitled to be present or to speak at any meeting of Debentureholders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel. 76 84 SECTION 11.05. Regulations. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Debentureholders, in regard to proof of the holding of Debentures and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies and other evidence of the right to vote, and such other matters concerning the conduct of the meetings as it shall think fit. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Debentureholders as provided in Section 11.03, in which case the Company or the Debentureholders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote of the meeting. Subject to the provisions of Section 10.04, at any meeting each Debentureholder or proxy shall be entitled to one vote (and/or fraction thereof) for each $50.00 principal amount of Debentures (and/or fraction thereof) held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Debenture challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Debentures held by him or instruments in writing as aforesaid duly designating him as the person to vote on behalf of other Debentureholders. At any meeting of Debentureholders, the presence of persons holding or representing Debentures in an aggregate principal amount sufficient under the appropriate provisions of this Indenture to take action upon the business for the transaction of which such meeting was called shall constitute a quorum. Any meeting of Debentureholders duly called pursuant to the provisions of Section 11.02 or 11.03 may be adjourned from time to time by vote of the holders (or proxies for the holders) of a majority of Debentures represented at the meeting and entitled to vote, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice. SECTION 11.06. Voting. The vote upon any resolution submitted to any meeting of Debentureholders shall be by written ballots on which shall be subscribed the signatures of the holders of Debentures or of their representatives by proxy and the serial number or numbers of the Debentures held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the 77 85 secretary of the meeting their verified written reports in duplicate for all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Debentureholders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 11.02. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting, and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 11.07. No Delay of Rights by Meeting. Nothing in this Article Eleven contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Debentureholders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Debentureholders under any of the provisions of this Indenture or of the Debentures. ARTICLE TWELVE SUPPLEMENTAL INDENTURES SECTION 12.01. Supplemental Indentures without Consent of Debentureholders. The Company, when authorized by resolution of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes: (a) to make provision with respect to the conversion rights of holders of Debentures pursuant to the requirements of Section 5.09; (b) to evidence the succession of another corporation to the Company, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Company pursuant to Article Thirteen hereof; (c) to add to the covenants of the Company such further covenants, restrictions or conditions for the protection of the holders of the Debentures as the Board of Directors of the Company and the Trustee shall consider to be for 78 86 the protection of the holders of Debentures, and to make the occurrence, or the occurrence and continuance, of a default in any of such additional covenants, restrictions or conditions a default or an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided, however, that in respect of any such additional covenant, restriction or condition such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such default or may limit the remedies available to the Trustee upon such default; (d) to provide for the issuance under this Indenture of Debentures in coupon form (including Debentures registrable as to principal only), but otherwise with all the provisions and subject to all the conditions and limitations of the Debentures issued hereunder in fully registered form, and to provide for exchangeability of such Debentures with the Debentures issued hereunder in fully registered form; and (e) to cure any ambiguity or to correct or supplement any provision contained herein or in any supplemental indenture which may be defective or inconsistent with any other provision contained herein or in any supplemental indenture, or to make such other provisions in regard to matters or questions arising under this Indenture which shall not be inconsistent with the provisions of this Indenture, provided such action pursuant to this clause (e) shall not adversely affect the interests of the holders of the Debentures. (f) to modify, eliminate, or add to the provisions of this Indenture to such extent as may be necessary to effect the qualification of this Indenture under the Trust Indenture Act, or under any similar federal statute hereafter enacted, if such qualification is or becomes necessary or desirable, and to add to this Indenture such other provisions as may be expressly permitted by the Trust Indenture Act, excluding, however, the provisions referred to in Section 316(a)(2) of the Trust Indenture Act as in effect at the date as of which this instrument was executed, or any corresponding provision in any similar federal statute hereafter enacted. The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations which may be therein contained and to accept the conveyance, transfer and 79 87 assignment of any property thereunder, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Any supplemental indenture authorized by the provisions of this Section 12.01 may be executed by the Company and the Trustee without the consent of the holders of any of the Debentures at the time outstanding, notwithstanding any of the provisions of Section 12.02. SECTION 12.02. Supplemental Indentures with Consent of Debentureholders. With the consent (evidenced as provided in Section 10.01) of the holders of not less than sixty-six and two-thirds per cent in aggregate principal amount of the Debentures at the time outstanding, the Company, when authorized by resolution of its Board of Directors, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner the rights of the holders of the Debentures; provided, however, that no such supplemental indenture shall (i) extend the fixed maturity of any Debentures, or reduce the rate or extend the time of payment of interest thereon, or reduce the principal amount thereof, or change any place of payment where, or the coin or currency in which, any Debenture or the interest thereon, is payable, or modify the provisions of this Indenture with respect to the subordination of the Debentures in a manner adverse to the Debentureholders, or impair the right to convert the Debentures into 1994-1 Series Stock on the terms set forth herein (except as permitted by Section 12.01(a)), without the consent of the holder of each Debenture so affected, or (ii) reduce the aforesaid percentage of Debentures, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of all Debentures then outstanding. Upon the request of the Company, accompanied by a copy of the resolutions of its Board of Directors certified by its Secretary or Assistant Secretary authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Debentureholders as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to this Section 80 88 12.02, the Company, at its cost and expense, shall mail a notice, setting forth in general terms the substance of such supplemental indenture, to all Debentureholders of record as of the date of such supplemental indenture. It shall not be necessary for the consent of the Debentureholders under this Section 12.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof. SECTION 12.03. Compliance with Trust Indenture Act; Effect of Supplemental Indentures. Any supplemental indenture executed pursuant to the provisions of this Article Twelve shall comply with the Trust Indenture Act of 1939 as in effect on the date of execution thereof if such compliance is necessary or is determined by the Company to be desirable. Upon the execution of any supplemental indenture pursuant to the provisions of this Article Twelve, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Debentures shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 12.04. Notation on Debentures. Debentures authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article Twelve may bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Debentures so modified as to conform, in the opinion of the Trustee and the Board of Directors of the Company, to any modifications of this Indenture contained in any such supplemental indenture may be prepared and executed by the Company, authenticated by the Trustee and delivered in exchange for the Debentures then outstanding. SECTION 12.05. Evidence of Compliance of Supplemental Indenture to be Furnished Trustee. The Trustee, subject to the provisions of Sections 9.01 and 9.02, shall be entitled to receive and rely upon an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Indenture. 81 89 ARTICLE THIRTEEN CONSOLIDATION, MERGER AND SALE BY THE COMPANY SECTION 13.01. Consolidation, Merger or Sale of Assets Permitted. The Company covenants that it will not merge or consolidate with any other corporation or sell or convey all or substantially all of its assets to any person, firm or corporation, (i) unless either (a) the Company shall be the continuing corporation, or (b) the successor (if other than the Company) shall be a corporation which shall expressly assume the due and punctual payment of the principal of and interest on all the Debentures, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of this Indenture to be performed by the Company by supplemental indenture satisfactory to the Trustee, executed and delivered to the Trustee by such corporation, and (ii) unless the Company or such successor corporation, as the case may be, shall not, immediately after such merger or consolidation, or such sale or conveyance, be in default in the performance of any such covenant or condition. SECTION 13.02. Succession by Successor Corporation. In case of any such merger, consolidation, sale or conveyance and upon any such assumption by the successor corporation, such successor corporation shall succeed to and be substituted for the Company, with the same effect as if it had been named herein as a party hereto instead of the Company. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of First Mississippi Corporation, any or all of the Debentures issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such successor corporation (instead of First Mississippi Corporation) and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver any Debentures which previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Debentures which such successor corporation thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Debentures so issued shall in all respects have the same legal rank and benefit under this Indenture as the Debentures theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Debentures had been issued at the date of the execution hereof. In case of any such consolidation, merger, sale or conveyance such changes in phraseology and form (but not in substance) may be made in the Debentures thereafter to be issued as may be appropriate. 82 90 SECTION 13.03. Evidence to be Furnished Trustee. The Trustee, subject to the provisions of Sections 9.01 and 9.02, may receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale or conveyance and any such assumption comply with the provisions of this Article Thirteen. ARTICLE FOURTEEN SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONIES SECTION 14.01. Discharge of Indenture. If (a) there shall have been delivered to the Trustee for cancellation all Debentures theretofore authenticated (other than any Debentures which shall have been destroyed, lost or stolen and in lieu of or in substitution for which other Debentures shall have been authenticated and delivered), or (b) all such Debentures not theretofore delivered to the Trustee for cancellation shall have become due and payable at maturity and the Company shall have deposited with the Trustee, in trust, funds sufficient to pay at maturity all of such Debentures (other than any Debentures which shall have been destroyed, lost or stolen and in lieu of or in substitution for which other Debentures shall have been authenticated and delivered) not theretofore delivered to the Trustee for cancellation, including principal and interest, and such deposit shall be upon terms making such funds payable forthwith upon due presentation, whether before or after such date of maturity or redemption of such Debentures, and if in either case the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, and shall deliver to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with, then (except as to any remaining rights of conversion of the Debentures) this Indenture shall cease to be of further effect, and the Trustee, on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel as required by Section 16.06 and at the cost and expense of the Company, shall execute power instruments acknowledging satisfaction of and discharging this Indenture. However, this Indenture shall continue in effect to the extent necessary to provide for (a) the conversion of Debentures as provided in Article Five, (b) the discharge of the duties and obligations of the Trustee, and (c) the right of the holders of the Debentures to payment of funds held by the Trustee pursuant to this Article Fourteen. The Company, however, hereby agrees to compensate and reimburse the Trustee for any services rendered and costs or expenses thereafter reasonably and properly incurred by the Trustee in connection with 83 91 this Indenture or the Debentures, and to indemnify the Trustee and hold it harmless against any loss, liability, or expense as provided in Section 9.06 hereof. SECTION 14.02. Deposited Monies to be Held in Trust by Trustee. All monies deposited with the Trustee pursuant to Section 14.01 shall be held in trust and, subject to the provisions of this Indenture and the Debentures, applied by it to the payment, either directly or through any paying agent, to the holders of the particular Debentures for the payment of which such monies have been deposited with the Trustee, of all sums due thereon for principal and interest. SECTION 14.03. Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies then held by any paying agent of the Debentures (other than the Trustee) shall, upon demand of the Company, be repaid to it or paid to the Trustee, and thereupon such paying agent shall be released from all further liability with respect to such monies. SECTION 14.04. Unclaimed Monies. Any monies deposited with the Trustee or any paying agent (including monies held in trust by the Company if it shall act as its own paying agent) not applied but remaining unclaimed by the holders of Debentures for six years after the date upon which the principal of or interest on such Debentures shall have become due and payable shall be repaid to the Company by the Trustee or such paying agent on demand, or if held in trust by the Company may at the Company's option be released from such trust; and the holder of any of the Debentures entitled to receive such payment shall thereafter look only to the Company, as the holder of a general claim, for the payment thereof, and all liability of the Trustee or such paying agent with respect to such monies, and all liability of the Company as Trustee thereof, shall thereupon cease, provided, however, that the Trustee or such paying agent, before being required to make any such repayment, may at the expense of the Company cause to be published once a week for two successive weeks (in each case on any day of the week) in an Authorized Newspaper a notice that said monies have not been so applied and that after a date named therein any unclaimed balance of said monies then remaining will be returned to the Company. 84 92 ARTICLE FIFTEEN IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS SECTION 15.01. Indenture and Debentures Solely Corporate Obligations. No recourse for the payment of the principal of or interest on any Debentures, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture, or in any Debenture, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Debentures. ARTICLE SIXTEEN MISCELLANEOUS PROVISIONS SECTION 16.01. Provisions Binding on Company's Successors. All the covenants, stipulations, promises and agreements in this Indenture contained by or in behalf of the Company shall bind its successors and assigns, whether so expressed or not. SECTION 16.02. Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation that shall at the time be the lawful sole successor of the Company. SECTION 16.03. Notices. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Debentures on the Company may be given or served by being deposited, first class postage prepaid, in a United States post office letter box addressed (until another address is filed by the Company with the Trustee) to First Mississippi Corporation, 700 North Street, Jackson, Mississippi 39202, Attention of the Treasurer. Any notice, direction, request or demand by any Debentureholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the principal corporate trust office of the Trustee, Deposit Guaranty National Bank, One Deposit Guaranty Plaza, Jackson, Mississippi 39205, addressed to the attention of its Corporate Trust Division (or such other address of the Trustee as shall have been set forth 85 93 in a notice from the Trustee transmitted by mail to all holders of Debentures, as their names and addresses appear upon the registry books of the Company). For the purposes of Article Four of this Indenture, any notice, direction, request or demand by the Company or any holder of Senior Indebtedness to or upon the Trustee shall be deemed sufficiently given or made only if given or made as described in the preceding sentence. SECTION 16.04. Subscription. Debentures will be issued only to persons to whom the Company has granted options to purchase such Debentures under the Company's 1988 Long-Term Incentive Plan. The Trustee shall have no obligations with respect to the terms or performance of such options or such Plan. SECTION 16.05. Governing Law. This Indenture and each Debenture shall be deemed to be a contract made under the laws of the State of Mississippi and for all purposes shall be governed by and construed in accordance with the laws of said State. SECTION 16.06. Evidence of Compliance with Conditions Precedent. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee an Officers' Certificate stating that in the opinion of the signers all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that the person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinion contained in such certificate or opinion are based; (3) a statement that, in the opinion of such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with. SECTION 16.07. Legal Holidays. If the date of maturity of principal or interest or the date of prepayment or redemption of any Debenture or the last day on which a Debentureholder has the right to convert his Debenture at the conversion price shall be (i) a Saturday, a Sunday or a legal holiday at the place where payment or conversion thereof, as the case may be, is to be made, or (ii) a day on which banking institutions at the place where such payment or conversion, as the case may be, is to be made are 86 94 authorized by law to remain closed, then such payment or conversion, as the case may be, may be made on the next succeeding business day which is not a day specified in (i) or (ii) above, with the same force and effect as if made on the nominal date of maturity, and no interest shall accrue for the period from and after such nominal date. SECTION 16.08. Trust Indenture Act to Control. If this Indenture is qualified under the Trust Indenture Act of 1939, then if and to the extent that any provision of this Indenture limits, qualifies or conflicts with another provision included in this Indenture which is required to be included in this Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, such required provision shall control. SECTION 16.09. Table of Contents and Headings. The table of contents, titles and headings of the articles and sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof. SECTION 16.10. Method of Publication or Other Notice When Indenture Provision for Publication or Notice Cannot Be Followed. In case, by reason of the temporary or permanent suspension of publication of any newspaper, or by reason of any other cause, it shall be impossible to make publication of any notice required hereby in a newspaper as herein provided, then such publication or other notice in lieu thereof as shall be made with the approval of the Trustee shall constitute a sufficient publication of such notice. Such publication or other notice shall, so far as may be, approximate the terms and conditions of the publication in lieu of which it is given. SECTION 16.11. Invalidity of Some Provisions Shall Not Affect Others. In case any one or more of the provisions contained in this Indenture or in the Debentures shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Debentures, but this Indenture and such Debentures shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. SECTION 16.12. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. Deposit Guaranty National Bank hereby accepts the trust in this Indenture declared and provided upon the terms and conditions hereinabove set forth. 87 95 IN WITNESS WHEREOF, FIRST MISSISSIPPI CORPORATION has caused this Indenture to be signed and acknowledged by its President or one of its Vice Presidents, and its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or one of its Assistant Secretaries, and DEPOSIT GUARANTY NATIONAL BANK has caused this Indenture to be signed and acknowledged by one of its Vice Presidents or Assistant Vice Presidents, and has caused its corporate seal to be affixed hereunto, and the same to be attested by its Secretary or one of its Assistant Secretaries, as of the day and year first written above. FIRST MISSISSIPPI CORPORATION [SEAL] By: /s/ R. Michael Summerford ---------------------------- R. Michael Summerford Vice President Attest: /s/ James L. McArthur - -------------------------------- Secretary/Assistant Secretary DEPOSIT GUARANTY NATIONAL BANK [SEAL] By: /s/ Pete J. Cajoleas ---------------------------- Vice President and Trust Officer Attest: /s/ Janice M. Powell - -------------------------------- Title: Assistant Trust Officer 88 96 STATE OF MISSISSIPPI ) ) SS. COUNTY OF HINDS ) On this 16th day of February, 1995, before me, the undersigned, a Notary Public of the State of Mississippi, personally appeared R. Michael Summerford, who proved to me on the basis of satisfactory evidence to be the Vice President, and James L. McArthur, who proved to me on the basis of satisfactory evidence to be the Secretary or Assistant Secretary of FIRST MISSISSIPPI CORPORATION, and that they, as such officers, being authorized to do so, executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year first above written. /s/ Nora Jean I. Breazeale -------------------------------- Notary Public of the State of Mississippi [Notary Seal] My Commission Expires September 20, 1997 -------------------------------- 89 97 STATE OF MISSISSIPPI ) ) SS. COUNTY OF HINDS ) On this 17th day of February, 1995 before me, the undersigned, a Notary Public of the State of Mississippi, personally appeared Pete J. Cajoleas who proved to me on the basis of satisfactory evidence to be the Vice President and Trust Officer, and Janice M. Powell, who proved to me on the basis of satisfactory evidence to be the Assistant Trust Officer of DEPOSIT GUARANTY NATIONAL BANK, and that they, as such officers, being authorized to do so, executed the foregoing instrument for the purposes therein contained. IN WITNESS WHEREOF I have hereunto set my hand and official seal the day and year first above written. /s/ Mary E. Husky -------------------------------- Notary Public of the State of Mississippi [Notary Seal] My Commission Expires February 18, 1996 -------------------------------- 90 98 FORM OF CONSENT TO PLEDGE To: First Mississippi Corporation The undersigned holds or intends to purchase a debenture in the aggregate principal amount of $_____________________ (the "Debenture") issued by First Mississippi Corporation (the "Company"). The Debenture is one of a series of debentures issued the Company entitled 1994-1 Series Convertible Subordinated Debentures (the "Debentures"). In accordance with the provisions of Section 10.06 of the Indenture dated as of November 14, 1994 governing the terms of the Debentures, the undersigned hereby requests the Company's consent to a proposed pledge of the Debenture to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- for the purpose of borrowing money to purchase the Debenture. Please signify the Company's consent to the proposed pledge by signing in the space below and returning an executed counterpart to the undersigned. Dated: -------------------- -------------------------------- Signature of Debentureholder -------------------------------- Printed Name of Debentureholder * * * * * * First Mississippi Corporation hereby consents to the above-described pledge of the Debenture. FIRST MISSISSIPPI CORPORATION By: ------------------------------ EXHIBIT A EX-4.8 6 SECOND SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.8 SECOND SUPPLEMENTAL INDENTURE TO THE INDENTURE DATED AS OF NOVEMBER 15 1991 BETWEEN FIRST MISSISSIPPI CORPORATION AND DEPOSIT GUARANTY NATIONAL BANK This Second Supplemental Indenture to the Indenture (the "Indenture") dated as of November 15, 1991 between FIRST MISSISSIPPI CORPORATION, a corporation duly organized and existing under the laws of the State of Mississippi (the "Company"), and DEPOSIT GUARANTY NATIONAL BANK, a national banking association organized under the laws of the United States (the "Trustee"), is entered into as of this 23rd day of December, 1996 by and among the Company, the Trustee and ChemFirst Inc., a wholly-owned subsidiary of the Company. Statement of Facts The Company and the Trustee are parties to the Indenture pursuant to which the Company has been authorized to issue Debentures in the aggregate principal amount of $102,437.50, of which Debentures in the aggregate principal amount of $-0- have been issued and are currently outstanding, and Debentures in the aggregate principal amount of $46,562.50 remain subject to issuance upon exercise of outstanding Debenture options. The Company is in the process of completing a transaction pursuant to which certain of the Company's assets, including all Indentures and Debentures to which the Company is currently a party, will be assigned to ChemFirst Inc. ("ChemFirst"), a wholly-owned subsidiary of the Company, whose stock will thereafter be distributed to the Company's shareholders on a pro rata basis. Section 13.01 of the Indenture provides that any successor to the Company which assumes the Company's obligations under this Indenture shall do so by supplemental indenture satisfactory to the Trustee. The Company, the Trustee and ChemFirst wish to amend the Indenture to provide for the express assumption by ChemFirst of the due and punctual payment of the principal of and interest on all the Debentures, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture. Modification of Terms For and in consideration of the foregoing premises, the parties hereto covenant and agree for the benefit of the Debenture Holders as follows: The provisions of the Indenture and the terms of the Debentures are hereby modified to provide that ChemFirst shall succeed to and be substituted for the Company for purposes of the Indenture and the Debentures, and in accordance therewith ChemFirst, by executing this Second Supplemental Indenture, hereby expressly assumes the due and punctual payment of the principal of and interest on all the Debentures, according to their tenor, and the due and punctual performance and observance of all of the covenants and conditions of the Indenture. In addition, the holder of each Debenture shall, subject to the terms and conditions of such Debenture, have the right to convert such Debenture into shares of Convertible Preferred Stock of ChemFirst and 2 such Debentures shall no longer be convertible into shares of Convertible Preferred Stock of First Mississippi Corporation. All applicable sections of the Indenture and all applicable terms of the Debentures, including without limitation those described below, are hereby amended to implement the foregoing modification: (a) The definition for "Company" in Section 1.01 of the Indenture shall be deleted and replaced with the following: "The term "Company" shall mean ChemFirst Inc., a Mississippi corporation, and, subject to the provisions of Article Thirteen, shall include its successors and assigns." (b) All references to "First Mississippi Corporation" in the Indenture and in each Debenture shall be stricken and replaced with the words "ChemFirst Inc." IN WITNESS WHEREOF, FIRST MISSISSIPPI CORPORATION, DEPOSIT GUARANTY NATIONAL BANK AND CHEMFIRST INC. have each caused this Second Supplemental Indenture to be signed and acknowledged by its President or one of its Vice Presidents, and its corporate seal to be affixed hereunder, and the same to be attested by its Secretary or one of its Assistant Secretaries, as of the day and year first written above. FIRST MISSISSIPPI CORPORATION (Corporate Seal) Attest: By: ------------------------------ ------------------------------ Secretary Title: DEPOSIT GUARANTY NATIONAL BANK (Corporate Seal) Attest: By: ------------------------------ ------------------------------ Secretary Title: CHEMFIRST INC. (Corporate Seal) Attest: By: ------------------------------ ------------------------------ Secretary Title: EX-5.1 7 OPINION OF J. STEVE CHUSTE 1 EXHIBIT 5.1 December 23, 1996 Board of Directors ChemFirst Inc. 700 North Street Jackson, MS 39202-3095 Gentlemen: This opinion is given in connection with a Registration Statement on Form S-8 (the "Registration Statement") which CHEMFIRST INC. (the "Company") is filing with the Securities and Exchange Commission to register (i) $433,125.00 in principal amount of its 1987-A Series Convertible Subordinated Debentures (the "1987-A Series Debentures"), for sale to participants under the ChemFirst Inc. 1980 Long-Term Incentive Plan (the "1980 Plan"), 30,000 shares of its 1987-A Series Convertible Preferred Stock (the "1987-A Series Stock") issuable upon conversion of the 1987-A Series Debentures and 48,300 shares of its Common Stock (the "Common Stock") issuable upon conversion of the 1987-A Series Stock, (ii) $1,051,875.00 in principal amount of its 1988-A Series Convertible Subordinated Debentures (the "1988-A Series Debentures"), for sale to participants under the 1980 Plan, 66,000 shares of its 1988-A Convertible Preferred Stock (the "1988-A Series Stock") issuable upon conversion of the 1988-A Series Debentures, and 106,260 shares of the Common Stock issuable upon conversion of the 1988-A Series Stock, (iii) $80,625.00 in principal amount of its 1988-1 Series Convertible Subordinated Debentures (the "1988-1 Series Debentures"), for sale to participants under the ChemFirst Inc. 1988 Long-Term Incentive Plan (the "1988 Plan"), 5,000 of its 1988-1 Series Convertible Preferred Stock (the "1988-1 Series Stock") issuable upon conversion of the 1988-1 Series Debentures, and 8,050 shares of the Common Stock issuable upon conversion of the 1988-1 Series Stock, (iv) $288,750.00 in principal amount of its 1989-A Series Convertible Subordinated Debentures (the "1989-A Series Debentures"), for sale to participants under the 1980 Plan, 16,500 shares of its 1989-A Convertible Preferred Stock (the "1989-A Series Stock") issuable upon conversion of the 1989-A Series Debentures, and 26,565 shares of the Common Stock issuable upon conversion of the 1989-A Series Stock, (v) $787,500.00 in principal amount of its 1989-1 Series Convertible Subordinated Debentures (the "1989-1 Series Debentures"), for sale to participants under the 1988 Plan, 45,000 shares of its 1989-1 Series Convertible Preferred Stock (the "1989-1 Series Stock") issuable upon conversion of the 1989-1 Series Debentures, and 72,450 shares of the Common Stock issuable upon conversion of the 1989-1 Series Stock (vi) $69,062.50 in principal amount of its 1989-2 Series Convertible Subordinated Debentures (the "1989-2 Series Debentures"), for sale to participants under the 1988 Plan, 5,000 shares of its 1989-2 Series Convertible Preferred Stock (the "1989-2 Series Stock") issuable upon conversion of the 1989-2 2 Board of Directors December 23, 1996 Page 2 Series Debentures and 8,050 shares of the Common Stock issuable upon conversion of the 1989-2 Series Stock, (vii) $576,033.00 in principal amount of its 1990-1 Convertible Subordinated Debentures (the "1990-1 Series Debentures"), for sale to participants under the 1988 Plan, 52,376 shares of its 1990-1 Series Convertible Preferred Stock (the "1990-1 Series Stock") issuable upon conversion of the 1990-1 Series Debentures and 8,430 shares of the Common Stock issuable upon conversion of the 1990-1 Series Stock, (viii) $46,875.00 in principal amount of its 1990-2 Series Convertible Subordinated Debentures (the "1990-2 Series Debentures") for sale to participants under the 1988 Plan, 5,000 shares of its 1990-2 Series Convertible Preferred Stock (the "1990-2 Series Stock") issuable upon conversion of the 1990-2 Series Debentures and 8,050 shares of the Common Stock issuable upon conversion of the 1990-2 Series Stock, (ix) $39,250 in principal amount of its 1991-1 Series Convertible Subordinated Debentures (the "1991-1 Series Debentures"), for sale to participants under the 1988 Plan, 4,000 shares of its 1991-1 Series Convertible Preferred Stock (the "1991-1 Series Stock") issuable upon conversion of the 1991-1 Series Debentures and 6,440 shares of the Common Stock issuable upon conversion of the 1991-1 Series Stock, (x) $45,562.50 in principal amount of its 1991-2 Series Convertible Subordinated Debentures (the "1991-2 Series Debentures") for sale to participants under the 1988 Plan, 5,000 shares of its 1991-2 Series Convertible Preferred Stock (the "1991-2 Series Stock ") issuable upon conversion of the 1991-2 Series Debentures and 8,050 shares of the Common Stock issuable upon conversion of the 1991-2 Series Stock, (xi) $39,062.50 in principal amount of its 1992-1 Series Convertible Subordinated Debentures (the "1992-1 Series Debentures") for sale to participants under the 1988 Plan, 5,000 shares of its 1992-1 Series Convertible Preferred Stock (the "1992-1 Series Stock") issuable upon conversion of the 1992-1 Debentures, and 8,050 shares of the Common Stock issuable upon conversion of the 1992-1 Series Stock, and (xii) 1,291,555 shares of Common Stock to be issued collectively under the 1980 Plan, the 1988 Plan and the ChemFirst Inc. 1995 Long-Term Incentive Plan (the "1995 Plan") (the foregoing plans being collectively referred to as the "Plans"). As General Counsel of the Company, I am familiar with the Company's Amended and Restated Articles of Incorporation and Bylaws; the Plans; the Registration Statement; the actions taken and resolutions passed by the Company's Board of Directors to authorize the 1987-A Series Debentures, 1988-A Series Debentures, 1988-1 Series Debentures, 1989-A Series Debentures, 1989-1 Series Debentures, 1989-2 Series Debentures, 1990-1 Series Debentures, 1990-2 Series Debentures, 1991-1 Series Debentures, 1991-2 Series Debentures and 1992-1 Series Debentures (collectively the "Debentures") and the taking of certain other actions in connection with the offering and sale of the Debentures, the action taken and resolution passed by the Company's Board of Directors to authorize the 1987-A Series Stock, 1988-A Series Stock, 1988-1 Series Stock, 1989-A Series Stock, 1989-1 Series Stock, 1989-2 Series Stock, 1990-1 Series Stock, 1990-2 Series Stock, 1991-1 Series Stock, 1991-2 Series Stock, and 1992-1 Series Stock (the aforementioned series of stock being collectively referred to as the "Series Stock") and the Common Stock issuable pursuant to the Plan; the Indentures (including all amendments and any supplemental indentures) between the Company and Deposit Guaranty National Bank, as Trustee such Debentures being respectively dated as follows: August 10, 1987 relating to the 1987-A Series Debentures, August 30, 1988 relating to the 1988-A Series Debentures, November 29, 3 Board of Directors December 23, 1996 Page 3 1988 relating to the 1988-1 Series Debentures, August 22, 1989 relating to the 1989-A Series Debentures, August 22, 1989 relating to the 1989-1 Series Debentures, November 10, 1989 relating to the 1989-2 Series Debentures, August 27, 1990 relating to the 1990-1 Series Debentures, November 9, 1990 relating to the 1990-2 Series Debentures, August 27, 1991 relating to the 1991-1 Series Debentures, November 15, 1991 relating to the 1991-2 Series Debentures, and November 13, 1992 relating to the 1992-1 Series Debentures; the form of each of the Series Debentures; the Debenture Options related to the Series Debentures, and such other matters and documents deemed necessary for the purpose of rendering this opinion. On the basis of the foregoing, I am of the opinion that: 1. The 1987-A Series Debentures, 1988-A Series Debentures and 1989-A Series Debentures have been duly authorized and when issued and paid for in accordance with the terms of the 1980 Plan and applicable debenture options will be validly issued and binding obligations of the Company. 2. The 1987-A Series Stock, 1988-A Series Stock and 1989-A Series Stock issuable upon conversion of the 1987-A Series Debentures, 1988-A Series Debentures and 1989 Series Debentures, respectively, will, when so issued in accordance with the 1980 Plan, the respective applicable Indenture applicable to each such series and the resolutions passed by the Company's Board of Directors, be legally issued, fully paid and non-assessable. 3. The shares of Common Stock issuable upon conversion of the 1987-A Series Stock, 1988-A Series Stock and 1989-A Series Stock will, when so issued in accordance with the 1980 Plan and the resolutions passed by the Company's Board of Directors, be legally issued, fully paid and non-assessable. 4. The 1988-1 Series Debentures, 1989-1 Series Debentures, 1989-2 Series Debentures, 1990-1 Series Debentures, 1990-2 Series Debentures, 1991-1 Series Debentures, 1991-2 Series Debentures and 1992-1 Series Debentures have been duly authorized and when issued and paid for in accordance with the terms of the 1988 Plan and any debenture option applicable thereto, will be validly issued and binding obligations of the Company. 5. The shares of 1988-1 Series Stock, 1989-1 Series Stock, 1989-2 Series Stock, 1990-1 Series Stock, 1990-2 Series Stock, 1991-1 Series Stock, 1991-2 Series Stock, and 1992-1 Series Stock issuable upon conversion, respectively, of the 1988-1 Series Debentures, 1989-1 Series Debentures, 1989-2 Series Debentures, 1990-1 Series Debentures, 1990-2 Series Debentures, 1991-1 Series Debentures, 1991-2 Series Debentures, 1992-1 Series Debentures will, when so issued in accordance with the 1988 Plan, the respective Indenture applicable to each such series of preferred stock and the resolutions passed by the Company's Board of Directors, be legally issued, fully paid and non-assessable. 4 Board of Directors December 23, 1996 Page 4 6. The shares of Common Stock issuable upon conversion of the 1988-1 Series Stock, 1989-1 Series Stock, 1989-2 Series Stock, 1990-1 Series Stock, 1990-2 Series Stock, 1991-1 Series Stock, 1991-2 Series Stock and 1992-1 Series Stock will, when so issued in accordance with the 1988 Plan and the resolutions passed by the Company's Board of Directors, be legally issued, fully paid and non-assessable. 7. All other shares of the Common Stock issuable pursuant to Stock Options and other awards under the Plans will, when issued in accordance with the respective Plans, be legally issued, fully paid and non-assessable. The opinion herein is limited solely to the laws of the State of Mississippi and the laws of the United States, and I express no opinion herein concerning the laws of any other jurisdiction. The opinion is subject to the following qualifications: (a) Rights and remedies set forth in the respective Indentures mentioned above and the Series Debentures are subject to applicable bankruptcy, insolvency, reorganization and other laws now or hereafter in effect affecting the enforcement of creditors' rights generally, and (b) No opinion is expressed as to the availability of any remedy or remedies that may be sought with respect to the specific enforcement of any provision of any Indenture referred to above or any of the Series Debentures. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me and to my opinion in the Registration Statement. Very truly yours, J. Steve Chustz General Counsel JSC:js EX-23.1 8 CONSENT OF J. STEVE CHUSTE 1 EXHIBIT 23.1 December __, 1996 Board of Directors ChemFirst Inc. 700 North Street Jackson, MS 39202-3095 Gentlemen: This opinion is given in connection with a Registration Statement on Form S-8 (the "Registration Statement") which CHEMFIRST INC. (the "Company") is filing with the Securities and Exchange Commission to register (i) $433,125.00 in principal amount of its 1987-A Series Convertible Subordinated Debentures (the "1987-A Series Debentures"), for sale to participants under the ChemFirst Inc. 1980 Long-Term Incentive Plan (the "1988 Plan"), 30,000 shares of its 1987-A Series Convertible Preferred Stock (the "1987-A Series Stock") issuable upon conversion of the 1987-A Series Debentures and 48,300 shares of its Common Stock (the "Common Stock") issuable upon conversion of the 1987-A Series Stock, (ii) $1,051,875.00 in principal amount of its 1988-A Series Convertible Subordinated Debentures (the "1988-A Series Debentures"), for sale to participants under the 1980 Plan, 66,000 shares of its 1988-A Convertible Preferred Stock (the "1988-A Series Stock") issuable upon conversion of the 1988-A Series Debentures, and 106,260 shares of the Common Stock issuable upon conversion of the 1988-A Series Stock, (iii) $80,625.00 in principal amount of its 1988-1 Series Convertible Subordinated Debentures (the "1988-1 Series Debentures"), for sale to participants under the ChemFirst Inc. 1988 Long-Term Incentive Plan (the "1988 Plan"), 5,000 of its 1988-1 Series Convertible Preferred Stock (the "1988-1 Series Stock") issuable upon conversion of the 1988-1 Series Debentures, and 8,050 shares of the Common Stock issuable upon conversion of the 1988-1 Series Stock, (iv) $288,750.00 in principal amount of its 1989-A Series Convertible Subordinated Debentures (the "1989-A Series Debentures"), for sale to participants under the 1980 Plan, 16,500 shares of its 1989-A Convertible Preferred Stock (the "1989-A Series Stock") issuable upon conversion of the 1989-A Series Debentures, and 26,565 shares of the Common Stock issuable upon conversion of the 1989-A Series Stock, (v) $787,500.00 in principal amount of its 1989-1 Series Convertible Subordinated Debentures (the "1989-1 Series Debentures"), for sale to participants under the 1988 Plan, 45,000 shares of its 1989-1 Series Convertible Preferred Stock (the "1989-1 Series Stock") issuable upon conversion of the 1989-1 Series Debentures, and 72,450 shares of the Common Stock issuable upon conversion of the 1989-1 Series Stock (vi) $69,062.50 in principal amount of its 1989-2 Series Convertible Subordinated Debentures (the "1989-2 Series Debentures"), for sale to participants under the 1988 Plan, 5,000 shares of its 1989-2 Series Convertible Preferred Stock (the "1989-2 Series Stock") issuable upon conversion of the 1989-2 Series Debentures and 8,050 shares of the Common Stock issuable upon 2 conversion of the 1989-2 Series Stock, (vii) $576,033.00 in principal amount of its 1990-1 Convertible Subordinated Debentures (the "1990-1 Series Debentures"), for sale to participants under the 1988 Plan, 52,376 shares of its 1990-1 Series Convertible Preferred Stock (the "1990-1 Series Stock") issuable upon conversion of the 1990-1 Series Debentures and 8,430 shares of the Common Stock issuable upon conversion of the 1990-1 Series Stock, (viii) $46,875.00 in principal amount of its 1990-2 Series Convertible Subordinated Debentures (the "1990-2 Series Debentures") for sale to participants under the 1988 Plan, 5,000 shares of its 1990-2 Series Convertible Preferred Stock (the "1990-2 Series Stock") issuable upon conversion of the 1990-2 Series Debentures and 8,050 shares of the Common Stock issuable upon conversion of the 1990-2 Series Stock, (ix) $39,250 in principal amount of its 1991-1 Series Convertible Subordinated Debentures (the "1991-1 Series Debentures"), for sale to participants under the 1988 Plan, 4,000 shares of its 1991-1 Series Convertible Preferred Stock (the "1991-1 Series Stock") issuable upon conversion of the 1991-1 Series Debentures and 6,440 shares of the Common Stock issuable upon conversion of the 1991-1 Series Stock, (x) $45,562.50 in principal amount of its 1991-2 Series Convertible Subordinated Debentures (the "1991-2 Series Debentures") for sale to participants under the 1988 Plan, 5,000 shares of its 1991-2 Series Convertible Preferred Stock (the "1991-2 Series Stock ") issuable upon conversion of the 1991-2 Series Debentures and 8,050 shares of the Common Stock issuable upon conversion of the 1991-2 Series Stock, (xi) $39,062.50 in principal amount of its 1992-1 Series Convertible Subordinated Debentures (the "1992-1 Series Debentures") for sale to participants under the 1988 Plan, 5,000 shares of its 1992-1 Series Convertible Preferred Stock (the "1992-1 Series Stock") issuable upon conversion of the 1992-1 Debentures, and 8,050 shares of the Common Stock issuable upon conversion of the 1992-1 Series Stock, and (xii) 1,291,555 shares of stock to be issued collectively under the 1980 Plan, the 1988 Plan and the ChemFirst Inc. 1995 Long-Term Incentive Plan (the "1995 Plan") (the foregoing plans being collectively referred to as the "Plans"). As General Counsel of the Company, I am familiar with the Company's Articles of Incorporation and Bylaws; the Plans; the Registration Statement; the actions taken and resolutions passed by the Company's Board of Directors to authorize the 1987-A Series Debentures, 1988-A Series Debentures, 1988-1 Series Debentures, 1989-A Series Debentures, 1989-1 Series Debentures, 1989-2 Series Debentures, 1990-1 Series Debentures, 1990-2 Series Debentures, 1991-1 Series Debentures, 1991-2 Series Debentures and 1992-1 Series Debentures (collectively the "Debentures") and the taking of certain other actions in connection with the offering and sale of the Debentures, the action taken and resolution passed by the Company's Board of Directors to authorize the 1987-A Series Stock, 1988-A Series Stock, 1988-1 Series Stock, 1989-A Series Stock, 1989-1 Series Stock, 1989-2 Series Stock, 1990-1 Series Stock, 1990-2 Series Stock, 1991-1 Series Stock, 1991-2 Series Stock, and 1992-1 Series Stock (the aforementioned series of stock being collectively referred to as the "Series Stock") and the Common Stock issuable pursuant to the Plan; the Indentures (inclusive of all amendments and including any supplemental Indentures) between the Company and Deposit Guaranty National Bank, as Trustee such Debentures being respectively dated as follows: August 10, 1987 relating to the 1987-A Series Debentures, August 30, 1988 relating to the 1988-A Series Debentures, November 29, 1988 relating to the 1988-1 Series Debentures, August 22, 1989 relating to the 1989-A Series Debentures, August 22, 1989 relating to the 1989-1 Series Debentures, November 10, 1989 3 relating to the 1989-2 Series Debentures, August 27, 1990 relating to the 1990-1 Series Debentures, November 9, 1990 relating to the 1990-2 Series Debentures, August 27, 1991 relating to the 1991-1 Series Debentures, November 15, 1991 relating to the 1991-2 Series Debentures, and November 13, 1992 relating to the 1992-1 Series Debentures; the form of each of the Series Debentures; the Debenture Options related to the Series Debentures, and such other matters and documents deemed necessary for the purpose of rendering this opinion. On the basis of the foregoing, I am of the opinion that: 1. The 1987-A Series Debentures, 1988-A Series Debentures and 1989-A Series Debentures have been duly authorized and when issued and paid for in accordance with the terms of the 1980 Plan and applicable debenture options will be validly issued and binding obligations of the Company. 2. The 1987-A Series Stock, 1988-A Series Stock and 1989-A Series Stock issuable upon conversion of the 1987-A Series Debentures, 1988-A Series Debentures and 1989 Series Debentures, respectively, will, when so issued in accordance with the 1980 Plan, the respective applicable Indenture applicable to each such series and the resolutions past by the Company's Board of Directors, be legally issued, fully paid and non-assessable. 3. The shares of Common Stock issuable upon conversion of the 1987-A Series Stock, 1988-A Series Stock and 1989-A Series Stock will when so issued in accordance with the 1980 Plan, the respective Indenture applicable to each series of preferred stock and the resolutions passed by the Company's Board of Directors be legally issued, fully paid and non-assessable. 4. The 1988-1 Series Debentures, 1989-1 Series Debentures, 1989-2 Series Debentures, 1990-1 Series Debentures, 1990-2 Series Debentures, 1991-1 Series Debentures, 1991-2 Series Debentures and 1992-1 Series Debentures have been duly authorized and when issued and paid for in accordance with the terms of the 1988 Plan and any debenture option applicable thereto, will be validly issued and binding obligations of the Company. 5. The shares of 1988-1 Series Stock, 1989-1 Series Stock, 1989-2 Series Stock, 1990-1 Series Stock, 1990-2 Series Stock, 1991-1 Series Stock, 1991-2 Series Stock, and 1992-1 Series Stock issuable upon conversion, respectively, of the 1988-1 Series Debentures, 1989-1 Series Debentures, 1989-2 Series Debentures, 1990-1 Series Debentures, 1990-2 Series Debentures, 1991-1 Series Debentures, 1991-2 Series Debentures, 1992-1 Series Debentures will, when so issued in accordance with the 1988 Plan, the respective Indenture applicable to each such series of preferred stock and the resolutions passed by the Company's Board of Directors, be legally issued, fully paid and non-assessable. 4 6. The shares of Common Stock issuable upon conversion of the 1988-1 Series Stock, 1989-1 Series Stock, 1989-2 Series Stock, 1990-1 Series Stock, 1990-2 Series Stock, 1991-1 Series Stock, 1991-2 Series Stock and 1992-1 Series Stock will, when so issued in accordance with the 1988 Plan, the respective Indenture applicable to each series of preferred stock and the resolutions passed by the Company's Board of Directors, be legally issued, fully paid and non-assessable. 7. All other shares of the Common Stock issuable pursuant to Stock Options and other awards under the Plans will, when issued in accordance with the respective Plans, be legally issued, fully paid and non-assessable. The opinion herein is limited solely to the laws of the State of Mississippi and the laws of the United States, and I express no opinion herein concerning the laws of any other jurisdiction. The opinion is subject to the following qualifications: (a) Rights and remedies set forth in the respective Indentures mentioned above and the Series Debentures are subject to applicable bankruptcy, insolvency, reorganization and other laws now or hereafter in effect affecting the enforcement of creditors' rights generally, and (b) No opinion is expressed as to the availability of any remedy or remedies that may be sought with respect to the specific enforcement of any provision of any Indenture referred to above or any of the Series Debentures. I hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to me and to my opinion in the Registration Statement. Very truly yours, FIRST MISSISSIPPI CORPORATION J. Steve Chustz General Counsel JSC:js EX-23.2 9 CONSENT OF KPMG PEAT MARWICK LLP 1 EXHIBIT 23.2 INDEPENDENT AUDITOR'S CONSENT The Board of Directors ChemFirst Inc.: We consent to the use of our report dated September 6, 1996, on the consolidated financial statements of ChemFirst Inc. and subsidiaries as of June 30, 1996 and 1995, and for each of the years in the three-year period ended June 30, 1996, incorporated herein by reference and to the reference to our firm under the heading "Experts" in the Prospectus. /s/ KPMG Peat Marwick LLP - ------------------------------- KPMG Peat Marwick LLP Jackson, Mississippi December 23, 1996 EX-25.1 10 STATEMENT OF ELIGIBILITY OF TRUSTEE 1 EXHIBIT 25.1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) DEPOSIT GUARANTY NATIONAL BANK (Exact name of trustee as specified in its charter) N/A 64-0147200 (Jurisdiction of incorporation or (I.R.S. Employer organization if not a U.S. national bank) Identification No.) Post Office Box 1200 39201 210 East Capitol Street (ZIP Code) Jackson, Mississippi (Address of principal executive offices) Arlen L. McDonald 210 East Capitol Street Jackson, MS 39201 (601) 354-8497 (Name, Address and telephone number of agent for service) CHEMFIRST, INC. (Exact name of obligor as specified in its charter) Mississippi 64-0679456 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification no.) 2 700 North Street Jackson, Mississippi 39215-1249 (Address of principal executive offices) (ZIP Code) ----------------------------------- 1987-A Convertible Subordinated Debentures 1988-A Convertible Subordinated Debentures 1988-1 Convertible Subordinated Debentures 1989-A Convertible Subordinated Debentures 1989-1 Convertible Subordinated Debentures 1989-2 Convertible Subordinated Debentures 1990-1 Convertible Subordinated Debentures 1990-2 Convertible Subordinated Debentures 1991-1 Convertible Subordinated Debentures 1991-2 Convertible Subordinated Debentures 1992-1 Convertible Subordinated Debentures (Title of indenture securities) 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Name Address Comptroller of the Currency Washington, D.C. Federal Reserve Bank Atlanta, GA (6th District) Federal Deposit Insurance Washington, D.C. Corporation (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. 3 None. 3. Voting Securities of the Trustee. Not applicable pursuant to Instruction B. 4. Trusteeships Under Other Indentures. Not applicable pursuant to Instruction B. 5. Interlocking Directorates and Similar Relationships with the Obligor or Underwriters. Not applicable pursuant to Instruction B. 6. Voting Securities of the Trustee Owned by the Obligor or its Officials. Not applicable pursuant to Instruction B. 7. Voting Securities of the Trustee Owned by Underwriters or their Officials. Not applicable pursuant to Instruction B. 8. Securities of the Obligor Owned or Held by the Trustee. Not applicable pursuant to Instruction B. 9. Securities of Underwriters Owned or Held by the Trustee. Not applicable pursuant to Instruction B. 10. Ownership or Holdings by the Trustee of Voting Securities of Certain Affiliates or Security Holders of the Obligor. Not applicable pursuant to Instruction B. 11. Ownership or Holdings by the Trustee of any Securities of a Person Owning 50 Percent or More of the Voting Securities of the Obligor. Not applicable pursuant to Instruction B. 12. Indebtedness of the Obligor to the Trustee. Not applicable pursuant to Instruction B. 4 13. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. There have been no such defaults. (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligor are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. There have been no such defaults. 14. Affiliations with the Underwriters. If any underwriter is an affiliate of the trustee, describe each such affiliation. Not applicable pursuant to Instruction B. 15. Foreign Trustee. Identify the order or rule pursuant to which the foreign trustee is authorized to act as sole trustee under indentures qualified or to be qualified under the Act. Not applicable. 16. List of Exhibits. Exhibit 1 - Articles of Association of Deposit Guaranty National Bank, as amended to date. Exhibit 2 - Certificate of Authority to Commence Business; incorporated herein by reference to Exhibit 2 of the Form T-1 of Deposit Guaranty National Bank, Registration No. 22-17661. Exhibit 3 - Authorization to Exercise Corporate Trust Powers;incorporated hereinby reference to Exhibit 3 of the Form T-1 of Deposit Guaranty National Bank, Registration No. 22-17661. 5 Exhibit 4 - Bylaws of Deposit Guaranty National Bank, as amended to date. Exhibit 5 - Consent of Deposit Guaranty National Bank required by Section 321(b) of the Act; incorporated herein by reference to Exhibit 8 of the Form T-1 of Deposit Guaranty National Bank, Registration No.22-17661. Exhibit 6 - Report of Condition of Deposit Guaranty National Bank as of the close of business on September 30, 1996, published pursuant to law or the requirement of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, Deposit Guaranty National Bank, a banking association organized and existing under the laws of the United States, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Jackson, and State of Mississippi, on the 20th day of December, 1996. DEPOSIT GUARANTY NATIONAL BANK By: /s/ PETE CAJOELAS ------------------------------------- Pete Cajoelas Senior Vice President 6 ARTICLES OF ASSOCIATION DEPOSIT GUARANTY NATIONAL BANK (Amended September 20, 1994) 7 ARTICLES OF ASSOCIATION DEPOSIT GUARANTY NATIONAL BANK FIRST. The title of the Association shall be "Deposit Guaranty National Bank." SECOND. The main office of the Association shall be in the City of Jackson, County of Hinds, State of Mississippi. The general business of the Association shall be conducted at its main office and its branches. THIRD. The Board of Directors of the Association shall consist of not less than five nor more than twenty-five shareholders, the exact number of Directors within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the full Board of Directors or by resolution of the shareholders at any annual or special meeting thereof. Unless otherwise provided by the laws of the United States, any vacancy in the Board of Directors, for any reason, including an increase in the number thereof, may be filled by action of the Board of Directors. FOURTH. The annual meeting of the shareholders of the Association for the election of directors and the transaction of whatever other business may be brought before said meeting shall be held at the main office or such other place as the Board of Directors may designate, on the day of each year specified therefor in the Bylaws, but if no election is held on that day, it may be held on any subsequent day according to the provisions of law; and all elections shall be held according to such lawful regulations as may be prescribed by the Board of Directors. Nominations for election to the Board of Directors may be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the bank entitled to vote for election of directors. Nominations, other than those made by or on behalf of the existing management of the Bank, shall be made in writing and shall be delivered or mailed to the President of the Bank and to the Comptroller of the Currency, Washington, D. C., not less than 14 days nor more than 50 days prior to any meeting of stockholders called for the election of directors, provided, 8 PAGE TWO however, that if less than 21 days' notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the Bank and to the Comptroller of the Currency not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the total number of shares of capital stock of the Bank that will be voted for each proposed nominee; (d) the name and residence address of the notifying shareholder; and (e) the number of shares of capital stock of the Bank owned by the notifying shareholder. Nomination not made in accordance herewith may, in his discretion, be disregarded by the chairman of the meeting, and upon his instructions, the vote tellers may disregard all votes cast for each such nominee. FIFTH. The authorized amount of capital stock of the Association shall be 3,225,181 shares of common stock, of the par value of $5.00 each; but said capital stock may be increased or decreased from time to time, in accordance with the provisions of the laws of the United States. If the capital stock is increased by the sale of additional shares thereof, each shareholder shall be entitled to subscribe for such additional shares in proportion to the number of shares of said capital stock owned by him at the time the increase is authorized by the shareholders, unless another time subsequent to the date of the shareholders' meeting is specified in a resolution adopted by the shareholders at the time the increase is authorized, except when they are: (1) issued to effect a merger or consolidation; (2) issued to effect an acquisition of assets; (3) issued for consideration other than cash; (4) issued to satisfy conversion rights, or other rights or options; or (5) issued pursuant to any employee stock option or stock purchase plan. The Board of Directors of the Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. SIXTH. The Board of Directors shall appoint one of its members President of the 9 PAGE THREE Association, who shall be Chairman of the Board, unless the Board appoints another director to be the Chairman. The Board of Directors shall have the power to appoint one or more Vice Presidents; and to appoint a Cashier and such other officers and employees as may be required to transact the business of the Association. The Board of Directors shall have the power to define the duties of the officers and employees of the Association; to fix the salaries to be paid to them; to dismiss them and to require bonds from them; to regulate the manner in which any increase of the capital of the Association shall be made; to manage and administer the business and affairs of the Association; to make all Bylaws that it may be lawful for them to make; and generally to do and perform all acts that it may be legal for a Board of Directors to do and perform. SEVENTH. The Board of Directors shall have the power to change the location of the main office to any other place within the limits of the City of Jackson, Mississippi, without the approval of the shareholders, but subject to the approval of the Comptroller of the Currency; and shall have the power to establish or change the location of any branch or branches of the Association to or to any other location, with the approval of the shareholders, but subject to the approval of the Comptroller of the Currency. EIGHTH. The corporate existence of the Association shall continue until terminated in accordance with the laws of the United States. NINTH. The Board of Directors of the Association, or any three or more shareholders owning, in the aggregate, not less than 25 percent of the stock of the Association, may call a special meeting of shareholders at any time. Unless otherwise provided by the laws of the United States, a notice of the time, place and purpose of every annual and special meeting of the shareholders shall be given by first-class mail, postage prepaid, mailed at least ten days prior to the date of such meeting to each shareholder of record at his address as shown upon the books of this Association. 10 PAGE FOUR TENTH. A. Subject to Section C of this Article Tenth, the Association shall indemnify any person who was or is a party or is threatened to be made party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Association) by reason of the fact that he is or was a director, officer, employee or agent of the Association, or is or was serving at the request of the Association as a director, officer, employee or agent of another corporation partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Association, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Association, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. This indemnification provision shall not extend to those suits instituted by any such director, officer, employee or agent unless and to the extent such indemnification is authorized by the Board of Directors. B. Subject to Section C of this Article Tenth, the Association shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Association to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Association, or is or was serving at the request of the Association as a Director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association; except that no indemnification shall be made in respect of any 11 PAGE FIVE claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Association unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper. C. Any indemnification under this Article Tenth (unless ordered by a court) shall be made by the Association only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section A or Section B of this Article Tenth, as the case may be. Such determination shall be made (i) by the Board of Directors by a majority vote of a quorum of the entire Board of Directors, which majority and quorum must consist of directors who were not parties to or otherwise interested in such action, suit or proceeding, or (ii) if such a quorum is not obtainable, by independent legal counsel in a written opinion, or (iii) by the stockholder. Directors "parties to otherwise interested in" an action, suit or proceeding shall include, for purposes of the preceding sentence, (i) any director instituting such action, suit or proceeding, whether in his capacity as director or stockholder (an "Instituting Director") and (ii) any other director nominated (x) by an Instituting Director (and not by the Board of Directors), (y) as part of the same slate of nominees as an Instituting Director (if not nominated by the Board of Directors), or (z) by the same stockholder or any of the same stockholders who nominated an Instituting Director. To the extent, however, that a director, officer, employee or agent of the Association has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case. Notwithstanding any of the provisions of this Article Tenth, in no event shall any person be indemnified against expenses (including attorneys' fees), judgments, fines and amounts due or paid in connection with any action, suit or proceeding instituted by any such director, officer, employee or agent unless and to the extent such indemnification is authorized by 12 PAGE SIX the Board of Directors, or against expenses, penalties, or other payments incurred in an administrative proceeding or action instituted by an appropriate bank regulatory agency which proceeding or action results in a final order assessing civil money penalties or requiring affirmative action by an individual or individuals in the form of payments to the Association. D. For purposes of a determination under Section C of this Article Tenth, a person shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Association, or with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the Association or another enterprise, or on information supplied to him by the officers of the Association or another enterprise in the course of their duties, or on the advice of legal counsel for the Association or another enterprise or on information or records given or reports made to the Association or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Association or another enterprise. The term "another enterprise" as used in this Section D shall mean any other corporation or any partnership, joint venture, trust or other enterprise of which such person is or was serving at the request of the Association as a director, officer, employee or agent. The provisions of this Section D shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Sections A or B of this Article Tenth, as the case may be. E. This Section E does not apply in an administrative proceeding or action instituted by an appropriate bank regulatory agency which proceeding or action results in a final order assessing civil money penalties or requiring affirmative action by an individual or individuals in the form of payments to the Association. In other cases, notwithstanding any contrary determination in the specific case under Section C of this Article Tenth, and notwithstanding the absence of any determination thereunder, any director, officer, employee or agent may apply to any court of competent jurisdiction in the state of Mississippi for indemnification to the extent otherwise permissible under Sections A and B of this Article Tenth. The basis of such indemnification by a 13 PAGE SEVEN court shall be a determination by such court that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Sections A and B of this Article Tenth, as the case may be. Notice of any application for indemnification pursuant to this Section E shall be given to the Association promptly upon the filing of such application. F. Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding may be paid by the Association in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Association as authorized in this Article Tenth. In addition, in the case of an administrative proceeding or action instituted by an appropriate bank regulatory agency which proceeding or action seeks to assess civil money penalties or require affirmative action by an individual or individuals in the form of payments to the Association, before any such advances are made, the Board of Directors , in good faith, must determine in writing that all of the following conditions are met: (1) The director, officer, employee or agent has a substantial likelihood of prevailing on the merits of such administrative proceeding or regulatory action; (2) In the event the director, officer, employee or agent does not prevail in such administrative proceeding or regulatory action, he or she will have the financial capability to reimburse the Association; and (3) Payment of such expenses by the Association will not adversely affect the Association's safety and soundness. In addition, prior to making any such advances, the Association shall enter into a written agreement with the director, officer, employee or agent providing that the Association shall cease making such advances if, at any time, the Board of Directors determines that any of the above three conditions are no longer met in a particular case, and requiring reimbursement for expenses already paid if a final order is issued in any such administrative proceeding or regulatory action assessing civil 14 PAGE EIGHT money penalties or requiring affirmative action, by such director, officer, employee or agent, in the form of payments to the Association, or if the Board of Directors determines that the director, officer, employee or agent willfully misrepresented factors relevant to the Board of Directors determination of conditions (1) or (2) above. G. The indemnification provided by this Article Tenth shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any Bylaw, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the Association that indemnification of the persons specified in Sections A and B of this Article Tenth shall be made to the fullest extent permitted by law. The provisions of this Article Tenth shall not be deemed to preclude the indemnification of any person who is not specified in Sections A or B of this Article Tenth, but whom the Association has the power or obligation to indemnify under the provisions of applicable federal or state law, or otherwise. The indemnification provided by this Article Tenth shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of heirs, executors and administrators of such person. H. The association may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Association, or is or was serving at the request of the Association as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted and incurred by such person, in any such capacity, or arising out of such person's status as such, if the Association would have the power or the obligation to indemnify such person against such liability under the provisions of this Article Tenth, provided that the Association shall not purchase or maintain insurance coverage for a formal order by a bank regulatory agency assessing civil money penalties against a director, officer, employee or agent of the Association. I. For purposes of this Article Tenth, references to "the Association" shall include, in addition to the resulting company, any constituent company (including any constituent of a 15 PAGE NINE constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article Tenth with respect to the resulting or surviving company as he would have with respect to such constituent company if its separate existence had continued. ELEVENTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this Association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. 16 BYLAWS DEPOSIT GUARANTY NATIONAL BANK AMENDED AND ADOPTED BY THE BOARD OF DIRECTORS AUGUST 20, 1996 17 TABLE OF CONTENTS DEPOSIT GUARANTY NATIONAL BANK BYLAWS
PAGE NO. -------- ARTICLE I. MEETINGS OF SHAREHOLDERS. Section 1.1. Annual Meeting. 1 Section 1.2. Special Meetings. 1 Section 1.3. Nominations for Director. 1 Section 1.4. Proxy and Teller Committee. 1 Section 1.5. Proxies. 2 Section 1.6. Quorum. 2 ARTICLE II. BOARD OF DIRECTORS. Section 2.1. Board of Directors. 2 Section 2.2. Number. 2 Section 2.3. Organization Meeting. 2 Section 2.4. Regular Meetings. 2 Section 2.5. Special Meetings. 2 Section 2.6. Quorum. 3 Section 2.7. Vacancies. 3 Section 2.8. Age Limit. 3 Section 2.9. Advisory Board. 3 Section 2.10. Honorary Directors. 3 Section 2.11. Regional Advisory Board. 3 Section 2.12. Secretary. 4 Section 2.13 Qualifications of Directors. 4 ARTICLE III. COMMITTEES OF THE BOARD. Section 3.1. Executive Committee. 4 Section 3.2. Audit Committee. 4 Section 3.3. Other Committees. 4 ARTICLE IV. OFFICERS AND EMPLOYEES. Section 4.1. Chairman of the Board. 5 Section 4.2. President. 5 Section 4.3. Chairman of Executive Committee. 5 Section 4.4. Secretary. 5 Section 4.5. Treasurer. 5 Section 4.6. Other Officers. 5 Section 4.7. Tenure of Office. 6 Section 4.8. Interim Promotions, and Appointments of Officers. 6 Section 4.9. Nature of Employment and Termination of Officers. 6 ARTICLE V. TRUST DEPARTMENT. Section 5.1. Trust Department. 6 Section 5.2. Trust Officer. 6 Section 5.3. Trust Policy and Investment Committee. 7 Section 5.4. Trust Audit Committee. 7
18 Bank Bylaws Table of Contents Page Two
PAGE NO. -------- Section 5.5. Trust Department Files. 7 Section 5.6. Trust Investments. 7 ARTICLE VI. STOCK AND STOCK CERTIFICATES. Section 6.1. Transfers. 7 Section 6.2. Stock Certificates. 7 ARTICLE VII. CORPORATE SEAL. 8 ARTICLE VIII. MISCELLANEOUS PROVISIONS. Section 8.1. Fiscal Year. 8 Section 8.2. Execution of Instruments. 8 Section 8.3. Records. 8 Section 8.4. Capital Expenditures. 8 ARTICLE IX. BYLAWS. Section 9.1. Inspection. 9 Section 9.2. Amendments. 9 ARTICLE X. POST-EMERGENCY OPERATIONS. Section 10.1. Continuity of Management. 9 Section 10.2. Post-Emergency Provisions for Alternate Location of Head Office. 9
19 DEPOSIT GUARANTY NATIONAL BANK BYLAWS ARTICLE I Meetings of Shareholders Section 1.1. Annual Meeting. The regular annual meeting of the shareholders for the election of directors and the transaction of whatever other business may properly come before the meeting, shall be held at the Main Office of the Bank, 210 East Capitol Street, City of Jackson, or such other place as the Board of Directors may designate. Said meeting shall be held on the third Tuesday in the month of February of each year at such time as may be determined by the Board of Directors and stated in the notice and call of the meeting. Notice of such meeting shall be mailed, by first class mail, postage prepaid, at least ten days prior to the date thereof, addressed to each shareholder at his address appearing on the books of the bank. If, from any cause, an election of directors is not made on the said day, the Board of Directors shall order the election to be held on some subsequent day, as soon thereafter as practicable, according to the provisions of law; and notice thereof shall be given in the manner herein provided for the annual meeting. (Amended January 20, 1970) Section 1.2. Special Meetings. Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by the Board of Directors or by any three or more shareholders owning, in the aggregate, not less than twenty-five percent of the stock of the Association. Every such special meeting, unless otherwise provided by law, shall be called by mailing, by first class mail, postage prepaid, not less than ten days prior to the date fixed for such meeting, to each shareholder at his address appearing on the books of the Association, a notice stating the purpose of the meeting. Section 1.3. Nominations for Directors. Nominations for election to the Board of Directors may be made by the Board of Directors or by any stockholder of any outstanding class of capital stock of the bank entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the bank, shall be made in writing and shall be delivered or mailed to the President of the bank and to the Comptroller of the Currency, Washington, D. C., not less than 14 days nor more than 50 days prior to any meeting of stockholders called for the election of directors, provided however, that if less than 21 days' notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the bank and to the Comptroller of the Currency not later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed nominee; (b) the principal occupation of each proposed nominee; (c) the total number of shares of capital stock of the bank that will be voted for each proposed nominee; (d) the name and residence address of the notifying shareholder; and (e) the number of shares of capital stock of the bank owned by the notifying shareholder. Nominations not made in accordance herewith may, in his discretion, be disregarded by the chairman of the meeting, and upon his instructions, the vote tellers may disregard all votes cast for each such nominee. Section 1.4. Proxy and Teller Committee. Every election of Directors shall be managed by the Proxy and Teller Committee, which shall be composed of at least three (3) persons, who shall be appointed by the Chairman of the Board. The appointment of the Committee shall be ratified by the Board of Directors at the meeting preceding the Annual Stockholders Meeting. The Committee shall tally all votes cast at the Annual Stockholders Meeting for motions setting the number of Directors, and for the election of said Directors, and shall certify the results thereof to the Secretary of the Meeting, with a copy to the Secretary of the Board if different from the Secretary of the Meeting. The Committee, at 20 Bank Bylaws Page Two the request of the Chairman of the Meeting, shall tally and certify the results of any other vote at such meeting. (Amended February 19, 1985) Section 1.5. Proxies. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing, but no officer or employee of this Association shall act as proxy. Proxies shall be valid only for one meeting, to be specified therein, and any adjournment of such meeting. Proxies shall be dated and shall be filed with the records of the meeting. Section 1.6. Quorum. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law; but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association. ARTICLE II Directors Section 2.1. Board of Directors. The Board of Directors (hereinafter referred to as the "Board") shall have power to manage and administer the business and affairs of the Association. Except as expressly limited by law, all corporate powers of the Association shall be vested in and may be exercised by the Board. Section 2.2. Number. The Board shall consist of not less than five nor more than twenty-five persons, the exact number within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the full Board or by resolution of the shareholders at any meeting thereof, provided, however, that a majority of the full Board of Directors may not increase the number of Directors to a number which: (1) exceeds by more than two the number of Directors last elected by shareholders where such number was fifteen or less; and (2) to a number which exceeds by more than four the number of Directors last elected by shareholders where such number was sixteen or more, but in no event shall the number of Directors exceed twenty-five. Section 2.3. Organization Meeting. The Cashier, upon receiving the certificate of the judges, of the result of any election, shall notify the Directors-Elect of their election and of the time at which they are required to meet at the Main Office of the Association for the purpose of organizing the new Board and electing and appointing officers of the Association for the succeeding year. Such meeting shall be appointed to be held on the day of the election or as soon thereafter as practicable, and in any event, within thirty days thereof. If, at the time fixed for such meeting, there shall not be a quorum present, the directors present may adjourn the meeting, from time to time, until a quorum is obtained. Section 2.4. Regular Meetings. The regular meetings of the Board of Directors shall be held, without notice, on the third Tuesday of February, April, May, August, November and December at the Main Office. When any regular meeting of the Board falls upon a holiday, the meeting shall be held on the next banking business day unless the Board shall designate some other day. The Directors may from time to time change the date of any regular meeting, but at least three days' notice shall be given of the time of such meeting. (Amended December 17, 1991) (Previously Amended November 20, 1990) Section 2.5. Special Meetings. The Board of Directors may be called to meet at any 21 Bank Bylaws Page Three time upon written request of any Executive officer of the bank or member of the Board, or upon written request of one or more stockholders representing as much as ten per centum of the outstanding common capital stock of the bank. All such written requests shall be filed with the Cashier or other executive officer and he shall be required to give notice of any such call, giving time and place of the meeting, by any method which will effectively notify the members of the Board. The directors may be required to meet at any time later than three hours after the issuance of the call for such meeting, as the persons making the request for the meeting and the officer calling the meeting may decide. A meeting for all purposes may be held without notice at any time when all directors are present and willing to meet for all or particular purposes or when a majority are present and all others have signified their willingness in writing that such meeting be held. Section 2.6. Quorum. A majority of the directors shall constitute a quorum at any meeting, except when otherwise provided by law; but a less number may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. Section 2.7. Vacancies. When any vacancy occurs among the directors, the remaining members of the Board, in accordance with the laws of the United States, may appoint a director to fill such vacancy at any regular meeting of the Board, or at a special meeting called for that purpose. Section 2.8. Age Limit. No person shall be elected to the Board of Directors who is sixty-five years of age or older on the first day of January immediately preceding the election of directors. No person shall be eligible for re- election who has more than 50% absences from Board and Committee meetings, unexcused by the Executive Committee. (Amended February 19, 1985) Section 2.9. Advisory Board. Immediately after the annual meeting of stockholders, the Board of Directors which shall have been elected at such meeting shall meet and elect an Advisory Board to the Board of Directors of not more than twenty-five persons who are not members of the Board of Directors. At any time when there are less than twenty- five members elected to and acting on the Advisory Board, the Board of Directors may at any regular or special meeting elect to the Advisory Board such additional members as they desire, provided that the total membership of such Advisory Board shall at no time exceed twentyfive members. The term of office of all members of the Advisory Board shall expire at the next annual meeting of stockholders, regardless of when elected. The Advisory Board shall meet with the Board of Directors at all meetings of the Board of Directors; shall advise with the Board of Directors at such meetings and discuss with the Board of Directors any matters coming before the Board of Directors, but shall not be entitled to vote on any matters. The compensation of members of the Advisory Board shall be the same as the compensation of members of the Board of Directors. No person shall be elected to the Advisory Board who was seventy (70) years of age on the first day of January immediately preceding the election of Directors. No person shall be re-elected to the Advisory Board who has more than 50% absences from Advisory Board and Committee meetings, unexcused by the Executive Committee. (Amended February 19, 1985) Section 2.10. Honorary Directors. A retired Chief Executive Officer of the Bank shall, upon said retirement, be eligible for election, annually, as an Honorary Director of the Bank, with the same age limitations, voting rights and compensation as those which govern Advisory Board members of the Bank. Section 2.11. Regional Advisory Board. The Board of Directors may from time to time appoint such Regional Advisory Boards as it may deem desirable to serve in connection with the operation of branch banks and may fix the number of members of said 22 Bank Bylaws Page Four Advisory Boards and the qualifications and duties of the members of said Boards. Section 2.12. Secretary. The Board of Directors shall appoint a Secretary of the Board, who is not required to be a member of the Board. It shall be the duty of the Secretary of the Board to keep and preserve minutes of its meetings and to perform such other duties as may be assigned to him by the Board. Section 2.13. Qualifications of Directors. Every Director must, during the whole term of his service, be a citizen of the United States and at least two-thirds of the Directors must have resided and must continue to reside in the State of Mississippi, or within one hundred miles of the main office of the Association for one year immediately preceding their election and during their continuance in office. Every director must own in his own right either shares of the capital stock of the Association the aggregate par value of which is not less than $1,000, or stock in another company which has control over the Association within the meaning of Section 1841 of Title 12 of the United States Code with either an aggregate par value, an aggregate shareholders' equity, or an aggregate fair market value of at least $1,000. Determination of these values may be based on the value of the stock on the date it was purchased or the date on which the Director became a Director, whichever is greater. Any Director who ceases to become an owner of the required number of shares of stock, or who becomes disqualified in any other manner, shall thereby vacate his place. ARTICLE III Committees of the Board Section 3.1. Executive Committee. There shall be an Executive Committee composed of not less than five nor more than fourteen members of the Board of Directors, the exact number of which shall be fixed from time to time by resolution of a majority of the Board of Directors. The Chairman of the Board and the President shall be members of this Committee. The Chairman of the Executive Committee shall be elected by the Board of Directors. Meetings of the Executive Committee shall be held, without notice, on the third Tuesday of each calendar month, except those months in which a regular meeting of the Board of Directors is scheduled, or more frequently at the call of the Chairman of the Committee, the Chairman of the Board or the President. Notice of special meetings of the Executive Committee shall be given in the manner provided in these bylaws for special meetings of the Board of Directors. Under the direction and control of the Board of Directors, the Executive Committee shall have charge and exercise complete control of all matters which may require attention at any time between regular meetings of the Board of Directors and shall also perform such other duties as the Board of Directors may designate. (Amended August 20, 1996)(Previously Amended December 19, 1967; February 18, 1975) Section 3.2 Audit Committee. There shall be an Audit Committee, which may be joint with the parent holding company, composed of not less than four Directors, exclusive of any active officers, appointed by the Board annually or more often, whose duties shall include causing an annual audit to be made of the financial statements of the Association by independent public accountants; reviewing with internal auditors and the accountants the scope of audits, significant accounting policies and audit conclusions; monitoring the adequacy of accounting, financial reporting and internal control systems; discussing with management and nominating or terminating the accountants; overseeing the internal audit function including the selection, retention, evaluation and compensation of the chief internal auditor; and such other duties as the Board may designate. The Board may designate the Audit Committee of the parent holding company as the Audit Committee of the Association." (Amended August 20, 1996) (Previously Amended February 19, 1985) 23 Bank Bylaws Page Five Section 3.3. Other Committees. The Board of Directors may appoint, from time to time, from its own members, other committees of one or more persons, for such purposes and with such powers as the Board may determine. ARTICLE IV Officers and Employees Section 4.1. Chairman of the Board. The Board of Directors shall appoint one of its members to be Chairman of the Board and Chief Executive Officer to serve at the pleasure of the Board. He shall preside at all meetings of the Board of Directors. The Chairman of the Board shall supervise the carrying out of the policies adopted or approved by the Board. He shall have general executive powers, as well as the specific powers conferred by these Bylaws. He shall also have and may exercise such further powers and duties as from time to time may be conferred upon, or assigned to, him by the Board of Directors. (Amended February 19, 1985) Section 4.2. President. The Board of Directors shall appoint one of its members to be President of the Association. In the absence of the Chairman, he shall preside at any meeting of the Board. The President shall have general executive powers, and shall have and may exercise any and all other powers and duties pertaining by law, regulation, or practice, to the office of President, or imposed by these Bylaws. He shall also have and may exercise such further powers and duties as from time to time may be conferred upon, or assigned to, him by the Board of Directors. Section 4.3. Chairman of Executive Committee. The Board of Directors shall annually elect the Chairman of the Executive Committee from among the members of the Board of Directors or the Advisory Board. The Chairman of the Executive Committee shall Bank preside at all meetings of said committee and shall supervise the carrying out of the duties of such committee. He shall also have and may exercise such further powers and duties as from time to time may be conferred upon, or assigned to, him by the Board of Directors. Section 4.4. Secretary. The Board of Directors shall appoint a Secretary who shall be Secretary of the Board and of the Association, and shall keep accurate minutes of all meetings. He shall attend to the giving of all notices required by these Bylaws to be given. He shall be custodian of the corporate seal, records, documents and papers of the Association. He shall provide for the keeping of proper records of all transactions of the Association. He shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice, to the office of the Secretary, or Cashier, or imposed by these Bylaws. He shall also perform such other duties as may be assigned to him, from time to time, by the Board of Directors. Section 4.5 Treasurer. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties as the Board of Directors shall determine. He shall have charge and custody of and be responsible for all funds and securities of the bank, and in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the President, or by the Board of Directors. The Treasurer shall be the chief financial and the principal accounting officer of the bank. (Added February 19, 1985) Section 4.6. Other Officers. The Board of Directors may appoint one or more Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Vice Bank 24 Bylaws Page Six Presidents, Trust Officers, Assistant Secretaries, Assistant Trust Officers, Cashiers, Assistant Cashiers, one or more Managers and Assistant Managers of Branches and such other officers and Attorneys-infact as from time to time may appear to the Board of Directors to be required or desirable to transact the business of the Association. Such officers shall respectively exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon, or assigned to, them by the Board of Directors, the Chairman of the Board, or the President. (Amended May 15, 1984) Section 4.7. Tenure of Office. An officer shall hold his office at the pleasure of the Board of Directors, unless he resigns, becomes disqualified, or is terminated from employment in accordance with the provisions of Section 4.9 of these bylaws. Any vacancy occurring in the office of Chairman of the Board Bank shall be filled promptly by the Board of Directors. (Amended October 17, 1989)(Previously Amended February 19, 1985; May 15, 1984) Section 4.8. Interim Promotions, and Appointments of Officers. Immediately following the Annual Stockholders Meeting, all officers to be appointed shall be appointed by the Board of Directors. Interim appointments shall be made by and upon the authority of the Executive Committee of the Board. (Amended December 17,1991) (Previously Amended Oct. 17, 1989; Added May 15, 1984) Section 4.9. Nature of Employment and Termination of Officers. Absent a written agreement signed by the Chairman of the Board or President to the contrary, all employment, including the employment of officers, with the Association is at will. Appointment or election to an office does not change the nature of employment. The employment of officers like that of all other employees, may be terminated at any time, for any reason, and without further obligation. The employment of any officer may be terminated by and upon the authority of the Executive Committee of the Board. (Amended December 17, 1991) (Added October 17, 1989) ARTICLE V Trust Division Section 5.1. Trust Division. There shall be a department of the Association known as the Trust Division which shall perform the fiduciary responsibilities of the Association. Section 5.2. Trust Officer. There shall be an Executive Vice President or other senior officer of this Association whose duties shall be to manage, supervise and direct all the activities of the Trust Division. He shall do or cause to be done all things necessary or proper in carrying on this business of the Trust Division in accordance with provisions of law and applicable regulations. He shall act pursuant to opinion of counsel where such opinion is deemed necessary. Opinions of counsel shall be retained on file in connection with all important matters pertaining to fiduciary activities. The officer shall be responsible for all assets and documents held by the Association in connection with fiduciary matters. The Board of Directors may appoint such other officers of the Trust Division as it may deem necessary, with such duties as may be assigned. Any officer of the Association assigned to the Trust Division functions shall have authority to sign documents relating to fiduciary transactions of the Association. (Amended February 19, 1985) 25 Bank Bylaws Page Seven Section 5.3. Trust Policy and Investment Committee. There shall be a Trust Policy and Investment Committee of this Association composed of at least seven members, who shall be capable and experienced officers or directors of the Association. This Committee shall have the overall responsibility for all of the Trust Division policies and the implementation of same including, but not limited to: Acceptance of New Business; Establishment of Fees; Administration; Investments; Account Reviews; and Other policy and administrative matters. This committee shall be authorized to appoint sub-committees as it may deem necessary to carry out the functions of the Trust Policy and Investment Committee. The Trust Policy and Investment Committee and all sub-committees shall maintain proper and separate minutes. (Amended February 19, 1985) Section 5.4. Trust Audit Committee. The Board of Directors shall appoint a committee of at least three directors, exclusive of any active officers of the Association, which shall, at least once during each calendar year and within fifteen months of the last such audit make suitable audits of the Trust Division or cause suitable audits to be made by auditors responsible only to the Board of Directors, and at such time ascertain whether the department has been administered in accordance with law, Regulation 9, and sound fiduciary principles. No active officer of the Bank may serve on the Trust Audit Committee, as a member or as Secretary thereof. (Amended November 20, 1979) Section 5.5. Trust Division Files. There shall be maintained in the Trust Division files containing all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged. Section 5.6. Trust Investments. Funds held in a fiduciary capacity shall be invested in accordance with the instrument establishing the fiduciary relationship and local law. Where Bank such instrument does not specify the character and class of investments to be made and does not vest in the bank a discretion in the matter funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under local law. ARTICLE VI Stock and Stock Certificates Section 6.1. Transfers. Shares of stock shall be transferable on the books of the Association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to his shares, succeed to all rights and liabilities of the prior holder of such shares. Section 6.2. Stock Certificates. Certificates of stock shall bear the signature of the President (which may be engraved, printed or impressed), and shall be signed manually or by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant Cashier, or any other officer appointed by the Board of Directors for that purpose, to be known as an 26 Bank Bylaws Page Eight Authorized Officer, and the seal of the Association shall be engraved thereon. Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed. ARTICLE VII Corporate Seal The President, the Cashier, the Secretary, or any Assistant Secretary, or other officer thereunto designated by the Board of Directors, shall have authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be substantially in the following form: ARTICLE VIII Miscellaneous Provisions Section 8.1. Fiscal Year. The fiscal year of the Association shall be the calendar year. Section 8.2. Execution of Instruments. All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted in behalf of the Association by the Chairman of the Board, or the President, or the Secretary, or the Cashier, or any Executive Vice President, Senior Vice President, Vice President, or above, or, if in connection with the exercise of fiduciary powers of the Association, by any Assistant Trust Officer or above. Any such instruments may also be executed, acknowledged, verified, delivered or accepted in behalf of the Association in such other manner and by such other officers as the Board of Directors may from time to time direct. The provisions of this Section 8.2 are supplementary to any other provision of these Bylaws. (Amended February 19, 1985) (Amended February 15, 1983) Section 8.3. Records. The Articles of Association, the Bylaws and the proceedings of all meetings of the shareholders, the Board of Directors, standing committees of the Board, shall be recorded in appropriate minute books provided for the purpose. The minutes of each meeting shall be signed by the Secretary, Cashier or other officer appointed to act as Secretary of the meeting. For a period of at least ten days before any annual meeting of shareholders, and at least five days before any special meeting of shareholders, the minutes of the preceding meeting of shareholders and the minutes of any other meeting of shareholders which have not been approved shall be open to inspection by any shareholder of record at the principal office of the bank during normal business hours. Such minutes shall also be produced and kept open at the time and place of the meeting, and shall be subject to the inspection of any shareholder during the whole time of the meeting. The Chairman or Secretary of the shareholders meeting shall read a resume of the minutes of such preceding meeting or meetings, which reading shall be sufficient for entertaining a motion for their adoption. Section 8.4. Capital Expenditures. No officer or employee may cause to be made, directly or indirectly, any capital expenditure in excess of $500,000, but less than $1,000,000, without prior approval of a majority of the Executive Committee, nor any capital expenditure of $1,000,000 or more, without prior approval of a majority of the 27 Bank Bylaws Page Nine Board of Directors. The term "capital expenditure" shall include any interest in real property, or improvements thereon, or personal property. (Added July 17, 1979) (Amended August 19, 1980) (Amended August 18, 1992) ARTICLE IX Bylaws Section 9.1. Inspection. A copy of the Bylaws, with all amendments thereto, shall at all times be kept in a convenient place at the Head Office of the Association, and shall be open for inspection to all shareholders, during banking hours. Section 9.2. Amendments. The Bylaws may be amended, altered or repealed, at any regular meeting of the Board of Directors, by a vote of a majority of the whole number of the Directors. ARTICLE X Post-Emergency Operations Section 10.1. Continuity of Management. In the event of an emergency declared by the President of the United States, or person performing his functions, or in the event of fire, flood, tornado, hurricane, damage resulting from civil disturbances, or other disaster of sufficient severity to prevent the conduct and management of the affairs and business of this bank, the officers of this bank in the order of their authority, shall continue to conduct the affairs of the bank under such guidance from the Directors as may be available. Three or more Directors shall constitute a quorum, in said emergency or disaster. In the event of said emergency or disaster, if the Chief Executive Officer of this bank can not be located by the then acting Head Office, or is unable to assume or to continue normal executive duties, then the authority and duties of the Chief Executive Officer shall, without further action of the Board of Directors, be automatically assumed by the next most senior officer of the Bank. Any officer who so assumes the Chief Executive Officer position shall continue to serve until (a) he or she resigns, or (b) until five-sixths of the other officers who are attached to the then acting Head Office decide in writing that he or she is unable to perform said duties, or (c) until an officer more senior than the one who assumed the Chief Executive Officer position, shall become available to perform the duties of Chief Executive Officer of the Bank. Section 10.2. Post-Emergency Provisions for Alternate Location of the Head Office. During any emergency or disaster resulting in the Main Office of the Bank being unable to function, the business ordinarily conducted at such location shall be relocated elsewhere in suitable quarters, as may be designated by the Board of Directors, it being contemplated that the largest remaining Branch Office or State Branch Bank available will be utilized. 28 EXHIBIT 6 Legal Title of Bank: DEPOSIT GUARANTY NATIONAL BANK Call Date: 9/30/96 ST-BK: 28-900 FFIEC 032 Address: 210 East Capitol Street Page RC-1 City/State/Zip: Jackson, MS 39205 FDIC Certificate No.: 0 9 7 8 4
Consolidated Report of Condition for Insured Commercial and State-Chartered Savings Banks for September 30, 1996 All schedules are to be reported in thousands of dollars. Unless other indicated, report the amount outstanding as of the last business day of the quarter. Schedule RC -- Balance Sheet
Dollar amounts in Thousands RCON Bil Mil Thou ASSETS 1. Cash and balances due from depository institutions (from Schedule RC-A): a. Noninterest-bearing balances and currency and coin (1) 0081 257,509 b. Interest-bearing balances (2) 0071 50 2. Securities: a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 115,882 b. Available-for-sale securities (from Schedule RC-B, column b) 1773 663,981 3. Federal funds sold and securities purchased under agreements to resell: a. Federal funds sold 0276 97,995 b. Securities purchased under agreements to resell 0277 105,306 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income (from Schedule RC-C) RCON 2122 2,953,640 b. LESS: Allowance for loan and lease losses RCON 3123 39,909 c. LESS: Allocated transfer risk reserve RCON 3128 0 d. Loans and leases, net of unearned income, allowance, and reserve (item 4.1 minus 4.b and 4.c) 2125 2,913,731 5. Trading assets (from Schedule RC-D) 3545 3,402 6. Premises and fixed assets (including capitalized leases) 2145 84,068 7. Other real estate owned (from Schedule RC-M) 2150 2,560 8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) 2130 20 9. Customers' liability to this bank on acceptances outstanding 2155 26 10. Intangible assets (from Schedule RC-M) 2143 66,052 11. Other assets (from Schedule RC-F) 2160 100,230 12. Total assets (sum of items 1 through 11) 2170 4,410,812
- -------------- (1) Includes cash items in process of collection and unposted debits. (2) Includes time certificates of deposit not held for trading. 29 Legal Title of Bank: DEPOSIT GUARANTY NATIONAL BANK Call Date: 9/30/96 ST-BK: 28-900 FFIEC 032 Address: 210 East Capitol Street Page RC-2 City/State/Zip: Jackson, MS 39205 FDIC Certificate No.: 0 9 7 8 4
Schedule RC -- Continued
Dollar amounts in Thousands RCON Bil Mil Thou LIABILITIES 13. Deposits: a. In domestic offices (sum of totals of columns A and C from Schedule RC-E) 2200 3,528,400 (1) Noninterest-bearing (1) RCON 6631 829,523 (2) Interest-bearing RCON 6636 2,698,877 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (1) Noninterest-bearing (2) Interest-bearing 14. Federal funds purchased and securities sold under agreements to repurchase: a. Federal funds purchased 0278 67,355 b. Securities sold under agreements to repurchase 0279 228,623 15. a. Demand notes issued to the U.S. Treasury 2840 0 b. Trading liabilities (from Schedule RC-D) 3548 0 16. Other borrowed money: a. With a remaining maturity of one year or less 2332 131,799 b. With a remaining maturity of more than one year 2333 7,242 17. Mortgage indebtedness and obligations under capitalized leases 2910 0 18. Bank's liability on acceptances executed and outstanding 2920 26 19. Subordinated notes and debentures 3200 0 20. Other liabilities (from Schedule RC-G) 2930 33,304 21. Total liabilities (sum of items 13 through 20) 2948 3,996,749 22. Limited-life preferred stock and related surplus 3282 0 EQUITY CAPITAL 23. Perpetual preferred stock and related surplus 3838 0 24. Common stock 3230 16,126 25. Surplus (exclude all surplus related to preferred stock) 3839 158,865 26. a. Undivided profits and capital reserves 3632 237,546 b. Net unrealized holding gains (losses) on available-for-sale securities 8434 1,526 27. Cumulative foreign currency translation adjustments 28. Total equity capital (sum of items 23 through 27) 3210 414,063 29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, and 28) 3300 4,410,812 Memorandum To be reported only with the March Report of Condition. 1. Indicate in this box at the right the number of the statement below that best describes the most comprehensive level of auditing work performed for the bank by independent external auditors as of any date during 1995 RCON 6724 N/A 1 = Independent audit of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the bank. 2 = Independent audit of the bank's parent holding company conducted in accordance with generally accepted auditing standards by a certified public accounting firm which submits a report on the consolidated holding company (but not on the bank separately). 3 = Directors' examination of the bank conducted in accordance with generally accepted auditing standards by a certified public accounting firm (may be required by state chartering authority). 4 = Directors' examination of the bank performed by other external auditors (may be required by state chartering authority). 5 = Review of the bank's financial statements by external auditors. 6 = Compilation of the bank's financial statements by external auditors. 7 = Other audit procedures (excluding tax preparation work) 8 = No external audit work. - --------------- (1) Includes total demand deposits and noninterest-bearing time and savings deposits.
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