-----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, BU+CBF+OwFGyaEWBn3Q02TY3ZEbfjHkYYZArN/4AV+4UH4i1MnEB6+LOON0CGNPS ZrhVJfqHXvTlGcfhJawEQA== 0000950134-98-005729.txt : 19980707 0000950134-98-005729.hdr.sgml : 19980707 ACCESSION NUMBER: 0000950134-98-005729 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19980706 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LAFARGE CORP CENTRAL INDEX KEY: 0000716783 STANDARD INDUSTRIAL CLASSIFICATION: CEMENT, HYDRAULIC [3241] IRS NUMBER: 581290226 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-57333 FILM NUMBER: 98660885 BUSINESS ADDRESS: STREET 1: 11130 SUNRISE VALLEY DR STE 300 CITY: RESTON STATE: VA ZIP: 22091-4329 BUSINESS PHONE: 7032643600 S-3/A 1 AMENDMENT NO. 1 TO FORM S-3 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 1998 REGISTRATION NO. 333-57333 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- LAFARGE CORPORATION (Exact Name of Registrant as Specified in its Charter) MARYLAND 58-1290226 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
11130 SUNRISE VALLEY DRIVE, SUITE 300 RESTON, VIRGINIA 20191 (703) 264-3600 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) --------------------- LARRY J. WAISANEN EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER 11130 SUNRISE VALLEY DRIVE, SUITE 300 RESTON, VIRGINIA 20191 (703) 264-3600 (Name, address, including zip code, and telephone number, including area code, of Registrant's agent for service) --------------------- Copies of Communication to: PETER A. LODWICK, ESQ. ROBERT B. WILLIAMS, ESQ. THOMPSON & KNIGHT, P.C. MILBANK, TWEED, HADLEY & MCCLOY 1700 PACIFIC, SUITE 3300 ONE CHASE MANHATTAN PLAZA DALLAS, TEXAS 75201 NEW YORK, NEW YORK 10005 (214) 969-1700 (212) 530-5000
--------------------- Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the Prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] --------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. SUBJECT TO COMPLETION, DATED JUNE 29, 1998 PROSPECTUS , 1998 $650,000,000 [LAFARGE LOGO] % SENIOR NOTES DUE The Senior Notes (the "Notes") are being offered by Lafarge Corporation, a Maryland corporation. Interest on the Notes is payable semi-annually on June 15 and December 15 of each year commencing on December 15, 1998. The Notes constitute senior and unsecured obligations of the Company, ranking pari passu in right of payment with all other senior and unsecured obligations of the Company. See "Description of Notes -- General." The Notes may be redeemed as a whole or in part at the option of the Company at any time, at a redemption price equal to the greater of (i) 100% of the principal amount thereof or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to such redemption date on a semiannual basis at the Treasury Rate (as defined herein) plus basis points, plus in either case accrued and unpaid interest on the principal amount being redeemed to the date of redemption. See "Description of Notes -- Redemption Provisions." The Notes are not subject to any sinking fund. The Notes will be represented by a Book-Entry Note registered in the name of the nominee of The Depository Trust Company, which will act as securities depositary. Beneficial interests in a Book-Entry Note will be shown on, and transfers thereof will be effected only through, records maintained by The Depository Trust Company and its direct and indirect participants. Except as described herein, the Notes will not be issued in definitive form. See "Description of Notes -- Book-Entry Notes." THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------------------------------------------- PRICE UNDERWRITING PROCEEDS TO THE DISCOUNTS AND TO THE PUBLIC(1) COMMISSIONS(2) COMPANY(3) - --------------------------------------------------------------------------------------------------------------------- Per Note..................................... % % % Total........................................ $ $ $ - ---------------------------------------------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from the date of issuance. (2) The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended. See "Underwriting." (3) Before deducting expenses payable by the Company estimated at $ . The Notes are offered by the several Underwriters, subject to prior sale, when, as and if delivered to and accepted by them, subject to certain conditions, including their rights to withdraw, cancel or reject orders in whole or in part. It is expected that delivery of the Notes will be made in New York, New York, on or about , 1998, in book-entry form through the facilities of The Depository Trust Company against payment therefor in immediately available funds. Joint Lead Managers DONALDSON, LUFKIN & JENRETTE WARBURG DILLON READ LLC -------------------------------------------- CITICORP SECURITIES, INC. 3 [Map of the Company's cement plants and construction materials operations] THE UNDERWRITERS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICES OF THE NOTES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." 2 4 AVAILABLE INFORMATION Lafarge Corporation, a Maryland corporation (the "Company" or "Lafarge"), is subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information filed by the Company with the Commission can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the following Regional Offices of the Commission: Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and New York Regional Office, Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy statements and other information concerning the Company can be inspected at the New York Stock Exchange, 20 Broad Street, New York, New York 10005, The Toronto Stock Exchange, Exchange Tower, 2 First Canadian Place, Toronto, Ontario, Canada M5X 1J2 and the Montreal Exchange, Stock Exchange Tower, 800 Victoria Square, Montreal, Quebec, Canada H4Z 1A9. This Prospectus constitutes a part of a Registration Statement on Form S-3 (together with all amendments and exhibits thereto, the "Registration Statement") filed by the Company with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus omits certain of the information contained in the Registration Statement in accordance with the rules and regulations of the Commission. Reference is hereby made to the Registration Statement and exhibits thereto for further information with respect to the Company and the securities offered hereby. Any statements contained herein concerning the provisions of any document filed as an exhibit to the Registration Statement or otherwise filed with the Commission are not necessarily complete, and in each instance reference is made to the copy of such document so filed. Each such statement is qualified in its entirety by such reference. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents filed by the Company with the Commission under the Exchange Act (File No. 0-11936) are incorporated by reference in this Prospectus: (a) the Company's Annual Report on Form 10-K for the year ended December 31, 1997; (b) the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 1998; (c) Proxy Statement dated March 23, 1998, relating to the 1998 annual meeting of stockholders of the Company; and (d) the Company's Current Report on Form 8-K dated June 3, 1998. All documents filed by the Company pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Notes pursuant hereto shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such document. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom this Prospectus is delivered, upon written or oral request of such person, a copy of any or all of the documents that are incorporated by reference in this Prospectus (other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to Mr. David C. Jones, Vice President -- Legal Affairs and Corporate Secretary, Lafarge Corporation, 11130 Sunrise Valley Drive, Suite 300, Reston, Virginia 20191, telephone number (703) 264-3600. 3 5 THE COMPANY The Company, one of the largest producers of cement and construction materials in North America, produces and sells cement, aggregates, ready-mixed concrete and other concrete products, gypsum wallboard and other construction materials in the United States and Canada. Canadian operations are conducted by Lafarge Canada Inc. ("Lafarge Canada"), the Company's Canadian subsidiary. In the United States, the Company is the third largest producer of cement by clinker production capacity and, including the recently acquired Redland Operations (as defined below), the fourth largest producer of aggregates. In Canada, the Company is the largest producer of cement by clinker production capacity and one of the largest producers of aggregates, ready-mixed concrete and other concrete products. The rated annual clinker production capacity of the Company's 14 cement manufacturing plants is approximately 11.7 million tons, with approximately 6.5 million tons of capacity in the United States and approximately 5.2 million tons of capacity in Canada. In 1997, the Company shipped 13 million tons of cement and, on a pro forma basis giving effect to the acquisition of the Redland Operations, shipped 75 million tons of aggregates and 10 million cubic yards of ready-mixed concrete. In September 1996, the Company entered the gypsum wallboard business by acquiring manufacturing facilities located in Buchanan, New York and Wilmington, Delaware, with a combined rated annual capacity of 700 million square feet of wallboard. The Company supplies a full line of gypsum wallboard products used in residential and commercial construction as well as remodeling and repair. The Company is also engaged in road building and other construction using many of its own products. On a pro forma basis, after giving effect to the acquisition of the Redland Operations, the Company had revenues of approximately $2.4 billion for the twelve months ended March 31, 1998. Since the early 1990's, the Company has implemented an operating strategy with the objective of increasing the profitability of existing operations while pursuing opportunities to increase both revenue and cash flow. Actions taken by management include: (i) repositioning the Company's asset portfolio to optimize its competitive position in strategic markets, including the disposition of non-strategic assets, (ii) entering new business areas such as gypsum wallboard manufacturing and (iii) lowering production, transportation and overhead costs and increasing productivity. Currently, the Company seeks to: - Achieve and maintain leading positions in targeted markets; - Improve operational efficiencies and increase customer focus to become the low cost supplier of choice for its customers; - Invest in existing operations and acquire strategic assets that meet the Company's investment criteria; and - Maintain a flexible financial structure in order to capitalize on attractive strategic opportunities. Approximately 52% of the Company's outstanding voting securities are owned by Lafarge S.A., a French corporation, and certain of its affiliates ("Lafarge S.A."). Lafarge S.A., with 1997 sales of approximately $7.2 billion, is a world leader in building materials active in 60 countries around the world. The Company was incorporated under the laws of the State of Maryland in 1977. Its principal executive offices are located at 11130 Sunrise Valley Drive, Suite 300, Reston, Virginia 20191 and its telephone number at these offices is (703) 264-3600. Unless otherwise indicated or the context requires otherwise, the "Company" and "Lafarge" refer to Lafarge Corporation and its subsidiaries and predecessors, and information regarding the Company's business and operations included in this Prospectus gives effect to the acquisition of the Redland Operations. See "Business -- Redland Acquisition." 4 6 RECENT DEVELOPMENTS On June 3, 1998, the Company acquired from Lafarge S.A. certain construction materials operations in North America (collectively, the "Redland Operations") formerly owned by Redland Aggregates North America ("Redland") and operated by Denver-based Western Mobile Inc., Redland Genstar Inc. of Towson, Maryland and Redland Quarries Inc. of Hamilton, Ontario. Lafarge S.A. acquired the Redland Operations in December 1997 as part of its acquisition of the British construction materials firm Redland PLC. The purchase price paid by the Company for the Redland Operations, free of debt, was $690 million, subject to working capital adjustments. The U.S. operations were acquired pursuant to a stock purchase agreement among the Company, Lafarge S.A. and Redland International Limited, providing for the acquisition of the stock of Redland, Inc. The Canadian operations were acquired pursuant to an asset acquisition agreement among Lafarge Canada, Lafarge S.A. and Redland Quarries Inc. The Company intends to use the proceeds of the offering of the Notes (the "Offering") to finance the acquisition of the Redland Operations located in the United States. The purchase price for the Canadian portion of the Redland Operations, approximately $40 million, was paid by Lafarge Canada from available cash. The Redland Operations, which include 64 aggregates operations, 34 ready-mixed concrete plants and 29 asphalt plants, had revenues of approximately $517.1 million for the year ended December 31, 1997. In 1997, the Redland Operations shipped approximately 32 million tons of aggregates, approximately two million cubic yards of ready-mixed concrete and approximately six million tons of asphalt. Unless otherwise indicated, all information set forth below relating to the operations and business of the Company includes the Redland Operations. USE OF PROCEEDS The proceeds to the Company from the sale of the Notes in the Offering, after deducting underwriting discounts and commissions and estimated offering expenses, are estimated to be $644.8 million. The net proceeds of the Offering, together with cash flow from operations, are expected to be used to repay $650 million of outstanding indebtedness under a short-term note between the Company and Lafarge S.A. (the "Bridge Note") funded June 3, 1998, which was entered into by the Company to finance, on an interim basis, the acquisition of the Redland Operations located in the United States. See "Recent Developments." The Bridge Note accrues interest at the London Interbank Offered Rate ("LIBOR") plus 30 basis points, has a maturity date of December 31, 1998 and may be prepaid at any time without penalty. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the Company's consolidated ratio of earnings to fixed charges prior to the acquisition of the Redland Operations for the periods shown:
THREE MONTHS ENDED ENDED MARCH 31, YEARS ENDED DECEMBER 31, MARCH 31,(2) LTM(3) -------------------------------- ------------- --------- 1993 1994 1995 1996 1997 1997 1998 1998 Ratio of earnings to fixed charges(1)................. 1.56 3.63 5.96 8.29 12.55 -- -- 13.48
- ------------------------------ (1) The Company's consolidated ratio of earnings to fixed charges was computed by dividing earnings by fixed charges. For this purpose, earnings are the sum of income (loss) from continuing operations before income taxes and fixed charges, excluding capitalized interest. Fixed charges are interest, whether expensed or capitalized, amortization of debt expense and discount or premium relating to indebtedness, whether expensed or capitalized, and such portion of rental expense that can be demonstrated to be representative of the interest factor in the particular case. (2) Due to seasonality, the deficiency of earnings to fixed charges for the three months ended March 31, 1997 and 1998 was $42.2 million and $35.4 million, respectively. (3) Last twelve months. 5 7 ACCOUNTING EFFECTS OF THE ACQUISITION Lafarge S.A., the majority shareholder of the Company, is the owner of Redland PLC. As a result, generally accepted accounting principles require that the acquisition of the Redland Operations by the Company be accounted for in a manner similar to a pooling of interests. Following the release of second quarter results, the Company will report the net assets of the Redland Operations at the historical cost of Lafarge S.A. retroactive to December 31, 1997. Lafarge S.A. acquired Redland PLC in December 1997 and accounted for the transaction using the purchase method. As such, Lafarge S.A.'s historical cost basis of the net assets acquired by the Company reflects the allocation of the purchase price to the net assets and goodwill. Similarly, results of operations of the Redland Operations will be combined with the Company's results, for reporting purposes, beginning January 1, 1998. As the post-combination results of the Redland Operations have not yet been reported, supplemental financial information has been incorporated by reference herein from the Company's Current Report on Form 8-K dated June 3, 1998 to show the impact of combining the Redland Operations with the Company for the year ended December 31, 1997 and for the quarter ended March 31, 1998. CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This Prospectus, including the documents incorporated by reference herein, includes "forward-looking" statements based upon current expectations that involve a number of business risks and uncertainties. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protections of the safe harbor with respect to all forward-looking statements. Several important factors, in addition to the specific factors discussed in connection with such forward-looking statements individually, could affect the future results of the Company and could cause those results to differ materially from those expressed in the forward-looking statements contained herein. Such additional factors include, among other things, national and regional economic conditions, levels of construction spending in major markets, supply/demand structure of the industry, unfavorable weather conditions during peak construction periods and changes in environmental regulations, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Therefore, the Company cautions each reader of this Prospectus to consider carefully these factors as well as the specific factors discussed with each forward-looking statement in this Prospectus and as disclosed in the Company's periodic reports filed with the Commission as such factors, in some cases, have affected, and in the future (together with other factors) could affect, the ability of the Company to implement its business strategy and may cause actual results to differ materially from those contemplated by the statements expressed herein and therein. 6 8 CAPITALIZATION The following table sets forth the unaudited capitalization of the Company as of March 31, 1998, on a historical basis and as adjusted to give effect to the sale of the Notes in the Offering and the application of the net proceeds therefrom as described in "Use of Proceeds." This information should be read in conjunction with the audited consolidated financial statements of the Company and the related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997, the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998 and the Company's Current Report on Form 8-K dated June 3, 1998, incorporated by reference herein.
AS OF MARCH 31, 1998 ------------------------ AS ACTUAL ADJUSTED(1) ---------- ----------- (UNAUDITED) (IN THOUSANDS) Cash, cash equivalents and short-term investments........... $ 285,424 $ 241,123 ========== ========== Short-term debt: Short-term borrowings and current portion of long-term debt.................................................. $ 71,643 $ 71,643 Long-term debt: Long-term debt......................................... 121,327 124,233 Senior Notes........................................... -- 650,000 ---------- ---------- Total long-term debt.............................. 121,327 774,233 Shareholder's equity: Common Stock, $1.00 par value, 110,100,000 shares authorized, 66,300,000 shares issued and outstanding........................................... 66,276 66,276 Exchangeable shares, no par value, 24,300,000 shares authorized, 5,500,000 shares issued and outstanding... 39,494 39,494 Additional paid-in capital............................. 656,994 666,975 Retained earnings...................................... 556,629 545,042 Foreign currency translation adjustments............... (91,414) (90,912) ---------- ---------- Total shareholders' equity........................ 1,227,979 1,226,875 ---------- ---------- Total capitalization........................................ $1,420,949 $2,072,751 ========== ==========
- ------------------------------ (1) Gives effect to the acquisition of the Redland Operations on a pro forma basis, including the payment of the purchase price for the Canadian assets of Redland, and to the sale of the Notes in the Offering with the application of the net proceeds therefrom to repay the Bridge Note. See "Use of Proceeds." 7 9 SELECTED CONSOLIDATED FINANCIAL DATA The following table sets forth selected consolidated financial data for the Company for each of the five years ended December 31, 1997 and for the three-month periods ended March 31, 1997 and 1998. The selected financial data as of and for the five years ended December 31, 1997 have been derived from the Company's Consolidated Financial Statements, which were audited by Arthur Andersen LLP, the Company's independent public accountants. Data for the three-month periods are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation. This table is qualified by and should be read in conjunction with the Company's Consolidated Financial Statements incorporated by reference herein. The historical financial data set forth below does not reflect the impact of the acquisition of the Redland Operations, which were acquired on June 3, 1998. For additional information regarding the acquisition of the Redland Operations, see "Unaudited Pro Forma Condensed Consolidated Financial Data" below.
THREE MONTHS YEARS ENDED DECEMBER 31, ENDED MARCH 31, ---------------------------------------------------- ------------------- 1993 1994 1995 1996 1997 1997 1998 (UNAUDITED) (IN MILLIONS, EXCEPT PER SHARE DATA AND PERCENTAGES) STATEMENT OF INCOME DATA: Net sales................................ $1,494.5 $1,563.3 $1,472.2 $1,649.3 $1,806.4 $ 244.0 $ 267.3 Earnings before interest and taxes....... 70.2 141.9 185.4 236.4 300.9 (52.6) (45.6) Interest expense, net.................... (42.7) (28.8) (15.2) (14.1) (6.6) (2.6) (0.2) Income tax benefit (expense)............. (21.6) (32.5) (40.6) (81.4) (112.3) 21.2 17.7 Net income (loss)........................ 5.9 80.6 129.6 140.9 182.0 (34.1) (28.2) Net income per share -- basic............ $ 0.10 $ 1.19 $ 1.89 $ 2.02 $ 2.56 $ (0.48) $ (0.39) Net income per share -- diluted.......... 0.10 1.18 1.82 1.95 2.54 (0.48) (0.39) Dividends per share...................... 0.30 0.30 0.375 0.40 0.42 0.10 0.12 BALANCE SHEET DATA: Cash, cash equivalents and short-term investments............................ $ 109.3 $ 243.6 $ 221.0 $ 209.3 $ 318.4 $ 203.0 $ 285.4 Working capital.......................... 315.4 402.3 448.6 394.9 520.2 328.7 439.1 Total assets............................. 1,687.7 1,651.4 1,713.9 1,813.0 1,889.1 1,750.3 1,871.0 Long-term debt........................... 373.2 290.7 268.6 161.9 132.3 149.3 121.3 Shareholders' equity..................... 791.7 841.4 981.0 1,110.5 1,255.7 1,069.3 1,228.0 SELECTED STATISTICAL AND OPERATING DATA: Gross profit as a percent of net sales... 16.9% 19.7% 21.9% 24.1% 26.1% (4.6)% 0.8% Selling and administrative as a percent of sales............................... 10.8% 10.4% 9.6% 9.2% 8.9% 15.3% 15.8% EBITDA(1)................................ $ 185.2 $ 245.5 $ 279.7 $ 336.9 $ 407.2 $ (25.6) $ (18.3) Depreciation, depletion and amortization........................... 115.0 103.6 94.3 100.5 106.3 27.1 27.3 Capital expenditures..................... 58.4 95.4 121.9 124.8 124.0 40.6 40.3 Acquisitions............................. 15.2 4.7 29.3 83.5 8.8 0.0 22.1 Return on average shareholders' equity... 0.8% 9.9% 14.2% 13.5% 15.4% (3.1)% (2.3)% Long-term debt as a percentage of total capitalization(2)...................... 26.3% 21.6% 18.6% 11.0% 8.3% 10.5% 7.7%
- ------------------------------ (1) EBITDA represents earnings before interest, taxes, depreciation and amortization. The Company has included EBITDA data (which are not a measure of financial performance under generally accepted accounting principles) because such data are used by certain investors. (2) Total capitalization represents long-term debt, other long-term liabilities and shareholders' equity. 8 10 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA Lafarge S.A., the majority shareholder of the Company, acquired Redland PLC in December 1997. The Company acquired the Redland Operations from Lafarge S.A. on June 3, 1998. See "Recent Developments." Since the Company acquired the Redland Operations from the holder of a majority of its voting securities, the acquisition will be accounted for similar to a pooling of interests. Accordingly, Redland assets and liabilities acquired by the Company from Lafarge S.A. are transferred to the Company at Lafarge S.A.'s historical cost, which approximates the purchase price paid by the Company. The unaudited pro forma condensed consolidated financial data reflect the impact of Lafarge S.A.'s preliminary purchase price adjustments on Redland, the impact of the Company's acquisition of the Redland Operations from Lafarge S.A. and the impact of debt financing of the Company's acquisition of the Redland Operations from Lafarge S.A. The following Unaudited Pro Forma Condensed Consolidated Income Statements for the year ended December 31, 1997, the Last Twelve Months ("LTM") ended March 31, 1998 and the three months ended March 31, 1998 give effect to the acquisition of the Redland Operations, the Offering of the Notes hereby, and the application of the net proceeds therefrom, assuming these transactions occurred at January 1, 1997. The Unaudited Pro Forma Balance Sheet as of March 31, 1998 gives effect to the acquisition of the Redland Operations and the Offering, and the application of the net proceeds therefrom, assuming the Offering occurred on March 31, 1998. The Unaudited Pro Forma Condensed Consolidated Financial Data, which are based on the historical financial information of the Company and the Redland Operations for the year ended December 31, 1997 and the three months ended March 31, 1998, are presented for informational purposes only and are not necessarily indicative of the combined earnings and results of operations had the Company completed the acquisition of the Redland Operations at the beginning of the periods presented, nor is such information intended necessarily to be indicative of the future results of operations. The Unaudited Pro Forma Condensed Consolidated Financial Data should be read in conjunction with the financial statements and other financial data of the Company and the Redland Operations incorporated by reference or included herein. 9 11 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
LTM(3) ENDED MARCH 31, YEAR ENDED DECEMBER 31, 1997 1998 --------------------------------------------------------------------------------- ---------- REDLAND ----------------------------------------- SUB-TOTAL PUSH-DOWN OF REDLAND HISTORICAL OF AND BASIS OF LAFARGE S.A. LAFARGE S.A. LAFARGE REDLAND PURCHASE PURCH. PRO PRO CORPORATION OPERATIONS ACCOUNTING(a) ACCOUNTING FINANCING FORMA FORMA Net sales........................ $1,806,351 $517,056 $ -- $517,056 $ -- $2,323,407 $2,357,139 Cost of goods sold........... 1,335,206 406,310 2,905(c) 409,215 -- 1,744,421 1,761,997 ---------- -------- ------- -------- -------- ---------- ---------- Gross profit..................... 471,145 110,746 (2,905) 107,841 -- 578,986 595,142 Selling and administrative... 160,963 51,632 -- 51,632 -- 212,595 217,890 Goodwill amortization........ 3,748 7,177 3,139(d) 10,316 14,064 14,593 Other (income) expense, net........................ 5,536 (5,200) -- (5,200) -- 336 2,155 ---------- -------- ------- -------- -------- ---------- ---------- Operating income (loss).......... 300,898 57,137 (6,044) 51,093 -- 351,991 360,504 Interest (income) expense, net........................ 6,664 16,936 -- 16,936 43,550(f) 50,514 48,083 (16,636)(f) -- ---------- -------- ------- -------- -------- ---------- ---------- Income (loss) before taxes....... 294,234 40,201 (6,044) 34,157 (26,914) 301,477 312,421 Income taxes expense (benefit)... 112,258 16,473 (1,191)(e) 15,282 (10,496)(e) 117,044 121,211 ---------- -------- ------- -------- -------- ---------- ---------- Net income (loss)................ $ 181,976 $ 23,728 $(4,853) $ 18,875 $(16,418) $ 184,433 $ 191,210 ========== ======== ======= ======== ======== ========== ========== Net income per share -- basic............. $ 2.56 $ 2.59 $ 2.68 Net income per share -- diluted........... 2.54 2.57 2.65 Dividends per share.............. 0.42 0.42 0.44 SELECTED STATISTICAL AND OPERATING DATA: Gross profit as a percent of net sales.......................... 26.1% 24.9% 25.2% Selling and administrative as a percent of sales............... 8.9% 9.2% 9.2% EBITDA(1)........................ $ 407.2 $ 500.8 $ 511.8 Depreciation, depletion and amortization................... 106.3 148.8 151.3 Capital expenditures............. 124.0 152.7 151.2 Return on average shareholders' equity......................... 15.4% 15.6% 16.7% Long-term debt as a percentage of total capitalization........... 8.3% 8.0% 33.5% Ratio of earnings to fixed charges(2)..................... 12.55 5.24 5.48
- ------------------------------ (1) EBITDA represents earnings before interest, taxes, depreciation and amortization. The Company has included EBITDA data (which are not a measure of financial performance under generally accepted accounting principles) because such data are used by certain investors. (2) The Company's consolidated ratio of earnings to fixed charges was computed by dividing earnings by fixed charges. For this purpose, earnings are the sum of income (loss) from continuing operations before income taxes and fixed charges, excluding capitalized interest. Fixed charges are interest, whether expensed or capitalized, amortization of debt expense and discount or premium relating to indebtedness, whether expensed or capitalized, and such portion of rental expense that can be demonstrated to be representative of the interest factor in the particular case. (3) Last twelve months. The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements. 10 12 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT FOR THE QUARTER ENDED MARCH 31, 1998 (IN THOUSANDS, EXCEPT PER SHARE DATA AND PERCENTAGES)
REDLAND OPERATIONS ------------------------------------------ SUB-TOTAL OF REDLAND HISTORICAL PUSH-DOWN OF AND LAFARGE BASIS OF LAFARGE S.A. S.A. LAFARGE REDLAND PURCHASE PURCH. CORPORATION OPERATIONS ACCOUNTING(a) ACCOUNTING(b) FINANCING PRO FORMA Net sales.................................... $267,292 $ 67,484 $ -- $ 67,484 $ -- $334,776 Cost of goods sold....................... 265,196 67,398 813(c) 68,211 -- 333,407 -------- -------- ------- -------- ------- -------- Gross profit................................. 2,096 86 (813) (727) -- 1,369 Selling and administrative............... 42,251 11,431 -- 11,431 -- 53,682 Goodwill amortization.................... 1,167 1,739 842(d) 2,581 -- 3,748 Other (income) expense, net.............. 4,288 730 -- 730 -- 5,018 -------- -------- ------- -------- ------- -------- Operating income (loss)...................... (45,610) (13,814) (1,655) (15,469) -- (61,079) Interest (income) expense, net........... 211 3,585 -- 3,585 10,888(f) 11,174 (3,510)(f) -------- -------- ------- -------- ------- -------- Income (loss) before taxes................... (45,821) (17,399) (1,655) (19,054) (7,378) (72,253) Income taxes expense (benefit)............... (17,654) (7,134) (333) (e) (7,467) (2,877)(e) (27,998) -------- -------- ------- -------- ------- -------- Net income (loss)............................ $(28,167) $(10,265) $(1,322) $(11,587) $(4,501) $(44,255) ======== ======== ======= ======== ======= ======== Net income per share -- basic................ $ (0.39) $ (0.62) Net income per share -- diluted.............. (0.39) (0.62) Dividends per share.......................... 0.12 0.12 SELECTED STATISTICAL AND OPERATING DATA: Gross profit as a percent of net sales....... 0.8% 0.4% Selling and administrative as a percent of sales...................................... 15.8% 16.0% EBITDA(1).................................... $ (18.3) $ (23.6) Depreciation, depletion and amortization..... 27.3 37.5 Capital expenditures......................... 40.3 42.3 Return on average shareholders' equity....... (2.3)% (3.6)% Long-term debt as a percentage of total capitalization............................. 7.7% 33.5%
- ------------------------------ (1) EBITDA represents earnings before interest, taxes, depreciation and amortization. The Company has included EBITDA data (which are not a measure of financial performance under generally accepted accounting principles) because such data are used by certain investors. The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements. 11 13 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 1998 (IN THOUSANDS, EXCEPT PER SHARE DATA)
REDLAND OPERATIONS -------------------------------------------- SUBTOTAL OF PUSH DOWN OF REDLAND AND LAFARGE HISTORICAL LAFARGE S.A. LAFARGE S.A. CORP. LAFARGE REDLAND PURCHASE PURCHASE PURCHASE CORPORATION OPERATIONS ACCOUNTING(g) ACCOUNTING(h) ACCOUNTING(l) FINANCING(n) ASSETS Cash......................... $ 121,001 $ 899 $ -- $ 899 $ -- $ (40,000)(o) (5,200)(p) Short-term investments....... 164,423 -- -- -- -- -- Accounts receivable, net..... 194,118 58,578 173(i) 58,751 -- -- Inventory.................... 227,093 31,096 150(i) 31,246 -- -- Other current assets......... 34,227 32,361 34(i) 32,395 -- -- ---------- -------- -------- -------- --------- --------- Total current assets......... 740,862 122,934 357 123,291 -- (45,200) ---------- -------- -------- -------- --------- --------- Property, plant and equipment, net............. 899,249 415,026 (2,426)(i) 411,787 -- -- ---------- -------- -------- --------- --------- (813)(m) -------- Other Assets Excess of cost over net tangible assets of business acquired, net.................... 40,284 73,919 231,364(j) 305,283(j) -- -- Other.................... 190,650 14,254 7,512(i) 21,766 -- 5,200(q) ---------- -------- -------- -------- --------- --------- Total assets......... $1,871,045 $626,133 $235,994 $862,127 $ -- $ (40,000) ========== ======== ======== ======== ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities.... $ 301,751 $218,325 $ (2,467)(i) $219,430 $ 550,577(l) $(690,000)(r) 3,572(k) Long-term debt............... 121,327 83,141 -- 83,141 (80,235)(l) 650,000(s) Other long-term liabilities................ 219,988 95,503 (5,185)(i) 90,318 -- -- ---------- -------- -------- -------- --------- --------- Total liabilities........ 643,066 396,969 (4,080) 392,889 470,342 (40,000) ---------- -------- -------- -------- --------- --------- Common shares................ 66,276 5 (5)(i) -- -- -- Exchangeable shares.......... 39,494 -- -- -- -- -- Additional paid-in capital... 656,994 170,239 310,084(i) 480,323 (470,342)(l) -- Retained earnings............ 556,629 67,844 (79,431)(i)(t) (11,587) -- -- Cumulative foreign currency translation adjustment..... (91,414) (8,924) 9,426(i)(t) 502 -- -- ---------- -------- -------- -------- --------- --------- Total shareholders' equity................. 1,227,979 229,164 240,074 469,238 (470,342) -- ---------- -------- -------- -------- --------- --------- Total liabilities & shareholders' equity............. $1,871,045 $626,133 $235,994 $862,127 $ -- $ (40,000) ========== ======== ======== ======== ========= ========= PRO FORMA ASSETS Cash......................... $ 76,700 Short-term investments....... 164,423 Accounts receivable, net..... 252,869 Inventory.................... 258,339 Other current assets......... 66,622 ---------- Total current assets......... 818,953 ---------- Property, plant and equipment, net............. 1,311,036 ---------- Other Assets Excess of cost over net tangible assets of business acquired, net.................... 345,567 Other.................... 217,616 ---------- Total assets......... $2,693,172 ========== LIABILITIES AND SHAREHOLDERS' EQUITY Total current liabilities.... $ 381,758 Long-term debt............... 774,233 Other long-term liabilities................ 310,306 ---------- Total liabilities........ 1,466,297 ---------- Common shares................ 66,276 Exchangeable shares.......... 39,494 Additional paid-in capital... 666,975 Retained earnings............ 545,042 Cumulative foreign currency translation adjustment..... (90,912) ---------- Total shareholders' equity................. 1,226,875 ---------- Total liabilities & shareholders' equity............. $2,693,172 ==========
The accompanying notes are an integral part of the unaudited pro forma condensed consolidated financial statements. 12 14 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (IN THOUSANDS, EXCEPT PER SHARE AND STATISTICAL AND OPERATING DATA) (a) Lafarge S.A. acquired Redland PLC in December 1997 and accounted for the transaction using the purchase method. This column reflects the pro forma purchase accounting adjustments assuming Lafarge S.A. purchased Redland PLC on January 1, 1997. (b) This column represents the pro forma total of the Redland Operations historical results of operations and associated purchase accounting adjustments assuming Lafarge S.A. purchased Redland PLC on January 1, 1997. (c) The purchase accounting described in note (a) resulted in a change in the carrying amounts of fixed assets and mineral reserves of the Redland Operations to new estimated fair values. As a result, the associated depreciation and depletion of these assets will increase by approximately $2,905 on a pro forma basis for 1997 and $813 for the three months ended March 31, 1998. (d) The purchase accounting described in note (a) resulted in additional goodwill that will be amortized over an average of 30 years. As a result, the associated amortization will increase by approximately $3,139 on a pro forma basis for 1997 and $842 for the three months ended March 31, 1998. (e) Reflects the impact of the pro forma adjustments on income taxes at the appropriate effective rate of Redland or the Company. (f) Adjustment reflects increased interest expense of $43,550 for 1997 and $10,888 for the three months ended March 31, 1998 related to an additional $650,000 in borrowings with an assumed fixed blended interest rate of approximately 6.7%. This is offset by a reduction in interest expense of approximately $16,636 for 1997 and $3,510 for the three months ended March 31, 1998, for debt associated with the Redland Operations that will not be assumed by the Company. (g) Lafarge S.A. acquired Redland PLC in December 1997 and accounted for the transaction using the purchase method. The adjustments in this column reflect the preliminary purchase accounting adjustments for the Redland Operations recorded by Lafarge S.A. (h) This column represents the total of the Redland Operations historical balance sheet and associated preliminary purchase accounting adjustments of Lafarge S.A. Since the Company acquired the Redland Operations from its parent, the balance sheet in this column is combined with the Company's historical balance sheet similar to a pooling of interests. (i) Reflects Lafarge S.A.'s adjustments to record the assets and liabilities acquired at preliminary estimated fair market values. (j) The preliminary calculations of the excess cost over fair value of the net assets acquired (goodwill) by Lafarge S.A. is as follows: Purchase price of the Redland Operations.................... $690,000 Value of net assets acquired: Historical net book value at December 31, 1997, excluding related party debt of $209,677 not assumed by the Company........................................ 448,604 Less historical goodwill.................................... (75,422) Liabilities associated with employee termination benefits and restructuring costs directly related to the acquisition............................................... (3,572) Add estimated increase in fair values of mineral reserves and other net assets acquired............................. 12,762 -------- Estimated fair value of net assets acquired................. 382,372 -------- Excess purchase price over fair value of net assets acquired (goodwill) at December 31, 1997........................... 307,628 -------- First quarter 1998 activity................................. (2,345) -------- Balance, March 31, 1998..................................... $305,283 ========
13 15 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (IN THOUSANDS, EXCEPT PER SHARE AND STATISTICAL AND OPERATING DATA) (k) Preliminary purchase accounting adjustment to current liabilities reflects a $3,572 adjustment to record termination benefits and restructuring costs directly related to the acquisition. Management began to assess these plans at the consummation of the acquisition of the Redland Operations and is currently taking steps to implement them. (l) This column reflects purchase accounting adjustments recorded by the Company in connection with its acquisition of the Redland Operations from Lafarge S.A. for $690,000, subject to certain working capital adjustments. The adjustments eliminate Redland Operations related party debt which was not assumed by the Company, eliminate Redland Operations paid-in capital and record the payable to Lafarge S.A. for the $690,000 purchase price. (m) Reflects the depreciation and depletion of property, plant and equipment related to purchase accounting adjustments for the three months ended March 31, 1998. (n) This column reflects the pro forma adjustments for the financing of the $690,000 acquisition of the Redland Operations by the Company. (o) Pro forma adjustment to reduce cash by $40,000 represents $690,000 in cash paid by the Company to purchase the Redland Operations from Lafarge S.A., net of $650,000 in proceeds received to finance the acquisition. (p) Pro forma adjustment to reduce cash by $5,200 represents the cash expected to be paid by the Company for financing and other fees associated with the issuance of $650,000 in Notes. (q) Reflects the $5,200 deferred financing fees associated with the issuance of the Notes that will be amortized as interest expense over the life of the debt. (r) Reflects the refinancing of the $690,000 payable to Lafarge S.A. for the acquisition of the Redland Operations. (s) Reflects the issuance of $650,000 in the Notes offered hereby with the proceeds used to purchase the U.S. portion of the Redland Operations from Lafarge S.A. (t) Included in adjustments to retained earnings and cumulative foreign currency translation adjustment are the Redland Operations net loss and foreign currency translation adjustment for the three months ended March 31, 1998. 14 16 BUSINESS The following discussion is qualified in its entirety by the more detailed information included or incorporated by reference in this Prospectus, including the Company's Annual Report on Form 10-K for the year ended December 31, 1997; the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1998; the Company's Proxy Statement dated March 23, 1998; and the Company's Current Report on Form 8-K dated June 3, 1998. GENERAL The Company, one of the largest producers of cement and construction materials in North America, produces and sells cement, aggregates, ready-mixed concrete and other concrete products, gypsum wallboard and other construction materials in the United States and Canada. Canadian operations are conducted by Lafarge Canada. In the United States, the Company is the third largest producer of cement by clinker production capacity and, including the recently acquired Redland Operations, the fourth largest producer of aggregates. In Canada, the Company is the largest producer of cement by clinker production capacity and one of the largest producers of aggregates, ready-mixed concrete and other concrete products. The rated annual clinker production capacity of the Company's 14 cement manufacturing plants is approximately 11.7 million tons, with approximately 6.5 million tons of capacity in the United States and approximately 5.2 million tons of capacity in Canada. In 1997, the Company shipped 13 million tons of cement and, on a pro forma basis giving effect to the acquisition of the Redland Operations, shipped 75 million tons of aggregates and 10 million cubic yards of ready-mixed concrete. In September 1996, the Company entered the gypsum wallboard business by acquiring manufacturing facilities located in Buchanan, New York and Wilmington, Delaware, with a combined rated annual capacity of 700 million square feet of wallboard. The Company supplies a full line of gypsum wallboard products that are used in residential and commercial construction as well as remodeling and repair. The Company is also engaged in road building and other construction using many of its own products. REDLAND ACQUISITION On June 3, 1998, the Company acquired the Redland Operations, free of debt, for $690 million, subject to working capital adjustments. The Redland Operations, which include 64 aggregates operations, 34 ready-mixed concrete plants and 29 asphalt plants, had revenues of approximately $517.1 million for the year ended December 31, 1997. In 1997, the Redland Operations shipped approximately 32 million tons of aggregates, approximately two million cubic yards of ready-mixed concrete and approximately six million tons of asphalt. Unless otherwise indicated, all information set forth below relating to the operations and business of the Company includes the Redland Operations. CEMENT OPERATIONS INDUSTRY OVERVIEW Cement is the essential binding material used in making concrete, which is widely used in residential, non-residential, commercial and industrial construction. The competitive marketing radius of a typical cement plant for common types of cement is approximately 250 miles except for waterborne shipments which can be economically transported considerably greater distances. Consequently, even cement producers with global operations compete on a regional basis in each market in which that company manufactures and distributes product. No single cement company in the U.S. has a production and distribution system extensive enough to serve all U.S. markets. A company's competitive position in a given market depends largely on the location and operating costs of its plants and associated distribution terminals and price in that market. Current demand for cement is dependent on levels of construction activity specific to a region or market. For example, current demand for cement in the Company's U.S. markets is in excess of current domestic cement capacity. The Company believes that a continuation of the current low interest rate environment and increased government spending on infrastructure improvement and paving work could have a favorable impact on future demand in its markets. Further, in Canada, the recent economic recovery has had a favorable impact on demand for cement due to increases in residential and commercial construction and increased spending in the oil and gas and farming sectors. 15 17 GENERAL The cement manufacturing process involves an intermediate product called clinker. Clinker is made from limestone, clay or shale and sand crushed, ground and blended into a mixture which is burned in a rotary kiln at extremely high temperatures. The mixing and grinding process may be done by either a dry process, which is more cost efficient, or a wet process. A majority of the Company's plants use the dry process. The clinker is then cooled and ground with a small amount of gypsum to produce a fine powder which is cement. A plant's cement production capacity generally is approximately 10% greater than its clinker production capacity. The Company manufactures and sells various types of portland cement used to make concrete and concrete products, as well as numerous special purpose cements including masonry and oilwell cement. The Company sells cement to several thousand unaffiliated customers including ready-mixed concrete businesses, manufacturers of concrete products such as blocks, pipes and prefabricated building components, and construction contractors. No single unaffiliated customer accounted for more than 10% of the Company's sales in 1997. Sales of cement are made on the basis of competitive prices in each market area, generally pursuant to telephone orders from customers who purchase quantities sufficient for their immediate requirements. Therefore, with the exception of isolated major construction projects, the Company's cement sales do not typically involve long-term contractual commitments. Because of freight costs, most cement is sold within a radius of 250 miles from the producing plant, except for waterborne shipments which can be shipped considerably greater distances. The Company utilizes trucks, waterborne vessels and rail cars to transport cement from its plants directly to customers or to its approximately 84 distribution terminals strategically located to serve regional markets. For the year ended December 31, 1997, the Company's cement operations had revenues before elimination of intercompany sales of approximately $1,050 million and operating profit (before corporate and unallocated expenses) of approximately $259 million, constituting, on a pro forma basis giving effect to the acquisition of the Redland Operations, approximately 43% of total revenues and approximately 64% of total operating profit (before corporate and unallocated expenses), respectively. FACILITIES The following table indicates the location, types of process and rated annual clinker production capacity (based on management's estimates) of each of the Company's operating cement manufacturing plants at December 31, 1997. RATED ANNUAL CLINKER PRODUCTION CAPACITY OF CEMENT MANUFACTURING PLANTS (IN SHORT TONS)*
UNITED STATES PLANTS CANADIAN PLANTS - ----------------------------------------------- ----------------------------------------------- CLINKER CLINKER LOCATION PROCESS CAPACITY LOCATION PROCESS CAPACITY Brookfield, Nova Paulding, Ohio.......... Wet 471,200 Scotia.................. Dry 517,700 Fredonia, Kansas........ Wet 376,200 St. Constant, Quebec.... Dry 1,046,200 Whitehall, Pennsylvania.......... Dry 718,600 Bath, Ontario........... Dry 1,121,700 Alpena, Michigan........ Dry 2,275,500 Woodstock, Ontario...... Wet 561,400 Davenport, Iowa......... Dry 943,500 Exshaw, Alberta......... Dry 1,185,500 Kamloops, British Sugar Creek, Missouri... Dry 517,500 Columbia................ Dry 211,700 Richmond, British Joppa, Illinois......... Dry 1,172,900 Columbia................ Wet 558,100 --------- --------- Total Capacity.......... 6,475,400 Total Capacity.......... 5,202,300 ========= ========= Total 1997 Clinker Total 1997 Clinker Production............ 6,106,400 Production.............. 4,293,000 1997 Production as a 1997 Production as a Percentage of Total Percentage of Total Capacity.............. 94% Capacity................ 82%
- --------------- * One short ton equals 2,000 pounds. 16 18 According to the "U.S. and Canadian Portland Cement Industry Plant Information Summary Report", as of December 31, 1996, Lafarge Canada had the highest capacity of Canadian cement companies with approximately 35% of total active industry clinker production capacity in Canada. According to that report, as of December 31, 1996, the Company's operating cement manufacturing plants in the United States accounted for an estimated 8% of total U.S. active industry clinker production capacity. Approximately 11%, or 1.4 million tons, of the Company's cement shipments in 1997 were made to the Company's construction materials operations. The Company's U.S. plants are primarily concentrated in the central and midwestern states, extending from the northern Great Lakes southward along the Mississippi River system. The Company is the only cement producer serving all regions of Canada. Distribution and storage facilities are maintained at all cement plants and at approximately 84 other sites in the U.S. and Canada, including four deep water ocean terminals. The Company purchases imported cement to supplement production in some of its domestic markets. CONSTRUCTION MATERIALS OPERATIONS INDUSTRY OVERVIEW The aggregates business consists of the mining, extraction, production and sale of stone, sand, gravel and lightweight aggregates such as expanded shale and clay. Aggregates are employed in virtually all types of construction, including highway construction and maintenance. The concrete business involves the mixing of cement with sand, gravel, crushed stone or other aggregates and water to form concrete which is subsequently marketed and distributed to numerous construction contractors. Demand for aggregates and concrete products largely depends on regional levels of construction activity, and therefore tends to follow cycles similar to those of cement. Both the aggregates and concrete industries are highly fragmented, with numerous participants operating in localized markets. The cost of transportation of both aggregates and concrete products is high relative to their value, and consequently, producers are typically limited to a market area within 100 miles of their production facilities. Similar to the market for cement, the Company believes that the current favorable conditions, including low interest rates, strong regional economies in its U.S. markets and in Ontario and the western provinces of Canada, as well as an increase in federal highway and transportation funding resulting from passage of the Transportation Equity Act for the 21st Century, could lead to increased residential, non-residential and public works construction activity, fueling the demand for aggregates and concrete. GENERAL The Company's construction materials operations encompass the production and sale of ready-mixed concrete, aggregates, asphalt, concrete blocks and pipes, precast and prestressed concrete components and other related products. The Company is also engaged in highway and municipal paving and road building work. Lafarge Canada is the only producer of ready-mixed concrete and construction aggregates in Canada that has operations extending from coast to coast. In the United States, the Company owns or has a majority interest in construction materials facilities with operations concentrated in Kansas, Louisiana, Missouri, Ohio, Pennsylvania, Washington, West Virginia and Wisconsin. Ready-mixed concrete plants mix controlled portions of cement, water and aggregates to make concrete which is sold primarily to building contractors and delivered to construction sites by mixer trucks. Aggregates are sold primarily to road building contractors and ready-mixed concrete producers. Management believes that Lafarge Canada is one of the largest manufacturers of precast concrete products and concrete pipe in Canada. Precast concrete products and concrete pipe are sold primarily to contractors engaged in all types of construction activity. No single unaffiliated customer accounted for more than 10% of the Company's sales in 1997. Sales of ready-mixed concrete and aggregates are made on the basis of competitive prices in each market area, generally pursuant to telephone orders from customers who purchase quantities sufficient for their immediate requirements. Therefore, with the exception of isolated major construction projects, the Company's sales of these products do not typically involve long-term contractual commitments. 17 19 For the year ended December 31, 1997, on a pro forma basis giving effect to the acquisition of the Redland Operations, the Company's construction materials operations had revenues, before elimination of intercompany sales, of approximately $1.3 billion, or approximately 53% of the Company's total revenues. For the same period, on a pro forma basis giving effect to the acquisition of the Redland Operations, the construction materials operations had operating profit (before corporate and unallocated expenses) of approximately $131 million, or approximately 33% of the Company's total operating profit (before corporate and unallocated expenses). FACILITIES On June 3, 1998, the Company owned or had a majority interest in the following construction materials facilities in the U.S. and Canada: 242 ready-mixed concrete plants, 197 aggregates facilities, 57 asphalt plants, and 54 precast and prestressed concrete, concrete block and concrete pipe plants and other construction materials operations. In 1997, the Company (excluding the Redland Operations) sold approximately five million cubic yards of ready-mixed concrete and approximately 31 million tons of aggregates in Canada and approximately two million cubic yards of ready-mixed concrete and approximately 12 million tons of aggregates in the U.S. In 1997, the Redland Operations shipped approximately 32 million tons of aggregates, two million cubic yards of ready-mixed concrete and six million tons of asphalt. GYPSUM WALLBOARD OPERATIONS In September 1996, the Company entered the gypsum wallboard business by acquiring manufacturing facilities located in Buchanan, New York and Wilmington, Delaware, with a combined rated annual production capacity of approximately 700 million square feet (approximately 3% of total manufacturing capacity in the United States). The Company's strategy in the gypsum wallboard business, as in its other product lines, is to build strong, regional positions in core markets with sound economic and demographic fundamentals and good earnings potential. The Company's two existing plants, which are geographically well located to serve the Mid-Atlantic and northeastern markets, supply a full line of gypsum wallboard products used in residential and commercial construction as well as the repair and remodeling segment. The Company will seek to expand its gypsum wallboard operations as attractive investment opportunities are found. The Company's gypsum wallboard products are sold to a variety of residential and commercial building materials dealers, individual and regional/national gypsum wallboard distributors, original equipment manufacturers, building materials distribution companies, lumber yards and "do-it-yourself" home centers. Sales are made on the basis of competitive prices in each market area, generally pursuant to telephone orders from customers. Customer orders are taken at each plant site. The amount of backlog orders, as measured by written contracts, is normally not significant. For the year ended December 31, 1997, the Company's gypsum wallboard operations had revenues of approximately $92 million and operating profit (before corporate and unallocated expenses) of $13 million, constituting, on a pro forma basis giving effect to the acquisition of the Redland Operations, approximately 4% of total revenues and approximately 3% of total operating profit (before corporate and unallocated expenses), respectively. OTHER OPERATIONS The Company's other operations include processing supplemental fuels and the management and marketing of coal combustion by-products and other cementitious materials. Systech Environmental Corporation, a wholly-owned subsidiary of the Company, processes fuel-quality waste and alternative raw materials for use in cement kilns. The Systech facilities and the Company's cement plants that utilize hazardous waste derived fuel are highly regulated by federal, state and local environmental statutes and regulations. The Company's wholly owned subsidiary, Mineral Solutions Inc., is engaged in the management and marketing of coal combustion by-products which are the residues produced by coal burning, electricity generating plants and industrial boilers. Fly ash is the predominant product and is used as an enhancement in 18 20 ready-mixed concrete (replacing a portion of the portland cement) and also in engineered fills, flowable fill, soil/sludge drying and stabilization. ENVIRONMENTAL MATTERS As more fully discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 1997, the Company's operations, like those of other companies engaged in similar businesses, involve the use, release, discharge, disposal, and cleanup of substances regulated under increasingly stringent federal, state, provincial, and/or local environmental protection laws. The Company has been and is presently involved in certain environmental enforcement matters in both the U.S. and Canada. Because of differences between requirements in the U.S. and Canada and the complexity and uncertainty of existing and future environmental requirements, permit conditions, costs of new and existing technology, potential remedial costs and insurance coverages, and/or enforcement-related activities and costs, it is difficult for management to estimate the ultimate level of Company expenditures related to environmental matters. While amounts accrued and paid in the past have not been material, the Company's capital expenditures and operational expenses for environmental matters have increased and are likely to increase in the future. The Company cannot determine at this time whether capital expenditures and other remedial action that the Company may be required to undertake to comply with the changing environmental protection laws will materially affect its capital expenditures or earnings. However, with respect to known environmental contingencies, the Company has recorded provisions for estimated probable liabilities and does not believe that the ultimate resolution of such matters will have a material adverse effect on the Consolidated Financial Statements. LEGAL MATTERS The Company is involved in certain actions and claims, including but not limited to those items described in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. In the opinion of management, such litigation and claims should be resolved without a material adverse effect on the Company's financial position. 19 21 DESCRIPTION OF NOTES The Notes are to be issued under an indenture dated as of October 1, 1989 between the Company and Citibank, N.A., as Trustee (the "Trustee"), and a supplemental indenture thereto dated as of , 1998 (collectively, the "Indenture"), copies of which are filed as exhibits to the Registration Statement of which this Prospectus is a part. The Notes will be limited to $650,000,000 aggregate principal amount and mature on , 20 . The following summaries of certain provisions of the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Indenture. Copies of the Indenture are available for inspection during normal business hours at the principal office of the Company and at the office of the Trustee in the City of New York. The holders of the Notes are entitled to the benefits of, are bound by, and are deemed to have notice of, all the provisions of the Indenture. Wherever particular sections or defined terms of the Indenture are referred to, such sections or defined terms are incorporated herein by reference. Certain capitalized terms used herein are defined in the Indenture. GENERAL The Indenture does not limit the aggregate principal amount of debt Securities which may be issued thereunder and provides that debt Securities may be issued thereunder in one or more series up to the aggregate principal amount which may be authorized from time to time by the Company. All debt Securities, including the Notes, which may from time to time be issued and outstanding under the Indenture are herein sometimes referred to as the "Debt Securities". The Company may, from time to time, without the consent of the Holders of the Notes, provide for the issuance of Debt Securities under the Indenture in addition to the $650,000,000 principal amount of Debt Securities authorized, issued and outstanding as of the date of this Prospectus. As used herein, "Holder" includes the Depositary (as defined below) with respect to the Notes issued in book-entry form. The Notes will be issued in fully registered book-entry form in denominations of $1,000 and any integral multiple thereof and will be issued as a Book-Entry Note (as defined below). Principal is to be payable, and the Notes will be transferable and exchangeable, at the office or agency of the Security Registrar, initially the Trustee, provided that the Book-Entry Notes will be exchangeable only in the manner and to the extent set forth under "--Book-Entry Notes." The Notes will bear interest at the rate per annum shown on the cover page of this Prospectus from the date of issuance or from the most recent interest payment date to which interest has been paid or duly provided for. Interest on the Notes will be payable semi-annually on June 15 and December 15 of each year (each, an "Interest Payment Date"), and at maturity or upon redemption, commencing on December 15, 1998, to the person in whose name a Note is registered at the close of business on the preceding June 1 or December 1 (each a "Record Date"), as the case may be. Interest on the Notes will be computed on the basis of a 360-day year of twelve 30-day months. If the original issue date of a Note is between a Record Date and an Interest Payment Date, the initial interest payment will be made on the Interest Payment Date following the next succeeding Record Date to the registered Holder on such next succeeding Record Date. Holders must surrender the Notes to the paying agent for the Notes to collect principal payments. Except as described in "-- Book-Entry Notes," the Company will pay principal and interest at the office or agency of the Company maintained for that purpose in New York, New York. All Debt Securities, including the Notes, issued and to be issued under the Indenture will be unsecured and will rank pari passu with all other unsecured and unsubordinated indebtedness of the Company from time to time outstanding. The Company conducts a substantial part of its operations through its subsidiaries. The Notes will effectively rank junior to any secured indebtedness of the Company to the extent of the assets securing such indebtedness and to any indebtedness of the Company's subsidiaries to the extent of the assets of such subsidiaries. At March 31, 1998, the Company and its subsidiaries had aggregate debt obligations in the amount of approximately $193.0 million, including approximately $38.8 million of secured indebtedness, and the Company's subsidiaries had aggregate indebtedness of approximately $12.9 million outstanding to third parties, including approximately $7.7 million of secured indebtedness. At the same date, the Company 20 22 had outstanding $154.2 million of indebtedness which will rank pari passu with the Notes, including $300,000 of guarantees with respect to indebtedness of its subsidiaries. The Indenture contains no restrictions on the amount of additional indebtedness which may be incurred by the Company or its subsidiaries; however, as set forth under "-- Certain Covenants of the Company -- Restrictions on Liens" below, the Indenture contains certain restrictions on the ability of the Company and its subsidiaries to incur secured indebtedness. The ability of the Company to pay principal and interest on the Notes is dependent in part upon the payment to it of distributions, dividends, interest or other amounts by its subsidiaries. The Company's principal subsidiaries, Lafarge Canada and Redland, Inc., are currently not a party to any agreements that contain material restrictions on their ability to pay dividends to the Company. At December 31, 1997, Lafarge Canada had $796.8 million of cumulative undistributed earnings which the Company considers to be permanently invested in Canada. While there are currently no material contractual restrictions on Lafarge Canada's ability to pay dividends to the Company, the Company's practice has been to retain earnings at Lafarge Canada. REDEMPTION PROVISIONS The Notes will be redeemable, in whole or in part, at the option of the Company, on any date (a "Redemption Date") at a redemption price equal to the greater of (a) 100% of the principal amount of the Notes to be redeemed and (b) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to such Redemption Date) discounted to such Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus accrued and unpaid interest on the principal amount being redeemed to such Redemption Date; provided, however, that installments of interest on Notes that are due and payable on an Interest Payment Date falling on or prior to the relevant Redemption Date shall be payable to the holders of such Notes, registered as such at the close of business on the relevant Record Date according to their terms and provisions of the Indenture. "Treasury Rate" means, with respect to any Redemption Date for the Notes, (a) the yield, under the heading that represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities" for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Maturity Date, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date. "Comparable Treasury Issue" means the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes. "Independent Investment Banker" means Donaldson, Lufkin & Jenrette Securities Corporation, Warburg Dillon Read LLC or Citicorp Securities, Inc. and their respective successors or, if such firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Company. "Comparable Treasury Price" means, with respect to any Redemption Date, (a) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations. 21 23 "Reference Treasury Dealer" means each of Donaldson, Lufkin & Jenrette Securities Corporation, Warburg Dillon Read LLC and Citicorp Securities, Inc. and their respective successors; provided however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company will substitute therefor another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to the Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. Notice of any redemption by the Company will be mailed at least 30 days but not more than 60 days before any Redemption Date to each holder of Notes to be redeemed. If less than all the Notes are to be redeemed at the option of the Company, the Trustee shall select, in such manner as it shall deem fair and appropriate, the Notes to be redeemed in whole or in part. Unless the Company defaults in payment of the redemption price, on and after any Redemption Date interest will cease to accrue on the Notes or portions thereof redeemed. BOOK-ENTRY NOTES The Notes will be issued in whole or in part in the form of one or more fully registered Notes (each, a "Book-Entry Note") which will be deposited with, or on behalf of, The Depository Trust Company in the City of New York (the "Depositary") and registered in the name of the Depositary or the Depositary's nominee. Except as set forth below, a Book-Entry Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any nominee to a successor of the Depositary or a nominee of such successor. The Depositary has advised the Company as follows: the Depositary is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. The Depositary was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. The Depositary's participants include securities brokers and dealers (including the Underwriters), banks, trust companies, clearing corporations and certain other organizations, some of which (and/or their representatives) own the Depositary (the "Participants"). Access to the Depositary's book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by the Depositary only through Participants. The Notes will be represented by a Book-Entry Note registered in the name of the Depositary or its nominee. Upon the issuance of a Book-Entry Note in registered form, the Depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the Notes represented by such Book-Entry Note to the accounts of Participants. The accounts to be credited shall be designated by the Underwriters. Ownership of beneficial interests in a Book-Entry Note will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests by Participants in the Book-Entry Note will be shown on, and the transfer of that ownership interest will be affected only through, records maintained by the Depositary or its nominee. Ownership of beneficial interests in the Book-Entry Note by persons that hold through Participants will be shown on, and the transfer of that ownership interest within such Participant will be effected only through, records maintained by such Participant. Owners of beneficial interests in the Book-Entry Note will not receive written confirmation from the Depositary of their purchases, but they are 22 24 expected to receive written confirmation providing details of the transactions, as well as periodic statements of their holdings, from the Participants through which they purchased beneficial interests in the Book-Entry Note. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in the Book-Entry Note. So long as the Depositary, or its nominee, is the registered owner of the Book-Entry Note, the Depositary or its nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by the Book-Entry Note for all purposes under the Indenture. Except as set forth below, owners of beneficial interests in the Book-Entry Note will not be entitled to have Notes registered in their names, will not receive or be entitled to receive physical delivery of the Notes in definitive form and will not be considered the owner or holders thereof under the Indenture. Payment of principal of, premium, if any, and any interest on the Notes will be made to the Depositary or its nominee, as the case may be, as the registered owner or the holder of the Book-Entry Note representing the Notes. None of the Company, the Trustee, any paying agent or the registrar for the Notes will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Book-Entry Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Company has been advised by the Depositary that, upon receipt of any payment of principal, premium or interest in respect of the Book-Entry Note, the Depositary will credit immediately Participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Book-Entry Note as shown on the records of the Depositary. The Company also expects that payments by Participants to owners of beneficial interests in the Book-Entry Note held through such Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participants. The Book-Entry Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor of the Depositary or a nominee of such successor. If the Depositary is at any time unwilling or unable to continue as Depositary and a successor Depositary is not appointed by the Company within 90 days, the Company will execute and the Trustee will authenticate and deliver Notes in definitive registered form in exchange for each Book-Entry Note representing the Notes. In addition, the Company may at any time and in its sole discretion determine not to have any Notes in registered form represented by one or more Book-Entry Notes and, in such event, will issue certificated notes in definitive form in exchange for the Book-Entry Note representing the Notes. In any such instance, an owner of a beneficial interest in the Book-Entry Note will be entitled to physical delivery in definitive form of certificated Notes represented by the Company equal in principal amount to such beneficial interest and to have such certificated notes registered in its name. CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE Nothing contained in the Indenture prevents the Company from consolidating with or merging into another corporation or conveying, transferring or leasing its properties and assets substantially as an entirety to any Person, provided that (a) the corporation formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety is a corporation (as defined in the Indenture); the corporation assumes, by an indenture supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on all the Debt Securities and the performance of every covenant of the Indenture on the part of the Company to be performed or observed and (b) immediately after giving effect to such transaction no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing. 23 25 CERTAIN COVENANTS OF THE COMPANY Restrictions on Liens. (a) The Indenture provides that the Company will not, and will not permit any Principal Subsidiary (as defined below) to, issue, assume or guarantee any debt for money borrowed (herein referred to as "Debt") if such Debt is secured by any mortgage, security interest, pledge, lien or other encumbrance (herein referred to as a "mortgage") upon any Principal Property (as defined below) of the Company or any Principal Subsidiary or any shares of stock or indebtedness of any Principal Subsidiary, whether owned at the date of the Indenture or thereafter acquired, without in any such case effectively securing concurrently with the issuance, assumption or guaranty of any such Debt, the Debt Securities (together with, if the Company shall so determine, any other indebtedness of or guaranteed by the Company or such Principal Subsidiary ranking equally with the Debt Securities and then existing or thereafter created) equally and ratably with such Debt. The foregoing restrictions do not apply to (i) mortgages on any property acquired, constructed or improved after October 1, 1989, which are created or assumed contemporaneously with, or within 180 days after such acquisition, or completion of such construction or improvement (or within six months thereafter pursuant to a firm commitment for financing arrangements entered into within such 180-day period) to secure or provide for the payment of all or a portion of the purchase price or cost thereof incurred after October 1, 1989 (or prior to October 1, 1989 in the case of any construction or improvement which is at least 40% completed at the date of the Indenture), or, in addition to mortgages contemplated by clauses (ii) and (iii) below, mortgages existing on property at the time of its acquisition (including acquisition through merger or consolidation), provided that such mortgage does not apply to any property theretofore owned by the Company or a Principal Subsidiary other than, in the case of any such construction or improvement, any theretofore unimproved real property on which the property so constructed, or the improvement, is located; (ii) mortgages on any property, shares of stock or indebtedness at the time of acquisition thereof from a corporation which is merged with or into the Company or a Principal Subsidiary; (iii) mortgages on any property, share of stock or indebtedness of any corporation existing at the time such corporation becomes a Principal Subsidiary; (iv) mortgages to secure Debt of a Principal Subsidiary to the Company or to another Principal Subsidiary; (v) mortgages in favor of governmental bodies to secure partial progress, advance or other payments pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of constructing or improving the property subject to such mortgages; (vi) mortgages to secure tax-exempt private activity bonds under the Internal Revenue Code of 1986, as amended; or (vii) mortgages for the sole purpose of extending, renewing or replacing, in whole or in part, Debt secured by any mortgage referred to in the foregoing clauses (i) to (vi), inclusive, or in this clause (vii), or any mortgage existing on the date of the Indenture, provided, however, that the principal amount of Debt secured thereby does not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement is limited to all or a part of the property which secured the mortgage so extended, renewed or replaced (plus improvements on such property). (b) The foregoing restriction does not apply to the issuance, assumption or guarantee by the Company or any Principal Subsidiary of Debt secured by a mortgage which would otherwise be subject to the foregoing restrictions up to an aggregate amount which, together with all other Debt of the Company and its Principal Subsidiaries secured by mortgages which would otherwise be subject to the foregoing restrictions (other than mortgages permitted under the foregoing exceptions) and the Value (as defined below) of all Sale and Lease-back Transactions existing at such time (other than any Sale and Lease-back Transaction the proceeds of which have been applied to the retirement of the Debt Securities or of certain long-term indebtedness or to the purchase of other Principal Property, and other than Sale and Lease-back Transactions in which the property involved would have been permitted to be mortgaged under clause (i) above), does not exceed 10% of Consolidated Net Tangible Assets (as defined below). Restrictions on Sale and Lease-back Transactions. Sale and Lease-back Transactions by the Company or any Principal Subsidiary of any Principal Property are prohibited (except for temporary leases for a term, including renewals, of not more than three years and except for leases between the Company and a Principal Subsidiary or between Principal Subsidiaries) unless the net proceeds of such Sale and Lease-back Transactions are at least equal to the fair value (as determined by the Board of Directors, the Chairman of the 24 26 Board, the President or the principal financial officer of the Company) of the Principal Property to be leased and either (a) the Company or such Principal Subsidiary would be entitled pursuant to the provisions of (i) of paragraph (a) of "-- Restrictions on Liens" or paragraph (b) of "-- Restrictions on Liens," to incur Debt secured by a mortgage on the Principal Property to be leased without equally and ratably securing any Debt Security or (b) the Value thereof would be an amount permitted under paragraph (b) under "Restrictions on Liens" or (c) the Company shall, and in any case the Company covenants that it will, within 180 days of the effective date of any such arrangement (or in the case of (iii) of this paragraph, within six months thereafter pursuant to a firm purchase commitment entered into within such 180-day period) apply an amount equal to the fair market value (as so determined) of such Principal Property (i) to the redemption, if applicable, or repurchase, if permitted, of the Debt Securities, (ii) to the payment or other retirement of Funded Debt (as defined) incurred or assumed by the Company which ranks senior to or pari passu with the Debt Securities or of Funded Debt incurred or assumed by any Principal Subsidiary (other than, in either case, Funded Debt owned by the Company or any Principal Subsidiary) or (iii) to the purchase of Principal Property (other than the Principal Property involved in such sale). The restrictions on Sale and Lease-back Transactions shall not apply to sale and lease-back arrangements existing on the date of the Indenture. Definitions. The term "Consolidated Net Tangible Assets" is defined to mean the total of all the assets appearing on the consolidated balance sheet of the Company and its Subsidiaries less the following: (1) current liabilities; (2) reserves for depreciation and other asset valuation reserves; (3) intangible assets including, without limitation, items such as goodwill, trademarks, trade names, patents, and unamortized debt discount and expense; and (4) appropriate adjustments on account of minority interests of other persons holding stock in any Subsidiary of the Company. The Indenture provides that Consolidated Net Tangible Assets must be determined as of a date not more than 60 days prior to the happening of the event for which such determination is being made. The term "Funded Debt" means any Debt which by its terms matures at or is extendable or renewable at the sole option of the obligor without requiring the consent of the obligee to a date more than twelve months after the date of the creation of such Debt. The term "Principal Property" is defined to mean any manufacturing or processing plant, office facility, distribution facility or sand and gravel or quarry site, including, in each case, the fixtures appurtenant thereto, located within the continental United States of America or Canada and owned and operated now or hereafter by the Company or any Subsidiary and having a book value on the date as of which the determination is being made of more than 2% of Consolidated Net Tangible Assets. The term "Principal Subsidiary" is defined to mean any Subsidiary which owns a Principal Property. The term "Value" is defined to mean, with respect to a Sale and Lease-back Transaction, as of any particular time, the amount equal to the greater of (1) the net proceeds from the sale or transfer of the property leased pursuant to such Sale and Lease-back Transaction or (2) the fair value in the opinion of the Board of Directors, the Chairman of the Board, the President or the principal financial officer of the Company of such property at the time of entering into such Sale and Lease-back Transaction, in either case multiplied by a fraction, the numerator of which is equal to the number of full years of the term of the lease remaining at the time of determination and the denominator of which is equal to the number of full years of such term, without regard to any renewal or extension options contained in the lease. EVENTS OF DEFAULT If an Event of Default with respect to any Debt Securities of any series shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of the Debt Securities of that series outstanding may declare the principal of all the Debt Securities of that series outstanding (or such lesser amount as may be provided for in the Debt Securities of that series) and the interest accrued thereon and Additional Amounts payable in respect thereof, if any, to be due and payable immediately and upon any such declaration such principal or such lesser amount shall become immediately due and payable; provided, that if all such Events of Default with respect to Debt Securities of that series shall have been cured, or waived as described under the heading "Modification and Waiver" below, and all amounts due otherwise than on account of such declaration 25 27 shall have been paid or deposited with the Trustee, the Holders of a majority in aggregate principal amount of the Debt Securities of that series then outstanding may rescind and annul such declaration and its consequences. An Event of Default with respect to any series of Debt Securities is defined in the Indenture as being: (a) default in the payment of any interest upon or any Additional Amounts in respect of any Debt Security of such series or any coupon appertaining thereto when such interest or Additional Amounts become due and payable, and continuance of such default for a period of 30 days; (b) default in the payment of the principal of and any premium on any Debt Security of such series when it becomes due and payable either at maturity, by declaration of acceleration, upon redemption, by request for repayment or otherwise; (c) default in the making of any sinking fund payment on any Debt Security of such series; (d) default in the performance or breach of any covenant or warranty of the Company contained in the Indenture for the benefit of such series or in the Debt Securities of such series, continued for 60 days after written notice as provided in the Indenture; (e) acceleration of the maturity of any indebtedness for money borrowed in excess of $5,000,000 of the Company or any of its Principal Subsidiaries if such acceleration is not rescinded or annulled, or such indebtedness is not discharged, within 10 days after written notice as provided in the Indenture; (f) certain events of bankruptcy, insolvency or reorganization; and (g) any other Event of Default provided with respect to Debt Securities of such series. The Trustee is required, within 90 days after the occurrence of a default with respect to the Debt Securities of any series that is continuing, to give to all Holders of the Debt Securities of such series notice of such default by mail; provided that, except in the case of default in the payment of the principal of or any premium or interest on or any Additional Amounts with respect to any Debt Securities of such series or in the payment of any sinking fund installment with respect to Debt Securities of such series, the Trustee shall be protected in withholding such notice if it in good faith determines that the withholding of such notice is in the interests of the Holders of the Debt Securities of such series. The Trustee, subject to its duties during default to act with the required standard of care, may require indemnification by the Holders of Debt Securities of any series with respect to which a default has occurred before proceeding to exercise any right or power under the Indenture at the request of the Holders of Debt Securities of such series. Subject to such right of indemnification, the Holders of a majority in principal amount of the outstanding Debt Securities of any series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to the Debt Securities of such series. The Company is required to furnish to the Trustee annually statements as to the fulfillment by the Company of all of its obligations and as to the absence of any defaults under the Indenture. MODIFICATION AND WAIVER The Company may amend the indenture with the written consent of the Holders of a majority in principal amount of each series of Debt Securities affected by the proposed amendment. However, without the consent of each Holder of Debt Securities of any such series, an amendment may not: (i) change the maturity date of the principal of, or any installment of principal of or interest on, the affected Debt Securities, (ii) reduce the principal amount of, or any premium or the rate of interest on, or any Additional Amounts payable in respect of the affected Debt Securities, (iii) change any obligation of the Company to pay any Additional Amounts in respect of the affected Debt Securities, (iv) reduce the amount of the principal of any Original Issue Discount Securities that would be due and payable upon acceleration thereof, (v) adversely affect any right of repayment at the option of Holders of the affected Debt Securities, (vi) change the place or currency of payment of principal of, or any premium or interest on, the affected Debt Securities, (vii) impair the right to institute suit for the enforcement of any payment on or with respect to the affected Debt Securities, or (viii) reduce the percentage in principal amount of affected Debt Securities, the consent of whose Holders is required for modification or amendment of the Indenture or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults or (ix) to modify any of the provisions of this paragraph, the provisions relating to the waiver of past defaults under the Indenture and the provisions relating to the waiver 26 28 of certain covenants under the Indenture, except to increase any such percentage or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the Holders of the affected Debt Securities. The Holders of not less than a majority in principal amount of the Debt Securities of any series may on behalf of all Holders of such series waive compliance by the Company with certain restrictive provisions of the Indenture. The Holders of a majority in principal amount of the Debt Securities of any series may on behalf of all Holders of Debt Securities of such series waive any past default under the Indenture with respect to the Debt Securities of such series and any Event of Default arising therefrom, except a default in the payment of the principal of, or any premium or interest on, or any Additional Amounts payable in respect of the affected Debt Securities or in respect of any covenant or provision which under the Indenture cannot be modified or amended without the consent of the Holder of each outstanding Debt Security of such series. DEFEASANCE PROVISIONS The Indenture provides that the Company will be discharged from any and all obligations in respect of the Debt Securities of a series (except for certain obligations to register the transfer or exchange of Debt Securities, to replace stolen, lost or mutilated Debt Securities, to maintain paying agencies and to hold moneys for payment in trust) upon the deposit with the Trustee, in trust, of money and/or U.S. Government Obligations, which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay any installment of principal of (and premium, if any) and interest on and any mandatory sinking fund payments in respect of any of the Debt Securities of such series on the stated maturity of such payments, or on any redemption date established for such Debt Securities, in accordance with the terms of the Indenture and such Debt Securities. Such discharge may only occur if (i) no Event of Default has occurred and is continuing, or will occur upon the giving of notice or the lapse of time during the period such defeasance and discharge is being effected, (ii) the Company has delivered to the Trustee an opinion of counsel based on a change in law occurring after the issue dates of the Notes or a United States Internal Revenue Service ruling to the effect that such a discharge will not cause the Holders of such Debt Securities to recognize income, gain or loss for Federal income tax purposes and will be subject to Federal income tax in the same amount and in the same manner and at the same times, as would have been the case if such discharge had not occurred, and (iii) in the event that the Debt Securities of such series are then listed on the New York Stock Exchange, the Company has delivered to the Trustee an opinion of counsel satisfactory to the Trustee to the effect that the discharge would not cause such Debt Securities to be de-listed as a result thereof. No defeasance and discharge may be effected with respect to any series of Debt Securities the terms of which provide for the payment of any Additional Amounts. The Company may omit to comply with the covenants described under the heading "Certain Covenants of the Company" above under the circumstances described herein with respect to the Debt Securities of each series. The Company, in order to exercise such option, will be required to deposit with the Trustee, in trust, money and/or U.S. Government Obligations which through the payment of interest and principal thereof in accordance with their terms will provide money in an amount sufficient to pay any installment of principal of (and premium, if any) and interest on and any mandatory sinking fund payments and any Additional Amounts in respect of any of the Debt Securities of such series on the stated maturity of such payments in accordance with the terms of the Indenture and such Debt Securities. Such covenant defeasance may only occur if (i) such deposit does not cause the Trustee with respect to such series of Debt Securities to have any conflicting interest, as defined in the Indenture, with respect to Debt Securities of any series, (ii) such deposit will not result in a breach or a violation of, or default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound, (iii) no Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to Debt Securities of such series has occurred and is continuing on the date of such deposit, (iv) the Company has delivered to the Trustee an opinion of counsel satisfactory to the Trustee to the effect that the covenant defeasance and related deposit will not cause the Holders of such series to recognize income, gain or loss for Federal income tax purposes and that the Holders will be subject to Federal income tax in the same amount and in the same manner and at the same times, as would have been the case if such covenant defeasance and related deposit 27 29 had not occurred, and (v) the Company has delivered to the Trustee an Officers' Certificate and an opinion of counsel, each stating that all conditions precedent to such covenant defeasance have been complied with. If any Additional Amounts should become payable with respect to a series of Debt Securities after any such deposit and related covenant defeasance with respect to such series of Debt Securities shall have occurred, the Company will be required to make additional deposits with the Trustee with respect thereto or such covenant defeasance will terminate. CONCERNING THE TRUSTEE Citibank, N.A. will serve as the Trustee under the Indenture. The Trustee and its affiliates may perform banking services for, or transact other banking business with, the Company in the ordinary course of business. Citicorp Securities, Inc., an affiliate of the Trustee, will act as an Underwriter with respect to the Notes. 28 30 UNDERWRITING Subject to the terms and conditions of an underwriting agreement, dated , 1998 (the "Underwriting Agreement"), the underwriters named below (the "Underwriters") have severally, and not jointly, agreed to purchase from the Company the respective principal amount of Notes set forth opposite their names below.
PRINCIPAL AMOUNT OF NOTES UNDERWRITERS ------------ Donaldson Lufkin & Jenrette Securities Corporation.......... Warburg Dillon Read LLC..................................... Citicorp Securities, Inc.................................... ------------ Total............................................. $650,000,000 ============
The Underwriting Agreement provides that the obligations of the several Underwriters to purchase and accept delivery of the Notes offered hereby are subject to approval by their counsel of certain legal matters and to certain other conditions. The Underwriters are obligated to purchase and accept delivery of all the Notes offered hereby if any are purchased. The Underwriters initially propose to offer the Notes in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus and in part to certain dealers at such price less a concession not in excess of % of the principal amount of the Notes. The Underwriters may allow, and such dealers may re-allow, to certain other dealers a concession not in excess of % of the principal amount of the Notes. After the initial offering of the Notes, the public offering price and other selling terms of the Notes may be changed by the Underwriters at any time without notice. The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the Underwriters may be required to make in respect thereof. The Notes are a new issue of securities with no established trading market. The Company does not intend to apply for listing of the Notes on any securities exchange and there can be no assurance that there will be a secondary market for the Notes. The Company has been advised by the Underwriters that one or more of the Underwriters may make a market in the Notes; however, they are not obligated to do so, and they may discontinue any such market making at any time without notice. Therefore, no assurance can be given as to the liquidity of the trading market for the Notes. Other than in the United States, no action has been taken by the Company or the Underwriters that would permit a public offering of the Notes in any jurisdiction where action for that purpose is required. The Notes offered hereby may not be offered or sold, directly or indirectly, nor may this Prospectus or any other offering material or advertisements in connection with the offer and sale of the Notes be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of such jurisdiction. Persons into whose possession this Prospectus comes are advised to inform themselves about and to observe any restrictions relating to the Offering of the Notes and the distribution of this Prospectus. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the Notes offered hereby in any jurisdiction in which such an offer or a solicitation is unlawful. In connection with the Offering, the Underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the Notes. Specifically, the Underwriters may overallot the Offering, creating a syndicate short position. The Underwriters may bid for and purchase Notes in the open market to cover such syndicate short position or to stabilize the price of the Notes. These activities may stabilize or maintain the market price of the Notes above independent market levels. The Underwriters are not required to engage in these activities, and may end either of these activities at any time. Certain of the Underwriters and their respective affiliates have, from time to time, performed and may in the future perform various investment banking and commercial banking services for the Company, for which 29 31 they have received or will receive usual and customary fees. In connection with the acquisition of the Redland Operations from Lafarge S.A., Warburg Dillon Read LLC provided financial advisory services and delivered an opinion to the Company's Board of Directors with respect to certain matters relating to the acquisition for which it has received customary fees and expenses from the Company. In addition to services in connection with the acquisition of the Redland Operations, certain of the Underwriters have provided from time to time, and expect to provide in the future, financial advisory and investment banking services to the Company and its affiliates, for which such Underwriters have received and will receive customary fees and expenses. LEGAL MATTERS The validity of the Notes offered hereby will be passed upon for the Company by Thompson & Knight, P.C., Dallas, Texas. Milbank, Tweed, Hadley & McCloy, New York, New York, will pass upon certain legal matters for the Underwriters. In rendering their opinions, Thompson & Knight, P.C. and Milbank, Tweed, Hadley & McCloy will rely as to matters of Maryland law upon the opinion of Piper & Marbury, Baltimore, Maryland. EXPERTS The financial statements incorporated by reference in this Prospectus and elsewhere in the Registration Statement, to the extent and for the periods indicated in their reports, have been audited by Arthur Andersen LLP, independent public accountants, and are incorporated by reference herein in reliance upon the authority of said firm as experts in giving said reports. 30 32 ====================================================== NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. ------------------------ TABLE OF CONTENTS
PAGE ---- Available Information................. 3 Incorporation of Certain Documents by Reference........................... 3 The Company........................... 4 Recent Developments................... 5 Use of Proceeds....................... 5 Ratio of Earnings to Fixed Charges.... 5 Accounting Effects of the Acquisition......................... 6 Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.................. 6 Capitalization........................ 7 Selected Consolidated Financial Data................................ 8 Unaudited Pro Forma Condensed Consolidated Financial Data......... 9 Business.............................. 15 Description of Notes.................. 20 Underwriting.......................... 29 Legal Matters......................... 30 Experts............................... 30
====================================================== ====================================================== $650,000,000 [LAFARGE LOGO] % SENIOR NOTES DUE ------------------------- PROSPECTUS ------------------------- Joint Lead Managers DONALDSON, LUFKIN & JENRETTE WARBURG DILLON READ LLC -------------------------------------- CITICORP SECURITIES, INC. , 1998 ====================================================== 33 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The Company will pay all expenses incident to the offering and sale to the public of the Notes being registered other than any commissions and discounts of underwriters, dealers or agents and any transfer taxes. Such expenses are set forth in the following table. All of the amounts shown are estimates except the Securities and Exchange Commission ("SEC") registration fee. SEC registration fee........................................ $191,750 Legal fees and expenses..................................... 100,000 Rating Agencies' fees....................................... 235,000 Accounting fees and expenses................................ 200,000 Printing fees and expenses.................................. 75,000 -------- Total............................................. $801,750 ========
- --------------- * To be provided by amendment. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 2-418 of the Maryland General Corporation Law ("MGCL") provides for the indemnification of directors and officers of a corporation incorporated under Maryland law under certain circumstances. A person who was or is a director or officer of the corporation may be indemnified by the corporation for judgments, penalties, fines, settlements and reasonable expenses (including attorneys' fees) actually incurred by the director or officer in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, to which such director or officer was or is made a party by reason of service in that capacity unless it is established that (1) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty; (2) the director actually received an improper personal benefit in money, property or services; or (3) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. If a proceeding is brought by or on behalf of the corporation, no indemnification will be made in connection with such proceeding if the director or officer was adjudged to be liable to the corporation. In addition, the MGCL permits a corporation to advance reasonable expenses to a director or officer upon the corporation's receipt of (a) a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by or on his behalf to repay the amount paid or reimbursed by the corporation if it shall ultimately be determined that the standard of conduct was not met. The termination of any proceeding by conviction, or upon a plea of nolo contendere or its equivalent, or an entry of any order of probation prior to the judgment, creates a rebuttable presumption that the director or officer did not meet the requisite standard of conduct required for indemnification to be permitted. It is the position of the Commission that indemnification of directors and officers for liabilities arising under the Securities Act is against public policy and is unenforceable pursuant to Section 14 of the Securities Act. Article Ninth of the Articles of Incorporation of the Registrant provides that the Registrant shall indemnify its directors and officers to the full extent permitted by Maryland law now or hereafter in force, including the advance of related expenses, upon a determination by the Board of Directors or independent legal counsel made in accordance with applicable statutory standards, and that the Registrant, upon authorization by the Board of Directors, may indemnify other employees or agents to the same extent. Article Ninth also contains a provision that eliminates the liability of officers and directors of the Registrant for money damages to the Registrant or its stockholders for any act or omission, including conduct of such officers and directors on behalf of the Registrant constituting gross negligence, unless (1) the director or officer received II-1 34 an improper benefit in money, property or services or (2) the action, or failure to act, by the director or officer was the result of active and deliberate dishonesty which was material to a cause of action adjudicated in a proceeding against such director or officer. Article VIII of the By-Laws of the Registrant provides for the indemnification of the Registrant's directors and officers to the extent permitted under Section 2-418 of the MGCL. The Registrant has insurance policies indemnifying its officers and directors against claims and liabilities (with stated exceptions) to which they may become subject by reason of their positions as directors and officers. ITEM 16. EXHIBITS.
EXHIBIT NO. IDENTIFICATION OF EXHIBIT ----------- ------------------------- 1.1 -- Form of Underwriting Agreement with respect to the Notes. 3.1 -- Articles of Amendment and Restatement of the Company, filed May 29, 1992 (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by the Company for the fiscal year ended December 31, 1992). 3.2 -- By-Laws of the Company, (as most recently amended on July 29, 1994) (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed by the Company for the fiscal year ended December 31, 1994). 4.1 -- Indenture between the Company and Citibank, N.A., as Trustee, dated October 1, 1989, relating to senior debt securities of the Company (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 (Registration No. 33-31333) of the Company, filed with the Securities and Exchange Commission on October 3, 1989). 4.2 -- Form of Supplemental Indenture between the Company and Citibank, N.A., as Trustee, relating to $650 million of senior debt securities of the Company. 4.3 -- Form of Note (included in Exhibit 4.2). 5.1 -- Opinion of Thompson & Knight, P.C. 12 -- Statement of Computation of Ratios of Earnings to Fixed Charges. 23.1 -- Consent of Arthur Andersen LLP, independent public accountants. 23.2 -- Consent of Thompson & Knight, P.C. (included in Exhibit 5.1). 24 -- Power of Attorney (included on the signature page of this Registration Statement). 25 -- Statement of Eligibility of Trustee under the Trust Indenture Act of 1939 on Form T-1.
ITEM 17. UNDERTAKINGS. A. Undertaking Regarding Filings Incorporating Subsequent Exchange Act Documents By Reference. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this 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. B. Undertaking in Respect of Indemnification. Insofar as indemnification for liabilities arising under the Securities Act 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 SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification II-2 35 against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. C. Undertaking Pursuant to Rule 430A. The undersigned Registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of the prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus 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. II-3 36 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-3 and has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Reston, State of Virginia, on this 6th day of July, 1998. LAFARGE CORPORATION By: /s/ LARRY J. WAISANEN ---------------------------------- Larry J. Waisanen Executive Vice President and Chief Financial Officer Pursuant to the requirements of the Securities Act of 1993, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ JOHN M. PIECUCH* President, Chief Executive July 6, 1998 - ----------------------------------------------------- Officer and Director (Principal John M. Piecuch Executive Officer) /s/ LARRY J. WAISANEN Executive Vice President and July 6, 1998 - ----------------------------------------------------- Chief Financial Officer Larry J. Waisanen (Principal Financial Officer) /s/ JOHN C. PORTER* Vice President and Controller July 6, 1998 - ----------------------------------------------------- (Principal Accounting Officer) John C. Porter /s/ BERTRAND P. COLLOMB* Chairman of the Board July 6, 1998 - ----------------------------------------------------- Bertrand P. Collomb Director - ----------------------------------------------------- Thomas A. Buell /s/ MARSHALL A. COHEN* Director July 6, 1998 - ----------------------------------------------------- Marshall A. Cohen /s/ PHILIPPE P. DAUMAN* Director July 6, 1998 - ----------------------------------------------------- Philippe P. Dauman /s/ BERNARD L. KASRIEL* Director July 6, 1998 - ----------------------------------------------------- Bernard L. Kasriel /s/ JACQUES LEFEVRE* Director July 6, 1998 - ----------------------------------------------------- Jacques Lefevre /s/ PAUL W. MACAVOY* Director July 6, 1998 - ----------------------------------------------------- Paul W. MacAvoy /s/ CLAUDINE B. MALONE* Director July 6, 1998 - ----------------------------------------------------- Claudine B. Malone /s/ ALONZO L. MCDONALD* Director July 6, 1998 - ----------------------------------------------------- Alonzo L. McDonald /s/ ROBERT W. MURDOCH* Director July 6, 1998 - ----------------------------------------------------- Robert W. Murdoch
II-4 37
SIGNATURE TITLE DATE --------- ----- ---- /s/ BERTIN F. NADEAU* Director July 6, 1998 - ----------------------------------------------------- Bertin F. Nadeau /s/ JOHN D. REDFERN* Director July 6, 1998 - ----------------------------------------------------- John D. Redfern /s/ JOE M. RODGERS* Director July 6, 1998 - ----------------------------------------------------- Joe M. Rodgers
*By: /s/ LARRY J. WAISANEN ------------------------------- Larry J. Waisanen Attorney-in-fact II-5 38 INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION ----------- ----------- 1.1 -- Form of Underwriting Agreement with respect to the Notes. 3.1 -- Articles of Amendment and Restatement of the Company, filed May 29, 1992 (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by the Company for the fiscal year ended December 31, 1992). 3.2 -- By-Laws of the Company, (as most recently amended on July 29, 1994) (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed by the Company for the fiscal year ended December 31, 1994). 4.1 -- Indenture between the Company and Citibank, N.A., as Trustee, dated October 1, 1989, relating to senior debt securities of the Company (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 (Registration No. 33-31333) of the Company, filed with the Securities and Exchange Commission on October 3, 1989). 4.2 -- Form of Supplemental Indenture between the Company and Citibank, N.A., as Trustee, relating to $650 million of senior debt securities of the Company. 4.3 -- Form of Note (included in Exhibit 4.2). 5.1 -- Opinion of Thompson & Knight, P.C. 12 -- Statement of Computation of Ratios of Earnings to Fixed Charges. 23.1 -- Consent of Arthur Andersen LLP, independent public accountants. 23.2 -- Consent of Thompson & Knight, P.C. (included in Exhibit 5.1). 24 -- Power of Attorney (included on the signature page of this Registration Statement). 25 -- Statement of Eligibility of Trustee under the Trust Indenture Act of 1939 on Form T-1.
EX-1.1 2 UNDERWRITING AGREEMENT 1 EXHIBIT 1.1 $650,000,000 LAFARGE CORPORATION ___% Senior Notes due _______ UNDERWRITING AGREEMENT July ___, 1998 DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION WARBURG DILLON READ LLC CITICORP SECURITIES, INC. c/o Donaldson, Lufkin & Jenrette Securities Corporation 277 Park Avenue New York, New York 10172 Dear Sirs: Lafarge Corporation, a Maryland corporation (the "Company"), proposes to issue and sell $650,000,000 principal amount of its __% Senior Notes due ____ (the "Securities") to Donaldson, Lufkin & Jenrette Securities Corporation, Warburg Dillon Read LLC and Citicorp Securities, Inc. (the "Underwriters") in the amounts specified in Schedule I hereto. The Securities are to be issued pursuant to the provisions of an Indenture dated as of October 1, 1989, as supplemented by a Supplemental Indenture thereto, to be dated as of _____ ___, 1998 (collectively, the "Indenture") between the Company and Citibank, N.A., as Trustee (the "Trustee"). Capitalized terms used but not defined herein shall have the meanings given to such terms in the Indenture. SECTION 1. Registration Statement and Prospectus. The Company has prepared and filed with the Securities and Exchange Commission (the "Commission") in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the "Act"), a registration statement on Form S-3 (No. 333-57333), including a prospectus, relating to the Securities. The registration statement, as amended at the time it became effective, including the information (if any) 2 deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as the "Registration Statement"; and the prospectus in the form first used to confirm sales of Securities is hereinafter referred to as the "Prospectus". Reference made herein to any preliminary prospectus or to the Prospectus shall include all documents incorporated by reference therein as of the date of such preliminary prospectus or Prospectus, as the case may be, and any reference to any amendment or supplement to any preliminary prospectus or the Prospectus shall be deemed to refer to and include any documents filed after such date under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and incorporated by reference in such amendment or supplement. If the Company has filed or is required pursuant to the terms hereof to file a registration statement pursuant to Rule 462(b) under the Act registering additional Securities (a "Rule 462(b) Registration Statement"), then, unless otherwise specified, any reference herein to the term "Registration Statement" shall be deemed to include such Rule 462(b) Registration Statement. SECTION 2. Agreements to Sell and Purchase. On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company agrees to issue and sell, and each Underwriter agrees, severally and not jointly, to purchase from the Company the principal amount of the Securities set forth opposite the name of such Underwriter in Schedule I hereto at ____% of the principal amount thereof (the "Purchase Price"). SECTION 3. Terms of Public Offering. The Company is advised by you that the Underwriters propose (i) to make a public offering of their respective portions of the Securities as soon after the execution and delivery of this Agreement as in your judgment is advisable and (ii) initially to offer the Securities upon the terms set forth in the Prospectus. SECTION 4. Delivery and Payment. The Securities shall be represented by definitive certificates and shall be issued in such authorized denominations and registered in such names as Donaldson, Lufkin & Jenrette Securities Corporation shall request no later than two business days prior to the Closing Date (as defined below). The Company shall deliver the Securities, with any transfer taxes thereon duly paid by the Company, to Donaldson, Lufkin & Jenrette Securities Corporation through the facilities of The Depository Trust Company ("DTC"), for the respective accounts of the several Underwriters, against payment to the Company of the Purchase Price therefore by wire transfer of Federal or other funds immediately available in New York City. The certificates representing the Securities shall be made available for inspection not later than 9:30 A.M., New York City time, on the business day prior to the Closing Date (as defined below), at the office of DTC or its designated custodian (the "Designated Office"). The time and date of delivery and payment for the Securities shall be 9:00 A.M., New York City time, on _____ ___, 1998 or such other time on the same or such other date as Donaldson, Lufkin & Jenrette Securities Corporation and the Company 2 3 shall agree in writing. The time and date of such delivery and payment are hereinafter referred to as the "Closing Date". The documents to be delivered on the Closing Date on behalf of the parties hereto pursuant to Section 8 of this Agreement shall be delivered at the offices of Milbank, Tweed, Hadley & McCloy, Washington, D.C. and the Securities shall be delivered at the Designated Office, all on the Closing Date. SECTION 5. Agreements of the Company. The Company agrees with you: (a) To advise you promptly and, if requested by you, to confirm such advice in writing, (i) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of the suspension of qualification of the Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for such purposes, (iii) when any amendment to the Registration Statement becomes effective, (iv) if the Company is required to file a Rule 462(b) Registration Statement after the effectiveness of this Agreement, when the Rule 462(b) Registration Statement has become effective, (v) of the happening of any event during the period referred to in Section 5(d) below which makes any statement of a material fact made in the Registration Statement or the Prospectus untrue or which requires any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading and (vi) of receipt by the Company or any representative or attorney for the Company of any other communication from the Commission relating to the Company, the Registration Statement or any Prospectus. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, the Company will use its reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. (b) To furnish (i) to you four signed copies of the Registration Statement as first filed with the Commission and of each amendment to it, including all exhibits, and (ii) to you and each Underwriter designated by you such number of conformed copies of the Registration Statement as so filed and of each amendment to it, without exhibits, as you may reasonably request. (c) To prepare the Prospectus, the form and substance of which shall be reasonably satisfactory to you, and to file the Prospectus in such form with the Commission within the applicable period specified in Rule 424(b) under the Act; during the period specified in Section 5(d) below, not to file any further amendment to the Registration Statement and not to make any amendment or supplement to the Prospectus of which you shall not previously have been advised or to which you shall reasonably object after being so advised; and, during such period, to prepare and file with the Commission, promptly upon your reasonable request, any amendment to the Registration Statement or amendment or supplement to the Prospectus which may be necessary or advisable in connection 3 4 with the distribution of the Securities by you, and to use its reasonable best efforts to cause any such amendment to the Registration Statement to become promptly effective. (d) Prior to 12:00 P.M., New York City time, on the first business day after the date of this Agreement and from time to time thereafter for such period as in the opinion of counsel for the Underwriters a prospectus is required by law to be delivered in connection with sales by an Underwriter or a dealer, to furnish in New York City to each Underwriter and any dealer as many copies of the Prospectus (and of any amendment or supplement to the Prospectus) as such Underwriter or dealer may reasonably request. (e) If during the period specified in Section 5(d), any event shall occur or condition shall exist as a result of which, in the opinion of counsel for the Underwriters, it becomes necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare and file with the Commission an appropriate amendment or supplement to the Prospectus so that the statements in the Prospectus, as so amended or supplemented, will not in the light of the circumstances when it is so delivered, be misleading in any material respect, or so that the Prospectus will comply with applicable law, and to furnish to each Underwriter and to any dealer such number of copies thereof as such Underwriter or dealer may reasonably request. (f) Prior to any public offering of the Securities, to cooperate with you and counsel for the Underwriters in connection with the registration or qualification of the Securities for offer and sale by the several Underwriters and by dealers under the state securities or Blue Sky laws of such jurisdictions as you may request, to continue such registration or qualification in effect so long as required for distribution of the Securities and to file such consents to service of process or other documents as may be necessary in order to effect such registration or qualification; provided, however, that the Company shall not be required in connection therewith to (i) qualify as a foreign corporation in any jurisdiction in which it is not now so qualified, (ii) take any action that would subject it to taxation in any jurisdiction or (iii) take any action that would subject it to general consent to service of process other than as to matters and transactions relating to the Prospectus, the Registration Statement, any preliminary prospectus or the offering or sale of the Securities, in any jurisdiction in which it is not now so subject. (g) To make generally available to its security holders as soon as reasonably practicable an earnings statement, which need not be audited, covering a period of at least twelve-months after the effective date of the Registration Statement that shall satisfy the provisions of Section 11(a) of the Act, and to advise you in writing when such statement has been so made available. 4 5 (h) The Company, during the period when the Prospectus is required to be delivered under the Act, will file promptly all documents required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act. (i) So long as the Securities are outstanding, to furnish to you as soon as available copies of all reports or other communications furnished to its security holders or furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed and such other publicly available information concerning the Company and its subsidiaries as you may reasonably request. (j) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all out-of-pocket expenses reasonably incurred and incident to the performance of its obligations under this Agreement, including: (i) the reasonable fees, disbursements and expenses of the Company's counsel and the Company's accountants in connection with the registration and delivery of the Securities under the Act and all other reasonable fees and expenses in connection with the preparation, printing, filing and distribution of the Registration Statement (including financial statements and exhibits), any preliminary prospectus, the Prospectus and all amendments and supplements to any of the foregoing, including the mailing and delivering of copies thereof to the Underwriters and dealers in the quantities specified herein, (ii) all reasonable costs and expenses related to the transfer and delivery of the Securities to the Underwriters, including any transfer or other taxes payable thereon, (iii) all costs of printing or producing this Agreement and any other agreements or documents in connection with the offering, purchase, sale or delivery of the Securities, (iv) all expenses in connection with the registration or qualification of the Securities for offer and sale under the securities or Blue Sky laws of the several states and all costs of printing or producing any Preliminary and Supplemental Blue Sky Memoranda in connection therewith (including the filing fees and fees and disbursements of counsel for the Underwriters in connection with such registration or qualification and memoranda relating thereto), (v) any filing fees and disbursements of counsel for the Underwriters in connection with the review and clearance of the offering of the Securities by the National Association of Securities Dealers, Inc., if any, (vi) the cost of printing certificates representing the Securities, (vii) the costs and charges of any transfer agent, registrar and/or depositary (including the Depository Trust Company), (viii) any fees charged by rating agencies for the rating of the Securities, (ix) the fees and expenses of the Trustee and the Trustee's counsel in connection with the Indenture and the Securities and (x) all other reasonable costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. 5 6 (k) During the period beginning on the date hereof and continuing to and including the Closing Date, not to offer, sell, contract to sell or otherwise transfer or dispose of any debt securities of the Company or any warrants, rights or options to purchase or otherwise acquire debt securities of the Company substantially similar to the Securities (other than (i) the Securities and (ii) commercial paper issued in the ordinary course of business), without the prior written consent of Donaldson, Lufkin & Jenrette Securities Corporation. (l) To use its reasonable best efforts to do and perform all things required or necessary to be done and performed under this Agreement by the Company prior to the Closing Date and to satisfy all conditions precedent to the delivery of the Securities. (m) If the Registration Statement at the time of the effectiveness of this Agreement does not cover all of the Securities, to file a Rule 462(b) Registration Statement with the Commission registering the Securities not so covered in compliance with Rule 462(b) by the earlier of 10:00 A.M., New York City time, on the date after this Agreement and the time confirmations are first sent or given for the Securities, and to pay to the Commission the filing fee for such Rule 462(b) Registration Statement at the time of the filing thereof or to give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act. SECTION 6. Representations and Warranties of the Company. The Company represents and warrants to each Underwriter that: (a) The Registration Statement has become effective (other than any Rule 462(b) Registration Statement to be filed by the Company after the effectiveness of this Agreement); any Rule 462(b) Registration Statement filed after the effectiveness of this Agreement will become effective no later than the earlier of 10:00 A.M., New York City time, on the date of this Agreement and the time confirmations are first sent or given for the Securities, and no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission. (b) (i) The Registration Statement (other than any Rule 462(b) Registration Statement to be filed by the Company after the effectiveness of this Agreement), when it became effective, did not contain and, as amended, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Registration Statement (other than any Rule 462(b) Registration Statement to be filed by the Company after the effectiveness of this Agreement) and the Prospectus comply and, as amended or supplemented, if applicable, will comply in all material respects with the Act, (iii) if the Company is required to file a Rule 462(b) Registration Statement after the effectiveness of this Agreement, such Rule 462(b) Registration Statement and any amendments 6 7 thereto, when they become effective (A) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (B) will comply in all material respects with the Act and (iv) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement or the Prospectus or any amendment or supplement thereto based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein. In addition, the documents incorporated by reference into the Prospectus, at the time they were or hereafter are filed with the Commission, complied and will comply in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder, and, when read together and with the other information in the Prospectus, did not and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were or are made, not misleading. (c) Except for those matters amended or included in the Prospectus, the preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Act, complied when so filed in all material respects with the Act, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in any preliminary prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein. (d) The Company and each subsidiary of the Company listed on Exhibit A (collectively, the "Subsidiaries"), each of which is a significant subsidiary as defined in Rule 405 of Regulation C of the rules and regulations of the Commission under the Act (collectively, the "Subsidiaries") has been duly incorporated, is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to conduct its business as described in the Prospectus and to own, lease and operate its properties, and each is duly qualified and is in good standing as a foreign corporation authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to be so qualified or to be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, and all of the issued and outstanding capital stock of each Subsidiary has been duly authorized and validly issued and is fully paid and non-assessable and, except for directors' qualifying shares and 7 8 the Exchangeable Preference Shares, no par value, of Lafarge Canada, Inc., is owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity (each, a "Lien"). (e) No labor disturbance by the employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is imminent which might be expected to materially adversely affect the conduct of the business operations, financial condition or income of the Company and its subsidiaries considered as one enterprise. (f) The Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as (A) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (B) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. (g) The Securities have been duly authorized and, on the Closing Date, will have been validly executed and delivered by the Company. When the Securities have been executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, the Securities will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms except as (A) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (B) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability. (h) The Securities conform as to legal matters in all material respects to the description thereof contained in the Prospectus. (i) Neither the Company nor any of its Subsidiaries is in violation of its respective charter or by-laws or in default in the performance of any material obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, note, lease or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, except for any such violation or default that would not have a material adverse effect on the Company and its subsidiaries taken as a whole. (j) The Company and its Subsidiaries own, possess, license or can acquire on reasonable terms, the material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented 8 9 and/or unpatentable proprietary or confidential information, systems or procedures), service marks and trade names presently employed by them in connection with the business now operated by them, and neither the Company nor any of its Subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing, except for any such unfavorable decisions, rulings or findings which, singly or in the aggregate, would not result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise. (k) The execution, delivery and performance of this Agreement, the Indenture and the Securities by the Company, the compliance by the Company with all the provisions hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not (i) require any consent, approval, authorization or other order of, or qualification with, any court or governmental body or agency (except such as may be required under (a) the Act, (b) the Exchange Act or (c) the securities or Blue Sky laws of the various states of the United States), (ii) conflict with or constitute a breach of any of the terms or provisions of, or a default under, the charter or by-laws of the Company or any of its Subsidiaries or any indenture, loan agreement, mortgage, lease or other agreement or instrument that is material to the Company and its Subsidiaries, taken as a whole, to which the Company or any of its Subsidiaries is a party or by which the Company or any of its subsidiaries or their respective property is bound, (iii) violate or conflict with any applicable law or any rule, regulation, judgment, order or decree of any court or any governmental body or agency having jurisdiction over the Company, any of its Subsidiaries (other than the [Redland Subsidiaries]), and to the best of the Company's knowledge, the [Redland Subsidiaries] or their respective property or (iv) result in the imposition or creation of (or the obligation to create or impose) a Lien under any agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or their respective property is bound that is material to the Company and its Subsidiaries, taken as a whole. (l) There is no action, suit or proceeding before or by any court or governmental agency or body, domestic or foreign, now pending, or, to the knowledge of the Company, threatened against or affecting, the Company or any of its subsidiaries, which is required to be disclosed in the Prospectus (other than as disclosed therein), or which might result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, or which might materially and adversely affect the properties or assets thereof or which might materially and adversely affect the consummation of this Agreement; all pending legal or governmental proceedings to which the Company or any subsidiary is a party or of which any of their respective properties or assets is the subject which are not described in the Prospectus, including ordinary routine 9 10 litigation incidental to the business, are, considered in the aggregate, not material; nor are there any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not so described or filed as required. (m) Except as described in the Prospectus, neither the Company nor any of its Subsidiaries has violated any existing foreign, federal, state or local law or regulation relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"), any provisions of the Employee Retirement Income Security Act of 1974, as amended, or any provisions of the Foreign Corrupt Practices Act or the rules and regulations promulgated thereunder, except for such violations which, singly or in the aggregate, would not result in any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise. (n) Except as described in the Prospectus, each of the Company and its Subsidiaries has such permits, licenses, consents, exemptions, franchises, authorizations and other approvals (each, an "Authorization") of, and has made all filings with and notices to, all governmental or regulatory authorities and self-regulatory organizations and all courts and other tribunals, including, without limitation, under any applicable Environmental Laws, as are necessary to own, lease, license and operate its respective properties and to conduct its business, except where the failure to have any such Authorization or to make any such filing or notice would not, singly or in the aggregate, have a material adverse effect on the Company and its Subsidiaries considered as one enterprise. Except as described in the Prospectus, each of the Company and its Subsidiaries is in compliance in all material respects with all the terms and conditions thereof and with the rules and regulations of the authorities and governing bodies having jurisdiction with respect thereto; and no event has occurred (including, without limitation, the receipt of any notice from any authority or governing body) which allows or, after notice or lapse of time or both, would allow, revocation, suspension or termination of any such Authorization or results or, after notice or lapse of time or both, would result in any other impairment of the rights of the holder of any such Authorization, except those that would not have a material adverse effect on the Company and its subsidiaries taken as a whole; and, except as described in the Prospectus, such Authorizations contain no restrictions that are materially burdensome to the Company or any of its subsidiaries; except where such failure to be valid and in full force and effect or to be in compliance, the occurrence of any such event or the presence of any such restriction would not, singly or in the aggregate, result in any material adverse change in the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise. 10 11 (o) Except as described in the Prospectus, there are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any Authorization, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, result in any material adverse change in the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise. (p) This Agreement has been duly authorized, executed and delivered by the Company. (q) Arthur Andersen are independent public accountants with respect to the Company and its subsidiaries as required by the Act and the rules and regulations thereunder. (r) The consolidated financial statements included or incorporated by reference in the Registration Statement and the Prospectus (and any amendment or supplement thereto), together with related schedules and notes, present fairly in all material respects the consolidated financial position, results of operations and changes in financial position of the Company and its subsidiaries on the basis stated therein at the respective dates or for the respective periods to which they apply; such statements and related schedules and notes have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; the supporting schedules, if any, included in the Registration Statement present fairly in all material respects in accordance with generally accepted accounting principles the information required to be stated therein; and the other financial and statistical information and data set forth in the Registration Statement and the Prospectus (and any amendment or supplement thereto) are, in all material respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company. (s) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus, will not be, an "investment company" as such term is defined in the Investment Company Act of 1940, as amended. (t) There are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company or to require the Company to include such securities with the Securities registered pursuant to the Registration Statement. (u) No "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act has indicated to the Company that it is considering (i) the downgrading, suspension or withdrawal of, 11 12 or any review for a possible change that does not indicate the direction of the possible change in, any rating assigned to the Company or any securities of the Company or (ii) any change in the outlook for any rating of the Company or any securities of the Company. (v) Since the respective dates as of which information is given in the Prospectus other than as set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), (i) there has not occurred any material adverse change in the condition, financial or otherwise, or the earnings or business affairs of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (ii) there has not been any material adverse change in the capital stock or in the long-term debt of the Company or any of its subsidiaries and (iii) there have been no transactions entered into by the Company or any of its subsidiaries, other than those in the ordinary course of business, which are material with respect to the Company and its subsidiaries considered as one enterprise. SECTION 7. Indemnification. (a) The Company agrees to indemnify and hold harmless each Underwriter, its directors, its officers and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities and judgments (including, without limitation, any reasonable legal or other expenses incurred in connection with investigating or defending any matter, including any action, that could give rise to any such losses, claims, damages, liabilities or judgments) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), the Prospectus (or any amendment or supplement thereto) or any preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished in writing to the Company by or on behalf of such Underwriter through you expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Underwriter who failed to deliver a Prospectus, as then amended or supplemented, (so long as the Prospectus and any amendment or supplemented thereto was provided by the Company to the several Underwriters in the requisite quantity and on a timely basis to permit proper delivery on or prior to the Closing Date) to the person asserting any losses, claims, damages, liabilities or judgements caused by any untrue statement or alleged untrue statement of a material fact contained in the preliminary prospectus, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if such material misstatement or omission or alleged material misstatement or omission was cured in the Prospectus, as so amended or supplemented, and such Prospectus was 12 13 required by law to be delivered at or prior to the written confirmation of sale to such person. (b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent as the foregoing indemnity from the Company to such Underwriter but only with reference to information relating to such Underwriter furnished in writing to the Company by such Underwriter through you expressly for use in the Registration Statement (or any amendment thereto), the Prospectus (or any amendment or supplement thereto) or any preliminary prospectus. (c) In case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 7(a) or 7(b) (the "indemnified party"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the "indemnifying party") in writing and the indemnifying party shall assume the defense of such action, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that in the case of any action in respect of which indemnity may be sought pursuant to both Sections 7(a) and 7(b), the Underwriter shall not be required to assume the defense of such action pursuant to this Section 7(c), but may employ separate counsel and participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of such Underwriter). Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party within a reasonably prompt period of time following the receipt of notification in writing from the indemnified party, or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such reasonable fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by Donaldson, Lufkin & Jenrette Securities Corporation, in the case of parties indemnified pursuant to Section 7(a), and by the Company, in the case of 13 14 parties indemnified pursuant to Section 7(b). The indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities and judgments by reason of any settlement of any action (i) effected with its written consent or (ii) effected without its written consent if the settlement is entered into more than twenty business days after the indemnifying party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at the expense of the indemnifying party) and, prior to the date of such settlement, the indemnifying party shall have failed to comply with such reimbursement request. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which the indemnified party is or could have been a party and indemnity or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability on claims that are or could have been the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the indemnified party. No indemnifying party will be liable for the costs and expenses of any settlement of any pending or threatened action effected by the indemnified party without the consent of the indemnifying party. (d) To the extent the indemnification provided for in this Section 7 is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages, liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities and judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other hand from the offering of the Securities or (ii) if the allocation provided by clause 7(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 7(d)(i) above but also the relative fault of the Company on the one hand and the Underwriters on the other hand in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other hand shall be deemed to be in the same proportion as the total net proceeds from the offering (after deducting underwriting discounts and commissions but before deducting expenses) received by the Company, and the total underwriting discounts and commissions received by the Underwriters, bear to the total price to the public of the Securities, in each case as set forth in the table on the cover page of the Prospectus. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties' relative intent, 14 15 knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7(d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any matter, including any action, that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 7(d) are several in proportion to the respective principal amount of Securities purchased by each of the Underwriters hereunder and not joint. (e) The remedies provided for in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. SECTION 8. Conditions of Underwriters' Obligations. The several obligations of the Underwriters to purchase the Securities under this Agreement are subject to the satisfaction of each of the following conditions: (a) All the representations and warranties of the Company contained in this Agreement shall be true and correct on the Closing Date with the same force and effect as if made on and as of the Closing Date. (b) If the Company is required to file a Rule 462(b) Registration Statement after the effectiveness of this Agreement, such Rule 462(b) Registration Statement shall have become effective by the earlier of 10:00 A.M., New York City time, on the date after the date of this Agreement and the time confirmations are first sent or given for the Securities; and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been commenced or shall be pending before or contemplated by the Commission. 15 16 (c) On or after the date hereof, (i) there shall not have occurred any downgrading, suspension or withdrawal of, nor shall any notice have been given of any potential or intended downgrading, suspension or withdrawal of, or of any review (or of any potential or intended review) for a possible change that does not indicate the direction of the possible change in, any rating of the Company or any securities of the Company (including, without limitation, the placing of any of the foregoing ratings on credit watch with negative or developing implications or under review with an uncertain direction) by any "nationally recognized statistical rating organization" as such term is defined for purposes of Rule 436(g)(2) under the Act, (ii) there shall not have occurred any change, nor shall any notice have been given of any potential or intended change, in the outlook for any rating of the Company or any securities of the Company by any such rating organization and (iii) no such rating organization shall have given notice that it has assigned (or is considering assigning) a lower rating to the Securities than that on which the Securities were marketed. (d) You shall have received on the Closing Date a certificate dated the Closing Date, signed by the Chief Executive Officer and the Chief Financial Officer of the Company, confirming the matters set forth in Sections 6(w), 8(a), 8(b) and 8(c) and that the Company has complied with all of the agreements and satisfied all of the conditions herein contained and required to be complied with or satisfied by the Company on or prior to the Closing Date. (e) Since the respective dates as of which information is given in the Prospectus other than as set forth in the Prospectus (exclusive of any amendments or supplements thereto subsequent to the date of this Agreement), (i) there shall not have occurred any change or any development involving a prospective change in the condition, financial or otherwise, or the earnings, business, management or operations of the Company and its subsidiaries, taken as a whole, (ii) there shall not have been any change or any development involving a prospective change in the capital stock or in the long-term debt of the Company or any of its subsidiaries and (iii) neither the Company nor any of its subsidiaries shall have incurred any liability or obligation, direct or contingent, the effect of which, in any such case described in clause 8(e)(i), 8(e)(ii) or 8(e)(iii), in your judgment, is material and adverse and, in your judgment, makes it impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. (f) You shall have received on the Closing Date an opinion (satisfactory to you and counsel for the Underwriters), dated the Closing Date, of Thompson & Knight, P.C., counsel for the Company, to the effect that: 16 17 (i) the Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms except as (A) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (B) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; in rendering the foregoing opinion that the Securities will be valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, such counsel may assume that the law of New York is identical to the law of Texas in all respects material to such opinion. (iii) the Indenture as supplemented by the Supplemental Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as (A) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (B) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; in rendering the foregoing opinion that the Indenture as supplemented by the Supplemental Indenture constitutes a valid and binding agreement of the Company enforceable in accordance with its terms, such counsel may assume that the law of New York is identical to the law of Texas in all respects material to such opinion; (iv) this Agreement has been duly authorized, executed and delivered by the Company; (v) the Registration Statement has become effective under the Act, no stop order suspending its effectiveness has been issued and no proceedings for that purpose are, to the best of such counsel's knowledge, pending before or contemplated by the Commission; (vi) the statements under the caption "Description of Notes" in the Prospectus and Item 15 of Part II of the Registration Statement, insofar as such statements constitute a summary of the legal matters, documents or proceedings referred to therein, fairly present the information called for with respect to such legal matters, documents and proceedings; (vii) the execution, delivery and performance of this Agreement, the Indenture and the Securities by the Company, the compliance by the Company with all the provisions hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not (A) require any consent, approval, authorization or other order of, or qualification with, any court or governmental body or agency of the United States of America or except for any such consent, approval or authorization, or order, which, if not obtained, would not prevent or adversely effect in any 17 18 material respect the performance of this Agreement or have a material adverse effect on the Company and its subsidiaries, taken as a whole (except such as may be required under the Act, the Exchange Act and the securities or Blue Sky laws of the various states of the United States) or violate or conflict with any federal securities law or any other law or rule, regulation, judgment, order or decree known to such counsel to be applicable to the Company or any of its subsidiaries of any court or any governmental body or agency having jurisdiction over the Company, any of its subsidiaries or their respective property (provided, however, that such counsel need express no opinion with respect to compliance with any state securities law except as otherwise specifically stated in such counsel's opinion); and (viii) the Registration Statement and the Prospectus and any supplement or amendment thereto (except for the financial statements and other financial data (including the notes thereto and the auditor's report thereon) included therein as to which no opinion need be expressed) comply as to form in all material respects with the Act and the Trust Indenture Act and the regulations under each of those Acts. The opinion of Thompson & Knight, P.C. described in Section 8(f) above shall be rendered to you at the request of the Company and shall so state therein. (g) Thompson & Knight, P.C., in rendering the opinions referred to in subsection (f) of this Section, may rely as to all matters relating to the laws of the State of Maryland upon an opinion of Piper & Marbury, dated the date thereof, in form and substance satisfactory to counsel for the Underwriters, a copy of which shall have been furnished to the Underwriters. Milbank, Tweed, Hadley & McCloy, in rendering the opinion referred to in subsection (i) of this Section, may rely as to all matters relating to the laws of the State of Maryland upon such opinion of Piper & Marbury. In giving their opinions required by subsection (f) and (i) of this Section, Thompson & Knight, P.C., and Milbank, Tweed, Hadley & McCloy, shall each additionally state that nothing has come to their attention that would lead them to believe that the Registration Statement, at the time it became 18 19 effective, and if an amendment to the Registration Statement or a filing of a report on Form 10-K, 10-Q or 8-K has been filed by the Company with the Commission under the Act or the Exchange Act, respectively, subsequent to the effectiveness of the Registration Statement, then at the time such amendment became effective or at the time of the most recent such filing, and at the date hereof, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as amended or supplemented at the date hereof, contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (h) You shall have received on the Closing Date an opinion (satisfactory to you and counsel for the Underwriters), dated the Closing Date, of David C. Jones, Vice President Legal Affairs of the Company, to the effect that: (i) each of the Company and its Subsidiaries has been duly incorporated, is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation and has the corporate power and authority to carry on its business as described in the Prospectus and to own, lease and operate its properties; (ii) to the best of such counsel's knowledge, each of the Company and its Subsidiaries is duly qualified and is in good standing as a foreign corporation authorized to do business in each jurisdiction in which the nature of its business or its ownership or leasing of property requires such qualification, except where the failure to be so qualified would not have a material adverse effect on the business, prospects, financial condition or results of operations of the Company and its subsidiaries, taken as a whole; (iii) all of the outstanding shares of capital stock of each of (x) the Company's Subsidiaries (other than Lafarge Canada Inc. and the Redland Subsidiaries) and (y) to the best of such counsels knowledge, the [Redland Subsidiaries], have been duly authorized and validly issued and are fully paid and non-assessable, and are owned by the Company, directly or indirectly through one or more subsidiaries, free and clear of any Lien; (iv) the Securities have been duly authorized and executed; (v) the Indenture has been duly authorized, executed and delivered by the Company; (vi) this Agreement has been duly authorized, executed and delivered by the Company; (vii) neither the Company nor any of its Subsidiaries, or to the best of such counsel's knowledge, the Redland Subsidiaries, is in violation 19 20 of its respective charter or by-laws and, to the best of such counsel's knowledge, neither the Company nor any of its Subsidiaries is in default in the performance of any obligation, agreement, covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument that is material to the Company and its subsidiaries, taken as a whole, to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or their respective property is bound; (viii) the execution, delivery and performance of this Agreement, the Indenture and the Securities by the Company, the compliance by the Company with all the provisions hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not (A) require any consent, approval, authorization or other order of, or qualification with, any court or governmental body or agency of the United States of America or the State of Maryland or except for any such consent, approval or authorization, or order, which, if not obtained, would not prevent or adversely effect in any material respect the performance of this Agreement or have a material adverse effect on the Company and its subsidiaries, taken as a whole (except such as may be required under the Act, the Exchange Act and the securities or Blue Sky laws of the various states of the United States), (B) conflict with or constitute a breach of any of the terms or provisions of, or a default under, the charter or by-laws of the Company or any of its Subsidiaries or to such counsel's knowledge, any indenture, loan agreement, mortgage, lease or other agreement or instrument that is material to the Company and its subsidiaries, taken as a whole, to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or their respective property is bound, (C) violate or conflict with any federal securities law or any other law or rule, regulation, judgment, order or decree known to such counsel to be applicable to the Company or any of its subsidiaries of any court or any governmental body or agency having jurisdiction over the Company, any of its subsidiaries or their respective property (provided, however, that such counsel need express no opinion with respect to compliance with any federal or state securities law or antitrust law, rule or regulation except as otherwise specifically stated in such counsel's opinion, (D) result in the imposition or creation of (or the obligation to create or impose) a Lien under any material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries other than the [Redland Subsidiaries], or to the best of such counsel's knowledge, the Redland Subsidiaries or their respective property is bound or (E) to the knowledge of such counsel, result in the suspension, termination or revocation of any Authorization of the Company or any of its subsidiaries or any other impairment of the rights of the holder of any such Authorization; (ix) such counsel does not know of any legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is or could be a party or to which any of their respective 20 21 property is or could be subject that are required to be described in the Registration Statement or the Prospectus and are not so described; (x) the information in the 10-K Report under the caption "Legal Proceedings", as amended or supplemented in any report filed by the Company with the Commission under the Exchange Act, to the extent that it constitutes matters of United States law or legal conclusions, has been reviewed by such counsel and is correct in all material aspects; (xi) to the best of such counsel's knowledge, there are no contracts, indentures, mortgages, loan agreements, notes, leases or other instruments or documents required to be described or referred to in the Registration Statement or to be filed as exhibits thereto other than those described or referred to therein or filed or incorporated by reference as exhibits thereto; the descriptions thereof or references thereto are correct in all material respects, and no default exists in the due performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument so described, referred to, filed or incorporated by reference; and (xii) to the best of such counsel's knowledge after due inquiry, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company or to require the Company to include such securities with the Securities registered pursuant to the Registration Statement. (i) The favorable opinion of, Alain Fredette, Manager, Legal Services and Secretary of Lafarge Canada Inc. to the effect that Lafarge Canada Inc. has been duly incorporated and is validly existing as a corporation under the laws of Canada and has corporate power and authority to own, lease and operate its properties and conduct its business as described in the Registration Statement and, to the best of his knowledge and information, is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which it owns or leases substantial properties or in which the conduct of its business requires such qualification, except where the failure to so qualify or be in good standing would not have a material adverse effect on the condition, financial or otherwise, or the earnings, business affairs or business prospects of Lafarge 21 22 Canada Inc.; and all of the issued and outstanding shares of capital stock of Lafarge Canada Inc. have been duly and validly issued and are fully paid and non-assessable. (j) You shall have received on the Closing Date an opinion (satisfactory to you and counsel for the Underwriters), dated the Closing Date, of Piper & Marbury, counsel for the Company, to the effect that: (i) the Company and each of its Subsidiaries incorporated under the laws of the State of Maryland has been duly incorporated and is validly existing as a corporation in good standing under the laws of Maryland; (ii) the Company has corporate power and authority to carry on its business as described in the Prospectus and to own, lease and operate its properties; (iii) the Securities have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the Underwriters in accordance with the terms of this Agreement, will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Company, enforceable in accordance with their terms except as (A) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (B) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; in rendering the foregoing opinion that the Securities will be valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms, such counsel may assume that the law of New York is identical to the law of Maryland in all respects material to such opinion; (iv) the Indenture has been duly and validly authorized, executed and delivered by the Company and is a valid and binding agreement of the Company, enforceable in accordance with its terms except as (A) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors' rights generally and (B) rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability; in rendering the foregoing opinion that the Indenture is a valid and binding agreement of the Company, enforceable in accordance with its terms, such counsel may assume that the law of New York is identical to the law of Maryland in all respects material to such opinion; and (v) this Agreement has been duly authorized, executed and delivered by the Company. (k) You shall have received on the Closing Date an opinion, dated the Closing Date, of Milbank, Tweed, Hadley & McCloy, counsel for the Underwriters, as to the matters referred to in Sections 8(f)(i), 8(f)(ii), 8(f)(iii), 8(f)(v) (but only with respect to the statements under the caption "Description of Notes") and 8(f)(vii)]. (l) You shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to you, from Arthur Andersen, independent public accountants, containing the information and statements of the type ordinarily included in accountants' "comfort letters" to Underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus. (m) The Securities shall have been rated "A-" by Standard & Poor's Corporation and "Baa1" by Moody's Investors Service, Inc. (n) The Underwriters shall have received a counterpart, conformed as executed, of the Indenture which shall have been entered into by the Company and the Trustee. (o) The Company shall not have failed on or prior to the Closing Date to perform or comply with any of the agreements herein contained and required to be performed or complied with by the Company on or prior to the Closing Date. SECTION 9. Effectiveness of Agreement and Termination. This Agreement shall become effective upon the execution and delivery of this Agreement by the parties hereto. This Agreement may be terminated at any time on or prior to the Closing Date by you by written notice to the Company if any of the following has occurred: (i) any outbreak or escalation of hostilities or other national or international calamity or crisis or change in economic conditions or in the financial markets of the United States or elsewhere that, in your judgment, is material and adverse and, in your judgment, makes it impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus, (ii) the suspension or material limitation of trading in securities or other instruments on the New York Stock Exchange, the American Stock Exchange, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or the Nasdaq National Market or limitation on prices for securities or other instruments on any such exchange or the Nasdaq National Market, (iii) the suspension of trading of any securities of the Company on any exchange or in the over-the-counter market, (iv) the enactment, publication, 22 23 decree or other promulgation of any federal or state statute, regulation, rule or order of any court or other governmental authority which in your opinion materially and adversely affects, or will materially and adversely affect, the business, prospects, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by either federal or New York State authorities or (vi) the taking of any action by any federal, state or local government or agency in respect of its monetary or fiscal affairs which in your opinion has a material adverse effect on the financial markets in the United States. If on the Closing Date any one or more of the Underwriters shall fail or refuse to purchase the Securities which it or they have agreed to purchase hereunder on such date and the aggregate principal amount of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of Securities to be purchased on such date by all Underwriters, each non-defaulting Underwriter shall be obligated severally, in the proportion which the principal amount of Securities set forth opposite its name in Schedule I bears to the aggregate principal amount of Securities which all the non-defaulting Underwriters have agreed to purchase, or in such other proportion as you may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the aggregate principal amount of Securities which any Underwriter has agreed to purchase pursuant to Section 2 hereof be increased pursuant to this Section 9 by an amount in excess of one-ninth of such principal amount of Securities without the written consent of such Underwriter. If on the Closing Date any Underwriter or Underwriters shall fail or refuse to purchase Securities and the aggregate principal amount of Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased by all Underwriters and arrangements satisfactory to you and the Company for purchase of such Securities are not made within 48 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter and the Company. In any such case which does not result in termination of this Agreement, either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and the Prospectus or any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of any such Underwriter under this Agreement. SECTION 10. Miscellaneous. Notices given pursuant to any provision of this Agreement shall be addressed as follows: (i) if to the Company, to Lafarge Corporation, 11130 Sunrise Valley Drive, Suite 300, Reston, Virginia 22091, Attention: Sharon Collins Casey and (ii) if to any Underwriter or to you, to you c/o Donaldson, Lufkin & Jenrette Securities Corporation, 277 Park Avenue, New 23 24 York, New York 10172, Attention: Syndicate Department, or in any case to such other address as the person to be notified may have requested in writing. The respective indemnities, contribution agreements, representations, warranties and other statements of the Company and the several Underwriters set forth in or made pursuant to this Agreement shall remain operative and in full force and effect, and will survive delivery of and payment for the Securities, regardless of (i) any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, the officers or directors of any Underwriter, any person controlling any Underwriter, the Company, the officers or directors of the Company or any person controlling the Company, (ii) acceptance of the Securities and payment for them hereunder and (iii) termination of this Agreement. If for any reason the Securities are not delivered by or on behalf of the Company as provided herein (other than as a result of any termination of this Agreement pursuant to Section 9), the Company agrees to reimburse the several Underwriters for all out-of-pocket expenses (including the fees and disbursements of counsel) incurred by them. Notwithstanding any termination of this Agreement, the Company shall be liable for all expenses which it has agreed to pay pursuant to Section 5(j) hereof. The Company also agrees to reimburse the several Underwriters, their directors and officers and any persons controlling any of the Underwriters for any and all fees and expenses (including, without limitation, the fees disbursements of counsel) incurred by them in connection with enforcing their rights hereunder (including, without limitation, pursuant to Section 7 hereof). Except as otherwise provided, this Agreement has been and is made solely for the benefit of and shall be binding upon the Company, the Underwriters, the Underwriters' directors and officers, any controlling persons referred to herein, the Company's directors and the Company's officers who sign the Registration Statement and their respective successors and assigns, all as and to the extent provided in this Agreement, and no other person shall acquire or have any right under or by virtue of this Agreement. The term "successors and assigns" shall not include a purchaser of any of the Securities from any of the several Underwriters merely because of such purchase. This Agreement shall be governed and construed in accordance with the laws of the State of New York. This Agreement may be signed in various counterparts which together shall constitute one and the same instrument. 24 25 Please confirm that the foregoing correctly sets forth the agreement between the Company and the several Underwriters. Very truly yours, LAFARGE CORPORATION By: ----------------------------- Title: DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION WARBURG DILLON READ LLC CITICORP SECURITIES, INC. By DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By --------------------------------- 25 26 SCHEDULE I Principal Amount Underwriters of Senior Notes ------------ ---------------- Donaldson, Lufkin & Jenrette Securities Corporation Warburg Dillon Read LLC Citicorp Securities, Inc. ----------- Total EX-4.2 3 SUPPLEMENTAL INDENTURE 1 EXHIBIT 4.1 ================================================================================ LAFARGE CORPORATION and CITIBANK, N.A., as Trustee --------------------- Supplemental Indenture relating to $650,000,000 ____% Senior Notes Due ____ Dated as of ______ __, 1998 --------------------- ================================================================================ 2 SUPPLEMENTAL INDENTURE, dated as of ____ __, 1998 relating to the Senior Notes referred to below (herein called the "Supplemental Indenture"), between LAFARGE CORPORATION, a corporation duly organized and existing under the laws of the State of Maryland (hereinafter called the "Company"), and CITIBANK, N.A., a national banking association incorporated and existing under the laws of the United States, as Trustee under the Original Indenture referred to below (hereinafter called the "Trustee"). WITNESSETH: WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture dated as of October 1, 1989 (hereinafter called the "Original Indenture"), to provide for the issuance from time to time of its unsecured and unsubordinated debt securities (hereinafter called the "Securities"), the form and terms of which are to be established as set forth in Sections 201 and 301 of the Original Indenture; and WHEREAS, Section 901 of the Original Indenture provides, among other things, that the Company and the Trustee may enter into indentures supplemental to the Original Indenture for, among other things, the purpose of establishing the form and terms of the Securities of any series as permitted in Sections 201 and 301 of the Original Indenture and otherwise amending the Original Indenture in a manner not prejudicial to the interests of the Holders of the Securities of any series; and WHEREAS, the Company desires to create a series of the Securities in an aggregate principal amount of $650,000,000 of ____% Senior Notes due ____ (the "Senior Notes"), and all action on the part of the Company necessary to authorize the issuance of the Senior Notes under the Original Indenture and this Supplemental Indenture has been duly taken; and WHEREAS, all acts and things necessary to make the Senior Notes when executed by the Company and authenticated and delivered by the Trustee as in the Original Indenture provided, the valid and binding obligations of the Company and to constitute these presents a valid and binding supplemental indenture and agreement according to its terms, have been done and performed; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That in consideration of the premises and of the acceptance and purchase of the Senior Notes by the holders thereof, and of the acceptance of this trust by the Trustee, the Company covenants and agrees with the Trustee, for the equal benefit of holders of the Senior Notes, as follows: ARTICLE ONE DEFINITIONS The use of the terms and expressions herein is in accordance with the definitions, uses and constructions contained in the Original Indenture and the form of Senior Note attached hereto as Exhibit A. ARTICLE TWO TERMS AND ISSUANCE OF THE SENIOR NOTES Section 201 Issue of Senior Notes. A series of Securities which shall be designated as the "___% Senior Notes due ____" shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of the Original Indenture and this Supplemental Indenture (including the form of Senior Note set forth in Exhibit A hereto). The aggregate principal amount of Senior Notes created hereby which may be authenticated and delivered under this Supplemental Indenture shall not, except as permitted by the provisions of the Original Indenture, exceed $650,000,000. 3 Section 202. Form of the Senior Notes; Incorporation of Terms. The form of the Senior Notes shall be substantially in the form of Exhibit A attached hereto, the terms of which are herein incorporated by reference and which are part of this Supplemental Indenture. Section 203. Place of Payment. The Place of Payment will be initially the Corporate Trust Office of the Trustee in New York City which, as of the date hereof, is located at 111 Wall Street, New York, New York 10043. ARTICLE THREE AMENDMENT OF ORIGINAL INDENTURE Section 301. Amendment to Reconciliation and tie between Trust Indenture Act of 1939 and Original Indenture. The Reconciliation and tie between the Trust Indenture Act of 1939 (hereinafter referred to as the "TIA") and the Original Indenture is hereby amended as set forth in Exhibit B hereto. Section 302. Amendment to Section 401(3). Section 401(3) of the Original Indenture is hereby amended in relation to the Senior Notes by adding the following to the last sentence thereof, immediately following "have been complied with" but before the end of the sentence: "and if Section 401(1)(B)(ii) or Section 401(1)(B)(iii) applies, an Opinion of Counsel meeting the requirements of Section 403(4)(A) relating to the discharge" Section 303. Amendment to Section 403(4)(A). Section 403(4)(A) is hereby deleted in its entirety in relation to the Senior Notes and shall be replaced by the following provision: "(A) an opinion of counsel based on a change in law occurring after the issue dates of the Senior Notes or a private letter ruling from the United States Internal Revenue Service addressed to the Company to the effect that the Holders of the Securities will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit and discharge and will be subject to Federal income tax in the same amount and in the same manner and at the same times as would have been the case if such deposit and discharge had not occurred; and" Section 304. Amendment to Section 608. Section 608 of the Original Indenture is hereby deleted in its entirety in relation to the Senior Notes and shall be replaced by the following provision: "The Trustee for the Debt Securities of any series issued hereunder shall be subject to the provisions of Section 310(b) of the Trust Indenture Act during the period of time provided for therein. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the second to last paragraph of Section 310(b) of the Trust Indenture Act." Section 305. Amendment to Section 613. Section 613 of the Original Indenture is hereby amended in relation to the Senior Notes by deleting all references to the "four" month period prior to or subsequent to a default and shortening such time period to "three" months every place it appears in Section 613 but only in Section 613. Section 306. Amendment to Section 703(a). Section 703(a) of the Original Indenture is hereby deleted in its entirety in relation to the Senior Notes and replaced with the following provision: "Within 60 days after the first May 15 which occurs not less than 60 days following the first date of issuance of Securities of any series under this Indenture and within 60 days after May 15 in every year thereafter, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the Security Register, dated as of such May 15, such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto." 2 4 Section 307. Amendment to Section 704(4). Section 704(4) of the Original Indenture is hereby deleted in its entirety in relation to the Senior Notes and replaced with the following provision: "(4) deliver to the Trustee within 120 days after the end of each fiscal year of the Company a brief certificate from the principal executive, financial or accounting officer of the Company as to his or her knowledge, after due inquiry, of the Company's compliance with all conditions and covenants under the Indenture (such compliance to be determined without regard to any period of grace or requirement of notice provided under the Indenture)." ARTICLE FOUR MISCELLANEOUS Section 401. Execution as Supplemental Indenture. This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof in respect of the Senior Notes. Section 402. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. Section 403. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 404. Successors and Assigns. All covenants and agreements by the Company in this Supplemental Indenture shall bind its successors and assigns, whether so expressed or not. Section 405. Separability Clause. In case any provision in this Supplemental Indenture or in the Senior Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 406. Benefits of Supplemental Indenture. Nothing in this Supplemental Indenture or in the Senior Notes, express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the Holders of Senior Notes, any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture. Section 407. Governing Law. This Supplemental Indenture and each Senior Note shall be governed by and construed in accordance with the laws of the State of New York. Section 408. Execution and Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 3 5 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the day and year first above written. LAFARGE CORPORATION [Seal] By ------------------------------------ Name: Title: Attest: - -------------------------------- Name: Title: CITIBANK, N.A., as Trustee By ------------------------------------ Name: Title: 6 STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the [____] day of [____________], 1998, before me personally came [___________], to me known, who, being by me duly sworn, did depose and say that [he/she] is a [__________] of Lafarge Corporation, one of the corporations described in and which executed the foregoing instrument; and that [he/she] signed [his/her] name thereto by like authority. ------------------------------------------- STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the [____] day of [____________], 1998, before me personally came [___________], to me known, who, being by me duly sworn, did depose and say that [he/she] is a [__________] of Citibank, N.A., one of the corporations described in and which executed the foregoing instrument; and that [he/she] signed [his/her] name thereto by like authority. 7 EXHIBIT A [Form of Face of Security] This Security is a Book-Entry Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depositary or a nominee of a Depositary. This Security is exchangeable for Securities registered in the name of a person other than the Depositary or its nominee only in the limited circumstances described in the Indenture, and no transfer of this Security (other than a transfer of this Security as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary) may be registered except in limited circumstances. Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC") to the issuer or its agent for registration of transfer, exchange or payment, and any definitive Note is issued in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner hereof, Cede & Co., has an interest herein. LAFARGE CORPORATION ___% Senior Note due ____ No. __________ $__________ Lafarge Corporation, a corporation duly organized and existing under the laws of the State of Maryland (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ___________________________________, or registered assigns, the principal sum of ________________________ Dollars on _________________________________, and to pay interest thereon from ________, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ____________ and ___________ in each year, commencing ________, at the rate per annum provided in the title hereof, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the _______ or ________ (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. As used herein, "Business Day" and "Special Record Date" with respect to any Interest Payment Date shall be as defined in the Indenture. Payment of the principal of (and premium, if any) and interest on this Security will be made at the office or agency of the Company maintained for that purpose in The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 8 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. LAFARGE CORPORATION [Seal] By ------------------------------------- Name: Title: Attest: - -------------------------------- Name: Title: 9 [Form of Reverse of Security] LAFARGE CORPORATION ___% Senior Note due ____ This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), issued and to be issued in one or more series under an Indenture, dated as of October 1, 1989 as supplemented by the Supplemental Indenture dated as of ________, 1998 (herein called the "Indenture"), between the Company and Citibank, N.A., as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof, limited in aggregate principal amount to $________. These Securities will be redeemable, in whole or in part, at the option of the Company, on any date (a "Redemption Date") at a redemption price equal to the greater of (a) 100% of their principal amount of the Securities to be redeemed and (b) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to such Redemption Date) discounted to such Redemption Date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus [__] basis points, plus accrued and unpaid interest on the principal amount being redeemed to such Redemption Date; provided, however, that installments of interest on Securities that are due and payable on an Interest Payment Date falling on or prior to the relevant Redemption Date shall be payable to the holders of such Securities, registered as such at the close of business on the relevant Record Date according to their terms and provisions of the Indenture. "Treasury Rate" means, with respect to any Redemption Date for the Securities, (a) the yield, under the heading that represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities" for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Maturity Date, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding to the nearest month) or (b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date. "Comparable Treasury Issue" means, the United States Treasury security selected by the Independent Investment Banker as having a maturity comparable to the remaining term of the Securities to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Securities. "Independent Investment Banker" means Donaldson, Lufkin & Jenrette Securities Corporation, Warburg Dillon Read LLC or Citicorp Securities, Inc. or, if such firms are unwilling or unable to select the Comparable Treasury Issue, an independent investment banking institution of national standing appointed by the Company. "Comparable Treasury Price" means, with respect to any Redemption Date, (a) the average of four Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (b) if the Trustee obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations. 10 "Reference Treasury Dealer" means each of Donaldson, Lufkin & Jenrette Securities Corporation, Warburg Dillon Read LLC or Citicorp Securities, Inc. and their respective successors; provided however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company will substitute therefor another Primary Treasury Dealer. "Reference Treasury Dealer Quotations" means, with respect to the Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date. Notice of any redemption by the Company will be mailed at least 30 days but not more than 60 days before any Redemption Date to each holder of Securities to be redeemed. If less than all the Securities are to be redeemed at the option of the Company, the Trustee shall select, in such manner as it shall deem fair and appropriate, the Securities to be redeemed in whole or in part. Unless the Company defaults in payment of the redemption price, on and after any Redemption Date interest will cease to accrue on the Securities or portions thereof called for redemption. Interest payments for this Security shall be computed and paid on the basis of a 360-day year of twelve 30-day months. The Indenture contains provisions for defeasance of (a) the entire indebtedness of this Security and (b) certain restrictive covenants, upon compliance by the Company with certain conditions set forth therein. If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of all series to be affected (voting as a class). The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest, if any, on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of (and premium, if any) and interest, if any, on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Securities of this series are issuable only in registered form without coupons in denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein 11 set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. This Security shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. 12 [Form of Trustee's Certificate of Authentication] This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. CITIBANK, N.A. By ------------------------------------------ Name: Title: Date: 13 EXHIBIT B LAFARGE CORPORATION Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of October 1, 1989
Trust Indenture Act Section Indenture Section - ---------------- ----------------- ss.310 (a)(1) ...................................................................... 609 (a)(2) ...................................................................... 609 (a)(3) ...................................................................... Not Applicable (a)(4) ...................................................................... Not Applicable (b) ...................................................................... 608 610 ss.311 (a) ...................................................................... 613(a) (b) ...................................................................... 613(b) (b)(2) ...................................................................... 703(a)(2) 703(b) ss.312 (a) ...................................................................... 701 702(a) (b) ...................................................................... 702(b) (c) ...................................................................... 702(c) ss.313 (a) ...................................................................... 703(a) (b)(1) ...................................................................... Not Applicable (b)(2) ...................................................................... 703(b) (c) ...................................................................... 703(a), 703(b) (d) ...................................................................... 703(c) ss.314 (a) ...................................................................... 704 (b) ...................................................................... Not Applicable (c)(1) ...................................................................... 102 (c)(2) ...................................................................... 102 (c)(3) ...................................................................... Not Applicable (d) ...................................................................... Not Applicable (e) ...................................................................... 102 ss.315 (a) ...................................................................... 601(a) (b) ...................................................................... 602 703(a)(6) (c) ...................................................................... 601(b) (d) ...................................................................... 601(c) (d)(1) ...................................................................... 601(a)(1) (d)(2) ...................................................................... 601(c)(2) (d)(3) ...................................................................... 601(c)(3) (e) ...................................................................... 514 ss.316 (a)(1)(A) ...................................................................... 502 512 (a)(1)(B) ...................................................................... 513 (a)(2) ...................................................................... Not Applicable (b) ...................................................................... 508 (c) ...................................................................... Not Applicable ss.317 (a)(1) ...................................................................... 503 (a)(2) ...................................................................... 504 (b) ...................................................................... 1003 ss.318 (a) ...................................................................... 108
- ------------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. EX-5.1 4 OPINION AND CONSENT OF THOMPSON & KNIGHT P.C. 1 EXHIBIT 5.1 July 6, 1998 Lafarge Corporation 11130 Sunrise Valley Drive Suite 300 Reston, Virginia 20191 Ladies and Gentlemen: We have acted as counsel for Lafarge Corporation, a Maryland corporation (the "Company"), in connection with the preparation of the Company's Registration Statement on Form S-3 (No. 333-57333), as amended (the "Registration Statement"), filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the proposed offering by the Company of $650,000,000 aggregate principal amount of the Company's __% Senior Notes due ____ (the "Senior Notes"). The Senior Notes are to be issued under an indenture, as supplemented (the "Indenture"), between the Company and Citibank, N.A., as Trustee, in the form previously filed with the Commission. The Senior Notes are proposed to be sold by the Company to Donaldson, Lufkin & Jenrette Securities Corporation, SBC Warburg Dillion Read Inc. and Citicorp Securities, Inc. (the "Underwriters") pursuant to and subject to the terms and conditions of an Underwriting Agreement among the Company and the Underwriters (the "Underwriting Agreement"), the form of which is filed as Exhibit 1.1 to the Registration Statement. In connection with the foregoing, we have examined the originals or copies, certified or otherwise authenticated to our satisfaction, of the Registration Statement, the form of the Underwriting Agreement, the Indenture, the form of Supplemental Indenture included as Exhibit 4.2 to the Registration Statement and pursuant to which the Senior Notes will be issued (the "Supplemental Indenture"), and such corporate records of the Company, certificates of public officials and of officers of the Company, and other agreements, instruments and documents as we have deemed necessary to require as a basis for the opinions hereinafter expressed. Where facts material to the opinions hereinafter expressed were not independently established by us, we have relied upon the statements of officers of the Company, where we deemed such reliance appropriate under the circumstances. Based upon the foregoing and in reliance thereon, and subject to the assumptions and qualifications herein specified, it is our opinion that: 1. The Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Maryland. 2. The Senior Notes have been duly authorized for issuance by the Company and, upon the effectiveness of the Registration Statement under the Securities Act, the due execution and delivery of the Supplemental Indenture and the Underwriting Agreement by the respective parties thereto in substantially the forms filed as exhibits to the Registration Statement, the issuance, execution and authentication of the Senior Notes in accordance with the provisions of the Indenture, and the delivery to and payment for the Senior Notes by the Underwriters in accordance with the Underwriting Agreement, and subject to any applicable state securities or Blue Sky laws, will be valid and binding obligations of the Company and will be entitled to the benefits of the Indenture. 2 Lafarge Corporation July 6, 1998 Page 2 3. The Indenture has been duly authorized by the Company and, when qualified under the Trust Indenture Act of 1939, as amended, and executed and delivered by the Company, will be the valid and binding agreement of the Company. The opinions expressed above are limited by and subject to the following qualifications: (a) We express no opinion other than as to the federal securities laws of the United States of America, the laws of the State of New York and the corporate laws of the State of Maryland; provided, however, (i) we have assumed, without investigation, that the laws of the State of New York are identical in all respects to the laws of the State of Texas and (ii) insofar as the opinions expressed herein relate to matters governed by Maryland law, we have relied with their permission upon an opinion of even date herewith of Piper & Marbury, L.L.P. (b) In rendering the opinions expressed herein, we have assumed that no action heretofore taken by the Board of Directors of the Company in connection with the matters described or referred to herein will be modified, rescinded or withdrawn after the date hereof. (c) The opinions expressed in Paragraphs 2 and 3 above are subject to the qualification that the validity and binding effect of the Senior Notes and the Indenture may be limited or affected by (i) bankruptcy, insolvency, reorganization, fraudulent transfer or conveyance, receivership, moratorium and other similar laws relating to or affecting creditors' rights generally, (ii) general principles of equity, regardless of whether applied in a proceeding in equity or at law and (iii) an implied covenant of good faith and fair dealing. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the reference to us under the caption "Experts" in the prospectus forming a part of the Registration Statement. In giving this consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder. Respectfully submitted, THOMPSON & KNIGHT, A Professional Corporation By: /s/ Peter A. Lodwick ----------------------------------- Peter A. Lodwick, Attorney EX-12 5 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12 LAFARGE CORPORATION RATIO OF FIXED CHARGES TO EARNINGS LAFARGE CORPORATION HISTORICAL
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 ------------ ------------- ------------- ------------- ------------- Fixed Charges Total Interest Expense 42,732,000 38,132,000 27,086,000 24,118,000 19,949,000 Interest Capitalized 0 700,000 2,100,000 1,200,000 1,400,000 Interest Element of Rentals 6,667,000 3,933,000 4,700,000 5,033,000 4,000,000 ------------ ------------- ------------- ------------- ------------- Total Fixed Charges 49,399,000 42,765,000 33,886,000 30,351,000 25,349,000 ============ ============= ============= ============= ============= Earnings Consolidated Pre-Tax Income 27,471,000 113,087,000 170,167,000 222,328,000 294,234,000 Add: Fixed Charges less Capitalized Interest 49,399,000 42,065,000 31,786,000 29,151,000 23,949,000 ------------ ------------- ------------- ------------- ------------- Net Earnings 76,870,000 155,152,000 201,953,000 251,479,000 318,183,000 ============ ============= ============= ============= ============= Ratio of Earnings to Fixed Charges Net Earnings/Fixed Charges 1.56 3.63 5.96 8.29 12.55 ============ ============= ============= ============= ============= Three Months Ended LTM 3/31/97 3/31/98 3/31/98 ------------- ------------- ------------- Fixed Charges Total Interest Expense 5,559,000 4,042,000 18,432,000 Interest Capitalized -- 363,000 1,763,000 Interest Element of Rentals 1,000,000 1,000,000 4,000,000 ------------- ------------- ------------- Total Fixed Charges 6,559,000 5,405,000 24,195,000 ============= ============= ============= Earnings Consolidated Pre-Tax Income (55,279,000) (45,821,000) 303,692,000 Add: Fixed Charges less Capitalized Interest 6,559,000 5,042,000 22,432,000 ------------- ------------- ------------- Net Earnings (48,720,000) (40,779,000) 326,124,000 ============= ============= ============= Ratio of Earnings to Fixed Charges Net Earnings/Fixed Charges -- -- 13.48 ============ ============= =============
LAFARGE CORPORATION PRO FORMA
LTM 12/31/97 3/31/98 ------------ ------------ Fixed Charges Total Interest Expense 63,799,000 61,982,000 Interest Capitalized 1,400,000 1,763,000 Interest Element of Rentals 5,525,000 5,525,000 ------------ ------------ Total Fixed Charges 70,724,000 69,270,000 Earnings Consolidated Pre-Tax Income 301,477,000 312,421,000 Add: Fixed Charges less Capitalized Interest 69,324,000 67,507,000 ------------ ------------ Net Earnings 370,801,000 379,928,000 Ratio of Earnings to Fixed Charges Net Earnings/Fixed Charges 5.24 5.48 ============ ============
EX-23.1 6 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Form S-3 Registration Statement of (a) our report dated January 22, 1998 (except with respect to the matters discussed in the Note entitled "Subsequent Events" as to which the date is March 18, 1998) relating to the December 31, 1997 consolidated financial statements of Lafarge Corporation included in Lafarge Corporation's Form 10-K for the year then ended, (b) our report dated April 15, 1998 (except with respect to the matters discussed in the Note entitled "Subsequent Event" as to which the date is June 3, 1998) relating to the December 31, 1997 combined financial statements of the Redland Businesses to be Acquired included in Lafarge Corporation's Form 8-K filed June 18, 1998, (c) our report dated June 3, 1998 relating to the December 31, 1997 consolidated supplemental financial statements of Lafarge Corporation included in Lafarge Corporation's Form 8-K filed June 18, 1998, and to all references to our Firm included in this Form S-3 Registration Statement for Lafarge Corporation to register $650,000,000 of Senior Notes. ARTHUR ANDERSEN LLP Washington, D.C. June 26, 1998 EX-25 7 FORM T-1 STATEMENT OF ELIGIBILITY OF TRUSTEE 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- FORM T-1 STATEMENT OF ELIGIBILITY 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) ____ ------------------------ CITIBANK, N.A. (Exact name of trustee as specified in its charter) 13-5266470 (I.R.S. employer identification no.) 399 Park Avenue, New York, New York 10043 (Address of principal executive office) (Zip Code) ----------------------- Lafarge Corporation (Exact name of obligor as specified in its charter) Maryland 58-1290226 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 11130 Sunrise Valley Drive Suite 300 Reston, Virginia 20191 (Address of principal executive offices) (Zip Code) ------------------------- Debt Securities (Title of the indenture securities) 2 Item 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 of New York New York, NY 33 Liberty Street New York, NY Federal Deposit Insurance Corporation Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as exhibits hereto. Exhibit 1 - Copy of Articles of Association of the Trustee, as now in effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983) Exhibit 2 - Copy of certificate of authority of the Trustee to commence business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577). Exhibit 3 - Copy of authorization of the Trustee to exercise corporate trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519) Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 to Registration Statement No. 33-34988) Exhibit 5 - Not applicable. 3 Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration Statement No. 33-19227.) Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as of March 31, 1998 - attached) Exhibit 8 - Not applicable. Exhibit 9 - Not applicable. ----------------- SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, Citibank, N.A., a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York and State of New York, on the 16th day of June, 1998. CITIBANK, N.A. By /s/ Arthur W. Aslanian ---------------------- Vice President 4 EXHIBIT INDEX Item 16. List of Exhibits. List below all exhibits filed as a part of this Statement of Eligibility. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as exhibits hereto. Exhibit 1 - Copy of Articles of Association of the Trustee, as now in effect. (Exhibit 1 to T-1 to Registration Statement No. 2-79983) Exhibit 2 - Copy of certificate of authority of the Trustee to commence business. (Exhibit 2 to T-1 to Registration Statement No. 2-29577). Exhibit 3 - Copy of authorization of the Trustee to exercise corporate trust powers. (Exhibit 3 to T-1 to Registration Statement No. 2-55519) Exhibit 4 - Copy of existing By-Laws of the Trustee. (Exhibit 4 to T-1 to Registration Statement No. 33-34988) Exhibit 5 - Not applicable. Exhibit 6 - The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939. (Exhibit 6 to T-1 to Registration Statement No. 33-19227.) Exhibit 7 - Copy of the latest Report of Condition of Citibank, N.A. (as of March 31, 1998 - attached) Exhibit 8 - Not applicable. Exhibit 9 - Not applicable. 5 EXHIBIT 7 Charter No. 1461 Comptroller of the Currency Northeastern District REPORT OF CONDITION CONSOLIDATING DOMESTIC AND FOREIGN SUBSIDIARIES OF CITIBANK, N.A. OF NEW YORK IN THE STATE OF NEW YORK AT THE CLOSE OF BUSINESS ON MARCH 31, 1998, PUBLISHED IN RESPONSE TO CALL MADE BY COMPTROLLER OF THE CURRENCY, UNDER TITLE 12, UNITED STATES CODE, SECTION 161, CHARTER NUMBER 1461 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT.
ASSETS THOUSANDS OF DOLLARS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin............... $ 6,890,000 Interest-bearing balances.......................................... 14,848,000 Held-to-maturity securities........................................ 0 Available-for-sale securities...................................... 31,464,000 Federal funds sold and securities purchased under agreements to resell......................................... 19,345,000 Loans and lease financing receivables: Loans and Leases, net of unearned income......... $159,106,000 LESS: Allowance for loan and lease losses........ 4,259,000 Loans and leases, net of unearned income, allowance, and reserve... 154,847,000 Trading assets..................................................... 36,633,000 Premises and fixed assets (including capitalized leases)........... 3,376,000 Other real estate owned............................................ 485,000 Investments in unconsolidated subsidiaries and associated companies....................................................... 1,386,000 Customers' liability to this bank on acceptances outstanding....... 1,824,000 Intangible assets.................................................. 160,000 Other assets....................................................... 9,670,000 ------------ TOTAL ASSETS....................................................... $280,928,000 ============ LIABILITIES Deposits: In domestic offices............................................. $ 37,884,000 Noninterest-bearing............................. $ 12,822,000 Interest-bearing................................ 25,062,000 In foreign offices, Edge and Agreement subsidiaries, and IBFs............................................................ 155,776,000 Noninterest-bearing............................. 9,878,000 Interest-bearing................................ 145,898,000 Federal funds purchased and securities sold under agreements to repurchase...................................................... 7,429,000 Trading liabilities................................................ 29,266,000 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases): With a remaining maturity of one year or less................... 9,518,000 With a remaining maturity of more than one year through three years..................................................... 2,340,000 With a remaining maturity of more than three years.............. 898,000 Bank's liability on acceptances executed and outstanding........... 1,992,000 Subordinated notes and debentures.................................. 5,600,000 Other liabilities.................................................. 12,507,000 ------------ TOTAL LIABILITIES.................................................. $263,210,000 ============ EQUITY CAPITAL Perpetual preferred stock and related surplus...................... 0 Common stock....................................................... $ 751,000 Surplus............................................................ 7,604,000 Undivided profits and capital reserves............................. 9,617,000 Net unrealized holding gains (losses) on available-for-sale securities...................................................... 443,000 Cumulative foreign currency translation adjustments................ (697,000) ------------ TOTAL EQUITY CAPITAL............................................... $ 17,718,000 ------------ TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL......................................................... $280,928,000 ============
I, Roger W. Trupin, Controller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. ROGER W. TRUPIN CONTROLLER We, the undersigned directors, attest to the correctness of this Report of Condition. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. PAUL J. COLLINS JOHN S. REED WILLIAM R. RHODES DIRECTORS -----END PRIVACY-ENHANCED MESSAGE-----